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Financial Services Innovation Lab, Georgia Tech 19

NMBL

Q3

Alex Kurtz

Anup Singh

It sounds like the October guidance from an enterprise perspective you guys assumed some large deals in the enterprise side we're going to close, right?

That’s right.

SWN

Q3

Brian Singer

William J. Way

Great. And what are your current drilling completion costs in the Marcellus?

The wells are averaging between 6.4 and 6.8 depending on location. The newest Lycoming wells are obviously deeper and longer, but we're in that range.

CMN

Q1

Mitra Ramgopal

Jorgen B. Hansen

I guess I'll [indiscernible] but I was reading recently again that Europe seems to be potentially could be heading into a recession. Are you more inclined to sort of slow things down there like the recent acquisitions and focus more in Asia, especially China and beyond?

I'll take this question. I mean as you know, Mitra, [indiscernible] maybe provide healthcare and our key businesses in Europe are focused around [indiscernible] Endoscopy which is a top focus for most of the healthcare systems in Europe. We haven't really seen any pressure on that in terms of investment. So even that you see some slowdown in the currently overall economy, I don't think we anticipate anything that has a material impact on the businesses we are in, which are very important to the healthcare providers and a small subset, very small subset of their overall healthcare spend. So I don't really think it's time for really refocusing that.

FISV

Q4

Bryan Keane

Thomas Hirsch

My first question is just about the Check business. I know, Jeff, you noted that as that business volumes are declining. I guess, can you size that business for us? And I guess going into 2012, is it just becoming so small and it's not going to be material by then?

Yes, and I think to Jeff's point there, Bryan, I think a lot of that electronification though, we should be -- by the end of '11, we believe we will be significantly along that ramp as far as electronification goes. So that compression as we look into 2012 should become much better because we just won't have as much as what we're going to experience here in '11. And going into '12, we're going to be in much better position because that electronification is not going to be fully 100%, but it's clearly ramping to that particular level.

HY

Q4

Mircea Dobre

Colin Wilson

Oh, so that's really helpful. When we are thinking about sort of the delay if you would, between the pricing actions that you implement versus what's coming through in your P&L, is it fair to say that this typically normalizes within a six month time span, hence your guidance for front half, back half, or is there something else that we should keep in mind?

It varies very much by supply, and where it is coming from in the world, as far as the components are concerned. I mean, we do buy steel Mick. I mean, we don't buy a lot of it into the U.S., we buy quite a bit of it in Mexico, just to put color on to my previous comment, that -- what we have tried to do always with our supply is push out price increases as far as we can, and as far as what we could buy from a steel point of view, we try to lock in when prices are favorable, three month, six month forward contracts. As far as we can negotiate with the middles and the suppliers. As far as our regular components suppliers are concerned, again, we try to push up any price increase, we know it's coming, therefore we put our truck prices up, and I wouldn't say a whole, but plan for the two to be as synchronized as possible.

HAE

Q4

Jan Wald

Brian Concannon

I guess a lot of the ones that I would've asked have already been asked. But let me try to follow up somewhat on what Larry was asking. In the whole blood market I know you're trying to create a value proposition to take to hospitals. I guess the question is, do you see any pull from the hospitals in that direction at all or is that a demand you're going to have to create as you go along?

But we’re already seeing that happen today, Jan, albeit a small but it's going to be something that we're going to have to create. But the difference being is we’re working with our blood center customers to create that versus taking that on a missionary sale hospital by hospital. You will think of very simplistic approach but 30 years ago every hospital ran their own kitchen, every hospital ran their own laundry, every hospital had sprawling pharmacies in the basements. Today that's changed. Hospitals are focusing on what they do best and that’s bringing clinical care to the patients they serve. How do we set up our blood center customers to become more relevant in that process? Initially taking over the logistics of blood such that hospitals don't touch blood until they are ready to give it clinically to a patient, then what does mean in terms of overall cost efficiencies, effectiveness, quality of care? And then ultimately how does that position them and us to advise hospitals in the clinical use of blood? Think of it in those two frameworks if you will and what we’re bringing to those customers.

GME

Q3

Arvind Bhatia

J. Paul Raines

Just a couple of questions here, guys. One, I wanted to see if you could give us a sense of what you're seeing in tie ratios for the PlayStation 4 so far and maybe compare that to what you saw early on either for the 360 or the PlayStation 3. And then also, the 20% to 30% industry growth guidance you guys -- or not guidance but how you guys think about the industry for next year, is there any change in your thought process? Are you guys more comfortable with that kind of number as you now have more visibility? And then I have a follow-up.

So attaching digital content is a big part of this, as well as software. Mike, the model, category model, anything you want to add to that?

RAIL

Q4

Sal Vitale:

Charles F. Avery:

Question I apologize. So if I look, I see your guidance for 2014 and I understand you don’t provide any guidance at this point for 2015, but assuming that your order flow for in your Shoals facility for your non-coal car types continue to accelerate, is it reasonable to assume that you’re willing to have more than 7,000 deliveries in 2015?

Sal, we’re not going to comment on that, that visibility that far out is tough as you know especially on the coal car side our orders come in big lump and as we talked in the past, as we can go a year without a big order and then get a year like that we did last year with multiple big orders. So, that visibility past right now in the 2015 is unknown.

CVU

Q3

Walter Morris

So again, to emphasize, what I thought I heard you say is there would be minimal impact on 2020 from these WMI issues and by early next year, you'll be operating at the efficiency and profitable levels you anticipated?

Absolutely, Walter.

GGG

Q1

Joe Ritchie

Jim Graner

Now, that's fair. I guess maybe following up on a comment you made earlier about Asia Pac and the double-digit decline that you saw in China and Japan; can you give us any color on the verticals where you really saw weakness?

Just a couple of points to add to that. We did have an increase in our backlog situation in China during the first quarter compared to the quarter the year before for about -- on our legacy business is about $4 million or $5 million. And if we were able to ship that, we would have had a flat kind of number there. We are, as Pat mentioned earlier, putting in place a warehouse there and stocking of that warehouse, we believe, will help our growth prospects. A little bit of disruption on the supply chain to that warehouse in the first quarter with the West Coast strike. So again, our team in Asia is expecting to have growth in the second quarter. In reviewing their numbers, they have some pretty good logic behind projecting growth in the second quarter. So hopefully, we'll move on from this low point and finish the year on a positive basis

MNST

Q3

Mark S. Astrachan

Rodney C. Sacks

Hi, guys. I guess one follow up to the last question. So monthly volatility has certainly increased from a sales standpoint. If you go to April and May it was up in the lower 30 if you had in June deceleration, July was up 25% August, September then worse in October back up. I realize when you get the orders and when you ship the products that you can’t fully control but is there something that you’ve thought about or is there some way that we can sort of rationalize how the selling and sell through sort of work here. So there’s a bit of an explanation for the increased volatility because obviously the underlying sales per the scanner date are good but they ship way too much volatility here month-to-month. I guess any color there. And then the second question -- so you exhausted the share repurchase authorization. How you are thinking about the roughly $600 million in cash on the balance sheet right now?

