Jean Coutu Group's (JCOUF) CEO Francois Coutu on Q3 2017 Results - Earnings Call Transcript

| About: Jean Coutu (JCOUF)

Navistar International Corporation (OTCPK:JCOUF) Q3 2017 Earnings Conference Call January 6, 2017 9:00 AM ET

Executives

Helene Bisson - Vice President, Communications

Francois Coutu - President and Chief Executive Officer

Andre Belzile - Senior Vice President, Finance and Corporate Affairs

Analysts

Irene Nattel - RBC Capital Markets

Peter Sklar - BMO Capital Markets

Michael Van Aelst - TD Securities

James Durran - Barclays

Vishal Shreedhar - National Bank

Keith Howlett - Desjardins Securities

Tal Woolley - Dundee Capital Partners

Operator

Good morning, ladies and gentlemen. Welcome to the Jean Coutu Group’s Financial Results for the Third Quarter 2017 Conference call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Ms. Helene Bisson. Please go ahead.

Helene Bisson

Good morning, everyone and a Happy New Year. Welcome to our conference call. The Q3 earnings release was put on the wire earlier this morning and was then posted on the Jean Coutu Group’s corporate website. The quarterly press release is accompanied by additional financial information, and we will refer to the quarterly result slide presentation and MD&A during this call. The press release and MD&A are also available on SEDAR.

Here with me this morning are Francois Coutu, President and CEO and Andre Belzile, Senior VP, Finance and Corporate Affairs. Mr. Coutu will discuss company’s results and key operating highlights, and Mr. Belzile will then cover few financial details. This will be followed by a question-and-answer period for analysts only. I would ask you to limit yourself to only one question at a time, so as to allow us time to address as many different analysts’ questions as possible. Media are invited to contact me for comments or interview purposes. We would like to remind listeners that the Company's forward-looking statement disclaimer applies to all our communications.

Now Mr. Coutu will begin our presentation.

Francois Coutu

Thank you, Helene. Good morning everyone, Merry Epiphany and Happy New Year. During the third quarter, both network sales and distribution center frontend sales showed a significant increased demonstrating the efficiency of our business strategies, also during that period we pursued the transfer of our operations from our distribution centers to its new location in Varennes. The quarter’s results were affected by the cost related to this gradual transition and will still be going on as we will expand.

Let’s look at the detail of these results. During the third quarter, network sales increased by 3.9% to 1.94 billion while the Jean Coutu Groups consolidated sales were up by 2.2% to 693.3 million. As shown on the first table, network pharmacy sales increased by 4.5% while distribution center pharmacy sales were up by 1%. The periodical withdrawals agreement with the Ministry of Health and Social Services and the AQPP increased the growth of retail pharmacy sales by 2.3% due to the impact of the retroactive adjustments of these deductions for the period of April to August, and recorded when they were introduced in September 2015. Sorry, it's little complicated but that’s the way it is at this time folks.

However, the introduction of new generic drugs reduced retail pharmacy sales growth by 0.7% in the last quarter and price reductions of generic drugs reduced it by another 0.3%. Without these factors, network pharmacy sales growth would have been 3.2% in their last quarter. The generic penetration rate increase by 1.6% year-over-year to reach 71.4% in the last quarter thus impacting pharmacy sales. Network frontend sales showed an increase of 3.4% while distribution center frontend sales were up by 5.4%.

Turning to the next slide, we see that operating income before depreciation and amortization decreased by 8.2% this quarter to $79.9 million. This decrease is mainly explain by the lower contribution of Pro Doc to the consolidated OIBA following the increase of professional allowances paid to pharmacist owners from 15% to 25% as of April and to 30% on October 28. Also, we experienced an increase in general and operating expenses such as higher labor cost and other expenses related to the transition to the new location in Varennes. Net profit amounted to $51.2 million or $0.28 per share during the quarter ended November 26, 2016 compared with $57.8 million or $0.31 per share last year.

The following slide shows the quarterly same-store sales growth for the PJC network. On a same-store basis, network pharmacy sales increased by 4.4% during the third quarter of fiscal 2017 over the comparable quarter while prescriptions count grew by 3.4% year-over-year. Once again keep in mind that combined with a 71.4% generic penetration rate introduction of new generic drugs, price decreases and lower growth and expenses specialty drugs reduced pharmacies retail sales growth while the one-time retroactive withdrawal of the Ministry of Health and Social Services in the same quarter last year increased. Also, on a same store basis, front-end sales increased by 2.8% year-over-year. Overall, network sales increased by 3.6% during the past quarter on the same basis.

