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Financial Services Innovation Lab, Georgia Tech 19

HLX

Q2

Philip Dodge

Tony Tripodo

Yes, good morning everybody, two questions, first as I understand it on the HP I at Macondo, you’re getting compensated to be financially equivalent to if it were producing at Phoenix. Can you just elaborate a little bit on how that calculation is made?

Phil, we have decided that we’re not going to talk about the rates with BP. They’ve asked us to keep that confidential, but you’re –

POWL

Q4

Tom Spiro Spiro Capital Management:

Pat McDonald:

Good morning. Just a question about the backlog. As a contractual matter, what are the circumstances in which a customer can either delay or cancel a project?

Delay. Typically, if the job is already on the floor, delays are in construction delays. We work with the customer all the time in those types of delays. If the job is not on the floor and we have not started that job, delays or deferrals or cancellations would be subject to cancellation clauses.

AMD

Q4

Srini Pajjuri 

Lisa Su

Thank you for squeezing me in. Lisa, maybe on the supply side, you know, you're guiding for a pretty strong growth here. I'm just curious, have you already logged in the supply for seven-nanometer? And as we go into second half of the year, especially as you ramp the game consoles, I believe that those die sizes tend to be very large. I'm just curious if you were to get upside, how are you feeling about your supply situation? Thank you.

Yeah. So, TSMC has supported us very well through the first couple of quarters of our seven-nanometer ramp here in 2019. I think, as we go into 2020, there will certainly be a significant growth for us in seven nanometer. You know, our current visibility supports the revenue guide that we gave you. It is fair to say that wafer supply is tight, and so, you know, it's really, you know, important for us to be planning well with our customers, and that's what we're working on.

POWL

Q4

John Franzreb Sidoti and Company:

Pat McDonald:

So you say that the competition has been solid on pricing recently at least?

Again, our competition, the number of people who are bidding on jobs is growing. To date, we have not seen any change in way people are bidding these jobs.

GERN

Q3

Karen E. Jay

Stephen M. Kelsey

It's Karen Jay in for Cory Kasimov. I just had a couple of questions on 1005 for the brain cancer trial, with brain mets. The [indiscernible] at San Antonio, is there -- can you give us a little more color as to whether or not it will be efficacy- related for the first patients that were involved, or will it be mostly safety?

No, the focus, KJ, the focus of our presentation at the San Antonio will be on efficacy.

AAPL

Q2

Toni Sacconaghi

Tim Cook

Yes, thank you. I wanted to revisit Mac question. Your Mac business was down 8% in the Americas, I presume that the US was potentially worst than that. According to Gartner, the US market was flat this quarter. Though you actually did lose material share and I think as you noted despite the fact that you had a new desktop line up that created a surge in your run rate at the end of the quarter. So I guess given that statement, one, do you care about your market share in the US? And second, given the movement in ASPs that you saw towards the lower end and given your share performance in the US, does that shape or change your thinking about Mac pricing in anyway?

On – Toni, it’s Tim. On a worldwide basis, just to make sure we’re in sync with the numbers, IDC projected a – that the market contracted by 7% worldwide. On a reported basis, we contracted by 3%, but as Peter said in his opening comments on a sell-through basis, we were essentially flat year-over-year. In the US, the US was our weakest, largest geography in terms of comparison year-over-year. But I would remind you that in our US business, a larger percentage of that business is education oriented and therefore subject to the budget constraints that have been significant in many, many other states, actually almost of the states. And so I think that’s one reason why the US is disproportionately affected. And the second is that we saw a less pro Macintoshes being bought in the US on a relative basis to other geographies and we would attribute that also to the economy. There were some mix found there across the world that’s much more so in the US where I think the professional markets have been hit much harder. And so do I care about US share, of course, I do. However, I think cycles come and cycles go. And what we’re about is making the best computers in the world, not making the most, and not getting to a point where we are building products that we are not building products that we are not proud of. And so that first and foremost is our objective and we believe that if we do that over the long-term that we will gain share. We’re – I am not going to worry about the ebb and flow of each 90 days, because I think that leads you to make a lot of short-term decisions that are not good for the company or for the brand over time.

RAIL

Q4

Justin Long:

Charles F. Avery:

Okay, fair enough. And I had one question on the balance sheet, if you could provide some detail on your CapEx expectations for this year and just given the current backlog what your expectations for the cash balance as we move throughout the year as well would be helpful?

And then in terms of the balance sheet we obviously have forecasts and so on with large deposit taken at year end, that will be used as you would expect to purchase inventory for that – that order. And we expect that to come down over the years. So, I mean, as we project out, I guess those are long-term as we’d like to be right in the $100 million range and again there will be a large consumption as we from the $192, as we buy in the inventory for the order.

DOV

Q2

Terry Darling

Paul E. Goldberg

And working capital as a percentage of sales was actually down year-over-year. So what am I missing there?

Well, if you look at it, when we started the share repurchase program, if you go back exactly a year, we hadn't done any real significant share repurchase. We really started in earnest in August of last year. So that a pretty hefty amount of share repurchase in a relatively short time. And from a free cash flow perspective, we had very strong free cash flow in the first quarter and the second quarter was relatively strong. So on a comparable basis, we are up 29% year-to-date over last year.

GGG

Q1

Charlie Brady

Pat McHale

I just want to focus on the -- just to make sure I'm clear - contractor. That incremental launch cost thing - that's done completely or is there a little bit left in Q2?

There could be a little bit spillover, but it shouldn't be significant. We got most of our launches in North America done here in the first quarter this year.

TDC

Q1

Aaron Schwartz

Michael F. Koehler

Just a quick question. You mentioned a little bit in your prepared remarks about some of the point solution companies and your large customers evaluating solutions from those type of vendors. As that evaluation continues to occur, I guess, the question for me is that, do you have all the product and technology you need to address demand from your top 50? And you sort of made a comment on the R&D spend that something could be inorganic here. And so could you just sort of review what you're looking at from a product portfolio, both organically and what you may be thinking about that you may need to add to the portfolio?

Aaron, we have the majority of the capability to provide analytics throughout the analytical ecosystem. There are different workloads and requirements and price points that we don't necessarily address them all today. We do have different point solutions that will be coming. Keep in mind, the average selling prices in this space are not large, but likely there's some -- we look forward to some upside here. There are some very specific things that are beyond analytics that are applications, if you will, that come to play. So we won't cover them all. But, by and large, the vast majority of all the analytics opportunities in customers today and over the next several years, we have those capabilities and we're going to add to them.

MPAA

Q2

Steven L. Dyer

Selwyn H. Joffe

Well, from a quarter-to-quarter standpoint, we certainly know that the size of the award, but it certainly came out pretty strong.

Yes. I think we could be stronger. I think we'll see a little bit of a dip because we were ramping up and certainly some inventory build was -- others benefit from some of the inventory build before we got this business. We think it's a fairly seasonal business, so we think the March quarter will be stronger. The third quarter maybe a little lighter. But, overall, we're seeing great register sales, and that's -- at the end of the day, those register sales are going to convert into our sales and we're also pretty optimistic about the reception to our launch of the product into the rest of the marketplace. So while there's nothing definitive to report there, it certainly seems very positive.

AVNR

Q4

Okay. Great. Thanks. And then other question is I wonder if you guys could walk through the best case and worst case scenarios for the litigation when we could see the first generics and what your plans are? Thanks.

Sure. Hi Roy, it’s Keith. So in terms of best case which is the case that we fully expected to be the outcome, the judge will -- will issue a ruling from the bench and that ruling will be in favor of Avanir and allow us to continue the promotion of the NUEDEXTA and helping PBA patients through 2026. Worst case scenario would be that after the judge rules against us, in which case the drugs would be allowed to enter. So long if that really happens after the expiration of the 30-months stay which is on December 30th.

EXPE

Q2

Deepak Mathivanan

Eric Hart

Great guys. Thanks for taking the question. Just a couple of ones. First, Eric, can you help us think about taking rates and booking window dynamic for the second half. With all the moving pieces, it's a little bit of a challenge to translate bookings to revenues. Any additional calls that you can provide thereon take rates and booking window are based on what you're seeing in July would be great. And then the second question. Can you talk about the supply acquisition campaigns on the global side? How has the supply side generally has been at and how should we think about the benefit of this translating into bookings, maybe in the back half and then also into next year? Thank you so much.

Thanks for the question. I -- listen. I understand your question on the first part when it comes to taking rates and booking windows, and it's something that we have caused us a lot of work and volatility if you will on our assessment on our side as well. And I would love to be able to give you more granular responses on what that projection would look like in Q3 and beyond. But the truth be told, that things are just moving around quite a bit when it comes to those booking windows and then from a take-rate standpoint, it's really going to depend on those mixes. And as Peter and I both mentioned, continues to be strong, we've seen conventional hotels come back. Sequentially, we've seen that in the air. We continue to see that in-car which has been quite strong as well it's nice to be associated with it. And again, I'll stop there, but you get the point through the various products. And so, between a combination --

AAPL

Q2

Gene Munster

Tim Cook

Hi good afternoon. Congratulations. I’ve got a question on the iPod. Our survey board suggest the exclusive relationship with the AT&T is the number one reason why people don’t purchase an iPhone and given the revenue shares no longer exist, can you walk us through some of your thinking in terms of why maintain an exclusive with AT&T. Just a follow-up question regarding any update on Steve Jobs? Thanks.

On AT&T, Gene, we view AT&T as a very good partner. We believe that they’re the best wireless provider in the US and we are very happy to be doing business with them. They have done a very good job with iPhone, they’ve put the full force and weight of their company behind it, it’s a major strategic thrust for them and so we’re very happy with the relationship that we have and do not have a plan to change it.

UHS

Q2

Kevin Fischbeck

Steve Filton

Okay. As you did mention earlier you have some CapEx projects coming – that you are starting. But obviously you took down guidance in part because you are concerned about the economy and that kind of things. How do you balance those two things, the desire to invest for growth down the line versus kind of what you are seeing right now as a weaker demand profile? What’s your thought process there?