On the stock repurchase issue. As we’ve stated in the past stock repurchases are determine by our board of directors. The board continues to review many factors affecting the company’s stock plan as well as the strength of the overall market and will at the appropriate time review whether to authorize a further stock repurchase plan. In light of the fact that we have now used up the existing plan.

PDLI

Q2

John 

John McLaughlin

I was just wondering if you can provide a little bit more guidance on how much of your balance sheet is committed to deals, and how much cash do you have free for other deals?

Yes, it's always – it's a great. It's not a -- as you're well aware, it's not a static number. Certainly we've shown you what the cash is on the balance sheet right now but bear in mind we're not -- unlike a fund where you (inaudible) you rate X number of dollars and you have X number of dollars to spend. Our cash actually gets replenished each quarter based upon the revenues that we receive as our royalty income. And in fact, we expect our free cash flow to jump after we pay off one of our notes, the secured notes in the third quarter. The last payment due on that and Bruce it's a little over $22 million if I'm remembering right?

NMBL

Q3

John Roy

Anup Singh

Hi. It's John Roy in for Steve. Quickly on your profitability, obviously, it’s not going to come next quarter. Do you have any type of color you can give us on when it might be? And also, are you still seeing a 3x to 4x advantage in pricing even though with the discounting?

And John on price performance it very much remains in place. I think as I have said before what we're witnessing are instances, numerous instances where our competitors already over the last few quarters I have said they are coming close to that cost in order to hold us off, particularly in large accounts and large deployments. We are witnessing even stronger pricing pressure where they're going under the cost in order to retain footprint. And as you can see, we don't back away just because someone is taking aggressive price, even with the pricing pressure our gross margin stays very strong. So price performance advantage is best reflected in how our margins are performed very much still in place.

AMD

Q4

David Wong

Devinder Kumar

No, no. I was talking about revenues from December into Q1, the sequential drop. Can you give us some idea of -- I mean, there's a big chunk that's game consoles, right? But what about the non-gam console part of it?

It is seasonality. Seasonality in the business. We have the consumer weight from a revenue standpoint in our CG segment. And we go from Q4 to Q1, you do have the seasonality coming into play, and typical seasonality is what driving the other portion of the decline in revenue from Q4 to Q1.

TECD

Q4

Brian Alexander - Raymond James

Jeff Howells

Great. And then just on Brightstar you guys have, it sounds that you have got some momentum there, you made money in quarter. How much is that joint venture being influenced by net books at this point both from growth and profitability share point?

Actually, technically on net books very little, however, the joint venture is selling small notebooks to various carriers. So the net books will probably be upside going forward, there are European opportunities to sell notebook and net books to carriers as they begin to subsidize that as an increment tool putting in their card in it. But it certainly helped, but I think the momentum on handsets as we indicated on the call, that we believe we had about 20% market share in Q4 in handsets alone in UK and Spain, pretty impressive performance considering it was a startup operation two years ago.

TER

Q2

Mehdi Hosseini

Gregory R. Beecher

Sure. And then on R&D, can you please explain again why the R&D mix is spiking in Q3?

In the third quarter, we have a set of NREs, fees paid to third parties, that coalesce in the third quarter, 3 -- about 3 NREs in different parts of the company, principally in SemiTest. So that's a bit of a bubble that we don't expect in the fourth quarter. And that's just timing. It happens now and then.

FISV

Q4

Christopher Shutler

Jeffery Yabuki

And then second question is actually on e-bills, grew about 2% to 3% this year. How confident are you guys that, that growth rate can materially accelerate at some point either in '11 or '12 off of that base? And then with Wells taking their bill pay in-house, how do you think about the risk of other large FIs doing the same thing?

Sure. Those are great questions. I'm going to take the latter one first, then we'll come back. Wells Fargo did not take their bill pay business in-house. Wells Fargo, a number of years ago, spent significant money and built their own bill payment system. What they did is they bought Wachovia back in '08, I guess it was, or '09 now, early '09. And they planned all along to convert that. They began converting the Wachovia business over to their own proprietary system, and they plan to complete that in 2010. So that's what happened in that case. And as it relates to others, I mean, we're very close to -- not surprising, we're very close to what's going on in the market. Beyond Bank of America, which is a well known large client of ours, Wachovia was about a 1% client of ours, we have a handful of other clients, bill payment clients, that are, I'll call it, 0.5%. And then beyond that, there's little concentration, and even 0.5% is not material concentration. The great news is we have renewed, most of it, not all of those agreements, over the last 18 months and we feel quite comfortable with that base of clients. So from that standpoint, we don't see any current risks. So that's the good news.

ACAT

Q1

Joe Hovorka

Claude Jordan

Yeah, okay. Okay. And then lastly, I think you had a comment about the inventory in the balance sheet, that that is reflective of an earlier build for Snowmobile. Did I hear that correctly?

Yeah, I think I would point to three things. First of all, the overall growth of the business in the fourth quarter, we were up 34% across the board. So that would be the one thing. Second thing would be last year; we were building snowmobiles well into December, which is something we do not like to do. So we have moved the production date a little bit earlier there. That’s required us to go ahead and start getting some of the longer lead items such as engines in-house and last year, they would not have been on our March closing balance sheet. This year they are. And then the third thing I would say is with our new monthly ordering system, the RPN system on the ATVs, instead of shipping a lot of products in June, because typically we’d stop in that March timeframe and ship a little bit in April and May, and then really ramp up in June, you’re seeing more of a smoother shipment pattern, so we never really slow down on the ATV and the side-by-side part of our business.

KONA

Q1

Mark Smith - Feltl & Company

Christi Hing

Okay. And then last question, can you just comment anything else that you can give us on kind of comp trends during the quarter and kind of what you have seen as weather has improved recently?

Mark, I think kind of we gave guidance of 1% for the second quarter and that kind of takes into account what we are seeing to-date. We actually get the benefit from Easter moving out of the second quarter, but then also with weather we have seen a little bit of both. We have seen some rainy weather, especially in Texas in some of the Midwest markets, and even I think upcoming there is a lot of rain expected in the Minneapolis, Chicago market began, so…. So, yeah, I think we are seeing better trends in Q1, but definitely we are not clearing out of the wood. So, 1% comp guidance we feel is something we can obtain for Q2.

ANET

Q1

Meta Marshall

Jayshree Ullal

Great. Thanks. Maybe just one for me. You noted kind of strong behavior out of some of the Tier 2 clouds. But has there been any change and thought? Or is it just too early as the Tier 2s go forward, whether they will continue to kind of build their own data centers or leverage the public cloud more? Do you expect kind of the -to have any change to that behavior? Thanks.

Meta, that's a good question. And I said before, it depends on the Tier 2. We know some of the larger Tier 2s have paused, and it's not that they're going to the public cloud, but they're just pausing their spending. Others are expanding their data centers and some of the smaller ones are continuing for their specialized applications. So it's my belief that they will continue to succeed in their special use cases and complement the public cloud, but it will be cyclical.They didn't do much of it last year and I think some of them are coming back this year. And what we are seeing is the specialty clouds are realizing that some of the workload, they can control better and some belong in the public cloud. So I don't -- I think they'll continue to have a place.And in fact, a good example of that was content delivery network guide. We saw improved traction with the CD customers, and there's some real real-time streaming and content delivery, particularly with work from home with the millions of users and the aggregates of 4K and 8K flows, you can see why they would make some important investments there.

