Bioamber's (BIOA) CEO Jean-Francois Huc on Q2 2015 Results - Earnings Call Transcript

| About: BioAmber (BIOA)
This article is now exclusive for PRO subscribers.

Bioamber Inc. (OTC:BIOA) Q2 2015 Earnings Conference Call August 4, 2015 4:30 PM ET

Executives

Mike Hartmann – Executive Vice President

Jean-Francois Huc – Chief Executive Officer

Francois Laurin – Chief Financial Officer

Analysts

John Quealy – Canaccord Genuity

Operator

Good day, ladies and gentlemen, and welcome to BioAmber Inc.'s Second Quarter 2015 Results Conference Call. My name is Leone, and I will be your operator for today. At this time, all participants are in listen-only mode, later we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Mike Hartmann. Please proceed.

Mike Hartmann

Thank you, Leone. Good afternoon, everyone, and thank you for joining BioAmber's second quarter 2015 earnings conference call. My name is Mike Hartmann, Executive Vice President, and with me today are JF Huc, our Chief Executive Officer; and Francois Laurin, our Chief Financial Officer.

Today we are presenting some slide to accompany our business update. If you have logged on to this call via webcast, you have access to the slide presentation directly on your webcast page. If you have dialed into the earnings call, you can simultaneously view the slideshow by going to investor.bio-amber.com and then clicking on the webcast link to register. Once you have registered, the slide show will appear on the right side of your webcast page. Please take a moment to register now before we begin the slideshow.

I would like to remind everyone that this conference call contains estimates and forward-looking statements that represents the company’s view as of today, August 4, 2015. BioAmber disclaims any obligation to update or revise these statements to reflect future events or circumstances. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. Please refer today’s earning release and BioAmber’s filing with the SEC for information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements.

In our second quarter earnings press release, which we issued at 4:05 PM today, you’ll find reconciliation to the most comparable GAAP financial measures for any non-GAAP financial measures discussed on this call. Our Q2 2015 earnings release is available on the Investor Relations page of our corporate website at www.bio-amber.com. Also, an audio replay of this call will be available on the company’s website starting two hours after the end of this conference call.

I will now turn the call over to JF.

Jean-Francois Huc

Thanks Mike, and good afternoon everyone. This is a very exciting time for BioAmber, we finished construction on our first commercial scale manufacturing facility. Our commissioning of the plant is proceeding on schedule and we expect to be in commercial operation this quarter.

We anticipate a rapid ramp in sales in the last quarter of this year and through 2016. We are poised for growth and are putting in place the elements we need to build the second plant which will further accelerate growth and profitability. Today’s business update will cover first of all our Sarnia plant, the growing demand that we are seeing for our succinic acid in a number of large markets and we’ll finish with the progress on the second plant.

If you take a moment to open the slide deck that accompanying this call, and turn to Slide 3 to 6 in the presentation, you will be able to see some recent pictures of our Sarnia facility. We achieved mechanical completion in June and as you can see from the photo on Slide 3 in the deck, we have began [indiscernible] that we need to test and operate the facility. Slide 4 shows the control center which is now fully operational and Slide 5 shows a picture of purification equipment that used to produce succinic acid after the fermentation process.

Slide 6 is a picture of the packaging area where our succinic acid will be put into one ton super sacks. I'm going to now turn to Slide 7, where you will see an update on Sarnia’s capital costs. When we went public in the spring of 2013 before the start of construction we estimated that the plant would cost $125 million plus or minus 10% based on the engineering detail that we had at the time. We are now projecting that the final capital cost of the plant will be $141.5 million which is $4 million above the high end of our original estimate of $137.5 million or 3% over budget.

We feel very good about this number, because our construction project was schedule driven and we absorbed a number of non-budgeting costs in the later stages of the project to minimize schedule delays. As previously disclosed, we also incurred higher than expected piping, engineering and scaffolding cost during the project. Overall, this is an important milestone because we no longer face material risk around the capital cost of the plant.