Slide 6 and 7 during this third quarter, we have put forward many different marketing initiatives such as special weekly flyers as well as TV and radio campaigns. We also launched various promotions and popular contests. On the real-estate front, we opened three new stores, including one relocation. These stores are situated in Montreal on Henri-Bourassa Boulevard in Drummondville and in LaPrairie. On Slide 8, you can see for those are the new drug stores.

Four renovation projects were completed during the quarter. On Slide 9, you can see follows three of the renovated drug stores in Dollard-des-Ormeaux, Sorel and Rivière-du-Loup. Furthermore, there are 14 renovation projects underway. During the third quarter, we launched an important flu vaccination campaign. Flu vaccines were offered across the network in more than 300 stores. Again this year, patient could make an appointment online and this service grew once more to be very profitable.

Thank you. Now, let’s take a look at the financial review by Andre Belzile.

Andre Belzile

Thank you, Francois, and good morning everyone. Table shown on Slide 12 reconciles operating income before depreciation and amortization through net profit. Income taxes amounted to $18.9 million in the third quarter of fiscal 2017 compared to $21.4 million in the comparable quarter of fiscal 2016. Earnings are still subject to a 26.9% tax rate in our 2017 fiscal year, and there was no significant item impacting the effective tax rate in the quarter.

Depreciation and amortization charges amounted to $10.3 million during the third quarter of fiscal 2017 compared to $8.2 million for the comparable quarter of fiscal 2016. As explained earlier by Francois, third quarter fiscal 2017 OIBA decreased to $79.9 million compared to a $7 million in the comparable quarter of fiscal 2016.

You also have a summary of our statement of financial position on the following slide. There was no bank debt used at quarter end, and we had $152.4 million of cash on hand. We have sufficient liquidity with availability of $250 million under our revolving credit facility with an optional accordion of another $500 million. The book value of total liquidity amounted $1,181.3 million compared to $1,120.3 million at the end of the previous fiscal year.

On Slide 14, you can see the cash flow related to operating activities amounted to $51 million during the third quarter of fiscal 2017. Cash flow used in investing activities was $3.1 million during the last quarter including $2.9 million used for the construction and acquisition of store related capital assets and 1 million investments in tangible assets. Total selling square footage was 3,283 million square feet at the end of the last quarter compared to 3,217 million square feet at the end of the same quarter in the previous fiscal year.

The last slide shows the contribution from our generic drugs manufacturing subsidiary and our consolidated results. Sales were flat with OIBA margin decreasing to 35% following further prices decline and increased professional allowances.

That concludes our presentation on the third quarter of fiscal 2017 results. I would now ask the operator to open the question period.

Question-and-Answer Session

Operator

Thank you. [Operator Instruction] The first question is from Irene Nattel of RBC Capital Markets. Please go ahead.

Irene Nattel

On the regulatory front, I was wondering if you could please provide an update on any conversations, the tone of conversations, any insight in terms of the implementation of Bill 81, and also any thoughts you might have around Bill 92, and the potential impact or any changes you expect to arise as a result?

Francois Coutu

I wish I would help to give you more clarity, Irene. The final regulation on tenders for generic prescription drug has not been published. No additional information has been released at the present time. So, I know that the Bill has passed. It’s just a question of when will this be explained to us. Mind you that there is a strike of all the lawyers or the ones who are working at the government level, but that could probably not accelerate the things at the government level but I don’t know. As for Bill 92 again the only thing that we know for sure will apply will be in September 2017 for the transparency of prices for insurance, the private sector. So, this I think, it’s not a big effect, it’s just going to be shown on the invoice or on the receipt that the cost of the drug, the fee and as well as the distribution fee as well. So, I don’t see a lot of effect on that one particularly.

Irene Nattel

Thank you.

Francois Coutu

I wish I could help you more to reduce that it’s something that the Ministry of Health is hiring on its own.

Irene Nattel

No, it has been incredibly frustrating for all stakeholders.

Francois Coutu

Yes, it is too with us. The uncertainty period is prolonged that’s all I can say.

