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Financial Services Innovation Lab, Georgia Tech 19

LBRANDS

Q2

Jennifer M. Davis

Stuart B. Burgdoerfer

A couple of clarifications on earlier questions. First, Sharen, on the bra launches, are there -- on the new introductions, are there any new technologies coming out? And Nick, on the market intensification efforts, are you only in Chicago right now? And then just a general question on Henri Bendel. I know it's a very small piece, just wondering for an update there.

And Bendel -- it's Stuart. We're obviously optimistic about that category. We added a number of stores to the business over the last few years. We've got a team there that is working hard to drive growth in sales and margin and so on, we're making progress, and we think it's a great category. And we're seeing progress in the business this spring and optimistic that, that business will deliver further sales growth and margin improvement in the fall.

AAPL

Q2

Bill Shope

Peter Oppenheimer

Okay thanks guys. Given your gross margin performance over the past several quarters as well as the guidance, how should we think about the long-term 30% gross margin target that you’ve mentioned in the past. It seems that just looking at the product mix, particularly on a GAAP basis is mathematically very difficult to get there without some fairly drastic changes to the business model. How do you guys think about that longer-term?

Well I have given you our guidance for the June quarter at about 33%. For the September quarter, I think our gross margins would be about 30%. We – I’m not going to make comments on fiscal ‘10. I think the important part is as you look forward, it’s just to understand that we are very, very focused on delivering extraordinary products to our customers and we’re going to provide them ever increasing value and we just don’t want you to count on the gross margins that you’ve recently seen which have benefited from just a tremendous commodity and component environment.

B

Q4

Edward Marshall

Gregory F. Milzcik

Yes, I think there's a lot of happy people out there today. Well, I mean just the deal multiples alone, I'm assuming that it looks a lot like just because of the synergies that are anticipated between the 2 businesses because they seem higher than some of the other multiples in the industrial space.

I'll tell you that there's tremendous synergies from a variety of perspectives. And I think that when we looked at how many synergy -- how much there was with synergies with MSC compared to our own company, it just confirmed our overall strategy that we need to be a more closely aligned manufacturing service business. And I think that the folks at BDNA will really appreciate being associated with a pure distribution company. They think distribution, they have been very successful over the years. The sales folks will have a lot more to sell, their product line offering will expand, so I really think this is a win-win. And it's part of our transformational strategy. We are definitely doing what we said we would do, and I'm really pleased.

SANM

Q4

Bob Eulau

I guess one observation is, is that in the past some of the shareholder value write-downs – which it looks like most of your acquisition write-downs are behind you hopefully, given where your goodwill’s at, et cetera, is that in the past some of the shareholder destruction has been having to write down something you purchased. And it seems like you have a decent business today, and so whether it’s in prior years paying 8% for leverage to somebody else to get a return or doing an acquisition or rewarding somebody else, it seems like if you stay on the same path, maybe do small acquisitions where you have to, that your shareholders today, including management, will be rewarded one way or another down the road based on these cash flow estimates. So I just wish you guys the best and I give you an A+ for the last three-year track record. Good job.

But, Rich, let me just add one more thing. I think we had a very difficult time to operate. We had a lot of debt after acquisition of SCI. Today, especially if you look at the last three years, we’ve brought it down to what I’d call reasonable. Personally I don’t like any debt and we’ll continue to drive debt down, but we have a lot more flexibility to do what’s right today in how we’re going to grow each of these businesses. So we’re not going to do anything crazy. I think, in a flat market, we’re going to continue to generate cash, try to improve the margin in each of these businesses. And in our growth area, I really believe we’re going to be throwing a lot of cash to the bottom line, because each of these businesses are now poised to do better. And I would like to leave it with that. So I appreciate your positive comments, but we’re really excited what think we can accomplish the next couple of years.

MPAA

Q2

Jacob Muller

David Lee

Right. We're currently running at around $4 million or so, is that correct?

$4 million, can you expand on that?

OCX

Q1

Paul Knight:

Lyndal Hesterberg:

The last question I have Ronnie is on that paper, what Lung-RADS classification were these samples?

Yes. All of these were – these nodules in patients fall between 5 and 3 centimeters, 0.5 and 0.3, my apologies. And so those were all early stage low Lung RADS and as will be reported subsequently once the embargoes over. They’re all very early stage cancer patients which also is quite unique to Doug’s point.

