4/28/2022

speaker
Operator

Welcome to the Lomate Vascular Q1 2022 Financial Results Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Mr. J.J. Pellegrino, Chief Financial Officer of Lomate Vascular. Please go ahead, sir.

speaker
J.J. Pellegrino

Good afternoon, and thank you for joining us on our Q1 2022 Conference Call. With me on today's call are our Chairman and CEO, George LeMaitre, and our President, Dave Roberts. Before we begin, I'll read our safe harbor statement. Today, we will make some forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by our using words such as believe, expect, anticipate, pursue, forecast, and similar expressions. Our forward-looking statements are based on our estimates and assumptions as of today, April 28, 2022, and should not be relied upon as representing our estimates or views on any subsequent date. Please refer to the cautionary statement regarding forward-looking information and the risk factors in our most recent 10-K and subsequent SEC filings, including disclosure of the factors that could cause results to differ materially from those expressed or implied. During this call, we will discuss non-GAAP financial measures, which include organic sales growth, as well as operating income and EPS, excluding special charges. A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the investor relations section of our website, www.lemate.com. I'll now turn the call over to George Lemaitre.

speaker
George LeMaitre

Thanks, JJ. On today's call, I'll cover four topics. Q1 organic sales growth of 13%, continued sales force growth to 112 reps, going direct in Korea, and the stronger U.S. dollar. Sales were 39.6 million in Q1, a 13% organic increase versus the year-ago quarter. All three regions posted double-digit organic growth. The Americas 12%, EMEA 13%, and APAC 15%. Due to Omicron's February improvement, the Q1 sales ramp was steep, $10.7 million in January, $13 million in February, and a record $15.9 million in March. Autographed and Zenasher once again led growth in both posted record quarters. Autographed was up 18% to $6.9 million in Q1 as that acquisition continues to outperform expectations. Zenasher bounced in Europe, and Japanese sales growth continued. Karata Chunts, Allografts and valvetomes also contributed to Q1 growth. Notably, we sold our first Allograft in Europe as that product received UK approval in March. We've also begun the application process for German Allograft approval. We've built our sales force back to match our pre-COVID high watermark of 112 reps. This 30% year-over-year rep increase may have helped Q1, but will certainly be a tailwind going forward. and we're hiring reps in 14 more cities, mostly in the U.S. and Europe. We should have approximately 120 reps by December. We're also growing our presence in Asia. In April, we agreed to buy out our Korean distributor for $540,000, and we signed a five-year office warehouse lease in Seoul. Last year, Jesang bought $800,000 worth of devices from Omate and sold them to Korean hospitals for approximately $1.6 million. We should be selling directly to Korean hospitals by January of next year. In the last three quarters of 2022, sales to the Korean distributor should be slow, and we anticipate approximately $300,000 of operating expenses associated with our Seoul office. The new Seoul location is LaMate's 12th worldwide sales office, and Korea will become LaMate's 25th direct-to-hospital country. On a different note, recent foreign exchange movements are causing a markdown in our sales and op income estimates for full year 2022. The strengthening of the U.S. dollar since our February 24th earnings call is expected to reduce full year sales by $3 million. The same issue impacts the bottom line, reducing operating income by $1.6 million. Despite these currency swings, the fundamentals of LeMaitre's business remain unchanged from two months ago. Indeed, full year 2022 organic sales growth is increasing slightly in today's guidance to 8.2% from 7.5% in the February 24th guidance. Before turning the call over to JJ, I'd also like to mention that in March, Lemaitre joined the NASDAQ U.S. Broad Dividend Achievers Index. This index is comprised of 373 public U.S. companies which have increased their dividends for at least 10 straight years. Our inclusion in the index underscores our longstanding focus on profitability and returning shareholder capital. I'll now turn the call over to JJ.

