Inter Parfums' (IPAR) CEO Jean Madar on Q2 2016 Results - Earnings Call Transcript

| About: Inter Parfums, (IPAR)

Inter Parfums Incorporated (NASDAQ:IPAR)

Q2 2016 Earnings Conference Call

August 10, 2016 11:00 AM ET

Executives

Russell Greenberg - EVP & CFO

Jean Madar - Chairman & CEO

Analysts

Joe Altobello - Raymond James

Frank Camma - Sidoti & Company

Jason Gere - KeyBanc Capital Markets

Stephanie Wissink - Piper Jaffray

Hamed Khorsand - BWS Financial

Operator

Greetings, and welcome to the Inter Parfums Inc. Second Quarter 2016 Conference and Webcast 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 introduce your host, Mr. Russell Greenberg from Inter Parfums, Inc. Thank you Mr. Greenberg, you may begin.

Russell Greenberg

Thank you, Operator. Good morning everyone and welcome to our 2016 second quarter conference call. Once again, I will start with a financial overview and then I will turn the call over to Jean Madar, our Chairman and CEO, who will discuss current business and upcoming plans. After that, we will take your questions.

Before proceeding further, I want to remind listeners that this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results. These factors include, but are not limited to the risks and uncertainties discussed under the headings, Forward-Looking Statements and Risk Factors in our Annual Report on Form 10-K and the reports we file from time-to-time with the Securities and Exchange Commission. We do not intend to, and undertake no duty to update the information discussed.

In addition, Regulation G, quantifications for the use of non-GAAP financial measures, prescribes the conditions for use of non-GAAP financial information in public disclosures. We believe that the presentation of the non-GAAP financial information included in this discussion is important supplemental measures of operating performance to investors. The information required to be disclosed for the presentation of non-GAAP financial measures is disclosed in our June 30, 2016 quarterly report on Form 10-Q, which has been filed with the Securities and Exchange Commission. The information is available on our Web site at www.interparfumsinc.com.

When we refer to our European-based operations, we are primarily talking about sales of prestige fragrance products that are conducted through our 73% owned French subsidiary, Interparfums SA. When we discuss our United States-based operations, we are primarily referring to the sales of prestige fragrance products conducted through our wholly-owned domestic subsidiaries.

Moving onto second quarter results. Net sales were 117.2 million, up 14.8% from 102 million. At comparable foreign currency exchange rates, net sales increased 14.2%. Net sales by European-based operations rose 14.8% to 88.6 million as compared to 77.1 million, and net sales by U.S.-based operations also increased 14.8% to 28.6 million compared to 24.9 million. Gross margin was 63.5% of net sales compared to 59.1%. Selling, general and administrative expense as a percentage of net sales was 53.7% compared to 51.1%. Operating income increased 39% to 11.5 million from 8.2 million and operating margin rose to 9.8% as compared to 8.1%.

Net income attributable to Inter Parfums, Inc. increased 34% to 5.8 million or $0.19 per diluted share as compared to 4.4 million or $0.14 per diluted share in last year's second quarter. Thus, for the first half of 2016 net sales totaled 228.7 million which is an 8.2% increase in dollars and an 8.4% increase at comparable foreign currency exchange rates. Net income attributable to Inter Parfums, Inc. was 13.2 million or $0.42 per diluted share. You'll recall that our first quarter results included the effect of a pending settlement of a tax assessment with the French Tax Authorities in the amount of 1.9 million. Excluding the effect of the pending settlement, net income attributable to Inter Parfums, Inc. for the first half of 2016 would have been 14.6 million or $0.47 per diluted share. And that compares to the net income attributable to Interparfums of 14.4 million or $0.46 per diluted share in last year's first half.

We covered key sales drivers in our release as well as in our 10-Q filing, so I will try to focus this discussion on profitability factors. As I just mentioned, our consolidated gross margin for the second quarter was 63.8% of net sales compared to 59.1%. For European operations, the gross profit margin was 67% as compared to 63% in last year's second quarter. Distribution channels played a significant role in that increase as much of our growth was in product that flowed through company-owned or controlled distribution organizations rather than through third-party distributors. In addition to increased sales of Montblanc and Jimmy Choo products that are sold through our United States distribution subsidiary. The Rochas brand which also was a major contributor as its sales are concentrated in France and Spain. Both of which are countries where we distribute direct to retailers.

