The ONE Group Hospitality, Inc.

Q3 2023 Earnings Conference Call

11/7/2023

spk02: Please and welcome to the One Group third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. As a reminder, this conference is being recorded. I would like now to turn the conference over to Tyler Loy. Please go ahead.
spk06: Thank you, Operator, and hello, everyone. Before we begin our formal remarks, let me remind you that part of our discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We'd also note that these forward-looking statements reflect our opinion only as of the date of this call. We undertake no obligation to revise or publicly release any revisions of these four statements in light of new information or future events. We refer you to our recent SEC filings for a more detailed discussion of the risk that could impact our future operating results and financial condition. During today's call, we will discuss certain non-GAAP financial measures which we believe can be useful in evaluating our performance. However, the presentation of these measures or other information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliations of these measures, such as adjusted EBITDA, adjusted net income, restaurant operating profit, comparable sales, and total food and beverage sales with owned and managed and licensed units to GAAP measures, along with the discussion of why we consider these measures useful, we see our earnings release issued today. With that, I'd like to turn the call over to Manny Hilario.
spk00: Thank you, Tyler, and hello, everyone. We sincerely appreciate you joining us today and for your interest in the One Group. First, I would like to express my gratitude to our amazing team members for their continued commitment to our mission, which is to be the best restaurant in every market that we operate in by delivering exceptional and unforgettable guest experiences to every guest every time. Their dedication gives me tremendous confidence in our ability to become the global leader in live dining. During the third quarter, total revenue grew 5.2% to $76.9 million, and our company-owned revenue grew 6%, which was driven by our new restaurant openings over the past 12 months. We are on track with our long-term growth objectives. In October, we opened a new SDK in Charlotte, North Carolina, and a new corner grill in Phoenix, Arizona. our third corner of the world in the area. Both restaurants are off to strong starts, and they bolster our belief in the long-term EBITDA and earnings power of our developing pipeline as we demonstrate industry-leading ROIs for our shareholders. We plan to open two new SDKs in the fourth quarter of this year and three additional SDKs towards the beginning of next year, one of which will be a licensed location. We have established incredible flexibility to our pipeline, and we are now in a position to open restaurants in a cadence that meets the needs of the business. Despite the softening sales environment, our same-store sales improved sequentially versus the second quarter. Our consolidated comparable sales decreased 3% in the quarter, consisting of an increase of 1.1% at Funagro and a decrease of 5.5% at SDK. When compared to 2019, our pre-pandemic base year, consolidated comparable sales increased 41.7%, reflecting an increase of 61% at SDK, consisting of a 40% increase in traffic and a 20% increase in average check, and a 23.7% increase at clinic growth. Clearly, even against a more challenging backdrop in the near term, we have retained our market share increases at both brands. As we look to the fourth quarter, our event bookings are building, and we have an incredible slate of sensational holiday and seasonal menu offerings planned. Our guests love to celebrate their holidays and special occasions with us, and our venues really come to life during the holiday season. We are excited about our lineup at both FTK and Puneb World for Thanksgiving, Christmas, and New Year's Eve. Along with holiday programming, we are laser focused on promoting our everyday value offerings at both FTK and Puneb World. We believe that our $3, $6, and $9 happy hour program is one of the most compelling in the industry as we offer similar culinary offerings as our main menu, but at attractive entry price points. We are seeing the velocity of the state part accelerate, and it's a key initiative for the company in this challenging sales environment. Another exciting value layer is our nine-ounce menu, which features wine or bubbles, an appetizer, an entree, such as a 14-ounce New York strip, sides, and dessert for only $69 per person at SDK. We feature a similar offering for $39 per person at Puna Grill. We believe this to be one of the best values in the industry and are promoting it along with our happy hour throughout our digital marketing efforts. Turning now to restaurant level margins, restaurant operating profit was 12.3% in the quarter compared to 13.1% in the prior year. In dollars, restaurant operating profit was flat year over year. During the quarter, we faced margin pressure due to our continued investments in labor for new restaurant openings. Because we have some of the highest average unit volumes in the