You turn to Slide 8, we provide a summary of our safety statistics to-date. We are proud to report that we completed construction without a single loss time injury. To-date, we recorded over 630,000 work hours without a single injury leading for loss time. We also did not record a single environmental incident. This is a testament to the attitude and behavior that our employees, our general contractor and the various subcontractors maintained through construction. We are maintaining our total commitment to safety as we startup and operate the plant. Safety is and we’ll remain the highest priority for our company.

Turning to Slide 9, we have an update on Sarnia commissioning in startup. All of our utilities have been commissioned in our operational throughout the plant including steam, electricity, instrument air and cooling water. We have commissioned all of our raw materials handling and storage systems and as I mentioned are now receiving commercial shipments from our suppliers.

We have also completed all sterility testing in the plant. Along the way, we have encountered the typical problems of the plant startup, valves that are incorrectly installed,

tanks and pipe wells that have leaks, equipment that was incorrectly wired, control sequence gaps, modifications to certain equipment following vendor inspection and testing and faulty of damage parts that require repair or replacement.

However to-date, we have not encountered any problems that have resulted in significant delays to the commissioning schedule and we are very pleased with the quality and the motivation of the people that we hired in Sarnia were now executing our commissioning plan.

We are now in the process of running our initial fermentations, we expect to have results shortly and our goal is to generate performance similar to what we had previously seen in the French demonstration facility. In parallel to this work, we are beginning to purify succinic acid and assess the quality of the final product to confirm that it needs specification.

On Slide 10, you will see a list of the milestones we are striving to achieve between now and the end of the year. In the coming weeks, our goal is to confirm that our yeast is operating as it should and that the succinic acid we produced meets our customers’ quality specifications. We also expect to begin commercial operations this quarter.

In the fourth quarter of 2015, we plan to initiate our two take-or-pay agreements qualify a number of customers and beginning to selling succinic acid to them. As I mentioned in my opening remarks, we are seeing tremendous growth prospects for succinic acid in a number of large market applications were our succinic acid can be used as a drop in renewable building blocks for existing supply chain. In these applications, differentiated performance is driving demand and adoption and renewable content is a plus.

Slide 11, highlights two commercial deals that we disclosed in the last quarter. Bayer Material Sciences and Flokser, these are not development agreements, both companies have started commercializing their products, in both cases succinic acid help to deliver performance and renewable content.

These two applications, textiles and synthetic leather together represent a 400 million pound market opportunity for succinic acid, that six times the capacity of our Sarnia plant. As a company, Bioamber has focused solely on chemicals and materials since its inception in 2008 and has been developing new market applications for succinic acid ever since.

Bayer and Flokser are the combination of several years of development work they did not happen overnight. We have leveraged the demonstration plant in France, which we operated for five years from 2010 through 2014 to qualify our product, engage potential customers and undertake development that was needed to penetrate new markets and build our credibility as a supplier. We are now seeing the fruits of our labor after seven years of hard work.

Slide 12, summarizes our work with Bayer MaterialScience which has launched a new line of innovative bio-based materials for textiles used in footwear, sportswear, automotive and apparel. By substituting other petrochemicals with our succinic acid, Bayer was able to formulate products that offer excellent performance while being up to 65% renewable content and eliminating the use of dangerous solvent, thereby offering an improved ecological footprint. Bayer MaterialScience has launched these innovative materials under their Impranil eco brand.

If you turn to Slide 13, you’ll see a summary of our work with Flokser and DuPont Tate & Lyle bio products. Flokser has developed a new generation of synthetic leather fabrics that have softer touch and better scratch resistance than the current products made with petrochemicals and they offer 70% renewable content.

Flokser has launched these synthetic leather fabrics under the Sertex brand. By collaborating with DuPont Tate & Lyle a leader in renewable chemicals that produces 100% biobased 1,3-PDO, we were able to come up with 100% biobased materials made from their 1,3-PDO and our succinic acid.

Flokser, a leader in synthetic leathers and textiles was able to formulate these materials into products and improve the overall performance of their synthetic leather fabrics. We’re excited by this first commercialization of renewable materials made with 1,3-PDO and succinic acid. Because we’ve only scratched the surface of their potential.

There are a number of other applications where these materials can bring differentiated performance and renewable content. And we anticipate that our collaboration with DuPont Tate & Lyle will lead to additional product launches in other applications expanding the markets for both succinic acid and 1,3-PDO.

