Algoma Steel Group Inc.

Q1 2023 Earnings Conference Call

8/4/2022

spk03: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Algoma Steel Fiscal First Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note, this conference is being recorded. I will now turn the conference over to your host, Michael Marocca, Treasurer and Investor Relations Officer for Algoma Steel. Thank you. You may begin.
spk06: Good morning, everyone, and welcome to Algoma Steel Group Inc.' 's first quarter fiscal 2023 earnings conference call. Leading today's call are Michael Garcia, our Chief Executive Officer, and Rajat Marwa, our Chief Financial Officer. As a reminder, this call is being recorded and will be made available for replay later today in the Investors section of Algoma Steel's corporate website at www.algoma.com. I would like to remind you that comments made on today's call may contain forward-looking statements within the meaning of applicable securities laws, which involve assumptions and inherent risks and uncertainties. Actual results may differ materially from statements made today. In addition, our financial statements are prepared in accordance with IFRS, which differs from US GAAP, and our discussion today includes references to certain non-IFRS financial measures. Last evening, we posted an earnings presentation to accompany today's prepared remarks. The slides for today's call can be found in the investor section of our corporate website. With that in mind, I would ask everyone on today's call to read the legal disclaimers on slide one of the accompanying earnings presentation and to also refer to the risks and assumptions outlined in Algoma Steel's financial statements and management's discussion and analysis for the full year ended March 31st, 2022. Please note that our financial statements are prepared using the U.S. dollar as our functional currency and the Canadian dollar as our presentation currency. Our fiscal year runs from April 1st to March 31st, and our financial statements have been prepared for the three months ended June 30th, 2022. Please note all amounts referred to on today's call are in Canadian dollars unless otherwise noted. Following our prepared remarks, we will conduct a question and answer session. I will now turn the call over to our Chief Executive Officer, Michael Garcia. Mike?
spk04: Thank you, Mike. Good morning, and thank you for joining Algoma Steel's earnings call for our first fiscal quarter ended June 30, 2022. I will start my comments, as we always do, by addressing what truly matters most to us, the safety of our employees. At Algoma, we believe in safety without compromise. and our continued focus has resulted in substantial improvement over the last decade in our lost time injury frequency rate. I commend our entire team for their collective success and continued diligence as we relentlessly pursue our goal of achieving zero workplace injuries. Now before we get into the results for the quarter, I want to update you on where we are with our union negotiations given the announcements over the past week. To start, all of our plants are fully operational at this time. There are two local chapters of the United Steelworkers that represent our unionized employees. The most recent multi-year labor agreements with those two unions were set to expire on July 31st. We believe we have made fair and attractive offers to both unions. Offers which ask for no concessions and provide our employees with a highly competitive compensation package that compares favorably to our North American peers. Last week, members of United Steelworkers Local 2724, which represents our technical, professional, and frontline supervisory employees, accepted our offer and ratified a new labor agreement with Algoma. Negotiations with USW Local 2251, which represents hourly workers, continue. Last Friday, we announced that we had submitted our best and final offer to that union's negotiation team, who declined to submit the proposal to its membership for a vote. Therefore, in anticipation of a strike this past weekend, we began taking steps to take our facilities offline safely ahead of the original deadline. On Saturday night, we announced the company and the union's negotiating team had reached an agreement to continue discussions without any workforce action for an additional 15 days, allowing us to continue operating our facilities normally in the interim. This extension demonstrates the willingness and desire on both sides to reach a fair and equitable agreement for operations of the facilities today and throughout the transition to electric arc steelmaking. At this time, we have no further update on the progress of those talks. Due to the sensitivity of these discussions, we will be limited in what we can share regarding these active negotiations during our Q&A session on this call. Now turning to our results. On today's call, I'll cover my observations for my first 60 days as CEO, as well as key events and milestones during the quarter and subsequent to its end. I will then turn over the call to Rajat for a deeper dive into the numbers before closing with thoughts on the current state of steel markets and our capital return policy. To say that my first two months on the job have been busy would be a major understatement, as we have advanced a number of strategic initiatives during that time. One of my first priorities was to roll up my sleeves and get out on the site, meeting our exceptional team, familiarizing myself with the specifics of