MTS Systems Corporation Q2 2008 Earnings Call Transcript

Apr.24.08 | About: MTS Systems (MTSC)

MTS Systems Corporation (NASDAQ:MTSC)

Q2 2008 Earnings Call Transcript

April 24, 2008 10:00 am ET


Sue Knight – CFO and VP

Laura Hamilton – President and CEO


John FranzrebSidoti & Co.

Liam BurkeFerris, Baker Watts Inc.

Mike HamiltonRBC Capital Markets/Dain Rauscher


Good day and welcome to the MTS Systems second quarter conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sue Knight. Please go ahead.

Sue Knight

Thank you, Pauline. Good morning. Welcome to MTS Systems fiscal 2008 second-quarter investor teleconference. Joining me on the call today is Laura Hamilton, Chief Executive Officer. I want to remind you that statements made today which are not a historical fact should be considered forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Future results may differ materially from these statements, depending on risks, some of which are beyond management's control. A list of such risks can be found in the company's latest SEC filings 10-Q and 10-K. The company disclaims any obligation to revise forward-looking statements made today based on future events.

This presentation may also include reference to financial measures which are not calculated in accordance with generally accepted accounting principles or GAAP. These measures are used by management to compare the operating performance of the company over time. They should not be considered in isolation or as a substitute for GAAP measures. Laura will now update you on our second quarter result.

Laura Hamilton

Thank you, Sue. Good morning and thank you for joining us today. I'm going to take you through our headlines for the quarter. I'm going to talk to you about our orders performance, and I'm going to provide you with some insights as to what's going on behind those orders. And then I would like to take the opportunity on each quarter to touch on a global trend or something that's really in the news and help you translate that on the impact MTS – the impact on our strategy and our business. And then Sue is going to take you through the financial details.

Let's start with headlines, and we have six headlines today. Half of the headlines is 35% orders growth, and that's both businesses, that's all geographies and almost every market that we are in. Our backlog has increased 7% to $246 million, which is a second consecutive quarter record backlog for the company, so quite [ph] a headline.

Our second headline is our Sensors business. The Sensor segment remains strong. Really, I think is outstanding, 29% revenue growth, 41% growth in income from operations, and strong cash flow again this quarter. It's really is the result of strong product performance, application knowledge and geographic presence.

Number three, 37% test growth margin rate. This is up 1 point over the first quarter, which we are pleased with, although it's down versus last year. Sue is going to walk you through the details, but I want to highlight is significant progress has been made on the majority of the projects that we've been struggling with in the custom area. We do expect to get this behind us by the end of this year.

Number four,36% earnings per share growth. There is a number of factors that contribute to this, and again Sue will walk you through the detail, what I would like to highlight is that we are really pleased with our reiterating cash from Japan that we've got it in the right place where it can utilized, but in addition with strong tax planning, we've done this at an – economically and it's resulted in a very positive tax benefit.

Number five is the generation of $20 million of operating tax for the quarter, very strong balance sheet, $129 million in cash with very low debt-to-equity ratio.

And finally number six is our guidance, and the highlight on guidance is that Q2 revenue and earnings per share results were as anticipated, which means we are raising our revenue guidance with a range now from $455 million to $465 million, which is really the result of the impact of currency and volumes, and we are maintaining our earnings per share range of $2.43 to $2.53 with the expectations that will be in the upper half of the range.

When I think about these fixed highlights, I think it paints a somewhat different picture than you might be hearing from other companies today or this week. And I want to summarize what I think it really means. There is strong external indicator in both businesses as indicated by our orders. If you are seeing a mix, a shift in the test business, but that's normal for our business. And mix often shifts growth margin by 2 to 4 points over the course of the number of years in this business, and that's just something that we have to manage.

We have a very strong Sensors performance for the first half, and we are continually improving some of the fundamentals of the business. Moving cash economically to make it more accessible, and improving our tax profile. And if you think about it, tax is one of our more significant business expenses. We are in a strong cash position. We are taking advantage of share purchase opportunity in the market, but I need to highlight that in the second quarter, we did take a conservative position and chose not to participate in the market pending resolution of our export matter.

