SPSS Inc. Q1 2008 Earnings Call Transcript

May.18.08 | About: SPSS Inc. (SPSS)

SPSS Inc. (SPSS) Q1 2008 Earnings Call April 29, 2008 6:00 PM ET

Executives

Jack Noonan - Chairman, President and Chief Executive Officer

Raymond Panza - Executive Vice President, Corporate Operations; Chief Financial Officer; and Secretary

[Douglas Dowell] – Senior Vice President of Corporate Development

Analysts

Nathan Schneiderman - Roth Capital Partners

Alan Cooke - Merrill Lynch

Steve Ashley - Robert W. Baird

Jon Maietta - Needham & Co

Sean Jackson - Avondale Partners

Ross MacMillan - Jefferies & Co.

Frank Sparacino - First Analysis

Operator

Welcome to the SPSS 2008 first quarter earnings conference call.

With the exception of historic information, the matters discussed in this conference call include forward-looking statements that involve risks and uncertainties, including but not limited to market conditions, competition and other risks indicated in the company’s filing with the Securities and Exchange Commission. A full Safe Harbor statement is available in the SPSS 2008 first quarter earnings press release posted at www.spss.com.

At this time, I would like to introduce Jack Noonan, Chairman, President and Chief Executive Officer; Raymond Panza, Executive Vice President and Chief Financial Officer; and [Douglas Dowell], Senior Vice President of Corporate Development.

Jack Noonan

Good evening and thank you for joining us to discuss our 2008 first quarter performance. I’ll give some opening remarks, and then Ray Panza, our CFO, will comment on our financial results and provide guidance for the second quarter and remainder of the year. We’ll end with a Q&A session.

As you have now seen in our press release issued earlier today, we had a good financial start to the year. Our performance reflects our commitment to driving profitable growth. Given the current economic environment, we were particularly pleased with our new license revenue growth, which was lead in part by a 13% increase in the United States and 17% in Japan, excluding currency effect.

Our diversified product lines provide support for our overall financial performance with a large part of new license revenue growth driven by increases in small and medium size transactions. Reflecting on the strength we derived from a diversified customer base, we saw new license revenue growth in the quarter of 6% in the commercial market and 25% in both government and academic markets.

Also, contributing to total revenue growth in the quarter was an increase in maintenance revenue and record growth in our services revenue, driven primarily by our training deliveries. Our first quarter financial performance, again, demonstrates the recognized value of predictive analytics, as well as the benefits of product, customer and market diversity. We are not dependent on any one product line, customer segment or geography.

Predictive analytics is not an IT spend, it’s a business investment. In today’s uncertain economic environment our customers are using predictive analytics to find, grow, and retain their customers more effectively. The ROI of predictive analytics is our best sales proposition.

With that, I’ll now the turn the call over to Ray Panza for his comments on our Q1 financial results, as well as our outlook for the second quarter of 2008.

Raymond Panza

Earlier today we issued an earnings press release for the 2008 first quarter including un-audited financial statements for the quarter ended March 31, 2008. It is to those financial statements that I will direct my comments.

The company’s Form 10-Q will be filed with the SEC tomorrow. I am pleased to report that SPSS has delivered operational and financial results in excess of its guidance and expectations. Even in this uncertain and challenging economic environment, the company continued to drive revenue growth efficiently, maintain a healthy balance sheet and deliver good cash flow.

These results reflect the increasing benefits of previous and ongoing process changes, productivity improvements and facility rationalizations as well as execution by the global organization to the company’s growth strategies. These results also reflect customer acceptance and recognized value of predictive analytic products, the value of the company’s broad customer base, the strength of its core products and lack of dependency on large transactions, as well as the diversity in the geographic sales territories and resulting benefit of favorable currency exchange rates.

For the 2008 first quarter, the operating margin was 18% or essentially equal to the fourth quarter 2007 record margin. Net income of $9.8 million was up 21% over the same prior year quarter, and diluted earnings per share; EPS of $0.51 for the 2008 first quarter was up 31% over the same prior year quarter.

