Q2 2019 ClearSign Combustion Corp Earnings Call

Aug 14, 2019 PM UTC 查看原文
CLIR - ClearSign Combustion Corp
Q2 2019 ClearSign Combustion Corp Earnings Call
Aug 14, 2019 / 09:00PM GMT 

Corporate Participants
   *  Brian G. Fike
      ClearSign Combustion Corporation - Interim CFO, Treasurer & Secretary
   *  Colin James Deller
      ClearSign Combustion Corporation - CEO & President
   *  Robert T. Hoffman
      ClearSign Combustion Corporation - Chairman

Conference Call Participants
   *  Robert John Kecseg
      Las Colinas Capital Management, Llc - Managing Partner, Chief Compliance Officer & CIO
   *  Matthew Selinger;Firm IR Group;Principal and Founder

Operator   [1]
 Good afternoon, and welcome to the ClearSign Corporation Second Quarter 2019 Conference Call. (Operator Instructions) Please note, this event is being recorded.

 I would now like to turn the conference over to Matthew Selinger, Investor Relations.

 Matthew Selinger;Firm IR Group;Principal and Founder,    [2]
 Thank you, operator, and welcome, everyone, to the ClearSign Combustion Corporation's Second Quarter 2019 Results Conference Call. During this conference call, the company will make forward-looking statements. Any statement that is not a statement of historical fact is a forward-looking statement, which includes remarks by the company's projections, expectations, plans, beliefs and prospects. These statements are based on judgments and analysis as of the date of this conference call and are subject to numerous risks, important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties associated with the forward-looking statements made in this conference call include, but are not limited to, whether field testing and sales of ClearSign's products will be successfully completed, whether ClearSign will be successful in expanding the market for its products and other risks that are described in ClearSign's public periodic filings with the SEC, including the discussion in the Risk Factors section of the 2018 Annual Report on Form 10-K.

 ClearSign assumes no responsibility to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.

 So on the call with me today are Rob Hoffman, ClearSign's Chairman of the Board; Jim Deller, ClearSign's Chief Executive Officer; and Brian Fike, ClearSign's Chief Financial Officer.

 So with that, I would like to turn the call over to Brian Fike. Brian, please go ahead.

 Brian G. Fike,  ClearSign Combustion Corporation - Interim CFO, Treasurer & Secretary   [3]
 Thank you, Matthew, and thank you to everyone for joining us here today. Before I turn the call over to Jim, I'd like to review our results from operations for the second quarter, which ended on June 30, 2019.

 The net loss for the quarter ended June 30, 2019, was $2.4 million compared to $2.4 million loss in the same period for 2018. Shares outstanding as of June 30, 2019, were 26,702,261. Our cash and investment resources were about $11.6 million at the end of the second quarter of 2019 compared to $13.7 million at the end of the first quarter of 2019.

 It's important to note that we have sufficient working capital available as of today to carry us well into 2020, even assuming no revenues or changes in expenditures.

 And with that, I would like to turn the call over to our Chief Executive Officer, Jim Deller. Please go ahead, Jim.

 Colin James Deller,  ClearSign Combustion Corporation - CEO & President   [4]
 Thank you, Brian, and good afternoon, everyone. Before getting into my comments on the progress and outlook of ClearSign's business today, I want to quickly review the key elements of the plans we laid out in our last quarterly conference call.

 In that call, we presented a strategy prioritizing key technologies that we can commercialize quickly, developing those technologies to minimize barriers to acceptance by our customers and to make them simple to incorporate into the equipment of major suppliers in the industry; and finally, to deliver our technology to our customers through collaborative arrangements with leading equipment manufacturers in the industry and identify and develop channels to market to support the ongoing growth of our business as well as that of our partners.

 At that time, we also discussed developments in our key combustion technology, especially the addition of a repositioned pilot that enables the ClearSign burner to start up and operate in the same way with the standard production process of boiler burner. We also stated that it is our intention to continue to develop our technology and the operations in a manner focused on the needs and preferences of our customers.

 In this call today, I will give updates on the development of our combustion technology, discuss the packaging of our technology for easy adoption by our current and future OEM partners, and talk a little, to the extent that I can, about our progress in developing strategic partnerships.

 Back in June, we announced the completion of a supplier agreement with ASHCOR LLC. I will talk about the opportunity presented by this agreement and give an update on our additional collaborative activities.

