VANCOUVER, BRITISH COLUMBIA, Oct 30, 2009 (MARKETWIRE via COMTEX News Network) -- GLG Life Tech Corporation (TSX: GLG) ("GLG" or the "Company"), the vertically integrated leader in the agricultural and industrial development of high quality stevia extracts, announces financial results for the third quarter ended September 30, 2009.
Third Quarter Revenue Up 349%
Revenue for the third quarter 2009 was $14.8 million, an increase of 349% over revenue of $3.3 million for the comparable period in 2008 and an increase of 37% over revenue of $10.8 million for the second quarter 2009. GLG continued to increase its production and shipments of high- grade stevia extract over that of the second quarter 2009. Sales were directly attributable to higher demand for stevia extract products, new purchase orders, as well as a delivery against current order backlog.
EBITDA Margin During the Third Quarter Exceeds Management's Upper End Guidance
EBITDA for the third quarter 2009 was $3.9 million or 26% of revenues versus a loss of ($0.1) for the comparable period in 2008 and an increase of 129% over EBITDA of $1.7 million for the second quarter 2009. Management had previously guided an upper range for EBITDA margin of 20% of revenues. The higher quality proprietary leaf from GLG's contracted farmers has been cited as the key driver for the EBITDA margin increase during the third quarter. This marks the first operating period that the Company has been able to use its Huinong One proprietary leaf strain, which contains approximately 60% rebaudioside A content in the plant leaf. In prior periods, GLG's leaf contained RA content in the 30 to 40% range which had been reflected in the first and second quarter results for 2009.
New 1,000 MT Rebiana RA97 Facility Construction Progress
During the quarter, the Company completed the building phase of its new rebiana (Rebaudioside A 97% purity) refining facility in Qingdao that will have approximately one million square feet of space available for processing lines. The new rebiana facility has been constructed following food grade "Good Manufacturing Practice" (GMP) standards and key components are being constructed following pharmaceutical grade GMP standards. The first line of Phase One construction is on schedule to add an additional 1,000 metric tons of RA97 capacity in December 2009, more than doubling the Company's current capabilities. This new facility, located in close proximity to Qingdao enables GLG easy access to ship, air, and rail for product movement, increased capacity for secondary processing, and positions the Company to further meet current and anticipated demand.
Enterprise Income Tax Exemption Received from Central China Government for Key GLG Subsidiary
GLG was informed on October 21, 2009 by the State Tax Bureau of Anhui Province in China that its 100% owned subsidiary, Chuzhou Runhai Stevia High Tech Company Limited ("Runhai"), would receive an enterprise income tax exemption for its RA60 product generated by that subsidiary. RA60 products are recognized as primary outputs of Agricultural Products by the Ministry of Finance and State Administration of Taxation, and are subject to preferential policies under China's Enterprise Income Tax. As RA60 is the only product produced by Runhai, this exemption is expected to result in zero enterprise income tax payable by Runhai. Runhai would otherwise be subject to a 25% corporate income tax rate in China. The Company has also filed for a similar exemption for its Dongtai subsidiary, which also produces RA60.
GLG Direct Sales Team Announced
During the third quarter, the Company announced that it hired three experienced sales and marketing executives from the beverage and sweetener industries. The Company has appointed Alan Martin and Jack Tokarczyk as Vice Presidents of Sales, and James E. Kempland as Vice President of Marketing. The new additions will focus on the development of rebiana high-grade stevia extract sales for the growing global market.
During the last two years, GLG's production capacity has been utilized primarily for delivering high quality stevia products to its strategic partner, Cargill. With the addition of 1,000 metric tons of RA97 capacity expected in December 2009, GLG is currently in discussions with a number of large multinational companies for the sale of its high-grade stevia products, including rebiana. The Company's new sales and marketing executives will focus on developing business with those companies.
Letter of Intent signed with Government of Paraguay
In the third quarter, the Company also announced that it signed a non-binding Letter of Intent ("LOI") with the Paraguayan Export and Investment Promotion Agency ("REDIEX") to enter negotiations for the development of stevia growth and production in Paraguay and to create a mutually beneficial business relationship for economic development in the country related to the growth and production of stevia.
