Datascope Corporation Q2 2008 Earnings Call Transcript

Feb. 8.08 | About: Datascope Corp. (DSCP)

Datascope Corporation (DSCP) Q2 2008 Earnings Call February 8, 2008 12:00 PM ET

Executives

Larry Saper - Chairman, Chief Executive Officer

Hank Scaramelli - Chief Financial Officer

Dr. Nino Laudani - Chief Operating Officer

Analysts

Greg Brash - Sidoti & Company

Operator

Good day, ladies and gentlemen and welcome to the Datascope Corporation's Second Quarter Earnings Release Conference Call. Today’s conference is being recorded. At this time, all lines have been placed in a listen-only mode and the floor will be open for questions and comments following the presentation.

The comments that we will make this afternoon will include forward-looking statements that are intended to fall within the Safe Harbor provisions of the Securities Litigation Reform Act. Actual results may differ from these forward-looking statements due to various risks and uncertainties including those that are disclosed in our press releases and regular filings with the SEC.

This conference call is being webcast live over the Internet. A replay of the call will also be available on the Investors Relations page of our website for 10 days.

At this time, it is my pleasure to turn the floor over to Mr. Larry Saper, CEO and Chairman of the Board. Please go ahead sir.

Larry Saper - Chairman, Chief Executive Officer

Thank you. We are going to start. Thank you for all and welcome to the Datascope Conference Call. Today we're going to start with Mr. Hank Scaramelli, who is our Chief Financial Officer.

Hank Scaramelli - Chief Financial Officer

Okay. Thank you, Larry. I'm going to go through the press release, highlight some sales numbers and some of the earnings numbers. But let me start with just an overview.

As we reported in the press release, we had sales growth of 8%, which was a record of $103.4 million including favorable foreign exchange of $2.1 million.

The Cardiac Assist division had record sales of 49.3 million, 14% above last year. The sales growth from Cardiac Assist was driven by very strong demand in the international markets for a new CS300 pump. We also experienced double-digit growth in our Safeguard sales and we had an initial stocking order to our new distributor in Japan. So Cardiac Assist did very well for the quarter. We're very happy about it, especially the strong selling of the CS300 pump.

In the patient monitoring business, sales increased 2% including 700,000 of favorable foreign exchange and from our acquisition that we made with our team in June, we were able to generate $3 million in sales from that acquisition.

We were a little down on our Central Stations in bedside monitors. We showed a decrease of 5% and we were adversely affected by two things. Last year we had a strong second quarter, which included several large international orders that were not repeated this year. And I think everybody is aware that the tightening of the credit market is definitely having an effect on capital equipment sales and that resulted in several of our orders and installations pushed out into the fourth quarter or future quarters, I should say.

With that said, our backlog grew during the quarter. Our orders were about 10% up in the monitoring business. So we were pretty comfortable with that and hopefully as the credit crisis slows down and the hospital spends some more money, and we start installing our pumps we should be back on line to what our forecast was. So, we weren't that disappointing. We expected because that's the way the market is going.

Our InterVascular graft business and our InterVascular sales were very strong for the quarter. We had 28% growth, 22% excluding foreign exchange. And two things; peripheral stents accounted for 15% of the growth, and we've done very well with the peripheral stent.

And, the other good news was the vascular grafts increased 10% in the quarter. We were very strong in Europe and very strong in our distributor business. So, between Cardiac Assist and InterVascular, we were really happy about the quarter and again the situation in the credit market definitely had an impact on our patient monitoring business. But, all-in-all I think we felt very comfortable about our sales performance for the quarter.

Let me talk a little bit about our earnings during the second quarter. Our GAAP net earnings for the second quarter were 7.1 million, $0.46 per diluted share compared to $0.22 last year.

Last year's earnings included after tax special items of 3.4 million, primarily related to the phase out of the IPD business and selective head count reductions last year throughout Europe in patient monitoring.

On a non-GAAP basis, earnings per share in the second quarter were $0.46 versus $0.43 last year, an increase of 7%. One of the things that hurt the quarter was our increase in tax rate up to 35%. This impacted our earnings per share by $0.3 versus Q2 last year and when I go through my script, I'm going to talk a little bit about the tax number and what's happening when we were going in the future.