Net income and EPS for the first quarter of 2008 were the highest for any quarter in the history of the company. Contributing approximately $0.04 to the EPS improvement is the lower number of shares outstanding due to last year’s repurchase of shares in connection with the convertible debt offering, as well as share repurchases during the fourth quarter of 2007 and the early 2008 first quarter, under the previously announced authorized share repurchase program.

The earnings improvement was primarily driven by reported total revenues of $78.2 million, up 12% compared with the same quarter last year. Reported revenues for the quarter represent the 18th consecutive quarter-over-quarter increase, and was the second highest quarter revenue in the history of the company, only exceeded by the previously reported fourth quarter of 2007. Our absence of dependence upon large transactions is demonstrated by the fact that during the 2008 quarter the largest single transaction was approximately $440,000, compared with the largest single transaction of $706,000 in the 2007 first quarter.

The over all improvement in total revenue during the 2008 first quarter was lead by an 11.2% increase, first quarter over first quarter, in the United States. Approximately 60% of the total 2008 first quarter revenues came from outside United States. Excluding the favorable currency exchange rates, total revenue for the 2008 quarter was up 5% over the same prior year quarter.

Total reported new license revenue for the 2008 quarter was up 10% over the 2007 first quarter. A total new license revenue of $38.4 million, this represented the second highest new license revenue quarter in the history of the company, again second to only the preceding fourth quarter of 2007. These results were realized without the benefit of any seven figure transactions. Given the challenges of the global economic environment, it is especially significant to note that there was an increase in the number of medium and small transactions, further evidencing the strength of the company’s core products and committed customer base.

For the first quarter of 2008, overall new license revenue for the company’s core stat tool products was up 17%, partially offset by lower data-mining revenue due to the 2008 absence of an unusually large 2007 transaction, resulting in a difficult prior year comparison. Overall, new license predictive tool revenue for the 2008 first quarter was up 11%.

Total new license revenue within the United States was up 13% for the first quarter 2008 compared with first quarter of 2007. Excluding the effect of favorable currency exchange rates, new license revenue in Japan was up 17% and up 6% in the UK. Partially offsetting these improvements, however, was a disappointing performance in France, Germany, Holland and Australia. Actions including a change in personnel have already been taken to address these execution and performance issues.

Excluding currency, total new license revenue for the 2008 quarter was up 3% of the same prior year period. A $32.1 million maintenance revenue for the 2008 quarter was at a historical high, up 11% over the same prior year period. Excluding currency, maintenance revenue for the 2008 first quarter was up 5% over the 2007 first quarter.

Service revenue for the 2008 quarter was $7.7 million, up 22% over the prior year. We are pleased with the progress in our services business as we continue to focus on making refinements to improve utilization rates and profitability. From an expense standpoint, total operating expenses for the 2008 quarter were 82% of total revenue, down from 83% of total revenue for the 2007 first quarter. In short, we are continuing to realize the benefits of ongoing cost management initiatives resulting in company wide improvements in productivity.

Total operating expenses for the 2008 first quarter were up $6.3 million, or 11% over 2007 first quarter. These higher expenses include $2 million related FX, higher sales, marketing and services cost up a net $5.5 million, primarily reflecting both the lower than normal level of marketing expenditures in 2007 compared with the greater 2008 investments and marketing programs, as well as higher sales compensation costs related to higher sales, plus $1 million higher expense directly related to cost of sales, largely higher software amortization.

These expense increases were offset by lower R&D cost, reflecting the previous facility’s consolidation and further expansion of our low cost development center in China, as well as reduced corporate cost and increasing savings realized from process and productivity improvements.

The effective income tax rate for Q1 2008 was 38.5%, slightly lower than expected, but higher than the 36.3% effective income tax rate for the 2007 first quarter. This increase is largely the result of income mix with greater income attributable to the US and Japan.

Moving onto the balance sheet at March 31, 2008 the cash balance was $294.6 million. This is down $12 million from year-end, entirely due to the cash outlay of $35.5 million related to share repurchases including $27.9 million during the 2008 first quarter and a $7.4 million cash outlay during the 2008 first quarter for shares repurchased immediately prior to year-end 2007 for which a year-end payable was recorded. These share repurchases were completed under a previously announced authorized share repurchase program.

