LL Flooring Holdings, Inc.

Q3 2021 Earnings Conference Call

11/3/2021

spk_0: thank you for your patience the lumber liquidators holdings inc third quarter twenty twenty one results come from school that she to begin shortly as an adult mind that if you would like to ask the question during the presentation you may did i from south led by one and with living keep ladies and gentlemen hi and welcome to the lumber liquidators holdings inc third quarter twenty twenty one results come from school my name is maxine and i'll be coordinating cool day if you would like to ask the question june presentation you may be sober pressure staff led by one on a cliff in keypad are now hundred that haste cheating at wheaton had it in the death of a good gdp gonna hate when you're ready
spk_1: thank you operator good morning everyone at thank you for joining us today i'm joined by charles tyson our president and chief executive officer and nancy walsh our chief financial officer every begin let me reference the safe harbor provisions of the us securities laws are forward looking statements this cop of may contain forward looking statements that are subject to significant risks and uncertainties including a future operating for the actual performance of el al form although a little flooring believe that the expectations reflected and it's forward looking statements are reasonable it can give no assurance that such expectations or any of it's forward looking statements will prove to be correct important risk factors that could cause actual results to differ materially from those reflected in the forward looking statements are included it in l o florida filings with the se feet during today's conference call management will be discussing results on and adjusted basis a reconciliation of non gaap financial measures to the not directly comparable gap financial measures and or explanation of why the non gaap financial measured maybe youthful are discussed in today's earnings release in addition during today's call we will be discussing our financial performance and bought a one and two your basis because we believe the to your presentation it's helpful to understand the true underlying trends in our business give us all killed a up a business and twenty twenty related to the effects of covert nine keen on consumer spending the information contained with cause accurate only as of the date discussed investors should not assume that the statements warning operative outer today and elkhorn undertakes no obligation to update any information discussed in this call now i am pleased to introduce president and ceo charles tyson charles
spk_2: thank you drew the morning everyone during the third quarter or associates demonstrated tremendous agility operating in a challenging supply chain environment they continued to exceed our customers' needs by launching new and innovative product sourced from expanded locations across our vast network of the and partners the help customers find a few they love but a great value from a broad selection of over five hundred scuse all of little effort is reflected in a strong net sales and profitability growth on a two year basis we were pleased to report double digit growth improve customers sales and installation sales on the third quarter of twenty twenty one for for the last year as anticipated this was not enough to offset the decrease in the i was sales resulting in comparable store sales being down four point five percent versus the third quarter of twenty twenty that said on the basis of third quarter comparable sales increased six point four percent law school we provided outlook for flowing comparable store sales on a two years dog basis for the second law for twenty one compared to queue to given the combination of increasingly challenging supply chain constraints on a majority replenishment potential consumer demand and the potential impact of the coven nineteen them for the area both a third and fourth quarters and twenty twenty one represent trough comparisons versus the strong d i y nesting for phenomenon in the second half of last year which helped drive comparable store sales growth of ten point nine percent and que three and ten point five different and que four of twenty twenty that said over the longer term we're confident in the outlook for demand for home improvement spending and our ability to grow sales to the our customers man she will share more details about a third quarter financial results and outlook in her prepared mob turning out to our strategies for growth that position l l flooring as the pro d i y and do it for me customers first choice and hard surface flooring a strong to your performance reflects the significant progress we've made on our strategic pillows people and culture improving the cars from experience driving traffic and transactions and improving profitability in addition to posting double digit pro uninstall sales growth and que three we open six new stores during the quarter with twelve open year to date or new stores open since twenty eight team over the past two years we demonstrate our ability to significantly improve profitability as we sharp focus on where and how we want to win would customers during this time we also build the foundation underlying of strategic pillows including numerous innovations and pilot programs to bonds are growth we feel very good about the traction with seeing and up our customers sales initiative and were customers response to a new l l flooring branded stores today we're pleased to announce our plans to drive accelerated growth over the next several years by increasing investment in these two key areas first we plan to increase the number of new stores we open per year to and hodja only channel convenience making it easier for more the i y customers to take advantage of highly valued services such as by online and pick up and store the new store also involves the availability for local pros to serve service their customers second we plan to expand our investment in a multi pronged strategy to grow sales with progresses we expect these