PRM

Q2

A.J. Guido - Golden Tree Asset Management

Kim R. Payne

Is this more related to the sale, the anticipation was that you weren’t going to have to pay taxes going forward?

The taxes are related to the sale. We still will have back taxes. We will have state income taxes as well as some ANP. So it’s not that we won’t have any but it will be significantly lower than it would be if we didn’t have any left.

NMRX

Q3

Matthew D. Ramsay

Stratton J. Nicolaides

This is Matt Ramsay on for Mike. A couple of questions from us. When you step back and look at the business and the investments that you've made, it sounds like the managed services deals should ramp ARPU over the next year or so. How would you characterize sort of the size of those opportunities in aggregate that we should see over the next 12 months or so? Obviously your sub base now is going to be approaching 2.5 million. What kept the sub base to look like, say, 12, 18 months from now from a percentage of the subs that are sort of the traditional ones that you've had up until now versus these managed services deals that could be materially higher ARPU?

Well, the -- we'll give our guidance for next year in our February call following the end of the year. But we expect that the ramp in these high ARPU subscription will be a significant contributor next year. Keeping in mind that if you look at our average, and it's about $2, many of these solutions carry ARPU with them several times that average. So we think it'll have a very meaningful impact on the recurring revenue that comes from our subscription base. So we expect to continue growing our base at a robust pace, and we'll also give some visibility into the dichotomy between the traditional horizontal platform business and the -- these solutions. So -- but we're still computing, so we'll figure out the guidance that we'll provide next year. But it looks very positive right now.

DGII

Q3

Greg Burns

Ronald Konezny

And then can you just talk about the full year EBITDA guidance, are these earn outs the reason kind of you are narrowing it to the lower end or are these kind of the one-time items like - or the inefficiencies around manufacturing and some of these other items you called out also impacting that full year like that.

Yes. So there is $2 million that weren’t originally in the guidance for the year, so that's certainly an impact. And then the other impact is what is just appearing in gross margin, which is a lower-than-expected gross margin as compared to what we had contemplated at beginning of the year. There is a couple of dynamics, one is the manufacturing transition is taking longer and so that's impacting our operating expense associated with our cost of goods. The other aspect is the supply chain for electronics is under tremendous pressure. It started in the memory areas when a couple of large providers did not expected last time buys and that had a ripple effect. As far as into certain capacitors and even some cases resistors so there has been some hoarding going on and so our ability to get our allocations has been under pressure and has forced higher transportation costs as well as in some cases higher component costs. So the combination was two, we really had the biggest impact on gross margin being up this quarter about 200 or more basis points and giving us reason to be cautious even in the current quarter.

SPTN

Q4

Mark Wiltamuth

Dennis Eidson

I know you personally have been spending some time on this segment, give us an update on your longer term thoughts on maybe expanding beyond just the commissary business as you get into thinking about troop feeding or base exchanges? Is any of that moving forward or are you still kind of in the early stages of planning for that?

We very much believe that the entire system would benefit from a more efficient distribution platform and frankly, we believe that we’re that solution. We are a worldwide solution to the commissaries. We also believe that the platform is perfectly suited to do far more business both in regard to troop feeding, and a lot of that goes overseas and we’re the preeminent supplier to Europe and Asia with our partner Coastal Pacific so we know that game plan very well. We think the exchange opportunity is a significant one and we continue to mine it in there as well. I think there’s plenty of upside to organically grow this business by getting into those additional segments.

FOSL

Q1

Dana Lauren Telsey

Kosta N. Kartsotis

And then on as you think about the percentage of the business becoming wearables over time, how do you see that?

Well, we're going to find out. We're in position now with great capabilities for both the traditional and wearables. It's interesting that there's significant demand out there for wearables, business growing extremely quickly. It's an aspirational female customer, largely, which is our customer. They're very interested in the whole idea of connectivity and new innovation, so the potential's very significant. We have something like a 5% or 6% share globally of the watch business. If we get that of what's expected to be in wearables, a $33 billion business in three years, it could be a very significant business for us. So, we'll play it out. We'll see what happens. We're in a position where we're going to do as much as we can with innovation, design and execution on both traditional and wearables. We've got great new product ideas coming out and we'll follow the customer wherever they take us.

BMY

Q1

Seamus Fernandez

Samit Hirawat

Oh, great. Thanks for the question. So I wanted to follow up on Chris' question as it relates to LAG-3. I noticed at the -- as one of the ASCO abstracts, there's also an adjuvant trial that is supposed to really report some data. I assume that this is just a single-arm trial. But what's Bristol hoping for in adjuvant melanoma in particular, as well as the planned acceleration of the non-small cell lung cancer opportunity? Just hoping that Samit could maybe opine a little bit or give us a little bit of visibility on where he sees LAG-3 kind of potentially fitting in on the lung cancer side? And then, separately, just wanted to get a little bit of a better sense of your thoughts around the stroke -- the SPTS trial with Factor 9. Still first half of next year? And maybe you could just remind us of the opportunity that you see there. In our view, we think that could be a $4 billion-plus opportunity that's really not reflected in expectations. But nobody knows this space better than Bristol-Myers Squibb, given your experience with products. Thanks.

Thank you, Giovanni. And certainly, very excited to see the data coming out, great for the patients and certainly very happy with where we're going in the pipeline for LAG-3 in oncology for BMS as well. Overall, the natural progression after seeing the data in the first-line setting of addition of relatlimab on top of Opdivo would be to go into the adjuvant setting. And that's where you're beginning to hear a lot more that we'll be progressing into a Phase 3 program in the adjuvant setting for this co-formulation that we now have as a fixed-dose combination for Opdivo plus relatlimab. Certainly more to follow as we look deeper into the data for the metastatic trial, to gain more in-depth knowledge on the biomarkers, as well as the long-term follow-up that will come from the current 047 trial that will continue to evolve in terms of our knowledge. Now the second part, which you asked, is about the non-small cell lung cancer opportunity. Certainly, excited to have started the early POC generation trial, as well as looking at the combination of nivo plus relatlimab plus chemotherapy to see where we can take it. And that's the idea behind accelerating the enrollment in that trial so that by the end of the year, we can initiate a Phase 3 program in that setting if we have tolerability that is demonstrated in that early trial that we're looking at. In addition to that, we will continue to hear evolution of the data potentially into hepatocellular carcinoma that we are looking also to have some look into in the Phase 2 study. And that can open up additional indications as we look forward. Beyond that, in the SSP trial, yes, we are still looking forward to the readout in the early part of 2022. As I said earlier, there are two opportunities. Opportunity number one is to improve on the current anti-coagulation paradigm with a single agent. And then, opportunity number two is to expand the use of anticoagulants with a background therapy of anti-platelet agents. And those are the two studies that together will form the basis of the clinical development plan that we are thinking through, whether it be the venous side or the arterial side of thrombosis.

BLDR

Q3

Timothy Daley

Chad Crow

So the first question, Chad, I was I guess hoping to better understand some of the commentary provided in the press release specifically around how the associates remained focused on developing close relationships with customers and have demonstrated this commitment in the third quarter. I don't think we've ever heard you use that terminology or language before to describe customer interaction. So, how should we be interpreting this? And does it signal any sort of change or, I guess, shift in focus on the sales strategy or kind of like its application of the sales force?