Turning to Slide 14, this highlights another market segment where we see tremendous potential for succinic acid. When combined with recycled PET, our bio-succinic acid provides performance improvements and enables the production of 100% renewable material. The materials made from recycled PET and succinic acid can replace petrochemical materials used today in paints, coatings and insulation foams for appliances and construction materials. Together representing a multi-billion pound addressable market.

The combination of recycled PET and bio-succinic acid provides performance benefits that can help accelerate penetration in this large market. When used in paints and coatings our renewable materials improved hardness and scratch resistance. And installation foams they eliminate the need for problematic substances such as formaldehyde and also offer better fire-retardant properties. We estimate that the market opportunity for succinic acid when combined with recycled PET is 200 million pounds.

Slide 15 provides an overview of other applications were succinic acid can substitute petrochemicals and provide high performance while adding renewable content. These include lubricants, paints and adhesives. In each instance, there is a clear value proposition that is driven by the differentiated performance, not the biobased content. These markets are on top of the segments that we have previously disclosed and developed such as food and flavors, personal care products, biodegradable plastics and pharmaceuticals.

Slide 16 illustrates how all of these applications we’re talking about are dropped in markets. We have only targeted applications were performance can be delivered and the resulting formulations do not require any changes to the processing equipment or downstream supply chain. Flokser and Bayer examples illustrate this point. Succinic acid replace adipic acid and Flokser and Bayer develop formulations that could be dropped into their existing manufacturing equipment without the need for any changes.

These new applications for succinic acid and in particular in the areas of paints, coatings, lubricants, recycled PET and polyurethane or what will drive the growth of the succinic acid market. The other driver of succinic acid growth will be at use as a feedstock for making BDO and THF, as we have planned to do in our second plant.

Slide 17 summarizes the projected growth of the succinic acid market from the last six market studies that have published. The average of these six studies as a compounded annual growth rate of 35% representing an average market size of 665,000 metric tons in 2020 or approximately 1.4 billion pounds. All of these studies assumed growth in the markets I previously described and in the conversion of succinic acid into BDO and THF. What will hinder this rapid growth is the availability of succinic acid. It is for this reason that we are seeking to deploy plants rapidly so that we can grow alongside the market.

Now, over our last two earnings calls, we have seen oil prices fluctuate significantly. In March of this year, WTI was approximately $50 per barrel and had risen to over $60 per barrel in May. Now they are back down under $50 as shown on Slide 18. One other strengths of our business is that we have limited exposure to oil prices because only 25% of our Sarnia volume commitment are projected to be straight substitution of petroleum succinic acid. This part of our business is exposed oil prices because petroleum succinic acid is made form benzene or butane, both of which are tied closely to naphtha prices.

As oil prices fall, the price of petroleum succinic acid falls, and we have to align our selling price to capture and maintain market share, despite this pressure we are confident that we can compete because at $50 per barrel oil, the variable cost of petroleum drive succinic acid will be 50% higher than the variable cost we project for our bio-succinic acid produced in Sarnia as illustrated on Slide 18. For the rest of our business, our selling prices are negotiated on the base of the value customers derived from our succinic acids and they are not linked oil. For example, our take-or pay agreement with PTTMCC has a set price that is independent of oil prices.

PTTMCC makes the biodegradable plastic using our succinic acid and by sourcing renewable succinic instead of petroleum succinic PTTMCC can produce the plastic that is 60% renewable content and important aspect of their product positioning.

Slide 19 summarizes that it fall at full capacity, our target EBITDA margin for Sarnia would be over 35% with current oil, corn and natural gas prices. In other words, we expect to generate attractive margins with oil at $50 a barrel, even though, we have to align our selling price with petroleum succinic acid in the merchant market. Our innovative patent protected biotechnology platform has a card structure that is disruptive to the petrochemical producers of succinic acid.

So to conclude on Sarnia, we are poised for rapid growth and have significantly derisk the facility. We finished construction and expect to be in commercial operation in this quarter and we have take-or-pay contract that represents 50% of the total capacity that we expect to initiate in Q4 of this year and we have supply agreements in place for the balance of available capacity. We have a number of additional contracts and negotiation that cover high growth applications where our succinic acid offers value and where we can generate strong margins even if oil prices remain depressed.