investments to result in both increase capital and operational spend and twenty twenty two and drive incremental population growth beginning in the second half of twenty twenty two trotting out for more details and performance during the quarter first pose cell phone customers as a key component of our long term growth strategy and with pleased to report double digit per customer sales growth vs last year driven both by traction on internal initiatives to improve the customer experience and continued strength their cause all types of flooring focus pose with whom we work two three more record corner for sales the poor customers we've seen continued momentum is our teams execute a multi pronged strategy to so the suppose first up for relationship program is driving preyed upon customer retention and higher sales per per customer second we're excited with the results from outside pro account sales rep program through this program where broadening our reached a new pros that not experienced the brand to one of us stores starting in queue for of twenty twenty one we plan to increase the number of power councils rent and to expand his program in twenty twenty two third we continue to get very positive feedback from oppose and a dedicated everyday pro pricing that they can extend to their customers this program builds loyalty with pros and represents a unique offer in the market for approach i'm very engaged with a pro website that makes it easier for them to do business with us in addition to showing an everyday competitive pricing and allowing them to extend their pricing to their customers the weather experience also gives pose a real time access to inventory levels across stores as well as her job histories we're still in the early stages are executing a robust road map increase the pro website functionality and the quality reflected in a new l l flooring brand is resonating well with pose for when am proud to recommend us to their customers the strategies if complimenting the others to create an elevated experience are pros and we look forward to reporting on our progress in future goals in addition to our success with pros let services sales primarily comprised of installation sales were up double digit starts with twenty twenty dude about traction on internal initiative and consumers be more comfortable with professionals in their home with pleased with the growing awareness for installation services driven by a new for love brand campaign which emphasizes and and offering from inspiration to installation installation is a cool service we provide our customers and we match them with a quality insulation to a broad network of qualified independent insulation contractors we continue to execute a digital road map for insulation to make the process even better for associates and because animals turning out to d i y as we anticipated we saw a challenging comparisons for sales to the i why customers in the third quarter due to the anniversary of last year's increase cope and nineteen nesting spending in the near term we expect to to need tough comparisons however over the long term we're confident enough strategies to improve the customer experience and drive traffic and transactions particularly as we build awareness for l l flooring brand transformation initiative supporting n d i y growth strategy include improving the copter experience and driving traffic and transactions first we offer a broad selection of train ride high quality flooring which is a big draw for our customers i want to recognize our talented team of merchants who continue to innovate with new products further strengthening our industry leading assortment of over five hundred train right flaws i'm thrilled to announce that weeks of launch about a new flooring category door of on a hybrid resilient flooring which combines the best characteristics of traditional flooring and the latest technology to create unprecedented premium performance for him doorman it is our exclusive product that combines to waterproofing technologies waterproof playing plus a watertight locking mechanism to provide double production from everyday spells and accidents the following is eco friendly one hundred percent pvc free a manufactured from responsibly manage bars as certified by the forest stewardship council it's also easy to install make it user friendly for the i like customers and time saving for a pause durant on his show us from europe and it's a great example of how much and team is tapping into our board network of global sorting partners to launch new and innovative products based on the early results consumers and pros are reacting positively to the it's exciting new category in august of further diversify something strategy we also launched the americana vinyl collection which is assembled in the united states a much and team has developed a strong pipeline a new product introduction of for twenty twenty two that will further bolster position as a leading destination for quality hard surface flooring and we look forward to sharing more on future calls tony now the only channel convenience which is a a competitive advantage for us we continue to enhance our digital expect the during the third quarter a digital sales through our flooring dot com increased more than one hundred percent on a two year stack basis we have implemented new ai tools a l l in dot com website that show our customers recommended attachments to the following they've selected to complete the home projects and further grow average ticket and improve the customer experience l o flooring dot com side is a key channel for building a brand with customers and for inspiring and through educational content and tools like picture it the elevation of a new brand is represented world in a recently launched for catalog which you can access on our website order and imprint the catalogue is based on the floor love brand theme and highlights the bread and quality of product line we are in a long term journey to build a brand equity and awareness and establish l l flooring as the leading destination for hard surface floyd