No, certainly not a shift in focus. I mean, we try to be in the back pockets of all our customers and that's where you're going to provide the most value in helping them actually build the house and be more than just a building products distributor. And so we're constantly pushing our guys to solve our builders' needs, solve their pain points. So, no, certainly not a shift in strategy. It's always been a strategy of ours, but it's something we continually harp on.

GCI

Q3

Jim Goss

Craig A. Dubow

Thank you. I was wondering with the discussion of the e-edition, if you are moving towards the notion of charging for at least some of the premium content and maybe talk about how the considerations might be changing as we move into an era where the debt has to pay for itself as well. And on a corollary, with the -- were you suggesting that the decline in circ at USA Today was basically due to lower occupancy rates at the hotels with whom you have the contracts? The charging for premium content issue.

Right. You know, we have been, Jim, as you know looking at this for quite a period of time and strategically, we have lots of considerations on the table. We’re not at this point ready to make any pronouncements as to direction but it’s again, with lots of study, lots of research, and I think what you are seeing us do is really become very customer focused from a content standpoint on what that differentiation will be in really creating value, so it’s something to stay tuned with but we’ve done a lot of research and we are going to continue looking at it.

NTCT

Q4

Kevin Liu

Jean A. Bua

Just regarding the service provider deal that slipped out of the back half, are you guys still factoring that into your guidance for the current year? And maybe more generally just from the larger Tier 1 customers that you've had traditionally, what's sort of the expectation baked in for the declines over there over the course of 2018?

Hi, Kevin, this is Jean. I would say that we are – they've been a long-term customer and we're on negotiations and discussions and relationship management with them. As you know from reading the headlines, a lot of these customers have been hit lately with the all-you-can-eat plans. So, it's caused them to stop and really look at their overall spending. So, I would say today that is really the situation that we're in with this particular Tier 1. So, while we don't anticipate at this point any large orders in the current quarter, we are hopeful that they will be continuing to see the value that we've provided to them and continuing to place orders with us over the next three quarters or so. Actually, just to add on one comment. We're also talking to all of the Tier 1s as it comes to our software-only solution. So, if there's any – as Anil talked earlier, where their budgets are being constrained due to their own economics where we have the software-only appliance also, we can give them a price point that more aligns with what their CapEx needs are or OpEx needs today, but continue to provide them with excellent service.

AXAS

Q4

Welles W. Fitzpatrick

Robert L. G. Watson

2.9 million, thanks.

That was the dollars. What was the production associated with it?

RHT

Q3

Keith Weiss

Charles E. Peters

Was there a higher prevalence of big deals in this fourth quarter than there was a year ago?

Yes. The year ago, I don't think we had any deals that were over $10 million. We had -- let's see, you have the fourth quarter statistics there?No, I don't, unfortunately, I can follow up with him though.

ANET

Q1

John Marchetti

Ita Brennan

Thanks very much. Jayshree, I'm curious with the supply constraints that are going on right now, if it impacts any one of the verticals a little bit more than any of the others, or it's broad enough that it's kind of having an even impact across the group.And then Ita, just sort of as a follow-up to that, you sold a bit out of inventory, I'm guessing because you bit out of inventory I'm guessing because you couldn't bring some other stuff in. Is that something that likely occurs again here quarter?

Yes. And John, to answer your question on our extended lead times, I'm not sure we saw a trend on verticals. What we did see is that our key customers worked very closely with Anshul and Chris and Ashwin to really sharpen their forecast and timing and work closely with us on their network designs and what products are available, what's not, when can we ship, what to them?And this is - I hope these are famous this last words, but I hope we can - John McCool and Christopher Schmidt and team are really working hard to overcome this. And should we improve this in Q3. I think we will have a chance to fulfil a lot our key customers’ needs and factor that into their 2020 deployment considerations. But I didn't see anything by vertical. I saw it more by top customers.

PTEC

Q1

Rich Kugele - Needham & Co

Richard Arnold

I was trying to draw just a correlation to how you actually did in the license side of the quarter and what happened in December ‘07 timeframe. That was about a 6% year-over-year decline if that’s a fair compare.

Yes, that’s a fair compare. Obviously, it’s confused by the way VPAs work and the sell through or otherwise on the VPA customers. The good news is that we don’t have major issues with customers who are shipping less than they’ve committed to in their VPAs. The bad news is that they are not as had previously been anticipated, shipping significantly above their original purchase forecast. We got some installation provided by the two year VPAs that we entered into, but that’s probably not material and I know you’d like for me, in answering this question to give some kind of revenue guidance for the March quarter, but we are just going to be pretty religious about not giving guidance in times like this.

BLDR

Q3

Michael Dahl

Peter Jackson

First question relates to just the environment. Obviously, a lot of moving pieces, particularly around the lumber but also with some of these slower builder order trends of late. So, strong fourth quarter guidance. I know it's early but I was wondering if you could provide a little commentary even directionally on what you expect from 2019. Is the magnitude of decline in lumber prices and this relatively slower growth such that it will be, I guess, difficult to grow EBITDA in 2019? Or can you talk about whether you expect growth next year?

Yeah, you're right. There are a lot of moving pieces right now and it seems like a lot of things are kind of in flux. But we do still feel like overall housing demand will grow, single-family demand will grow next year. Best guess now, maybe single family is up 4%, 5%. Time will tell, obviously. But it still feels like more of a pause, a speed bump, whatever you want to call it. So I would say sitting here today I expect single family to be up. Commodity prices. It's funny, two quarters ago we were talking about how high prices were and were we going to update our long-term forecast because what we've thrown out there would be a slam dunk at those prices. And now we're talking about are prices going to stay where they are today. I think what we can all agree is prices aren't going to stay where they are. And I think when I responded to the question two quarters ago, I said, yeah, that would be great but we all known prices won't stay where they are, commodity lumber prices, they just don't, they never do. So I would fully expect to see commodity price inflation. From where we are today, it's starting to feel like we've hit some lows. And we'll be dealing with some of the same things we've dealt with last year, transportation issues, things like that. So, yes, if commodity prices stayed where they were today all the way through next year, that'd be a pretty big headwind, but I really don't anticipate that's going to happen. And we're closing out a year that was probably the most volatile ever in commodity prices and I think we managed through it really well and we're producing a hell of a year. And so we'll deal with whatever cards are dealt us next year, but I would fully expect to see some inflation between now and then as we work through the rest of next year.

HAE

Q4

Larry Keusch

Brian Concannon

So as you think into ‘16, should we be thinking about that just so that we can calibrate expectations here, that again that will be a year of -- again assuming that your products are cleared by the FDA, of getting it to your customers, demonstrating the value and we really shouldn't for ‘16 think about a whole lot of incremental new business? Again, I'm really just trying to understand the timeline for how you are thinking about all of this starting to gain some traction.

