Full Transcript of Family Dollar’s F1Q06 (Qtr Ending Nov 26, 2005) Conference Call - Q&A (FDO)

| About: Family Dollar (FDO)

Here’s the entire text of the Q&A from Family Dollar’s (ticker: FDO) fiscal Q1 2006 conference call. The prepared remarks are here. We recognize that this transcript may contain inaccuracies - if you find any, please post a comment below and we’ll incorporate your corrections. And please note: this conference call transcript is a Seeking Alpha product, so feel free to link to it but reproduction is not permitted without the explicit permission of Seeking Alpha.

Question-and-Answer Session

Operator

Thank you. At this time, we’re ready to begin the question and answer session. If you would like to ask a question, please press “*” “1” on your touchtone phone. You will be prompted to record your name. To withdraw your request, you may press “*” “2”. Once again, if you would like to ask a question, please press “*” “1” at this time. One moment please.

Our first question comes from Meredith Adler of Lehman Brothers. Ma’am your line is open.

Q - Meredith Adler

Hi guys, congratulations. I have a couple of questions for you, it’s a thought maybe you could talk a little bit about shrink, and what is it that’s making your season progress right now, what’s the outlook for the next couple of quarters, then I have a couple of other questions.

A - James Kelly

Meredith as we’d discussed over the last several conference calls, we introduced some new technology back last spring, and that’s helping us detect issues much earlier and we’re being much more responsive to those issues. In addition, shrink has been a item, has been #1 on our priority list for a while now. So, the store operations group is really done a nice job, in creating more focus in greater awareness in the shrink area. As you know, shrink is also tied very much to store level retention in the quality of our personnel layer. The rollout of our, our new automated screening package last spring and we’ve around a 1000 stores with the new system now, some of our larger stores, are helping us in terms of free qualifying applicants and helping us with the hiring process. So, when you are looking at shrink, there is no silver bullet. But we believe that we have turned a corner and expect for the current trend of modest improvement to continue through this year.

Q - Meredith Adler

Great, and then maybe, you could talk a little bit more about what you said on the urban initiatives, and it was what Howard was saying about attacking the cost structure. And I guess I am, still, it’s a little unclear to me, in the markets where you have the most trouble. What really has been the obstacle to making this work? Just turnover or, I am not sure, I understand.

A - Howard Levine

Sure, Meredith, what we have found is, when we rolled out this initiative to the stores last year, it was basically a one-size-fits-all. And one of the things that we wanted to do this year is to go back and look at each market and make some tweaks and adjustments where appropriate. Most of the stores had did receive the urban initiative, did anticipate and plan appropriately and we had strong leadership in those markets. The markets that were most challenging towards for those markets that did not have is effective leadership as we would have liked, and also had an abnormal amount of new store growth as well. So, what we wanted to do is go back in these markets, in some cases, we added new AOMs Area Operations Managers, in some cases, we replaced Area Operations Mangers, some cases, we expanded, to plan our organizations structure, to include some additional HR, and loss prevention help and we feel very confident that the changes that we are making will take us to a level of profitability in these stores as in most all of the other urban initiative stores.

A - James Kelly

Meredith, I think it’s important to note that what we are finding is that the, the structural and cultural changes are indeed working. So, the issues in those markets that we have not achieved our goals, are implementation transitional kinds of issues, as suppose to something that would indicate that there are inherent reasons in certain markets that the program will not work. So we are, where we are having those transitional issues, we are focusing on the specific issues and the specific market and remain confident that the program will be successful in those markets as well.

Q - Meredith Adler

Great, and then I just, my final question is, there is a pretty big range for your second quarter guidance. And obviously, you are showing very good momentum in both sales and it looks like in earnings. What, in particular, would bring you to the low end or what would bring you to the high end? Is it just sales, or is there some other factor that you think is really important?

A - James Kelly

Well I think the key ingredient is the holiday sales. We also, as a matter of policy are very aggressive in managing our seasonal inventory. So, if there is an issue with seasonal sales then you would have higher seasonal markdowns as a result of that. Those would be the 2 major ingredients that add a little more variability to the second quarter than other quarters.

Q - Meredith Adler

Got it. Okay, thank you very much.