our operations, processes, and approach. and seeing up close and personal the impressive facilities we operate in Sault Ste. Marie. Having spent time with many of our team members, I come away even more excited about our operations and our future. We have a dedicated group of operators focused on executing the pathway to Algoma's future as a leading North American producer of green steel. Relentless execution by the team drove strong results we achieved in our first fiscal quarter. Those results, which Rajat will discuss in more detail momentarily, included shipments of 538,000 tons, revenue of $934 million, adjusted EBITDA of $358 million, and cash generated by operating activities of $277 million. During the quarter, we continue to advance construction of our transformative electric arc furnace project, which I am pleased to report remains on budget and on time for our planned 2024 startup. We completed the first phase of our two-phase plate mill modernization project in June 2022, with expected quality being achieved. The second phase, initially expected to be completed in November, has been extended to June 2023 to support our customers impacted by a longer than anticipated startup due to automation issues during the first phase. Further, by extending the timeline, we are better positioned to apply learning from the first phase to the second phase outage to ensure seamless execution. We launched the next phase of our capital allocation program with a 400 million U.S. substantial issuer bid. We distributed over 150 million in our employee profit sharing program, a corporate record that reflects our outstanding results in fiscal 2022. And prior to launching our SIB, we repurchased 1.6 million shares through our normal course issuer bid, or NCIB, at an average price of U.S. $9.11 per share. Like I said, a busy quarter. Just last week, we successfully completed the oversubscribed SIB process, which resulted in the repurchase of approximately 41 million shares, or approximately 27.9% of our issued and outstanding shares at the time of the program announcement, at a price of $9.75 US. Algoma now has 105,403,930 issued and outstanding common shares. It's a testament to the execution by our team during these times of challenging market conditions like these that we are able to operate our existing portfolio of assets normally without being operationally impacted by the construction of our transformational EAF project, all while being able to return meaningful capital to shareholders. Now I will pass the call over to Rajat to go over the strong financial results for the quarter. before closing with some thoughts on the markets and our capital allocation program. Rajat.
spk01: Thanks, Mike. Good morning, and thank you all for joining the call. Our first fiscal quarter results continue to demonstrate the impressive cash-generating potential of Algoma. I'll remind you again that all numbers are expressed in Canadian dollars, unless otherwise noted. Our quarterly results were highlighted by net income of $301.4 million or $1.49 per share, adjusted EBITDA of $357.7 million, which exceeded our guidance of $335 to $355 million, and reflects an adjusted EBITDA margin of 38.3%, and cash generated from operating activities of $276.6 million. The only long-term debt on our balance sheet is in the form of government loans linked to our capital projects. We finished the quarter with $1.1 billion of unrestricted cash and remains undrawn on our revolving credit facility. So even after funding our successful US $400 million SIP last week, our balance sheet remains strong. Diving into the key drivers of our performance, we shipped 538,000 net tons in the quarter, down 2% sequentially and down 12% as compared to the prior year quarter. As we previously disclosed, we had a one-month schedule outage at the plate mill during the quarter, during which we completed phase one of our planned upgrade, impacting year-over-year comparisons. Furthermore, the automation challenges Mike described earlier will have an impact on shipments in the second fiscal quarter. Net sales realization averaged $16.32 per ton, up 1% sequentially, and up 38% versus the prior year period. The increase versus this prior year reflects the positive impact of our contract order book as higher lag prices flow through our revenue. This resulted in steel revenue of $877 million in the quarter, flat sequentially, but up 21% versus the same quarter of last year. On the cost side, Algoma's cost of goods sold averaged $9.20 per ton in the quarter, down 3% on a sequential basis, but up 32% over the prior year period. The main drivers of this increase versus the prior year period include commodity price increases for selected raw material inputs, increased employee-based profit sharing as a result of our historic performance, and higher SG&A costs related to being a public company. From a cash flow perspective, Algoma's change in non-cash working capital generated $12.2 million in cash flow firm operations in the quarter. This was higher than expected and resulted in us having slightly more cash on the balance sheet at the end of the quarter than previously anticipated. The main drivers of the increase in cash flow firm operations include the release of approximately $73 million of accounts receivable during the quarter due to falling prices. and lower shipments, and an increase in taxes payable, which included withholding taxes payable in connection to the prior year profit sharing. These factors were offset