For U.S. operations the second quarter gross profit margin was 53% versus 47% in last year's second quarter with the increase due to a greater concentration of sales of our higher margin prestige products including Abercrombie & Fitch, Hollister, Oscar de la Renta and Dunhill. For both European and U.S. operations the increase in selling, general and administrative expense both in dollars and as a percentage of sales was primarily due to higher promotional and advertising expenses. Promotion and advertising included in selling, general and administrative expenses aggregated 24.9 million or 21% of net sales in the current second quarter, as compared to 17.5 million or 17% of net sales for the corresponding period of 2015. The increase in 2016 is primarily the result of higher advertising and promotional expenditures incurred in both our European operations and U.S. operations in support of new product launches for Montblanc, Abercrombie & Fitch, and Hollister. This trend of higher advertising and promotional expenditures on new product launches is expected to continue throughout the remainder of 2016. As we are preparing for our launch of Coach fragrances and continue our geographic rollout for Abercrombie & Fitch and Hollister.

Despite the higher selling, general and administrative expenses in the second quarter, we achieved a 39% increase in operating income and 170 basis point improvement in operating margin compared to last year’s second quarter as a result of the strong increase in gross profit. In the current second quarter, our effective income tax rate was 36% as compared to 34%. However, we expect our effective rate excluding the previously reported pending settlement with the French tax authorities to be approximately 35% for the year as a whole. We have again affirmed our guidance and assuming that the dollar remains at current levels to 2016 net sales should be in the range of 500 million to 510 million. Including the non-recurring tax settlement, net income attributable to Inter Parfums Inc. should be in the range of 1.01 to 1.06 per diluted share. The tax settlement reduces net income by about $0.04 per diluted share.

Moving on to our balance sheet, we closed the quarter with working capital of 338 million including approximately 232 million in cash and cash equivalents and short-term investments. Our long-term debt comprised entirely of a 5 year term loan aggregated 90 million at mid-year. One item I would just like to mention before I turn the call over to John with respect to Brexit, we are monitoring currency trends in the UK and are evaluating our current pricing models. As of today, we do not expect any significant pricing changes. However if the devaluation of the British pound continues, it may affect the future gross margins from sales in that territory. However, we do not expect any material losses on accounts receivables to be collected in British pound as we routinely hedge those amounts. Jean, please continue.

Jean Madar

Thank you, Russ and good morning everyone. I know we’ve said it before but I would like to re-insist that our two largest markets were also for this quarter are two factors growing as first half sales in Western Europe were up 44% and North America increased 10% over same period last year. Despite negative market conditions in China our overall sales in Asia, our third largest market were slightly ahead of the first half of last year with Korea and Japan making up some of the shortfall from China. However, the negative market condition in Eastern Europe and in the Middle East and South Africa that prevailed in the first quarter have continued in the second.

For 2016 as a whole, we expect most of our growth within our European operations to come from the inclusion of Rochas for the full year and the launch of our first women’s scent for Coach. Come the fall, the new Coach signature scent will enter US$3,000 including Macy's and Sephora and Nordstrom, Dillards. The scent has been adapted for the Asian market and we launch also in Singapore, Taiwan and Korea in the fall and a rollout in Japan and Hong Kong early next year. By the end of 2017, we are looking to be in 20,000 doors worldwide for the brand Coach.

So we have as I said before high expectations for Coach in the U.S. and in Asia. The Coach brand for your information is a second largest imported brand in Japan after Louis Vuitton. The Coach ads campaign features photography by Steven Meisel who also shoot the Coach fashion campaign the ads are inspired by the State of New York and will feature 19 year old actress Chloe Grace Moretz. The marketing efforts will be focused on television slots, Internet and social media as well as select print advertising.

Regarding Abercrombie & Hollister fragrance, these are the big new additions to our U.S. operations. Let me remind you that in the international markets these are viewed as American fashion brands so they are being sold in perfumeries and beauty boutiques and departments and specialty stores, and travel retail duty-free stores. Abercrombie & Fitch First Instinct targets, First Instinct is another fragrance, targets 18 to 25 year old men. The rollout started in May and ultimately we expect to be in 7,000 doors throughout the UK, France, Germany, Brazil, Argentina, Taiwan, Philippine and Indonesia.