 Please note that we are actively negotiating with multiple prospective collaboration partners at this time in an effort to reach the best and most mutually beneficial business arrangements, and ultimately, contract terms. The requirements of each of these parties and the due diligence activities are different from one another, as are the status and details of our ongoing negotiations. Because of this, I will not provide specific information regarding the parties of these negotiations, including their names at this time.

 I will make mention of the ongoing interactions, as appropriate, when providing updates on the development of our production lines. We will make announcements at the conclusion of this process when partners are selected, negotiations completed and contracts have been signed.

 Additionally, and of note, I would like to mention that we have been, and continue to be, very cognizant of costs. Since there is sometimes concern that savings will be at the expense of progress, I will address our approach to cost control and our strategy of balancing this against the necessary scale-up of our operation's capabilities as our business develops to commercial order processing. I would also comment on some other specific areas of focus in our cost-control activities. Later on in my remarks, I will give an update on our progress in China and on our ongoing projects. Finally, to conclude my remarks, I will talk a little about plans for controls technology, which I have not mentioned to date.

 As background to an update on developments of our technology, I want to elaborate on the key theme presented in the new version of our investor presentation, which is posted on our website. The investor presentation addressing naming and branding, but also gets to the essence of our business strategy. As we configure our ClearSign technology for embedding as the technical high-performance core of our prospective partner's equipment, we need to provide a standard package that is consistent and repeatable. It also needs to be in a form that our prospective partners can anticipate and depend on as they modify their equipment to accommodate the ClearSign components. The details of the ClearSign components will vary by product and also scale in size depending on the fine rate and size of the equipment into which they will be installed, but they will be predefined and inconsistent. We have branded the technology that will be built into our prospective partner's equipment as ClearSign core, a name derived by our Board Member, Susanne Meline. Our intention is that the name ClearSign Core will become an industry-wide recognized brand. We also planned the name ClearSign Core will be part of the identity of the equipment into which our products are fitted. For example, possibly as an XYZ burner with a ClearSign Core or XYZ ClearSign Core burner, flare, vapor recovery unit, et cetera.

 To avoid confusion, the name Duplex will be phased out as we do not believe this currently has significant market recognition or trace in association with ClearSign or provides a self-evident description of how ClearSign technology is made available to our customers. As I mentioned earlier, if anyone on this call has not had the opportunity to review the updated investor presentation, I encourage you to do so. It is available under the Investor Relations portion of our website.

 On the last call, I noted that Engineer and Business Leader, Jeff Lewallen, had recently joined ClearSign to develop and commercialize our process burner technology. Since that time, we believe we have made substantial progress developing the capabilities of this technology to meet the operating criteria that is sought by refining users in the industry. Beyond the inclusion of a new pilot configuration discussed in the last meeting, we have extended the operating range of this technology to align it with the operation of standard burners in almost every way.

 During this last quarter, we have demonstrated this technology to multiple potential partners and end users with unanimously positive responses. We have installed new pilot configuration at Tricor, where it has operated without industrial setting as seamlessly as it did in our test furnace. To me, more impressively at that installation, the scaling of our technology from 5 million BTUs now in our test furnace to the original 8 million BTUs an hour, now 15 million BTUs an hour out of the box and without any diminishment in performance is a great testimony to the scalability of this technology compared to I and others from the industry are used to with traditional burner designs.

 For those who like quantitative specifics, this latest installation of Tricor is operated with a heat density of 476,000 BTUs per hour per square foot. That is a full 60% of industrial guidelines, still getting the same circa 5 PPM NOx performance with no indication of heat disruption concerns.

 This data is significant as it demonstrates the ability of the ClearSign process burner technology to operate effectively in tight confines, therefore, offering a solution to all customers that have heaters facing production limitations due to the flame size, flame interactions and troublesome furnace patterns created by traditional low NOx burner technology. This installation is also operating with a full burner management system, basically to start a burner and bring it to operating rate, and to shut down the burner, the operator needs to do no more than push a button. At this installation, the new burner has been started and shut down daily without issue since early July.

 We are encouraged by the response from our prospective partners and customers to this technology, particularly those who have seen it in operation in our test furnace in Seattle, working in the field or both. Of particular note is a number of prospective install inquiries we have received where the value of the technology to our customers is not mainly focused on NOx, but enable furnaces to operate at full rates when previously would have been derated or turned down after being fitted with traditional low NOx burners. In fact, one hopefully notices that when we describe ourselves in press releases, we purposely say that our technology improves energy and operational efficiency while dramatically reducing emissions, rather than leading with emissions reduction. In many cases, the payback period for a ClearSign burner is in the order of a year to 18 months, especially in cases where the heat output can increase without flame impingement.

