5/1/2024

speaker
Operator

Welcome to Aviat Network's third quarter fiscal 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Andrew Fredrickson, Director of Investor Relations. You may begin.

speaker
Andrew Fredrickson
Director of Investor Relations

Thank you and welcome to Aviat Network's third quarter fiscal 2024 results conference call and webcast. You can find our press release and updated investor presentation in the IR section of our website at www.aviatnetworks.com along with a replay of today's call. With me today are Pete Smith, Aviat's President and CEO, who will begin with opening remarks on the company's fiscal third quarter. followed by David Gray, our CFO, who will review the financial results for the quarter. Pete will then provide closing remarks on Aviat's strategy and outlook, followed by Q&A. As a reminder, during today's call and webcast, management may make forward-looking statements regarding Aviat's business, including but not limited to statements relating to financial projections, business drivers, new products and expansions, and economic activity in different regions. These and other forward-looking statements reflect the company's opinions only as of the date of this call and webcast and involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements. Additional information on factors that could cause actual results to differ materially from the statements made on this call can be found in our most recent annual report on Form 10-K filed with the SEC. The company undertakes no obligation to revise or make public any revision of these forward-looking statements in light of new information or future events. Additionally, during today's call and webcast, management will reference both GAAP and non-GAAP financial measures. please refer to our press release, which is available in the IR section of our website at www.aviatnetworks.com and financial tables therein, which include a gap to non-gap reconciliation and other supplemental financial information. At this time, I would like to turn the call over to Aviat's President and CEO, Pete Smith. Pete?

speaker
Pete Smith
President and CEO

Thanks, Andrew, and good afternoon, everyone. Let's review Aviat Network's results for the third quarter of fiscal year 2024. We are pleased to report that AVIAD continued execution of its organic growth strategy and made further progress on its PasoLink acquisition. Highlights from the third quarter include total revenue of $111.6 million, which represents growth of 34% versus Q3 of last year. Core AVIAD revenue growth of 7% versus the same period last year. Non-GAAP gross margin of 35%, with core aviat margins above 38%. Adjusted EBITDA of $12 million, 11% higher than the year-ago period. Non-GAAP EPS of $0.73. Strong cash generation in the quarter, with $59.2 million of cash in marketable securities on the balance sheet and a net cash balance of $10 million. These financial and operational results are driven by the continued implementation of Aviat's operating model and made possible thanks to the effort and execution of the Aviat team and our partners throughout the quarter. Let's review key highlights of the third quarter. We continued to progress the integration of the Pasolink business. In our first full quarter of ownership, we accelerated the execution of cost structure optimization and approached our near-term profitability goals. These efforts will continue to accelerate over the next two quarters as Aviat moves away from transition services provided by NEC. The PasoLink business was nearly breakeven on an EBITDA basis in the quarter and was accretive to our free cash flow generation. As we have onboarded PasoLink customers, we have undertaken a customer profitability review to ensure margins are at sustainable levels. While work is still ongoing, we expect that this will result and a slower ramp to the target 140 million annual run rate contribution. However, this should translate to more attractive business for Aviat shareholders. Beyond the existing Pasolink base, the sales teams continue to build cross-selling opportunities where we are introducing Pasolink products to historical Aviat customers and vice versa. We have already converted some of these into bookings and expect this will continue to grow in the quarters ahead. From a cost perspective, we are tracking to our internal plan to reduce cost of goods