Irene Nattel

And that’s for sure. Just if I could, turning to more tangible issues. Clearly, it seems as though the whole vaccination program is really gaining traction. Wondering what kind of carryover you might be seeing from, in terms of inside store sales, both OTC and frontend store from people who come in for their flu shots?

Francois Coutu

Well, obviously, it’s another traffic builder as well. We think that the people when we offer that service also provide an opportunity to talk more about also their prescriptions and the nurse that as applied to work care for this particular program also make some new acquaintance and give them an opportunity to meet with them again on a more regular basis. So, that’s interesting and obviously the people who are getting vaccinated at the Jean Coutu store will also take the opportunity. Especially, at that time of the year when there is an opportunity also for expanding in the store, but our stores were ready to do and to make sure that people appreciate also the offer that we have in our stores. So, it’s so dynamic in the pharmacy field so that, that’s why we always say, this is a great opportunity to invest because there is always going to be an attraction to a drug store, and that’s when other examples of the flu vaccination which is done rapidly with efficiency, and that’s always been the way we’ve done business in the past.

Irene Nattel

Is there any way for you to track what the carry, what I guess the conversion rate might be of people coming in for the vaccine, and then incremental purchases?

Francois Coutu

No, not really, because that’s what they are taking an appointment to see the nurse and to get the vaccination, but so at this time we don’t necessarily track whether the things that they're buying in the store, but that mind you we have so many means of attracting people in the stores. So, if we had to do that, it's just that this program is just suit us perfectly, and that’s why we’re so enthusiastic in maintaining and making sure that people don’t forget every year because it belongs to the role and the authority as well as the responsibility of the pharmacists to offer this service.

Operator

Thank you. Your next question is from Peter Sklar, BMO Capital Markets. Please go ahead.

Peter Sklar

You’ve been relatively active on the normal course issuer bid this quarter which has changed from where you've been previously. As I recall, you used to say that you were holding back on buying back stock until you saw the outlook firm up in terms of regulatory reforms, and so given that Bill 81 has not been resolved, I'm just wondering why you were on the bid this quarter?

Andre Belzile

Yes, thanks for the question. Even though, we have more visibility these days on potential impacts of some of those regulatory changes. Others are still unknown as for Bill 81. For example, the recent activity on our NCIB actually was more driven by opportunistic buying under price weakness of our share following the release of our previous quarter numbers. If you recall, right after the stock declined a bit and we thought it was a note bringer at that time. And that’s about the reason why we were active in the last quarter.

Peter Sklar

Okay, and Andre just one other question. Like in the press release I think you’re using an expression I haven't seen before you talk about sales at the commercial section of our distribution centers. When you say commercial section, I assume you're referring to frontend distribution?

Andre Belzile

Yes, I think it’s about completion of the French…

Peter Sklar

Okay.

Andre Belzile

French way to CAGR as we'll set here.

Francois Coutu

Now, when, we saw the professional and commercial.

Andre Belzile

Yes.

Francois Coutu

Professional, you know what it means and commercial.

Peter Sklar

Yes, and I think now that your frontend warehouse sales were quite strong. Was there anything underlying in that or just timing of shipments?

Andre Belzile

Not really, but you look at the frontend sales of the store level; you could see that they will combine very well. We shift again strongly before the Christmas season which was good at Jean Coutu. But, strong sales result of several initiatives that we made mainly with our weekly flyer, we made some more gift card promotions and seasonal activities and so on. So, that rejuvenates all the activities whether at distribution or at retail level.

Operator

Thank you. The next question is from Michael Van Aelst of TD Securities. Please go ahead.

Michael Van Aelst

So, I guess I wanted to talk first on the operating expenses. Can you give us a little bit more color as what’s behind the growth or the changes in the three main components of OpEx that you provide in your notes so wages, leases and another?

Andre Belzile

As you know, as we grow the network selling square footage, the rent expenses going up, but all those expenses are being recharged or charged back towards to the franchisees that are operating these stores. And we have also the annual increases, normal annual increases of those rents. So, that’s what you see then nothing really different other than maybe as we are taking more time to transition from our former DC center in Longueuil to Varennes, we are actually renting that space that we're still using in Longueuil, but that margin shouldn’t make that much of difference in these numbers.