Our gross profit was strong. We are very happy about it. We came in at 56.4%. Last year we ran 55%. And two things really contributed. We had a definitely favorable mix of sales, more sales coming out of cardiac than the patient monitoring business, and they naturally make a higher gross margin. And, also in the monitoring business for one of the first times we've seen a turnaround. We picked up about 2.5% to 3% in gross margin percentage, and most of it is coming from cost reductions related to raw material programs, outsourcing the raw materials, and some manufacturing efficiencies.

So, from a gross margin standpoint, we were happy with monitoring from the sales standpoint. As I said the market and a couple of orders that were not repeated last year hurt us for the quarter. With that said, our orders were up 10%, and our backlog increased $700,000. So, we weren't really that concerned about the quarter in patient monitoring.

Let me switch to our GAAP earnings for the second quarter was 7.1 million, $0.46 per diluted share compared to $0.22 last year. Last year's earnings included after tax special items of 3.4 million related to the phase out of the IPD business and head count reductions.

On a non-GAAP basis, our earnings per share in the second quarter were $0.46 versus $0.43 last year, an increase of 7%. I mentioned the tax rate 35%, which decreased our earnings by $0.3 versus last year.

Again, our gross profit was 56.4% compared to 55% last year. We did have a favorable sales mix and we did generate higher margins in the patient monitoring business again due to outsourcing the raw materials and improved manufacturing efficiencies.

Our R&D expense was 9.3% of sales versus 8.9% last year. Included in R&D was 800,000 for Artema, which was the acquisition we made in June. And, we had 300,000 in start up costs related to regulatory in our new business venture in Japan offsetting some of those expenses we are restructuring savings of 800, 000, which partially offset the above spending. Our projection on R&D expense should be approximately let say a little below 10% for the second half of the year, but say (collectively) at 9.5% or 9.6% as we move forward.

SG&A in the quarter, we ran 36.9% of sales. Last year, we ran 36.6%. Included in our SG&A spending were the following: We had increased legal and other professional fees of 1.2 million. Most of that was related to the proxy contest that was held in December regarding the Board of Directors. Unfavorable foreign exchange mainly coming out of our InterVascular business cost us 1.1 million.

We have our team, whose expense is $700,000 hitting us in G&A. And remember again we made that acquisition on June 6th of last year. We did up severance cost of 500,000 in our cardiac assist business and we also invested million dollars related to marketing and selling programs for new products including CS100, which as you can tell between the fourth quarter and now we have done exceptionally well and it spread outside the US.

We have cost related to the recent launch of NetGuard on the peripheral stents, not are we are doing very well, but we have a stent registry not only for peripheral stents, but for a Silver grafts where we spend the money to get some more clinical data and we also had to start up in Japan.

One thing, I want to know during the quarter, we did realize the $1.7 million restructuring savings in SG&A. However, that's not the total that we had projected in the past, but keep in mind we are still incurring expenses related to the interventional products division since we continue to fill orders for vascular closure products and we continue to manufacture raw material or raw collagen I should for our vascular grafts in OEM customers.

The one thing, I will know which is kind of ironic, we seem to be at this 1.1 million to 1.3 million constant flow of sales between onsite and the VasoSeal product, they both run at very high margins and is very little cost. We are not supporting it at all from a sales standpoint and clinical standpoint and a marketing standpoint. We believe these users who just prefer our product and it's been a constant slightly over $1 million per quarter sales venture. So that despite shutting it down we are still taking orders.

On our tax space, which is a problem, we went up to 35% for the quarter. Last year, we were at 30.2% and the increase in the rate is three fold. We did lose 12/31/06 expiration of the tax benefit on U.S. export sales. We lost the expiration of the R&D tax credit and we had a shift of earnings to higher tax jurisdiction.

Our projection for our tax rate is about 34%, and we are skipping gears here and that's going to hinge on whether or not we reinstate our tax credit or get it reinstated. So we are at 35, if anybody is doing any modeling, I would say 34% is more likely of a number that we could achieve. We are doing some tax planning. We are looking at some transfer pricing, but I would say to be conservative drop it down 1% of 34%.