speaker
J.J. Pellegrino

In Q1 2022, we posted a gross margin of 65.6%, a decrease of 70 basis points versus the prior year quarter. The strong U.S. dollar alone reduced the gross margin by 70 basis points in the quarter, while favorable product mix offset manufacturing inefficiencies. As we look to improve our gross margin, we continue to hire additional Burlington production staff, and we're now at a record 194 direct labor employees. This 49 percent year-over-year increase is intended to reduce our hourly labor rate. The hiring surge and inventory build should also guard against these three issues, which cause back orders, CE Marks MDR transition, the great resignation, and supply chain disruptions. In another effort to improve our gross margin, in June, we will close our factory in Saint-Etienne, France. This 17-employee factory was acquired in 2018 and produced Wovex and Dialine polyester grafts, Chevalier valvulatomes, and biologic glue. Going forward, the manufacture of Chevalier valvulatomes will transition to our Burlington facility, while production of other product lines will cease. We plan to sell out our current stock of Lovex and Dialine, after which we intend to transition these customers to our Burlington-produced AlbaGraft polyester grafts. We estimate that the closure will result in $3.1 million of special charges in 2022, $400,000 of which are non-cash charges. Up to $3.1 million, $2.6 million will be charged in Q2 2022. The closure should produce savings of approximately $1 million per year beginning in 2023. Q1 2022 operating income was $7.9 million, flat versus the prior year period, as 14 percent operating expense growth offset sales increases. Operating expense growth was driven by a 30 percent increase in sales reps to 112 at March 31, 2022. Our Q1 operating margin was 20 percent. Going forward, we expect operating margins, excluding special charges, of 22 percent in Q2 and 22 percent for the full year 2022. We ended Q1 2022 with $70.1 million in cash, an increase of $900,000 versus Q4 2021. The increase was largely driven by cash from operations of $4.7 million, which was partially offset by dividends of $2.7 million. Turning to guidance, we expect Q2 2022 sales of $40.1 million to $42.1 million, which represents a reported increase of 1% at the midpoint versus Q2 2021 and 5% organically. We also expect operating income of $5.7 million to $7 million, which represents a decrease of 43 percent at the midpoint and 19 percent excluding special charges. Our Q2 2022 EPS guidance of 20 cents to 25 cents per share implies a midpoint of 23 cents per share or 32 cents per share excluding special charges. For the full year 2022, we expect sales of $160 million to $164 million, which represents an increase of 5% at the midpoint versus 2021 and 8% organically. We also expect operating income of $31.4 million to $34 million, which represents a decrease of 10% at the midpoint and 2% excluding special charges. Our 2022 EPS guidance of $1.10 to $1.20 per share represents a decrease of 8% at the midpoint and up 1% excluding special charges. With that, I'll turn it back over to the operator for questions.

speaker
Operator

Thank you. And to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Again, to ask a question, please press star 1. And our first question comes from the line of Zach Weiner of Jefferies. Your line is open.

speaker
George

Hey, guys. Congrats on another good quarter, and thanks for taking the question. Just first, on the headcount expansion and how that plays through the OpEx, can you just give some color there and how we should expect that? Is it all sitting in sales and marketing, or is it a spread, I guess, between sales and marketing and general and admin?

speaker
George LeMaitre

Right. This is George. Zach, thanks for the great question. So a lot of this is actually sitting in cost of goods sold. You notice that we're talking about a 49% increase in the direct labor headcount year over year. So a lot of it is going to be about producing goods and putting them on the balance sheet. So a lot of that is segregated away from the op expense report, but of course, You know, we discussed we have a high watermark here again for sales reps, and we're up 30%. So we think that is indeed impacting the op expense statement as the year goes through. And, of course, we plan to hire more of them. Counteracting that on the op expense line throughout the year is the FX effect that keeps on making that seem a little bit smaller, even though, of course, we all know we're, you know, hiring reps.

speaker
George

Got it. That's helpful. And then one just on procedure backlog, you know, I know we've talked about it in the past, but just are you guys seeing anything? I know COVID has been, I guess, less impactful through the tail end of the first quarter and even less so in the second quarter so far, at least in the U.S. Any comments on procedure backlog or backlog or capture, I guess, now that COVID is at least for a majority of – the revenue in the tail or in the rear view?

speaker
George LeMaitre

Right. So I'm going to limit my comments just inside of the first quarter and not talk about Q2, which I try to do. And I would say, I mentioned the sales numbers for January, February, March. We saw a real rush of procedure unloading in Q3, excuse me, in March, the third month of the quarter. And things were really slow in the last week of December of 2021, as well as the full month of January. So it was very different They were being pent up in January, and we saw a bunch of them get released. I said this in Q2 of 2021 on the call, and I'll say this now. In March, it felt really like the customer was at our throat pulling devices out of our company, just like they were in Q2 of 2021 when we all thought the vaccines were going to solve everything, and it was a very strong Q2 of 2021. That's what March felt like.