Well my general sense Kevin is that CapEx decisions tend to have a longer term perspective to them than operating decisions. So we I thought had very good cost controls as an example in both of our business segments this quarter as we reacted to a more modest revenue growth environment and we react very much in real-time to those kinds of changes. As we think about CapEx and particularly as you think about bigger CapEx, building a new hospital in Temecula, building a new tower at Wellington or adding beds in behavioral, those I think are much longer term decisions and I think we have to think beyond just the current economic recovery and just the market position and what we view as the long term projections in a market and that’s how we do it. So I think that’s why you see sort of more immediate changes in our operating cost structure and less immediate changes in our capital planning.

HLX

Q2

Philip Dodge

Owen Kratz

Yes, okay and also, can you foreshadow at all 2011 CapEx, how they might compare with 2007, whether the cash flows – estimated cash flow is a important metric and also what the priorities might be?

We’re working very hard right now on looking at our capital requirements for 2011, of course they vary greatly depending on what happens with the outcome of the production assets. The way we’re looking at it though is assuming that again assuming the worse in that we aren’t able to divest the production assets, what would the capital requirements on the production side be. We’ve been pairing back capital investment in production as part of this whole process and going forward I think it’s fair to say that that’s sort of built up a capital requirement that if we are to be operating the properties next year the capital investment on production would be greater than 2010. On the service side, we have nothing planned right now as far as growth capital. We do anticipate, I’d say our maintenance capital on our fleet is roughly $50 million a year, but then beyond that we are looking at various M&A opportunities and we’re looking at some small organic additions, but nothing is planned yet.And I will add though Phil that we’re going – our goal is going to be to definitely contain our capital spending well within our cash flow generation.

NWSA

Q2

Michael Nathanson:

Chase Carey:

Yeah, exactly. So how much of that billion or so is coming from those two new revenue lines?

Yeah, I mean its revenue and I guess it’s a little bit, I mean the billions of profit numbers. Obviously retrans is a revenue so, but probably not going to specific dollar on it, there has been a fair amount out there about how what we are looking to get for it. So that’s sort of the speculation speak for itself. Yeah, I think we’ve got, I think we’re pretty well sort of defined the market for us in terms of the O&O. The affiliate side is probably, we are more actively engaged in right now. Well, I guess its big numbers. This is certainly, it’s hundreds of millions of dollars. It change with the nature of this business. And in many ways, I think that broadcast network should look like a cable network and it should have two real meaningful streams of revenue, subscription and advertising as we look for this to be a significant part of the revenue for that broadcast business.

LBRANDS

Q2

Jennifer Black

Sharen Jester Turney

I think this question is for you, Sharen. I was curious to know if you have early reads from the catalog that just dropped the fall trend edit. And about the website, the catalog, everything looks amazing. And then also it looks like you rebranded the footwear, and we are wondering if you had changed manufacturers.

Well, today is the big day to actually get a read in terms of all of the new catalog, as well as the new website for that particular pair of catalog goes up. No, we have rebranded, we have redesigned the shoe business, but we have not changed manufacturers. We put more emphasis on quality, and so we feel good about that. But today is a big day to really -- because this officially launches today.

POWL

Q4

Brent Thielman D.A. Davidson:

Pat McDonald:

Relative to the offshore market, any sort of update that are you still seeing good activity in that particular oil and gas area?

We are seeing good activity in it and good dialogue and discussions with our customers. I think that's going to be again another strong point in the future. As we look at pipelines and offshore platforms, as people look to find energy sources from other areas, the offshore plays a big role for us in the future. Because it is a less costly extraction process than other things like the tar sands. By congress allowing more offshore drilling to begin, I think that's going to bode well for us in the future.

RAIL

Q4

Justin Long:

Theodore W. Baun:

Thanks, Ted. That’s helpful. And – in terms of the increase for Shoals, what do they look like as it relates to size? Are you typically seeing increase in the hundreds of units or are they smaller than that?

I’m not going to comment on any particular size of enquiry, but I will say that on average, we are seeing enquiries about where they were through Q3 and Q4 and a slight uptick as we enter 2014. So we are seeing a bit of improvement across the Board with FreightCar enquiries. And obviously we will decide where to put those be it Shoals, Roanoke, or potentially Danville as we move forward.

UHS

Q2

Kevin Campbell

Steve Filton

Good morning, thanks for taking my questions. Just a couple of quick ones on guidance. Can you give us an estimate of the impact that moving Auburn Regional Medical Center out of continuing ops had on the earnings guidance?

Just to be clear because of its relative immateriality we do not show or report Auburn as a discontinued op, we just sort of removed the detailed revenues and expenses and recorded the EBITDA loss of Auburn, which was a couple of million dollars in the quarter in the other operating expense line. Because we expect to dispose off Auburn in the third quarter, we’ve included in our guidance a comparable amount for Q3 and then assume that it’s no longer owned by us.

RAIL

Q4

Michael James Baudendistel:

Charles F. Avery:

Thanks. With the closure of one of the repair shops, is there more to do there with additional shops that you would close?

No, now I think our strategy is going to remain in at the same in growing that. The facility we closed has been a different geographic, it didn’t have the dynamics, of being on a high volume quarter like our shops out in the Nebraska are. So it is just a different decision, I think, there are other shops so we still like to still see an opportunity to grow our value from those.

POWL

Q4

John Franzreb Sidoti and Company:

Pat McDonald:

Could you just review that decision process and do you think it's a good one or bad one in light of municipal spending and also, if you will, potential infrastructure spending on the new administration. I guess there’s a put and take kind of there with that decision.

I don't think I would second-guess the decision. I think we need the space and high bay area, whether it's transportation or it's utility or it's oilbased. Our deal is to supply solutions to the customers, and we need that type of overhead high bay crane space to do that with.

SWN

Q3

Brian Lively

Steven L. Mueller

That's great. I'll follow up with him because it sounds like there's some bias upside to the numbers. And just for me the last question on the Fayetteville. The commentary about the Fayetteville being flat for the next couple of quarters, just wonder if you guys could put some more context around that in the vein of what 2013 might look like. Are you talking about flat through 2013? Are you talking about just flat maybe for the first half of the year?

I'm not sure about the flat comment. I think what I said was rig count. Right now, we’re running 7 rigs and we'll go into the year with running 7 rigs. And if you ran 7 rigs for the entire year, you'd have about 350 wells.

SYK

Q2

Jeffrey Johnson

Kevin Lobo

Thank you. Good afternoon, guys. I'll be quick. Just one, Kevin, I'd be interested, it's always tough as an early reporter for you guys to know market share shifts and things like that. And the volatile numbers we're getting from everybody, these next couple quarters will be even tougher, just wondering kind of momentum wise that you're seeing with surgeons, in your core ortho business, can you talk to hip, knees, trauma, spine, any of those four areas where you've seen maybe a change at all good or bad in momentum, you think of pooling surgeons in on a competitive front? That'd be helpful. Thank you.

Yes, listen, it feels good to be sort of getting back to normal. It isn't totally normal. There are these pockets of disruption. But I would say that surgeons are starting to fill up their schedules, they're taking meetings with us, they're coming to trainings. And so we feel like we're sort of almost getting back to the kind of rhythm we had before, you can see it in our guidance. I mean it is a pretty bullish guide, to say we're going to do 9% to 10%, organic, plus strong performance out of Wright Medical, which was an integration and pretty complex, involving the trauma extremities, as well as our joint replacement business, because those businesses used to be under common sales management, and we've pulled those out. And so to be able to do all that and have this kind of wind at our back is pretty exciting and I would say customers are ready to engage ALS. I think it will be a pretty big conference, and based on what I'm hearing, it will be fairly well attended. And I think those are great opportunities for us to be able to show the power of Stryker and what we can offer to our customers.

RH

Q4

Michael Lasser

Jack Preston

Do you think it'll be kind of May, June economy will be reopened, you’ll have some reasonable comparisons and then you'll get a sense for what the run rate of the business is?

And, Michael, it’s Jack. I did want to add just one point when you asked about H2 profitability just not giving specific direction here. But if you think about advertising, I just want to clarify. In 2020, we mailed books in the spring but not in the fall. So most of the spend happened in H1 versus H2. Obviously, the opposite is going to happen this year. We'll clearly mail outdoor book. But the books - the main books are going to be mailed in the fall. So you are going to have a flip flop of advertising…

OCX

Q1

Keay Nakae:

Doug Ross:

Thanks. Mitch, what kind of – I guess two parts to this question. What kind of pricing are you currently getting for RX and what percent of the test that you run are you actually getting payment for?

Yes. I think you’re hitting the high point well. For some of the competitors, for Merck as you said, moving from second line to first line is an opportunity and to have a biomarker that actually works much better for identifying responders is an opportunity to enter first-line therapy market. And as well as a 40% response rate is not good enough and the side effects are very significant, so in our conversations with physicians and CMS it’s very clear that there is room for improvement in biomarker performance and a biomarker that clearly demonstrated an incremental improvement on the existing paradigm would be very attractive both for health economic reasons and for patient management reasons. So in terms of pushback, I think the market has really been waiting for a good phenotypic assessment, a good assessment of what’s going on in the tumor specimen. We think ours is excellent at that. And so I don’t think that we’re getting much pushback aside from sort of the process of maturing the data.

HLX

Q2

Joe Gibney

Owen Kratz

Okay, that’s helpful I appreciate it. One last one and I’ll turn it back, just curious you mentioned heavy well intervention North Sea. Just, any update on the Statoil FEED for the well intervention asset there?

We’ve – we’re at the point, we’ve completed our shipped our packages and we’re working with the shipyards to develop the concept further. The initial technical submission is September 15 with the commercial submission due October 15 and an award by the end of the year. So we’re pressing hard on all fronts there, and we have a pretty large team working on it.

GLW

Q2

Jim Suva

James Flaws

It sounds like you’re indeed building in a no return of the China subsidy into your outlook, which I think is a positive. Under the premise of if the China subsidy were to come back, do you have the capacity to ramp production? And if so, what’s a typical lead time for you to pour the glass, get it into the channel, and for it to make it onto the shelves for selling to the local Chinese citizen, if the subsidy were to return?