We are pleased that this behind us and we will be back in the market, and delivering value to shareholders. So, there is a lot of good news in the test – MTS picture, and that's getting us through the Test execution issues. So, we think that puts us in a good position. Strong orders performance clearly indicates our position in the marketplace. There is good demand for testing, and as we said, we will deliver the year and our business fundamentals are strong going forward.

This is a positive note. Last week I visited with a automotive OEM, this is one of the international players who is here at MTS to review us for as a supplier over two days. As I met with them in our closing meeting, one of their highlights was our new risk review process. And they said that that's probably not only an industry-best practice but it delivered great value to them as a customer. So, we are pleased about the progress that we are making in our custom business. Let's shift a minute to orders and backlog.

We had now had back to back strong order quarters. In Q1, we grew 13% in orders, and we now follow that by a 35% order growth, that's 28 points of organic growth, 7% from currency, and as I said, it resulted in a 7% increase in backlog which is a record high. Let's look at it by business.

First Test. 38% orders growth in Test, with orders that are $106 million, 32 points of that was organic, 6% from currency and it's the second quarter of over $100 million in orders. One way to understand this is to look at it geographically, and 11% increase in orders in the Americas. This is particularly significant as we are all concerned about the US economy, and this really reflects strong base business in the Americas. Also in that number is a $7 million ground vehicle order for a construction, mining equipment maker, and this is to equip a new test lab for vehicle structures and driveline, so exciting business for us in the Americas.

Geographic perspective, 27% increase in Europe, which is really driven by the materials business, ground vehicles durability and ground vehicles performance. And then a resounding 85% increase in Asia. This is both strong base business as well as two large orders, one $5 million order in Ground Vehicles related to railroad development, and an $18 million infrastructure order for earthquake simulation.

Another way to get perspective on our order is to look at this by market, and as we were thinking about it, it's much more relevant to do this on a half-year basis than do this on a quarter by quarter because as you know our quarters can be very lumpy. So, let's look at this as a six-month, year over year, and start with Ground Vehicles, we are seeing 21% growth in Ground Vehicles.

In the fiscal '07 first half of the year, we booked two rolling road orders for wind tunnel testing. Though the large orders that are sometimes hard to replace. So that 21% growth is on top of that. What it really represents is business for new labs, for service and upgrades, orders related to regular – regulatory compliance, this is in passenger car, construction vehicle and rail, its suppliers and OEM. So, it's essentially business across the entire Ground Vehicle spectrum. It also includes $7 million construction, mining OEM orders and the $5 million railroad order.

At Infrastructure, we see 45% orders growth in the infrastructure, which really is resulting from strong base materials business, and that includes after market and further. One of the things I've been talking about is our three growth areas and one of those for Test is lifecycle management and we say that that starts with after market and service, and that's what you can really see in this infrastructure growth.

Both years have large earthquake simulator business but in FY08 it is up really due to one particularly large order which was the $18 million order this quarter. Aero, which is our smallest business, which is usually about $40 million to $50 million revenue business for us, is actually down 20% year over year, which is really the result of the completion of some of the large OEM programs in fiscal '07. We are extremely pleased with our year-to-date orders result. But I still need to caution that test order patterns are highly variable from quarter to quarter.

So, let's talk for a minute about Sensors orders. 27% growth in the Sensors business, 15 points organic, 12 from currency. The geographic view has all geographic regions up, starting with North America, 18% growth this quarter really driven by industrial machine demand which is strong with the US dollar being weak, it's really helping exports for US industrial machine makers.

In addition in this number includes growth in the supply for worldwide gasoline distribution projects, which is all in our North American numbers, 18% growth in Europe, which is really attributable to no single application, no single industry and really represents the strength of the diversity of our business. And then we've got 67% growth in Asia. China and Japan are strong and industrial machine demand is strong in these regions, in particular plastics and rubber.

If I do the same thing and take a market view from a first half perspective, worldwide industrial machine demand remains strong, although our European customers are beginning to see price pressure from Asian competition and we'll need to keep our eye on them. So with the broad geographics footprint, we think that this good for our business overall.

Infrastructure type markets are up particularly we'll see that in terms of steel processing and oil and gas. So, in the Sensors business, we still use it as our early indicator for the warning signs in economic slowdown. We have not seen that yet, but we will continue to monitor order trend. We do need to keep our eye on what's happening in the US and the potential impact more broadly across the world. We don't have – we have not seen the impact yet, but that doesn't suggest that we won't be impacted in the future. But we do believe that our breadth, both our market breadth as well as our geographic breadth will help us wither any potential slowdown.

