Executives
Joel F. Gemunder - President and CEO
David W. Froesel, Jr. - Sr. VP and CFO
Cheryl D. Hodges - Sr. VP and Secretary
Analysts
Melissa Jaffe - Merrill Lynch
Randy Stanicky - Goldman Sachs
Charles Rhyee - Oppenheimer & Co.
Eric Gommell - Stifel Nicolaus
Robert Willoughby - Banc of America Securities
Lisa Gill - JPMorgan
Omnicare Inc. (OCR) Q1 FY08 Earnings Call May 8, 2008 11:00 AM ET
Operator
Good morning. My name is Jovi, and I will be your conference operator today. At this time, I would like to welcome everyone to the first quarter 2008 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instruction].
Thank you. Ms. Hodges, you may begin your conference.
Cheryl D. Hodges - Senior Vice President and Secretary
Thanks, Jovi. Good morning, everyone, and welcome to Omnicare's first quarter 2008 earnings conference call. Here today from Omnicare are Joel Gemunder, President and CEO; Dave Froesel, Senior Vice President and Chief Financial Officer; and myself, Cheryl Hodges, Senior Vice President, Investor Relations.
Before we begin, let me remind you that as we conduct this call various remarks that we make concerning our expectations, predictions, plans and prospects constitute forward-looking statements, as a result of the variety of factors including those identified in this morning's news release and in our various filings with the SEC. You are also cautioned that any forward-looking statements reflect management's current views only and that the company undertakes no obligation to revise or update such statements or to make additional forward-looking statements in the future.
For simplicity's sake and to focus on what we believe are the best indicators of our operating performance, we will discuss our results today excluding special items and reimbursable out-of-pocket expenses in all periods. Reconciliation of this non-GAAP information has been attached to our press release and is also available on our website under supplemental financial information on the investor's page.
With that, let me call… turn the call over to Joel.
Joel F. Gemunder - President and Chief Executive Officer
Thank you, Cheryl, and good morning, everyone. Thanks for joining us today to discuss our results for the first quarter of 2008. I must say that we're gratified to open our call today by noting that our adjusted earnings for the quarter beat expectations, both the Street consensus as well as our own expectations by $0.05 a share.
For a little over two years now, we have been operating in an industry environment that has been affected by two significant and ongoing factors, Medicare Part D and the massive shift from branded to generic drugs.
As we have mentioned in the past, these factors have directly and indirectly affected many aspects of our business. While this has been a very challenging two years, and many of these issues remain, we nevertheless believe our results reflect the continuation of relative stability in our operations that we discussed last quarter, the continued execution of strategies designed to adjust our business to the new difficult operating environment so as to achieve stability and growth, as well as strong seasonal trends in our market.
We are going to focus on our remarks today, largely on comparisons between the first quarter of 2008 and the fourth quarter of 2007. We believe these sequential results provide the most meaningful gauge of our recent performance. And as the quarter came together, the fact as we discussed with you that would bring our expectation to adjusted earnings to the mid-30s, say $0.35 in the first quarter from where we were in the fourth quarter, all played out about as we expected.
These factors primarily included the absence of rebates on Risperdal and other drugs where for various reasons, the volumes attain impacted our purchasing costs. MACs on certain generics that were incremental to the fourth quarter and though the first quarter did include an unanticipated MAC on our of our larger Federal employee plans.
Third, lower revenues reported from copays and rechecks, as well as from customer-related litigation matter, in accordance with our new operating policies put in place late in the fourth quarter, and fortunately a higher effective tax rate.
That said, we also saw in the first quarter robust price inflation on branded drugs, a strong flu season which tends to drive higher acuity and growth in our specialty pharmacy services and CRO businesses.
These factors contributed to overall sales of $1.56 billion for the quarter that were above Street consensus expectations, as well as our own, and despite lower net beds served sequentially, we're up modestly above the fourth quarter.
As we indicated in our press release at the end of March 2008, we served long-term care facilities as well as chronic care and other settings, comprising 1,446,000 beds, including about 69,000 patients served by patient assistance programs and our specialty pharmacy business that we had not been including previously. You can also see by the comparable December 31, 2007 numbers provided that the number of specialty pharmacy patients served grew very nicely on a sequentially basis.
Let me spend a minute putting these specialty pharmacy patients in the context. As you know, our bed count includes patients in a variety of care settings, nursing homes, hospitals, hospice and other settings. The patient assistance program services… the patient assistance program services that we provide on behalf of 15 major pharmaceutical manufacturers made prescription drugs available at no cost to patients who could not otherwise afford them. We help with the dispensing and administration, but we obviously don't own the drugs. Because we are paid in this area through dispense and then other service fees and not product costs, revenues are, of course, lower than our average script. But, this program compares very favorably in terms of operating profit per script to our long-term care business.
In addition, this patient assistance business has been experiencing double-digit revenue growth since Medicare Part D rules were clarified about it in 2006. And from a strategic standpoint, this program has helped to broaden and deepen our relationships with these pharmaceutical and biotech companies which is very beneficial to the other parts of our business and serves, I believe, as a great example of leveraging our core business with rapidly growing higher margin businesses.
We thought especially pharmacy patients more than met the criteria we use for bed count and should be included in our overall bed tally and now that we are at the beginning of reporting periods for the new year, we thought it was the time to begin to introduce these data.
With respect to our institutional pharmacy business, net beds were down about 1% from the December quarter end, but this included approximately 8,000 beds or more than half of the shortfall that relate to issues outside our control, such as facility closures or sales or where we voluntarily withdrew from business for pricing or payment issues. That said, we continue to focus on initiatives that we believe would drive net bed growths.
First, while our total gross bed losses were up a bit sequentially, owing to a large -- owing in large measure to the factors I just spoke about, our customer retention team had a very strong first quarter. The number of beds saves including renewals of problematic accounts by the team for the first quarter of 2008 was approximately 13,700 beds, representing approximately 71 million in annualized revenue or an improvement in our annual retention rate of more than one percentage point. This is also roughly equivalent to the number of beds renewed or saved by this group in all of 2007. So the activity and the consistently positive results are ramping up substantially here and this we believe should have a salutary impact on the customer retention this year.