We do have capacity, and the lead time is relatively short, as we are in Asia, and it’s pretty easy for do that. So I would say definitely two months or less we can have capacity there.

TAP

Q3

Judy Hong

Kevin Boyce

Thank you. Kevin, I’m hoping to get a bit more color in terms of your cost profit performance in Canada in the quarter. If you can quantify how much of the decline was really won off the items versus the heightened level of discounting that you’ve mentioned? And can you just talk about what’s really driving the higher discounting activity in the third quarter and it sounds like you talked about the fourth quarter trends being a bit of a moderation from a discounting activity perspective. So if you could just go through that in more details I’d appreciate it.

OK, Judy, let’s start with one-time versus ongoing. The numbers that we’ve quoted are all our ongoing business. We’ve eliminated the one-time. So then if you focus in on the various markets, I’d say in the short term there have been price increases in both Quebec, Ontario and Alberta as well, earlier in September. That will begin - we’re seeing in Ontario not just the price increase of the premium brands, but we have seen over the last six weeks movement up on the products that are the value brands, which is encouraging. And that continues today. So we’re very encouraged by that. I’d say Quebec - although pricing has been taken certainly to date in this quarter - it remains pretty competitive in that market, and if you go back in time this is really - it happens from time to time in our market place where certain markets get overheated and it usually works its way through in a period of time, but this summer was, starting in the second quarter but really into the summer was a particularly aggressive time amongst all competitors in the marketplace.

KLAC

Q4

Farhan Rizvi

Bren Higgins

Got it. And then my second question is on gross margins, the gross margin guidance for September quarter. If I think about the gross margins, your gross margins at that level were only way back in 2009. So I just wanted to understand like going forward after the September quarter, how should we think about gross margin? Is there some sort of a decline that has happened going forward or is it just a onetime issue?

Well, I think as I mentioned, I think how we're sized relative to the revenue levels is a factor certainly in that -- in September. I think going forward, over the long run, you always have some volatility in terms of the mix of products that we end up revenue-ing, and that has some impact on gross margin. I don't see anything fundamentally different or structural in the overall business in terms of gross margin performance. And I think you ought to continue to see us, over broad periods of time, perform fairly consistently with the gross margin model that we cited many times at 60% to 70% incremental gross margin on revenue growth. So I think given where we're starting from here, I think if mix holds the way I think it is today and obviously, that moves around a little bit, I think we'd probably end up performing towards the higher end of that range early on. But we'll have to see how it plays out. But nothing, as I said, that's sort of structural that, over broader periods of time, that would indicate that there's anything different than what we've seen in the past.

BLDR

Q3

Trey H. Grooms

Peter Jackson

Got it. Thanks. Sorry I missed that. And then with free cash flow, the target, $170 million to $190 million, expecting to come in at the low-end, I think that's what you guys said last quarter, too. But just wondering what was the driver of coming into the low-end. I understand the earlier part of the year when you had a big working capital draw with the higher lumber, but I would have thought it might be more of a tailwind with the commodity coming down and maybe might catch a little more benefit in the 4Q. Any just commentary around the direction there of going towards the low-end?

Yeah. I'll be real candid that that type of cash flow forecasting for the year-end is always very challenging. We're looking at the numbers in detail and trying to dial it in. Part of it has to do quite simply with the burn-off of the – or the collection process around the sales and the burn-off of the inventory that we had earlier on in the year. I'm sure you can appreciate the fact that the averages look nice and easy, but down at the location level, it's a bit more challenging to see where's the wood, where are the receivables, and at what pricing, and then how are we burning it off. It's our best estimate. We're clearly going to shoot for more than that, but I think that $170 million is the right number for the guidance. But in light of that, we are still going to be below the 3.5 times levered number. That's a commitment that we are committed to and that we're looking forward to delivering on as sort of the final chapter in the ProBuild acquisition story.

NMRX

Q3

Richard Valera

Richard A. Flynt

And what would the gross margin have been x that change? I'm sorry, is it 56 point...

It would have been 56.0%.

GLW

Q2

Simona Jankowski

James Flaws

I just had a question on display, and then a couple of followups on Gorilla. On display, you had ended Q1 with what you considered tight internal inventories and were air shipping some product. Is that still going on? Or do you feel like you’ve caught up now in terms of your own inventories and production? And also, did you convert any additional tanks to Gorilla in the second quarter? Or are you putting that on hold for now given the situation in Gorilla you talked about?

We’re not converting more tanks to Gorilla right now, as the supply chain works off some of the inventory. In terms of our own inventories, we actually remain tight. We did air ship in Q2. We hope to not air ship in Q3, but we’re still tight. We wouldn’t mind having more display inventory. Corporately, on inventories, we have built inventory. The build is the largest in telecom, where we built over $100 million inventory. And we have built some Gorilla inventory.

GERN

Q3

Unknown Shareholder

John A. Scarlett

So you're not a pay-to-play kind of an operation or whatever?

Not at all. They're -- as far as I understand it, they're -- individuals submit articles. We have absolutely nothing to do with any of them. We find out about them exactly at the same time that you do or anyone else. So it's a completely independent function, which we have nothing to do with.

NMBL

Q3

Katy Huberty

Suresh Vasudevan

Thanks. Good afternoon. I guess looking forward, what changes in large enterprise given that the incumbents are willing to price aggressively and they get the last bid. What can you do to change those dynamics? And then secondly, should we now assume that the goal of breakeven is off the table until you start to see that enterprise business really ramp as expected? Thank you.

Yes. Let me address the first one, Katie. I want to start by saying, when you look at our business in terms of mix of Fibre Channel, when you look at our business in terms of bookings from deals over 250,000, 500,000 notwithstanding the competitive environment and the pricing environment those are growing and growing faster than our overall business. And they are becoming a larger portion of our mix. And so let me start by saying that the trajectory of what we're seeing at the high-end of our business is moving along well. Our concern is that the kind of return we wanted from our investments, we were essentially looking for more leverage in those investments than we're seeing. So, it's more a question of how long before they become as productive as our commercial segment rather than that we are not able to make progress. So, it's much more of profitability question rather than success in the enterprise question. Now with that said, that goes back to your second part of the question which is, what do we expect from a profitability standpoint? It is true that we've not given specific guidance on when we expect to get back to breakeven. The investments we’re making in the first we believe will take the first half of next year and that's when we're going to see sort of most of the investments concentrated. And so second half you should start to say leverage again in our model relative to this year. Beyond that we're not getting specific on what that translates into for breakeven.

CTIC

Q4

Okay. And any -- will the pacritinib data, will that be further follow-up data from the ongoing Phase II trials, or will it be more preclinical, exploring the drug in indications like AML?

So we would anticipate the next presentations will take place at the DHAP and then at ASCO, abstracts we had shared with you today, actually. So we obviously don't know yet exactly what would be presented. We've done additional work on describing the pharmacokinetic properties of pacritinib. We have also reviewed the safety profile for the drug as well and summarized that data. So those are the kinds of presentations that you may be seeing in the next few months.

PDLI

Q2

Phil Nadeau

John McLaughlin

Senior. And you mentioned that's secure by the assets. Are there restrictions on what Merus can do with those assets? For example, is it allowed to re-partner or partner any of its – (inaudible) or isn't that restricted?

There are restrictions on terms of what their activities are. Obviously, we want to be careful in terms of how they operate and we do have a lock-on, not only their current asset but any new assets they bring in. So it's a pretty broad scope in terms of the coverage, the seniority, and there are some pretty standard financial covenants there.

CAJPY

Q2

Benjamin Lu

Toshizo Tanaka

Got it. Okay, thank you for clarifying. And then in Q2, your digital camera units were down 22% year-over-year. Can you tell me how compact and SLRs did in the quarter and if you can also comment on the monthly linearity in terms of how SLR and compact units did in the months of April, May, June and how July is tracking so far to help us understand the monthly improvement since the quake? Thank you.

Breakdown of the decrease of the 22% in the digital camera, single compact is minus 28% and single reflects camera is 3 points decrease. So total is 22%. Unfortunately, I don’t have any breakdown of the monthly, but roughly speaking, the month-by-month, the figures is improving. So maybe month of June is almost the same as last year’s. So, biggest damage is in month of April and getting better in May and June almost return to the same level of Russia. That is the situation, that completed my answer.

B

Q4

Matt J. Summerville

Gregory F. Milzcik


Couple of questions. First on the transaction. Because I know your tax rates differed so much by jurisdiction, how much EPS accretion was there in 2012 from the business you're selling?

Oh, that's a good question.

PLXS

Q1

Anja Soderstrom:

Todd Kelsey:

Hi, thank you for taking my question. Congrats on a great quarter and congrats, Shawn and Heather. A lot of good questions asked already, but I just wanted to get a sense more of your revenue guidance for the second half. You say it’s sort of going to be in line with that fiscal second quarter expectations that assume that electives still stay sort of suppressed. That could be a surprise upside in the second half comes back more forcefully ?

Yes, it does. I mean, basically, it looks at the environment as being more or less what it is today, perhaps even, maybe, call it a little softer than what we’re seeing for the fiscal second quarter, because we saw a lot of drop in upside demand that impacted the second quarter that doesn’t necessarily impact Q3 and Q4 at this point. So, there’s a lot of potential, I think for opportunities within the second half, it’s just, our visibility says it’s flat to Q2 right now, more or less.

ODP

Q3

Matthew Fassler:

Neil Austrian:

Its Goldman Sachs. I've got one strategic question for Neil and then a financial question for Mike. Neil, my question to you would be, if you could you talk about the timing of the board's decision, why now? I know you said that the SEC settlement did not factor into your thinking, but to the extent that this is a mutual call by you and by Steve. What did the board see that drove the timing on its end?