speaker
George

No, that's helpful. If I could sneak one more in. On the 4Q call, you mentioned that there was going to be an 11% price increase on Artograph in January. January feels like a long time ago now. With all the inflationary pricing that we're seeing and the broader environment, is there any risk or expectation to increase price I know the limit playbook is to kind of do it at the beginning of the year and let it play out. But any expectation on another price increase?

speaker
David

Zach, it's Dave Roberts. At the moment, no. We did put that 11% price increase through on January 1, and it all seems to be sticking. So at the moment, no. But, you know, obviously if circumstances change a lot, we could reconsider. Okay.

speaker
George

All right. Thanks for taking the questions. I really appreciate it. Have a good one. Thanks, Zach.

speaker
Operator

Thank you. And as a reminder, to ask a question, you will need to press star 1 on your telephone. Again, that is star 1 on your telephone. And our next question comes from the line of Brooks O'Neill from Lake Street Capital. Your line is open.

speaker
Bruce

Good afternoon, guys. I guess I'm just a little confused. Maybe I'm slow because I've been grinding through a bunch of models and earnings reports, but we've hired 30 reps. We're back where we started pre-pandemic. I think I heard you say the demand environment's really good, and we're thinking basically flat Q2 revenue. just helped me to be absolutely sure I understand what's going on out there in the world.

speaker
George LeMaitre

Hi, Brooks. It's George again. I'll start, and if someone else wants to jump in, they can. Please keep in mind this FX thing. We tried to focus on it as one of my key four talking points here. Every month you get deeper in here, you're going to be working with a euro that's 105. That's what we've keyed into all of our models, and it was, I think, 112 in the in the Q1, and then it was something like 120 a year ago. Same thing now is also happening to Japanese yen. So two places where we're having a lot of success. Europe and Japan were getting killed by FX. So I would say there's that. You may also be responding, and maybe you didn't ask this question, but I'll go ahead and answer it. Hey, why is there only 5% organic growth between Q2 of last year, Q2 2021, and Q2 of this year? And it's because last year was this incredible full quarter of, oh my gosh, we all have vaccines. We're going to be fine. And everyone then went out to the hospital and got all those procedures. So Q2 of last year stands as just this crazy good quarter. And we're keying in that we're going to be 5% above that organically. We feel comfortable with that. I think that's a local address of the Q2 question. As for the year, again, as you get deeper into the year, you're going to have three months of each quarter that's at this bad exchange rate. So that's hampering us a bit. And you also see the Korean thing a little bit. You're losing revenue in Korea, but that's a very small piece of the puzzle.

speaker
J.J. Pellegrino

And, Brooks, I'll give you – this is JJ. I'll just give you a couple dollar numbers because they're pretty impressive. Year over year, FX is hurting in the quarter $1.7 million, we think. And then sequentially – Q1 to Q2, it's almost a $700,000 hit to our top line. So these are not small numbers. And so the organic numbers still, you know, is nice enough, as George said. But on a reported basis, you're getting whacked with that FX pretty substantially.

speaker
George LeMaitre

To bring this point home, sorry to hammer this too much, Bruce. No, no, this is good. At the last call, the organic growth that we gave you all for the entire year was 7.5%. And at this call, it's 8.2%. So amazingly, even though it doesn't feel like it to you out there on the call, this is a bump in guidance, believe it or not, sales guidance.

speaker
Bruce

You mean you're telling me that units or some measure like that is growing fast and getting better, but the FX thing is masking that?

speaker
George LeMaitre

Yes. In a short answer, yes. sales, if the FX rate hadn't changed since February 24th to April 28th, sales guidance at this company would be up by a small amount, but it would still be up. So we would have bumped guidance up to account for the beat that we did in Q1, and then also some additional optimism about the last three quarters of the year. So this, believe it or not, doesn't feel like it, we're increasing guidance on the sales number, if not for the FX problem.