Beds brought into service during the quarter were lower than the fourth quarter of 2007, as was the number of beds added through acquisition. And as we have discussed before, the acquisition business can be lumpy on a quarter-to-quarter basis but overall our pipeline continues to look very healthy.
Importantly, as we enter the second quarter, we have a backlog of 24,700 beds already signed but not yet placed into service, and these along with new contract signings represent our current pipeline of upcoming bed adds over the next several quarters.
New contracts signings in our national accounts area lag the prior quarter as this group tends to sign less frequent but larger pieces of business, so it too can be a little bit of a lumpy business. But since the end of the quarter, we have already entered into agreements with two mid-sized assisted living chains.
New contract signings by our operating personnel were essentially even with the prior quarter, but new contracts signings by our national sales force in the first quarter reached their highest quarterly levels since the first quarter of 2006.
Signings for this group in the first quarter were up 110% versus the same quarter last year and up 47% sequentially. This strong growth reflects the increase in productivity and effectiveness of this team, a positive sign that changes in sales management, the increased quality of the sales force and enhanced training are continuing to gain traction.
So, looking at the cost side now, we're continuing to focus on our productivity initiatives, as well as increasing our purchasing savings on both drug and non-drug expenditures. One area that will ultimately help bring cost down is the outsourcing of our repackaging activities to Cardinal Health.
We continue to make progress here in the first quarter of 2008. And today, Cardinal is going about 60% of the planned volume of unit dose box production, representing approximately 40 of our largest volume unit dose products, up from roughly 40% in December. And we are adding one additional machine to expand capacity at Cardinal, and Cardinal is also just this month started operating a bingo card repackaging line drug that supplements the volumes at Vangard, our existing centralized repackaging facility in Kentucky initially adding six products.
As capacity continues to ramp up in Cardinal, repackaging activities will begin to transition back out of our field pharmacies to Cardinal, so we do expect to gradually see lower labor costs and higher productivity in our pharmacies as this transition takes place.
Now as I mentioned earlier, we've broadened our growth platform by entering adjacent markets. By way of update, our hospice pharmacy business saw a solid growth in census sequentially, but a continuation of competitive pricing on patient mix trends resulted in sales and operating profit that were lower on a sequential basis.
Actions have already been taken to address both the top line and cost issues that we believe will ameliorate or cancel these negative factors and improve performances as the year progresses. Our specialty pharmacy business on the other hand saw robust sales and operating profit growth on a sequentially, as well as a year-over-year basis, reflecting excellent performance across the Board, including the unit growth noted earlier in this patient assistance program.
Looking also at our CRO business, overall our revenues, excluding the impact of out-of-pocket expenses were up both sequentially as well as on a year-over-year basis. Despite the fact that some projects were delayed, in part, associated with certain sponsors relying on the credit markets to fund their R&D projects [ph]. Offsetting the impact of this issue was very strong sequential growth in Clinimetrics. Our CRO business focus largely on the biotech sector.
Managing expenses in this highly variable business is, of course, always a challenge, nonetheless was difficult… with disciplined cost management, we see progressive revenue growth being more highly leveraged as projects [ph] emerge from on hold status and as new projects start to kick in. Moreover, we also see potential new opportunities for our CRO to work with generic drug manufacturers and seeking ANDA approvals. Accordingly, we are expanding our product offerings in the Phase I arena. So we see this business improving as the year progresses.
Now before turning the call over to Dave, I would like to take a moment to talk about the $100 million share repurchase program the Board approved on March 27th. The implementation of this program reflects our view of Omnicare's valuation versus its prospects and demonstrates our ongoing commitment to increasing shareholder value.
Owning to the fact that we were on the threshold of a blackout period, leading up to our quarterly earnings when we announced this program, we have not yet been able to repurchase any shares, but we expect to be able to implement this program in the second quarter depending on market conditions and other factors.
So, speaking of strong operating cash flow, I think I'll now turn it over to Dave to discuss his favorite subject.
David W. Froesel, Jr. - Senior Vice President and Chief Financial Officer
Thanks, Joel. As Joel mentioned, we continue to operate in a dynamic environment and even though we have seen some volatility in our earnings, we continue to generate strong operating cash flow. In the first quarter of 2008, we generated $142 million in operating cash flow, making this the third strongest quarter in our history. In view of this performance, we are increasing our original 2008 full year cash flow guidance of $300 million to $375 million upwards to $350 million to $400 million.
Given that our total adjusted EBIDTA for the quarter of $144 million was lower than both the prior year and sequential quarter. Excluding the fourth quarter incremental provision for doubtful accounts, clearly our cash collections and reduced working capital needs drove our cash flow performance for the quarter.
First, our net receivables declined by approximately $19 million sequentially as of March 31, 2008. Our DSOs at the end of the March are at 81 days, down 3 days sequentially, reflecting the decline in net receivables in the quarter, as well as the impact of the incremental provision for doubtful accounts taken in the fourth quarter of 2007.
You will recall that our account receivable increased significantly with the transition to Medicare Part D and the resulting shift in our payor mix. We are continuing our collection average across all payor types. At the end of March 2008, we had copays from Part D plans outstanding of approximately $43 million, of which approximately $19 million related to the year 2006.
We and our entire industry are continuing to seek solutions, particularly on the copay issues through CMS and the PDPs to resolve these issues on a retrospective and prospective basis. We are, in fact, pursuing arbitration and other legal actions in order to resolve some of these issues, and as Joel will discuss in a moment, we are making some progress here.
Having just come off a quarter where our bad debt expense was increased by $94 million above or more normal level of about $30 million per quarter, I will note that in the first quarter of 2008 our bad debt expense remained at about 1.9% to 2% of sales. We do however believe that through our expanded collection efforts and progress on the co-pay and reject issues, this expense can be brought down as the year progresses.
With respect to inventories in the first quarter of 2008, our overall inventories came down $39 million or about 9%. This brought inventory days on hand in our pharmacy business in the first quarter of 2008 down by one day to approximately 34 days. This was largely due to improved management of our inventory levels and continued penetration of generic drugs. With respect to usage of cash we funded approximately $36 million in cash outlays for acquisitions, which includes deferred payments from prior year acquisitions.
We also undertook capital expenditures for the first quarter 2008 totaling approximately $12 million, consistent with the fourth quarter. We remain on track with our targeted $60 million in CapEx for the year, of which $40 million relates to the Omnicare full potential plan and $20 million for maintenance CapEx.