Hi, Matt. Good morning. I think there's basically, never a good time to make a change. And I think in this situation, we were starting to see a return to some of the economic positives that we'd experienced in the past. We were beginning to see margin improvement. We were beginning to see the situation from a total economy standpoint bottom out. Yet at the same time, no one was 100% pleased with the results. And basically, we both concluded that now was a good a time as any. And I want to reiterate, it didn't have anything to do with the SEC issue. If you use a sports analogy, at sometime, you make a quarterback change, and there's never good time to do that, and you're never 100% certain if it's going to work, but on the field, there is an emotion, there's a spark, there's an energy level that the whole team gets from that kind of change. And I think, both of us at this point, felt that, that was probably necessary.

PLXS

Q1

Steven Fox:

Steve Frisch:

And those shifts would be done with – like their current facilities would be utilized by the customer, you’d be outsourcing into your existing facilities, like their strategy around their own plant and equipment is what?

Yes, they would exit their facilities. And we would do that one of two ways. One is either to this move the facility entirely at the moment that they exited or do what we call manage in places where we’d manage it for 18 months, 24 months, and then transfer it. Under a rare circumstance, if there’s a strategic alignment, would we consider a facility? Yes. But that would be under a very strategic decision.

TTE

Q4

Lydia Rainforth

Patrick Pouyanne

Thank you and good afternoon. And hopefully, the March 24 presentation, we will manage to see each other in-person. Two questions, if I could. The first one was on the integration side and the Total being multi-energy. Can you actually talk us through the economics of something like the Iraq project? And is that sort of saying the best example of where multi-energy really works for Total. And then secondly, on the renewable side, you talked about kind of the business now being in over 70 countries. I was wondering at what point do you think that -- how much you need to focus that business and is more geography actually better? Or is there specific areas you kind of think that where you need to focus on. And then just very lastly, just to pick up on the cash return. You mentioned the share price earlier. Is the -- so is the buyback level dependent actually now on the share price?

Last question, yes, there is a level where obviously it become too expensive. So I don't want to cap the share price hike, let's be clear. But there might be an arbitration between having the debt going down, keeping the money. And then because we know the markets will be volatile. The best buybacks for our investors and for the company, the best investment in buybacks is to buy the shares when the share is low -- when the share is very high. So we -- the Board will obviously monitor that. There is no -- I mean, don't ask me a mathematical solution. There is no magic there. It's just a question of monitoring it because I have already met a lot of investors which criticized us somewhere sometimes when we buy but it's high. So why not keeping the money and then using it when the share is low. We would have more -- last year, it was not possible. It was a year when the share was at EUR 30 per share. But I know some investors who bought some shares at this level, we are not able to do it as a company. So that's a point where, just a remark. On the economic benefits on the integration but there are several ones. One of them in particular, in the case of Iraq and we are using that in other oil countries, is that when you have developers willing to develop large projects in these emerging countries, they are all asking to -- when you are a small developer, they want some sovereign guarantees. When you are an oil and gas company and you receive revenues from a state, larger revenues, let's be clear, the revenues from oil compared even to what we want to do in Iraq, the magnitude of the power of revenues is not the same. You can find a way to, I would say, guarantee your electricity revenues by the oil revenue. So there is a link there which is a good leverage in terms of economic benefits and possibility to make the projects. And so I mean -- and same -- at the end of the day, the gas resources which we have leveraged are also part of, I would say, an extensive contract service. Contracts, is -- I will not call that. I don't know what is the name of the contract in Iraq. I don't remember. But it's part of -- you can use like, we've done in other countries, like it was done, for example, in Qatar by Shell with GTL. You can use revenues of one to leverage the investment in the other. So that's the beauty of it, if are able to invest in different projects, then it's a question of managing the different parameters of the contract. Yes. The advantage to be in more countries for renewables is that there are less competitors. I will tell you the advantage is that, first, we are there. We know the country. We have a presence. We have some people working already in marketing and services, in E&P. So we have a knowledge of authorities. They respect us. We have an image. So it's good because we have a trust, I would say, you build on the trust. The second part is that most of the developers have -- of course, the smaller ones, you have some small companies. But the larger, I would say, utilities are focused on some countries, mainly, the large countries which offer PPAs which is not the case, of course, of all these emerging countries or the ID what we are is, of course, it's complex in some of the smaller countries but the profitability can be higher. So this is what we are looking for to have direct negotiation to be able to leverage, I would say, what it can bring to the country in order to have a better profitability. So -- and I think this is an advantage of a company like TotalEnergies. We are present in many countries. There is longer service relationship, we can leverage it. We call them renewable explorers. They will not replace our real explorers but they will bring some good profits in the future.

ANET

Q1

Tim Long

Jayshree Ullal

Jayshree, I was hoping you could talk a little bit about the enterprise vertical and maybe on two different vectors, if you can just kind of give us a little color on what you're seeing on large enterprises. And then as it relates to -- you talked about a longer process for the campus move.Could you just talk a little bit about the moving parts near-term given that, obviously, a lot of people are working from home? So it's difficult to sell on-prem equipment. So if you could just give us a little more color there. Thank you.

Yes. Sure, Tim. So to answer your broad question on enterprise sector, I think Arista's brand is very well recognized for data center. And with our 6,000-plus customers, we've got very good recognition there from a differentiated product. And we've already been very engaged with them.So, customers we’ve been engaged with, in fact, we had most recently in February, just a little before all the doors got shut down on us, we were engaged with over 100, 150 enterprise customers. And we had a global advisory and Arista innovate.So our intimacy with enterprise customers is very high, and we continue to do well with them with both existing and new projects. I think where we will be challenged in the enterprise and also in the campus is new prospects. We're not going to get enough face time with them.We're doing a lot of virtual webinars, virtual events, virtual ebCs, it's a virtual world we're certainly living in. But the level of contact for both, product capability conversation, relationship, partnership and in fact, even testing, for both new prospects and enterprise and campus will be challenging. And nobody is in the building to upgrade their campus either.So this COVID-19 will definitely delay our enterprise cycles for new prospects, but it should be okay for new projects with familiar customers.

ODP

Q3

Mitchell Kaiser:

Kevin Peters:

So is the expectation that you'll have those in the fourth quarter here in a meaningful way?

Yes.

TTC

Q3

Mark Rupe

Michael Hoffman

Okay, and then on the Professional segment, you said golf was strong, but then you said that product mix was a little bit of issue on the margins, just trying to look at the two and where am I missing, some in golf typically higher margin or was it something else within golf or something else that brought the product mix being I guess more unfavorable?

Yes, within the Professional segment we have some things like factoring in the acquisition of Unique put some pressure on the margins. All-in golf as you know is one of the stronger, more profitable businesses, and so – but there's still some moment even within that area. But I would leave it at golf is very healthy.

VSH

Q3

Shawn Harrison

Gerald Paul

Hi, good morning. Just a few brief follow-ups. Hopefully, I’m not re-asking these but the commentary at point of sale being down by 8% sequentially for the third quarter. With October coming back, are you seeing, I guess, that increase. Did it increase sequentially, the point of sale for the month of October?

I have reliable information this case for a quarter, so I would rather not comment on a month on POS but obviously as quarters have come back to a degree, I would say the POS for sure will not have come down further, I think. It is what I would hope through from that.

SXC

Q1

Brett M. Levy

Frederick A. Henderson

I guess, with respect to selling the coal coke or I'm sorry, the met coal assets, I guess, it would reflect a certain amount of bearishness longer term. I mean, you listen to some of these guys saying, "Listen, 2014 is not going to be a great year, but maybe 2015 will be much better." I guess, the question is, why not wait if you're at least medium bullish on met coal?

First of all, I don't have a view on met coal. I'm not that good. And even Mike Hardesty who works for me, who is that good, I mean, his crystal ball is not that great either. And so our view is no time like the present, might as well just get on with it. We don't really have -- we don't have a strategy which could make us successful. We are subscale. We have all the challenges. In other words -- and we won't -- it's not like we were printing cash when met coal prices were high. So as we think about it, now that the tax sharing agreement is over, yes, it's a tough time to sell the business, it's an even more difficult time for us to be in the business. And so we felt like it will be the right time to just get moving. And to the extent that we want to -- if we have a view on met coal, it's part of the transaction, some form of the consideration as an upside for met coal, fine. I'm flexible on that. But I just don't think staying in a business where you don't have a recipe for success, and to wait for commodity prices to rise is good strategy for us.

IM

Q2

Richard Gardner

Kevin M. Murai

Okay and then just finally when you talk about weakness in corporate, is that primarily large corporate, same as you saw last quarter or have you seen some weakening in the small to mid size business area in June as well?

It's primarily large corporate. This small to mid size business I think is doing relatively well. The growth is going to change quarter-to-quarter, it still continues to be one of the strongest segments that we have. I do believe though that as we continue to implement or not to implement as we continue to move down the path of our new infrastructure technology division, that's going to help to spur growth for us in particular in more of that corporate space with the higher end products serving there as-well-as being able to serve the SMB markets to.

VZ

Q2

Matt Niknam

Matthew D. Ellis

Hey, guys. Thank you for squeezing me in. Just two, if I could. One, on 5G, what are you hearing from your larger commercial enterprise customers in terms of demand for specific use cases? I'm wondering if that could facilitate any sort of acceleration in your pace of builds heading into next year? And then secondly, maybe for Matt, on tax reform, you talked about using the benefits this year at least to strengthen the balance sheet. How should we think about optimal leverage for the business today? And how do the uses of excess capital and tax reform benefits, how do they potentially evolve into '19? Thanks.

Yes. I'm Matt. On your question around tax reform and certainly flowing through the cash flow and the capital allocation. Look, the capital allocation, we've talked about this numerous times, and we're focused on being able to invest in the networks, providing a return to our shareholders. We know the dividend is important and we've increased the dividend for 11 years in a row now. And we've also said we want to strengthen the balance sheet and get back to those pre-Vodafone credit rating profile. And certainly tax reform helps accelerate our ability to do that. That's our focus for 2018. You saw a good progress in the first half of the year, not just on the debt pay-down, but also when we say strengthen the balance sheet, we include the -- what we did with the pension contribution as well. So we're making good progress here. Too early to give specific views on 2019. But certainly, as you know, tax reform will help us get to those leverage profiles quick than we would have done otherwise and look forward to updating you on '19 when we get closer to it.