Otherwise, the quarterly expenses related to the transition are pretty much similar to previous quarter more or less 1 million per month as that we explained in the previous disclosure of the quarterly release or about same numbers in this quarter. So, there is few components on that. Obviously, the salaries involve in being in operation in two different locations at the same time and also related expenses as for transportation to go back and forth from both locations and that’s about it.

Michael Van Aelst

And when do you expect to see those transition costs start to fall off and then disappear?

Andre Belzile

Actually, we decided to push back the transfer of the prescription drugs distribution in the Varennes DC into Q1 of fiscal 2018. So, by the end of the first quarter of the next fiscal year, as it is the most critical product category and we want to really fully optimize our new systems here and the end before we actually finalize that transition. As we’ve mentioned in previous quarter, our priority is to maintain our usual service level to the stores, so no impact is felt at retail, as demonstrated by our strong sales both at the DC and at retail, we were fortunate enough that these transition issues absolutely no impacted at this point on the sales at retail. So that’s really our priority.

So, Q1 numbers should still include the related transition expense but after that it should be done. Now, why is it taking more time? Actually, there is obviously like in any transformation, such large transformation like this, there is always very normal training time that has to be spent with the employees, so they are more productive. There is a few glitches in the software that we have to adjust overtime, there is some reliability of the automation equipment that we have to improve.

They are reliable absolutely, but what there is definitely improvement to be done there before we commit to transfer the prescription drugs, which as you know is something we cannot afford to make any mistake. If a patient comes to a store with a need for a prescription drug, the drug has to be there. So, we don’t want to take any chance with that and that’s why we elected to postpone again the transition of that core category.

Michael Van Aelst

Okay, and then just finally. When you look at your, the pace of your renovation, major renovations that are underway. You said you got 14 underway now. At this time last year you had 22. So, are we starting to get near the end of the major renovation projects and to the point where the vast majority of your stores are up at the level that you want to see them at?

Francois Coutu

I don’t think Michael that it will never end because there is always new opportunities, especially the stores that are showing good growth, we want them to maximize. So, that would be on an individual store-by-store basis, and I agree with you, the chain now looks much better today than it was I think 10 years ago, that’s for sure because we undertook that renovation program, the relocation program that obviously makes us much more competitive. But there is always the --always, there is going to be renovation program because every seven years or so, we’ve liked to indicate to our pharmacist owners that it's time to stand in the stores so to give the opportunity of their clientele to appreciate a new look, a new dynamism to inject into this store, and well the consumers are coming back positively so that’s what important to us.

Operator

Thank you. The next question is from James Durran of Barclays. Please go ahead.

James Durran

Just wanted to go back to the generic rebate situation, we’re now entering that phase where we’re going to be having no sealing in place. With respect to this quarter, if I’m correct you had two months where that 30% sealing was in place. Did you see the rebate levels at Pro Doc go up to the 30% level?

Francois Coutu

Sorry, before getting to your front of your question just wanted to confirm with you that actually the 30% level of professional allowance was unfortunately for one month in the quarter.

James Durran

And on October, okay. So, did it go up to that level?

Francois Coutu

Sorry.

James Durran

So, did it go up to that level in that month?

Francois Coutu

In the month of November, yes, Yes, it does and it did.

James Durran

Right. And so now that we’re entering the phase of no sealing, have you got any insight that you can provide us as to whether you feel 30% is the market sealing or whether we could expect to see rebate levels go higher?

Francois Coutu

Well, you know there is a lot of things that will happen, the regulation is still planning for the removal of the cap on professional allowance at the end of the month. We don’t know, there is no information to the contrary at this time. But we never know with this Minister that we have and Health Minister. At the same time, if you look at Bill 81, under the kind of the tendering for some molecules. So, this will, they coordinate all of this together. I know one thing they can ask, do the tendering process and then give the un-cap professional allowance at the same time. It just means that this got to be a coordination of both, we’ll see.

Andre Belzile

Yes, Jim. Definitely, we think it will go higher than 30%, but by what magnitude we don’t know.

James Durran

Okay.

Andre Belzile

Really, it's going to be an over through market. So, it will depend on the ability of the pharmacists to negotiate better rebate. We’ll see, and we’ll adjust ourselves. But at this point, there is no firm view on where these professional allowances will go after January.