We also made our balance sheet a priority and continued to take actions to strengthen it in the first quarter of 2008. We paid down $50 million in debt during the first quarter and ended the quarter with about $316 million in cash on the balance sheet.
As a result, our total debt to capitalization stands at approximately 45.5%, representing a 70-basis point improvement over the fourth quarter of 2007 and a 230 basis point improvement since March 2007. Moreover, on a net debt basis, we are at about 42.5%.
Lastly, as previously disclosed in the fourth quarter of 2007, we had a onetime favorable reduction in income tax expense of almost $3 million or about $2.05 per share and our effective tax rate for the first quarter of 2008 increased to 39.9%. We expect the tax rate will fluctuate from quarter-to-quarter during 2008, primarily associated with tax planning initiatives.
To summarize, we continue to maintain our financial strength and flexibility in the first quarter of the year, despite the ongoing dynamics at our industry and in fact made progress, as a company on key metrics important to a sound foundation for future growth.
With that, I will turn it over to Cheryl .
Cheryl D. Hodges - Senior Vice President and Secretary
Thanks Dave. As we look at our performance in the first quarter in our pharmacy services segment compared to the fourth quarter, sales were approximately $1.51 billion, up about $2 million and representing the consecutive quarter of sequential sales growth in this segment. And while this sequential sales growth was modest, as Joel mentioned, our overall level of sales exceeded the Street consensus and our own internal forecast. Sequentially, the factors holding back sales, were primarily the continuing impact of generics, a lower net number of beds served as well a mix shift toward assisted-living. Little revenues reported from co-pays and rejects as well as from the customer related matters in litigation and reduced reimbursement from either MAC or drugs with utilization issues such as Procrit and Aranesp and competitive pricing issues.
But more than offsetting these factors were price inflation related to brand drugs, a strong flu season and higher overall drug utilization, as well as growth in our specialty pharmacy business. Our payor mix for the first quarter was consistent with the fourth quarter. Part D at 41%, Medicaid at 10%, private pay, third-party and facilities at 43% and 6% other.
At March 31st, 2008, we served long-term care facilities as well as the chronic care and other settings comprising 1,446,000 beds, which now includes the 69,000 patients served in our specialty pharmacy business, where we saw an increase of 12,000 patients on a sequential basis. And as Joel noted, of the lower net number of beds served sequentially in the institutional pharmacy business, 8,000 beds or more than 50% of this net decline was represented by the voluntary withdrawal from business and facility sales or closure.
Our revenues per bed for the first quarter were $1,043 now including the specialty pharmacy patients, which was up slightly from the December quarter on an apples-to-apples basis. The specialty pharmacy revenues have always been included in our sales, so naturally this revenue number would be lower than what we had previously reported.
In our institutional pharmacy business, we saw revenues per bed actually increase about 1% sequentially despite the headwinds to our sales such as generics and the other factors I just mentioned. This reflects not only drug price inflation, but also increases in utilization related to higher acuity generally as well as the incremental prescriptions for drug such as tamiflu and certain antibiotics used in the treatment of flu and pneumonia.
Just to comment on EPO related drugs, Procrit and Aranesp that we have been discussing over the past year. Sales of these drugs dropped about $2 million sequentially as expected.
On a year-over-year basis, the decline in both scripts and dosage per script has amounted to a reduction in sales of about $40 million. But we continue to believe this trend is now leveling off.
IV sales for the first quarter totaled $66.4 million, essentially even with the fourth quarter of 2007, this reflects largely the trend in beds offset by overall increases in acuity generally as well as the strong flu season.
Adjusted pharmacy EBITDA was $158.1 million for the first quarter of 2008, which aside from the incremental provision for doubtful accounts taken in the fourth quarter, was lower by about 7% sequentially owing largely to the factors affecting sales I mentioned earlier, along with higher professional fees, offset in part by drug price inflation, increased use of generics and other cost savings.
Our CRO business, excluding reimbursable out-of-pocket expenses, had revenue for the first quarter of $41.8 million, up about 3% sequentially. Adjusted operating profits for the CRO business was $3.4 million in the first quarter, down marginally from the fourth quarter, but up 35% versus the first quarter of 2007. Adjusted EBITDA of $3.9 million for the quarter followed a similar pattern and represented 9% of adjusted revenues.
Lastly, at March 31, 2008, our book-to-bill ratio stood at 1.421 and our backlog stood at $309 million, a slight decrease sequentially but up form about $300 million at the end of March 2007.
Now I would like to turn the call back over to Joel for his concluding remarks.
Joel F. Gemunder - President and Chief Executive Officer
Thank you Dave, and thank you Cheryl. As I said at the outset, the dynamics we have seen over the past 24 months, mainly Medicare Part D, and its ongoing development, as well as the shift in the pharmaceutical market for generics, continue to be factors in our business in 2008.
So, I'd like to just make a few comments relating to each. First, with respect to Part D, it represents approximately 41% of our business today. Given this large contribution to our revenues, we and the industry overall must dedicate significant resources in the form of time, effort and capital to make it workable for our customers in the residence we serve.
For example, we have to give a lot extra time, effort and capital resources to resolve the ongoing and complex administrative and payment issues, such as incorrect copays, both on a perspective as well as a retrospective basis, and we would, of course, rather dedicate those resources to other parts of our business, but we are making progress here. Our daily weighted rejected claims is remaining stable at 3% or less.
With respect to copays, we are continuing to see unfortunately and appropriately excess copays occur. As you know, we've been working with CMS as well as the PDPs to resolve these issues. And as you know, we are in arbitration or litigation with a number of PDPs to formalize the pursuit of the restoration of these funds that have been withheld.
And while this is a long process, we have begun to see some progress with the winning of our first arbitration. The arbitrated decision here was very important in establishing that obtaining the data needed to identify beneficiaries as both benefits dually eligible residents of the long-term care facility, also known as Best Available Evidence, is the responsibility of the plans themselves.
This issue is a sticking point in the ultimate resolution of these issues, so we were pleased to see this decision. And moreover, we are also, I am pleased to say, in active settlement negotiations with a number of large plans who now seek to resolve the issue outside of litigation or arbitration.