we feel good about the positive feedback were receiving from pros and homeowners on that quality perception of a new flooring brand and the store rebranding is well underway were creating a lighter more modern and appealing exterior and interior store environment that better reflects our l a dated brand promise this leads me to a real estate strategy and plans to accelerate the number of he's doors will open for year increasing the convenience of omni channel experience to new store openings is an important driver a future growth during the third quarter we open six new stores including three showroom only concepts bring our total store account to four hundred and twenty two the smaller showroom only concepts are staffed with experienced associates that allowed to select locations and attractive and convenient reach out centers where we can best serve at target customers the value the l l flooring brand we fulfill the inventory through neighboring warehouse stores increasing both our cause them reach and supply chain efficiency in that market we will continue to monitor the success of the showroom only stores i report back to on future calls on a second quarter conference call and august twenty twenty one else a review of real estate portfolio and it's strategic deep dive into best longer some store opening opportunities during that process we identified a substantial number potential new store locations with attractive return on investment which formed the foundation of a real estate strategy what integrating more sophisticated analytics into a process to identify attractive conveniently locations that meets the needs of both pro and the i why customers are like a strong balance sheet and data driven strategy supports a greater number of new openings over the next three years starting with twenty twenty two were targeting twenty to twenty five new store openings well enough standard format up from a net of for team this year through these new stores we will be closer to more about pro and d i y customers who appreciate the convenience of local services including buy online and pick up and store as a national flooring retailer expanding our store footprint in attractive and convenient locations will strengthen our customer experience and we look forward to updating you on our plans be on twenty twenty two on future calls turning to our people and culture initiative underpinning all of this great work and execution is our team of associates the market for talent has never been more competitive and we have increased investment to strengthen our position as an employer of choice in addition to increasing wages and creating more attractive financial incentives would commitment to building a strong company culture that embraces diversity equity and inclusion them were making significant investments in training and career development entry level associates can look forward to multiple potential career paths with in a field organization our associates tell us that they are attracted to the korea development opportunities we offer and our extensive learning and development programs that help them build valuable skills turning out to consumer demand i spoke earlier about some of the near term headwinds to d i was spending over the medium and longer term however we see strong demand drivers for both pros and consumers the housing backdrop for home improvement spending remain positive some key supporting points for this are the competitive resell housing market bodes well for homeowners renovating their existing homes rather than moving up into a new home millennials who represent a large generational kermode are increasingly by new homes and home value appreciation gives can be seen as more confidence in making the investment in home improvement particularly in an ongoing low interest rate environment in addition consumers are unhealthy financial shape with savings rates at an all time high this is reflected in the remodel index which is at an all time high and a strong remodeling project pipeline the biggest the media challenges we face and needing this strong them on a navigating and continue constrain supply chain environment and elevated supply chain and material costs we expect the supply chain to remain constrained into twenty twenty two continuing to limit inventory that the an increase material and transportation costs as we have shared with you over the past several quarters we believe we would have posted stronger net sales results in the third quarter if we had more product available to meet demand when facing constraints both from an international shipping and domestic manufacturing standpoint from an international standpoint limited ocean a capacity and kind of interrelated shutdowns particularly in viet nam as well as portal backups around the globe have constrained receipt of inventory from overseas and starting in late september we began to see manufacturing capacity pullbacks in china due to power outages in the u s raw material and labor shortages have unfavorably impact our ability to bring in an optimal supply of onwards our supply chain and merchant insulting teams king diligently to improve inventory to optimal levels we've proven our jewelry by actively expanding our supply network of and upon as across the globe to both move sorting out of china as well as towards new innovative products such as donna honor these moves allow us to develop exciting new products a competitive pricing so we can deliver consumers that train right islam and at a great value we are able to use the spot market to secure more containers while a container costs have increased significantly above historical levels which will be a headwind to gross margins we believe it's important to secure consistent flow of goods for our customers as sourcing diversification and product innovation further strengthen our competitive advantage over the long term particularly compared to the small independent flooring retailers who comprise more than thirty percent of the roughly twenty two billion hard shirt pocket we will look to continue to mitigate higher material and transportation costs as well as the system terrorists on certain products imported from china from pricing and promotional strategies and alternative country and and sourcing has always go to deliver quality products at great value for our customers and we will remain highly competitive with the market we will also continue to invest in a city job growth tellers while looking to achieve savings so does finland expansion