The LOI is part of the Company's global strategy to diversify its stevia growth and production operations into geographies outside of China. Objectives within the LOI include:
1. To develop agribusiness contracts with stevia farmers for the growth and harvest of GLG stevia seed strains;
2. To develop a joint research and development program focusing on new and improved stevia plant strains, as well as the continual development of advanced cultivation techniques for high Rebaudioside A (RA) yielding stevia plants;
3. To construct a stevia processing facility for the purpose of producing stevia extract products to be sold within the South American marketplace, as well as for export to other regions.
2009 Stevia Leaf Harvest
GLG commenced its 2009 stevia leaf purchase program in August 2009. To date, GLG has seen improvements in the quality of the leaf purchased in terms of lower foreign material and moisture content compared to the harvest in 2008, reflecting the success of its education program with local farmers in China on acceptable foreign material and moisture content. GLG has also been successful in increasing the amount of proprietary leaf that it has purchased from contracted farmers this year. This year marks the first harvest of GLG's proprietary leaf strain of approximately 60% rebaudioside A content. GLG expects its leaf purchase activities to continue into the first quarter of 2010.
Rebiana Market Developments: New Product Announcements, Regulatory Approval and Market Research
In addition to a number of important milestones for the Company, the third quarter 2009 also marked several important developments in the overall market for rebiana and products sweetened with rebiana. Coca Cola launched four new Vitaminwater10 flavors sweetened with rebiana, including Recoup Peach Mandarin, Revitalize Green Tea Extract, Mega C Grape Raspberry and Go-Go Mixed Berry. All Sport Naturally Zero(TM) has re-launched their product now sweetened with TRUVIA(TM). In September, Hansen's Natural launched four Natural Lo-Cal Juices sweetened with TRUVIA(TM).
Pepsi announced that it will distribute its G2(R) product to be sweetened with PureVia(TM) in Mexico, and in October it launched Aquafina Plus Vitamins 10 Cal(TM) Vitamin-enhanced Water with PureVia(TM) All Natural Sweetener in Canada.
In August 2009, Mintel International Group Ltd. ("Mintel"), an independent research firm, released a study of stevia in the US market. In this report, Mintel found that since December 2008, when the FDA confirmed that it had no objection to GRAS status for rebaudioside A (an active ingredient of stevia) in US foods and beverages, the stevia market has increased significantly. By mid-July 2009, stevia sales were above $95 million, a substantial increase over $21 million of sales in 2008. Mintel further predicted that the US stevia market could exceed $2 billion by the end of 2011.
In September 2009, the Company announced the approval in France of Rebaudioside A stevia extract for use in food and beverages. The French Government's approval was made after a review of the safety of Rebaudioside A by the Agence Francaise de Securite Sanitaire des Aliment (AFFSA) was first published in June 2009. France's approval is the first for a European Union market and allows the food and beverage industry in France to sweeten products with rebiana, high purity Rebaudioside A, for the next two years.
Management expects that these developments will support continued growth for the stevia market globally. GLG's direct sales efforts, as well as those of its GLG-Weider Sweet Naturals venture, continue to work with food and beverage companies. GLG expects further new product announcements by food and beverage companies in the fourth quarter 2009 as they continue to emerge from formulation and testing phases for their rebiana-sweetened products.
Third Quarter 2009 Financial Results Highlights
Revenue for the nine months ended September 30, 2009, which was derived entirely from stevia sales, was $ 28.6 million, an increase of 447% over $5.2 million in revenue for the comparable period in 2008. Revenue for the three months ended September 30, 2009 was $14.8 million, an increase of 349% over $3.3 million in revenue for the third quarter in 2008. The increase in stevia revenues was driven by;
(1) New production capacity coming on line at GLG's plants at Mingguang and Dongtai during the first quarter of 2009, which materially improved the Company's production throughput of final product. (Leaf processing capacity increased from 5,000 metric tons per year to 41,000 metric tons with the addition of the Mingguang and Dongtai facilities);
(2) Higher demand and purchase orders for the Company's high-grade stevia extract products in 2009 versus 2008;
(3) Greater shipments of higher value stevia extract against existing purchase orders than in the comparable period.
Notwithstanding these factors, the Company's Canadian dollar reported revenues were impacted negatively by the appreciation of the Canadian dollar against the US dollar during the third quarter because GLG's purchase contracts and orders are typically US dollar denominated. During the third quarter of 2009 the Canadian dollar appreciated 8.4% relative to the US dollar.