Also relative to Part D and litigation, our results continue to be impacted by the unresolved matter with UnitedHealth. The differential in rates between the originally negotiated contract with United and the any willing provider contract will now operate under with PacifiCare totaled about $24 million for the quarter. And while this differential was lower given the reassignment by CMS of a portion of dual eligibles outside of the United plans… that is to say, taking those dual eligibles out of the United plans where they were formally situated.
The cumulative impact of the differential in rates since April of 2006 has negatively impacted our sales and operating profit by nearly $223 million or about $1.14 per diluted share. Our lawsuit against UnitedHealth is pending in the federal court in the northern district of Illinois and is moving forward with a trial date set for October 14th of this year. We continue to believe our antitrust and frauds claims are strong, and we are looking forward to pursuing these claims on behalf of our shareholders and the residents we serve.
Now, with respect to the overall reassignment of the dually eligible beneficiaries related to the 2008 bidding process, notably from UnitedHealth and Humana, the overall net effect of renegotiation and reassignment has come in at current market share levels about as we expected and modestly positive. We have yet to see the full migration out of these plans that was expected. So, while we are not forecasting further movement, there is here a potential upside if further migration of dual eligibles occurs.
Next, I'd like to make a few comments about the movement in the pharmaceutical market toward generics. Given some of the events over the past year and commentary around these events, there may be confusion about whether we at Omnicare believe this trend is positive or negative for the business. Well, let me reassure you, generics are a very good thing for us.
First, while we all know that they reduced our revenues, as revenue reduction reflects, the substantial savings produced for our customers and payers. Second, given the dynamics of the generic market coupled with our scale, we are able to achieve substantial cost reductions that improved our gross profit on generics versus their branded counterparts. So our incentives are aligned with those of our customers and payers.
We are often asked about the contribution of generics, particularly over the long-term. And here, we recently conducted a study of our top 100 generics, which represents about two-thirds of our total generic revenue. We then segregated all generics that had been on the market for four years or more and that was a total of 57 drugs.
And while reimbursement may come down over time as new and more effective brand drugs become available or generic competition increases or drugs are MACed, 54 of these 57 drugs or 95% are still today providing a greater gross profit per script than their branded counterparts, including related discounts.
So, while we can have sequential aberrations occurring in reimbursement and/or pricing, owing to MACs or increased competition over the short run, overall generics in the long-term are good for our customers and payers and good for us.
In the first quarter, nearly 68% of our total scripts were generic and over 69% under Part D. Moreover, as we noted on our last call, 2008 promises to be another significant year for generic introductions in our market. Given the mix of drug in the geriatric marketplace, the annualized dollar value of the drugs we buy potentially going off-patent in 2008 looks to be substantially higher than was the case in 2007.
We also noted previously the timing of these expected generic launches is heavily skewed to the latter half of the year. Current market information suggest that of our annualized brand spend on drugs is expected to go generic this year, 89% go after May 1, with most of that occurring between May 1, and September 30. And while this information is good for the moment only as one states can and do move around frequently, we know that two big drivers in this period Risperdal and at least two forms of Depakote slated to launch essentially in the third quarter are already in pediatric exclusivity.
So you can see while we have projected a very back-end waiting to our earnings beginning in the third quarter of 2008. One word about Risperdal, we received a lot of phone calls relating to the announcement of exclusivity being awarded to Teva Pharmaceuticals and the potential impact on our cost forecast.
Let me first just say that in our wide range of guidance, we factored in our initial views of the differential that may occur in our cost under the two scenarios, exclusive or non-exclusive launch. Both are positive or be at different levels. Of course, until we know the final outcome of our negotiations and reimbursement levels, and we see the June 29th launch come up as expected, and we want to know the precise contribution to our earnings. But I can say that we are working aggressively to close the gap in contribution that we originally projected for this important drug.
So, looking forward for 2008, we are saying most of the fact as we discussed with you two months ago, play out as we predicted. And we did experience tailwinds in the form of strong trends and drug price inflation and acuity.
I would say that we remain very focused on top line growth and specifically on that customer growth. As you know, we've taken a number of actions and made investments to better position ourselves to retain the business we do have and to add more. Specifically, we have invested in customer retention through the expansion of our specialized customer retention team and efforts and resources related to enhancing customer service throughout the pharmacy organization.
It's important to note here that customer attention is also a function of the quality of customer service. According to our quality service in which we survey a sampling of customers monthly on various customer satisfaction metrics, we have made much improvement over the past year. We believe that this combined with our customer retention team's efforts, we'll over time enhance even further our customer retention rate. Moreover, we have placed much emphasis and have invested in adding new business. We made changes to senior sales management about a year ago and added new energy to our selling efforts.
We have then made further investments in the development, training and expansion of the national sales force and the positive impact of these actions has already apparent. We are also adding resources in marketing, adding development programs for attractive market segments, such as assisted-living and expanding technology resources and solutions for our customers.
And then too, we would expect our acquisition activity to pick up as the year progresses, which should add new business at very attractive returns. Overall, our goal is to be modest net bed growth in 2008 from all our sources. However, we will also continue to voluntarily withdraw from business where pricing or payment terms are not acceptable, a move that only helps the business in the long run.
So, we have a number of programs and strategies in place to grow our top line and we remained confident that we are headed in the right direction and we will continue to make investments here as conditions warrant. And of course, we see the long term answer to net customer growth and the Omnicare full potential plan. We continue to make progress here and let me give you just a very brief update.
With respect to Hub and Spoke, all 31 hubs are on original support centers as we can sometimes call them are in development, 8 hubs have completely finished construction and the remainder are in various phases of their construction process. Today 11 hubs are beginning to process rebuilds or perform order entry for certain of their local pharmacies in their hub system.. in their Spoke system I should say.
As was reported earlier, the delivery of equipment from MTS was somewhat slowdown as we worked out the things, but I am now pleased to report that MTS has now delivered 13 of the 25 planned pieces of equipment and we now have formally accepted the first on-demand two machines as it is now meeting or exceeding planned production rates. And we have also, as of today, taken delivery of three auto label and verify our ALV generation two machines using our proprietary technology and are in the validation testing and performance qualification phase for this equipment. We also began the roll out of customized document Imaging technology in March and it is going as planned with five operations in seven locations.
And lastly, with respect to our regionalization of billing, we have eight… excuse me, eight of our 11 planned regional billing centers now at some level of operation. So we are moving forward.