CTIC

Q4

I have 2 questions actually. First on Pixuvri, you mentioned you were going to talk with the regulatory agencies in Europe about moving from OS to PFS in terms of the endpoint. Can you characterize how much discussion you think that might take? And then the second, can you -- when we talk about your JAK2 inhibitor, there is a discussion generally with investors, there's a discussion generally about the GI AEs. Can you talk about how did those -- the AEs were managed in prior trials and how you're characterizing -- or how you're managing those side effects in the ongoing trials? Because I think there's a little bit of a question as -- in investors' minds as how they've been handled previously and how they will be handled going forward

Sure. First for Pixuvri, we anticipate talking with the EMA representatives in the second half of this year. We believe those discussions should be straightforward based on their recent published guidelines and past discussions that the company has had with the EMA. Can't give you more than timing than second half of this year.

ACAT

Q1

Craig Kennison

Claude Jordan

Are you able to quantify the dollar impact of attachment you get with PG&A for Wildcat, if you will?

Right now I’d say, we’re only a couple of months into shipping the Wildcat, so it’s really hard to come out with an attachment rate on that just yet.

POWL

Q4

J.D. Padgett Boston Company:

Don Madison:

When can we see some resolution there?

Basically, we have a ruling from the court. That ruling took place about late in the second quarter. What we have been dealing with since then, and it will continue until early part of next year, is the appeals process.

BGFV

Q2

Steven L. Martin

Barry D. Emerson

Could you give us a little more specificity on the third quarter guidance because your guidance implies the smallest increase to gross margin and the smallest improvement in SG&A expense that you've had for a while? And is there something specific about this third quarter that would lead to very small improvement in gross margin? Especially when your mix -- I'm sorry, especially when your mix of apparel has been so much stronger.

Yes, Steve, we're -- well, I mean, our guidance for the first -- for the third quarter is positive low single digit. Of course, that's down from what we had in the second quarter and the first quarter and frankly, the fourth quarter. So we are going up against tougher compares. From an SG&A standpoint, we do anticipate leveraging for the third quarter. Now, as I've mentioned, we're able to leverage our costs at levels lower than we have historically. So even at the low single same-store sales growth, we're able to leverage our expenses and expect to do that. Now margins for the quarter, again, it depends on promotional cadence, it depends on -- if there's an offset to sales growth and things like that, at the high end of our guidance. Our POS margins will likely be positive at the low end of the guidance. Our POS margins could be -- it could be negative.

HPE

Q4

Amit Daryanani

Tim Stonesifer

Hi, thanks a lot. Good afternoon, guys. I guess couple of questions from me as well. When I look at the fiscal ‘18 guide, which you guys are talking about the Q1 historically, Q1 is the kind of about 20% to 23% of full year EPS and implications about 17.5%, so it seems like a much more back end loaded year than normal. Could you just talk about what other lever that give you comfort that back half will be so much better and is it all really around the restructuring initiative, is it different levers of growth vector that you have in the back half that give you confidence here?

Yes. Again, I will go back to two things. As far as looking at last year’s seasonality as an example, it’s a little bit skewed because of one, the memory costs increases, so again remember last year that increase didn’t happen until call at the latter part of January. So whereas when you look at this year we have a full year impact or full quarter impact of that elevated DRAM costs pressure. Again I’ll go back it’s really I think the biggest driver is HPE Next. So when you look at that $250 million of cost savings again two thirds of that are roughly two thirds of that is in the back half of the year and the reason that is when we’re doing this clean sheet exercise we’re being very thoughtful as one how can we implement this correctly, and then two how do we minimize business disruption. So if you think as an example the simplification of the regional structure the reducing the platform, the SKU rationalization, that does take a little time to work through, because we want to make sure we get that right. So we minimize any business disruption, so that’s really the primary driver along with the M&A that I spoke about and some of the other things, but the HPE Next is the big driver.

POWL

Q4

Fred Buonocore CJS Securities:

Don Madison:

Finally, on working capital, how should we think about this as it relates to, and you continue to have strong orders, you're continuing to sort of finance these projects for your customers, at what point do things catch up to where your cash flow from operations is a source of cash as opposed to use.

At this point in time, I think that the full year 2009 will result in a source of cash. When you are looking at the first quarter, the first quarter will likely continue to be a use. But at this point in time, I think that we will turn the corner and start seeing positive cash flows predominantly coming from reductions in working capital relative to revenue around midyear.