sold and excess inventory from the pass-and-link business. We had some wins in the quarter and anticipate beginning to realize some more significant savings in the current fiscal fourth quarter, primarily from inventory rationalization. Further, inventory optimization and college savings will materialize in fiscal year 2025. Overall, the transaction is tracking to an IRR in excess of 2.5 times Aviat's weighted average cost of capital. Moving on to the core Aviat business. In private networks, investments and upgrades to networks both in the U.S. and internationally continued to support growth in this segment. The recent U.S. nationwide Tier 1 outage underscores the importance of of private public safety and critical infrastructure networks. Our customers turn to Aviat for design and operation of networks that are engineered with a high degree of redundancy and reliability. Aviat's equipment enables first responders, utilities, and governments to continue communicating even when public networks are compromised. Driving further investment in private networks is the recent authorization by the FCC at the end of February for companies to begin offering automated frequency coordination systems, or AFC, for spectrum in the 6 GHz band. This is an exciting development that will likely lead to more fixed wireless access usage. However, concern persists among many of our private network customers as their microwave backhaul largely utilizes the 6 GHz band, creating the possibility for interference. We've been preparing and have developed a comprehensive suite of solutions to protect these networks by detecting and correcting interference issues. Our frequency assurance software, or FAS, is patented software that analyzes customers' networks to detect interference and suggest remediation actions. Working on Avion radios and the radios of a leading competitor, FAS allows a network operator to have confidence in their network's reliability and performance, even in the face of potential interference without having to move communication to a new band. Once interference is detected or for proactive customers who wish to avoid the possibility entirely, Aviat offers two solutions. First is an ultra-high power radio at 11 gigahertz to enable customers to move to a new band. We estimate upwards of 80% or more of the 90% thousand 6 gigahertz microwave links in the U.S. can move to 11 gigahertz with this product. Second is a new innovative multi-band solution operating at 6 and 11 gigahertz and utilizing the 11 gigahertz UHP radio specifically designed to protect longer link distances. These new offerings represent a large opportunity for Aviat to solve a growing problem for our customers. And we believe we are several quarters ahead of our closest competitor with these products. In the third quarter, we made several updates to our products to better address our private network customers. We released 1 plus 1 hardware protection on our WTM radio platform. This is important to open the all outdoor radio market in mission critical segments, such as with public safety, federal, and utility customers. We also released a new hardware variant of our CTR router to improve the interface and address the growing capacity needs of our router customers. These upgrades will help to sustain our leadership in the private network segment. Additionally, we want our first major LTE radio access network deal in an international military application, which is an exciting adjacency market based on our Redline acquisition. In mobile networks, we continue to execute to serve our global Tier 1 and Tier 2 operators, who in many cases are still in the middle of or just beginning to build out their microwave 5G networks. To enable pass-hailing customers to better manage their networks and to further expand the addressable market for our software, we will roll out support for our pass-hailing portfolio in our ProVision management platform in Q4 fiscal year 2024. In India, we received our first orders for microwave backhaul radios. Previously, we had been selling only our e-band and multi-band solutions. The microwave backhaul order is exciting as it represents Aviat's first sale into a $200 million Indian microwave segment that had previously been unaddressed by Aviat. With that, I will turn it over to David to review our financials before coming back for some final comments. David?