restaurant industry, we prefer to open them with management and staff who have experience working at volume in our existing restaurants. We anticipate this impact to lessen during the fourth quarter with the new store openings upcoming. Additionally, we continue to invest in our digital marketing channel to drive broad customer awareness and promote our just-in-time marketing efforts. For example, during some of the nice fall days in New York City, we were able to drive traffic to our beautiful new patio at SDK Midtown and our wonderful rooftop at SDK Downtown. While this investment may have a short-term impact on margins, It's allowed us to retain the robust market share we've gained over the last several years. Going forward, we are committed to our sales growth and margin driving initiatives. Number one, continue to delight our guests at both SDK and Puneb Royal with exceptional and unforgettable experiences. This is our mission and focus and what allows us to differentiate ourselves from the competition. Our fantastic operating team create the fun and vibe dining experiences that are truly memorable, and our customer satisfaction metrics continue to be the highest we've seen at the company. Number two, keep investing in digital marketing. Focus on our everyday value offerings such as brunch, power lunch, happy hour, night out, and late night happy hour. We are very focused on driving attention and awareness to our valuators, as we believe they are some of the best in the industry, especially to those who may be more wallet-conscious. Number three, optimize our pricing relative to our peers and inflationary add-ons. We've been conservative in our pricing and plan to take a bit more pricing heading into the holiday season, about 3 to 4 percent at each brand to offset the persistent inflation that we've seen across the industry. The high customer satisfaction scores discussed earlier give us confidence in our pricing strategy. Number four, open new restaurants at a consistent pace for the foreseeable future. Number five, improve restaurant operating profit and overall profitability without impacting the guest experience. through mainly focusing on purchasing efficiencies for both food and operating supplies, maximizing productivity through smart scheduling, and evaluating third-party vendor relationships and reducing travel costs. Make no mistake, we understand fully the need to improve restaurant-level margins, and we plan to do so. Moving on to development, during the second half of the year, we continue to execute on our robust unit growth. In July, we opened a corner grow in Riverton, Utah, and as previously discussed in October, we opened an SDK in Charlotte, North Carolina, and a corner grow in Phoenix, Arizona, in the Desert Ridge Marketplace. For the full year, we expect to add eight new units, of which six are already opened. For the remainder of the year, we are on track to open two new company-owned SDKs in the following cities. Boston, Massachusetts on Berkeley Street in the Back Bay, and Suffolk City, Utah in the West Quarter across the street from the Delta Center. Early in 2024, we plan to open a company-owned SDK in Washington, D.C. at the Marriott Grand Marquis, a company-owned SDK in Aventura, Florida at the Aventura Mall, and a licensed SDK. Over the long term, we view our addressable market as 200 SDK restaurants globally and 200 corner grills domestically with best-in-class ROIs of between 40 and 50%. There is clearly a long runway of opportunity ahead of us that we are just beginning to act on. Now, I'll turn the call over to Tyler.
spk06: Thank you, Manny. Let me start by discussing our third quarter financials in greater detail. Total gas revenues were 76.9 million, increasing 5.3% from 73 million for the same quarter last year. Included in our total revenues is our own restaurant net revenues of 73.7 million, which increased 6% from 69.5 million for the same quarter last year. The increase in revenue is primarily attributable to the opening of four owned venues since August 2022. This was partially offset by a 3% decrease in comparable sales. Consolidated comparable sales were 41.7% compared to 2019, our pre-pandemic base year. Management license and incentive fee revenues were $3.2 million, decreasing 8.6% from $3.5 million in the third quarter of 2022. The decrease was primarily driven by lower revenues at a managed property in London, England. Owned restaurant cost of sales as a percentage of owned restaurant net revenue improved 20 basis points to 24.7% in the third quarter of 2023 compared to 24.9% in the prior year, primarily due to menu mix management, pricing, and operational cost reduction initiatives, partially offset by increased commodity prices. Owned restaurant operating expenses as a percentage of owned restaurant net revenue increased 90 basis points to 62.9% in the third quarter of 2023 from 62% in the third quarter of 2022, primarily due to higher labor costs driven by wage inflation and investments in anticipation of growth, increased marketing expenses, and general operating cost inflation. Restaurant operating profit was 12.3% for the third quarter of 2023 compared to 13.1% in the third quarter of 