speaker
Bruce

Yeah. No, that's really helpful because Obviously, it's not clear to me. I'm guessing there's at least one investor out there that's going to feel the same way. And all the color you just gave, I think, hopefully will help me and probably other people as well, which is great. I guess I'll ask one more. Curious, the acquisition environment, obviously, you've got a nice war chest on the balance sheet. You've done a beautiful job of integrating autographs. We know the playbook. Maybe David can just give us a quick overview of what he's seeing out there in the world in terms of acquisition possibilities.

speaker
David

Yeah, thanks, Brooks. The short answer is definitely have a few targets in the pipeline. They tend to be revenue of $10 million or higher, definitely looking a little bit larger these days. I mean, the core is disposables and implantables used by vascular surgeons, but we're also looking closely at adjacent markets, for example, peripheral endovascular, even cardiac surgery, where we get about 10 or 12 percent of our revenue. We'd like to stay in the niche market. So we've got a few, two or three targets that we're looking at. I think valuations, you know, it feels like valuations sort of peaked, I don't know, about six or eight months ago. They're declining, but Sometimes it takes a little while for these sellers to get the email on that. So I do have one seller that's sort of hung up on price, but otherwise I feel like, at least from a valuation standpoint, it's coming back down to earth a little bit.

speaker
Bruce

Great. Perfect. Thanks for all that. I'm looking forward to the year, even though the FX is moving around all over the place.

speaker
George LeMaitre

Thanks, Brooks. Yeah. Thank you. Yep.

speaker
Operator

Thank you, and our next question comes from the line of Mike Putosky from Barrington Research. Your line is open.

speaker
Mike Putosky

Hey, good evening, guys. A few questions. I guess first, is there any way, JJ, you could provide the data that we got from Artograph, like percentage increase in revenue on Zena Shore and Valvage Homes? Is that handy by any chance?

speaker
J.J. Pellegrino

Yeah, so Artograph was up 16%, I think, in the quarter. That's sort of 11% price. I think George mentioned that earlier. Was it 16% or 18%? I thought I heard 18% earlier.

speaker
George LeMaitre

It was 18% except the whole category, which includes another bovine graft, was up 16%. So truly autographed, 18%. Gotcha.

speaker
Mike Putosky

And Xenosure and Valvatomes?

speaker
George LeMaitre

Sure, I can give those to you. Valvatomes up 10.4% organically for the quarter, and Xenosure up 15.6% organically in the quarter.

speaker
Mike Putosky

In terms of the sales rep figure, and I can't remember where I may have heard this on a conference call, maybe on an MDR, I think at one point you guys may have been talking that that number could go north of 120. Is that still the plan, or is that possibly pushed out until you guys work through some of this FX stuff? Any commentary there?

speaker
George LeMaitre

Sure. I think we reread the transcript from the last earnings call today before we got on. I think at that call, we were talking 115 to 120. And I think we're pushing more up towards 120 in this phone call. What you're maybe talking about is I think in theory, we always sort of talk about, yeah, maybe $1 million of sales deserves one sales rep as a real high-level talking point. But I don't think you've ever heard us come on this call and say 130 or 140. I think that's not what we've ever said. I think we've always been bounded by about 120. I don't remember talking over 120.

speaker
J.J. Pellegrino

No, I don't think so. And Mike, also, I think to your earlier part of that question, there is definitely a balance going on between sales rep increase in headcount and the bottom line. And we're certainly watching that. And it's a tough comp year, right? Last year was the year when COVID sales recovered, but expenses were still low. The bottom line was strong. and we're comping against that now. And you can see that in our numbers. But I think sequentially, we sort of like the answers we're getting, and we certainly want to balance that growth of the bottom line with the growth of the sales rep. So it's a little bit of a dance. You've seen us do it before. It's sort of been in our playbook for a long time. Last year was a little odd in a good way on the bottom line because of COVID, but we're back at that. Great.

speaker
Mike Putosky

And then sort of piggybacking on part of Brooks' question, just a bigger picture question in terms of capital allocation. Obviously M&A is a possibility. You guys are making internal investments in hiring and production. You have a share repurchase that I believe is still alive and not active but authorized. And you have obviously the dividend and you've raised it many years in a row. George, can you just talk about how you would sort of stack rank those different capital allocation opportunities, and any color on that would be great. Thanks.