Yes, so to put that in perspective, Larry, we've not dialled [ph] a tremendous amount of incremental revenue from our whole blood initiatives. We've given ourselves what I’d call some headroom as we bring these to market to ensure we don't get out ahead of ourselves. But fiscal ‘15 will be a year that really helps us understand whether or not we’ve been conservative in fiscal ‘16 or not. We realize that fiscal ‘16 really speaks to stability in the whole blood market with growth coming from our growth drivers and not being eaten up by declines in those markets as they will be this year.

HLX

Q2

Roger Read

Owen Kratz

I guess maybe Owen, everybody is, nobody knows how the moratorium is going to end or exactly when it will end. But if you just sort of talk with your customers, their views hey, if the moratorium ends on November 30th, we would expect to need X in 2011 or, are people still just maybe a little too discombobulated from all this to really think that far ahead yet?Well just your customers, are they thinking about 2011? Are you talking with them about pipelay vessel needs in 2011, or was your commentary on the vessels that you expect to see within your own fleet, repositioning potentially, is that just – that’s how you’re interpreting the market today. I’m trying to understand, what are the moving parts that you see?

I’m taking a worse case view forward and assuming that with six months – so no drilling here that’s going to have some impact on the volume of development work that occurs in 2011. It may or may not be that severe. We haven’t had a lot of feedback from our clients. A lot of the development work that was going to occur during this period actually the permitting process slowed down even for pipeline. So a certain amount of that has moved to the right. So I’m not confident that we’re going to see much of a slowdown really, but I’m just anticipating the worse than we’re looking for alternative uses of the assets.

CTAS

Q1

Michael Schneider:

Michael L. Thompson:

So, in other words, Mike, you are saying that the more tenured sales people are achieving productivity level today that are higher than what they were historically?

Right.

B

Q4

Edward Marshall

Christopher J. Stephens

Okay. And the proceeds, did you say half the proceeds will be used for debt and the other half will be used for stock repurchase? Just can you go over those numbers again for me?

Sure, Ed. So immediately, obviously, when we get the proceeds, we will reduce our debt. And the expectation in terms of the use of those proceeds, we said up to up to half of those proceeds would roughly be used to buy back shares, and we would anticipate that to be roughly 4 million to 5 million shares in the year. And again, of course, that's subject to change. As you know, we're continuing to look at opportunities from an acquisition point of view, but that's our thought right now.

CTAS

Q1

Bruce Simpson:

William C. Gale:

So, when you told us earlier when you gave us… know that we got granularity on the operating segments, when you earlier gave us the organic growths rate, is that strictly beautiful rental or is that includes facility services?

One of the things that we have is that we have is that, that business operates from the same facilities, the same management team. There is a lot of intertwining of that business together. So, we do not believe in the near future would be breaking that segment out any finer than what you are saying right now.

POWL

Q4

Fred Buonocore CJS Securities:

Pat McDonald:

Just a few followups. As it relates to orders and we've been talking about, you have seen an impact in the September quarter from the storm. More relevant to the current economic situation, can you just give us a sense for trends in October and November with orders?

I think we're reasonably safe to say that orders for the first quarter of this fiscal year will exceed our fourth quarter of last fiscal year. I think we're seeing a good trend.

BMY

Q1

Andrew Baum

Giovanni Caforio

Many thanks. First question is to Giovanni. In relation to business development, Bristol, we anticipate it's going to be more active than many of your peers given the cadence of LOEs you have in your portfolio. The FTC has been making increasingly loud noises about consolidation being a driver of increased drug prices and diminish patient access of late. I'm interested on how you think this could impact our business development going forward, whether it's more noise than actions. And what we should be looking for in novel mechanisms to engage to determine whether M&A relates in anticompetitive activities. And then, second question for Samit. Perhaps you care to comment on whether you anticipate a panel meeting to assess JAK safety broadly in a cross-divisional way. I'm, obviously, thinking about deucravacitinib in terms of its broader membership of that particular category. Thank you.

Thank you, Andrew. Let me start with your question on business development, and then, Samit will follow on your second question. So it's really difficult to speculate at this point in early days what the evolving position of the FTC will be. A couple of things that I would say is, number one, I do agree with you that business development is an important priority for us. It has been for a while. And it will remain one of the priorities for deploying capital in our capital allocation strategy. The second thing that I like to say is that I actually feel that we've demonstrated over and over that when we acquire assets into the company, it's actually a way of accelerating their development and generating even more value for patients. And that's an important element of what drives our business development strategy. I feel there are plenty of opportunities to continue to strengthen our portfolio across all of the areas where we have presence and expertise. And obviously, we'll always take competition issues into account when we look at opportunities, but I don't see that at this point as limiting our ability to continue to execute a very differentiated business development strategy. So with that, Samit?

ANET

Q1

Sami Badri

Jayshree Ullal

Hi. Thank you. I was a little bit curious if you could give us a little bit more of maybe an idea on dynamics or just maybe some observations you've had in 1Q 2020, what's going on in Europe. And are you competing against different companies? Or are they offering different types of products, at least in the European region versus what Arista has to offer?And I know you've made comments that, a lot of your customers in the U.S. want to take you 1 also in Europe. But have you seen dynamics change, either pre or post COVID or anything going on in 2020 that you can shed light on as an observation?

No, I think for Arista, because our presence internationally is somewhat new. We are feeling stronger in terms of our investment in sales and different countries. So country-by-country, we feel better about Europe now than we did, say, even a year or two ago.What I think is the difference between Europe and the United States is, they don't have the equivalent of cloud titans. And we haven't won major service provider titans. So we tend to have smaller wins, but many customers.And I think that's -- but country-by-country, the level of engagement, in fact, my -- our entire executive team was at a Europe customer session last -- was it last November? We were all there. It seems like forever, but it wasn't that long ago. And the level of intimacy that the team has developed with our customers especially in the developed countries Germany, U.K., France, Middle East, even Israel has been very strong. So I think the European customer base is embracing Arista for its differentiation and value add. But we just don't have the size of customers we do in the U.S.

VSH

Q3

Shawn Harrison

Gerald Paul

Very, very helpful and the final question, you guys did a very good job of controlling operating expenses this quarter. In case I missed it, where are they expected to go on a dollar basis for the fourth calendar quarter?

They approximately where we are, maybe 191-192 something like that. Depends, of course, on the exchange rate also.

RRD

Q4

Edward Atorino

Daniel N Leib

In the magazine/catalog, book catalog, book carrier, could you isolate? Were they all up? Were 2 out of 3 up, 1 out of 3 up?

Yes. So magazine/catalog retail was up. The book directory continues to be a bit challenged. Expectations on '13 is that we will not see a large adoption rolling into '13. So we'd expect a pretty similar performance. We obviously know the successes that we've had on the sales side and what will be coming onto the platform in '13, and so we feel good about that.

AAPL

Q2

Tim Cook

Peter Oppenheimer

Okay, that’s helpful. Thanks. And then, could you guys provide the direct/indirect sales mix for the quarter and did it have an effect on gross margins for the quarters and does it have any bearing on your guidance here for the third quarter? Thanks.

Bill, the direct percent in the March quarter was 48%. It really didn’t have a bearing on gross margin that was reasonably close to what we thought. Now, as we enter the June quarter, the education buying season begins and that is one of the reasons why I expect gross margin to be down sequentially along with the impact of the U.S. dollar and the commodity and component environment.