Net accounts receivable at March 31, 2008 were $48.5 million, for a record low DSO of 57 days. This compares to net receivables of $56.6 million and DSO of 65 days at December 31, 2007, and net receivables of $48.6 million and DSO of 64 days at March 31, 2007.

The balance sheet amount of capitalized software at March 31, 2008 was $34.3 million, or approximately $0.2 million up from the 2007 year-end balance of $34.1, reflecting nearly equal amounts of software capitalization and amortization during the 2008 first quarter period.

Except for the convertible debt offering completed on March 19, 2007, SPSS has no other debt. The $150 million of convertible has a five-year maturity with a 2.5% coupon. As a reminder, these are no-call notes with the 42.5% conversion rate and while the bond security and net share settlement feature, there is an option for physical settlement.

During the quarter the company entered into a $50 million debt revolver. The agreement allows for borrowings under customary covenants with an interest rate of 50 basis points over LIBOR. As of March 31, 2008 there have been no draw downs under that agreement.

Very briefly, while the attributes of the statement of cash flow are evident, for the 2008 first quarter, net cash flow from operating activities was $14.1 million, compared with $21.8 million for the 2007 first quarter period. The decline in the reported 2008 operating cash flow includes $7.4 million related to the 2007 share repurchases that were accrued at December 31, 2007 and dispersed in early January 2008.

Looking ahead, we remain confident about the company’s ability to deliver previously expected revenues and earnings during the remaining nine months of 2008. Accordingly, for the 2008 second quarter, we expect revenues to be between $74 million and $78 million, with reported diluted earnings per share between $0.40 and $0.48.

The 2008 second quarter EPS guidance includes an estimated $0.08 charge for share- based compensation, or $0.01 more that was incurred in the 2008 first quarter. Also included in the 2008 guidance, we expect higher expenses of approximately $0.02 per share for further investments and marketing activities, and revenue growth initiatives.

For the full year 2008, based on the first quarter performance, we are increasing revenue guidance to between $310 million and $320 million and our increasing 2008 fiscal year EPS guidance from the previous $1.85 to $1.95 per share to a new range of $1.90 to $2.00 per share.

For the fiscal year 2008, the EPS guidance includes an estimated expense of $0.26 related to share-based compensation and assumes an effective income tax rate of 39%. Our focus for the second quarter and beyond will continue to be on delivering long-term shareholder value, building on the successes to-date and creating a solid operational and financial foundation for growth. While committed to improving productivity and reducing cost, earnings and margin improvements will be most dependent upon continuing growth in revenues.

At this time I’d like to turn the meeting back over to Jack.

Jack Noonan

Before we open the call up for questions, I’d like to end by noting with our leadership position in the emerging market of predictive analytics we continue to focus on technology leadership, channel effectiveness and operating efficiency to drive long-term profitable growth.

Now we’ll open the call up for questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Nathan Schneiderman - Roth Capital Partners.

Nathan Schneiderman - Roth Capital Partners

Ray you gave us the constant currency growth rates for license and maintenance, but what was it for the services revenue?

Raymond Panza

About $0.4 million for FX, so it’s a small percentage. That means that spot 22% growth rate was about 16% without FX.

Nathan Schneiderman - Roth Capital Partners

You’ve given us the differences in FX, the impact of that year-over-year, but there were some pretty wild movements from Q4 to Q1, what was the revenue lift sequentially due to changes in FX?

Raymond Panza

I don’t have that right in front of me, but actually currency moved around significantly. It actually came back rather close to where it ended in the fourth quarter. So, it’s not significant.

Nathan Schneiderman - Roth Capital Partners

The other income came in a fair bit stronger than I had imagined and was there anything unusual going on there? And the rates have come in quite a bit during the quarter or so, how would you recommend we model other income going forward?

Raymond Panza

Yes, there are two things going on there. It’s up about $1.4 million in total, and what that represents is we had about $1.1 favorable swing in below-the-line currency. As you recall, this is balance sheet translation of inter-company accounts. Normally as the currency gets weaker, this number turns to a loss, this is the offset to what the benefit is up above, and if you recall that generally the way it’s worked.