2022, We are making significant investments in growth, which impact the margin, but as Manny discussed earlier, we have significant cost reduction initiatives in place. On a total reported basis, general and administrative expenses were $7.3 million compared to $6.4 million in the prior year. The increase was attributable to increased stock-based compensation expense and additional investments required to have new restaurant openings. Compared to the previous quarter, general and administrative expenses and adjusted general and administrative expenses, improved $0.7 million and $0.8 million respectively, reflecting the impact of many of the initiatives we already have in place. When adjusting for stock-based compensation, adjusted general and administrative expenses were $6 million in the third quarter of 2023 and $5.4 million in the same quarter last year. Pre-opening expenses were $3.1 million compared to $2.7 million in the prior year, The increase was related to payroll, training, and non-cash pre-open rent for Cone and Grill Riverton, which opened in July 2023, for SDK Charlotte and Cone and Grill Phoenix, which both opened in October 2023, and for SDK and Cone and Grill restaurants currently under development. Interest expense was $1.7 million in the third quarter of 2023 compared to $0.4 million in the third quarter of 2022. The increase was driven by increases in our outstanding balance and benchmark rate year over year. Income tax benefit was $0.4 million in the third quarter of 2023 compared to $0.3 million in the third quarter of 2022. Net loss attributable to the one-group hospitality Inc. was $3.1 million, or $0.10 net loss per share, compared to a net income of $0.5 million in the third quarter of 2022, or $0.01 net income per share. Adjusted net loss was $2.4 million, or $0.08 adjusted net loss per share, compared to an adjusted net income of $2.4 million in the third quarter of 2022, or $0.07 net income per share. Adjusted EBITDA for the third quarter, a true total of one group hospitality, was $6.2 million, compared to $7.1 million in the third quarter of 2022. We have included a reconciliation of adjusted EBITDA and adjusted net income in the tables in our third quarter, 2023 earnings relief. During the third quarter, we repurchased approximately half a million shares of our common stock. In total, we have purchased 2.2 million shares, or approximately 7% of our outstanding shares, under our buyback program. The repurchase program was completed in October 2023. Turning to liquidity, we finished the quarter with $22.1 million in cash and have $10.4 million available under our revolving credit facility, subject to certain conditions. During the third quarter, we paid large amounts for restaurants that will be opening later this year and the first part of 2024. Our fourth quarter is our highest revenue and adjusted EBITDA quarter, and typically a quarter where we generate significant cash, which we plan to build. We believe that we have the liquidity necessary to fund our future development plans. Now I'd like to provide some forward-looking commentary regarding our business. This commentary is subject to risks and uncertainties associated with forward-looking statements as discussed in our SEC file. We always remind our investors the actual numbers and timing of new restaurant openings for any given period is subject to a number of factors outside the company's control, including macroeconomic conditions, weather, and factors under control of landlords, contractors, licensees, and regulatory and licensing authorities. Based on the information available now and the expectations as of today, We are updating the following financial targets for 2023. Beginning with revenues, we project our total gap revenues of between $335 and $345 million. Managed license and incentive revenues are expected to be between $14.5 and $15 million. Total owned operating expenses as a percentage of owned restaurant net revenue of 84% to 83% Total G&A excluding stockage compensation of approximately $26 to $27 million. Adjusted EBITDA of $40 to $45 million. Restaurant pre-opening expenses of approximately $8 million. An effective income tax rate of between 5% and 10%. Total capital expenditures net of allowances received from landlords of approximately 2.5% of company-owned revenue and approximately $4 million for new company-owned venue. And finally, we plan to add eight new venues in 2023. I will now turn the call back to Manny.
spk00: Thank you, Tyler, and thank you all for your time today. Let me conclude by saying we are in the early stages of our long-term growth strategy as we continue to build a portfolio of high-volume brands with compelling returns for our shareholders. Thank you all for your interest in the one group. As I always say, none of this would be possible without the fantastic support of our teammates who bring our mission of great execution to life every day. We have some exciting times ahead, and we'll be opening a lot of restaurants in the near future, and I look forward to seeing you all out there. We appreciate everyone joining us on the call today. Tal and I are happy to answer any questions that you may have. Operator.