What I would like to do is shift just for a moment and talk a little bit about what's happening in the external world, and use this time each quarter to try to link something in the news may be a global trend, just a world event and help you understand how that impacts the business that our customers are in and ultimately how that might be impacting MTS.

Today, what I would like to about is energy and the environment. This transcends all of our markets. We feel the effects of energy and the environment in industrial sensors, mobile hydraulic sensors, in ground vehicles, aero space and infrastructure. You know that weekly there are headlines, whether it's the cost of oil or the US price of gasoline, this is in the news everyday. I'm by no means an expert on energy and the environment, but I can help identify some the implications to our customers and to our business.

Higher prices for energy are making it more cost effective to go back to old sources whether it's old oil reserves or natural gas. And the implication is that our customers need to drill deeper, and drilling deeper means the development of new material. It also means that you need to do testing under more extreme environmental condition because fundamentally making a mistake when you are that much further underground is much more expensive.

It also means that there is more pipe line development because we need to move these natural resources closer to where the demand is. Higher price also means that there's people working on alternative energy sources, and things that means for our customers and our business are next generation energy program, which again means materials development. It also triggers the need for alternatives like wind power. Interestingly enough there's opportunity for our Sensor's business, as wind power generators are becoming more intelligent machines and requiring precise measurement.

At the same time as these machines become more and more capable, the blades are getting longer, they are moving faster and you need to be confident that those – the blades are going to perform as expected because they are moving into more highly populated environment, and that effects are Testing business.

So this is not only impacting sources of energy, but there's also a clear focus on uses of energy and the impact on the environment. Just this week Boeing, Airbus, GE, and Rolls Royce committed to cooperate in the development of new technology with the eventual aim of achieving carbon-free travel. Whether we are talking about lighter airplanes, fuel-efficient engines, tightening emission standards or hybrid cars, it's every where. Energy and the environment are changing product design.

One example of this is the need for faster and more reliable automated machine. Machine builders need more accurate and reliable measurement capabilities, thus our Sensors business to really enhance the throughput of their machine, which reduces the energy consumed per unit produced. Another example of this is more efficient off-road vehicle.

One example, one of our customers is a large maker of diesel and natural gas construction and mining equipment. We work directly with their technical center, which is responsible for research and development of engine structure – vehicle structures, engines and driveline as well as prototype engine controls and materials such as ceramics and carbon fibres.

This technical center is increasingly responsible for emissions research. And they say new EPA Tier 4 emission standards. Either going to be phased [ph] over several years, but the ultimate goal of the Tier 4 standard to reduce emissions by up to 90% over today's output. This OEM has been redesigning their products. They are redesigning cabs, cooling systems, and vehicle (inaudible) surrounding the engine that house the emission components.

This, the OEM did not have existing in-house test capability. They could not meet aggressive production timelines and they would say it's costly fine for non-compliance with the new standard. MTS leveraged our technology and real life simulation knowledge to equip an entirely new test lab that would enhance this OEM's test capability. It would reduce the testing bottleneck of the new design while enabling them to meet production schedule.

Energy and the environment impact our core business everyday. Our strategy is to focus on our core, and through our applications expertise quickly adapt to changes affecting our customers. Energy and the effects on our environment are pressing issues for our customers. We are well positioned today and in the future to deliver value to these customers. We are building confidence through precise measurement and real life simulation in product performance whether that's a windmill, a pipe line, a back hole or an airplane, and this is the way energy is impacting our business today.

Now, I'm going to ask Sue to update you on the detailed financial results for the quarter.

Sue Knight

Thank you Laura. Laura summarized the orders and backlog picture for you, so I'll begin with revenue. Revenue grew 13% in the quarter to $115 million, which was driven by an increase in both businesses. The 13% included 5 points of organic growth and 8 points due to favorable currency as the US dollar continue to weaken relative to both the Euro and the Yen.

Test revenue was $90 million, 9% higher than last year. Both North America and Asia increased year over year, and Europe was down based on the timing of projects and backlog. From a market perspective Ground Vehicles and Infrastructure increased and Aero was less than the prior year similar to the orders trend.