speaker
David Gray
Chief Financial Officer

Thank you, Pete, and good afternoon, everyone. During my remarks today, I'll review some of the key fiscal 2024 third quarter financial highlights, noting our detailed financials can be found in our press release and 10-Q filed this afternoon. As a reminder, all comparisons discussed today are between the third quarter of fiscal 2024 and the third quarter of fiscal 2023, unless noted otherwise. For the third quarter, we reported total revenues of $111.6 million as compared to $83.5 million for the same period last year, an increase of $28.1 million, or 33.7%. On a constant currency basis, our revenue would have been $114.5 million. North America, which comprised 40% of our total revenue for the quarter, was $44.4 million, a decrease of $3.6 million from the same period last year due to the near completion of a large Tier 1 project. For the first nine months of fiscal 24, North America is up 3% versus the prior year, and bookings and backlog remain strong. International revenue was $67.2 million for the quarter, an increase of $29.8 million, or 79.7% from the same period last year. The addition of the Paso Link business contributed $22.5 million of that growth, while the core aviat business grew by $7.3 million, or 19.6%. The strong organic growth was driven by Latin America and Asian Pacific regions, offsetting weakness on the African continent. Our trailing 12-month book-to-bill ratio remained above 1, as it has since fiscal 2018. Gross margins for the quarter were 32.7% on a GAAP basis, and 35.2% on a non-GAAP basis, as compared to 35.7% GAAP and 35.9% non-GAAP in the prior year. GAAP margins were impacted by $2 million write-down of Aviata inventory that will be replaced in the market by PassiveLink products, as well as $0.6 million in amortization of the inventory step-up purchase accounting adjustment. Non-GAAP margins were diluted as expected by the impact of the Pasolink business. Core Aviat non-GAAP margins for the quarter were very strong at 38.4%, driven by product mix and operational productivity. Third quarter GAAP operating expenses were $31.5 million, an increase of $9.2 million from the prior year, driven by the addition of approximately $5.5 million in Pasolink-related OPEX. M&A expenses, and increased core R&D expenses. Non-GAAP operating expenses, which exclude the impact of restructuring charges, share-based compensation, and deal costs, were $28.5 million, an increase of $7.9 million driven by Pass-a-Link and increased R&D. Third quarter operating income was $5.0 million on a GAAP basis and $10.8 million on a non-GAAP basis, compared to prior year GAAP of $7.5 million and non-GAAP of $9.3 million for a decrease of 32.9% and an increase of 16.2% respectively. Third quarter tax provision was $0.6 million compared to $2.2 million last year. Starting in Q3, we have increased our non-GAAP cash tax estimate from $0.3 million to $0.5 million per quarter as a result of the Pasolink acquisition. As a reminder, the company has nearly $500 million of NOLs that will continue to generate shareholder value via minimal cash tax payments for the foreseeable future. Third quarter GAAP net income was $3.4 million, down from $4.9 million last year due to the previously mentioned M&A related expenses. Third quarter non-GAAP net income, which excludes restructuring charges, share-based compensation, M&A related costs, and non-cash tax provisions, was $9.4 million compared to $8.9 million for the same period last year. An increase of $0.5 million, or 5.6%, driven by core revenue growth and margin expansion, partially offset by the additional R&D investment and modest dilution from the past and linked business. Third quarter non-GAAP EPS came in at $0.73 per share on a fully diluted basis compared to $0.75 per share for the same period last year. a decrease of 2.7% as a result of the shares issued in connection with the Pasolink acquisition. Adjusted EBITDA for the quarter was $12.0 million or 10.8% of revenue, an increase of $1.2 million or 11.1% in the prior year. Moving on to the balance sheet, our cash and marketable securities increased by $13.3 million to $59.2 million driven by strong cash from operating activities of $15.3 million in the quarter. As a result, we moved from a net debt position of $3.6 million last quarter to a net cash position of $10.2 million at the end of the third quarter. This strong cash generation was driven by core operating results and a positive contribution from the Pass the Link business. From a working capital standpoint, our DSOs and inventory returns continue to be impacted by the addition of the Pass the Link assets. which added roughly 20 days to DSO for Q3 and reduced inventory turns from 7.8, excluding Pasolink, to 4.9 as reported. We expect these impacts to moderate over the coming quarters as the Pasolink business ramps and working capital levels normalize. Moving on to our fiscal 2024 guidance. We are updating our full year 2024 revenue guidance to be in the range of $408 to $418 and our EBITDA guidance to remain within the previously announced range. This softened guidance is primarily attributable to the slower ramp in Fastenlink revenue, cautious CapEx spend by Tier 1 customers, and African Mobile Network business. We expect our EBITDA for the fiscal year 2024 to approximate the current consensus estimate. With that, I'll turn it back to Pete for some final comments.

speaker
Pete Smith
President and CEO

Thanks, David. Before Q&A, I would like to briefly discuss our outlook. The Pasolink acquisition is ahead of plan from an EBITDA and pre-cash flow perspective, and we continue to expect it to be EPS secretive by September 2024 quarter. Additionally, the acquisition is tracking well ahead of plan from an IRR perspective. We still believe the business will get to $140 million run rate level by previously discussed, and our EBITDA margin goals for Pasolink are in sight. The core AVIAD business executed in line with our expectations, and we're achieving sustained growth ahead of the overall market growth rate. With that, operator, let's open up for questions.

speaker
Operator

Thank you. As a reminder, to ask a question, please press star 11 on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Jason Schmidt of Lake Street. Your line is open.

speaker
Jason Schmidt
Analyst, Lake Street

Hey, guys. Thanks for taking my questions. I just want to start on the updated fiscal 24 guidance. Dave, I know you kind of laid out kind of three drivers from that. But if we think about, let's call it the $15 million delta at the midpoint between the two ranges, can you sort of rank order those three issues in terms of impact?

speaker
Pete Smith
President and CEO

So, let me rank order them, Jason. One is the Pasolink ramp, and then I would say two would be Africa, and three would be the Tier 1 environment.