The Hollister fragrance called Wave is targeted to teens and young adults aged 16 to 25 and it has started at the end of June. Overtime, we expect them to be sold in over 10,000 doors in the UK, France, Germany, Brazil, Korea, Philippine and Israel. First instinct and Wave are doing especially well in the initial markets. We got the first results in UK, France and Germany and they are quite encouraging. Following some exclusivity arrangements with certain retailers, broader distribution within this market is underway as planned as is broader geographic distribution in other countries and regions.

The new scents we have created for Abercrombie & Hollister will also be sold to their respective retail and online stores. For starters First Instinct will be meeting the New York, Paris, London, and Milan Abercrombie stores soon and Wave is launching in six Hollister stores internationally later this month. I might also add that we have also been successful expanding the international distribution of the brands' legacy scents beyond our men fixed stores. There have been a few additions to our 2017 line since our last conference call for example we have several flankers debuting with the Dunhill brand, including one of the very successful Icon family.

Also in the work is a flanker duo for Hollister Wave. A new scent for a woman under Oscar de la Renta brand is under development as well. And as I mentioned on the last call, our first new product for Rocha, the women fragrance, will be introduced in the winter as with our new Lanvin and Abercrombie women scents. We also have a new collection in the works for Boucheron debuting in the winter. And in the spring we'll have a new Jimmy Choo scent for woman and in the fall a very important Montblanc Legend family will welcome another member. These plans, of course, are subject to change. We have what it takes to build on our success, a diverse portfolio of brands, a distribution network encompassing 100 countries an industry-wide reputation for growing fragrance franchises that enhance each brand and enrich brand owners and a very strong balance sheet and pool of talent throughout our organization.

So, with that operator, you can open the floor for questions.

Question-and-Answer Session

Operator

Thank you. At this time we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Joe Altobello with Raymond James. Please state your question.

Joe Altobello

I just wanted to start off on Abercrombie and Hollister, and the launches in the quarter. You mentioned in the past that this was a “major contributor” in the quarter. Have you broken out what the pipeline scale or the impact of the launch was on the top-line?

Russell Greenberg

No, we have not. As in the past with a lot of our specialty retailers that are also publicly traded companies. They don't want us to disclose individual brand sales and for the most we tend to agree with them and therefore we do not break out the individual sales for Abercrombie or Hollister or any of our other specialty brands.

Joe Altobello

Okay. In terms of Fierce, any change in distribution to that brand in Abercrombie?

Jean Madar

Note this is as you know is distributed of course in the Abercrombie store, and we've started last year selling it in Sephora in Europe and some duty frees in the U.S. and in Asia, the results are quite good, actually very good, so we're following this carefully. For the new fragrance First Instinct it's a little early but the first indication of sales for the last two weeks of June, actually the last week of June and the month of July were quite good. We were in the top-10 for Hollister in UK, same for Abercrombie. So, it's -- we are definitely beating the number for Abercrombie and Hollister our internal numbers I mean.

Joe Altobello

Okay, that's great, Jean. And then just one last one on advertising I mean if you look at the sales number I guess year-over-year, it was up 15 million. Advertising was up more than 7 million. So how do you guys think about the ROI that you're getting on advertising? And obviously this is behind launches, so it's a little bit apples-and-oranges, to some degree. But do you feel like you're still getting a very good ROI on an incremental A&P spend?

Russell Greenberg

Yes, absolutely. I think that in this environment that we’re in a significant uptick on investment in promotion advertising is absolutely required especially when you’re trying launch a new product. This year is a year for Inter Parfums that most of our growth does consist of new products between Coach, even Rochas, Abercrombie and Hollister. That’s why it’s even in our prepared remarks I expect that the higher end of promotion advertising spending is where we’re going to be for the year. Last year we spent almost 18% in the -- of sales in the SG&A line on advertising, so far this year we’re at around 21%, I think that that 21% is probably a much closer number to where we’re going to end up for the full year, especially considering that we have Coach launching in the second half of the year and we plan to continue rolling out Abercrombie and Hollister for our U.S. operations. So clearly we’re going to be almost 3 points higher than where we ended last year on the A&P line.

Operator

Our next question comes from the line of Frank Camma with Sidoti & Company. Please state your question.