Operator

Stacy Turnof of Merrill Lynch, you may ask your question.

Q - Stacy Turnof

Good morning every one. And I wanted to ask a little bit of the commercial environment in the Dollar Store industry, generally its been, there’s been a lot more promotions with some of your piers, we’ve been seeing a discounts in toys in seasonal, and what are you doing to compete against this retailers and then particularly, at the holiday season, anything different is being planned for post Christmas?

A - Howard Levine

Stacy, clearly this is another very competitive holiday season with the, I had a challenging economic backdrop, it’s certainly has been exacerbated somewhat. Family Dollar has taken some very similar approaches to last years. So, for example, November and December circulars are comparable to last year, in addition to that what we have done on a very select basis have taken or accelerated some markdown very selectively on some seasonal categories to take advantage of some of the traffic in our stores and to bring a little more excitement to our stores during this time of the year. As you know, we do have an exit strategy for all of our seasonal goods today. So, this is not something that was unplanned as much as just accelerating, some of the plans that we had undertaken for this year. But, we believe that we are very well-positioned this year, the initiative, primarily the treasure hunt initiative has brought a lot of excitement to our stores, and I think that we are going to end up with a pretty positive holiday season.

Q - Stacy Turnof

Great, and I had one other question on your POS, I know that you guys have been working new pilot for POS, and could you tell us about how that’s helping your sort of Techo-process, on accepting debit cards, et cetera.

A - James Kelly

Well, just for in the plan, we are continuing the pilot programs. So, we are not really ready to comment on either the timing of that program, or the benefits we expect to accrue from it. But as we move forward, we’ll certainly keep you up to date.

Q - Stacy Turnof

Okay, thanks so much.

Operator

Mark Miller of William Blair, you may ask your question.

Q - Mark Miller

Hi good morning. I was hoping you could talk about what has changed through on their urban initiative markets because your comp sales trend, my understanding is similar to where you were last quarter, and so what’s the source of the increase profitability? Is that; is there a change in the hours, a lot unto those stores? Or was it on the shrink side?

A - James Kelly

Well, I think in, it’s, from an overview perspective, you are right; they continue to comp in the mid-single digits. Now, obviously, and for those stores have been open a year, they are accounting on account. So, that sure does help. And for the others, I think it is a combination of cost/expense controls as well as the fact that we do not have the incremental cost associated with the start up of the program.

Q - Mark Miller

Okay can you elaborate little bit more on some of the following phases? The pricing strategies you eluded to, I assume that means, the zone pricing and, any update you have on that? And then also, the flow processes in differentiated merchandising?

A - Howard Levine

Sure, Mark first on the zone pricing, we continue to believe the zone pricing will play an important role in bringing more opportunities to our urban stores and we expect to gradually relive the benefits of this program. Right now, it’s in a limited number of stores and a limited number of items, but we do expect to continue to gain some benefits from zone pricing. On the slowed processes, one of things that is a challenge for us is doing big business in small box stores, how you club merchandise into those stores, so you do not overwhelm stores within a lot of trade in 1 week, is just one example that is something that we have huge opportunity on, and that’s one of the things that we are working out very aggressively. And finally, the third assortments, how can we better tail our assortments to specific markets, so for example, one thing that we found in some markets, we don’t so know, all because a lot of these stores are on walking streets, they don’t find that well. Or another example maybe some very large items, like an area, we worked at, is too cumbersome to get on a bus. Those are some examples of some, how we will better tail our mix or merchandise in some of those stores.

A - James Kelly

Mark, I think it’s important that you look at each of these initiatives or sub initiatives of the overall urban program. Over some form of time horizon, as Howard indicated for example, the managing of significantly higher sales levels within a smaller facility, it’s a challenge that there might be 5,6,7,8 more actions that will be required to properly address that. We have a taskforce that will be taking one step at a time as we go through that. So, I don’t want you to get the impression that we are going to be solving those problems near-term; many of them are issues that we should be able to gradually improve over a period of time.

Q - Mark Miller

Yeah, we got that those are not all the easy exclusions. But, my last question is on the increase in the average ticket of this quarter, really I think the strongest increase, I think that I have seen in the business in a longtime, what is that describing, that is that more items in the basket or is there a change in the mix? Thanks.