speaker
George LeMaitre

Sure. And I might add one, too, but you got it basically. And I think if I was sitting with my checkbook, the big checks I want to write are towards Dave's acquisitions. That's the number one check I want to write. I want to write a check to the shareholders to let them know we make cash here and we give it back to them. And then third, you're seeing this in this report, We do like to buy out our distributors when they get big enough and it's worthwhile on a project, and you're seeing that in Korea. We like to buy out the distributors. So I would say on a strictly cash allocation, I would say that's where I'd go with my cash.

speaker
Mike Putosky

Are there other near-term opportunities on the distributor side?

speaker
George LeMaitre

You know, there's always – short answer is yes. And Korea was one of three countries – So including – now, of course, I don't think anyone would be excited if we said we're going direct in Russia. But the three big opportunities were Korea, Thailand, and Russia. And we're in very early stages in Thailand, but we'll see where that goes. South Africa as well.

speaker
David

And, Mike, it's Dave. Just to contextualize that, Korea was, I think, the second biggest distributor for us. So, you know, 95% of our revenue is direct to hospitals. So distributors only account for 5% of the revenue. And so, yes, we've gone direct in many countries over the years. I expect we'll continue to, as George has described. But in terms of how much capital is directed, normally we're paying maybe one times the distributor's selling margin or selling profit. So it's not an enormous amount of capital compared, for example, to acquisitions.

speaker
Mike Putosky

Can I sneak one last one in? On, you know, obviously knocking out of the park with Autographed and Zeno and Velvet Tomes' quarter and FX, you know, huge drag. Is there anything that you guys can do? And I know you're always sort of looking at it and doing it from time to time, and you sort of alluded to with the closing of the facility possibly doing some more of this, but Are there opportunities on sort of the lower margin products to rationalize them, possibly sell certain products or businesses? I mean, or are you guys sort of running the way you want to run at this point?

speaker
George LeMaitre

Sure. Mike, that's a great question. I think we touched on this at the last call, but I'll expand on it even more. I think you'd be happy to know that we consider these things a little too small to spend your guys' time on, but in the last about 18 months, We've thrown about six devices, not in the trash can, but we've written them off. You're feeling that in the P&L, even though we're not spending our time talking about it. We've written six small ones off. They are low-growth products, sorry, negative-growth products with bad gross margins. So we're excited that those are going away. The bag is simplifying, and then it allows us to point our 112 reps at sort of nine better devices rather than nine good devices and six bad devices. So yes, at a product line level, and then furthermore, at an SKU level, last year we got rid of 60 SKUs, or stock keeping units, catalog numbers, if you will, and that was on a base of about 360. So we fully got rid of one-sixth of our SKUs. That does include those other product line divestments, if you will. We're not selling them. We're just getting rid of them. Once in a while, we're thinking about selling them, but their product lines are small enough that no one wants to buy them.

speaker
J.J. Pellegrino

And Mike, the good news is that they were only sort of 1% of sales or so, not a big answer on the sales line, maybe less of an answer on the GP line as a percent of GP. So these aren't things that you would, you know, we'd do it and then you'd go, oh no, here goes 6% of sales. It's not that. It's more about operational sort of efficiency streamlining, sales rep efficiency and focus, and all that kind of good stuff. Okay.

speaker
Mike Putosky

Very good. Very helpful. Thanks, guys. Thank you.

speaker
Operator

Thank you. And our next question comes from the line of Jim Sadoti from Sadoti. Your line is open.

speaker
Jim Sadoti

Hi. Good afternoon. Thanks for taking the questions. JJ, can you break out that $2.6 million charge, where that will be on the income statement

speaker
J.J. Pellegrino

Yeah, that is mostly severance charges, Jim. There's a component that's sort of fixed. There's a component you negotiate. Then there's some fringe on top of that. And on the P&L, it's going to be its own separate line above op income. Okay.

speaker
Jim Sadoti

And then I assume there's going to be some cost to start up the facility to build the value tones in P&L. in Burlington, when will you start to incur those costs?

speaker
George LeMaitre

Right. Oh, sorry. Jim, this is George. It'll be happening. It's already done. We've been doing it for the last 18 months.