Cost of Sales
Cost of sales for the nine months ended September 30, 2009 was $ 21.5 million, an increase of 459% over $3.8 million in cost of sales for the comparable period in 2008. The increase in cost of sales year over year was driven by;
(1) New production capacity coming on line at GLG's plants at Mingguang and Dongtai during the first quarter, which materially improved the Company's production throughput of final product. (Leaf processing capacity increased from 5,000 metric tons per year to 41,000 metric tons with the addition of the Mingguang and Dongtai facilities). During the quarter the Company was not operating at full capacity at these facilities and there are resulting higher fixed costs charged against cost of sales, which has decreased gross profit margin.
(2) There were also higher costs experienced during the start-up of these new facilities. The Company has seen production costs at its new facilities consistently decline during the third quarter relative to the start-up period during February and March 2009, as production management improved its efficiencies. The higher production costs seen at the initial start-up of the facilities flowed through the cost of goods sold during the second quarter.
(3) Larger shipments of higher value stevia extract than in the comparable period against existing purchase orders also increased cost of sales for the nine month and three month periods.
(4) The continued expensing of the interest capitalized into inventory associated with a customer's order that continued delivery during the third quarter. This accounted for approximately 4% of the cost of sales for the third quarter and is a one-time item to impact the cost of goods sold.
Gross profit for the nine months period ending September 30, 2009 was $7.2 million, an increase of 414% over $1.4 million in gross profit for the comparable period in 2008. The absolute increase in gross profit can be attributed to increased stevia sales. The gross profit margin for the nine months ended September 30, 2009 was 25%, compared to 27% gross profit margin achieved on sales for the comparable period in 2008. The gross profit margin decline was driven by the same factors that increased cost of sales for the three and nine month periods.
Gross profit for the quarter ending September 30, 2009 was $4.1 million, an increase of 393% over $0.8 million in gross profit for the third quarter of 2008. The gross profit margin for the three months ended September 30, 2009 was 28%, compared to 25% gross profit margin achieved on sales for the comparable period in 2008. The increase in gross profit for the third quarter 2009 compared with the third quarter of 2008 was attributable to the following factors:
- Use of higher quality leaf during the final weeks of the third quarter from the new 2009 stevia leaf harvest, which improved extraction and processing yields. The higher quality stevia leaf benefit came from two areas:
-- Use of new proprietary leaf (second generation leaf strain) that contains approximately 60% rebaudioside A, relative to the second generation of leaf harvested in 2009 which contained approximately 40-45% rebaudioside A.
-- Improvements in the quality of stevia leaf purchased by tighter procurement standards of lower foreign material and moisture content.
- Higher volume of high-grade stevia extract production during the quarter relative to the second quarter in 2009 and better economies of scale experienced for labour and plant utilization.
General and Administration Expenses
General and administration expenses include sales, general and administration costs (SG&A), depreciation and amortization expenses on non-manufacturing fixed assets and stock based compensation.
Sales, General, and Administration (SG&A) Expenses
SG&A expenses for the nine months ended September 30, 2009 were $5.4 million, an increase of $2.2 million or 71% over the same period for 2008 of $3.1 million. The key expense categories that increased were salaries, consulting fees, office and travel, which accounted for 86% of the period over period increase. GLG's employee count at the end of September 30, 2009 was 1,186, a 46% increase of 808 people over yearend 2008. Approximately 75% of employees work in the production function of the Company.
SG&A expenses for the three months ended September 30, 2009 were $1.7 million, which is an increase of $0.3 million or 22% over the same period for 2008. The key expense categories that increased were salaries, consulting fees, office and travel, which accounted for 100% of the period over period increase.
SG&A expenses increased $0.03 million comparing the third quarter of 2009 to the second quarter of 2009, and were essentially flat relative to comparable expenses in the second quarter of 2009.