speaker
Jason Schmidt
Analyst, Lake Street

Okay, that's really helpful. And I know you mentioned you guys are looking over sort of the Pasolink business from a margin perspective. Curious if this changes your thoughts, Pete, on how are you looking at fiscal 25? I think last quarter you thought sort of 515 to 520. Is that still achievable?

speaker
Pete Smith
President and CEO

Look, I think we got a little bit overly enthusiastic with respect to our number for FY25. We typically put that in the August session, and I think We will update that guidance in August. And I would say that 515 number will be probably the high end of the range. But we're not ready to do that. And look, we discovered some quote unquote empty revenue in Pasolink. So we're not going to take that. And what we're really, really excited about We're ahead of our plan on cash generation, and we expect by September to be EPS accretive, if not sooner.

speaker
Jason Schmidt
Analyst, Lake Street

Okay, that makes sense. And then just the last one from me, and I'll jump back into Q. I know you previously said that you never expected B to have a big impact on calendar 2014. I'm curious if you could just update your thoughts on how you're thinking about some of these government funding initiatives and what's our timetable to an impact to the P&L.

speaker
Pete Smith
President and CEO

Yeah, so we've been consistent that DEED is a calendar year 25. We are seeing some incremental orders from the Rural Digital Opportunity Fund and ARPA, the America Rescue Act, we... We know that that needs to be spent by the end of December 2026. And we are not forecasting anything, but we are well positioned to have a positive surprise. And when we get that, then we'll update you all.

speaker
Jason Schmidt
Analyst, Lake Street

Got it. Thanks a lot, guys.

speaker
Operator

Thank you. One moment for our next question. And our next question comes from Scott Searle of Roth Capital Partners. Your line is open.

speaker
Scott Searle
Analyst, Roth Capital Partners

Hey, good afternoon. Thanks for taking my questions. Hey, Pete, maybe to dive in on Pasolink, I think, you know, back of the napkin math, it's about 22 million or so in the quarter, gross margins in the 28% range. I'm wondering if you could address, you know, where you think Pasolink can get to. I think that the target number was getting 30, 35 million on the top line and being able to bring up gross margins.

speaker
Pete Smith
President and CEO

more in line with uh core aviat you know what are the current thoughts there how big is the magnitude of you know called empty or hollow revenue that you were finding with basilink yeah so so scott you know it's a matter of time on getting to the 140 and our view on getting to 33 uh gross margins uh remains intact and you know one of the drags on the gross margin right now is the impact of the transition services and that each quarter we progress that will get less less and less and that so that'll have a positive impact and then we are working on you know reducing field service costs as well as cost of goods sold so we feel we feel good about that gotcha and

speaker
Scott Searle
Analyst, Roth Capital Partners

You know, maybe to follow up, from an OPEX standpoint, it seems like you guys have done a lot of rationalization at this point in time. Is there more to go on that front?

speaker
Pete Smith
President and CEO

Yes. So, look, we're disappointed with our enthusiasm on the top line. We are very, very enthusiastic about our ability to remove costs and squeeze both the operating expense and the gross margin line. And that's really why we gave the hint about our IRR being two and a half times our WAC. And I think we'll give some more color on that in six months because we're really, really pleased with the returns we're projecting. We, you know, look, the returns would be even better if we, the faster we can get some of the ramp issues out of the way. But net-net, we would still do this deal, and we're happy about the customer engagements. We're happy about the return, and we just need to be a little more circumspect with respect to the Paso Inc. ramp.

speaker
Scott Searle
Analyst, Roth Capital Partners

Gotcha. Last two items, I think core AVIAD gross margins said 38%. Historically, that's tended to be a bit of an anomaly. So is that the sustained range going forward, or does that come in a little bit in the June quarter? And lastly, new products and opportunities, India, and then specifically some of the areas of router in 11 gigahertz. I was wondering if you could just give the timeline of when you expect that to contribute. Thanks.

speaker
David Gray
Chief Financial Officer

Scott, I'll take the margin question first. Our organic gross margins were very strong in the quarter at 38.4%. Year-to-date, we are right around 38%, which is a couple hundred basis points better than our initial guidance for the full year of FY24. We do expect probably a modest pullback in Q4, but we'll still be well ahead of of what we were projecting on a four-year basis. So I think things are looking good from that standpoint. I think it kind of resets what the expectations should be going forward.

