EQUITY RESEARCH COMPANY UPDATE March 1, 2011 Stock Rating: OUTPERFORM 12-18 mo. Price Target $48.00 SODA - NASDAQ $39.68 3-5 Yr. EPS Gr. Rate 30% 52-Wk Range $46.88-$20.00 Shares Outstanding 19.2M Float 6.2M Market Capitalization $761.9M Avg. Daily Trading Volume 649,121 Dividend/Div Yield NA/NM Fiscal Year Ends Dec Book Value $8.38 2011E ROE 77.5% LT Debt $0.0M Preferred NA Common Equity $144M Convertible Available No EPS Diluted Q1 Q2 Q3 Q4 Year Mult. 2010A 0.22 0.20 0.42 0.33 1.22 32.5x Prior (E) -- -- -- 0.13 0.90 44.1x 2011E 0.22 0.26 0.37 0.44 1.30 30.5x Prior (E) 0.18 0.22 0.34 0.33 1.10 36.1x 2012E 0.32 0.41 0.53 0.61 1.85 21.4x Prior (E) 0.28 0.37 0.49 0.46 1.60 24.8x Reflects adjusted EPS for 2010. EPS estimates for 2011 and 2012 are adjusted to exclude IPO related share-based compensation expense. CONSUMER & BUSINESS SERVICES/CONSUMER, HOUSEHOLD & PERSONAL CARE PRODUCTS Follow-Up: Very Strong 4Q Results Reflect Broad-Based Growth; Estimates Raised SUMMARY SODA's better than expected 4Q results reflect broad-based sales growth across geographies, driven by increased consumer awareness and distribution, particularly in the Americas, while its US expansion appears to be going very well. Importantly, the company introduced encouraging 2011 guidance, which includes sales growth of ~25%. Despite the stock's strong performance since its IPO last November, we remain bullish on the shares and continue to believe that valuation does not fully reflect SODA's meaningful US growth opportunities. We are raising our EPS estimates for 2011 and 2012, as well as our DCF-derived PT to $48 from $40 prior. KEY POINTS SODA reported better than expected 4Q results Tuesday morning, as sales of 50M increased 59% and easily exceeded our estimate of 42M, while reported EPS of $0.28 (or $0.33 adjusted) were also well ahead of both our and the consensus estimates of $0.13 and $0.12, respectively. This robust sales growth was broad-based, with each of SODA's geographic segments delivering better than expected top-line improvement. However, the standout was the Americas, where sales improved by 238%, to 14.5M, driven by increased consumer awareness and retail distribution, particularly in the US. Importantly, SODA's US launch appears to be going well, as sell-through exceeded returns in the two weeks following Christmas, while sell-through of consumables was up week/week for every week since December. In addition, retailers have tripled the number of cylinders they're holding in stock, as well as expanded their product offerings. The company also introduced encouraging 2011 guidance, including sales growth of 25% and reported net income growth of 40%. While all regions are expected to show improvement, the US should lead the way again, with SODA expected to test at least one big box retailer in 2011. SODA is currently trading at among the highest multiples in our HPC universe. That said, given our expectations for rapid top- and bottom-line growth for the foreseeable future, as well as the company's strong balance sheet (>$2/share of net cash), we believe the stock continues to offer value to investors. Stock Price Performance 1 Year Price History for SODA 48 40 32 24 Company Description is the world's leading manufacturer of home beverage carbonation systems, which enable consumers to convert ordinary tap water into carbonated soft drinks and sparkling water. Q3 Q1 16 2011 Created by BlueMatrix Joseph Altobello, CFA 212-667-8085 Joseph.Altobello@opco.com Henry Capellan 212-667-7191 Henry.Capellan@opco.com Oppenheimer & Co. Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. See "Important Disclosures and Certifications" section at the end of this report for important disclosures, including potential conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report, where applicable. Oppenheimer & Co Inc. 300 Madison Avenue New York, NY 10017 Tel: 800-221-5588 Fax: 212-667-8229