IM

Q2

Richard Gardner

Gregory M. Spierkel

Interesting Richard, Greg here, one other quick comment too. Of all the geographies we are operating in right now with the four major regions, the North America markets for the first time that I can recall in a while is the slowest growing in the IT sector and its somewhat reflective of our results that we are seeing right now too.

Interesting Richard, Greg here, one other quick comment too. Of all the geographies we are operating in right now with the four major regions, the North America markets for the first time that I can recall in a while is the slowest growing in the IT sector and its somewhat reflective of our results that we are seeing right now too

SYKE

Q1

Frank Atkins

Chuck Sykes

Thanks so much for taking my question. Can you talk a little bit about the attrition rates in the hiring environment, specifically in the Philippines? Just what you are seeing out there right now?

Yes. The intensity of the competition is certainly much, much longer than it's been in the past. But at the same time, the projection of growth that we are experiencing now on the offshore locations, I would say it's at a more controllable state. So the labor market in the Philippines can support the industry. You will see to our attrition levels for us have gone up compared to where they were five years ago. But it's on a pretty controllable state right now. We are not seeing something there that's alarming or that it's growing. Every year it's getting worse and worse and worse. I would say, we have reached a little more of a steady state type of thing. I will tell you too that offshore you are looking at attrition rates that are probably 40% of the rates that you see maybe in other developed countries like in the United States. So it's a good environment to operate in.

BMY

Q1

Matt Phipps

Giovanni Caforio

Thanks for taking the question. First given the current environment and potential trouble accessing infusion clinics, is there any reason to accelerate the development of our subcutaneous nivolumab and other trials going on there since 2018 looking at that? And secondly, for the TYK2 a small molecule just want to confirm that psoriasis trials are on track to complete or midyear this summer. And all the physician assessments can be completed. And then there's been a lot of formulation work ongoing according to clinical trials.gov. And just wondering if any of our impact potential filings in new clinical trials are successful?

Thank you, Matt. So Samit, I think there's two questions on subcu nivo and then the status of the TYK2 program.

RDUS

Q4

Greg Harrison

Jesper Hoiland

With regards to the TYMLOS price increase, what proportion of that increase do you expect to realize and what is your strategy with respect to balancing the price that reflects the value of the drug with also having -- keeping the lower price in Forteo and trying to use that to grow the market to where it had been previously.

So Greg, if I may add to it, just because price is of my sincere interest and the price differentiation that you have seen is of course also, you need to think about the potential entry of a biosimilar by end of 2019. So we have put ourselves as a point where we feel we can very much compete with whoever comes into the space at that point of time, because the typical way forward for the biosimilars is of course being to take a 20% to 30% price decrease of the whack and thereby going in and within 180 days skim the market if you will. We are taking a very different price approach because if that's what the biosimilars are going to do, then they will still be in the 30,000 when we are in the early 20,000. So as far as I'm concerned, we are in a very, very strong position going forward with the price point that we have provided on here. So all in all, we will navigate in the space, we have got the market access that we wanted, that's also a very important component of course within 9 months to have 259 million lives to be covered I think speaks for itself and that's of course a part of the pricing strategy that we set up with in the very initial phase.

FISV

Q4

Brett Huff

Thomas Hirsch

Two quick questions. One is, can you tell us just more specifically about the very nice margin expansion that you saw in the Financial segment? You detailed a little bit, but I wanted to make sure that I understood exactly all the moving parts on that. And going forward, you called out a few things that will help continue with that cost savings and things like that. But will the thing that happened in the fourth quarter repeat itself?

Well, I think we don't -- the fourth quarter, let me just talk about the quarter for a moment. We did have a lot of good growth there from a top line. If you compare it to the third quarter right, revenues were up in that particular segment, about $20 million. Most of that dropped to the bottom line. Typically, in the fourth quarter, Brett, we do have some good purchasing from clients as far as license revenue goes compared to the third quarter. So when you compare the Q4 to Q3, we just had a lot of good incremental drop through in that particular quarter because, really, our license revenue in that particular segment was up on a sequential basis. And we had a really solid quarter from that standpoint as far as that drop through goes. And in comparison to the quarter four of last year, again, good mix of revenue. But also, we have some discretionary compensation expenses last year, which did not recur in the current year, which helped that year-over-year comparison. But I think going forward, we look at margins, sometimes these licensees will fall into the fourth quarter, sometimes into the third, sometimes into the second. But overall, we're going to continue to grow our margins in both of our segments. We continue to have a number of opportunities, and we continue to have more outsourcing revenue in this segment. And we have, again, good scale businesses. We have our new $250 million target for operational effectiveness. We have a lot of things going on in our check business with electronification, and so we continue to have some solid opportunities there.

TWI

Q4

Stephen Volkmann

Paul G. Reitz

Okay, great. And then just a quick totally unrelated follow up. But I think that somewhere around mid '18 is when they potential put option on that Russian deal kind of comes to fruition and I’m just curious if you have any updated thoughts about how that’s going to play out? And if you did have to put out cash for that, how would that kind of get funded and so forth?

We are having discussions with our partners on that and that will continue as we get closer to the date you mentioned. From our perspective we’re assembling a multitude of plans on how we can address it and it will depend on how we end up with our partners and how we move forward with them into the future. I think as Jim stated, we’re comfortable with whatever solution is drawn up and it will – in all likelihood it may be a blend of different approaches versus just one direction. But it’s still early on that but it’s definitely not something that we’re waiting to really plan for. It’s something that we will continue to work on, Steve, but we don’t have anything concrete that we can talk about here today.

TECD

Q4

Joey - Citigroup

Bob Dutkowsky

Yes, good morning this is Joey on behalf of Rich Gardner. I wanted to see if you can provide any color on the overall credit quality of your customers, maybe any specific metrics on AR ageing?

Actually our team around the world did an excellent job throughout last fiscal year on credit management. Our losses, as I referenced and somewhat foreshadowed in the last call only went up slightly, a basis point here or two. So excellent job, we had no deterioration in the ageing around the world. We stay very close and on top of our customer relationships, so to-date credit exposure or losses has not been any kind of a negative for Tech Data.

CTAS

Q1

Brandt Sakakeeny:

Michael L. Thompson:

Okay, great. And then, obviously, you have done a good job in cost control particularly given what we have seen in fuel prices any color there? Are you able to pass those fuel price increases on to customers through better pricing or absorbing it or just sort of managing that better?

The fuel price systems sales are about comparable to the first quarter of last year. We were at about 3.4% both in the first quarter of last year and the first quarter of this year. So, we haven’t seen any appreciable change from what we have experienced. In fact, it was about 3.4% in the fourth quarter of this last fiscal year. So, as a result, I would tell you that we were able a year ago to pass on… a year to 18 months ago to pass on some of these cost increases through to our customers. And that’s why our price increases were a little bit higher as we talked through in fiscal ’06. Right now though the cost of fuel are basically comparable to what they had been. So, there really hasn’t been a dramatic change there.

NMRX

Q3

Ross Licero

Stratton J. Nicolaides

So in order to get to that, you have to have 20-plus gross margins in the fourth quarter given the midpoint of the hardware revenue. Is that sort of where we should be?

No, we -- I think we're not expecting hardware revenue to be that high in the fourth quarter. Margins, rather, on hardware to be that high in the fourth quarter. But I don't think we need that number to get there. It's -- we just -- with the fourth quarter, with what we see in the hardware revenues and the margin produced, it should be higher. We're expecting a, maybe, a slightly improved margin. We said, at least, maintain our current margins in Q3 margins in Q4, but we could certainly see that increase. But we don't think it'll increase to that degree.

VICL

Q2

Alan Carr - Needham & Co

Vijay Samant

You mentioned earlier that when you were talking about burn, Jill that you all were factoring in potential partnership revenue. Can you give us a sense of where things stand with and the various programs that you are seeking to partner in and the extent of revenue that you are expecting from these partnerships this year?

Well, it’s a excellent question Alan, obviously we had an active discussion, but we don’t have a partnership in hand, because if we had one we would have told you. The revenue projections that we have included in our burn rate are not so huge that it is going to blow our burn rate out of line if we don’t accomplish this particular partnership goal. I think the issue is not whether we are going to accomplish the partnership goal Jill, but the timing of when that’s going to occur. Good probability, it may occur before the end of the year and it doesn’t occur, it may shift one quarter, but independent of that we have sufficient cash.

HSY

Q3

Michael Lavery

Steve Voskuil

You've talked about the increase in e-commerce sales, even if it might have decelerated a little bit, but it's up very strongly. You've said in the past that baskets and dollar ring are higher online, is that still holding true with the growth that you're seeing now. And on the margin side, you've mentioned that there is a small gap, but that is that you were narrowing it and the scale would help that -- is that coming along the way that you would have expected. How does that look now?

Yeah. I want to say is that we said in the past that overall e-commerce margins are a little bit dilutive and it's there -- as Michele just said, in click-and-collect and local delivery, very similar, not much impact in that, probably two-thirds of our e-commerce business, the piece that is more dilutive is the shift to home and in particular cold shift, and that's an area where we continue to work with our customers and look at our overall investment with those customers and joint business planning to drive efficiencies over time so that those margins align.

LBRANDS

Q2

Richard Ellis Jaffe

Stuart B. Burgdoerfer

Just a question on merchandise margins. In both divisions, seeing that, albeit very modest pressure on margins, I'm wondering if there's an opportunity on the flip side, with the introduction of beauty, with better sourcing, with mix changes, you see merchandise margin improvement in the balance of this year and into 2014.

Richard, it's Stuart. The guidance that we've given is in the third quarter down slightly, and we've been down slightly. The business is always working to get it to the right merchandise margin rate. And we think the guidance is about right. And to your point, there are a lot of pluses and minuses, and believe me, we're, first and foremost, focused on dollars. We've all heard the expression, you don't take rate home to the bank, and things like more work on full-price selling and speed and so on. But we think the guidance for the remainder of the year is about right, and you can be sure that the business is going to be focused on getting the maximum number of dollars that they can get, and part of driving that can be opportunity to earn rate. But we think the guidance is about right.