At full capacity we will be cash flow positive as a company. Our next plant will allow us to accelerate revenue growth and profitability. The next plant will produce 70,000 metric tons of BDO and 30,000 metric tons of THF annually and we’ll also bring another 70,000 metric tons of succinic acid capacity online to meet the forecasted demand. BDO and THF are both large volume chemicals used to produce engineering plastics, polyurethanes and spandex. Our renewable and BDO and THF will be identical to petroleum derived BDO and THF and through dropped in products.

Slide 20 illustrates how we are thinking about funding the next plant. Our primary objective is to secure mezzanine debt at the corporate level which can be used to contribute as our equity stake in the second plant. Depending on the amount of mezzanine debt we secure, we would adjust the minority interest percentage. Vinmar has committed to 10% equity stake and we have several other parties including Mitsui & Co were interested in participating in the plant. Collectively they could contribute between 20% and 49% of the equity further minimizing the amount that we would need to contribute and eventually raising the public markets.

Given our degree of derisking, we believe we can also secure 65% debt on this plant. This is not unrealistic, if you consider that we secured 50% debt financing on our first of kind plant in Sarnia and you factoring the free cash flows that will be available for debt servicing. This plant will be significantly derisk from both the commercial and technology perspective. We have take-or-pay contracts or 88% of the total output over the first 15 years. The cumulative of revenues from these take-or-pay contracts will exceed $5 billion, assuming the 10 year average selling prices for succinic acid BDO and THF.

We also have minimized technology risk by adopting the same design of Sarnia for succinic acid production and licensing in JM Davey’s proven technology for the conversion of succinic acid to BDO and THF.

We have engaged commercial lending institutions for project level debt and we are in discussions with government programs in both the U.S. and Canada. Government programs can provide loan guarantees and/or direct low interest loans that will lower the effective of cost of project debt.

Our project is receiving a lot of interest in government programs based on its risk profile in the favorable environmental footprinted offers along with the renewable nature of its production. We are striving to achieve a financial close on the next plant by the middle of 2016 and to have the plant build in 2018. With the take-or-pay agreements we have in place, this plant will generate rapid revenue growth in sales of approximately $400 million at full capacity with operating margins of approximately 40% if we sell our product at the 10 year historical average selling prices. The free cash flows from this second plant would allow us to self finance the construction of future plants.

This concludes our business update and I will now ask our CFO, Francois Laurin to summarize our financial results for the quarter. But before I do, I would like to say that we are disappointed to be losing Francois who was an important member of our management team. Though he resigned 10 days ago, Francois has led the preparation of our second quarter financial results and he is overseeing the filing of our Form 10-Q this week. His last day will be on Friday August 7, after which he will join Laurentian Bank as their new CFO. Laurentian Bank is Canada’s Seventh largest chartered bank and it’s headquarters here in Montreal.

While Francois will be missed, we are pleased to have Andy Ashworth step back into the CFO role on an interm basis. So that we can take the time we need to find a permanent successor. With that I turn it over to Francois.

Francois Laurin

Thank you, JF. I would like to begin my – by thanking my colleagues at Bioamber for their support and my difficult decision. In my seven months with the company I was impressed with the quality of the people, the technology, the progress in Sarnia and the near-term growth prospects. My resignation was a no way related to the company, its finances or its outlook. I was fully committed when the Laurentian Bank approached me within an opportunity that I could not refuse.

I have had a chance to work over the past week with Andy, and I’m confident that the company will be able to manage the transition to a new CFO effectively. I will now walk everyone through the financial highlights of the quarter.

Revenues for the quarter ended June 30, 2015 decreased to $342,000 from $415,000 for the same period in 2014. The decrease was primarily due to a reduction in average selling price partially offset by an increase in volume sold.

The gross loss for the quarter ended June 30, 2015 decreased to $410,000 from $1.8 million for the same period in 2014. This was driven primarily by $1.3 million reduction in the inventory reserves taken in the quarter. In the second quarter this year a reserve of $300,000 was recorded as compared to a reserve of $1.6 million for the second quarter 2014.