We have obviously been managing this number very closely. We don’t want to make money or lose money. We’d like it to be zero. Last year, it was about an $800,000 loss, this year it’s about a $300,000 favorable because of our ability to use the cash that we have and move it between entities, between countries and anticipate currency movements. So, in effect, that gave us a $1.1 million improvement, just on currency. That should get less and less as we go out into the year, because we have been managing it through last year.

Also contributing to this though, is a fairly significant change on interest income and interest expense. As I’m sure everybody is aware, interest rates have dropped dramatically from a year ago. At the same time last year, we did not have any debt the first quarter until the last two weeks of March, when we did the convertible debt offering. This year, of course, we had interest expense through the entire first quarter.

What we’ve also been able to do though, is do better cash management, so what you are seeing here is that $300,000 increase in net interest is actually about $1 million improvement in interest income, despite lower rates, and about $700 increase in interest expense for the net of $300 favorable; so the $300 plus the $1.1 is the $1.4.

Nathan Schneiderman - Roth Capital Partners

And carrying that forward, do you have a suggestion of how to model other income going forward, just given the rate changes during Q1?

Raymond Panza

Yes, you’re going to have less of a dramatic shift going forward, of course, because in the second quarter of last year we had the debt for the entire quarter. This year we will have the debt for the entire quarter, and interest rates have dropped, obviously, fairly substantial. The one big item that I would model in is the fact that we are now sitting on significantly larger cash balance. So, I’d probably look at the balance sheet, look at the cash balances, and just assume a lower interest rate.

Nathan Schneiderman - Roth Capital Partners

I was hoping you could speak at a high level on your revenue, your constant currency revenue growth at 5%, I am just curious why you don’t think you are at a higher level than that, and do you see that changing, or what’s the limitation and what’s the outlook here on the constant currency side?

Raymond Panza

Given the current economic environment, we are not all that disappointed at 5% across the board, particularly when you look at what happened in Europe, in particular. What the US was experiencing in the latter half of last year, and particularly the fourth quarter, certainly hit Europe very strongly this year and as you heard in my comment,

while Japan was up 17% ex-currency, we were disappointed by some of the performance in some of the countries on the continent, France, Germany, Holland in particular. We certainly think that we’ve managed our way through that, and we’ve taken steps to fix execution issues.

[Douglas Dowell]

The other thing I’d urge you to consider is Q1 of 2007 was an incredibly strong quarter. It was the largest Q1 we’d ever seen. It came in just shy of Q4 of the previous 2006. That, and we had never quite seen that strong of a first quarter. So to be even 5% up in net of currency effects, says we gained over a very difficult comp, and we showed progress. So, I think from that standpoint we are looking at good, solid basic operations.

Raymond Panza

And Nate just one last comment on that. As I am sure you are more aware than we are, so we look at what’s happening to the peer group, and in the industry right now we don’t really see a lot of concern over the 5% compared to what’s happening across the industry. And what’s most important, of course, is we were able to take most of that increase or more of that increase and drop it to the bottom line, with a healthy increase in EPS.

Operator

Your next question comes from Alan Cooke - Merrill Lynch.

Alan Cooke - Merrill Lynch

What execution issues did you have in Europe, and what changes have you made, and how long do you think it will take for those to be fixed?

Jack Noonan

Its leadership and we are making the change as we speak.

Alan Cooke - Merrill Lynch

And how long do you think it will take to flow through, do you expect it to turnaround right away in Q2, or do you think it will take two or three quarters?

Jack Noonan

No, I expect you to see a change in Q2. The forecast we have today, I expect to see a change in Q2.

Alan Cooke - Merrill Lynch

In terms of your forecast you beat in Q1 by $4 million, you raised the full year by $5 million. Am I correct in implying that your outlook remains the same as it was three months ago? So your pipeline looks roughly the same?

Jack Noonan

Very much the same.

Alan Cooke - Merrill Lynch

Can you give us some update on your progress with the restructuring? I noticed your R&D expenses on a dollar basis were down year-over-year. Can we expect that going forward?