Regarding our balance sheet, our balance sheet is very clean. At the end of the quarter, we remained very strong with cash and marketable securities of 56 million. We had no debt. We have working capital of 149 million. We have a current ratio at 3.2, which is pretty strong.

Our accounts receivable increased 13 million from Q1, but that was basically driven by increase in sales of 16 million. Despite that our DSOs dropped from 82 days in the first quarter down to 80 days. And our inventories decreased 1.5 million from the first quarter. Our weeks of sales were 20 days, 20 weeks.

Our board of directors declared a regular cash dividend at $0.10 per share, which is payable February 8th to shareholders of record as of January 22nd 2008.

So I think all-in-all, if you look at our sales performance in cardiac, if you look at our sales performance in Intervascular. We did get hit a little bit with the credit crunch in patient monitoring. The tax number hurt us a little bit. But on a non-GAAP basis we're up 7%.

I'm not saying we can ever get back or we can't get back to the 30% tax rate. But that differential cost us another $0.03. We could have had our earnings up to 14%. And we know what we need to do going forward with the patient monitoring business. We're going to be looking at that in pretty much detail and see how we can boost some sales in the second half of the year.

So that kind of concludes my remarks from a financial standpoint. And at this time, I will pass it over to Larry to introduce Dr. Laudani.

Larry Saper - Chairman, Chief Executive Officer

Thanks. It's my pleasure to introduce Dr. Laudani, we call Nino. He came to us by way of Tyco Healthcare and collectively they account for about 18 years of his 20 somewhat years of experience.

Let me give you some of Dr. Laudani's history with Datascope. He joined the Cardiac Assist division in 2002. It's almost six years ago. And he joined as a Vice President for EMEA sales and that’s the geographical position that covers all of Europe, Eastern, Western Europe, Middle East and Africa. And the first thing he did is to reorganize the sales in clinical themes in order to emphasis the clinical value of the Cardiac Assist principle product, which is the kind of pulsation therapy express by the use of the intra-aortic balloon and the intra-aortic balloon pump.

That initiative resulted in renewed growth of the disposable portion of that market which the intra-aortic balloon. And he was able to do that in a mature market. That has given us a model for what we are now at work in implementing in the mature market of the US.

In June of 2004, he took on the sales and marketing portfolio for the InterVascular Company. There he combined the separate sales forces for InterVascular and the Cardiac Assist group to create the EMEA group and that resulted in a significant compounded sales and margin growth through fiscal 2007, over a three year period.

In February of 2007, he took on additional post as President of the InterVascular Company. And at that InterVascular he turned around a downward trend of sales and earnings by increasing market share reducing selling cost and improving the quality of production.

He's also been active in business development. He acquired the distribution rights and purchase option for the sore and paralytic carbon peripheral stent that Hank referred to in his remarks. And that stent is been contributing to EMEA sales and margin growth since mid fiscal 2007. And in October 2007 because of his accomplishments and his proven record as an Operating Executive Nino is promoted to Chief Operating Officer.

I now pass the mike over to Nino.

Dr. Nino Laudani - Chief Operating Officer

Thank you Larry for your introduction and good afternoon everyone. And thank you for joining us for this conference call. My name is Nino Laudani as Larry specified and I am the Chief Operating Officer.

In the next few minutes, I will give you a pre-forward view of our second quarter results. And I will then move into the divisional performances. Datascope has Hanks said grew by 8.2% versus last year thanks to a double-digit growth in our international business mainly.

In the second quarter of Datascope fiscal year 2008, Cardiac Assist grew over 14% versus last year mainly due to a strong performance in Japan, Latin America and Europe, Middle East and Africa.

Patient monitoring sales grew 2% versus last year thanks to the acquisition of Artema and a double-digit growth in Europe.

InterVascular division, sales grew more than 27% over the last year. Thanks to a strong performance in Europe and other international market. I should note that the recently launched peripheral stent line accounted for more than half of the second quarter of the IV divisional growth versus last year.

Let me now move to more specific details for each division. And, starting with Cardiac Assist, Cardiac Assist worldwide sales grew 14.5% versus last year. Pump sales reached a record double-digit growth in international market and a very promising single-digit growth in our domestic market.