We continue to see the ultimate pre-tax savings from the full potential program in the $100 million to $120 million range on an annualized basis. And as we mentioned on the last call, we see the timing of achievement of those savings will be extended into the first part of 2009, owing among other things to the timing of the completion of facility build out… build outs extending, in some cases, beyond our original schedules. But nonetheless, we believe for an endeavor of this magnitude, we are making substantial progress in relatively short order and in essence we are on plan.
So pulling all of this together, I would like to make a few comments related to our guidance for the balance of the year.
We continue to see sales coming in at $6.1 billion to $6.2 billion, and as Dave indicated earlier, given our cash flow performance in the quarter, we are raising our operating cash flow to $350 million to $400 million for the year.
With respect to earnings, we achieved first quarter results on an adjusted basis, that was above… that were above our own internal forecast as well as the Street consensus.
That said, there still remain a number of moving parts, many of which are at this early point in the year still difficult to predict and that can move the needle both positively and negatively and continue to necessitate a wide range for the full year. Accordingly, at this juncture, we are keeping our full year guidance at $1.65 to $1.95 per diluted share as adjusted for special items and we will revisit this range on our next earnings call. We believe at that point, we will have greater visibility on certain issues and can hopefully narrow the range.
With respect to the second quarter, you will recall that we indicated a bump up of 5% to 10% on our first quarter expectations of the mid-30s EPS number. Given that our earnings came in stronger, we now see our sequential earnings come again within the range of $0.38 to $0.40, the low-end of which is roughly the street consensus today and reflects the absence of the robust flu season in the second quarter and lower acuity which generally starts to be seen in the spring and summer months.
So all in all, our focus now on for the remainder of the year is on the issues driving our business, though that will provide continued stabilization and growth, reduced costs, and increased productivity, and above all restore shareholder value.
And now, I'd like to open the call for questions.
Question and Answer
Operator
[Operator Instructions]. Our first question comes from Melissa Jaffe with Merrill Lynch.
Melissa Jaffe - Merrill Lynch
Hi, good morning.
Joel F. Gemunder - President and Chief Executive Officer
Good morning to you.
Melissa Jaffe - Merrill Lynch
So just given your comments about script profitability, brands versus generics, and gross profit of generics holding up relatively well over an extended period of time, I am just trying to reconcile that with the decline in gross profit. I mean they are still down about 10% for the last two years, I mean is most of that driven by the bed losses?
Joel F. Gemunder - President and Chief Executive Officer
Well that certainly would be a part of it, but it's also function of patient mix. For example, I should say assisted-living patients. While the patients in service generally tend to have a higher number of scripts that are prescribed, their penetration rate of these facilities is lower. Yes, we still have to deliver drugs to those facilities on a daily basis and our yield per stop is less. So those kinds of factors come into play. MACs, which the government allows insurance companies to place, are also a factor. In essence, we have several hundred insurance companies competing with us for the spread between the prices that are set by the government and are nibbled away by the insurance companies. And we on the other hand, have to use our scale and cost control to offset these issues. Though it's a push me pull you, kind of business that we are in. And so far, and then we've done a pretty good job of keeping our margins where they should be.
There is no doubt that the advent of Part D has taken some of the margin out of this business. But we work very-very hard to restore it in a number of ways, and I think as you look at these margin numbers, they start to improve from quarter-to-quarter. Isn't that right, Dave?
They are improving because we are reacting favorably to these MACs and are finding ways to offset the impact by the use of our scale, cost control, better purchasing, which I always thought was very good to begin with, but even better purchasing and more adroit managing of the buy side of our business.
Melissa Jaffe - Merrill Lynch
Okay. That's helpful. And then I was wondering if you could just provide a little color on some of your ancillary businesses, specialty and hospice. Can you give sort of rough range of size of those businesses relative to the institutional, the core institutional business?
Joel F. Gemunder - President and Chief Executive Officer
Generally speaking, they are in the… taken together, they are somewhere between $50 million and $60 million in EBITDA.
David W. Froesel, Jr. - Senior Vice President and Chief Financial Officer
Right.
Joel F. Gemunder - President and Chief Executive Officer
Maybe little towards the higher range of that range probably. Not probably. They are growth businesses, we have leading position in both of those ancillary businesses. They leverage and potentiate our core business. I kind, of indicated that with our patient assistance programs, where we are now dealing directly with 15 of big pharma companies and that certainly helps us when we are doing our other… it helps us in our CRO business, it helps us in our purchasing of branded drugs and other services we can provide for these companies. It is -- it's not I would say, an easy business, but it is a business where we compete effectively. We do have competition and we compete effectively in those markets.
Melissa Jaffe - Merrill Lynch
Okay. And…
Joel F. Gemunder - President and Chief Executive Officer
That about all I can really say on that.
Melissa Jaffe - Merrill Lynch
And thoughts on the acquisition of one of your large hospice competitors?
Joel F. Gemunder - President and Chief Executive Officer
Let me put it this way, we are not a hospice provider. We don't cover hospice patients, we don't provide that service, that would be competing with our customers. What we do do, we are the largest provider of pharmaceuticals to the hospice market, to hospice patients, both in the home and in the nursing home and hospital settings.
Melissa Jaffe - Merrill Lynch
Right now I was referring the hospice scripts, sorry.
Joel F. Gemunder - President and Chief Executive Officer
Oh, hospice scripts. Are you talking about the company hospice script?
Melissa Jaffe - Merrill Lynch
Yes. Health Extra bought this month?
Joel F. Gemunder - President and Chief Executive Officer
Oh, yeah that's the company we looked at and frankly that's a business we have entered on a de novo business and we're making good progress in there. And we see the use of our capital better employed, doing business on the battlefield and on the acquisition fronts for that. But every tub has to sit on its own bottom and we look at every opportunity afresh. That was one where we felt that we would do better on an internal growth basis for that particular company than we would… it would be arithmetic, just didn't work out favorably for us.
Melissa Jaffe - Merrill Lynch
Okay, thanks a lot.
Operator
[Operator Instructions]. Our next question comes from Randy Stanicky with Goldman Sachs.