by a significant increase in inventory related to normal restocking for our typical seasonal low inventory levels at March 31st, as well as a significant increase in work-in-progress inventory as slabs were produced and stocked during the Platinum Modernization outage. We finished the quarter with $1.1 billion of cash and equivalents on the balance sheet, a record which positioned us well to complete our SIP while retaining ample liquidity to address future capital and operating needs. As an update to EF project spending, as I mentioned on the previous call, approximately 8% of the spending occurred in the prior fiscal year. Approximately 60% will be spent in fiscal 2023, and the balance of the spending occurring after fiscal 2023. Up to the end of June quarter, we have spent approximately 103 million on the EAF project. Looking at the project in totality, approximately 60% has been contracted with fixed price commitments, with the balance 40% to be contracted. GOMA still maintains a significant portion of its original contingency to support the remaining project spending that is not yet committed. Beyond the EF project, we were excited to successfully complete our SIP last week, the last leg in our capital allocation program. In addition to the SIP, our continued strong financial results position us to be active in returning capital to shareholders on multiple fronts, including our normal quarterly dividend, and through our NCIB, which we will resume effective today as it was temporarily suspended during the SIP as required under the applicable law and stock exchange rules. On to the Fortress balance sheet and strong cash generation profile. We are well positioned to continue evaluating all options around capital allocation. I would now like to turn the call back to Mike for some market update and closing comments. Mike.
spk04: Thank you, Rajat. Looking at the state of the North American steel market today, pricing has fallen from recent highs reached in April. That said, buyer sentiment appears to reflect a growing consensus that pricing is normalizing near current levels. Among other indicators, this is evidenced by today's forward curve for Hot Road Coil, which is showing higher prices over the next few months. Pricing near today's levels is still historically high relative to any point prior to 2021 and still well above mid-cycle pricing. In the near term, we expect pricing to stay near current levels, and we remain optimistic about the intermediate and long-term supported by the fundamentals we continue to see in the market and in our order book. Those fundamentals include a diverse customer base, a consistent, strong contract mix, and a wide range of product offerings. Concerns and headwinds related to inflation, currency, global conflict, and supply chains persist. Yet we have a number of reasons to be optimistic that near and intermediate term pricing will remain at attractive levels. Demand remains consistent with our expectations, from the automotive, construction, oil and gas, and other steel-intensive industries, and controls on imports remain in place. We have positioned the company to benefit from these favorable market conditions operationally and are excited to be able to do so even as we execute the construction of the EAF project. Before we open it up to questions, a few words on our capital allocation policy. Our primary focus remains on delivering prudent financial discipline and operational excellence to ensure our ability to execute our EAF project, ushering in the next phase of our company that provides a foundation for long-term value creation for our stakeholders. We are proud that even as we transition to a low-cost green steel company, the steps we have taken to strengthen the balance sheet and to position our operations to benefit from the strong market pricing, like we have seen over the last two years, have also afforded us the opportunity to return capital to shareholders. As I mentioned previously, our biggest step to date was the successful $400 million U.S. Sib, which augmented our U.S. $0.05 per share regular quarterly dividend and our normal course issuer bid program. As I said on my first call in June, My view is consistent with the Board's in that we expect to be a significant generator of free cash over the long term, putting us in the enviable position of being able to continuously evaluate our capital allocation policy with the Board, all while continuing to live within our means and not spend money we don't have or expect to generate. The fiscal first quarter was a strong start to what promises to be a very exciting year at Algoma, one in which we will continue our relentless focus on safe, reliable, efficient operations at our existing facilities to enjoy the benefits of strong markets, even as we advance the dual EAF projects. Thank you very much for your continued interest in Algoma Steel. We look forward to what the future holds. At this point, we would be happy to take your questions. Operator, please give the instructions for the Q&A session.
spk03: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue, please press star two. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, to ask a question, please press star one. Our first question is from Dave Galliano with BMO Capital.
spk08: Great. Thanks for taking my questions. I missed some of the commentary there in the beginning, and I apologize. Can you talk through again what is happening operationally and what are the delays that you mentioned?