BIO

Q4

Dan Leonard

Christine A. Tsingos

Okay. That's helpful. And secondly on the smoothing efforts in the Life Science business, can you elaborate further – I think this is a question for John – really what that entailed and will we see any residual impact in 2017?

Yes. And I think in terms of how it plays out, Dan, and you can see this in how 2016 rolled out, there's going to naturally be some tougher versus easier to compare periods as we look to 2017, especially for Life Science, and we think about that strong double-digit growth they had in Q3, et cetera. But, overall, I think on an annual basis, we're still looking for pretty solid growth.

EXPE

Q3

Kevin Crissey

Dara Khosrowshahi

And the airlines are commenting that they're seeing nice strong holiday bookings, Thanksgiving, Christmas. Can you confirm that you're seeing that as well?

I don't want to speak specifically to what we're seeing, but generally, what we see is pretty similar to the industry. It's good to see the industry healthy. It's good to see some capacity coming in, and it seems like the capacity is coming in, in a disciplined manner along with demand. And we think that's a good balance.

UNVR

Q1

Allison Poliniak

Carl Lukach

I wanted to touch on the volume decline in the U.S., I know you attributed some of it to your actions specifically, but then also a little bit of sluggish market. Could you help us quantify your [indiscernible] was it mainly your actions that led to the volume decline, was it markets still, and what kind of visibility do you have for the balance of the year?

Well, the only added color I can give you, Allison, if you look at the 3% decline globally, it was more so in the USA, and that's there, I'd say quantify -- I know you want to quantify if, but roughly a third of that was conscious withdraw in the upstream oil and gas business, and in particular at one account. So that was one area. The next third would be in what I'd say are lower-margin bulk commodity products. And that would be the third one-third would be our active margin management efforts account-by-account.

GGG

Q1

Walter Liptak

Jim Graner

Hi, Thanks and good morning. I wanted to ask about operating leverage. And I guess for the rest of the year, all in with the three segments, where are you envisioning the businesses for operating leverage?

I'll take you on a little bit of a journey. Long term, we've always guided to about 40% operating leverage. That's, of course, predicated on a couple things. Stronger organic growth than when we've been reporting. You know, high single digits versus middle or low single digits. Organic growth and it also reflects a mix that's more geographically equal. So this quarter, we had a lot of growth in North America and negative in Asia and flattish in EMEA. That hurts our incremental profitability. So again, when the world gets back to equilibrium and our new product performance is getting us to, I'll call it the 8% to 10% organic growth, and it’s coming around the world, we believe the 40% is still appropriate. For sure this year, short term, we have the issue around exchange and we have the fact that we're not growing quite as rapidly - or lack of growth would probably be a better term - in Asia Pacific and EMEA. So near term, we're going to be significantly less than that 40%.

HLX

Q2

Jim Rollyson

Tony Tripodo

Okay and then last question from me, Tony, maybe the drop in EBITDA guidance from the 400 to 500 down to a tighter range of 400 to 450. Do you think the majority of that delta relates to the production decline?

I’d say somewhat related to lower production from Noonan and really Jim, I have to admit we’re just being conservative here.

GLF

Q1

Turner Holm

Quintin V. Kneen

Yes, I just wanted to dig in a little bit to how you guys see 2018 developing based on the information you have now. You guided for a 20% or more increase in North Sea day rates for the second quarter, very encouraging there. Would you think that based on the rates that you're booking now that third quarter would be about the same? Or it's a possibility to see a little bit more momentum into the third quarter seasonally and I guess the strongest? What's sort of the moving pieces on that?

I do think there's a little bit of upside in Q3 as well, but my expectation is that they will lock a lot of books currently on the spot market in the remainder of the second quarter and that will run through the third quarter and hopefully into October as well. So I would say, the third quarter may be 3 or 4 percentage points. I'm optimistic for more, but that's what I'm thinking about as I think about third quarter this year so far.

KONA

Q1

Mark Smith - Feltl & Company

Berke Bakay

Okay. And then timing on the new openings, are you looking at early Q4 to get two of those? Is there a chance if you get in by Thanksgiving, will they be pushed into Q1? And then kind of that third one, are you looking for that to be kind of an early Q1 opening next year?

Yes, for the third one, we are looking for a Q1 opening. As it relates to the two restaurants in Q4, we are committed to open them during the fourth quarter. So far we should start construction fairly soon and we have relatively aggressive construction planning anywhere from 140 to 148 days give or take. So, we feel pretty confident in our ability to open them during the full quarter, but I am not going to give more specific guidance other than what part of the quarter they may fall.

TWI

Q4

Larry De Maria

Paul G. Reitz

Okay. Thanks. And then I just two more quick questions. You mentioned, Paul, I think that ag order books in Europe were weaker. Is there something fundamentally driving that or is that maybe driven by some [indiscernible] and some other rules in Europe, if you could clarify that specifically? And secondly, price cost, can you just help us understand what kind of inflation for steel and rubber you expect this year and what kind of price increases we should be looking for? Thank you.

As far as my comments on European ag, it’s weaker compared to the rest of the markets that are growing. It’s not in a declining situation that causes panic, it’s just – it’s generally speaking just not as strong as everywhere else and so it’s again not an area of highlighted concern where we’re looking back – that we’re looking to have to pull back costs and reduce production levels. But it’s just not an area of growth – it’s not the same level of growth as the rest of the business. As far as the questions on raw materials, I think our forecast for raw materials on the rubber side of the business, it looks like the supply is in pretty good condition. So the issues that existed in 2017 don’t appear to be percolating at this moment. And steel, obviously there’s just a lot of talk going on in the world these days about steel and specifically from the U.S. perspective. From our North American business, the way we have it structured we do believe at this time we have sufficient supply for steel and we have sufficient capability to pass through any increased costs to our customers in what I would call a timely efficient manner. So our North American wheel business is much different than our tire business. And so as we sit here today, we clearly are watching it closely both supply, costs, price in the market, but we don’t have forecasted headwinds for steel. And that’s generally true across the world on steel but steel is volatile. The announcements of potential tariffs and what may be going on with price competition clearly it’s something we just got to stay very close to. But at this moment, the way things are, the rising cost in steel is not a concern and it’s not even the same situation as what we faced last year with rubber. So at this point again, raw materials appear to be in a fairly stable, neutral environment and we don’t have any forecast for that. And by neutral, I just mean price to cost not obviously price of steel is going up. But for us, the price to cost ratio seems to be very stable.

RAIL

Q4

Doug Dyer:

Charles F. Avery:

Could you please have a brief discussion as to where you think that maybe capacity to deliver cars on a quick turn, who would have that capacity now if anyone does?

Again, without knowing the order books though, one of my competitors I know I think outside, their backlogs are well out. I think we heard and take their comment anecdotally some of the covered hoppers is out a bit, but there is capacity this year. We – as we talked about we have capacity in our Danville facility for certain car types of course. So, there is some capacity out there. But again quick as a relative term as lead-times are three to six months depending on the car type for materials.

GLW

Q2

Simona Jankowski

James Flaws

And then on Gorilla, where you talked about the perceived softness there in the guidance. You commented on thin glass. Is that impacting the revenue growth levels in Gorilla, in particular if that’s causing you to get a lower ASP per square area? And then I also wanted to get an update on your expectations for 3D glass, if that’s something that is going to ship this year, and is going to be a meaningful contributor. And then lastly, it seems that Asahi’s Dragontrail is gaining some traction in the market and is starting to get used as a second source. Is that impacting your Gorilla expectations?

I don’t think Dragontrail is really impacting our expectations. Clearly we don’t have quite as strong a share as what we had originally, but it’s still extraordinarily high. I don’t have an update on 3D, so I’m sorry, I’m not current on whether we’re going to ship anything this year or not. I know the program is continuing to move ahead.

GVNC

Q2

Ren Benjamin

Paul Fischer

Good morning. Can you just give us an update, I think you mentioned in the press release that a 181 patients have been enrolled as of July, how is the enrollment, I mean, is it tracking according to your projections, is it going slower, going faster, is there enthusiasm among the investigators? When do you anticipate based on this rate of enrollment that the complete trial will be completed or a norm will be completed and then also can you just review for me when the next set of interim analysis, after the end of the analysis will occur?

Ren, thanks for the question this is Paul. The enrollment we have looked at the beginning of the year within the six date patients per month range and actually for the first seven months of this year we’ve been at that higher ends so we actually average about 8 patients per month in the first seven months. So, we think that enrollment is good but lot of people think enrollment is kind of like an assembly line and a patient comes in on Tuesday and then another one Thursday and then another one on the next Tuesday, next Thursday and it’s actually not that way at all. So, what really happens is you will get patient coming in maybe none for a couple of weeks and then you get couple of weeks we have several each week. So, its important for us to look at the bigger picture which is a quarter or two quarters enrollment, which we see nice steady progress compared to last year. The other thing is we view it as a benchmark, the genuine tech study in pancreatic cancer, which of course, is a high quality company and we’ve been consistently this year outperforming that benchmark. So, we think taken in all the things together enrollment is doing well. We also projected that 200 patient numbers at the end of the year and the reason for that Ren was alluded to in your question when is the next interim analysis going to be? So, it’s important for us, we felt to be sure that by the end of this year we basically had the patients enrolled that would be necessary for that second interim look and we were on track to do that. So, I think on both of those fronts we’re comfortable, having said that I know Mark and his teams are always looking at ways to improve the quality of the site and continue to focus on enrollment. So, they are doing two things now, they are working really hard to get the data ready for the analysis and to be sure that enrollment is moving forward.

TECD

Q4

William Fearnley - FTN Equity Capital Markets

Néstor Cano

Okay. And if I could switch gears to Europe. On the competitive side, are you starting to see some of your smaller regional competitors struggling and do you think that is starting to turn into a tailwind for you from a competitive and a revenue standpoint in Europe?

Hi this Néstor. And not everybody has the same type of availability, and also the credit limits are being difficult in the marketplace. and as the market deteriorates it becomes an advantage for the companies to have solid balance sheet and they have kind of work [organically]. We expect to see this helping out on growth rate compared with our competition.