Randy Stanicky - Goldman Sachs
Great, thanks. It's Randall here. I just have two relatively quick questions. I guess, the first one, I'm a little bit surprised and maybe you can help me better understand, but you actually had factored into your initial guidance range, a generic exclusivity for Teva? And then, maybe could you just talk a bit more about how those economics flow through, whether we--?
Joel F. Gemunder - President and Chief Executive Officer
Right. It's not the easiest thing to understand. In most cases, we do better when a product goes into pediatric… I'm sorry, first to file exclusivity for six months, because we avoid the impact of insurance companies MACing those drugs. In this case, with Risperdal, because we have a dominant market share, we are either among the very top purchasers or probably the very top purchaser in this country of Risperdal. Our market power would be greater in a multi source environment than in a patent environment which the exclusivity is. Nonetheless, we do our best and we are working very aggressively to close that gap.
To repeat, normally an exclusivity period works to our advantage because we avoid during that period any ability of the insurance companies to MAC the product; that is to say, to reduce the pricing that they'll pay for those products what is set by the exclusive provider. But in a case where we have enormous market power as we do in this one particular drug, where we are probably one of the very largest purchasers of that and utilizers of that drug. We have more power and the more purchasing clout in the multi source market.
So, it's just a turnabout in this one particular, but this does not happen very often. Risperdal, I think it's number two or three… number three drug based on the--.
Randy Stanicky - Goldman Sachs
Right.
Joel F. Gemunder - President and Chief Executive Officer
So, we have an unusual situation.
Randy Stanicky - Goldman Sachs
Great.
Joel F. Gemunder - President and Chief Executive Officer
But as I have said in my comments, we are working very, very diligently to do what we can to level that playing field.
Randy Stanicky - Goldman Sachs
So Joel, just to frame the situation, clearly you benefited evolution to exclusivity, is there a way to better understand or frame that the earnings upside, if that was to be announced?
Joel F. Gemunder - President and Chief Executive Officer
I don't think we've made that public, but it's significant.
Randy Stanicky - Goldman Sachs
It is significant.
Joel F. Gemunder - President and Chief Executive Officer
Yes, sir,
Randy Stanicky - Goldman Sachs
Okay. And then the related to that, do you in your internal forecast factor in other exclusively or risk adjusted any at risk generic launches?
Joel F. Gemunder - President and Chief Executive Officer
Do we… no. Just living with our business on a day-to-day basis is enough risk for me, thank you. We don't try to get… we can get, but we don't factor that into our forecast. That would be beyond the pale, I think, for us.
Randy Stanicky - Goldman Sachs
Just one last question I have. Looking at, obviously, CRO trends are incredibly strong, evaluations reflect that you guys have what is a growing and fairly sizable internal PBM, can you just… or sorry, CRO, can you just remind us what the synergies are and have there been thoughts at all at some point about monetizing that business?
Joel F. Gemunder - President and Chief Executive Officer
We have reviewed these issues several times a year. To see up where we benefit for the CRO, I can give a good case in point. We are now talking to our major providers of generic drugs to serve and looking at the ability for us to do a number of the ANDA applications, which are coming fast and furious for all generic drug companies around the world… for our CRO, and we are meeting a very positive reception for that. That would just be one example which is on the tip of my tongue because it's occurring in recent months. There are others, lots of others I could give you, but I think it would be appropriate to do it on the air.
There are exciting opportunities there, again, it builds our relationships with pharmaceutical companies. But it's a good business on its own. I originally moved into this business years ago, because I believe that in setting up trials, if you look at where pharmaceutical companies make their money, the longer you have under patent, the more money you are going to make. And the thing that takes the most time to get started within the clinical trial is arranging for the patients that we admitted into the trial.
Now, for example, if someone were to do a study on congestive heart failure, I would say that we have, what, 400,000 patients with congestive heart failure, and the thought was and my belief is still strong along those lines that it would be a lot easier to pick the patients and the physician investigators, and also we could probably put together competent patients for a trial. We have over 500 of our nursing facilities, which we serve, which have been qualified to do these trials on-site. And the thought was we could leverage it there.
So far, the industry prefers to look at single morbidity than younger people, because it's easier, it makes it easier for the clinicians to determine the efficacy of the drug. But there have been… the FDA has mandated dosing in the elderly and we continue to believe that if we want to do really effective testing in the elderly, you have to look at all other co-morbidities that go along with congestive heart failure, for example, and not… and not just in single morbidity and in otherwise healthy person.
That was our original concept in going you note, I think it's still a valid concept and it was taking more time than we thought it would and hopefully, we will be proving right and if it becomes to a point where we believe that we will do better in placing the resources that we have in that business and in other areas of the company, we will act on it. We don't see it at this point in time.
Randy Stanicky - Goldman Sachs
Fair enough. I appreciate the questions. Thanks very much.
Joel F. Gemunder - President and Chief Executive Officer
Thank you very much for intelligent questions.
Operator
Next question comes from Charles Rhyee with Oppenheimer.
Charles Rhyee - Oppenheimer & Co.
Yeah, thanks for taking the questions. Just a couple if I could. You talked about adding in the specialty beds as part of the patient assistance programs here, and you talked about the increase in sequential beds. If I strip out those beds, and you mentioned that the specialty business is growing I think you said double digit in revenues and it's a higher level of profitability. Is that fair to say then, if I remove that, the underlying business is seeing some margin pressure?
Joel F. Gemunder - President and Chief Executive Officer
No, I don't think you could make that judgment. It's a sweetener, yeah, but I once said that we are under margin pressure. I think our business are, Dave, I'd say our basic margins are improving particularly as we move towards generic from branded drug. If you look out on the universe of branded drug say for the next four or five years, I think the numbers I have seen are somewhere in the range of almost 40% of all the drugs that are out there, that are branded will be going generic. And there is a definite positive swing in margins.
And we told you that, I think I tried to convey to you earlier that even after five years the margins on generic drugs, the profit per script on generic drugs even five years later is higher than the profit per script.
Charles Rhyee - Oppenheimer & Co.
I understand that. I mean--
Joel F. Gemunder - President and Chief Executive Officer
We just described including all kinds of discounts that go along with it. So the movement towards generic drugs is a positive on margins. And we are saying that our margins are improving. Now you can have a quarter or so where there is a big surge in Max which will knock you down for a quarter or so. But, the underlying trend is a very strong in moving for higher margins because generic drugs have higher margins, not only margins in percent but margins in dollars.