GCI

Q3

Craig Huber

Gracia C. Martore

And Gracia, is that to say the circulation daily was -- I think you said second quarter pretty much it was down in the 11% range --

It was down in -- yeah, I think it’s in the low- to mid-teens, in that vicinity.

DOV

Q2

John G. Inch

Paul E. Goldberg

But if you... Paul, if you look at 2008, Triton wasn't really losing money, right? It was... you get...

No, they were.

B

Q4

Matt J. Summerville

Gregory F. Milzcik

Okay. And then, I guess, would you say your OEM business at this point, excluding 787s, so your legacy platforms, would you say that you're seeing a business level out the door, so parts going out the door is commensurate to how many planes the OEs intend to build as they've raised their forecast?

I would even include 787 in that. There's been no halt to 787 ramp-up at all. I know they have the issues with the battery and like, but there's they've been no impact that I've been able to ascertain, and that's the feedback we're getting from our customers as well. So we're seeing that there's a delay of 6 to 9 months or it's in advance to 6 to 9 months. In other words, it's 6 to 9 months from the time we ship a product before it gets out to the OEs, the final OE that is.

NVDA

Q2

Blayne Curtis

Colette M. Kress

Hey, guys. Thanks for squeezing me in here, and great execution on the quarter. Two related questions. One, I just – Colette, I was just curious, your view on the return – use of capital and buybacks obviously an accelerated one, only $9 million in the last quarter. What's your view going forward? And then Jen-Hsun, maybe a bigger question in terms of use of capital, whether you could talk about – you said CPU is not an area that you would want to go into, but obviously GPUs have legs. I was just curious if you have to look around at other areas, maybe in the datacenter where you could also add value?

Yeah, thanks. Thanks, Blayne. The return of capital continues to be an important part of our shareholder value message, but remember, it is still two parts of it. Part of it is still dividends and part of it has been our purchasing of stock. So as we continue to go forward, the dividend is definitely a long-term perspective and we'll make sure that we can watch the dividend yield there to stay competitive and also looking at our profitability. Our share repurchase, we'll look at the opportunistic time for those repurchases and making sure that we're also doing that carefully as well.

DOV

Q2

Terry Darling

Ronald L. Hoffman

Thanks. Wondering if you could comment a little bit on what you see changing on three items for the second half of the year, that you've addressed that sort of implicitly a bit first, on organic growth, 5.5% or so, this quarter, very strong. Looks like on a book-to-bill, we ought to see that pullback a bit. And then wondered if you could also talk about this raw material price, continuing into the second half. You're being cautious on it. Is that just based on the macro factors? Or do you have some visibility on that, continue getting tougher for you?

Kind of addressing each of those questions, certainly from an organic growth standpoint, we've identified that we forecast 4 to 5% organic growth through the remainder of the year. There's not a lot of acquisitions that we did in the end of '07 that will fuel acquisition growth. So we still feel pretty good about that number. I would also say that referring to, back to our book to bill I think, we kind of covered it fairly well in the last comments but there wasn't anything significant in the market that really caused us to see a significant change in business level. We were up year-over-year. We continue to feel very strong about the oil market. We continue to believe their product ID is going to hold up well. Electronics certainly has a nice comeback in the quarter where we would like to think that we'll see some of that hold up, but that's always a bit of a variable market. But we still feel pretty good about the economy right now. Terry, it's been a pretty strong year so far. Racking the raw material prices, I think we've done a number of things to prepare our companies to be less a more proactive as it relates to the raw material pricing and kind of how we handle that. We did a lot of moves of our companies to Mexico to other Eastern block companies to increase our presence in Asia over the last couple of years. There was cost associated with that. I think we are getting the benefit of that now. I think our companies have internal initiatives on synergy. They are making it more efficient and then I think we are doing a much better job of analyzing the real value we bring to our customers and appropriately pricing through that. And I think those things in total have caused us to offset majority of our raw material price increases year-to-date.

GIS

Q1

Ken Goldman

Ken Powell

Hi. I have a bit of general question. What do you think has to happen for the food industry to get out of, to me, what seems to be the fairly self-destructive pattern of heavy promotional spending right now? Do we just need and this is really across a lot of categories? I'm just curious, if someone just have to say enough is enough, I am going to loose volume in order to restore some, I guess, price rationality or are you just getting so much pressure you being the industry from large retailers to fund deal back that even if you want to be more rational it might be a little difficult at the current time?