spk02: Thank you. We'll now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
spk03: At this time, we'll pause momentarily to assemble our roster. The first question comes from Joshua Long with Stevens.
spk02: Please go ahead.
spk01: Great. Thank you for taking my question. Manny, I was curious if you could level set kind of what you saw through the quarter, how that resulted versus your expectations, and maybe touch on just the overall strength of your core consumer. Look, at the end of the day, volume is still very strong, but then there's been a lot of discussion out in the industry in terms of just where the consumer's at, their level or kind of appetite for engaging in the restaurant industry, but it feels like you're continuing to see some strength in your concepts. So just curious if you could provide some perspective from how you see the consumer in the current environment.
spk00: Thanks, Josh. I'll answer it this way. You know, I'll break out, you know, Kona Grill in the quarter, we were plus 1.1 in same-store sales. We were actually up on checks in the quarter, so we were very encouraged by that. So there was a strong performance from a traffic perspective in the quarter for Kona Grill. And we also had pricing in there in a neighborhood of seven points. We did see, though, in the concept trading down. So we clearly, from a PMICS perspective, we're seeing the customer trade down significantly. you know, the items that they're buying when they come to the restaurants. And then STK, we were down about 5.8 on checks. We had pricing of about 6.5 or so for the quarter. So we also did see a trade down with the STK consumer. So I would say the broad trend was You know, relatively solid performance on traffic for both brands, but clearly the phenomenon now happening with the consumer, at least as we've seen it in our restaurants, has been trading down on the items purchased in the restaurant. In terms of day of the week trend, I think I've reported over time that we still see strong performance on Fridays and Saturdays. in the restaurants and still the most more challenged days in terms of customers is Monday through Wednesday. So those are kind of like the relative trends that we see in the consumer. And going into the fourth quarter, our emphasis is value. So you'll notice from my prepared statements there that I believe value plays a big role in the current environment. So our focus will be on our happy hour, 3-6-9, and then as night out at the $69 price point and $39 price point for Kona Grill. So we're being proactive. We've been proactive with value layers now for over a year. So we're expecting to leverage that in the fourth quarter.
spk01: Great. That's helpful. And then when we think about just the strong value offering that you've you know, had in place and then contextualize that with some of the trade down you've seen. Where are you seeing the trade down? Is it broad based? Are you, you know, you also talked about the value layers and the importance there. That seems like a steady part of the messaging. Curious how you work with your digital marketing or kind of messaging to help elevate and draw awareness to that going forward.
spk00: Yeah, I mean, I think if you look at our digital strategy for, you know, frankly, for the last two years, it's been focused on the experience. It's been focused on premium products. We've highlighted a lot of the premium experiences in the restaurants. If you look at our digital, more of our messaging today, we are hitting the messaging more directly with price point. For instance, we have marketed happy hour, you know, in the last, 18 months, but we generally promote a just happy hour. Whereas if you look at our current collateral materials, we're a lot more clear that it's $3, $6, $9. So we believe that price point has become critical with the only caveat on that is that the price point is important, but the experience still trumps anything. So we do make sure that we provide great product opportunities. That is kind of what we do in the rest of the menu at those price points. So it's not just, you know, providing the price point, but it's really providing the great products and the great experiences at those other price points.
spk01: The last one for me, can you talk about the new unit or the environment for opening new units? You've gotten a couple open here, several open here year to date. You've got a couple more in the pipeline for this year and then singing out into next year as well. Yeah. permitting kind of delays? How have those been trending? And what's the overall environment look like from a new unit development perspective for your brands?