Sensors revenue was $24 million or 29% higher than second quarter 2007. Favorable currency was the contributor and the organic growth was 17%. Sensors had double digit growth in all three geographies with particular strength in Europe and Asia driven by industrial market demand.

Moving on to growth margins, margin dollars increased 3% to $47 million on 13% revenue growth. At the rates of revenue growth margin was 41%, a decline of 4 points compared to an unusually high margin rate last year of 45%. Last year's result concluded very favorable product mix in Test, which resulted in a tough year over year comparison.

Test growth margin declined by $2 million or 6% on 9% revenue growth. The margin rate declined approximately 6 points, 2 points due to higher custom project cost, 2 points from mix, and 2 points due to other costs including currency impact. While custom project cost remain high, we made significant progress during the quarter, meeting the technical performance specifications in completing the onsite system testing to achieve customer acceptance on these critical projects in the second half of the year.

In summary, Test growth margin declined from 43% to 37%, but improved by 1 point compared to the first quarter. Talking about growth margins for Sensors, that segment delivered 32% or $3 million increase in growth margin dollars on 29% revenue growth. The margin rate grew by more than 1 point to 56% based on higher factory utilization and benefits from cost productivity initiative.

Summarizing the EBIT results, the growth margin increase of $1 million was more than offset by $3 million of additional operating expenses. Approximately half of the increase resulted from planned investments and the remainder included $800,000 expense to settle the export [ph] matter, which was communicated to all share holders in a letter from Laura in March.

The cost containment reductions relative to plan that were implemented in Test in the first quarter that partially offset the Test margin rate decline did result in lower second quarter cost compared to our plan. In addition, the Test result included $1.5 million of other operating income due to favorable currency transacting gain.

The net effect of the growth margin contribution in operating expense in the quarter reduced EBIT by $1 million or 6%. As a percent of revenue, EBIT declined 2.5 points to 13% with the decline in Test more than offsetting the increase in Sensors.

Moving on to tax, tax expense for the quarter was $2 million or 13% compared to $6 million or 37% last year. The rate reduction was the result of both a non-recurring tax benefit and the recurring benefit which I'll describe in more detail. We realize the $3.7 million tax credit from our strategy to optimize global liquidity by cost effectively repatriating cash from Japan.

We returned $20 million of cash to the US utilizing foreign tax credit to do so. The year-over- year tax rate declined by 5 points due to this initiative. There will also be a recurring annual tax benefit of 1 point associated with the change in our permanent reinvestment of earning status in Japan.

In addition, the recurring annual tax rate has favorably impacted this year and in future years compared to the statutory rate because of actions that were taken in 2007. The combination of the legislative tax rate reduction in Germany from 38% to 30%, the establishment of wholly formed/owned MTS entity in China and the realization of additional R&D tax credits associated with the product development work that's done in our Test custom projects will reduce the tax rate by about 2 points, again compared to the statutory rate.

On a full year basis, we expect the fiscal 2008 tax rate to be in the 29% to 30% range compared to 28% in 2007. In summary, we are making great progress on our initiative to reduce our effective tax rate.

Moving on to earnings per share, we saw an increase of 36% from $0.56 to $0.76 in the current quarter. The impact of the decline in EBIT was offset by $0.21 from tax benefit and $0.3 due to a lower average share count. The last topic for today is cash.

We ended the quarter with $129 million in cash, an increase of $16 million. Operating cash flow as Laura mentioned was $20 million and capital expenditures were $2.5 million. From a geographic perspective, in the prior quarter only 21% of the cash or $24 million was in the US. The Japan repatriation project and operating cash flow results in North America has increased the domestic cash balance to $39 million or 30% of the total. This provides us with additional domestic liquidity to fund operating requirements, dividends and share purchases.

Considering the recent general public market experience with asset impairment, I would like to share with you our cash investment strategy as communicated in our 10-K in priority order. First and foremost is preservation of capital, second is liquidity and third is return. Based on the recent market risk associated with auction rate securities and the priority we have to preserve our capital, we've liquidated our short-term investments in the first quarter and have no option rate securities in our portfolio. Our global cash is conservatively invested in banc deposits, treasury and money market fund.