Stock Based Compensation Expense
Stock based compensation was $0.8 million for the third quarter of 2009 compared with $0.06 million in the third quarter of 2008. GLG had an amended stock compensation plan approved by its shareholders at its annual general meeting in June 2008. Under the amended plan, the number of common shares available for issue is 10% of the issued and outstanding common shares. Prior to 2008, the Company did not grant stock options since 2005. Grants made during 2008 were 1,474,480 compensation securities including both options and restricted shares. Eighty-four percent of these grants have three year vesting and performance criteria set by the Compensation Committee of the Board of Directors in order to be fully earned by the recipients. An additional grant was made by the Board of Directors during the second quarter of 2009. This amounted to 1,500,000 compensation securities including both options and restricted shares. Eighty-one percent of these grants have three year vesting and performance criteria requirements set by the Compensation Committee of the Board in order to be fully earned by the recipients. G&A Depreciation and Amortization
G&A related depreciation and amortization expenses for the three months ended September 30, 2009 was $0.4 million, an increase of 128% over $0.2 million for the comparable period in 2008. The main driver for the increase in amortization is related to the increase in intangible patent amortization related to the acquisition of Agricultural High Tech Developments Limited.
Other income for the nine months ended September 30, 2009 was $1.3 million, a 223% increase compared to other income of ($1.1) million for the comparable period in 2008. There were two items that contributed the majority to the other income (expenses) for the nine months ended September 30, 2009; (1) foreign exchanges gains on US dollar-denominated liabilities that GLG was holding during the period ($3.2 million) and (2) interest expenses ($1.9 million). Interest expenses of $1.9 million for the nine months period ending September 30, 2009 were mainly related to (1) a US$20 million advance from a customer and (2) the Company's bank loans in China. With respect to the US$20 million facility and associated interest due on the facility, it is expected to be repaid as GLG ships product to this customer during 2009.
Other Income (expenses) for the third quarter 2009 was $1.1 million, an increase of 1,037% over the third quarter 2008 ($0.1 million) and was impacted by the same items as described for the nine months period.
Net Income (loss)
Basic income per share was $0.02 for the three months ending September 30, 2009, compared with a loss per share of $0.01 for the comparable period in 2008. Net income improved to $1.4 million for the three months period ending September 30, 2009, in comparison to the loss of 1.0 million for the third quarter 2008. This $2.4 million improvement was driven by (1) higher gross profit margin from increased production at GLG's new facilities in Mingguang and Dongtai ($3.3 million) and (2) foreign exchange gains driven by an appreciation of the Canadian dollar relative to US dollar in the third quarter ($1.9 million), which were offset by an increase in G&A expenses ($1.2 million), a net interest expenses increase ($0.7 million) and a net increase in income taxes ($0.8 million). The nine month net income for the period ending September 30, 2009 improved by $3.7 million, compared to the same period in 2008. For the nine month period the $3.7 million income improvement compared to the previous year was driven by (1) higher revenues and gross profit margin from increased production at the Company's new facilities in Mingguang and Dongtai ($5.8 million) and (2) foreign exchange gains driven by an appreciation of the Canadian dollar relative to US dollar in the third quarter ($3.2 million), which were offset by an increase in G&A expenses ($4.3 million) and a net interest expenses increase ($0.9 million).
EBITDA for the quarter ended September 30, 2009 was $3.9 million, compared to negative $0.1 million in EBITDA for the comparable period in 2008 and is 129% higher than EBITDA of $1.7 million for the quarter ended June 30, 2009. The main drivers for the increase in EBITDA for the three months ended September 30, 2009 compared to the corresponding period 2008 is attributable to (1) higher stevia revenue and gross profit for the third quarter 2009 as compared to the third quarter of 2008, (2) reduction in one-time start up related costs and (3) transfer of production staff costs from general and administrative costs to production costs with the start-up of operations at the Company's new facilities in Mingguang and Dongtai.
EBITDA for the nine months ended September 30, 2009 was $6.0 million, an increase of 724% over negative $1.0 million in EBITDA for the comparable period in 2008.
Capital expenditures for the three months ended September 30 2009 were $10.3 million. GLG's capital expenditures of $10.3 million for the third quarter of 2009 reflected a decrease of 45% in comparison to $18.6 million in the third quarter of 2008. The third quarter capital expenditures were primarily incurred for the Company's new rebiana facility in Qingdao that is currently under construction. The completion date for this facility is expected in December 2009.