So, Ken, its Ken Powell, and thank you for the question. I would say that we have albeit Q1 aside. And we can talk in more detail about how that played out in the comparison of this quarter to a year ago and some of the plumbing around that. But I would say in general as we look at price points, as we look at promotional discounts and this sort of thing, we have maintained fairly steady levels there across our categories. But to your general comment on what’s it going to take industry wide, I think all the roads lead to higher levels of innovation. I'm continuing to focus on brand renovation making sure that we have the right level of messaging behind our core brands and new products. I mean, I think ultimately innovation and capitalizing on consumer trends is what gets -- what gets us to higher levels of growth. And the reason we’re so certain of that is because we see that when we get that formula right, we get a very market response from consumers. We talked a little bit about some of the cereal changes in Cinnamon Toast Crunch, Lucky Charms. Last quarter, we’re seeing the response very rapidly. This quarter we have developed now over the last year and a half and launched very good varieties of Greek Yogurt as an example and in support of those with very effective marketing campaigns and it’s very satisfying now for us to see those products to gain traction. We changed the formulation in the positioning of our core Yoplait original and that brand was up double digit this quarter. So behind consumer targeted initiatives, so ultimately the answer to your question, which I think is the right question is innovation, core renovation, strong consumer communication, that will get us where we need to be.

VSH

Q3

Joe Flaningvil

Gerald Paul

Hi good morning, it’s Joe Flanningvil [ph] on the line for Shawn Harrison. First question, I think you kind of alluded to, you said the MOSFET’s book-to-bill has improved here in October, can you get a little bit more specific in what kind of book-to-bills you saw throughout the month of October and by ...

I want to be that precise, but you know, in the quarter, it was 0.5. Let me highlight it substantially better than that. But still not on the level we would like to see as you mentioned, but substantially better especially on the MOSFET.

BGS

Q2

Andrew Lazar

David Wenner

Okay. Lastly will just be, as you talk preliminarily about 2015 around inflation and pricing, is there a way to sort to start to help quantify a little bit, even though we know its preliminary, in terms of what type of overall sort of cost in goods increase you might have, and therefore with the type of pricing we are talking about, to try and hold your margins steady?

It's not at 1% of sales yet. Of course, that's developing thing. We are at mid-year 2014, so it's hard to project the full year 2015. Right now, we are looking at an increase that's below 1% of sales. What justifies taking price increases in that context, is it falls hard in certain product lines and not so much to the other product lines. So to the extent that fruit prices are a driver of this, and fruit is a very important part of the Polaner line for instance, you have to look hard at what kind of pricing you're going to do in that particular category.

DOV

Q2

Scott Davis

Robert A. Livingston

Okay. Last question on Paladin. It's... can you give us an indication of the rate of change? Is it still negative? Have we stabilized at all at lower levels or are we still going down?

Well, I would... certainly, the demolishment recycling market of Paladin has continue to hold strong. That's been really the highlight of that marketplace. The utility business within Paladin has really performed well. Heavy construction, light construction certainly has been down. We don't anticipate any significant change or improvement in that through the course of the year. I would also point out, though, Scott, even with those challenges, we have been doing significant things behind the scene to improve our cost base in that business. We have also been seeking greater synergies among our companies. We have closed some plants to streamline the business, and that business was a double-digit margin business in the second quarter.

NWSA

Q2

Jessica Reif Cohen:

Chase Carey:

It was on TV Everywhere, just on your views on where you are?

I think it's again, I prefer to call it authentication because I think it's a better price I think it sort of as you move forward into an array of digital platforms, how you package it and create value out of it. So I think it's a good thing, I think it's a bit of a, it has struggled to get going. I think to some degree it’s been encumbered by a cable industry that tries to create too many walls around it. I think if, it is going to be enhanced a bit. It was approached in a more open like where it had a more of an opportunity for an array of digital platforms to consist in an authenticated world. And I think it will be a good thing if we get some traction. But do I think its, but it’s got a, like at the end of the day its success is going to be built on making it a good experience for the consumers and if you turn to find other options which is like I think cable industry ought to sort of, the cable satellite industry just about, the distribution industry ought to find a way to make it more open and enticing and appealing and an opportunity for consumers and what does it do a good job and succeed, because then if they, consumers are going to migrate to where to the experiences they value and like. But I think authentication is an important initiative and something we'd like to see succeed even it’s a little frustrating, it’s been talked about for two years and still hasn’t yet gotten very far.