That's the end of our prepared comments. I would like to turn the meeting back over to Pauline for your questions.

Question-and-Answer Session


(Operator instructions) And our first question will come from John Franzreb.

John Franzreb – Sidoti & Co.

Good morning Sue and Laura.

Laura Hamilton

Hai, John

Sue Knight

Good morning.

John Franzreb – Sidoti & Co.

I'd want to talk a little bit about the cross issues you're having in Test. It started in the summer of 2007, and in your prepared remarks you said, it should be done by the fourth quarter of this fiscal year. Could you give us a little color, why it's taking so long, I thought you did corrective measures, prudent prices that wouldn't be an issue any more? What's the problem here? Why it's taking so long?

Laura Hamilton

Okay. This is Laura. Okay, you asked first going back. Yes, originally we did say, we thought it was behind us. The reason it takes long to get through these projects is essentially that we are doing product development on customer order. And this was – what we said was that we have a larger number of – actual developments in our mix in our custom mix that started per se last summer. And so, we've got a handful of projects that have more development and it's really that (inaudible) in nature of development, and so we have a design and we start executing against that design and then we learnt something about that design that tells us that it's not optimized or it's not fully capable of meeting the acceptance criteria that we've agreed to in the order. Now, normally these cycles happen in your R&D line, and you build that in sometimes to the schedule in a customer order. On these orders we didn't enough time or enough cost and to having multiple iterations to get these designs right. So, last quarter we said, rather than tell you the day that'll be done, we are going to contain the cost – other cost, we are going to do cost cutting our containment measure and we are going to use all of our levers to ensure we still deliver the year. At this point when we look at this portfolio, I think what Sue was saying is, we've made progress on the majority of these projects, we now have confidence that we will gain acceptance for these projects in the second half. And so, we think then this is contains to (inaudible) and the quality of our backlog at this point, there is less development in our backlog going forward.

John Franzreb – Sidoti & Co.

Does that suggest Laura that your margin returns in Test will return to historical averages by I wouldn't say exiting fiscal '08?

Laura Hamilton

I think we should be back in the range with the caveat [ph] that mix always a big component, but I think we are going to stop talking about custom project overruns after release.

John Franzreb – Sidoti & Co.

Okay. Second question, the Sensor business is doing extremely well. Can you talk a little bit about the value proposition of MTS Sensors or why you are doing so extremely well relative to other Sensor groups?

Laura Hamilton

Yes, that's a great question. In the industrial business, our value proposition is around the precise measurement, so it's the accuracy of the measurement, and I was referring to that as you think about automated machines going faster, and if you think about productivity, you think about up times, and you think about safety then the precision of that measurement as well as the ruggedness of the Sensor is really the value proposition. The other part which is less about the product and more about total value is our applications knowledge mix it so that we are really good at modifying the Sensor are rapidly prototyping it to get it into your next product development or the customers next product development. And the ability to do that is – when I mentioned Europe, it's not one market, it's not one segment, it's not one application, and so our ability to cover this breadth with this value proposition is what's helping the Sensor business.

John Franzreb – Sidoti & Co.

Great. And one last question, can you talk a little bit about your R&D efforts? You talked in the past about introducing more standard products especially through Test that's going on in China. Can you talk about gains you've made on that front and when we would see product introductions along those lines?

Laura Hamilton

Sure. Actually this year two of our product introductions that are definitely helping, one of them is Landmark which is updated and margilar [ph] load frame product line. So, I call it a new product although we've been doing load frames for 40 years, and the market response is actually very positive. By being margilar [ph], we can deliver actually an incredibly high number of possible configuration which means it's not custom but it meets the customers requirement, and we can do that faster than we could do before so our deliveries are much more competitive and we are doing this at very competitive prices. And so Landmark combined with, we've actually just (inaudible) and updated controller. So, while these are our base products, they're also new products this year and that's helping a lot of this base business growth that I described in North America, Europe and Asia.

John Franzreb – Sidoti & Co.

Just a follow on. Where's the (inaudible) to test margins for these products introductions?

Laura Hamilton

In the overall mix when we talk about mix, doing things these programs are the kinds of programs that are going to help us offset price pressure without giving up margin.

John Franzreb – Sidoti & Co.

Okay. Great. Thank you very much, Laura.