GGG

Q1

Kevin Mackza

Jim Graner

Another question on process margin. So some of these costs go away. The translation effect doesn't. Can you just a little bit longer term, talk about the way this business is configured now with the new acquisitions in there, kind of what you think the potential is here for margins? Can they come back up to that 24% level over time?

I would say that, Kevin, we view this as an industrial segment like margins ultimately. A little bit lower with, I'll say, a third of the business coming from the legacy lubrication, but the process business and the oil and gas eventually should look a lot like our industrial segment

NTCT

Q4

Matthew George Hedberg

Anil K. Singhal

Hi guys. Yeah, thank you. Sorry about that. You guys have talked about getting gross margins back to their historic levels of, I think, near 80%, versus kind of mid-70%s today. I guess, including the release of InfiniStreamNG, can you outline and maybe rank the other opportunities for gross margin expansion?

I'll let Jean maybe add to this. But I think the biggest opportunity is because InfiniStreamNG has become the combined platform for TekComms and NETSCOUT moving forward, and it's available in the software and appliance versions. And so margins are already increasing even with the appliance version, because it's higher gross margin than the TekComms' custom hardware version. But we think that this will allow us to reach our 80% gross margin target sooner than we would have thought earlier, and maybe even exceed it in the future. Jean, anything else?

DGII

Q3

Scott Searle

Ronald Konezny

Got you and looking at the guidance into September of 60 million to 64 million, could you give us a guide or an idea sequentially about how you see both on the hardware products side performing in terms of some of the traditional categories that you talked about in routers embedded et cetera. And then also with regard to the solution side of the equation, I think talking about 25 million to 30 million will be the target for this year, implies you are kind of flat to up sequentially. Maybe give us some frame work for how you're thinking about seeing things swing in that range for solutions as we going to September, what are going to be the driving factors there to move it either get it flat or move it up.

Yes I think Scott, you picked up on this really nicely when you kind take that 25 to 30 brackets and you backfill based on what's been accomplished so far. You're looking at kind of flat to maybe modestly up quarter for solutions. It’s going to be driven quite frankly a lot by our ability for our customers to absorb the rollouts. We are anticipating success there but some of these larger implementations can run into some timing issues with access to facilities training and resources and et cetera. But I think you've got the brackets there in terms of solutions and then off course backed from what that means for IoT products and services. We do think that Accelerated will continue to have a nice contribution, we don’t think the contribution is going to be quite as strong as what we experience in fiscal Q3, but will make up for that if you will with performance with Digi's core IoT products and services.

MPAA

Q2

Philip Shen

Selwyn H. Joffe

I'd like to start off on wheel hub. Can you give us a general update on the next potential customer, in particular, we're trying to get a sense for the potential size of the revenues and even timing as well?

Again, we're working on all fronts to gain customers. I can't give you any insight as to when or where or what or how big that may or may not be. All I can tell you is that our revenue guidance of $45 million on wheel hubs, we still believe in very strongly. And hopefully, we will be able to beat that. But at this point, that's pretty much as much as I've got.

TAP

Q3

Bryan Spillane

Stewart Lindening

And then as we’re looking at pension expenses and pension funding going forward

Sure. Let me give you a couple pieces. I mean, it’s hard to give a very precise answer here, because obviously with the current equity performance levels expense and expense will likely be higher next year. It’s very difficult to say precisely what number that will be, and I just can tell you from previous years this stuff moves around a lot, obviously while equity may be down, discount rate is up, and it’s very difficult for me to give you any guidance around that. And my best advice is to wait until year end. As it relates specifically to cash requirements of the pension plans, those are driven mostly by various regulatory bodies. In the case certainly of Canada and UK that’s a bit of a triennial valuation. And depending on where that falls, that may or may not drive increased contributions. And I’d say the last thing, which is a moderating factor for us is that the last couple of years we have been gong through a process of trying to de-risk those pension plans by shifting assets from equity-based instruments into fixed income instruments. So mix all that together and you’ll have to wait really until the end of the year to get a better picture of what that will look like. Bryan, the thing I would add is the de-risking that we did was before the recent sharp declines in the equity markets.

NMBL

Q3

Aaron Rakers

Suresh Vasudevan

Okay. And with that said with that point I believe in the past you've always talked about long-term model as kind of mid-60% product gross margin, should we now assume that we’re trending to that level quicker than what previously maybe you would have thought given those incremental investments and if so when do you think we should maybe think about mid-60s rather than the 68% you’ve been running out?

Yes. So, I think we expect the competitive environment to continue. Certainly the discounting and pricing environment we are currently in. Our long-term target for margins, for products is in the 64% to 66 % range. We still are comfortably above that. Our margins and products are about 68. We think that this will trend down a bit over a time. Our support and service you might have noticed is going up. So to some extent it's offset out on margins over all. But definitely I think incrementally over time, we're going to start to approach our long-term model.

ROST

Q3

Michael Binetti

Michael O'Sullivan

And then, if I guess, may be continue on that, I feel like there’s not a week that goes by that we don’t hear another one of a department store brand companies updating their strategy to include significantly lower inventory buys going forward. So maybe a soft inventory out there today, but in general, the off price channels continue to comment that inventory in the marketplace remains robust. You guys have certainly benefited from better inventory turns but better merchandise margins over time. If the brands do follow through with that strategy and take inventory lower, it becomes a bit counterintuitive for us to keep hearing off price industry in general, to say that, we still see plentiful inventory out there. How do you think forward to if inventories do get a little bit harder to come by, how you look at approaching your business for next year? Thanks.

So, those are good questions. I think, it all depends on what sales those departments stores are able to do and the comparison between those sales and the inventories that they have -- they bought themselves into. I mean, right now, as I say, based upon what we are seeing in the marketplace, we see no problem with the buy.

TAP

Q3

Bryan Spillane

Stewart Lindening

So higher proportionate fixed income before the equity markets went down?

That’s right. If you look at our year-end 10K you’ll see that all of our major plans - call them defined benefit plans - were in the range of half-equities, which was a substantial reduction from before we did the de-risking.

LTRX

Q3

Jaeson Schmidt

Kurt Busch

First one, wondering Kurt if you could comment on any particular notable trends that you’re seeing from a geographical perspective?

Sure. First of all thanks for calling in Jaeson, it’s great to hear from you. So we’ve seen most of the weakness we’ve seen in capital spending is really where our enterprise business is the strongest and that’s in North America. Today we see Europe holding up pretty well, but enterprise is relatively small there as well as enterprise is relatively small outside the United States. So from a geographic point of view the weakness is primarily in the enterprise capital spending areas of North America.

B

Q4

Edward Marshall

Christopher J. Stephens

Well, not just the acquisition of Synventive, but any inventory accounting, anything else like that?

Yes, yes, it's a full-up number, exactly. It's not on adjusted basis. Let's say, $2.03 to $2.18 would be on a GAAP basis.

EXPE

Q3

Herman Leung

Michael Adler

First, ADR trends looks like it's in a pretty good position right now, increasing 4% year-over-year right now. It looks like it's stabilizing there. Can you give us a bit of a breakout in terms of how it trended in domestic versus international markets? And second question is, you guys raised some money on the debt and you guys used it for some buybacks. And there's been some speculation about some potential expansion into Europe through acquisitions. Curious on what your thoughts there are from an acquisition standpoint.