speaker
Jim Sadoti

Okay. And then, you know, when we think about 2023, you know, will any of these charges spill over or should we, you know, consider, you know, when we start our model for 2023 that, you know, we should start at that 121 to 131 number?

speaker
J.J. Pellegrino

Yeah, there's going to be a small carryover, probably $100,000, $150,000, maybe $200,000 in 2023, a pretty small number. These are estimates, Jim. So as we get through that negotiated piece of the settlements, we'll be sort of updating them for you. But I think that's our best guess as of right now. Small answer next year.

speaker
Jim Sadoti

Okay. And then with Korea, when you go direct there, how many sales folks will you have in Korea?

speaker
George LeMaitre

Right. Day one, we'll just have a general manager and an office manager and then also an RA person, regulatory person, filing for more approvals. I would say by the end of the year, I don't know, pick a number two or three, mostly about Seoul, and then later on getting out into the other parts of the country.

speaker
Jim Sadoti

And that's part of the 120 that you're hoping to get to by the end of December?

speaker
George LeMaitre

Yes, in a way.

speaker
Jim Sadoti

In addition to?

speaker
George LeMaitre

You know what? I'm going to say in addition to, just as an on-the-fly answer, Jim.

speaker
Jim Sadoti

Okay. All right. And then the last one for me, back to France. You said there were a couple products there that you're not going to sell anymore. Were they material in revenue at all?

speaker
J.J. Pellegrino

Yeah. So there were essentially three product lines that we purchased with that acquisition. One was some biologic glue, which we no longer sell. The other is the valvulatones, which we're going to continue selling now, manufactured in Burlington. And the third piece was the Dacron grafts. And those, we have a bunch of inventory on that, Jim, like three-ish years, maybe more. And we'll sell that inventory out over the next years-ish. And then when we're done with that, we'll transition those customers over to our Albo graft product line, if you remember that, Dacron graft product line that we manufacture in Burlington.

speaker
George LeMaitre

Jim, the biologic blue device, the third one JJ referred to, was a $600,000 device in 2021. It will have a little sales this year and zero in 2023. It's one of the six devices that I talked about with Mike Petusky that we're writing off. We're not interested in the future of that product line for its own reasons having nothing to do with this factory transition. Okay. All right. Thank you. Thanks a lot, Jim.

speaker
Operator

Thank you, and again, if you would like to ask a question, you will need to press star 1 on your telephone. Again, to ask a question, that is star 1. And our last question, we have a question from Javier Fonseca from Spartan Capital. Your line is open.

speaker
Javier Fonseca

Hi, thanks so much for having me on, and it's great to speak with you guys again. My question would be more in line with autographed, so obviously, you know, it's been almost two years since the acquisition and still going strong. As far as the actual commercial presence for autographed, does management have any sort of expectation or any time limits for as far as international rollout to get autographed out there in foreign markets?

speaker
George LeMaitre

Sure. Javier, thanks a lot. It's a great question. In fact, we do. We are in the preparation stages to prepare our CE submission And we think that CE mark submission will go in deep into 2023, and maybe we'll have an approval in like 2025 or 2024. But there's a lot of work that goes into getting that ready from where the product line sits right now. We started doing that. That's on all of our mission statements around all of our offices.

speaker
Javier Fonseca

Excellent. And before getting to that CE mark, should investors expect any sort of increase in noticeable increase in R&D for this product line, given how well it's performed in the United States?

speaker
George LeMaitre

So in terms of development of the product, I think no. But in terms of all of the standardizing the processes and getting them up to snuff, I think there'll be a lot of R&D money spent on that, but not on a change to the product that the hospital would see.

speaker
Javier Fonseca

Excellent. And I guess my last question would be, I think you said earlier in the call, and I might have missed it. But what's what was the actual dollar amount that our graph brought in for q1 6.9 million.

speaker
George LeMaitre

And it was an 18% organic growth rate over q bus. Yeah, q1 2021.

speaker
Javier Fonseca

Excellent. Thank you so much for thanks so much for taking my questions. Thanks a lot, Javier.

speaker
Operator

And there are no further questions at this time. And ladies and gentlemen, that concludes today's conference. I would like to thank you for your participation and you may now disconnect. Have a great day.

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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