spk00: Yeah, I mean, I think just in general, the construction environment, as many people have reported, is more complex. I think our strategy has been to put as many projects in process, kind of priming the pump with a number of projects. I think we've been doing that now for the last 12, 14 months, really lining up the amount of projects in the pipeline. And I think now we're at the point where we have plenty of alternatives within the pipeline that it's more about us picking and choosing which projects we want to bring on. And it's really about prioritizing, you know, which one we want to bring on. So, for instance, as you probably see from the pipeline, we have a very exciting group of SDKs that we want to open up in the near future. So you'll see that the pipeline right now, the next four or five is is STKs. And by the way, that's not because we're not delighted with Kuna Grill. As a matter of fact, Our Desert Ridge corner grill, which we just very recently opened, has already jumped up to the top in revenue in the chain or in the group. So we're super excited about that. And I think that really speaks to the quality of the real estate that we've gotten to the pipeline in the last couple of years. So we're still super excited about the quality of the pipeline. But one of the things you'll hear us talk a lot more about is just flexibility and the opportunity to pace the openings at the pace that feels comfortable and right for us, because obviously you always have to balance the financial resources and the human resources when you're going through your growth. So it's really just us keeping pace. and making sure that we're balancing those two factors. In terms of the overall environment, permitting is still challenging. So there's nothing really lightening up on that side of the development. And construction is expensive. Labor is a primary input into the restaurants that we build. So in the last 24 months, we certainly have seen the costs of labor within the construction sector. um, builds, uh, going up. So it's certainly something that we keep monitoring very well. And obviously the way to get through, um, uh, labor in construction projects is to shorten, uh, the construction cycle so that you get in, get out of, uh, building the site. So you don't stretch out the labor, uh, within the construction cycle. So, you know, so those are kind of like the two big items within that development cycle that we, we're managing very closely permitting, as well as managing a length of projects so that we get the best in labor.
spk07: Thank you. Thanks, Josh.
spk02: Next question comes from Nick Satian with Whitebush Securities. Please go ahead.
spk05: Hey, thank you. Your unit loan margin guidance implies around 20%. in Q4, you know, just given the leverage you've seen year to date, you know, how much confidence do you have in that sort of, you know, very high 19s, low 20% type of, you know, of a margin in Q4?
spk07: So, Nick, great question.
spk00: So, the items that You know, I would call the positives leading into the quarter into the margin. One is we did take pricing, the holiday pricing just actually this week. So I think the higher pricing by definition should help with the margins. And we typically put our holiday menus in place. In the third week of November, we decided to do a little earlier this year, so I think that helps with the margins. I think the next thing that helps with the margin is that we've taken a significant amount of people from existing restaurants, and we're moving them now to the new restaurants, so that takes pressure off having, you know, possibly duplicate positions within the restaurants, so that helps with the labor side in the restaurants as I think Tyler mentioned that we've done a significant amount of initiatives in supply chain items like paper and stuff like that. We kind of brought down a little bit the spec on the paper that we use and really took advantage of maybe more of our size in paper purchasing. So we're doing a lot of things within the ops space. costs that probably will be very helpful and just generally you know being very careful with scheduling labor in the in the slower weeks within the quarter although it's a really good quarter for us there's still a couple weeks in there that are kind of low volume weeks so just making sure that the team's manage the schedules really well. Again, I think we also mentioned this, they still have wins in some of the commodities. Beef is still something that we need to manage through and make sure that we offset that. But overall, that is good. And then we are launching our premium lines like we do every year in the holidays. We're having some very cool items in our Wagyu promotion this year. So that should help drive both percentage and dollar margin during the holiday season. So those are kind of the things that I guess I gave you both pluses and, you know, and maybe a head one in there in terms of how we look at the March and the fourth quarter.
spk05: Okay. Thank you. And then just my last question, you guys mentioned that the comps sort of improved as the quarter progressed. Would you mind telling us the month to month comp and then how you're doing in October in terms of sensor sales?
spk00: I mean, I think in general, you know, I would say, you know, the month-to-month differences to us, to be honest with you, weren't that significant in our business model. So I wouldn't say that, you know, they were that significant from that perspective. And, you know, Tal, you want to add anything on that?
spk06: No, I mean, they were relatively consistent, but we didn't see sequential improvements for the quarter. And then in terms of, you know, October – I think our guidance really kind of lays out how we're feeling about the fourth quarter relative to October and the rest of the quarter as well.
spk07: Okay. Thank you very much. Thanks, Nick.
spk02: The next question comes from Mark Smith with Lake Street Capital. Please go ahead.