Sure. So on the use of proceeds from the bond offering over the summer and the use of proceeds we stated at the time is general corporate purposes, stock buybacks, M&A. You saw some of the stock buyback activity in the quarter. On M&A, I think you'll continue to see a little bit of more of the same. We'll be looking to continue to make acquisitions in the media side of the business. We'll continue to look for international, say tuck-in acquisitions on the transaction side of the business. So if there's a particular market or markets where we think we can grow better or expand more quickly, we could make an acquisition in that market as well. And also, just given the strong performance of the Egencia business and the huge opportunity that we see there, yes, we're also looking at tuck-in acquisitions for Egencia as well.

GERN

Q3

Unknown Analyst

Stephen M. Kelsey

And is the data for -- a mean of the telomere length, I imagine among -- from tumors there's too much variability...

It's essentially is an average of the length of all of the telomeres in all of the tumor cells that appear in the section that we're provided with.

QADA

Q3

Bhavanmit Suri:

Daniel Lender:

Then one for Daniel, you know, the issue with the large cloud during the quarter, is that a one-off issue or you have -- could that happen again? Just a little more color on what exactly happened, that would be helpful. Thank you.

It's really -- it's a one-off issue with large deal that has certain contractual provisions in there that basically requires to have some environment slides before we get to start recognizing revenue, I mean those projects are ongoing and we expect to meet those milestones during Q4, so we're counting on that revenue for Q4. So Q4 will include a little bit of a catch-up relating to Q3 for that particular customer.

SYK

Q2

Jeffrey Johnson

Kevin Lobo

Anything in those four core areas of orthopedics that where you're seeing kind of a change in your competitive positioning where just over the last three to six months or so, you may be feeling a little bit better or worse about your positioning and bringing in competitive accounts?

I would say more of the same. If you look at that knee number, that's a pretty good knee number and that has been the killer application with Mako and Mako was very, very strong, as you saw through the pandemic. And I think that will continue to be probably the one business that stands out. I mean, obviously upper extremities is going to continue to be a very, very strong performer. But I would say that's the one that probably we're feeling continued bullishness, if you will, but there's not been really I mean any other new dynamics just in the last quarter.

ENTR

Q4

Aalok Shah

Patrick Henry

Okay. And then in terms of CSS business, I think you guys said there are three to 10% plus customers, two of which were doing CSS. Is the DIRECTV and the EchoStar business done through those two customers that you mentioned for CSS?

Both of those are DIRECTV suppliers. Now in the case of WNC, they do both MoCA business and CSS business.Now, we also supply CSS to other people besides DIRECTV, some of the international satellite deployments. Neither one of those guys are currently EchoStar suppliers, I don't think – are they Dave?

DGII

Q3

David Gearhart

Ronald Konezny

Okay. And then in terms of professional services 2.7 million for the quarter. It seems like it’s a multi-quarter high. Just wondering if you could comment on what you're seeing there? And if that looks like it’s a sustainable run rate or just given this business is lumpy, that we shouldn’t kind of forecast that out going forward?

David, thanks for pointing it out. We do expect services to continue double-digit growth rates, there is two big elements, there is a professional services element, our wireless is on services group has really performed well both in this quarter, but also in trending. What is nice is they are being associated with Digi products more and more as well and so they are ends up being an effect that’s just beyond just the professional services revenue, but helps our customers adopt Digi products. The other big portion of that is our enterprise software and we are seeing higher take rates associated in particular with our cellular router business that includes revenue from both our Accelerated and Digi side of the product lines, quite frankly Accelerated take rates on enterprise software are higher than Digi take rates. But that’s having a positive influence on Digi’s ability to connect and get that recurring device management and enterprise software revenue. So we do expect that revenue category to continue to grow.

ROLL

Q4

Larry Pfeffer

Dr. Michael J. Hartnett

So just kind of trying to dive into the industrial side of the business, what are you guys thinking about for growth rate there, do you think the 3.5% to 4% you saw in the underlying North American business this quarter is a decent run rate for fiscal 2015, fiscal 2016?

Yeah. Let's see. Well, I think the industrial business – it's got some strong spots and some not-so-strong spots. So I think we look at the general industrial business that we service and it's strong, and it's good, and it's growing, and it's got sort of some exciting new programs with substantial scale, which will be phasing in slowly this year and more – and with more mass next year and the year following. So I think general industrial was good. I think the mining business we expect that to start off weak in our first two quarters and strengthen in our last two quarters. So, mining is sort of touch and go right now. And on the oil and gas side of our business, I think everybody kind of has a view of what's happening there. That market isn't wonderful. We're kind of in a sweet spot in that market where our volumes have some protection around them, for some of the OEMs that we service. And so, I think we don't see any growth occurring in that market next year and that we're going to be happy to maintain sort of a flat revenue number. So, I think the heavy lifting in our industrial business next year is going to have to be done in the general industrial markets.

LAKE

Q2

Peter Muckerman

Christopher Ryan

Okay. Good. Good. I think that’s smart. The other thing is I’m just curious, I always think about you all when I turn on the news because there is the crisis of the day as I think we can all agree. And I was curious to whether all these wildfires out west were something – I mean, I have just been listening to the news reports I have gathered are going [ph] that they can’t hire these – I mean, they’ve been taking people out of jail to fight the fires. I mean, is it that bad? And I was just curious if that’s something that you’ve gotten any sort of…

That drives overall demand, whether it’s direct or indirect. And when I mean by direct they may buy our smoke-jumping uniforms, which are uniforms we make specifically for the situation which are wildfires. Or if we’re not going to get the order directly they may order from one of our competitors who then have to run and produce it, which means that capacity in the industry is at a modicum and prices go up. So either way it helps us.

ROST

Q3

Kimberly Greenberger

Barbra Rentler

About 3%, okay, great. And I’m wondering if there was any year-over-year increase in incentive compensation either driving that 20 basis points of gross margin deleverage or in your SG&A. And then lastly, Barbara, I apologize if I didn’t hear this directly, but could you just comment on the apparel execution in the women’s business? I think on the August earnings call you had mentioned, you’ve made a great deal of progress in the second quarter, but you weren’t entirely happy yet. I’m just wondering if you can just update us on the progress there. Thanks.

And, Kimberly, in terms of the ladies business, we do feel like we’re making progress. We are moving in the right direction and we are expecting, as long as we execute effectively where we had some real major execution issues in Q1 that we’re going to continue to see it strengthening in the business. So, it’s month-to-month improving business by business, but we do feel like we’ve made progress and we do feel like we’re on track as long as we continue to execute appropriately.

ACAT

Q1

Joe Hovorka

Tim Delmore

Okay. Sorry, I didn’t hear the down 4% to down 6%. And then your guidance about operating expenses being flat as a percentage of sales. And I think you mentioned that was your guidance for last year as well and obviously, you did much better than that. Is there a reason why we wouldn’t see leverage on that line item with growing top line? Is there something in there that will make G&A and R&D, for example, go up in line with sales, or is that just being a conservative kind of way to look at it?

Well Joe, we lose a $2 million good guy for the Canadian hedge most likely and we are investing in our R&D and sales and marketing efforts to drive new products and retail sales, so.