R&D expenses for the quarter ended June 30, 2015 increased to $5 million from $4.3 million for the same period in 2014. The increase was primarily due to an increase in non-recurring expenses related to the commissioning and start-up of the Sarnia plant. This was partially offset by stock option compensation expenses related to stock option cancellations in the second quarter of 2014, which did not occur in 2015.

Sales and marketing expenses for the quarter ended June 30, 2015 decreased to $1.1 million from $1.7 million for the same period in 2014. This was driven primarily by stock option compensation expenses related to stock option cancellations in the second quarter of 2014, which did not occur in 2015.

G&A expenses for the quarter ended June 30, 2015 remained stable at $3 million compared to $2.9 million for the same period last year.

Other operating expenses increased $1.8 million for the quarter ended June 30, 2015 as compared to the same period in 2014. The company disclosed in May 2015 that it had terminated its license agreement with DuPont following its decision to pursue BDO commercialization with technology it licensed from JM Davey. As a result the company recorded a non-cash write-down of the intangible asset in the amount of $1.1 million. In addition, the company had $200,000 foreign exchange loss for the quarter ended 20 – June 30, 2015 as compared $400,000 gain for the same period in 2014. Financial charges remain stable at $3.8 million compared to $3.9 million for the same period last year.

The company recorded a net loss attributable to Bioamber Inc. shareholders of $14 million or a loss of $0.58 per share for the quarter ended June 30, 2015, compared to a net loss of $14 million or a loss of $0.75 per share for the same period in 2014. The adjusted net loss attributable to Bioamber Inc. shareholders for the quarter ended June 30, 2015 was $9.5 million or a loss of $0.38 per share compared to an adjusted net loss attributable to Bioamber Inc. shareholders of $7.5 million or a loss of $0.40 per share for the same period in 2014.

Adjusted net loss attributable to Bioamber Inc. shareholders is the non-GAAP financial metrics that excludes for the quarter ended June 30, 2015 the impact of the change in fair value of the warrants issued in connection with the IPO. The non-cash inventory reserve expense and the intangible asset impairment related to determination of the technology expense – license. That same financial non-GAAP metric excludes for the quarter ended June 30, 2014 the impact of the change in the fair value of the warrants issued in connection with the IPO. The non-cash inventory reserve expense and the non-cash expense resulting from the cancellation of certain employee stock options.

Please refer to Annex A: non-GAAP financial information-adjusted net loss attributable to BioAmber Inc. shareholders for more information regarding this non-GAAP financial metrics. Finally, we ended the quarter with more than $48 million of cash. Our next cash burn in operating activity is continued to be just under $2 million per month in Q2 2015 excluding one time charges for commissioning in Sarnia.

Of the $48.7 million in cash on hand, we estimate that $14 million will be allocated to construction project capital expenditures for Sarnia and the balance will be for general corporate purposes.

I would now like to turn the call over to the operator, so that we can open up the call to any questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Your first question comes from John Quealy from Canaccord Genuity. Please go ahead.

John Quealy

Hey, good afternoon folks. So a couple questions. First, if we can go to the balance sheet and cash for a moment. So can you talk about forecasts just the cadence of it, the next couple quarters, we shake down the facility in Q3, we start to get some initial revenues in Q4, can you talk about, JF or Mike cash expectations the rest of the year and actually into the first half of 2016, obviously you're going to need some time to ramp this thing. So can you just talk about for a little bit?

Jean-Francois Huc

Well, obviously we expect some – as we mentioned John, we’ve got $14 million for CapEx, the rest will be the commissioning. And ramp up of production and we are going to have – we expect sales to come in, in the fourth quarter of 2015 to be able to maintain to have cash balance by the end of the year and well into the first quarter of next year.

John Quealy

So my point is, but in September, let's say, there's no revenues in September from Sarnia but seems like a decent expectation. Is that heavier than a $2 million per month burn and then that gets later obviously as revenues come in? That was really the heart of my question if I asked it better.