Charles Rhyee - Oppenheimer & Co.
Okay, great. Thanks for that clarification. Just quick question, when you talked about the 8,000 beds that you sort of walked away from a facility closures or closed down, can you give us a mix between the ones that you sort of walked away from versus the ones that would do more to facility closures and--?
Joel F. Gemunder - President and Chief Executive Officer
I can't remember exactly. We walked off the beds, 3,000 we walked away from, others were closures or sales. Let me say that the skilled nursing facility market has roughly 16,200… I think 16,200 facilities at last count. The market is essentially flat, it grows by plus or minus 1% per annum. And the reason for that in my opinion is that the baby boomers will not reach the age of going into nursing homes, skilled nursing facilities for maybe another 10 year. Assisted living, however, is now running at about, last numbers I saw were 36,000 facilities or more than doubled the number of skilled nursing facilities and growing.
There is also a preferential to put your parents into a good looking condo-type environment that you see in assisted living and there is a continuum of services that are provided. So that is the growth element in today's market and there we are doing very well and putting on a new business. In some of the other cases, you'll see in skilled nursing facilities, some are closing, some are being sold and some, in some cases, particularly those where we inherit some of these facilities through acquisitions, we find that a business might have been a profitable at the time the contract were initially entered into, but over time it has become unprofitable. And in those cases, we try to amend that situation by trying to increase the prices and half of the cases we are successful and half of the case we are not but we won't and we can't legally enter into businesses where we lose money. That's legally… that's just a legal no, no, so we would draw from those.
Charles Rhyee - Oppenheimer & Co.
Okay. And then one final question, you… to an earlier question, you talked about the potential upside if Risperdal were to lose its exclusivity, that's significant, can you give us a sense of how much within your current guidance between a $1.65 to $1.95, perhaps the difference in Risperdal would be to that range?
Joel F. Gemunder - President and Chief Executive Officer
We haven't done that, but you could probably figure it out by talking to people in the trade, I would rather not put that out publicly if it's significant, I'll just say that.
Charles Rhyee - Oppenheimer & Co.
Do you think that is the majority of the range?
Joel F. Gemunder - President and Chief Executive Officer
I don't know.
Cheryl D. Hodges - Senior Vice President and Secretary
There are a number of factors in the range… that's really, I think I'd like to say that.
Joel F. Gemunder - President and Chief Executive Officer
I think you can… if you get out there and talk to some of the people in the industry I think that will give you a pretty good idea. But I am not going to do that here.
Charles Rhyee - Oppenheimer & Co.
Thank you.
Joel F. Gemunder - President and Chief Executive Officer
Thank you.
Operator
Your next question is from Eric Gommell with Stifel Nicolaus.
Eric Gommell - Stifel Nicolaus
Good afternoon. Just going back to the AL opportunity, how much of the market do you feel Omnicare has penetrated at this point on the AL side?
Joel F. Gemunder - President and Chief Executive Officer
The ALV could...
Cheryl D. Hodges - Senior Vice President and Secretary
No. It's assisted-living.
Joel F. Gemunder - President and Chief Executive Officer
Assisted living. I would say somewhere around a third, give or take, because the market is growing significantly every year. But I think if you looked at it, in terms of licensed beds or it would… or in terms of beds in the facility, it's about a third and growing.
Eric Gommell - Stifel Nicolaus
Great. And then one thing you didn't give us an update on, and perhaps you could shed some light on it, some of the technology that you've talked about in the past, I guess the rollout of Vicura and some of the software that you've talked in the past. How is that being received in the market place and how is it running?
Joel F. Gemunder - President and Chief Executive Officer
There is no question that Vicura has deemed to be the premium product in the marketplace, and we have… our challenge has been to get it out in the marketplace as quickly as we can and there is a learning phase that's required and I think, so we've asked Perot systems to help us with the training and implementation of those phases. So, this is a pretty big undertaking for us.
We believe that technology… customer facing technology is an important element in building our business, particularly in the skilled nursing facilities, but also increasingly in the assisted living facilities. And although they require different technology, and the combination of our Omniview and the electronic eMAR systems that we have with Vicura are certainly doing that and our challenge is to get as many of these systems in, their complex systems and you just don't drop it off like installing a VCR or a DVD machine, it takes about almost, what, 30 days of training to put the system in and we would be beyond our capabilities to… in our own staff to do it more than one or two off at a time. So, we have asked Perot Systems to come in and help us to do the installation and training.
We believe in automation, we believe in technology, we believe that our industry in 20 years has come from cottage industry to a 21st century business, but it requires scale, it requires automation, much of which didn't click [ph] and we have to develop it ourselves and which we've done successfully, thank goodness. And in other areas, but we have to be able to deliver drug products to patients in a very cost effective manner. And nursing homes have to be able to accept those products in a very cost effective manner.
Eric Gommell - Stifel Nicolaus
Great. And my last question, and I will hop off. On the $36 million acquisition or spend on acquisition, how much of that was actually to deferred payments?
David W. Froesel, Jr. - Senior Vice President and Chief Financial Officer
Small part.
Eric Gommell - Stifel Nicolaus
Okay.
Joel F. Gemunder - President and Chief Executive Officer
Our acquisition programs are on ongoing. As I am sure you are aware, acquisitions don't always cooperate with clock and the calendar. They go their own pace. Just like in large companies, small companies have families with different points of view as to whether a company should be sold or not, and there are issues both legal and technical issues with the DEA and the OIG that have to be worked out before we can close an acquisition in some cases. So it's lumpy, but we normally, at the end of the year come very close to our initial objectives.
Eric Gommell - Stifel Nicolaus
Thanks.
Operator
Next question is from Robert Willoughby with Banc of America Securities.
Robert Willoughby - Banc of America Securities
How much of the expected cost savings in working capital savings from the full potential claim do you think you've actually realized to date and what's… what percentage maybe is still in front of you, and then just any plans for additional de-leveraging over the course of this year?
Joel F. Gemunder - President and Chief Executive Officer
Additional. Let me take your second question first. De-leveraging, in addition to the $100 million, we've already announced?
Robert Willoughby - Banc of America Securities
I guess the $50 million in the quarter, I thought is…. or is there more…
Joel F. Gemunder - President and Chief Executive Officer
De-leveraging, well, Dave, why don't you take that? I think there is room for more.