RAIL

Q4

Sal Vitale:

Charles F. Avery:

Right, but the actual contribution margin for the individual car you were saying is about similar to that the coal?

We expect that over the long-term yes, when we are fully operational and have the number of these produced in our back pocket.

VZ

Q2

David Barden

Matthew D. Ellis

Hey, guys. Thanks for taking the questions. Thanks, again, Lowell, congrats to you and Hans. Matt, could I just ask some questions on the finance side, just on the lower-tax guide. Could you talk about the reasons why that is, and is that flowing through to the cash flow side of the equation? And do we need to address that in the free cash flow number as well? And then the second one is, could you talk about, I think, as we've done, historically, some of the changes in the union contract forthcoming, how should we think about that impact on the cost structure? I know you gave us about a 20% margin in the wireline side for this year. But is that -- did those negotiations give you some window and potentially having some upside in that margin number in the wireline business? Thanks.

Yup. Thanks, David. So I'll start with the tax question. So as you look at the first half of the year, the ETR was impacted certainly by tax reform, but we had a couple of one-timers in there, especially related to the pension contribution we did in first quarter, but you wouldn't see necessarily flow through to the second half of the year. So that's why we're guiding toward the lower end of the 24% to 26% range for the year as a whole. In terms of it flowing through to the cash flow. I would say certainly you should expect cash taxes to be positively impacted this year by tax reform. We did not have that in the first quarter because we had no scheduled payment, as you know. Second quarter, we had the first two scheduled payments for the year, and so started to see those flow through, expect to see lower tax rate flow through to our cash tax payments in the rest of the year, and that's certainly behind the commentary that we gave around the ability to strengthen the balance sheet this year. So expect to continue to see the benefit from the lower tax rate. I'll let Lowell answer your question around the new union contract.

CTAS

Q1

Michel Morin:

Michael L. Thompson:

Yes, hi, again. Very quick one. Energy cost, how has that changed over the year… year-on-year?

Michel, we probably didn't hear it before, but I did say that it really has not changed at all over the last 15 months. It’s basically been about the same level of 3.4%.

BKYI

Q3

Unidentified Analyst

Mike DePasquale

Yes. Just ballpark, first question, and also do you have a general, I mean that facial recognition for Apple, that's probably a lot more expensive to you, right, for another consideration.

Well, yeah, because the camera obviously is quite sophisticated and it's their device. Keep in mind, it's a proprietary technology. So it's not going to be widely or pervasively available to other vendors like Dell or HP or Samsung anyone to integrate into their device. So that's kind of a separate issue. On the subscription side, we have a handful of customers. We just started that push. Barbara really began that change in the second quarter and so we have a handful of customers and we think that will grow over time. It certainly makes it more affordable for these customers to be able to buy or acquire the technology and deploy it. So it's good for them and it's good for us because it will ultimately make us more predictable long term, but many companies, especially many small and medium sized software companies are going through this transition and it can be somewhat painful in the beginning, but I think in the long term, it's going to pay off.

BGFV

Q2

Sean P. McGowan

Barry D. Emerson

Okay, good. Barry, would you mind repeating what's the net per share effect of the closings and impairment in the second quarter? And then, any comment you would have on the balance of the year? And I have a follow-up question on that for either one of you two.

Last year? Okay. Well, okay. I mean, so last year included $0.02 a share of impairment charges. It also included -- I'm sorry, let me -- $700,000, plus or minus, of store closing costs, $0.02 a share, as well as $200,000 of impairment costs, about $0.01 a share. So a total of $0.03, Sean.

KLAC

Q4

Timothy M. Arcuri

Richard P. Wallace

And then I guess, just a big-picture question for Rick. Rick, I've been covering KLA for like 16 years and KLA never used to miss on any number. They never used to miss guidance, very predictable results, operate with a lot of backlog. And now every quarter it seems like we're guiding below or margins are whipping around a lot, yet you still have about the same amount of backlog that you've always had. So I was just wondering if you can sort of wax poetic a little bit about maybe what's different about the company today because it seems like it's becoming a lot less predictable and a lot less operating with a lot of backlog as it used to, and I'm just not sure why?

Yes, great question. I think -- 2 thoughts, and I'll let Bren weigh in on part of this answer. It's interesting if you look back in the last 4 or 5 years. The predictability year-on-year has actually never been higher. Our ability, when we go back and look at our plans for our calendar year, our internal plans, fiscal year-on-year, it's actually pretty close to what happened. The volatility has dramatically increased on a quarter-by-quarter basis, however. And I think it speaks a little bit to what's going on in terms of fewer customers, fewer units, larger ASPs. And the backlog is partly affected by our customers not needing to take things early or not wanting to take things early but not wanting to have them late. So they want all the equipment to come in at the same time kind of to Bren's comment earlier, when they're looking at a ramp, they want to front-load it with process control. But when something moves out as it did in the September quarter, the guys that want to move in, did -- it's not a plug-and-play in terms of being able to fill in that revenue. So I think the backlog is still very solid, it's just not as fungible in terms of short term as it was. Bren, if you want to add anything to that.

BLIN

Q3

Howard Halpern

Ari Kahn

I'm okay. With I guess, the restructuring complete, can I guess you go over a little bit of now what and you have now offered units what's the average sales cycle time and then implementation once a customer is acquired?

Sure, sure. So the Celebros product line has an average sales cycle of two or three weeks, so we had made six sales and 12 weeks in our third quarter, so I guess that's a two-week average and there is very little implementation effort on that is may be a week worth of implementation. On both the OrchestraCMS and the Bridgeline Unbound, the sales cycles there are four to six months with implementation times and with six-month range as well.The OrchestraCMS sales we tend to commence those deals later in the sales cycle because we're being introduced by salesforce.com in many cases. So the sales cycle might already be two months in before we enter that [indiscernible] four months of our participation.

HLX

Q2

Roger Read

Johnny Edwards

Okay, and then a final question, the HP I expectation you get that back on the Phoenix field starting up, I guess September, do you have, I mean that’s kind of the hurricane season obviously, September in terms of disrupting operations. Is that factored into it or is this timeline you’re considering right now basically consistent with release from Macondo unit and the shipyard and then that’s when it would be available, I mean can you get it on sooner, would be I guess the short question there.

Our outlook is strictly based on our guess on when the vessel will be released from the Macondo efforts. So we’re assuming late Q3, but it could be sooner or it could be later, we just don’t know. We’re out there to help the situation as long as BP needs to, the vessel we’re going to her out there.

BGS

Q2

Andrew Lazar

David Wenner

Got it. How about on the volume side, volume improved this quarter obviously as you had hoped it would, with pricing being and promotions being a little more judicious, I mean, is a good outcome for the back half to have volume that's also sort of flattish to up a little bit, is that what you're looking for, is that more hope than reality, or is that something that's achievable?

I know you like catchphrases for your write-ups. My catchphrase on this one is flat is the new up. Flat to slightly up with neutral pricing would be a very good outcome I think.

UHS

Q2

John Ransom

Steve Filton

Are you seeing any large acute care deals that you are even close to pulling the trigger on, I know you guys are very sticky and you should be commended for being so. And then conversely do you think it’s possible you might explore anymore acute divestitures?

I think as Alan suggested we are seeing a large number of deals available out in the marketplace and I think that’s reflective of what our peers say as well. As you suggest John we're quite proud of the fact that we're very judicious in how we evaluate those deals and what we choose to pursue. Our general sense on the acute stuff especially is that those deals are going to be available, not those specific deals, but deals of that kind will be available now for the foreseeable future. I mean I think the landscape of healthcare is changing in the country and there’s pipeline that is robust at the moment, I think will remain so. And so we'll continue to look at those kinds of deals. Just as we're looking at organic expansion, I alluded to a couple of new projects in my remarks that were underway, and new beds in behavioral. Again all those items are on the table as we think about our business going forward.

TER

Q2

Chad Dillard

Mark E. Jagiela

Can you talk about how you're tracking on your memory share gain targets? I know before you were talking about 3% to 4%. Where are you right now in the year? And where do you expect to be at the end of the year?

Sure. Memory is a little bit of a bright spot in that the share gains, we're on track for the first half of the year with what we said, 3 to 4 points of share gain. We're seeing increasing demand in memory, actually. The -- both DRAM and the Flash speeds are going up dramatically. That is causing, I think, unplanned obsolescence at some of our customers. Whereas they had hoped they could reuse some legacy equipment, the mix shift toward higher-speed DRAMs and higher-speed Flash is driving a little bit more demand. And that's playing into our products' strength and driving our share north. So last year, we finished around 25%, 26% share of the memory market. Our goal this year is if we can stretch it to 30%, plus or minus a few, it would be great.

CTXS

Q3

Karl Keirstead

Arlen Shenkman

Thanks very much. Arlen, I've got a couple for you. A little bit more modeling questions. First, if you could maybe help define what sharply negative means when you're talking about Q1, are we talking down 5%, 8%? Just -- that's not typical language you guys use for revenues. They're normally quite steady. So maybe you could help us there. And then secondly, just on the operating margin front, there's, as you're aware, a fairly healthy debate among investors about whether COVID and the crisis has fundamentally changed the margin structure of software companies as reps don't need to be flying every day and conferences can be virtual, et cetera. You didn't explicitly provide margin guidance for 2021, but your revs and EPS guide look, maybe I'm wrong, but it feels like up 75, 100 bps, something like that. Where do you land on that question of whether the crisis we're in has changed the margin outlook of Citrix in the broader sector? Thanks so much.