 We are working through a similar commercialization process with our 5G boiler burners. This includes the configuration of a ClearSign Core with similar performance attributes. At the time Jeff Lewallen joined ClearSign to take the lead on our refining and petrochemical business, our CTO, Donald Kendrick, took personal accountability for the development of our boiler burner technology.

 While we do not yet have any field installations of a new burner configuration, we are now demonstrating a fully automated 5G boiler burner in Seattle. This burner is providing full process flexibility and significantly sub-5 PPM NOx in our test boiler. The operation and low emissions demonstrated by this technology has been key to the engagement of prospective collaboration and supply channel partners. We also have incorporated the successful design features of our 5G technology into the design of the modified components by water tube boiler burner. I will talk more about this shortly as it is integral to our project in China.

 As mentioned at the start of this call, we currently have ongoing negotiations with several companies interested in partnering with us for these burner technologies, some of which have undertaken due diligence procedures. And as for the process burner technology, I need to ask your patience as we complete these negotiations. I will say, however, that the feedback has been encouraging, and in the words of some of our very interested visitors, wild and very impressive.

 This past June, we announced our first collaborative supply agreement with ASHCOR for the flare vertical. ASHCOR is a very dynamic and nimble flare manufacturer based in Chattanooga, Tennessee. ASHCOR specializes in the technology and business of enclosed flares. Its business development aspirations and history of the senior management and technical team make them a very good fit for ClearSign. The agreement prohibits the disclosure of the commercial and technical details for obvious reasons and describes the inclusion of a ClearSign Core or multiple ClearSign Cores into an ASHCOR flare. The ClearSign Core components are standard design and have already been engineered into an ASHCOR flare body. There are also mutual development obligations to expand the applicability of ClearSign-ASHCOR technology to other products.

 The first embodiment of the standard ClearSign Core flare technology is already manufactured and awaiting installation in the most recently delivered ClearSign-provided flare order for a CRC refinery near Bakersfield, California. This installation to retrofit another enclosed wellhead ground flare to ensure compliance with air district requirements was announced this past May. At this time, ClearSign and ASHCOR staff are working together, creating promotional materials and planning sales activities. This is a very exciting development for ClearSign, and we very much look forward to the future of this relationship.

 While we talk about our efforts moving towards commercialization for our technology, we are also simultaneously focusing on our organization and future operations as it relates to selling and delivering our technologies in a commercial environment. In addition to addressing our process heater burner, boiler burner and flare technologies, it's timely to update on this designed-for-efficient operations effort also.

 The ClearSign Core of our burner and flare technologies has been reengineered to contain a limited number of components. It's not only enabled a simplified installation and maintenance by our customers, but also it gives us opportunity to standardize the components we buy from our suppliers, limit the amount of inventory we will need to keep on hand and increase the turn rate of the inventory. This allows our suppliers to realize the efficiencies unachievable with larger volume production. Of course, this will, in turn, allow ClearSign to benefit from the economies and component costs, simplified materials management and shorter lead times. It will also simplify the warehousing of replacement parts and maintenance activities of our customers.

 In addition to working with prospective equipment manufacturers, we are also working with the companies that engineer and store equipment as a solution for customers. As an example, one very active company in the Los Angeles region, California Boiler, has already witnessed the performance of our technology, quoted ClearSign equipment and proposed solutions to their customers, and coupled with their strategic growth plans, have recently hired engineers to expand their coverage. And when we connected the 2 parties, California Boiler formed a supply agreement with ASHCOR. California Boiler is also planning to send a team of sales personnel and engineers to Seattle next month to better understand what ClearSign technology provides and to assist them with selling ClearSign's technology.

 Before switching topics to cover cash consumption and sensing technologies, I'd like to give some updates on our ongoing projects. We have completed all the contractual negotiations with South Coast Air Quality Management District and World Oil. While receiving the signed documentation for South Coast as expected, it's always gratifying to get all the signatures on the same page. This completes the 3-way contract for our collaborative demonstration project. This project is on track as we have taken detailed measurements from the World Oil heater, and the engineering design and creation of fabrication drawings for these burners is well underway. The installation start of new burner technology is scheduled for Q1 2020. But of course, depends ultimately on the refinery shutdown and turnaround schedule.