Review of 4Q Results Well Ahead of Expectations on Strong Sales Growth reported better than expected 4Q results Tuesday morning, as sales of 50 million increased 59% and easily exceeded our estimate of 42 million, while reported EPS of $0.28 (or $0.33 adjusted) were also well ahead of both our and the consensus estimates of $0.13 and $0.12, respectively. This robust sales growth was broad-based, with each of SODA's geographic segments delivering better than expected top-line improvement, including Central Europe/Middle East/Africa (up 52%, to 5.8 million), Asia-Pacific (up 42%, to 4.3 million) and Western Europe (up 25%, to 25 million). However, the standout was the Americas, where sales improved by 238%, to 14.5 million, driven by increased consumer awareness behind investments in marketing and expanded retail distribution, particularly in the US. Importantly, SODA's US launch appears to be going very well, and in fact management offered a few anecdotal data points during Tuesday's conference call that support our bullish outlook, as this is SODA's largest growth opportunity. First, sell-through exceeded returns in the two weeks following Christmas, implying that those consumers who received it as a gift tended to keep it. Second, sell-through of higher margin consumables, which includes CO2 cylinders and syrups, were up week over week for every week since early December. In addition, retailers have tripled the number of cylinders they're holding in stock, as well as expanded their product offerings. For example, Bed Bath & Beyond increased the number of soft drink syrups it is selling from 8 to 15, with a similar increase at Macy's. In terms of profitability, 4Q gross margin was down 60 bps, to 54.3%, although this was generally consistent with our estimate of 54.5%. The year-over-year decline stemmed largely from the impact of negative product mix that included a greater proportion of sales of lower margin soda makers as part of SODA's strategy to increase penetration. In fact, total soda maker sales increased 85%, to 712,000 units during the quarter, and represented a greater proportion of sales this quarter relative to the prior year (54.5% vs. 49.4%). Sales and marketing expenses more than doubled to 19 million, or 37.9% of sales, which was ahead of our estimate of 16.5 million, but below our forecast of 39.5% of sales. The greater than expected investment in sales and marketing primarily reflected SODA's greater level of investment to support brand awareness around the holiday season, particularly in the US, where it performed over 10,000 in-store demonstrations and was highlighted in radio and print advertising. General and administrative expenses totaled 4.6 million, modestly ahead of our 4.2 million estimate, although it included share-based compensation expense of 684,000 and 88,000 related to discontinued management fees paid to Fortissimo Capital. As a result, reported operating income totaled 3.7 million, nearly double our estimate of 2.1 million, while reported operating margin was 7.4% vs. our 5.0% estimate. On an adjusted basis, operating income totaled 4.5 million, or 8.9% of sales. Working Capital Increase Intentional to Support Expected 2011 Growth Moving to the balance sheet, there were a few data points worth highlighting. For example, both accounts receivable and inventories roughly doubled from the prior year, to nearly 39 million each at the end of the year. Management explained on Tuesday's conference call that the increase in inventories reflected an intentional buildup in order to support what is expected to be another year of robust sales growth in 2011, which is already off to a strong start. The increase in accounts receivable primarily reflected notably strong sales in November and December around the holiday season, while SODA's DSOs typically average around 60 days. 2