spk_3: as well as efficiency and productivity
spk_2: in closing during the third quarter we demonstrated strong pro and installation sales growth versus the third quarter of last year as well as significant sales and profitability and on a two year basis we continue to innovate a leading edge product portfolio and we diversified a filthy we remain confident in the strong value that we will bring to the consumer relative to other national small independent hard surface for retailers a solid execution on new store openings has positioned us to accelerate the number of locations we opened for year starting in twenty twenty two and with very excited about the growth potential from optimizing multi pronged strategy is to increase sales to pro customers despite the volatility in today's environment we've never been more excited about the future of aloe flooring we will continue to make investments in a long term strategies that will accelerate growth and position us to emerge from today's challenging supply chain environment a much stronger company
spk_1: we look forward to reporting on our progress next quarter i will now turn the color over to nancy to share the financial details of the coding nancy thanks charles and good morning everyone
spk_4: before i began i'd like to make sure everyone knows that be discussing non gap adjusted numbers today which eliminate certain items that are not indicative of our core business without please by third quarter results press release for more details
spk_1: reinforcing the charles said during third quarter of twenty twenty one we were very pleased post double digit growth and fails customers and installation service sales underscoring going on with these customers however as we anticipated do to tough year every year comparisons the decrease in our sales to d i y customers pulled total net sales and comparable sales down for the quarter on a one year basis
spk_4: we did however demonstrate strong net failed and profitability growth first versus the third quarter of two thousand and nineteen we believe our to your performance provide a better indication of the underlying strength of our business even the impact of covert nineteen on consumer spending and the continued challenging environment
spk_1: as a result during my discussion i will review third quarter results and both a one and two year basis in the third quarter net sales of two hundred and eighty two point two million dollars decreased thirteen point six million dollars or four point six percent versus the third quarter of two thousand and twenty this is due to a seven point seven percent decrease in net merchandise sales it was partially offset by a nineteen percent increase in net service sale
spk_4: we saw a nineteen percent increase in our average ticket reflecting a great a mix of inflation sales as well as fire merchandise average ticket and twenty three point five percent decrease in transaction count compared to the same period in two thousand and twenty selecting the decrease in sale to the i like customers when compared to the third quarter of two thousand and nineteen net sales increased six point nine percent driven by five percent higher merchandise sales and a nineteen point three percent increase in net service sales average ticket improved fifteen point five percent and transactions decreased nine point one percent due to lower the i fail as charles noted third quarter two thousand and twenty one comparable store sales decreased four point five percent versus the third quarter of two thousand and twenty but increased six point four percent on a two year stack basis turning out a gross profit
spk_1: adjusted gross prop with one hundred and five point two million dollars in the third quarter of two thousand and twenty one compared to one hundred and seventeen point three million dollars in the third quarter of two thousand and twenty and ninety six point five million dollars in the third quarter of two thousand and nineteen
spk_4: adjusted gross margin was thirty seven point three percent thirty nine point seven percent and thirty six point five percent but the third quarter of two thousand and twenty one two thousand and twenty and two thousand and nineteen respectively a two hundred and forty basic point decrease in third quarter two thousand and twenty one adjusted gross margin purchase two thousand and twenty
spk_1: primarily reflects significantly higher transportation and material costs and higher tariffs which were collectively up more than seven hundred basis points that we were able to partially mitigate by pricing promotion and alternative country and bender sourcing strategy compared to two thousand and nineteen adjusted gross margin increased eighty basis points primarily reflecting er pricing promotion and alternative country and bender sourcing strategies that more than mitigated higher material and transportation costs
spk_4: adjusted three an expense to the third quarter of two thousand and twenty one with ninety three point five million dollars compared to eighty eight point six million dollars in two thousand and twenty and ninety three point one million dollars in two thousand and eighteen the higher adjusted sgt expense in two thousand and twenty one compared to two thousand and twenty reflect increase investment in the field and our growth initiatives this year as well as last year's one time two point five million dollars favorable final settlement of the business interruption insurance claim related to the august two thousand and nineteen network security incident
spk_1: which with not repeated and two thousand twenty one