A - Howard Levine

So, I think it’s both of those things, Mark, more items in the basket and particularly as we went into the November period, where we were able to sell some of our treasure hunt type product which is some higher price point product that helped to improve that transaction count, of the transaction size.

A - James Kelly

Mark, from a macro perspective, there’ve been a number of studies of length that have indicated low income shoppers or shopping the less frequently, in response to both the higher energy prices, transportation cost as well as the issues with the pay cycle, and that’s probably having an impact on us, they’re shopping less frequently, but when they do come to our stores, they are buying a little more. And then as, Howard indicated certainly both the food strategy and the treasure hunt strategy and as we’ve commented before the urban initiative are all heading to encourage our customers to buy an additional item.

Q - Mark Miller

Great, thanks and good luck.

A - James Kelly

Thank you.

Operator

Patrick Mckeever of Suntrust Robinson Humphrey, you may ask your question.

Q - Patrick Mckeever

Thanks, good morning everyone. I was just wondering as you might share some thoughts on the competitive landscape as it relates to store openings next year. I think, since you articulated your store growth plans for fiscal 2006, 400 grocery stores, is that all you can, really has come out and said that they are going to open at least 830 stores, so more than twice the number that you are planning for your fiscal year. How do you view that?

A - Howard Levine

Patrick, if we are beginning to make some of the changes in our real estate area to improve some of the processes, it would be premature for me to give you a lot update right now, but we remain confident that we will be able to open stores more timely and that we will also be able to accelerate our openings. But, one of the things that we did talk about as you mentioned is, we wanted to slow down that process this year to improve the related processes, and we are working very hard to do that and we remain confident that we will be able to reaccelerate our growth in the future.

Q - Patrick Mckeever

So, you are not thinking that will present any issues in terms of real estate site selections, but, selections for the current fiscal year?

A - Howard Levine

No

Q - Patrick Mckeever

Okay and your growth in stores in fiscal 2006 is going to be more weighted then it has been over the past few years, a little bit back towards smaller markets, is that correct Howard?

A - Howard Levine

No, no we will continue to open stores in urban markets, there maybe some slight tweaking, but there is not substantial change there.

Q - Patrick Mckeever

Okay, and then a second question on product costs, particularly in consumer products, hearing and seeing price increases from some of the big consumer products, manufactures, that didn’t seem to have a negative effect on you in the quarter, is that initiative we should be concerned about?

A - Howard Levine

There is no question that there is plenty of pricing pressures out there and as I’ve said before we continued to challenge and fight those as aggressively as we possibly can. We have had to take some price increases and the good news is we’ve been able to pass on some of those price increases of retail. We continue to be very kinds so that the fact that we must remain competitive and our vendors know that we will be challenged in the making some changes in items and categories, if necessary, to maintain that competitive posture.

Q - Patrick Mckeever

When, now how are you passing those along as it, going from, let’s say, $2 to $2.15 or $2.25 that sort of thing. Are you making broader use of non-even dollar price points?

A - Howard Levine

We are doing all sorts of things Patrick; it would be hard to classify one approach in the way we are looking at that.

Q - Patrick Mckeever

Okay, thanks Howard.

A - Howard Levine

You are welcome.

Operator

Shermin Tan (ph) of Citigroup you may ask your question.

Q - Shermin Tan

Thank you good morning. Just a couple of quick questions here is there anything you can share just additional color on the gross margin side in terms of what’s been helping, drive the improvement in your initial markets? And also, in terms of, as you are decreasing your inventories on the softline side, do you think that there is opportunity from that perspective in terms of improving markdowns over the next few quarters? Thank you.

A - Howard Levine

Shermin, one of things that we highlighted and solved, as we were rolling out our foods and we needed to come up with some initiatives that would help offset some of the pressures from that margin, one of the things that we’ve really seen a nice improvement in our margin is some of the treasure hunt type product that we’ve purchased particularly into this holiday season. And generally that higher margin product that we’ve had success with, so we still are not raising what our expectation is for the margin for the rest of the year, but I frankly think that we do have opportunities to do an even better job of presenting and buying some of this treasure hunt product. On the apparel side, we absolutely focused on reducing markdowns there, as indicated, on the parallel inventory levels being down 6% and comp sales not being down that much, we are increasing out productivity of those categories and hope it to continue to do so.