James Durran

Do you think there is a linkage as well to what the Canadian pharmaceutical alliance is up to? I mean as you know they did announce an in term of this bridge decision right whether taking six molecules from 18% reimbursement down to 15%. Do you believe that the Quebec Minister has to look at that as well and decide how to play the tendering situation versus Quebec’s participation in the alliance?

Francois Coutu

Your guess is as good as mine. I guess that the only thing is that obviously the process, the correlation is taking is the negotiation process which all of the parties are involved and are signing an agreement while it doesn’t look like in Quebec they want to do it in that way. I don’t know. Ask the question to Mr. Barrette

James Durran

Thanks for that. Last question just flu season, so the follow-on on the flu shot side of the equation I assume. But, can you give us a sense of how and what type of impact flu had in this quarter? And any insight you can provide as to how it's unfolding subsequent to the quarter?

Francois Coutu

Last year, we had a good -- allow me to say a good flu season, and someone probably would be affected with the bad flu season. But this year was just a little above last year, so considering the situation, people were happy to see that pharmacists were well equipped to help them go through that season.

Operator

Thank you. The next question is from Vishal Shreedhar, National Bank. Please go ahead.

Vishal Shreedhar

Just wondering on the amendments to Bill 92, which acquired disclosure of fees to the private payers. In the opening remarks or I think in enhancement to your question, it was said that you don’t expect there to be any impact for this minor interpretation as you don’t expect there to be any impact to the economics as a result of this? So that’s the case then what’s the intention of that legislation? And do you think overtime like there with the next few years it could ultimately impact economics?

Francois Coutu

Yes, well that’s a good question. We don’t know the real reason for that though because it's already transparent. I mean everybody knows the cost of the -- it's published in the formularies, everybody know the percentage of distribution which is 6.5% and the price is, the selling price gives you the difference between the cost and the profitability to the pharmacist. So, I don’t understand really, but if that’s what it is, we’ll do so, we’ll comply with the law.

Vishal Shreedhar

Okay, but you don’t see this having any impact on economics even an extended period of time?

Francois Coutu

Well, you know the private sector that there is a competitive environment anyway, and each pharmacist has to price their prescriptions as according to their expenses, and at the end of the month, they have to show their profit otherwise they won’t be in business anymore. So, that’s why the price is as the freedom, the pharmacies of the freedom to give their price the way it is.

Vishal Shreedhar

Okay. And just moving on to the DC and that’s a one quarter delay in transition. Is there any impact related to the actual efficiency benefits that you expect or is that still unchanged relative to your prior view?

Francois Coutu

What do you mean lower gains from where we were expecting before?

Vishal Shreedhar

Right, right. So, the run rate operating cost at the new DC, is that the same as what you thought coming in, or is it improved or weakened?

Francois Coutu

I mean looking forward in terms of future benefits. It will be pretty similar, but it's going to take more time, that definitely take a little more time to get to the productivity levels that we’re expected. This is a transformational change for us and it's going to take a little more time. But, we’ll still going to get there at some point.

Vishal Shreedhar

Okay. And how long does it take to get there, like how long should we model that?

Francois Coutu

I wish I could know, it’s taking more time. And we are -- let say we are learning a lot these days, and we’re working hard and but we’ll get there I can tell you that.

Andre Belzile

The good part is that we have the luxury at least to operate from three DCs at this time. We’re still using the Hawkesbury DC for our promotional activity. We still operate the Longueuil to fill this far prescription. So, that’s why it is so important to do it, consciously to do it efficiently is that we wanted to make sure that here in Varennes, it is working perfectly. So that when we assume the rest because the prescription drug, it will be difficult to go department-by-department, we’ll have to do it probably almost at once within a three week period to transfer everything. So that’s why it has to work perfectly. And I think it’s more cautious to not only to us, but also shareholders to make sure that this transition is done right. And that eventually, we ramp up with the synergies eventually because there will be synergies there is no question about how we haven't invest in this DC with all the technologies, not to get some efficiency from everyone.

Vishal Shreedhar

Okay. That makes sense. And just on those synergies, will management at some point disclose what those synergies are in advance or we just have to wait to the quarters to observe as they come?

Andre Belzile

Yes. You will see them as they come.

Operator

Thank you. The next question is from Keith Howlett of Desjardins Securities. Please go ahead.

Keith Howlett

Yes, I had a question on Bill 92. Does the Bill require that the professional allowance be itemized on the Bill, or not?