spk_4: as the percent of net sales adjusted as a for the third quarter of two thousand and twenty one was thirty three point one percent an increase of three hundred and twenty basis points from the third quarter of two thousand and twenty due to the factors i just mentioned as well as the leveraging on lowering it sale however when compared to two thousand and nineteen adjusted she in a leverage two hundred and ten basis points on higher net sales adjusted operating income in the third quarter of two thousand and twenty one with eleven point seven million dollars compared to twenty eight point seven million dollars for the prior year period and three point four million dollars for the third quarter of two thousand and nineteen adjusted operating margin for the third quarter of two thousand twenty one was four point one percent a decrease of five hundred and sixty days of points from the nine point seven percent in the third quarter of two thousand and twenty but an increase of two hundred eighty basis points from one point three percent in two thousand and nineteen
spk_1: the higher adjusted operating income and margin on a two year basis reflect good progress on a profit improvement initiative with are merchant and sourcing teens implementing strategies committee or material and transportation costs and our overall organization driving disciplined expense management
spk_4: in the third quarter of two thousand and twenty one reported other expense of eighteen thousand dollars compared to other expensive six hundred and eighty five thousand dollars for the three months ended september thirty two thousand and twenty the decrease of six hundred and sixty seven thousand dollars was driven by the repayment of all outstanding debt during the second quarter of two thousand and twenty one
spk_1: in the third quarter of two thousand and twenty one we recognize income tax expense of three point two million dollars or effective tax rate of twenty seven percent compared to income tax expensive seven million dollars or effective tax rate of thirty one percent for the third quarter of two thousand and twenty
spk_4: the variability of our third quarter tax rate is due to using it estimated annual effective tax rate in two thousand and twenty one compared to a discrete provision in two thousand and twenty because of coded nineteen uncertainty adjusted earnings to the third quarter of two thousand and twenty one of eight point five million dollars decrease by eleven point one million dollars compared to adjusted earnings at nineteen point six million dollars for the third quarter of two thousand and twenty and increased six point six million dollars compared to adjusted earnings of one point nine million dollars in two thousand and nineteen
spk_1: adjusted earnings per diluted share of twenty nine cents compared to adjusted earnings of sixty seven cents for the third quarter of two thousand and twenty and adjusted earnings of seven cents in two thousand and nineteen
spk_4: turning out to the balance sheet inventory the end of third quarter was two hundred and twenty five million compared to two hundred and twenty four million at the end of june two thousand and twenty one and two hundred and thirty seven million dollars at the end of september two thousand and twenty the five percent year over year reduction in in metairie was primarily driven by continued supply chain constraints on replenishment our balance sheet and liquidity remain strong as a reminder be repaid the entire one hundred and one million dollars about dating get during the second quarter of two thousand and twenty one as of september thirty two thousand and twenty one we had two hundred and thirty two million dollars of liquidity comprised of one hundred and four million dollars of cash and cash equivalents and a hundred and twenty eight million dollars of excess availability under the credit agreement net cash provided by operating activities with fifty point three million dollars for the nine months ended september thirty two thousand and twenty one primarily driven by net income of thirty one point four million dollars and positive working capital changes
spk_1: we continue to work toward rebuilding our inventory to optimal levels and we expect to use working capital and cash provided activities to do so
spk_4: turning out to the fourth quarter of twenty twenty one our teams are remaining agile and meeting our customers demand for flooring as we navigate and increasingly challenging supply chain environment we continue to navigate uncertainty in the macro environment related to global supply chain disruptions consumer spending inflation challenging labor market as a result we are not providing financial guidance at the time
spk_1: what i can share is that we are pleased with the tracks we're gaining on our transformation initiative and the momentum in are pro customer and installation service sales that said we expect the challenging d i y comparisons to continue into the fourth quarter
spk_4: in addition we anticipate higher cheerio and transportation costs will persist in the fourth quarter and we look to continue to offset costs to pricing and promotion strategies while monitoring the mark to inform and guide our decisions note that the higher transportation a material costs will flow through our income statements in two thousand and twenty two as be good sell through
spk_1: with respect to eschew ne during the fourth quarter of two thousand and twenty one weeks fact adjusted estuarine a spending to increase as a percent of sales compared to the third quarter and we increase investments in our field organization
spk_4: we expect capek than vestments of approximately nineteen to twenty three million dollars in two thousand and twenty one primarily for the broad scale rebranding of our stores the opening of fifteen new stores and investments and digital
spk_1: in summary we delivered strong sales growth and profitability in the third quarter on a two year basis demonstrating solid progress and her transformation initiative even if we continue to navigate a challenging supply chain environment