spk04: hi guys first question for me just trying to balance many you talked about you know some focus on kind of value here in q4 that with taking some price increases on you on the menu I don't know if you can quantify price increases maybe where you're planning on taking that and and how you still send a value of message with some of the price increases
spk00: So fantastic question, Mark, and probably one that helps us, you know, I guess really the focus in defining the strategy is that, you know, with Happy Hour and the other price points that we have, like 39 at Kona Grill, 69 at SDK, is we really use that level or those price points to really make the brand approachable to a much wider group of customers. demographics, and so it's really an access to the brand opportunity for us. So we believe that there's that level of consumer that is sensitive, and we want to make sure that we give them an opportunity to still experience the brand. But then the pricing strategy on the menu in terms of taking prices up is really targeted at the higher end of our demographic groups. that will, you know, participate on the bigger steaks and on the full dining experience. So our strategy is really use valley layers to make Brent super accessible to everybody. And then when you're in the restaurant, if you, because there's still a very, I think there's a high level of spinning on the higher end demographics that is still intact. And so having the higher price points and having also promotions with items like Wagyu and other stuff that is, frankly, very pricey kind of works really well. So it's a one-two punch, really bringing people in with the messaging, the marketing, the positioning that we're an accessible brand. And then once you're in, it's giving the choice to the core customer of the brands to participate on the premium products within the brands.
spk04: Okay. Next question was just private events and your outlook for private events here as we move into, again, holiday season, fourth quarter on total results.
spk00: Yeah, I mean, our visibility right now, I mean, we tend to be about... 30% to 40% of the books built by this time of the, maybe a little bit higher by today, but we do have a pretty good visibility. All reports right now is that we do have a very strong book coming into the quarter. So I'm actually super pleased about that. And now we're really focusing more around the holidays, which we dominate. So Thanksgiving and Christmas Day, And also New Year's Eve. So really focusing on maximizing and really it's all about managing capacity on those days. So I would say that right now the events book is really powerful. And as always the challenge is that we do have limited space in some of our restaurants. So it's always about how you manage the capacity during those four or five weeks in December that really make it happen. So it's really about that. But the early demand is strong. and uh we still we still haven't done our full promoting on it yet so there'll be some promotions and marketing that we'll be doing in the next couple weeks that should even further that so i'm pretty bullish on the event outlook for the quarter okay and last question for me was just looking at some of the cost cutting initiatives you've talked about some i'm not i'm not sure if i picked them up can you
spk04: talk any more in depth about kind of, you know, what areas you're looking at, where you expect this to hit, and then maybe if some of this is outside of the four walls of the restaurant and within kind of corporate overhead.
spk06: Yeah, Mark, this is Tyler. So in terms of, you know, cost initiatives, I think, you know, really kind of walking down through the, you know, I think we're really thinking through scheduling and smart scheduling in the restaurants, making sure that we're staffed appropriately for the volumes by day of the week and by day part. And then, you know, really other operating expenses around operating supplies and some of the costs that I think are embedded in the model that just are not as guest-facing and finding out, you know, optimization there. And then we talked about it a little bit, but I think really from an overhead perspective, some of the soft costs around travel and some of the soft costs in G&A, just being really thoughtful about those expenses.
spk00: Yeah, I mean, I would say on the travel, the big one for us is the cities that we travel to are not exactly inexpensive cities to travel into, particularly from a hotel and airfare. So really instituting a lot of discipline around travel booking flights earlier and really making sure that we get the right rates with hotels. So just being very smart on travel. And we did take some positions that were not critical. We didn't replace them on the GNA. So there's been some attrition on GNA and positions that we've chosen on the short term to hold back on. And then there's other soft things that we kind of, we used to do secret shopper reports every week, every restaurant. We decided to go down to one every two weeks. So that cuts some costs out. So, you know, we've taken out, you know, some of our hot points in the restaurants, which are those booths that you take pictures and stuff like that. So we've trimmed out some of the things that we don't think impact guest experiences that help out the P&L community.
spk07: Thank you.
spk02: Thank you all very much. This concludes our question and answer session. I would like to turn the conference back over to Manny Hilario for any closing remarks.
spk00: Thank you for your continued interest under one group. We always appreciate you being here with us to listen to our story and what we're working on. And particularly in this fourth quarter, I look forward to seeing you all in our restaurants. Everyone have a great day.
spk02: This conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a good 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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