Q - Shermin Tan

Great, and then I just have one other follow up advertising side, in terms of your circular. Can you show to us just what your schedule might be looking like over the next few quarters and then just in terms of any binding you have from your customers, in terms of various stocks?

A - Howard Levine

As I have indicated before, one of the strategy behind the circular program is to highlight some of the new seasonal product that we have purchased as well as some of the treasure hunt product. The timing of those circulars is generally around a, an event in the future. So for example, the November circular and December circular were relating to holiday merchandise. We’ll probably have something in the spring or early spring to try to highlight some of our spring type merchandise and, we will give further information as we progress in the years, to win the next circular that will be coming out.

Q - Shermin Tan

That’s great thank you.

Operator

Jack Bayless of Nedwood Research, you may ask your question.

Q - Jack Bayless

Hi, first regarding a higher occupancy cost, in your new stores, what was the reason against the new stores coming in at 85% compared to having coming at 90%? Is the higher occupancy expense, a ratio of that happening, or is it a repay to real estate market?

A - James Kelly

I think it’s like anything else Jack, as number of say deposit over 500 stores, its 13 months worth of openings. So it reflects a total range of things to include sales performance and more rule markets, sales performance in the urban markets. So, I think it, basically is something that we have looked at and targeted 85% to 90% of an average store sales is being the place that we’d like to be and what that enables us to do is properly balanced a neat subject as maximizing the opportunity within a given market, which gives you some level of transparence with the needs for, initial performance of the new store.

Q - Jack Bayless

Like, there is a higher occupancy cost is also a, a reflection of having to pay more in terms of the real estate market itself?

A - James Kelly

For the biggest drivers of our de-leverage of occupancy cost were utilities, utility was more than half of the increase and depreciation. So, it wasn’t the base ramps.

Q - Jack Bayless

Okay. Regarding the stock compensation expense, could you let us know what that, what that was in dollars, because you didn’t have that expense year ago, so if you had it rather comparative on the expenses?

A - James Kelly

Yeah, Jack if you add the expensing options with the other programs which is really what the extend of the non-comparable expenses; it’s roughly $3 million.

Q - Jack Bayless

3 million. Okay and regarding the remaining 6.9 million shares authorized to be purchased. I think the, the initial 10 million shares are estimated in shorter to you about at 19.95 a share, now that the stock is pulled out a share higher. How is that additional cost absorbed?

A - James Kelly

Basically, we will have a true up when the bank actually purchases the shares and that throughout will be based on, on there, the acquisition or the average due opt price during the repurchase time period. So net-net, if their average is $22 a share we will end up getting $220 million for those 10 million shares.

Q - Jack Bayless

Okay and one last thing, in terms of your sales expectations going forward, you expect approximately the same comp store sales gains for January and February as you do for December despite the fact that the 2 year comp store gain for January and February is significantly higher than for, than the past 2 years for December, which was less than 5% than the January and February on 2-year basis were over 89%, so I was just wondering what do you expect to occur in January and February to help your comp store sales?

A - James Kelly

Jack, I call out to December last year was one of our best December’s in a long time. Also the mix of the product in December is much more proportional to discretionary spends which you’re impacted to a greater degree by things such as energy costs and decline real wages et cetera. January and February are predominantly driven by core consumables and during the January and February time period, this year we will have more coolers in place and we’ll be better prepared to respond to our, our customers day-to-day needs.

Q - Jack Bayless

And what about the higher heeding cost for January and February this year was little much higher for your customers and have more of an impact on them, how did you expect that to affect this spending?

A - James Kelly

All of those things being equal, its not going to help.

Q - Jack Bayless

Okay, thank you.

Operator

Christine Augustine of Bear Stearns. You may ask your question.

Q - Christine Augustine

Thank you, what is your plan for inventory at the end of this quarter and are you searching for a permanent replacement for indiscernible for softlines. And then my final question is are, is there anything else there you’re working on, on the SG&A side, in terms of managing expenses, obviously its been difficult with utilities and rollout coolers depreciation, but I am just wondering if there any other initiatives that you would be able to discuss on the expense growth? Thanks.