Initial 2011 Guidance Is Encouraging Importantly, the company also introduced encouraging 2011 guidance, which includes sales growth of approximately 25%, above our prior forecast of 20% growth on a higher base period, while reported net income is expected to increase approximately 40%, implying 13.6 million ( 0.69-0.70 per share based on 19.6 million average diluted shares outstanding) relative to 2010's reported net income of 9.7 million. That said, this 2011 net income guidance includes a share-based compensation expense of approximately 3.7 million ( 0.19 per share) related to the IPO. On an adjusted basis and excluding this share-based compensation expense, net income is expected to increase roughly 30%, to approximately 17 million ( 0.87 per share). While sales growth is expected to remain broad-based, we expect the Americas to once again lead the way, as SODA continues its US expansion, including a potential test in at least one big box retailer. Raising Estimates and Price Target, As We Remain Bullish Based on these results and guidance, we are raising our EPS estimates for both 2011 and 2012 to $1.30 and $1.85, respectively, from $1.10 and $1.60 prior. We should point out that our estimates exclude the IPO-related stock-based compensation expense noted above and are based on a euro/us$ foreign exchange rate of $1.38 vs. $1.32 prior, as well as a more robust sales outlook. Specifically, we are now forecasting sales growth of 26% in 2011 and 18% growth in 2012, up from 20% and 17% prior. In addition, we are taking this opportunity to reiterate our Outperform rating on SODA while raising our DCF-derived price target to $48 from $40. Despite Tuesday's 10% pullback in the shares, we remain bullish on the company's growth opportunities, particularly in the US, where in our view it is off to a very good start and has just scratched the surface in the world's largest beverage market. Other than perhaps the increase in receivables and inventory, we are hard pressed to find a fundamental reason for the weakness in the shares; perhaps this reflected a bit of profit taking, as the stock had performed very well since going public at $20 last November, and some "selling on the news," with the run-up in the shares in recent weeks implying relatively high expectations for the quarter. As for valuation, the shares are currently trading at 30.5x and 21.4x our revised 2011 and 2012 EPS estimates, respectively, among the highest multiples in our Household & Personal Care Products universe. That said, while our 2011 EPS estimate implies only 6% growth off of last year's adjusted EPS of $1.22, this is due to the significant increase in the share count related to the IPO, with average diluted shares outstanding expected to increase from 14.7 million last year to 19.6 million this year. Applying the higher share count to 2010 results implies adjusted EPS of roughly $0.92 last year, with our 2011 EPS estimate of $1.30 up over 40% off this adjusted base, with similar growth expected in 2012. When looked at in this context, and considering the company's very strong balance sheet (over $2 per share of net cash) and meaningful growth opportunities in the US, we believe the stock continues to offer value to investors. 3