 In our last call, our Chairman, Rob Hoffman, likened ExxonMobil's fired equipment group having the care and attention to detail similar to an extremely careful master carpenter who measure 100 times before cutting once. By experience -- this methodological care and diligence enables steady progress. It also takes time when working through the fine print of labor contracts. We still maintain full engagement with ExxonMobil, have regular dialogue with their technical team in addition to their legal team and believe we are very close to agreeing mutually acceptable contractual terms. We will, of course, let you know as soon as an announcement is mutually agreed.

 In terms of developments in China, we continue to plan for our upcoming installations there. The new technology design for the water tube boiler is complete and materials are in the sourcing or supply phases. As mentioned earlier, we have made extensive modification to the water tube boiler burner technology based on the design and knowledge gained from our smaller scale 5G boiler burner development. The majority of the components that have been revised are being fabricated in China to mitigate shipping delays and possible complications during the importation process. At this time, we fully expect to have everything in store and ready to operate by the start of 2019 winter heating season.

 We are also seeking the ideal host boiler for our 5G technology while we finalize the production details for this demonstration burner. We are targeting a boiler the same size of our test boiler in Seattle. The plan for this technology demonstration is to build and test the burner in Seattle then simply remove it from the test furnace and ship it into China for installation in our client's boiler.

 Shortly after our first quarter call back in May, our customers and some perspective partners in China, it was clear that ClearSign has strong relationships with various senior personnel in companies in China. Some of these are evidenced by the heating district and CITIC MOUs we have in place. In order to capitalize on the anticipated acceptance of ClearSign technology into the Chinese markets, we are also laying the groundwork for our supply network within the country. At present, we have many options open to this and continue to meet with potential manufacturers, partners and collaborators.

 With the ongoing trade war and deterioration in political relationships between the U.S. and China, the nature of our anticipated operations in China are relevant and informed. The commercial operation we seek to establish in China will involve the manufacture of products for the Chinese customers within China with minimal, if any, materials being imported into China from the U.S.A. The proportion of the material that makes up the delivered product supplied by ClearSign, the proprietary components making up the ClearSign Core, are a small portion of the total supply. So our exposure is small, even if, for some reason, the material does need to be imported. Further, specialty materials used for the burners we are focusing on for the Chinese customers are largely from global suppliers who have manufacturing operations within China or are, at least, available from other countries outside of the U.S.A. I do have another visit to China plant in the near future and continue to see this region as having a huge potential for the future development of ClearSign.

 At this point, I want to switch to look internally and call in on our company expenditures. We have reduced our cash burn over the last 6 months. This is the result of many trimmings and operational efficiency gains, rather than any single major action. The primary contributors are an emphasis on completing work with in-house resources and focusing our efforts on the endeavors highlighted as key objectives for the company. The focus on trimming is ongoing and is applied to our day-to-day activities and at other areas such as our IP portfolio, which includes inventions that are no longer pursuits of ClearSign. These patents cost money to maintain and maybe more valuable to others. We are taking great care to ensure that while we review and commit to expenditures carefully, the work on our top priorities is not hindered.

 From a financial perspective, we are also taking advantage of gains in operating efficiency to balance the development of our operational resources required to prepare for our anticipated future commercial operations. We will then invest as and when being prudent, especially in areas required to develop our operational capability in support of the business growth that is anticipated through collaboration with our prospective future supply partners.

 To date, and since I joined the company, we have employed a consistent strategy of prioritization to get ClearSign to commercial operations as quickly as possible. We initially identified the process burner technology and the 5G burner technology as top priorities. The development of the process burner technology, with the addition of a new pilot, led directly to the rapid deployment of what is essentially our process burner ClearSign Core technology into flare equipment, hence the accelerated development in this product line and the already enacted agreement with ASHCOR.

 As our strategies and technologies in the burner-type applications transitioned to commercial deployment, it is appropriate to comment on another sector of ClearSign's portfolio. The technology I will speak about is an evolution from the original ECC technology and focuses on sensing applications, i.e., the development of high-value sensors.

 We are very conscious of our need to focus our efforts on technology that can be commercialized much readily. The ClearSign engineers developing our sensing technology are not the same staff working on our combustion or burner-type technology. So introducing a selective sensing technology into our highly prioritized business is not depletive to our efforts to commercialize burner and flare technologies. We have applied the same business approach to develop what we believe is a product area that can be commercialized with focus and prioritization. This product opportunity has been selected from a multiple other possible derivatives spawned from the original ECC technology. Although this technology is not so prominent within ClearSign's portfolio at present and the staff working on it, and therefore, the resources committed are few compared to the combustion technologies, it has great potential value to ClearSign in the future, given what we believe is a broad market appeal.