Our new pump, the CS300, that's the pump with the fiberoptic technology, which was launched in March of last year already represents over 50% of our total pump sales. It needs to be noted that in developed markets such as North America and the EMEA, Europe, Middle East, and Africa, this already represent more than 80% of our total pump sales.

The new pump was a strong in all markets. Japan is exclusive, because we plan to launch the product in 6 months from now and we already have the NGW approval but our official launch will happen in 6 months from now.

The CS300 along with the Sensation fiberoptic balloon catheter is a real breakthrough in counterpulsation, and is giving more incentives to our customers to upgrade their existing pumps. This catheter is a 7-French diameter. It's the smallest in the market. The fiberoptic technology makes possible blood pressure monitoring by the balloon catheter itself eliminating the need for a separate catheter (powering) blood outside the body.

Although, balloon sales in Q2 continued to be flat in the US, we have seen in the first month of Q3 a very positive sales trend that we believe will continue in the next month. This reflects recent actions we have taken to achieve stronger sale management. We expect further gains in the future as we move to follow as Larry said the European model, also mentioned market and the US. But, we're launching counterpulsation so we speak and by doing so to increase the utilization of the therapy among international cardiologists and cardiac surgeons. Balloon sales in the rest of the world versus last year continuing the positive trend of the last quarter.

Now, I'll move to the EVH line. The EVH line endoscopic vein harvesting line sales were slightly down in North America, but growing in the rest of the world where the penetration of the endoscopy technique is very low, but gaining more and more interest among the surgical community.

We believe that the European market is a growth opportunity. We estimate the penetration of endoscopic vein harvesting is now less than 5% in Europe compared with 60% in the USA. However, we believe that endoscopy technique will gain more and more attention from doctors and patients using the superior clinical and cosmetic outcomes versus the open technique. We believe that the increasing demand coming from patients would drive the growth of this technique outside the US as it did happen for laparoscopy.

The EVH devices are specifically designed to support the endoscopic harvesting of vein or arteries, which would be then used by the cardiac surgeon to create the bypass between the aorta and the still open coronary artery. (Despite) the open surgical procedure has become less and less utilized in USA since it represents the risk for infection and creates serious discomfort to the patient. Most of the patients remember the vein harvesting as a more painful experience than the CABG itself. The CABG is the coronary artery bypass.

Now, I will move to Safeguard. Our sales have increased to 10% in the domestic market. This increase in the second quarter was due to the fact that the entire Cardiac Assist sales force was selling the product. We also have recently included our clinical support team in the efforts to promote clinical benefits of Safeguard. We expect because of that additional sales growth from the increase of support.

Internationally, we have achieved more than 10% growth and we expect this to continue with a greater pace in the future. And although the price is generally lower in the international market, we have seen already an increase of our ASPs in the last quarter versus previous year.

In North America, Cardiac Assist improved in Q1 versus Q1 in three of product categories. Balloons were flat in Q2, but trending up in the first two weeks of Q3. (Pump sales showed) single digit versus the last year, after negative sales in Q1. The EVH product line declined due to some quality issues, which we have been resolved. Safeguard grew double digit, thanks to conversion of major accounts and increase of all those from our sales and clinical teams.

In EMEA, Europe, Middle East, and Africa, sales grew double-digit, thanks to the great performance of our funds. Safeguard and EVH this confirms the validity of the sales model used in EMEA where the majority of our sales teams is in charge of selling products for more than one division.

Datascope has now successfully established a new legal and business entity in Japan for cardiac assist. This unique entity will be responsible for registering, importing, licensing, distribution, sale support, product service in post-market product surveillance of IABP products Datascope Japan K.K. is also expected to provide a foundation for introduction of broader range of Datascope products into the Japanese market, which represent a significant opportunity for future sales growth for Datascope in Japan. Of course, more detail can be found in our recent press release.

The change of our distributor and business model has generated additional margin coming from (inaudible) at the higher price. Sales in Asia Pacific just to conclude and Latin America were substantially above from last year. We do expect this trend to continue in the next quarter.