Francois Coutu

The requirements at this point as we understand them are to disclose separately three different things. First, the actual formulary cost of the drug, the wholesaler margin and any professional fees charged by the pharmacists in that.

Keith Howlett

And just on the store network, there were, I think four stores closed in the quarter, one I guess was the relocation, but the stores that are closed, are they residual prior acquisitions of script files? Or it seemed like a larger-than-normal number of closures.

Francois Coutu

Yes. We’ve closed a couple of clinics, meaning the small pharmacies and doctors and clinics. And two also were sold back to a pharmacist owners that decided to leave the group, decided to sell the pharmacies and retain just two of them to Bill drug stores in the clinic environment and that’s why these we have foreclosures.

Keith Howlett

And in terms of the specialty drugs, mentioned that the rate of growth is slowing a bit there, is that a function of a slowdown of new drugs, or just a tighter control as to who can use them? Or is there any underlying cause there?

Francois Coutu

Yes, there is some underlying cause. For example, I know one of my drug stores we offered facility drug and obviously the Minister has decided to slash down on acceptance of these debt program at the public levels. So that is considerably reduced, the demand for this prescription drugs. So that’s why this is an example, I mean the government have to make decisions to whether they cover certain drugs or not and at this time that’s what they are juggling with.

Operator

Thank you. The next question is from Tal Woolley, Dundee Capital Partners. Please go ahead.

Tal Woolley

Just wondering if we can talk a bit about the franchisee profitability, as the professional allowances get uncapped. Previously, you've made reference to, you are offering franchisee support programs to some of these franchisees who have been struggling in prior years, and I guess when I'm thinking about some of the money they may now be putting back into their pockets, when would you as the franchise or perhaps get the chance to address some of the franchisee support programs that you offer? In light of their improving profitability.

Francois Coutu

Yes, as mentioned to all earlier, we will look at the impact of the new regulatory changes on our franchises profitability. At this point, it's unclear really where the professional allowances will lend after the removal of the cap. But obviously, if their profitability is improved and we will wait until we can have a view on that probably sometime in February and March, then we will adjust some of the discretionary support programs. If they are not required anymore then again we will adjust, that’s for sure.

Tal Woolley

Okay, and when I just look at the progression if I put product to the side and look at the progression of the profitability of the franchising business over the course of the year, EBITDA was down about 8% in the first half, but you did see an improvement this quarter. You're still carrying some excess costs from the DC, and your royalty income would be starting to stabilize from, as having annualized the withdrawals that the government was making. Do you see over the next few quarters as the distribution center picture stabilizes, that franchise EBITDA could return to growth?

Francois Coutu

Yes, as sales are growing, obviously, the overall gross profit generated by the franchising operations should improve as sales are growing. Obviously, as you mentioned the unknown and the big component that could be and probably will be impacted is the generic drug manufacturing in the regulatory environment.

Tal Woolley

Okay, but the retail franchising business, in terms of your segmentation, that is something that realistically, through the course of fiscal '18, we could see return to growth?

Francois Coutu

Yes. Sure.

Operator

Thank you. The next question is from Michael Van Aelst, TD Securities. Please go ahead.

Michael Van Aelst

Two follow-ups. First, do you have any major or meaningful cash outflows or inflows still to come related to the new DC?

Andre Belzile

No.

Michael Van Aelst

And then the sundry line item has been lower every quarter this year. Can you give us an idea how we should be thinking about that line item going forward?

Andre Belzile

That’s a mix of many different items. It's a -- I would have to review that and to explain you why exactly the trend has been declining. But you shouldn’t see major discrepancies there unless something either specifically nonrecurring or otherwise happening. If you would like, I can review that and get back to you, but there is shouldn’t be major differences there.

Operator

Thank you. There are no further questions registered. I would now like to return the meeting over to Ms. Bisson.

Helene Bisson

Yes, well. We thank you for your interest in Jean Coutu Group and your participation in this conference call. If you have any further questions, please feel to free to call us, our contact information is contained in the Company's communications. We look forward to report on our fourth-quarter results of fiscal 2017 on April 27. We wish you a very nice day. Thank you very much.

Francois Coutu

Thank you.

Andre Belzile

Thank you.

Operator

Thank you. The conference has now ended. Please disconnect your lines at this time. And we thank you for your participation.

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