Frank Camma

A question on Coach specifically, since Japan is such an obviously big market for this, why is that later in the rollout schedule?

Jean Madar

We are launching firstly Eau de Parfum which is the fragrance that is more for the USA it’s a white flower which we think is the right smell for this market. For Asia, we will be launching Eau de Toilette. It's a different fragrance and we will test it in Hong Kong and Korea and Singapore but China and Japan which is like you said the biggest market will happen more in 2017. We think that we’ll have more visibility for this important market in 2017.

Frank Camma

Okay, that makes sense. Let me ask you just about general comments, if you can, on the luxury market, in particular, I mean Coach and some others have sounded a little bit down on guidance here. And I was just wondering if there is -- necessarily is that a spillover into fragrance, or if you would like to comment on that at all?

Russell Greenberg

I don’t necessarily think -- I read some reports on Coach which just reported just not even that long ago and brands such as that and some of the things that they are trying to do is to improve the image of their brand and cut down on some of the distribution that may be not be favorable if you will or most favorable for the brand. But the numbers were pretty strong overall and I think that is going to bode well for the fragrance launch and we hopefully we're going to kind of feed on each other, as Coach does better in their fashion brands I think it's going to help us and I think that the fragrance and the amount of advertising spend that we're going to put behind the Coach brand is also going to be favorable for the fashion brand.

Frank Camma

And my last question is a question to you, Russ, on the -- is this quarter typically the quarter that you -- when you pay the dividend in France, that it affects your income tax expense or do I have the wrong?

Russell Greenberg

Yes, no I mean, it does a little bit. We've gone more if you remember with some of the reporting last year we went a little bit more to an effective annual rate during the quarterly period. So, you won't have as much of an impact as a result of a one-time kind of a thing like the dividend. So, but I do expect it again as I said in our remarks, excluding the pending settlement I think 35% is the right number to use.

Operator

Our next question comes from the line of Jason Gere with KeyBanc Capital Markets. Please state your question.

Jason Gere

I guess a couple of questions. I guess the first one, just thinking about the second half in terms of the sales, I guess I'm just trying to figure out, when we think about the second half versus maybe the second quarter, the incremental sales versus replenishment that will come through, so in terms of launches out there, U.S. versus Europe. Because if we look at the trends, obviously it looks like you might see a little bit of a slowdown in third quarter for some replenishment. And fourth quarter holiday, I think, might be better. So I was just wondering if you can give a little bit of context how should we think or if there is something I am missing here, in terms of how we think about the cadence of the back half of the year from a sales perspective.

Russell Greenberg

I'm going to try Jean on this one…

Jean Madar

You can try but, yes go ahead.

Russell Greenberg

I mean you can imply what we're projecting as far as growth just by using the overall guidance trend, the 500 and 510. So, based upon where we are, the third quarter is always now our biggest quarter of the year. Not only because of launches but also there's a certain amount of seasonality within the business. Our guidance is kind of implying somewhere around an 8% or 9% continued sales growth between now and the end of the year. I think it's going to be very consistent with what we had in the past, as far as the third quarter and the fourth quarter. So, just comparing those I think it's going to be very-very similar from the standpoint of growth over the prior year. They should both be somewhere in that 8% or 9% compared the prior year.

Jason Gere

And is there anything from a retail inventory level, where anything to kind of point out where you are a little bit concerned. Or even with as you are rolling out more, just some of the incremental shelf space that you may have received for some of the products. So just wondering, just trying to think about how the retail inventory landscape looks right now, and kind of adjusting for it. Obviously Europe is -- you are doing exceptionally well there. But I am just trying to think about that from a POS versus kind of a shipment perspective.

Jean Madar

Our inventory level at store level is in a very good shape maybe it is a little bit low but we want to keep it like that, we can replenish quite quickly. The goal is the ability to -- for brands like, the important brands such as Montblanc and Jimmy Choo, Coach and Abercrombie to increase the shelf space but immediately after however the success of Montblanc Legend Spirit, we saw that stores have allocated more space to Montblanc. For Illicit for Jimmy Choo the success of Illicit was able to get us more space. So I think it’s quite automatic, when retailers see that they can do, that they can sell more it’s easier of course to convince them to give it. What is a little bit more difficult is for new brands such as Coach, Coach is not new in the fragrance because they had a past experience with -- under another licensee. But it's a whole new line, it is a whole new line, a whole new campaign, a whole new positioning and I will say that in the U.S. and in Japan which have the largest market for Coach we didn’t find any programs to get space for women’s fragrance. For Abercrombie, it's exactly the same thing also. That’s what I can tell you today in terms of space and inventory wise.