spk04: Dave, we referenced the startup of our plate mill in subsequent to the end of the first quarter. And that startup has been more protracted than we originally planned. And that's the delays we were referencing.
spk08: Okay. I'll take a look at the transcript when it comes out. And then just to follow up on that, I guess, in a certain regard. To help us fine-tune things in the near term, can you talk about, obviously, it's whatever, it's August 4th, and lead times, I suspect, suggest that you've got visibility into September now. We're getting there on the quarter, and I was wondering if we could just speak to operating assumptions, operating metrics, volumes, mix, costs on a quarter-over-quarter basis. And if you want, perhaps even pricing as well. I know there was some pricing commentary around holding your current levels, but what does it look like for the third quarter or for the third calendar quarter? Thanks.
spk01: Hey, David. This is Rajat. So, David, from guidance perspective, we probably will reserve our comments for this quarter. However, There are a few comments that are worth noting, which Mike mentioned in his prepared remarks. Our plate mill is taking longer, so we will see less volume getting produced and shipped in this quarter on the plate side. So we were saying a month-long outage, which probably has taken us additional six to eight weeks to ramp up, or will take six to eight weeks to ramp up. So we'll see that impact coming in the September quarter. Other than that, I don't think so we'll be in a position to guide you any further. So the volume will be lower just because of the plate melt.
spk04: And David, this is Mike. As far as pricing, I mean, you can see that current pricing has, I think, the public number that we look at and share is hot road coil index price of and still a substantial premium between hot road coil and plate. And then there's commentary around the slope of the movement of the price and the forward curve of the price that builds a little bit of a view that maybe we may be reaching a plateau or an area of stability. But again, that remains to be seen. So pricing is still well above mid-cycle, and that's basically where we are and what we're building our plans around.
spk08: Okay. I mean, that's effectively why I was asking those questions, because pricing has been all over the place, and lags change, and lead times change, and the business model is highly sensitive to relatively small changes. We saw that a couple quarters ago, and And in an effort to try and avoid those, you know, what I would call probably immaterial from a longer-term perspective, but nevertheless important from a near-term perspective, variations in how it impacts results, I was hoping we could get a little more color on the operating metrics. Let me ask this question. You know, sometimes when prices fall, mixed shifts between contract and spot, is there a a way to frame how much spot business versus contract business we should be modeling in for the current quarter?
spk04: I don't think we've seen a significant shift between contract and spot. I think one of the biggest differences we've seen is that we have a shorter visibility into the future in terms of the size of our order book. It's, because lead times are shorter, we close out the order book, let's say, you know, for the month of, for the current month, later in the month than we typically would. It's still closing out at expected levels, so the volume is there. It does, you know, we do book it, but it's a shorter view forward in terms of looking at an order book than we would typically expect, but the significant shift or material shift between spot and contract, I can't say that we've seen that.
spk08: Okay, thanks. I'll turn it over to someone else. Thanks.
spk03: Our next question is from David Ocampo with Cormark Securities.
spk09: Thanks. Good morning, everyone. I just wanted to follow up on David's questions as it relates to at least volume side here. If I take a look at the sheet shipments, it's trending below where you were Q1 of last year and even Q2 of last year. Is that decline primarily on the spot business or is that on your contracted business?
spk01: That decline is mostly on the spot business and The reason for that decline, as well as the plate mill outage, it's actually a combination mill, as you know. It produces strip as well as plate. And when the mill is out, it affects both sheet and plate. So we have seen that impact in the Q1 as the numbers are, and we will see that little bit of impact coming in the September quarter as well because the plate and strip is taking longer to ramp up.
spk09: Okay. And for your contracted business, I think it's close to 65% of your overall book. How much flexibility are you willing to give your customers if we do see some weakness here? Is it you know, plus or minus 10%, or is it more take or pay?
spk01: No, there is some flexibility. It's normally in the range of plus, minus 10%, and that's it. So there is pretty good compliance on the contracts otherwise.
spk09: Okay, that's good. And then, Mike, you touched a little bit about the futures curve. It's currently in contango right now versus the more normal steep backwardation I'm just curious if that changes how you guys consider hedging. I know you have a small hedge book right now. I think it's 66,000 tons. But would you get a little bit more aggressive on that, just given the dynamics that we're seeing in the marketplace?