Raymond Panza

You can expect it to continue to stay down because of the closure of some of the facilities. Last year, for the entire year you had facilities in the UK and Denmark which are now no longer there, at least for the balance of this year. So, from a comparative standpoint that’s a cost that is absent this year.

Alan Cooke - Merrill Lynch

Can you give us an update on the competitive landscape and any changes you’ve seen?

Jack Noonan

It’s business as usual. We have our number one competitor, we are seeing them more in the market, and we are having fun.

Operator

Your next question comes from Steve Ashley - Robert W. Baird.

Steve Ashley - Robert W. Baird

Ray, you raised revenue guidance for the full year a little bit. How much of that increase was due to FX?

Raymond Panza

No more than what we’ve experienced in the first quarter. We certainly expected some currency movements this year, and when we gave original guidance we made some estimates, when we gave the $305 to $315. So, as Alan pointed out, we took the first quarter and increased the full-year. We did not see any reason to change what’s happening in the second, third or fourth quarter.

Steve Ashley - Robert W. Baird

In terms of the strength you saw in government and academic, can you give maybe color around the strength you saw in those market segments?

Jack Noonan

That was just good solid execution on the small transactions. We saw transaction growth continue to increase this year, as we saw last year.

Steve Ashley - Robert W. Baird

Maybe you could just provide lastly the breakdown of the business license growth. I think that in the prepared remarks you said the tools business grew 17%, what percent of total license might tools have been, and what happened to deployment solutions?

Raymond Panza

What I said is the 17% was the core stat tools. Total tools were up 11%.

[Douglas Dowell]

And that was 92% of the new license revenue. And the solutions business was essentially flat, constituting 8% of the total license revenue.

Operator

Your next question comes from Jon Maietta - Needham & Co.

Jon Maietta - Needham & Co

Jack, I was wondering if you could comment on level of activity with regard to deals that are greater than $100,000, they had ticked up in Q4 above historical levels, and do they tick back down to more normalized levels this quarter?

Jack Noonan

When I look at the even the outlook in Q2 I don’t see a mega-deal sitting out there, and so as we look at the movement from every quarter stuff slips in and slips out. Normal stuff happened at the end of Q4, normal stuff happened at the beginning of Q1, normal stuff happened at the end of Q1.

So, I’m not seeing anything different, and when you think about the deal swing, because we didn’t have seven figure deals, we are talking about the largest transaction we are talking about a few hundred thousand dollars difference.

Raymond Panza

One of the benefits we have, particularly in this economic environment, is we aren’t deal dependent on seven figure deals, the large deals, but what we do have is the consistency of the deals and in those cases where we had larger deals, we did see about a 2% increase in the average value of those deals.

Jon Maietta - Needham & Co

Barry or Doug, do you have the partner-influence license revenue number, I think it was roughly 14% last quarter?

[Douglas Dowell]

Yes, for the first quarter of 2008 7% of the new license revenue was partner-influence that compares to 6% in Q1 of 2007. So, we are seeing some progress on a year-over-year basis. If you want to look at the where are they coming from, we still have seen a constant, from HP is still producing a fair amount of OEM revenue, in terms of other deals we’ve had several deals with Oracle, a few deals with Business Objects, a few with IBM, and CGI.

Jon Maietta - Needham & Co

Business Objects, is that going to be more of a contributor in 2H ‘08?

[Douglas Dowell]

I think what we should start to see is the OEM business should start to kick in the latter part of this year.

Jon Maietta - Needham & Co

Ray with regard to if I look at cash from operations for the year. Should that approximately grow in line with my non-GAAP operating income, is that a good proxy?

Raymond Panza

It should. Net income growth, you should see an increase in operating cash flow. And if you factor in the $7 million that we talked about, we’d still expect to see total operating cash flow in line with last year.

Operator

Your next question comes from Sean Jackson - Avondale Partners.

Sean Jackson - Avondale Partners

Ray, can you talk about the maintenance revenue, it’s bounced around the last several quarters. Can you explain just the relative strength this quarter, and what are the expectations for the rest of the year on a quarterly basis?