Laura Hamilton



Our next question will come from Liam Burke. Please go ahead.

Liam Burke – Ferris, Baker Watts Inc.

Good morning, Laura; good morning, Sue.

Laura Hamilton

Good morning, Liam.

Liam Burke – Ferris, Baker Watts Inc.

I'm on Sensors side, you would always think that unit pricing would decline, however with your margins up significantly year over year, are you seeing any pricing pressure in those areas?

Laura Hamilton

We are very watchful of price pressure, and I think the way I would describe it is very spot [ph] right now. For example, I mentioned that European industrial machine builders are feeling pressure from Asian competitors. So, that's the beginning of – coming back and talking about Sensors pricing. One of the things that's helping us maintain pricing still today is our lead over the competition. So, we are still watching to see when the competition comes out with their next generation and whether or not it closes some of the gap. But at the same time that's our – we are continuously working how to keep staying ahead. So, I would say it's Far East [ph] and we continue to watch it and we are pleased that we are able to maintain pricing right now.

Liam Burke – Ferris, Baker Watts Inc.

Alright, and I know this not something you advertise, but have you been approached to develop any new applications in the Sensor area?

Laura Hamilton

Our focus on Sensors right now, we've talked a lot about mobile hydraulics.

Liam Burke – Ferris, Baker Watts Inc.


Laura Hamilton

So, we are – it's more internal – always our new applications in our base industrial business both we research those out and somebody may come and ask us, but on a larger basis that's not in the base industrial, we tend to canvas the marketplace and challenge ourselves to see if we can meet the performance set in a segment, and then we go after that like mobile hydraulics. So, we try to keep those early (inaudible) going to make sure we can generate future growth.

Liam Burke – Ferris, Baker Watts Inc.

Great. Thank you.


Our next question will come from Mike Hamilton, please go ahead.

Mike Hamilton – RBC Capital Markets/Dain Rauscher

Good morning. Back on the custom arena and the margin issues, can you quantify what the remaining backlog to walk through the system is that's tied to projects where you are dealing was incremental engineering and cost?

Laura Hamilton

I know that I – going to answer your question, let me try this answer. We've always characterized this as 10 or less and we're still talking about those same ten projects, they are 10 or less. And so, we are still saying this handful of projects and what we are trying to do, and this is an analogy, it's the rat through the snake and you got to get all the way through, and so it's really getting these projects all the way to acceptance. We've got the majority are at the stage where we are just pre-acceptance. We've got a few that are in the final stages of development. So, characterizes where we are at and why we believe that we are going to get this one behind us by end of '08.

Mike Hamilton – RBC Capital Markets/Dain Rauscher

As you look at it, given view that basically points of (inaudible) close margin pressures associated with it, some assuming that you are probably running close margin to Test levels of what normal would be in those projects. Is that a realistic view?

Laura Hamilton

We don't really talk about growth margin for each project, it really varies…

Mike Hamilton – RBC Capital Markets/Dain Rauscher

What I mean – what's in the mix overall, that that's the kind of impact we're talking about within these?

Laura Hamilton

I'm not sure, I'm totally understanding. Can you..?

Mike Hamilton – RBC Capital Markets/Dain Rauscher

Whether if you are looking at 38% anticipated gross margin going into the projects but you are running about half that rate in that basket?

Laura Hamilton

Yes, I would conclude that. I think it's very specific to the project and the situation that we say. So, I don't think that would be a fair representation.

Mike Hamilton – RBC Capital Markets/Dain Rauscher

Okay, thanks. On you EPS guidance, I assume that share repurchase is not a factor in current year's outlook. In other words any future repurchase is not in guidance?

Laura Hamilton

We – guess what I say is I mean we had – we also do share purchase, so we (inaudible) that we are continuously in the market.

Mike Hamilton – RBC Capital Markets/Dain Rauscher

Okay. So, in other words it is a portion in your guidance?

Laura Hamilton


Mike Hamilton – RBC Capital Markets/Dain Rauscher

Okay. Thanks. That's it for me.


It appears that we have no further questions, I'll turn it back over to you if you have any closing remarks.

Laura Hamilton

We're good. Thank you for participating and we look forward to our next quarter's call. Thank you.


This concludes today's conference call, you may disconnect your lines at any 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 All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: Thank you!