(In uro millions, except per share data) Income Statement 2010A Mar11E Jun11E Sep11E Dec11E 2011E Mar12E Jun12E Sep12E Dec12E 2012E Western Europe 99.8 23.0 31.5 31.1 28.0 113.6 25.1 34.0 33.2 29.6 122.0 Y/Y Change (%) 34% 20% 15% 12% 10% 14% 9% 8% 7% 6% 7% CEMEA 19.4 6.1 6.1 5.5 7.0 24.7 7.2 7.0 6.2 7.7 28.0 Y/Y Change (%) 42% 35% 30% 25% 20% 27% 18% 15% 12% 10% 14% Americas 31.5 7.2 8.2 13.6 22.4 51.4 10.8 11.8 19.1 30.3 72.0 Y/Y Change (%) 189% 80% 70% 65% 55% 63% 50% 45% 40% 35% 40% Asia-Pacific 10.0 3.4 2.2 2.0 5.4 12.9 4.2 2.8 2.5 6.7 16.1 Y/Y Change (%) 64% 40% 30% 25% 25% 29% 25% 25% 25% 25% 25% Net Sales 160.7 39.7 48.0 52.2 62.7 202.6 47.3 55.7 60.9 74.3 238.2 Y/Y Change (%) 53% 32% 25% 24% 25% 26% 19% 16% 17% 18% 18% Cost of Sales 74.1 18.6 23.0 24.0 29.2 94.9 22.0 26.4 27.7 34.2 110.3 Gross Profit 86.6 21.0 25.0 28.2 33.6 107.7 25.3 29.2 33.2 40.1 127.9 Y/Y Change (%) 48% 29% 28% 19% 24% 24% 20% 17% 18% 20% 19% Gross Margin 53.9% 53.0% 52.0% 54.0% 53.5% 53.2% 53.5% 52.5% 54.5% 54.0% 53.7% Y/Y Change (bps) (170) (90) 130 (230) (80) (70) 50 50 50 50 50 Other (Income), Net (0.2) - - - - - - - - - - Administrative Expenses 15.2 4.6 4.3 4.4 5.6 19.0 5.4 5.0 5.2 6.7 22.3 % of Net Sales 9.5% 11.5% 9.0% 8.5% 9.0% 9.4% 11.5% 9.0% 8.5% 9.0% 9.4% Selling Expenses 57.1 12.7 16.3 17.5 20.7 67.2 14.7 17.3 18.9 23.0 73.8 % of Net Sales 35.5% 32.0% 34.0% 33.5% 33.0% 33.2% 31.0% 31.0% 31.0% 31.0% 31.0% Operating Income (Adjusted) 14.5 3.8 4.3 6.3 7.2 21.6 5.2 7.0 9.1 10.4 31.7 Y/Y Change (%) 28% 38% 175% 16% 62% 49% 38% 61% 46% 44% 47% Operating Margin (Adjusted) 9.0% 9.5% 9.0% 12.0% 11.5% 10.6% 11.0% 12.5% 15.0% 14.0% 13.3% Y/Y Change (bps) (180) 40 490 (90) 260 160 150 350 300 250 270 Management Fee/Other 3.3 0.9 0.9 0.9 0.9 3.7 0.4 0.4 0.4 0.4 1.6 Operating Income (Reported) 11.2 2.8 3.4 5.3 6.3 17.9 4.8 6.6 8.7 10.0 30.1 Interest Expense, Net 1.5 0.2 0.1 (0.1) (0.2) - (0.2) (0.2) (0.2) (0.2) (0.8) Other Financial Expenses (1.8) - - - - - - - - - - Pre-Tax Income (Reported) 11.5 2.6 3.3 5.4 6.5 17.9 5.0 6.8 8.9 10.2 30.9 Income Tax 1.8 0.5 0.6 1.0 1.2 3.2 1.0 1.3 1.7 1.9 5.9 Tax Rate 15.4% 18.0% 18.0% 18.0% 18.0% 18.0% 19.0% 19.0% 19.0% 19.0% 19.0% Net Income (Reported) 9.7 2.2 2.7 4.5 5.3 14.6 4.1 5.5 7.2 8.3 25.0 Y/Y Change (%) 36% 6% 27% 115% 53% 51% 87% 103% 63% 55% 71% Adjustments (Net of Tax) 3.3 0.9 0.9 0.9 0.9 3.7 0.4 0.4 0.4 0.4 1.6 Net Income (Adjusted) 13.0 3.1 3.6 5.4 6.2 18.3 4.5 5.9 7.6 8.7 26.6 Y/Y Change (%) 69% 45% 65% 36% 47% 41% 44% 62% 42% 39% 45% Shares Outstanding (Diluted) 14.7 19.5 19.6 19.6 19.7 19.6 19.7 19.8 19.8 19.9 19.8 Diluted EPS (Reported) 0.69 0.11 0.14 0.23 0.27 0.75 0.21 0.28 0.36 0.42 1.26 Adjustments 0.23 0.05 0.05 0.04 0.05 0.19 0.02 0.02 0.02 0.02 0.08 Diluted EPS (Adjusted) 0.92 0.16 0.19 0.27 0.32 0.94 0.23 0.30 0.38 0.44 1.34 Y/Y Change (%) 48% 0% 19% -13% 28% 2% 44% 58% 41% 38% 43% EBITDA (Reported) 15.5 3.4 4.0 5.9 7.0 20.3 5.6 7.4 9.7 11.2 33.9 Adj. For Discontinued & Exceptional Exp - - - - - - - - - - - Controlling Shareholders Mgmt Fees 3.3 0.9 0.9 0.9 0.9 3.7 0.4 0.4 0.4 0.4 1.6 Debt Conversion to Grant - - - - - - - - - - - EBITDA (Adjusted) 18.8 4.3 4.9 6.8 7.9 24.0 6.0 7.8 10.1 11.6 35.5 Y/Y Change 42% 34% 38% 23% 28% 28% 37% 60% 48% 47% 48% EBITDA Margin 11.7% 10.9% 10.2% 13.1% 12.6% 11.8% 12.6% 14.1% 16.6% 15.6% 14.9% Y/Y Change (90) 20 100 (10) 30 10 170 390 350 300 310 Exchange Rate ($/Euro) $1.33 $1.38 $1.38 $1.38 $1.38 $1.38 $1.38 $1.38 $1.38 $1.38 $1.38 (In $ millions) Net Sales $213.2 $54.8 $66.3 $72.1 $86.7 $280.0 $65.4 $76.9 $84.2 $102.7 $329.2 Y/Y Change (%) 49% 34% 41% 26% 31% 31% 19% 16% 17% 18% 18% Gross Profit $114.9 $29.1 $34.5 $38.9 $46.4 $148.9 $35.0 $40.4 $45.9 $55.5 $176.7 Operating Income (Adjusted) $19.2 $5.2 $6.0 $8.7 $10.0 $29.8 $7.2 $9.6 $12.6 $14.4 $43.8 EBITDA (Adjusted) $20.6 $6.0 $6.8 $9.5 $10.9 $28.0 $8.2 $10.8 $14.0 $16.0 $46.9 Y/Y Change (%) 20% 37% 56% 25% 34% 36% 37% 60% 48% 47% 67% Net Income (Adjusted) $17.3 $4.3 $5.0 $7.4 $8.6 $25.4 $6.2 $8.1 $10.6 $12.0 $36.8 EPS (Adjusted) $1.22 $0.22 $0.26 $0.37 $0.44 $1.30 $0.32 $0.41 $0.53 $0.61 $1.85 Y/Y Change (%) 57% 2% 34% -12% 33% 6% 44% 58% 41% 38% 43% Free Cash Flow ($17.1) $3.1 $0.1 ($6.4) ($1.8) ($5.0) ($0.1) $2.6 ($3.5) $1.6 $0.5 Modified Free Cash Flow $14.4 $1.8 $1.2 $2.5 $1.8 $7.2 $1.3 $2.4 $4.3 $4.4 $12.4 Source: company reports and Oppenheimer & Co. estimates 4