David W. Froesel, Jr. - Senior Vice President and Chief Financial Officer
Okay. In the first quarter, regarding working capital improvements, there is very-very, if any, associated with the Full Potential program. And second, regarding the savings of $100 million to $120 million associated with the Full Potential program, there is very little in the first quarter. We are primarily going to start seeing some benefit of the savings in the second half of the year. Primarily in the fourth quarter, and as we've commented on it before, it's a small number that we've built into our forecast of $1.65 to $1.95.
Joel F. Gemunder - President and Chief Executive Officer
And there are some reasons for that. Training expenses, accounting wise have to be at its best. So as we put up a new system and new procedures, there is a very significant cost in training which is... which we have to undertake and which we have to expense accounting wise. So we really won't see the benefit start to roll in until Q4, when we overtake the training cost with savings…the savings overtake the training cost to get to savings.
Robert Willoughby - Banc of America Securities
Okay. And then, just the debt reduction?
Joel F. Gemunder - President and Chief Executive Officer
What are you looking forward to, Dave, and further debt de-leveraging.
David W. Froesel, Jr. - Senior Vice President and Chief Financial Officer
Sure. With respect to our free cash flow, what our Board, as you will know, Bob, is authorized, first and foremost, we're going to take care of the $100 million associated with the stock buyback. Second is in terms of priority, we will use our free cash flow to continue to do strategic acquisitions. And third, if there is available capital or free cash flow left over, we will continue to pay down debt. But as John mentioned earlier associated with acquisitions, they can be lumpy. So it's a little early for me to forecast any definitive debt reduction between now and the end of the year.
Joel F. Gemunder - President and Chief Executive Officer
But with $400 million, there should room.
Robert Willoughby - Banc of America Securities
We're continuing to look at it.
Joel F. Gemunder - President and Chief Executive Officer
So that's about all I can get out of him.
Robert Willoughby - Banc of America Securities
Thank you.
Cheryl D. Hodges - Senior Vice President and Secretary
I think we have time for one more.
Operator
The last question comes from Lisa Gill with JPMorgan
Lisa Gill - JPMorgan
Thanks very much.
Joel F. Gemunder - President and Chief Executive Officer
Hi, Lisa. How are you?
Lisa Gill - JPMorgan
I'm good. How are you?
Joel F. Gemunder - President and Chief Executive Officer
Good
Lisa Gill - JPMorgan
I know we've all come back to this guidance question time and time again, but Joel and Dave, if we look at this and look at the… you basically had about a $0.40 run rate. That would be $1.60 for the year. What would cause you to be in the lower end of the guidance range? I clearly understand there are a lot of positive things that could bring us to the upper end of the guidance range, but why not bring up the lower end of that range? And then, secondly, from the time that you gave us the guidance for the fourth quarter till today, you announced the $100 million share repurchase. So, how should we be thinking about the timing aspect of that and how that's going to impact guidance?
Joel F. Gemunder - President and Chief Executive Officer
Well, I'll give it the overview, and I'll let Dave talk about the specifics. I think I've taken some significant pain to explain that the big move in profitability for the company will come in the second half of the year as Risperdal, Depakote, and what is the one of the other big one--?
Lisa Gill - JPMorgan
[inaudible]
Joel F. Gemunder - President and Chief Executive Officer
Yes, will be coming off. And as of right now, we don't want to… we've said that, it will be a significant improvement either with the exclusivity period or without the exclusivity period for Risperdal, but we don't want to commit to that today until we are closer to the end of June. So, we indicated that we would update our guidance with our second quarter results, because by then we will have a pretty good idea of where things will sort out. So, Dave, do you have anything more you would like to add.
David W. Froesel, Jr. - Senior Vice President and Chief Financial Officer
No. Joel, I think you've explained it very clearly that it's largely second half positive issues associated with brand and going to generic, and combined to a lesser extent with benefits from the full potential program.
Joel F. Gemunder - President and Chief Executive Officer
So it's a matter of how high it is up. And I think we'll be able to give you better guidance and that we'll be, I think, pretty sound when we come up with our second quarter results. By then, we can know a lot more than we know today.
Lisa Gill - JPMorgan
And how should we be thinking about the $100 million stock repurchase, Joel, or Dave, I mean that it wasn't really part of your guidance the last time, are you going to do an accelerated programs, should we be thinking about, you buying in over the next several quarters through out the year?
Joel F. Gemunder - President and Chief Executive Officer
From where I sit, I wish it had already happened.
Lisa Gill - JPMorgan
Right.
Joel F. Gemunder - President and Chief Executive Officer
But we are a law abiding company and we have to follow the rules. And if you look at our average, we can purchase and we are never going to purchase it in the open market. And if you look at what we can do, I think the rule is something like 25% of the average trading in the last month or so. And that is not an impairment to getting these things done quickly. So based on market conditions, we believe the sooner we get it done, the better it will be for all parties.
Lisa Gill - JPMorgan
Okay.
Joel F. Gemunder - President and Chief Executive Officer
But we have to be able to do it in a responsible way.
Lisa Gill - JPMorgan
Great. And I guess one last question as it pertains to guidance. When we think about your revenue guidance of 6.1 billion to 6.2 billion, again does that include any acquisitions?
Joel F. Gemunder - President and Chief Executive Officer
It includes a number of acquisitions that we budget for the year. It would not be a massive factor in our thinking. It would be there, but it is a small factor. It would not be an overwhelming factor. In other words, if they don't happen, it won't make that much difference to our… I think because that makes some ratably [ph] over the year, the acquisitions have only half an impact in terms of revenues on an annual… to our annual earnings and that was we are already in May. So we are looking at about a little more than a quarter of an impact on us. In another words, if we would buy a company with say $50 million in revenues, it's likely to produce around $15 million for the rest of the year. If it were bought today, if it were bought in July or August, it would be even the lower number than that.
Lisa Gill - JPMorgan
That's great. We look forward to the next update. Thanks very much.
Joel F. Gemunder - President and Chief Executive Officer
Thank you.
Cheryl D. Hodges - Senior Vice President and Secretary
Thanks, Lisa, and thanks everyone for joining us today.
Operator
This concludes today's conference. You may now disconnect.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!