spk_0: our entire organization remains focused on driving growth and profitability in two thousand and twenty one and are strong balance sheet and liquidity provide us with the financial flexibility to fund our strategic growth initiative and position ll flooring for long term success thank you all for your time this morning with that lf the moderator to open up the call to question
spk_5: english and gentlemen if you would like to last a question peace past are funded by one on your anything keypad now if he change of mind piece of stuff by key when potential was your question please i'm if i'm eating it
spk_4: alice question comes from lui champion from loop capital he learned a him
spk_6: good morning thanks for taking my question is about the increase investment enough teenage expands which i think he just called out
spk_3: starting in queue for how much of that is devoted the increasing the pro sales staff and how much is just general wage inflation impacting am queue for next year yeah morning or thanks for the the call from you know as you know we've been on a journey of building our logo pro value proposition and we made some significant investments pulled from a dismal perspective and launching a outside for sales team as well as launching urban april no our pricing which is a critical differentiator for us because we don't approach or get buy differential price and so we have been running with pilot with our outside so forth and we're very pleased with the result and so as we move through both this quarter and next year we will continue to
spk_6: that capability and that allows for us to get broader reach of from outside of fools the second element of as you know for next year obviously is expanding a stool acceleration or between the twenty and twenty five stores that we that we talked about
spk_3: as you noted of you know the wage or the market or that the market fell on his aggressive
spk_7: it is critical that we are higher and retain expertise or more going on best and are people on it is a critical part of our strategy we've threat developed a group ah thing we've added some additional training positions to help us retain town and so we think we're making the right strategic investments for
spk_0: a long term strategic growth of in channel segments of pero and installed as well as making sure that one our customers come through front door to the the on chad over a video they have experts and and we will continue to invest in our people are as we grow the company
spk_8: thank you
spk_9: and floor
spk_6: as another reminder if you lights off a question please post office by one and it's missing key pad now on the next question comes from the south bastion from that like the security should on is now a pen peace go ahead
spk_3: thanks a home the money
spk_6: the question one of his walls
spk_3: patricia year after drunk supply chain big cetera but there were covered and market new eighteen percent terms of manufacturer shit and seclusion catalina last quarter and your sales were much lower know eating doesn't that iraq again at a repeal options for mardi gras and how do you think what are the market yeah so that the bigger question are you eat your was going through that catalina report again yesterday and they even state a report that you know there isn't a lot of challenges energy estimating the manufactured sales in the way the product is flowing in and so yes it's a proxy for real
spk_6: tell failed out of those a lot a lump in it's right in terms of supply chain input for the common so you know we said that we've we believe we are growing market share across both are pro and instill business which is critical to our long term strategy of repositioning i'm brand we we are working for to improve our customer experience and improving traffic victory for marketing optimization on growing both the i bought why business as well as a pro referral business and so i think we gotta watch catalina are over the next couple of quarters to see how things are equal out and and them and the and then i they will ever a better indication of how those manufactured estimates really relate to market your
spk_10: yeah okay so you think you're losing considerable share them the i lived side as their in a one year basis and possibly live in to your date
spk_6: palm i didn't say considerable share i said that we are working on improving idea why experience but i'm really referring to your youth catalina which catalina themselves that is not particularly accurate in terms of it's as much based on what's happened through this crisis and so i
spk_8: thank you know we we will judge us over the next few close as we continue to under across all of our businesses and glimpse of what we're gonna do around sure
spk_6: yeah i'm okay and then they're going with some of the pro and you should you mentioned there
spk_3: online website it with pricing that they can extend to their customers so they are you offering sanctuary pro pricing to consumers through groans or can pros i just like him that their customers see
spk_6: yeah so unlike unlike other folks were the pro by of the retail price pros get a differentiated pro price and they can choose whether to a use that as were far pricing to their customers and obviously they're registered with us so we know that through their customer will they can choose to use that in terms in announcing their overall profitability and we'd been really excited by the feedback that were again from our customers on the flexibility that that is giving them as we build our pro loyalty program the is foundational my former
spk_8: and you provide all a bit more colored on what types and this can't you're offering prayers wealthy to list the i by writing and of vary based on purpose volumes are other factors
spk_0: yeah for that you're really highly competitive information from on a show that level of each holiday
spk_2: our i thank you very much
spk_0: thanks
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only. Earnings Call, 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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