speaker
Pete Smith
President and CEO

Okay. So Scott, let me jump in with the product question. So the 1 plus 1 hardware protection on the WTM, Right. That gives us a high reliability, high capacity outdoor radio. We think that that increases the addressable market by about 50 million. We also mentioned our frequency assurance on our leading private network competitor. That's available now, and we have received initial orders, and that's high margin. We see the The 11 gigahertz radio we have previously announced to Azure Energy that is in the market. We think the opportunity size there is 120. And then the long-distance link protection with the multiband 6 plus 11, that's a smaller market, say $30 million, and it's in our toolbox right now. And the reason we bring all that stuff up is because of the – the six gigahertz unlicensed band opportunity, which we think will drive more backhaul and is good for the fixed wireless folks. Great. Thank you.

speaker
Operator

Thank you.

speaker
Operator

One moment for our next question.

speaker
Operator

And our next question comes from Theodore O'Neill of Litchfield Hills Research. Your line is open.

speaker
Theodore O'Neill
Analyst, Litchfield Hills Research

Thank you very much. Pete, you mentioned in your prepared remarks that you are seeing cross-selling, and I was wondering, between the PestleLink and your products, are there any surprises there that you weren't expecting?

speaker
Pete Smith
President and CEO

So, you know, that's actually making it difficult to kind of keep the business separated, and we see opportunity... in services to provide services where Aviat didn't have footprint and vice versa. So that's a pleasant surprise that's masked by our slower than expected ramp. But we're really excited about that. And I would say we're six months out from being able to bring some of the Aviat software and put it on top of the PassLink And what I would – you know, this doesn't show up in the financials, but we're enthused about the customer engagement and the desire for us to, you know, make things like FAS and HASS and our network management software work on the Pass-a-Link radios.

speaker
Theodore O'Neill
Analyst, Litchfield Hills Research

Okay. And on the – the first India microwave backhaul order. Did something unique happen in India that opened up this opportunity for you?

speaker
Pete Smith
President and CEO

I think we proved ourselves with the E-band and multi-band and our vendor agnostic software as well as our delivery. And what that was an opportunity to do was go after some of the incumbents and The feedback that we've received, we did well when we got the small opportunity. And the feedback we're getting now on the microwave piece is they like the technical performance of our product, the simplicity of the design, and some of our key features. So we executed on the toehold, and it seems like it's going to pave the way for future growth.

speaker
Theodore O'Neill
Analyst, Litchfield Hills Research

OK. And for David, on selling an admin expense, I'm wondering how it should trend from here. There's 1.7 million of M&A in the current quarter, and I'm wondering if that continues.

speaker
David Gray
Chief Financial Officer

That should go down significantly from here on out. I wouldn't expect there to be some straggling costs as we tackle certain things. But no, like Pete mentioned, the that would help the margins. It would also help our OPEX is the reduction in some of the transition services costs quarter over quarter as we go forward. So we expect to be getting more of those costs out, you know, going forward. So that should be working in our favor.

speaker
Theodore O'Neill
Analyst, Litchfield Hills Research

Okay. And my last question, Pete, I think every company should be filing, do S3 shelf filings of however much money they can get. But I was wondering if you could share your thoughts on putting that in place for Aviat.

speaker
Pete Smith
President and CEO

Yeah, so we have an existing shelf from three years ago that expires on May 4th. And I know that some investors get concerned about that. I think we've been a prudent deployer of capital. And so us just putting the shelf in place is good corporate housekeeping. If some opportunity were to present itself, we're in position to capitalize on it. But I want to be clear, we currently have no active deal in our M&A pipeline that would necessitate pulling down the shelf, but we just wanted the flexibility. And then a couple investors put in some questions since that filing came out. you know about our firepower and we were comfortable using debt up to three times our 12 months trailing EBITDA or three times the pro forma combined EBITDA so we think we have some significant firepower and then an additional question was if you use that debt what would the rate be and we think it would be in the SOFR plus 250 to SOFR plus 300 basis points. Okay, thanks very much.

speaker
Operator

Thank you.