Jean-Francois Huc

No, that the cash burn is make – take the commissioning and startup cost aside. The burn is expected to be less than $2 million a month.

John Quealy

Okay, yes, okay. And then in terms of the Q4 period, I imagine this is initial batches, so customers will look for a certain characteristics and specs in the succinic acid. So is this going to be more batch-related revenues in Q4 or do you think they're going to start to take volumes down on these pre-existing agreements?

Jean-Francois Huc

We’ll start to see a ramp up in volumes. I mean we’ve been managing our customers and telling them that we’ve been on allocating to a lot of them and limiting the amount we would sell right now with the expectation that Sarnia would be coming online in third quarter. So as we moving to fourth quarter, we have a fairly extensive qualification program in place to get them samples and to get them qualified once they see that the product is as they’ve seen in the past, they will commence in earnest, and I’d say the only thing we have to time or take-or-pay agreements, where we want to be sure that the plant is stabilized and producing consistent quality and not subject to stops and starts, because we don’t want to be in the situation where we have a take-or-pay customers that’s ordering and we can’t supply because there will be penalties associated with that.

John Quealy

Great. And thanks for the detail on, I guess, Slide 10 it is in terms of the milestones. When I look at this, it looks clearly the spec for bio-succinic is critical in Q3. When you think about Q3, is that mostly in the last month of Q3 or I know I'm getting very precise on the details here, but when do you think you'll know how the bio-succinic acid meet spec is that – in the September timeframe, October? How do you think about that?

Jean-Francois Huc

No. It will definitely be within the next few months, if everything goes according to plan, it’s in the coming weeks and if we run into hiccups along the way, it may take a little longer than that. But these are tests we’re starting now. So we should, we hope to be in a position to communicate those first three, those first couple of milestones in the coming weeks and the third milestone of being in continuous commercial operation to be able to communicate that before the end of September.

John Quealy

Okay, Okay and then just a couple quick follow-ups. In terms of plant two, your last slide there. Talk about the puts and takes about starting this initiative. Now given that Sarnia is just ready to get going. Does the cost of capital come down assuming that Sarnia is producing decent amounts in the first half of 2016, it seems like you can and I know you said you wanted financing perhaps by next summer around there, but my point is that could be variable for a couple of quarters and how do you think about that JF for plant two?

Jean-Francois Huc

I think that in order to complete our financial close on plant two, whether it would be drawing down on mezzanine debt or securing project debt or government support, all three of those are going to be predicated on a Sarnia facility that’s running smoothly and running as its designed. So having the economics or very close to the economics that we had designed the plant for.

If we run in the trouble in Sarnia, I can imagine that’s closing on plant two, until we get those problems fixed. But Sarnia is running according to design basis, then I think it opens up our whole different category of capital, so it’s kind of like the – that the loan we got from EDC, FCC and Comerica, its that kind of debt with that kind of commercial lending rate which is far more reasonable than venture debt that we would be looking at and then government assistance would just bring that effective rate down further.

John Quealy

Okay, and then my last one on JM-Davy. I mean, I assume that was a decent amount of money to secure them for plant two. Have they done anything in earnest yet on designing more processor or is it just more of a retainer fee so when plant two if and when it gets secured financially they you have been slotted out for the build out thanks guys. I'll hop back in line.

Jean-Francois Huc

Okay, thanks John. So they are working in earnest you’ll see that there is some pretty significant amounts of money that have been both in terms of licensing fees and engineering fees that we’re paid out in the past quarter. I think we have some wiping detail on that in our Form 10-Q and the – I believe they’re on schedule to deliver the engineering package early – late this quarter or early the next quarter. And that’s NACL 3 [ph] level engineering.

Operator

Thank you. [Operator Instructions] There are no further questions at this time. Please proceed.

Jean-Francois Huc

Okay. Thank you, Leone. With that wraps up our second quarter earnings call. Thanks, John for his questions and on behalf of everyone at BioAmber, including the Board of Directors, I’d like to thank Francois for his contributions and we wish him success at La Banque Laurentienne and we wish everyone good evening. Thanks, again.

Operator

Ladies and gentlemen, this concludes your conference call today. We thank you for participating. And ask that you please disconnect your lines.

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!