(In uro millions, except per share data) SODA DCF Model 2011E 2012E 2013E 2014E 2015E Assumptions Net Income 18 27 36 46 55 Risk-Free Rate 5.00% Plus: Interest Expense (After-Tax) - (1) (1) (1) (1) Beta 1.25 Plus: Depreciation & Amortization 2 4 4 5 5 Market Risk Premium 6.00% Less: Capital Expenditures (16) (21) (5) (6) (7) Cost of Equity 12.50% Plus/Less: Changes in W/C & Other (6) (5) (5) (5) 13 Unlevered Free Cash Flow (1) 4 29 39 66 Tax Rate (Statutory) 18.00% PV of Unlevered Free Cash Flow (1) 3 21 26 39 Cost of Debt (Pre-Tax) 5.00% Cost of Debt (After-Tax) 4.10% PV of Free Cash Flow 88 PV of Residual Value 518 Cost of Preferred 0.00% Enterprise Value 607 Less: Total Debt/Preferred - Shares Outstanding 18.4 Equity Value 607 Price $40 Mid-Year Adjustment Factor 1.05 Market Cap 729 Equity Value (Adjusted) 639 Total Debt - Shares Outstanding 18 Preferred - Value Per Share ( ) 35 Total Capitalization 729 W A C C Terminal Free Cash Flow Growth Rate 2.0% 2.5% 3.0% 3.5% 4.0% 9.8% 36 38 41 44 47 10.3% 33 35 38 40 43 10.8% 31 33 35 37 39 11.3% 29 31 32 34 36 Capitalization Current Target Equity 100% 80% Debt 0% 20% Preferred 0% 0% WACC 10.8% Residual FCF Growth Rate 3.00% $/Euro Exchange Rate $1.38 USD Price Target $48 11.8% 27 29 30 32 34 Source: company reports and Oppenheimer & Co. estimates 5
Investment Thesis Our Outperform rating on the shares is based on our view that SODA's position as the leader in the burgeoning home beverage carbonation market should afford it significant growth opportunities in the coming years, particularly in the US, the world's largest soft drink market and one in which SODA is meaningfully underpenetrated. In addition, we believe the premium valuation for the shares is justified by this growth opportunity, while on a price-to-earnings-growth (PEG) basis the shares appear reasonably priced. Price Target Calculation We derive our 12- to 18-month price target of $48 through our five-year discounted cash flow valuation, using a weighted average cost of capital (WACC) of 10.8% and a 3.00% residual growth rate of our terminal (2015) unlevered free cash flow estimate of 66 million, while employing a euro-us dollar exchange rate of $1.38. Key Risks to Price Target The greatest risk to the SODA story, in our view, is the company's ability to successfully penetrate the US market, which will require a change in behavior on the part of consumers, as well as significant investments in marketing and infrastructure. Even if SODA is successful in executing its US growth strategy, however, this is likely to attract competitors, which could mitigate growth. Important Disclosures and Certifications Analyst Certification - The author certifies that this research report accurately states his/her personal views about the subject securities, which are reflected in the ratings as well as in the substance of this report.the author certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. Potential Conflicts of Interest: Equity research analysts employed by Oppenheimer & Co. Inc. are compensated from revenues generated by the firm including the Oppenheimer & Co. Inc. Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. Oppenheimer & Co. Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, Oppenheimer & Co. Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers. In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, Oppenheimer & Co. Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest. 6