A - Howard Levine

Christine, from an inventory perspective, we continue to hope to gain productivity in our inventory and would like to see it continue to gradually come down, I think we’re making some progress there and would like to see continued progress. In regard, to the replacement of our softline’s position, yes we do have planed and are looking for a sofline’s person as we speak, Jim you want to add some regard to the expense, question.

A - James Kelly

Yes, I think managing expenses is a, ongoing initiative quite frankly and we’ve, we do have a number of things going right now in that direction. Clearly, the largest single expense that we have is store level payroll, so our focus there is in the area of A) controlling the amount of payroll per store, B) making sure that the, we enhance the productivity of the labor that’s in the store to the extent possible. For example, we’re working at the move; we having a limited number of stores now, a store portal which enables the in-store personnel to move effectively manage labor through that. We’re also looking at things such as outsourcing, we have outsourced a bit of our data processing work; already we have other areas that we have used outsourcing as a vehicle for reducing cost. We’re looking at centralized procurement and then had a number of options over the last several months that have been successfully reducing our cost. So we’re going to keep working on that area and we think that we will overturn be able to more affectively leverage expenses.

Q - Christine Augustine

Thank you very much.

Operator

David Cumberland of Robert Baird, you may ask your question.

Q - David Cumberland

Thanks. One question on the urban initiative, have you’ve been able to sustain improvement for the stores with program that’s been in place but long as, what are the trends for the first vacant stores.

A - Howard Levine

David we, we first vacant stores are the stores that we will do pay a lot of attention to, to ensure that they do maintain the agreement they work on and they, we were pleased to say that they are doing quite well and the trend is positive in those first vacant stores.

Q - David Cumberland

Thank you.

Operator

Michael Baker of Deutsche Bank, you may ask your question.

Q - Michael Baker

Thanks, so just a little bit more color on, on the advertising circular, we know that, the November one, sounds like it, it drove some nice treasure hunt products which helps your margin, what about these circular that broke in early December, is that also, is that also successful in driving some of that type of product?

A - Howard Levine

Yes, yes we’ve, we were pleased with our December circular results, we will add a little more color to that after we released our December sales.

Q - Michael Baker

Yet, it sounds like you, you still not looking for a growth profit, pickup is that just, the acknowledgement that January and February probably turn more, more basic or it was the December circular, that does not give you a gross margin lift as expected?

A - Howard Levine

No, as I said Michael, we’ve, and we would like to give more color to that after we’re done with December in the quarter.

Q - Michael Baker

Okay, fair enough. And then one, just housekeeping, so why, does depreciation up sounds like about 20 basis points?

A - James Kelly

Depreciation is up for, for a number of reasons which we’re using a fairly short period for depreciation, depreciating choose many at least all improvements in many cases 5 years, so that has accelerate depreciation. We also have a number of projects that are resulting in the adding of additional capital expenditures for example, our loss prevention efforts have resulted in the adding of additional detective devices at the store level. So, it really is simply a result of a shorter period as well as our capital expenditure program.

Q - Michael Baker

So, a real quick, and only 2 more questions, so should we expect that to continue as a model of this year and then on the CapEx, I did noted that it was up year-over-year, I think your full year plan was about 12 million to 15 million which was down from a year ago, is that still before your CapEx plan?

A - James Kelly

It is, I think what you are saying now is that, we’ve got a distribution centre that actively under construction so that giving us fairly a significant amount of CapEx in the first quarter. But our plans for the overall year remain to have CapEx down slightly. We are, and began addressing the depreciation issue, we saw it growing at a rate faster than what we’ve targeted as we discussed earlier we are targeting to move our SG&A breakeven point back down to the 3, 3.5 comp level and part of the effort to do that will be to make sure that we affectively manage our CapEx and the related depreciation.

Q - Michael Baker

All right, thank you very much.

Operator

Chris Weissman of Empirical Capital, you may ask your question.