Now let's move to patient monitoring. Our global sales grew by 2% versus last year, mainly thanks to the additional business, which was generated by the recent acquisition of Artema and strong sales in Europe.

Sales in domestic markets were down because of previous year due to decrease and difficulties encountered by hospitals to get access to credits to finance the acquisition of new equipment, while our orders are increased versus last year, we observed delays and increased numbers about the cancellation. However, the EMA sales were up versus last year, thanks to some performance in our data markets and specifically in U.K.

The other international markets were down versus last year duet to an important order we received last year which of course will not be replicated this year. Bedside monitors were substantially flat versus last year. The increase of 2% was mainly to a positive exchange rate effect. However, the recently launched Spectrum OR has contributed to a double-digit crawl of the Spectrum product range.

Central monitoring systems are down versus last year due to the comparison with the very strong second quarter of last year in the above mentioned tightening of the credit market as we said before. The other products and accessory had a very positive double-digit growth mainly to (censored) accessory sales.

As announced in October, we have started a promotion of NetGuard, the new revolutionary clinical alert system. This system is specifically designed to protect and monitor patient by (Inaudible) of for cardiac arrest. Today in US, more than 40,000 patient while on monitor buy in hospitals due to sudden cardiac arrest or typical arrhythmia.

We have completed the training of our sales team and we have recently initiated active promotion of the product in several major institution. More than 100 customers has been contacted already. As announced in December, we have received the first order from one hospital in the South West region of U.S. We expect to open the first clinical reference site by the end of Q3 of our fiscal '08. Beta sites will be our reference for network and will be instrumental in promoting the system in U.S. and abroad.

In addition to our U.S. sales effort, we are also in contact with centers in Europe where we have strong interest, we have seen a strong interest for the NetGuard technology. Our intention is to create clinical reference site in Europe right after the successful installation of the first site in USA.

Artema sales in Q2 were in line with our expectations. And we are very confident to achieve our target for the first year of sales in Artema. Artema also represents the cost saving opportunity for us as Hank has mentioned before. The division continues to develop new products and is strongly committed to continue with important R&D investments.

Now let's move to the InterVascular. Our global sales grew by almost 28% versus last year or more 21% excluding the exchange rate. More than half of this growth is due to recently launched peripheral stent. However, very positive results came from also our drugs and patches line.

In a declining market we have been able to grow ourselves by almost 4%. This is due to the sales contribution of new international market in our increased market share. In addition to the recent launch of our new (EPTSC) line which compliments the existing polyester gut line and opens new business opportunities in Europe and several other international markets.

The sales to our US distributor decreased due to their plan to reduce inventory level. In contrast to that however, we have noted that sales from our distributors to market has increased doubled-digit in the recent quarters.

Sales in Japan were very positive, but were slightly impacted by the NHLW reimbursement price reduction program. We expect this to have a very minor marginal impact in our next quarter.

Graft sales in North Europe, UK, and Eastern Europe have achieved an outstanding double-digit growth thanks to the newly allocated resources in the EMEA model. We continue to search for commercial agreement and acquisition in Endograft, which we believe will represent the major opportunities probably within the next year.

The worldwide Endograft market forensic and abdominal is estimated to be close to $1 billion. And is one of the fastest growing segments of the vascular markets. Endograft products represented less invested alternative to open surgery to the treatment of aortic and asthmatic disease. And of course the incidence of aortic and asthmatic diseases is strongly related to age and is increasing with the increasing of the aging population.

With that I conclude my presentation and I will get back to Larry.

Larry Saper - Chairman, Chief Executive Officer

We'll now open the conference call up for questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). We'll go to Greg Brash with Sidoti & Company.

Greg Brash

Hi, Larry. Hi, Hank and Nino.

Larry Saper

Hi.

Greg Brash

A very strong growth in Cardiac Assist here, would you be willing to break down the growth rate in international versus US and also quantify the size of its stocking order?

Hank Scaramelli

I'll answer that Greg. The stock-in-order is less than 2% of the total corporation sales for the quarter. And the sales break down for Cardiac for the second quarter, were basically flat in the US, 32% up over last year in the international market.

Greg Brash

Okay. So the stock you know, 2% of the total…?