Jason Gere

Okay, no, that's good. And the last question, it was obviously very nice to see a quarter were gross margin was driven not by kind of the FX play. And with currency and some of your comments about the pound, we will obviously have to watch. But as we think about going forward, you start to lap some of the tougher gross margin periods. How much -- I guess if the sales grow in this 8% to 9%, as you are saying, in the back half, how much mix benefit should we see to kind of offset what I would say is tough comparisons to last year, where currency made a bigger play? I am assuming gross margins will probably be kind of flattish, won't see that big spike. But I'm just trying to contextualize this a little bit more.

Russell Greenberg

I do understand the question. It’s interesting because in the first quarter, a portion of the gross margin expansion was the result of FX and here in the second quarter, it really played no role whatsoever. I can’t predict where the dollar is going to, whether it’s going to be strong or weak over the next 6 months but assuming it stays where it is today, I think that the trend that we’ve seen here in the second quarter will probably continue because the growth is coming from Rochas, it’s coming from Montblanc and these are sold more significantly through in territories where we have our own distribution and I think that’s going to continue to drive the margin.

Jason Gere

Okay, so in other words, gross margin should obviously tick up, and that's what's funding obviously more of the step-up in A&P that you are projecting, which logically makes sense, but I just want to be clear on that.

Russell Greenberg

That’s absolutely correct. Keep in mind. Jean did you want to say something?

Jean Madar

No, I was saying that its absolutely correct. We improve our launching and we spend most of what you said in extra savings it’s quite simple.

Russell Greenberg

Yes, the key thing that I wanted to mention is in those territories where we are the distributor, we are driving the advertising spend in that local market as opposed to in areas where we sell through the third-party distributor, it's our third-party distributor who is driving the advertising in that particular local market and that's one of the reasons why you see a higher ad spend in support of these new product launches.

Jason Gere

You are not able to break out the difference between third-party and your no, no, no.-- own [Multiple Speakers] is that something [Multiple Speakers]?

Jean Madar

No.

Russell Greenberg

No, no.

Operator

[Operator Instructions] Our next question comes from the line of Stephanie Wissink with Piper Jaffray. Please state your question.

Stephanie Wissink

Just to follow-up on Joe's earlier question regarding some of the changes in ad and promo spend, could you just talk a little bit about some of the mediums? If you are shifting anything from traditional vehicles of advertising towards maybe new digital formats, and if that has been more beneficial to [Technical Difficulty] driving sales and then the second piece with respect to 2017, as you look out over the next 18 months or so, do you think about 2017 as another new launch driven-year, or more of an extended period of the 2016 launches?

Jean Madar

You wanted to answer her Russ on the digital?

Russell Greenberg

Well, on the ad spending, clearly in this day and age and environment there's a shift to a lot more spending on the digital environment. So, clearly there's a little bit of a shift to that side. However with most of the brands, the traditional advertising, the traditional magazine, even television spots in certain territories continue to be where the lion’s share of the spend is but I do think that -- we do see a shift and I think it's actually going to continue as we move on. Going into 2017, 2017 Jean in his remarks went through a whole litany of launches some with existing brands, of course we have some product like the Rochas women fragrance that's going to be launched in 2017, the Abercrombie women fragrance that's going to also be launched. So, there's quite a bit of combination of existing portfolio brands and some of the newer brands. As we get closer to November which is when we typically our guidance for 2017, that's when we'll have our calendar set, I think that's kind of why we wait until that time in order to announce guidance because we'll know exactly what and when we're going to be launching in 2017. So, we're giving a little bit of a flavor as I said in Jean's remarks but it's going to be a year of a combination we've got some Montblanc product, we've got some Jimmy Choo.

Jean Madar

We'll continue rollouts of existing products that are being launched in 2016 and we'll see some new products. But the fact also that we've decided to launch Coach in Japan and China in 2017 is also important and we're able to control -- not to control the growth but to capitalize on other market before we launch, the very important market of Japan and China for Coach. Also in 2017, we’ll come up with new fragrance for Abercrombie and Hollister. So 2017 will be a busy year.