speaker
Operator

One moment for our next question.

speaker
Operator

And our next question comes from Tim Savageau of Northland Capital Markets. Your line is open.

speaker
Tim Savageau
Analyst, Northland Capital Markets

Hey, good afternoon. You mentioned 7% organic growth for Aviat in fiscal Q3. I wonder if you can give us, you know, a similar estimate, not a similar number, but the same type of estimate for organic growth that you're implying here for Q4. And I think that brings you in, right, you know, likely bring you in somewhere around 5% for the year. Is that sort of rate maybe a little bit below your historic growth rate? But would you expect, at least as you look at it now, would you expect that to persist into fiscal 25 or maybe something more typical, kind of mid to high single digits in terms of organic growth rate for Aviat?

speaker
David Gray
Chief Financial Officer

Thanks. Yeah. I think in that mid single digits where we would end this year would carry forward into

speaker
Pete Smith
President and CEO

into 25 we're not we're not going to estimate in the high single digits at this point look for modeling purposes put it at mid single digits and you know we you know of course we're going to try and do better than that and you know look we we talked about two other headwinds tier one and Africa and We think that the Africa is really at a bottom, and that's largely interest rates. And another data point that I'd like to add is on our cost and currency basis, our revenue was down 4%. It would have been 4% higher if we didn't have the emerging market currency issue, and we would have had about $1.9 million more EBITDA. So, you know, we beat the consensus on the bottom line despite that. So, you know, our number one focus is to drive the Pasolink revenue up quicker. And, you know, I would say the African currency issue you know, that's beyond the control of AVIAD, but we're well positioned when that dam breaks.

speaker
Tim Savageau
Analyst, Northland Capital Markets

Okay, thanks. And maybe I was going to follow up with that with hopefully a discussion on some of the puts and takes around that organic growth rate. You mentioned Africa, although that sounds like it's impacting this year. And if it's bottoming, maybe that could be a tailwind. You know, I imagine, you know, the rural broadband growth drivers could get stronger next year. Then again, you mentioned finishing up a Tier 1 project, and maybe that's a tough compare. So, Pete, I wonder if you might just, you know, go through some of those puts and takes around that mid-single-digit growth rate and, you know, what could drive it either way.

speaker
Pete Smith
President and CEO

The Tier 1 project is a tough compare. You know, we think we have about 35%, 35% share of world broadband. And if the RDOF kicks in a meaningful way, that's going to be very, very positive for us. A reversal in the currency with respect to Africa is going to be good. And then, you know, so let me come back to the U.S. Tier 1 project. This is a question that we've gotten in the quiet period is about some multi-dwelling unit trials that we can't disclose to the customer, but we'd acknowledge those, and if that were to get across the goal line, that would be a significant uplift to offset the completion of the project. We're pretty happy with our funnel, and we think that the future is rather bullish for us. So the puts and takes. The put is the completion of the U.S. Tier 1. We see new projects with our major U.S. Tier 1 customer that could be lift for us. We see African currency at the bottom, and we need, as interest rates moderate, that's going to reverse, and we need to get the PASO link ramped up to where it should be.

speaker
Tim Savageau
Analyst, Northland Capital Markets

And that's a good place to end for my last question, which is, would you hope to have that up to the target run rate by the end of fiscal 25? And that's it for me. Thanks.

speaker
Pete Smith
President and CEO

Yes. Yes. Yeah, that's funny. Tim, you usually give me a hard time for not being direct in my answers, and rightfully so from your perspective. My answer on that is a crystal clear yes.

speaker
Tim Savageau
Analyst, Northland Capital Markets

When received in crystal clear fashion. Thanks, Pete.

speaker
Operator

Thank you. And as a reminder, to ask a question, please press star 1-1. One moment for our next question. I'm actually showing no further questions. At this time, I'd like to turn the conference back to Kate Smith for closing remarks.

speaker
Pete Smith
President and CEO

Thanks, everyone, for joining us. We're looking forward to updating you in about 90 days. We remain enthusiastic about the business. We think our products, customers, and our cost reduction program are on track, and we're certainly bullish about the future. Thanks, everyone.

speaker
Operator

This concludes today's conference call. Thank you for participating, and you may now disconnect.

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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