spk04: Thanks for the question, David. We would certainly examine it. And if it reaches a point where we believe it'd be prudent to take a different position with that, with that hedging book, certainly something we can do. I don't think it's yet at a point that would cause us to do that, but it's certainly something we keep an eye on, and we know that that is an option that is available to us or a course of action that might make sense in the right scenario.
spk09: Okay, that's it for me. I'll hand the line over. Thanks, guys.
spk04: Thank you.
spk03: Our next question is from Ahmad Shah with Beacon Securities.
spk02: Hey guys, thanks for taking my question. I'm just wondering if there's any color you can give us on the cost trends, whether short-term or for the second half of the calendar year, any color on the cost trends, whether it's an EBITDA per ton or COGS, that would be appreciated.
spk01: Sure. So on the cost side, I think it's something that I've always mentioned, but I will repeat it. We normally see on the iron ore side a five to six months lag. So as you're seeing prices coming down on the iron ore index or HRC, we will see that flowing into our cost with a lag of five to six months. So that definitely will help us as we go along the year. coal is fixed for the full year, so we don't see major change. So the big change will come from iron ore. There are other commodities that are coming down as the price of these commodities come down, whether it's alloys, refractory, which definitely will impact us over, you know, within a quarter. So within a quarter and within six months, we should see the trajectory of our of our variable costs coming down mostly because of iron ore and some commodities which are fluctuating. Coal remains same throughout the year.
spk02: That's great, Colin. Thank you, Rajat. I'll jump back in with you.
spk03: Our next question is from Ian Gillies with Stifel.
spk04: Morning, everyone. Morning, Ian. Morning, Ian.
spk05: With respect to coking coal, if I recall correctly, those contracts typically get renewed in the fall at some point. When you look at price trends today versus kind of where you're contracted, would you expect that that becomes a tailwind for margins as we head into the next year of usage, or is it still too early to say?
spk01: I think it's little early to say, but it's moving in the right direction. people will come out with their, when I say people, the manufacturers will come out with their RFQs later in this quarter, early next, and there will be settlements happening. Definitely coal companies are indicating that their cost of production has gone up because of inflation. However, we've seen some of the listed companies reporting very similar cost as they reported last year, so sub-$100. So, yeah, this trend is good from cost perspective, and we are hopeful that settlements can happen at an attractive price.
spk05: Okay. And then the other cost piece I wanted to hit on, could you maybe talk a little bit about the impact that these elevated natural gas prices are likely to have on the business in the back half of the year, and if there's any way to maybe mitigate some of the price increases that are occurring for that specific input?
spk01: So from pricing perspective and cost perspective, we consume roughly six MMBTU per tonne. of finished steel production. So you can do the math to see what natural gas is as a percentage of our cost. We do have some flexibility in our operations, primarily in the blast furnace where we can substitute the heat, which is coke, coking coal produced coke with natural gas. So what we do is we keep flexing between gas and coke depending upon the price of each and the calorific value of the heat to try to optimize our cost. So that's what we do. As far as long-term mitigation is concerned, we are working through our hedging strategies specifically on natural gas to see how we can best use that tool. to reduce volatility in pricing, but currently the price itself is too high. And when you look at the futures, suddenly the $7, $8 price drops to $4 as soon as you get into April, which is, you know, which is not reflective of any dynamics, any fundamentals. It's more sentimental. So we are watching natural gas price. We are watching our cost and trying to optimize based on our operational capabilities. And we'll be looking at tools like hedging to mitigate it over longer term.
spk05: Okay, that's helpful. And then last one for me, I mean, I acknowledge that the order book sounds like it's pretty full for August, but with respect to lead times and things of that nature, have you seen any discernible difference on that front that gives you a pause for concern, or is that all pretty steady to where you saw it, call it a month or two ago?