Raymond Panza

Yes, I know this is a topic that causes some concern, but it’s really rather straight forward. We generally expect it to be single-digit, consistent growth, moving with the increase in license revenue, and if you look at the raw numbers that’s exactly what you’ve seen over the last several years.

So, at 5%, ex-currency, we’re not at all concerned, it’s about where it ought to be, we got a lot of currency impact in that at 11%. The better way to look at it is, as you recall from prior discussions, is to always look at it on a trailing 12 months. And if you start working backwards in each quarter, what you see is there has been consistent growth in the total trailing 12 months.

So if you take 12 months back from this quarter, 12 months from last quarter, from the third quarter, and so forth, what you see is it is progressively continued to increase. It demonstrates that there is loyalty among the customer base, there is consistency of that growth with license growth. So, yes we’re really not all that concerned with it, it’s coming in at where we would expect it to be.

Sean Jackson - Avondale Partners

Is there a seasonality with that that’s somewhat different than the seasonality associated with the new license growth?

Raymond Panza

You do get some seasonality just out of the math because of when licenses renew. So, for example, you usually get certain changes in the third quarter when the government contracts renew or don’t renew, but it also depends on what else is happening in those periods. There is a tad of seasonality, but it’s more tied to when those contracts, generally 12 months in length, are renewed and then continue to renew going forward.

Sean Jackson - Avondale Partners

How many predictive app deals were there in the quarter?

[Douglas Dowell]

We’ve got 11, which is consistent, 11 in the first quarter 2008, and that matches the 11 we had in the first quarter 2007. So we are about even, year-on-year. The difference is a substantial number of those now are in the United States, well over half were in the United States, so that’s been the uptick.

Sean Jackson - Avondale Partners

Could you give the metric of how much capitalized R&D was in the first quarter, and did that change much at all from previous quarters?

Raymond Panza

It did not necessarily change all that much. It’s about $3.1 million. As I mentioned on the call what we saw is about $3 to $3.1, and about $2.9 of amortization, so it’s pretty much a push.

Operator

Your next question comes from Ross MacMillan - Jefferies & Co.

Ross MacMillan - Jefferies & Co.

Contrasting the growth in commercial versus government and academic. Could you just remind me how the sales organization is set up, and are those different sales teams or the same sales folks selling into either all or more than one vertical?

Jack Noonan

It’s three separate sales teams both with our field organization and our inside sales.

Ross MacMillan - Jefferies & Co.

And would you characterize then, just the commercial performance was the weakness in Europe a contributing factor to the lower growth in the commercial side, is that a fair reflection?

Jack Noonan

You got it right.

Ross MacMillan - Jefferies & Co.

On the DSO which you’ve done a terrific job in collections, do you think that goes any lower? Do you think that DSO can go lower than the 57 or so that we are seeing now, I don’t know the target range that you have so may be you could just help me on that?

Raymond Panza

For this industry, 60 is an outrageously good number, 57’s a record low and Mark Nelson and his team deserve a lot of credit for being highly focused on this. Of course, my job is always to ask him do lower, but we’re very pleased at 57.

Operator

Your last question comes from Frank Sparacino - First Analysis.

Frank Sparacino - First Analysis

Could you provide some detail on the solutions growth year-over-year, and maybe talk about dimension, and if there was any discernable impact with the new release in Q4, Q1 timeframe?

[Douglas Dowell]

Yeah Frank, I think what we saw with Dimensions’ revenue is again essentially flat on the previous first quarter of 2007. So what it says is we are starting to work our way back. I think, as you’ll recall, we saw some significant downticks during the previous year. And that the key thing to focus on is, we are seeing, we continue to see growth in the lower range of Dimensions, the lower deal values of Dimensions.

For example when you look at the deals in the $25 to $100,000 range. We almost doubled the number of deals, in just shy of doubled the amount of revenue we generated in that category. So again overall, we are looking at flat but we are seeing growth at the low to mid range in the market and that’s what we’re looking to capitalize on as we move forward.

Jack Noonan

So it’s many new named accounts to add to.

Operator

There are no more questions in queue.

Jack Noonan

Now thanks again everybody for taking the time to hear about SPSS and our first quarter results.

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!