Sure. Thanks, Karl. I think when you think about 2021, obviously, we had a 20% growth rate in the first quarter. And there's work for us to do in terms of how we think about the business. And we're certainly not in a position to provide quarter-by-quarter guidance when we think about 2021 at this point. But I think we just wanted to help you in your model to start to get your arms around the concept that it's going to be challenging because we're going to be writing SaaS licenses for these converted customers. And so there will be a headwind. We, obviously, as we go into fourth quarter, we'll be able to provide more guidance. But David and I thought it was important just to make that everyone recalls the significant growth rate we had in the first quarter last year, and obviously, we take that into account as we think about normalization and acceleration through 2021. The second question around op margin. I think my two sense are, obviously, you're going to have decreases in travel, but you're going to have increases in other areas in terms of enablement and employee empowerment and helping your employees make the right decision for them based upon their role and where they can be most effective in getting their jobs done. As we think about that as a company, that's what we do. And so we, as a company, will continue to invest in our business to ensure we have the right processes, tools and infrastructure in place to make our customers successful. So I don't see it fundamentally changing our business. I think that there will be a lot of companies that have to address needs of their employees by moving money from one portion of their P&L to another. There certainly could be from a real estate and from other areas longer term benefits. But when I look at our business, I think David and I see great opportunities to grow this company, and I think you'll continue to see us invest towards those growth opportunities.

HY

Q4

Mircea Dobre

Al Rankin

That makes a lot of sense. I mean, hopefully, we will be able -- once the deal closes, to get some, maybe some numeric perspective as to how you are thinking about it longer term and the contribution it could make. My last question is really on Nuvera, and I know we discussed this segment back and forth on calls, but I struggle to really see any operating improvement here. You have had this business for three years. It's something like $100 million worth of pre-tax that has been sunk into this business, now you have taken a charge. And I am going to ask the question that I have asked before, at what point in time do you conduct an assessment here and you decide that you might need to alter course and really kind of redirect the earning power of the business away from this?

We don't expect to do that at all. It's just not part of our strategy, if something happened at some future time. But we feel -- all I can say is, I think we feel a lot better about it than we did a year ago. We have professionalized the business and we are moving it forward and what we think, as an orderly constructive way and from a long term perspective, it's by far the biggest opportunity that our business has to add profitability to our overall company.

MPC

Q3

Corey Goldman

C. Michael Palmer

Hey, guys. Just a quick question on the MidCon fleet during the quarter. Obviously, DAPL, it's still ramping; can you just tell us how that impacted if at all the MidCon refineries in 3Q?

Yeah, Corey, it's Mike Palmer here. DAPL became operational in June. And obviously what that does for us is it does give us the conduit into Patoka for the North Dakota Light crude. And over the third quarter, I can tell you that we've been ramping up the volumes of North Dakota Light as it has been attractive relative to the alternatives. So it's – again, it gave us the optionality we needed to take advantage of a well-priced feedstock.

ACAT

Q1

Stephen Roseman

Tim Delmore

So, we’ll get it here sorry, open it up, so in 2011, units up 24% versus the dollar sales up 61%, just in the Snowmobile category. Versus, for example, in 2010, it was up 33% and 33%; 2009 down 31%, down 35%. Again tracking pretty close. I understand there is a difference in the shipped, but it just struck us as worth asking about certainly when we got together with you, guys.

Very good question, but again, no surprise to us with the – we see the mix every day and every year and no surprise to us.

PTEC

Q1

Rich Kugele - Needham & Co

Woody Hobbs

A few questions; I guess first, in terms of your place within the broader food chain, I believe that you intend to be actually a lagging indicator around broader PC units and so maybe a 6% year-over-year decline or sequential decline is not really the right way to look about it.Do you think that the types of decline that we’ve seen from the other OEMs is something we should see maybe the balance in your decline in this upcoming quarter; is that the right way to think about it or do you think that the inventory within the supply chain of PCs both in finished and work-in-process is down enough where maybe it gets less than that type of decline where something with a two in front of it?

I think that, if you’re thinking about OEMs, you certainly are right that there is a difference in our timing in the OEMs. However, our timing more closely matches Intel’s and AMD’s, because the chips are sold and the BIOS is put inside the computer and we’re both on somewhat the same kind of conditions in terms of revenue recognition. So, I don’t think you can match it exactly to the OEMs and I think Rich can enhance it from there.

PRM

Q2

A.J. Guido - Golden Tree Asset Management

Kim R. Payne

Looking at second quarter, so you had $4.3 million in one-time costs and you have a $1 million insurance recovery. Theoretically, should we be looking at pro forma EBITDA $3.3 million higher than the $14.9 million?

We are not giving specific guidance in the quarter. These are some things that happened this quarter that identified.

ANET

Q1

Paul Silverstein

Jayshree Ullal

So as much as I’d like to ask here again, for how much of the weakness is supply chain versus the demand. I want to say, it’s a different question which is interestingly you have come up with – may be not try only this quarter, but I’ve got sort of in terms of the classic question risk displacement for the cloud titans that investment community worried for quite some time.And going to recognize its not currently just for day given the background in the current macroeconomic environment. But any change your – about to lay your position with the Microsoft in particular in [indiscernible] in general relative to that order concern.

Okay, I will try and answer the question you are sounding very muffled, Paul. Maybe you're wearing a mask. But if I understood the question, what does the competitive landscape look like with cloud titans and I would just sort of generically say that our fundamental thesis is unchanged. We're not seeing major competitive issues or architectural shifts.In fact, if you look at the recently released market data from both Deloro and Creehan, it validates our number one spot in 100 gig. And for the third consecutive year, we are doing that, where we are the number one market share in 100 gig.And we continue to increase market share into the high teens for high-performance data center switching. So, we are pleased with our progress year after year, including 2019. Anshul, I'd like to call you to see if there's any specific titan issues you want to highlight.

NMBL

Q3

Amit Daryanani

Suresh Vasudevan

Thanks a lot. Good afternoon guys. I guess just following on that question, Anup, it's you from I guess replying backward pricing or competitive pressure on your own side because your gross margins are ahead of your own locking target. Do you now see there is enough price velocity I guess in this marketplace for you to lower margin and potentially take more share and hit those targets you've had in the past?

Yeah. Amit, this is a good question. I think we have answered -- address this before as well and I will say this on any given deal typically we don't walk away because there is a point at which we are not willing to match our competitor on price. In larger deals what we tend to see sort of happening as a result of price is two things. One, the customer evaluation cycle gets longer and so often deals that we've noticed a greater than 10% elongation in our sales cycle, as customer spend more time sort of going back and forth if you will on the decision-making and that's one factor. The second factor is in many instances the last word the long's to the incumbent. In many instances when EMC or NetApp's say they are willing to go all the way down in price to hold off any single project that tends to be the barrier. What we have also noticed is every one of those instances is one where we go back on the next project or the project after that to the same customer. So you may lose a project on price, but inevitably the fact that we have been evaluated by the customer who keeps the door open for us.

ROST

Q3

Oliver Chen

Barbra Rentler

Hi. Congrats on best comps in retail. Regarding the comps and traffic gains, what was happening with traffic with respect to how they were -- it was so impressive? Were you able to chase into categories and did you have to delay shipments in terms of some of the seasonal weather? Just curious about how that traffic number was so impressive. A related question is just on the merchandise margins. Is that attributable to the strong inventory control? Thanks.

And in terms of chasing into categories, again there’s been a lot of availability in the marketplace. So the merchants are out in market every day, looking for opportunities, so they’ve been able to chase into categories that we are selling. In terms of seasonal products, we had relatively conservative seasonal plans for the Q3 and so seasonal performance has been overall fine at this point in time and the categories go-forward remain to be seen what we find out in the marketplace as we chase our way across.

SYKE

Q1

Shlomo Rosenbaum

Chuck Sykes

Okay. Thanks. And then lastly, has there been some fundamental changes undergoing in the financial services vertical since Drew Blanchard joined?

You mean internally insight? Or are you talking about from a market perspective?

NVDA

Q2

Mitch Steves

Jen-Hsun Huang

Hey. Thanks for taking my question, guys. So just kind of circling back to the datacenter piece and the deep learning aspect. Is there a change in ASPs you guys are seeing when you enter that market?

No.

RDUS

Q4

Matthew Harrison

Gary Hattersley

And then sorry one other follow-up that I just wanted to ask, can you just detail in terms of PK data that you have on slide 31, how many patients – what was the sample size that you had to generate the AUC exposure, can you have any arrow bars on here, how variable was the response and how confident do you feel in patch to patch variability.

That's actually a great and actually a very important question. So the dataset you're looking at on that slide is derived from 20 patients with our optimized patch. And so from a PK perspective, that's actually quite a rich dataset that does actually give us a very good handle on what the variability of the patch is and I think we're very encouraged to see that that patch variability is in line with what we see with subcutaneous injection and that's even a prepay experience with our prototypes as well. And also that, when we’ve conducted this exposure response analysis, putting this transdermal PK data into that model, one of the things that it looks at is also the inherent variability. So when you see the estimated mean and 95% confidence intervals for the BMD change on I think slide 32, you're actually seeing the integrated effects of variability in that model as well again, which I think gives us high degree of confidence that we have a patch that is suitable to go into the pivotal study with a great probability of success.

BLDR

Q2

Megan McGrath

Peter Jackson

Good morning. Just a quick follow up on multifamily comment. You're not the first to talk about maybe a working through a little bit of backlog in multifamily in the second quarter. So just curious where you see that backlog now? Will we see a bit of a payback in future quarters or do feel like it's stabilized a little bit?

I would say for us we're seeing stabilization. We think our backlog looks pretty good, growing in some parts of the country. So we feel pretty good about it.

OSUR

Q3

Frank Takkinen

Roberto Cuca

Great. And then maybe one for Roberto. We saw gross margins came in at 63%. It's definitely a nice contributor to flipping the model back to profitable fourth quarter. I was curious if you could comment on that level of margins given the increasing mix of molecular collection and the expected continued momentum behind this business?

Sure. So, you correctly deduced that the driver of that is the COVID-19 products and we continue to expect those to be growing contributors to our revenues. So versus the third quarter and the fourth quarter -- in the fourth quarter we expect gross margin to be at least as good as the third quarter and likely a bit better given the historical seasonality in our commercial genomics business. There will be some moderation to the gross margin as we see continued growth in our HIV international business, which is a lower gross margin business. But we do overall see this as a sustainable gross margin level that will see some seasonality from quarter-to-quarter in the coming year.