Hank Scaramelli

Less than 2%.

Greg Brash

So around 2 million?

Hank Scaramelli

No less than 2%.

Greg Brash

Okay.

Hank Scaramelli

Less than 2 million.

Greg Brash

Less than 2 million. Okay, and I was just curious have you been able to take advantage at all of one of your main competitor in that space being acquired, maybe some distraction there. And I know a new competitor has entered the space have seen any more of them?

Hank Scaramelli

You are talking about (Kelly Flex) and Arrow?

Greg Brash

Yes.

Hank Scaramelli

Okay. I could answer that but I think Nino might be the more appropriate person to answer it regarding what they're currently doing with their pumps and their transit contracts and the low volume on balloons and what they're doing in the marketplace.

Greg Brash

Okay.

Hank Scaramelli

In terms of pulling out equipment.

Dr. Nino Laudani

Well as I think we don't want to comment on what lets say our competitor is doing. What we have seen. Of course a change in the strategy and I don't think we can say what this exactly is. But we have seen some positive effect in ourselves but again it probably is too early to make the decisive conclusion on that.

Greg Brash

Okay. Switching gears to the patient monitoring and you talked about some deferred shipments to the tightening credit markets. Just curious if you would be willing to quantify what effect that had in this quarter and that happened across the board or is that you are mostly seeing that from the smaller hospitals?

Hank Scaramelli

It is mainly in the US and as you know most of our cold points are the 100 to 200 bed hospitals or the surgery centers. And again, I think you've got to look at it from this standpoint. Orders are up 10% which was strong. But we lost a big order at the end of the quarter that we are going to book in the third quarter for almost $1.5 million.

And we did have some installations pushed off because of the tightening of the credit. And we're planning on depending on what happens in the credit market, some of these hospitals are pushing off some expansion which effects our installations. If they delay, the opening of another wing in a hospital or whatever, its going to push not us but anybody else us who is out there a little bit.

It is not a huge factor. Our backlog grew almost $1 million in the quarter. So it hurt, but it wasn't a disaster. And certainly, the move we made with our team is key, we didn't have that $3 million opportunity in the anesthesia area with that gas module, and now we do. In the second half of the year, you're going to start seeing a benefit of our volume being combined with theirs and then you are going to see some accretive earnings second half of this year.

Greg Brash

And I guess further along with the monitoring and it is real nice to see some improvements in the gross margin there. Do you still think that there is room for further improvement as we make our way through the year?

Hank Scaramelli

Yes we do.

Greg Brash

You will be willing to quantify that?

Hank Scaramelli

No.

Greg Brash

A couple of hundred basis points possibly?

Hank Scaramelli

How many?

Greg Brash

100 or 200 basis points?

Hank Scaramelli

You are in the ballpark.

Greg Brash

Okay. And then just for modelling purposes, the SG&A, you had some legal expense there. Is it safe to assume on a total dollar amount if your revenues were roughly same in Q3 would you see the SG&A come down?

Hank Scaramelli

We are not going to have a proxy contest every year. I don't think, I hope not anyway. Right, so that's a logical (multiple speakers).

Greg Brash

That mainly why was it 1.2 million, Hank?

Hank Scaramelli

A 1.2 million really mostly the proxy contest we have. We should maybe send a thank you note to certain people, but we won't.

Dr. Nino Laudani

And we shouldn't have the repeat of the severance cost at this point. So, yes your answer is it should come down slightly.

Greg Brash

Okay, just one final question and I've back in the queue. On the NetGuard opportunity, just curious when we should expect to hear some feedback from the trial sites? And when you believe that you'll fully launch the product and when you start to see it in your revenue contribution?

Larry Saper

The answer to that is after the installation of the first beta site in the Q4.

Greg Brash

Okay.

Larry Saper

And once we see that we are happy with any and all issues that may come up once we have it in the beta site. And we're comfortable with that. Then you'll see some, we'll be able to do a lot more talking than we're doing now.

Greg Brash

Okay great. Thank you.

Larry Saper

Welcome.

Operator

(Operator Instructions). And having no further questions, this will conclude today's conference. We do thank you for your participation. You may disconnect at this time.

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!