spk04: Ian, this is Mike. It's not dramatically different than a month or two ago. I think the sentiment remains that there's an expectation or maybe an overhang or worry in the markets of a recession or a decrease in overall economic activity that And so that's, you know, resulted in customers who have large inventories and service their customers out of these inventories to be very deliberate and mindful about the inventory positions that they maintain, and as a result, the ordering that they do with us and others to maintain those inventory levels. So I think that's pretty much continued to be the state, but at So while all that is happening, I think there was maybe some period that was a little quieter because of, you know, the adjustment taking place. But if you think about the adjustment kind of already in place, then the ordering, you know, the volume that they are actually pulling continues to be at our expectations because their fundamental, my assumption is because their fundamental business has not yet reached a reduced activity that, you know, they may be worried or concerned about at this time, if that's helpful.
spk05: No, that's very helpful. I appreciate that context. It's very useful. So thanks very much. I'll turn the call back over.
spk04: Thanks, Ian.
spk03: Our next question is from Anup Bihar with Aid Capital.
spk10: Good morning. Rajat, just with respect to the budget for the EAF, I think you said in your remarks that 60% of the budget had been committed I think the last time we spoke about the contingency, we said it was something in the neighborhood of about $80 million. Has that changed materially since that last commentary?
spk01: No, it's not changed materially. There is some contingency being used, but it's substantially still available.
spk10: Okay. And then just coming back to the commentary on the Q2 volume, should we expect Q2 volumes to be down on a year-over-year basis? Yes. Thank you.
spk03: As a reminder, to ask a question, please press star one. Our next question is from Alexander Jackson with RBC Capital Markets.
spk07: Yeah. Hey, guys. Thanks for taking my question. Just another one on the EAF budget. I was curious on the cadence of the capital spending in fiscal 2023. I know you guys are spending 60% there. Just trying to get a sense of when we might see some sort of key milestones crossed in terms of de-risking. Thanks.
spk01: So from spending perspective, you know, we will see a large part of the spending coming in the coming two quarters up until December and less so in the March quarter. From Milestone's perspective, as we said, we have given all the contracts up till now, including building and equipment. The other milestone will be the balance contracts that we are doing detailed engineering on, which we expect to get completed and given sometime later this year. Most of the work, let's say a large part of that 40% remaining should be done in the coming quarters, by March end, so that at least we have de-risked a large part of our spending. Mike, anything else?
spk04: Just for a little more color, if you were to drive by or go spend time at the site, the foundations and pilings work has been continuing, and we expect to start erecting start erecting buildings or things above the level of the ground, I guess you could say, in the fall, October, the time frame, late September. Another big piece of work we need to do, the advantage of this project is that we had very little existing infrastructure or operations that were taking place in the footprint of the new EAF complex What we did have was a small, relatively small ladle maintenance repair shop that we have relocated. And probably the biggest thing we had was the internal railroad tracks that we used to convey our hot iron from the blast furnace to the steelmaking BOS. We had to reroute that track, that section of track. It's probably maybe a quarter mile at the most, a little less than that, move it off to the side of where the EAF building is going to be constructed so that we could have smooth operations of that part of the steelmaking process and have a clear footprint to continue with the project. That work has been done and So from that perspective, that's kind of what the project is looking at at this moment, looking like at this moment. Sorry.
spk07: Thanks. Thanks for that color, guys.
spk00: That's all for me.
spk03: We have one follow-up question from Dave Galeano with PMO. Please proceed.
spk08: Hi. Just a couple of quick clarifications. Do you expect your sheet volumes to be down quarter over quarter? That's my first question. And then the second question, the CapEx came to the CapEx the next two quarters. Do we expect that to be over $100 million on a quarterly basis each of the next two quarters, this quarter and the next one, before it declines a little bit in March?
spk01: Yeah, so on the sheet side, we might expect some volume to be down quarter over quarter. And from CapEx spending perspective, You know, we should see, I think, in the same light as you're saying, you know, let's say bigger portion coming in this quarter and next quarter and then dropping down in the March quarter.
spk08: Okay. Okay, that's all. Thank you.
spk01: No problem, David.
spk03: Ladies and gentlemen, we are out of time and I've reached the end of the question and answer session. I would like to turn the call back to management for closing remarks.
spk04: Thank you. I'd like to thank all of you again for your participation in our first quarter fiscal 2023 earnings conference call and for your continued interest in Algoma Steel. We look forward to updating you on our results and progress when we report our fiscal second quarter results later this fall.
spk03: This concludes today's conference. Algoma Steel thanks you for your participation. You may disconnect your lines at this time.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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