Rating and Price Target History for: (SODA) as of 02-28-2011 12/13/10 I:O:$40 48 40 32 24 2008 2009 2010 2011 16 Created by BlueMatrix All price targets displayed in the chart above are for a 12- to- 18-month period. Prior to March 30, 2004, Oppenheimer & Co. Inc. used 6-, 12-, 12- to 18-, and 12- to 24-month price targets and ranges. For more information about target price histories, please write to Oppenheimer & Co. Inc., 300 Madison Avenue, New York, NY 10017, Attention: Equity Research Department, Business Manager. Oppenheimer & Co. Inc. Rating System as of January 14th, 2008: Outperform(O) - Stock expected to outperform the S&P 500 within the next 12-18 months. Perform (P) - Stock expected to perform in line with the S&P 500 within the next 12-18 months. Underperform (U) - Stock expected to underperform the S&P 500 within the next 12-18 months. Not Rated (NR) - Oppenheimer & Co. Inc. does not maintain coverage of the stock or is restricted from doing so due to a potential conflict of interest. Oppenheimer & Co. Inc. Rating System prior to January 14th, 2008: Buy - anticipates appreciation of 10% or more within the next 12 months, and/or a total return of 10% including dividend payments, and/or the ability of the shares to perform better than the leading stock market averages or stocks within its particular industry sector. Neutral - anticipates that the shares will trade at or near their current price and generally in line with the leading market averages due to a perceived absence of strong dynamics that would cause volatility either to the upside or downside, and/or will perform less well than higher rated companies within its peer group. Our readers should be aware that when a rating change occurs to Neutral from Buy, aggressive trading accounts might decide to liquidate their positions to employ the funds elsewhere. Sell - anticipates that the shares will depreciate 10% or more in price within the next 12 months, due to fundamental weakness perceived in the company or for valuation reasons, or are expected to perform significantly worse than equities within the peer group. 7
Distribution of Ratings/IB Services Firmwide IB Serv/Past 12 Mos. Rating Count Percent Count Percent OUTPERFORM [O] 294 53.40 129 43.88 PERFORM [P] 246 44.60 74 30.08 UNDERPERFORM [U] 11 2.00 2 18.18 Although the investment recommendations within the three-tiered, relative stock rating system utilized by Oppenheimer & Co. Inc. do not correlate to buy, hold and sell recommendations, for the purposes of complying with FINRA rules, Oppenheimer & Co. Inc. has assigned buy ratings to securities rated Outperform, hold ratings to securities rated Perform, and sell ratings to securities rated Underperform. Company Specific Disclosures In the past 12 months Oppenheimer & Co. Inc. has provided investment banking services for SODA. Oppenheimer & Co. Inc. expects to receive or intends to seek compensation for investment banking services in the next 3 months from SODA. In the past 12 months Oppenheimer & Co. Inc. has managed or co-managed a public offering of securities for SODA. In the past 12 months Oppenheimer & Co. Inc. has received compensation for investment banking services from SODA. Oppenheimer & Co. Inc. makes a market in the securities of SODA. Additional Information Available Please log on to http://www.opco.com or write to Oppenheimer & Co. Inc., 300 Madison Avenue, New York, NY 10017, Attention: Equity Research Department, Business Manager. Other Disclosures This report is issued and approved for distribution by Oppenheimer & Co. Inc. Oppenheimer & Co. Inc transacts Business on all Principal Exchanges and Member SIPC. This report is provided, for informational purposes only, to institutional and retail investor clients of Oppenheimer & Co. Inc. and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of Oppenheimer & Co. Inc. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The analyst writing the report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with respect to any security recommended in this report, the recipient should consider whether such recommendation is appropriate given the recipient's particular investment needs, 8
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