Q - Chris Weissman

Yeah, thank you very much. How many stores are currently on zone pricing and how will that role out continuing, can you quantify the impact so far on zone pricing, then a couple more questions if I may, what are you doing with consumables beyond the coolers in the stores or you increasing the amount of consumables in your stores as you rolling your new stores out and then can you comment on any items that Dorlisa Flur may have identified and, in her area that you see improvement coming?

A - Howard Levine

Let me start with the last question and you may have to remind me of the first 2 as we get in here, Dorlisa Flur is leading our strategic planning effort and there is a number of things that we’re looking at there to continue to drive comps and then to improve profitability and we will talk about those as we continue to develop our strategy. On the consumable front, as we’ve talked about for quite a long time is the, extremely important part of our business, the additions of coolers to our stores is an area that is brought more consumable sales to us as we’ve seen basket size increased, as the result of those cooler stores and we continue to see if that would be an important part of our comp store growth over the next, over the next year. And then finally, on the zone pricing as I talked about zone pricing is something that we continue to believe in and will continue to bring us opportunities to improve our gross margin over the next several years, right now it’s in just a very limited number of stores and a very limited number of items but we expect that to grow over the next several years.

Q - Chris Weissman

Any, can you qualify how many stores you expect to have a zone pricing say by the end of this next year?

A - Howard Levine

No we, we’re not going to do that.

Q - Chris Weissman

Okay and on the, on the Dorlisa’s strategic planning effort when, when would you expect to be able to bring some of those items forward as far as, those initiatives?

A - Howard Levine

Dorlisa is going to, she’s appreciating me, correcting…

Q - Chris Weissman

Excuse me, Dorlisa?

A - Howard Levine

That’s okay. We actually have implemented some of those initiatives already, the cooler initiatives was, a initiative that was the under her direction, so you’ve already seen one that something that we’ve talked about is extremely important to our growth. By the end of this year, we will have half of these stores rolled out and hopefully in the near future over the next couple of years, we will be able to complete the chain rollout of coolers. We’re also looking to see how we can better leverage that traffic and haves a complete food assortment to take advantage of some of the traffic that we are getting out of our cooler program and there is a number of things it would really be premature for me to talk about at this point, until we are more fully developed in some of those categories in areas.

Q - Chris Weissman

I guess that counts, points to the question that I was asking on consumables, I was saying beyond the coolers, the addition of the coolers to the stores, are you increasing the amount of consumables in your stores beyond the cooler?

A - Howard Levine

Yes, one of things that we think it’s an opportunity for us and that’s what I was trying to say before, it’s the leverage through the food business a little more effectively. In other words, we have a pretty limited food assortment today, is they’re opportunistic to further grow that to drive traffic in our stores as we are driving traffic with the, the addition of the cooler program. So, consumables will continue to grow as a percent of our sales as they’re having a stronger comp increase in some of the other areas. So, that alone will increase the amount of consumables that we are selling today.

Q - Chris Weissman

And the size of your stores, your existing store base. You can move those consumables through a store of existing size or should that lead us to believe that possibly your store size going forward maybe larger?

A - Howard Levine

No I think we are not looking to expand the size of our stores, what we done over the past several years is we allocate space within our stores, to gain productivity within our stores, our current store size. So we like operating small box stores and think that the opportunities are more how we can better utilize space within the existing footprint.

Q - Chris Weissman

Okay and then finally, your store openings, I know in the past, it really haven’t been that smooth as far as the number store are reaching, opening each month. Did you expect any smoothing out of our store openings?

A - Howard Levine

Yeah, that’s one of things that we talked about is why we slowed down our new store growth this year to 400 stores was to improve the profits as an opening stores and to have a more even flow throughout the year. That is a very big goal of ours this year.

Q - Chris Weissman

Thank you very much.

Operator

Thank you, at this time, this concludes the question and answer session. And I’d like to turn the call back over to Ms. Rawlins.

Kiley Rawlins, Divisional Vice President, Investor Relations and Communications

Thank you, Carrie. Thank you again for your continued interest in Family Dollar if you didn’t get your question today, I’ll be available all week, and we’d like to wish you all a safe and happy holiday.

Operator

This concludes today’s conference. Thank you for your participation and you may disconnect at this time.

Related:

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL 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 CONFERENCE CALLS. 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 CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

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!