 As we did in the combustion sector, we are now assessing potential customer needs and opportunities, in what form of products or technologies can and should be brought to market, and potentially what other developments may have a great value in the future that need more development.

 One of the appealing aspects about the sensing or sensor market for ClearSign is that whereas our combustion technology is focused in the markets where Nox emissions is a key variable, new sensing technology can potentially have a universal market regardless of emissions requirements, including applications outside of the traditional combustion fields. We look forward to discussing developments and opportunities in this area of our business as upcoming calls and communications.

 In concert with our technology and business channel development, we also need to address our marketing, communications and promotions. To this effect, we are in the process of developing a new website for launch in Q4. This will focus on developing the ClearSign brand and enabling targeted messaging and engagement with our customers, partners and investors. We recognize that the current website does not use the ClearSign Core brand yet and still refers to Duplex, but we'd rather develop our new website on a clean slate, rather than take the time to edit the current version.

 We also continue to present at selected industry and technical conferences to promote the development of our technology and the strategy to make it available in the marketplace. For reference, we will present 2 papers at the American Flame Research Committee Conference next month. We will also make these and other applications available on our website when published.

 Wrapping up my remarks, I'd like to mention in my years of experience in this industry, we have come a long way in a short time in terms of advancing the technology and courting a few suitors for collaborative partnerships. I am encouraged by how well the team is working together, and we look forward to updating our investors as developments and partnerships come to fruition.

 With that, I'd like to introduce our Chairman of the Board, Rob Hoffman, for some closing remarks before we open the line for questions. Rob?

 Robert T. Hoffman,  ClearSign Combustion Corporation - Chairman   [5]
 Thanks, Jim. When we first discussed what my role would be on this call, I thought I would summarize Jim's comments and highlight the accomplishments of the firm in the 5 short months Jim has been our CEO. And as you just heard, that list is long, and given that everyone will have the ability to review the transcript of the call, I encourage all to focus on all of the different areas Jim expounded upon since they are all very meaningful. I will, however, emphasize a few areas that I believe are vitally important in the short term as well as the long term.

 Current cash burn has been reduced, even while accomplishing all of the above. How we go to market and what we provide the market has been retooled. The interest and enthusiasm of potential supply partners is real, and having relationships with these strong partners will be appreciated by the end customer.

 Not only has Jim and his team reconfigured the burner to be more normal or recognizable on how it operates, but the DFM, design for manufacturing, efforts have dramatically reduced the number of parts that go into the ClearSign Core. As we ramp sales, that will work -- that work will pay large dividends.

 Speaking of the ClearSign Core, a not insignificant change was the decision to move from the term Duplex. It's sort of a generic term that didn't communicate much to ClearSign Core. Much like Intel Inside, we want to set the groundwork for our product identity that communicates that a burner, heater or boiler has the best technology embedded in its brain or core, and as Jim also commented, placed into our strategy of having supply partners whose name and reputation will

 (technical difficulty)


 Lastly, I will comment on the esprit de corps that I sense from the entire ClearSign team. They are working hard. I'm proud of what they have accomplished in a short period of time and are excited at the prospect of success measured in revenues in the not-too-distant future. I think I speak for the entire Board of Directors in sharing that enthusiasm.

 With that, we'd like to open up the call to Q&A. Operator, can we open up the call to questions, please?

Questions and Answers
Operator   [1]
 (Operator Instructions) Our first question comes from Robert Kecseg with Las Colinas Capital.

 Robert John Kecseg,  Las Colinas Capital Management, Llc - Managing Partner, Chief Compliance Officer & CIO   [2]
 Jim, I got on the call a little bit late so I missed a little bit of it and I did it on a source here that was really kind of scratchy, so it was kind of hard for me to understand. But I just like to then just kind of throw the question out there regardless of if it fits or not. But as far as the fire tube boiler, before you came on, that was something that was in process, I believe. Can you tell me or give us some kind of an idea about how much of a product that is? I mean did we believe we have the product to be able to deliver fire tube?

 Colin James Deller,  ClearSign Combustion Corporation - CEO & President   [3]
 I appreciate the question, Bob, and thank you. I mean in short, yes, we absolutely do. Since I joined, we have modified the fire tube boiler. As you state, that burner or a preliminary version of this burner was installed in the test boiler we have here in Seattle.