Capital expenditures for the nine months ended September 30 2009 were $24.2 million. GLG's capital expenditures for the nine months ended September 30, 2009 of $24.2 million reflected a decrease of 25% in comparison to $32.2 million for the comparable period in 2008. Approximately one third of these capital expenditures were incurred in the first quarter of 2009, driven by the completion of the leaf processing facilities at the Runhai (Mingguang) and Runyang (Dongtai) subsidiaries (approximately $8 million). The remaining two thirds of capital expenditures incurred during the first nine months of the fiscal year were incurred in the set-up and construction of the Company's new rebiana facility in Qingdao (approximately $16.2 million).
Cash generated by operating activities before changes in non-cash working capital items was $2.4 million in the three months ending September 30, 2009, compared to $0.2 million used in the comparable period of 2008 reflecting the higher cash generated by operations as shipments of stevia increased significantly over the comparable period in 2008. Non-cash working capital items used $6.9 million of cash. The biggest use of non-cash working capital (adjusted for foreign currency impacts) in the quarter were driven by an increase in prepaid expenses of $9.9 million, approximately 50% of which were associated with constructions and equipment costs for the Company's new rebiana facility in Qingdao and approximately 50% of which were associated with stevia leaf purchases.
The main items that offset the reduction in non-cash working capital during the quarter were an inventory reduction of $1.5 million driven by increased sales during the quarter and an increase in accounts payable of $2.7 million.
Cash used by investing activities was $8.2 million during the third quarter of 2009, compared to $18.7 million in the same period in 2008. These capital expenditures were for GLG's new rebiana facility in Qingdao. Cash generated by financing activities was $4.4 million in the third quarter of 2009 compared to $23.5 million in the same period in 2008. The key item that generated the increase in cash generated by financing activities during the third quarter came from a net increase in short term bank loans in China of $12.6 million, as well as a $4.8 million shareholder loan, which were offset by the repayment of advances from customers of $13.0 million.
Cash and cash equivalents increased by $1.5 million during the first nine months of 2009. Working capital (unadjusted for foreign exchange impacts) decreased by $5.8 million from the yearend 2008 position. The working capital decrease can be attributed to a net increase in short term liabilities during the first nine months of $8.2 million, compared to the net increase in current assets of $2.4 million during the same period. The increase in current liabilities during the first nine months of 2009 was driven by a number of factors. Short term loans increased during the nine month period by a $25 million and loans from related parties increased by $6.7 million, offset by a decline in advances due to customers of $21.2 million, a decrease in interest payable of $1.0 million and a decrease in deferred revenue of $2.0 million. The factors that increased the Company's current assets by $2.8 million include the net increase in cash of $1.5 million, an increase in prepaid expenses of $4.7 million and taxes receivable of $2.9 million, offset by a reduction in inventory of $4.3 million and a reduction in accounts receivable of $1.6 million.
The Company's capital expenditure estimate for 2009 is $28 million to $30 million (see 2009 Outlook section for further details) of which $24 million has already been incurred. The Company plans to finance these investment needs with cash on hand and credit available from its existing credit facilities in China.
As at September 30, 2009, the Company had at its disposal bank credit facilities of approximately $39 million, of which $18.8 million are drawn. The Company also had $8.9 million of cash and cash equivalents as at September 30, 2009. Over the course of the remainder of fiscal 2009, $13.6 million in short term loans in China will mature and the Company expects it will be able to renew these loan facilities for another year when they come due. The Company successfully renewed one loan (RMB 30 million) during the third quarter, which came due on September 30, 2009 and has been renewed until March 31, 2010.
Market and Operations 2009 Outlook
The Company expects the demand for its stevia products to be significantly stronger in 2009 compared to 2008. This expectation is driven by the new markets that have opened up for stevia. The major geographic market that has opened up for high purity Rebaudioside A stevia extract products is the U.S., which approved it as a food ingredient in 2008. There were several important product launches in the U.S. at the end of 2008 and in the first quarter of 2009. GLG's alliance partner, Cargill, successfully launched a tabletop sweetener (TRUVIATM) in July 2008 using rebiana. The Coca-Cola Company has launched Sprite Green, Odwalla juices and Vitaminwater10 using rebiana late in the fourth quarter of 2008 and during the first quarter of 2009. PepsiCo has also launched a series of beverages sweetened with high purity Rebaudioside A. The Company expects major food and beverage companies to announce additional new product launches later in 2009 based on the feedback received from customers and prospects.