Stephanie Wissink

Russ, just one final as a follow-up I know the last few years, the fragrance marketplace in general has been going through de-rationalization and price rationalization. Are you feeling like the bulk of that is behind you now? And the channel and the trade is healthier in terms of pricing architecture, as well as brand opportunities, given the competitive dynamics?

Jean Madar

I didn't hear very well, so…

Russell Greenberg

Yes, correct me if I am wrong Stephanie. The question was more of the pricing structure and changes that the Prestige fragrance market has seen over the last several years. I think more of the pressure was more on the mass market side and shifts from mass market fragrances. I don’t really see a significant shift in pricing in the Prestige fragrance market around the world. I mean in a particular territory you might have some issues, I mean certainly that’s why we’re watching the pricing models in the United Kingdom because of the Brexit situation. But I don’t think that there has been any real significant pricing changes in most of the markets with which we do business. Jean do you?

Jean Madar

Yes, I agree with you.

Operator

Our last question comes from the name of Hamed Khorsand with BWS Financial. Please state your question.

Hamed Khorsand

Just a follow-up on the last series of questions here, and given where you were in Q2 as far as the sales growth, and what you are seeing for the rest of the year, do you think this is really brand-driven? Or do you think this is customers gravitating towards the prestige line? Or is it what you are doing with promos? What is driving that growth?

Russell Greenberg

I think it’s a combination of both. I think that Inter Parfum has been very strategic in the brands that we bring in to our portfolio. We turned down quite a bit of brands that we don’t think is right for our business. Coming into this year, we knew that our sales are going to be driven by new product launches, with the Rochas, with the Abercrombie and the Hollister. Clearly Montblanc has been a stellar performer. Certainly achieving levels that are certainly a little bit higher than what we originally budgeted for with a flanker brand, this is the legend family that is coming up with additional flanker products that is just driving the sales and therefore we’re increasing our market share. So I think it’s really a combination of the strength of the existing brands that we have especially the large brands within our portfolio the Jimmy Choo and the Montblanc, and then being very selective on choosing good brands that fit on model that we can launch and hopefully create whole new business lines with.

Hamed Khorsand

Okay. And then just a follow-up on that is, do you have any kind of backup plan if consumer demand just shifts away from Montblanc and other brands and maybe it's not even in your portfolio, I mean what are you -- what's the contingency plan for that?

Russell Greenberg

We are…

Jean Madar

Long term -- we've long term licenses with Montblanc and Jimmy Choo and the good news is that when you have a brand that is working, that people continue to buy when the bottle is empty we tend to buy it again. The difficult part is to have a success but we have some franchise into Montblanc that are very successful. All the Legend product are very successful, we keep launching products around that and they perform very well in the market. Stephanie [indiscernible] and Russ [indiscernible] $100 million this year in sales [Multiple Speakers] So, there's no risk that Montblanc will go from 100 to zero, the risk is from the 100 million where do we go, how we're going to bring it to the 150 million, so we need to create more products, we need more space, we need more promotion. This is the kind of environment we are in.

Russell Greenberg

And the last thing I'm going to just add to that is the environment with respect to new acquisitions, new licenses, and new opportunities. This is one of the reasons that we keep the cash on hand so that we can be opportunistic in the event that any of our brands hit a growth shortfall if you will hopefully over the next year or two years, three years, we'll be able to bring additional brands into our portfolio and grow new franchise that could also become $40 million, $50 million, $100 million type brand, similar to what we've done with Montblanc and Jimmy Choo and alike.

Operator

That does conclude our Q&A session. So, I will turn it back to management for closing remarks.

Russell Greenberg

Thank you, Operator. One last point before we close, I will be presenting at two conferences here in New York City on September 13th I'll be at the B. Riley Financial Consumer Investor Conference and I will also be at the KeyBanc Capital Markets Consumer Conference which runs from December 7th through December 8th. I hope to see some of you at these events. Again thank you for your participation on this conference call whether live or listening via webcast and as usual if any additional questions, I'm available to take your calls. Thank you and have a great day.

Jean Madar

Thank you everybody.

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!