 Over the last few months, we have modified the way that it functions in much the same way as the process burner. We have reconfigured the way that the burner lights up. If you've been following the technology, the older version required a small warmup burner to fire for a period of time to warm up the ClearSign ceramic components that we've -- or we're now branding the ceramic core. And then by modification to the burner, we effectively jumped the flame onto that ceramic core, which is normal operating mode for the ClearSign technology.

 We think this new pilot allows the burner to light off and immediately ignites on the ClearSign Core. So essentially, it runs just like a normal burner. You push the button and the burner lights up and it's ready to go. So the whole operation sequence is much, much simpler.

 We've also, ready to help with that demonstration, built a control system for this burner so we can now demonstrate the burner to our customers exactly the same as it operates when it's in the field in a normal production burner. And that's the mode we've actually demonstrated into the various customers and partners that we've had come through our offices and facility here in ClearSign, and they've seen it ramp up from 0 up to full operating rate and down and modulating just as a boiler would in a normal boiler environment.

 And I'm really looking forward to our plans for China and to basically take this burner and put it in a functioning boiler in China to demonstrate it to the -- our potential partners and customers there in China.

 So going back to your question, yes, we very much believe that we do have a product here and that product is ready for market.

 Robert John Kecseg,  Las Colinas Capital Management, Llc - Managing Partner, Chief Compliance Officer & CIO   [4]
 Something I've never asked before that's come to mind. Obviously, there's all these burners in place in all these refineries and so forth. And in the fire tube boiler market, and hundreds of -- I get probably hundreds of thousands of installations. Could you speak to a little -- give us a little bit of an idea about replacement? I was wondering if these relationships, once they're underway with various existing burner or boiler companies, would give us an idea. Is that kind of the market for when there's replacement activity for them that gives us an opportunity to install ClearSign Core into that replacement market? Am I thinking along the right lines?

 Colin James Deller,  ClearSign Combustion Corporation - CEO & President   [5]
 No, you are exactly along the right lines. I mean there is some new equipment installed into the market, but very much the opportunity, and by far, the greatly biggest market is to replace all of those burners that are already installed out there in the industry, and there are tens of thousands even in our target regions.

 As the ultra-low NOx flames are being installed and our clients are seeking to operate at full rate, they do run into problems with the long flames from traditional burners. But we are providing a technology that now lifts that restriction and allows this very small and highly fired boilers and burners to fire up the normal rate. And that's why I mentioned the heat flux density in the condensation of this feature we just have. Also, of course, is the need to comply with the current and future emissions requirements. The existing burners we installed in our clients' heaters in many regions cannot do that, and they are faced with a very expensive retrofit for some post-flue gas cleanup like an SCR or they can just change out the burner components to a new burner containing the ClearSign Core as a much more efficient and easy to operate means to address that upcoming problem.

Operator   [6]
 (Operator Instructions) Showing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Jim Deller for any closing remarks.

 Colin James Deller,  ClearSign Combustion Corporation - CEO & President   [7]
 Well, thank you, operator. If there are no further questions, I would like to thank everyone for participating on this call, and we look forward to updating you on our progress as events occur. We do appreciate your continued support, and I very much look forward to talking to you all in the future.

Operator   [8]
 The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

PRELIMINARY TRANSCRIPT: "Preliminary Transcript" indicates that the 
Transcript has been published in near real-time by an experienced 
professional transcriber.  While the Preliminary Transcript is highly 
accurate, it has not been edited to ensure the entire transcription 
represents a verbatim report of the call.

EDITED TRANSCRIPT: "Edited Transcript" indicates that a team of professional 
editors have listened to the event a second time to confirm that the 
content of the call has been transcribed accurately and in full.

Thomson Reuters reserves the right to make changes to documents, content, or other 
information on this web site without obligation to notify any person of 
such changes.

In the conference calls upon which Event Transcripts are based, companies 
may make projections or other forward-looking statements regarding a variety 
of items. Such forward-looking statements are based upon current 
expectations and involve risks and uncertainties. Actual results may differ 
materially from those stated in any forward-looking statement based on a 
number of important factors and risks, which are more specifically 
identified in the companies' most recent SEC filings. Although the companies 
may indicate and believe that the assumptions underlying the forward-looking 
statements are reasonable, any of the assumptions could prove inaccurate or 
incorrect and, therefore, there can be no assurance that the results 
contemplated in the forward-looking statements will be realized.

Copyright 2019 Thomson Reuters. All Rights Reserved.