The Company's key operational objectives for 2009 include:
1. Commence operation of new facilities to increase production capacity and revenues (Completed).
2. Prepare necessary GLG proprietary seedlings to meet expected demand from customers for Q4 2009 and 2010 (Completed).
3. Organize stevia growers in partnership with local governments in China to meet expected 2009 stevia demand (Completed).
4. Generate additional sales growth from its Direct Sales force and its GLG-Weider Sweet Naturals venture (Additional 1,000 metric tons of RA97 capacity will be available in December 2009).
5. Complete a new rebiana production facility (Phase One - 1,000 metric tons) by yearend 2009.
6. Continue R&D program for high RA yielding seeds and seedlings (continuing progress made in China and started Paraguay project).
The 14% appreciation of the Canadian dollar against the US dollar seen to date in 2009 has impacted GLG revenue performance throughout 2009, and it is further expected to impact revenues in the fourth quarter of 2009. The original outlook of CAD $50-60 million was based on a $0.80 US dollar to Canadian dollar exchange rate forecast. This outlook forecast for revenue expected to be generated in the third and fourth quarter was further updated to a $0.86 US dollar to Canadian dollar exchange rate. An analysis of the Canadian dollar against the US dollar shows the following actual (source RBC: Finance Monthly, October 2, 2009).
Q1 exchange rate $0.79 Q2 exchange rate $0.86 Q3 exchange rate $0.93 Q4 forecast exchange rate $0.92
Since the Company expected its 2009 revenue to be significantly weighted to the third and fourth quarter of 2009, the appreciation of the Canadian dollar against the US dollar has had a material impact of the third quarter revenues and is forecasted to have a further impact on fourth quarter revenues based on the latest RBC exchange rate forecast.
The original US dollar forecast sales used in the Company's outlook were USD $40-$48 million. The Company still expects the US dollar sales outlook to be achievable in 2009, however due to the Canadian dollar's appreciation against the US dollar during 2009, the Company is revising its Canadian dollar sales outlook to CAD $44-$53 million from CAD $50-$60 million. The average exchange assumption for the 2009 sales outlook is $0.90 USD per CAD from the original exchange rate assumption of $0.80 USD per CAD.
About GLG Life Tech Corporation
GLG Life Tech Corporation is a global leader in the supply of high purity stevia, an all natural, zero-calorie sweetener used in food and beverages. The Company's operations cover each step in the stevia supply chain, including non-GMO stevia seed breeding, natural propagation, stevia leaf growth and harvest, proprietary extraction and refining, marketing and distribution of finished product. GLG's advanced technology and extraction techniques make it one of the world's leading producers of high purity stevia extracts, including rebiana made with 97% Rebaudioside A. Rebiana recently received GRAS status in the United States for use in food and beverages. The Company has operations in Canada as well as agricultural and processing facilities in China in the provinces of Anhui, Jiangsu, Shandong and Heilongjiang. China is responsible for an estimated 85% of the world's current stevia production. GLG stevia processing capabilities include 41,000 metric tons of raw stevia leaf and 1,000 metric tons of high-grade stevia extract. The Company holds a strategic partnership and preferred supplier agreement with Cargill, Incorporated to supply 80% of its global stevia extract demand and 100% of any stevia sourced from China. In addition, the Company's global sales and marketing arm, GLG-Weider Sweet Naturals works with companies around the world to bring stevia extract supply solutions for food, beverage, pharmaceutical and nutraceutical applications.
Forward-looking statements: Forward-looking statements: Certain statements in this press release constitute "forward-looking statements". Such forward-looking statements include, without limitation, statements evaluating the market for stevia, the Company's production capacity, demand for stevia and the Company's stevia based products and general economic conditions. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include operational risks, the effects of general economic conditions, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures and other risks and uncertainties disclosed under the heading "Risk Factors" in our Annual Information Form in respect of our year-ended December 31, 2008 and the risk factors in our Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2008 and for the interim period ending September 30, 2009, all of which are available on SEDAR at www.sedar.com. The Company's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. The Company assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change, except as required by law. Financial outlook information contained in this press release about prospective results of operations, capital expenditures or financial position is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information as of the date hereof. Such financial outlook information should not be used for purposes other than those for which it is disclosed herein.