ODP

Q3

Christopher Horvers:

Neil Austrian:

As a follow-up, as you compare it to when you brought Steven in 2005, and he did a great job early on and the recession's been really tough. But how maybe is the lens that you're looking through for the search different today versus what it was in late 2004?

I think it's going to be in some ways, more difficult to find a good new CEO. In other ways, it's going to be easier. It's going to be easier because from my perspective, and that's my lens, there is a far more solid and more in-depth management team here at the company today than when I was here in 2004. And I think that's a huge positive. I also think that the reason it may well take a little bit longer is because of the economy, and because of the fact that we've had two changes in the last 10 years and somebody on the outside may wonder if this is an appropriate time to make a change.

PTEC

Q1

Joe Maxa - Dougherty & Co.

Richard Arnold

I see. Rich, I was going to ask; do you have an organic growth number for us for the quarter?

Organic growth member? I’m sorry. I don’t understand what you mean.

DTLK

Q2

Glenn Hanus

Charles B. Westling

Anything within your verticals that you’re seeing? I know you don’t have much exposure to financials but spending patterns in other major verticals that you serve?

Nothing dramatic or clear in terms of trend or pattern, it tends to be again, very customer specific. Some customers may be up and accelerating opportunities based on their particular situation and place in the market versus others in the same vertical that might be saying, “Let’s be more cautious and extend and analysis this before we pull the trigger on things.” So, I would broad brush it and say up or down consistently across the verticals. As you alluded too, we are pretty balanced horizontally as it relates to our vertical industry success and efforts so not overly dependent on any one vertical. I think the one thing I’ve seen and I think is a positive is we’re seeing really a lot of opportunity in the professional services vertical, law firms, accounting firms, other engineering, architecting firms, just seems to be an area where we’re having more and more success positioning the technology solutions and our value proposition.

ABC

Q4

Robert Willoughby

Steven H. Collis

Do you anticipate any changes in the scope of the Express Scripts contract? Or will that simply be business as usual? And then, quickly, how – if the Rite Aid deal were to close today, how quickly could you layer on those revenues?

Yeah. I just would add that – thanks, Tim – that WBA needs to honor its existing contract agreements, but it's not like we're not aware of what could occur again. We have been very planful. So thanks for the question, Bob.

GERN

Q3

Ryan Martins

Stephen M. Kelsey

And just on the JAK2 mutation levels, I know you had mentioned you all would be assessing this, is this going to be assessed initially when patients enter the study and then at 12 months? Are there certain time periods at which --

All of the patients have JAK2 allelic burden measured prior to starting imetelstat, and it's then the protocol calls for repeat measurements at quarterly intervals.

MPC

Q3

Paul Cheng

Raymond L. Brooks

Just to – on the – with the IMO 2020, do you plan to make any large refining CapEx related to that? I think at one point several years ago you were contemplating about resid hydrocrack, and then of course that being shared (31

Yeah, this is Ray Brooks. I'll take that question. As far as IMO, yes, we are looking at strategic opportunities for resid upgrading primarily at our Gulf Coast refineries where we've got the STAR project that we've talked about before. The big part of that is upgrading our resid, we've done some of that. We have some more planned with our resid hydrocracker expansion there. And then at Garyville, you ask about the resid hydrocracker there, we have no plans to pursue that, but we're looking at some opportunistic and quick-hit projects to expand our coking capacity at Garyville. So, yeah, the IMO is on the horizon for us and we think we've got a couple of good-looking opportunities.

SXC

Q1

Sam Dubinsky

Frederick A. Henderson

And I apologize if I missed this, but what is the corporate overhead associated with the coal business?

Interestingly, you didn't miss it. If you just look at our total corporate costs before allocations, we're generally $80 million to $85 million, and then we allocate roughly $50 million of that to whether it's coke plants or the coal business. The coal business is a reasonable part. We spend a fair amount of time on the coal business. However, if you were to come to our headquarters and try to pick the 25 people who work on coal, everybody works on it a part of their time. We have some people, but it's -- and so the decision we took in order to reduce our manpower about 10% and curtail a number of other spending-related categories was really intended to meaningfully reduce that growth number so that if we were to sell the coal business and no longer have the allocation, that we wouldn't end up having a negative effect on our coke assets. We've not really talked about how much goes to coal versus other plants, so you didn't miss it. But that gives you some sense of what we're trying to get accomplished.

DGII

Q3

Joshua Reilly

Ronald Konezny

Olay great. And then just one question on the solutions business. 6000 net adds in the quarter is really strong obviously. Are there any specific vertical markets that you were successful within the quarter or was it pretty broad based strength across all the verticals?

Yes, it’s a good question. We continue to see strength in transportation and health. There is a tremendous opportunity in food that we are anxious to unlock, but the health and transportation verticals are the ones that are really contributing more so.

ENTR

Q4

Alex Gauna

Patrick Henry

Okay. And then in terms of your visibility or backlog coverage for the current quarter, do you need to do any turns business to get your guidance and typically what kind of lead time you get from Verizon, if you don't mind me asking?

So within the current quarter, we have really good visibility. We have several lot of [ph] turns business, but generally we have great visibility in the current quarter. Part of our turns business is because we are in the Motorola hubbing program. So, we recognize revenue on so out of the hub and so into the hub. That creates some level of churns business for us. Also, our chain of business have some level of churns component associated with them. But generally, we feel like we have really good visibility in the current quarter and we feel that way about this quarter as well. As far as Verizon goes, Verizon isn't a direct customer. They (inaudible) with guys like Motorola and Actiontec and Alcatel and people like that, and then those are our direct customers. So we typically get like a 12 month rolling forecast. We have 16-week lead-time that we quote to our customers. They usually don't kind of filling out of those, but we usually have pretty big coverage to our lead time. So generally, customers are pretty good about at least giving us 12 to 13 weeks sort of thing. Am I [ph] right, Dave?

DOV

Q2

Steve Tusa

Ronald L. Hoffman

Just on the outlook. When I look at your normal seasonality from the second to the third quarter, you usually have somewhat of a bump up there, maybe 5 to 6% growth quarter-over-quarter. Is there anything you're seeing out there in the near term that would throw you off your... the normal seasonality?

I think you're comment on seasonality is directionally somewhat right, Steve. It's very historical. I would think the peaks in values [ph] of that may be somewhat muted and it will be a little flatter as we look at where we are at compared to the remainder of the year. Not a lot of seasonal impact probably from second to third quarter.

OCX

Q1

Thomas Flaten:

Ronald Andrews:

And then I was wondering if you guys would be willing to share any numbers around test volumes that you’ve seen since the launch of RX? I know because of the accounting principles we’re probably not going to see it reflected accurately in the numbers.

Yes. Thomas, we had – we wanted to begin to give guidance on that at this quarter and obviously we didn’t expect the COVID pandemic. It’s a little hard to give you a real good trajectory given that we just now are starting to ramp back up even though we saw steady flow of connections to physicians and samples came in during the COVID, the worst part of that pandemic. Today, we’re just now starting to engage a lot of the places we brought on board during the virtual onboarding and we’re starting to see physicians start to order. Our goal obviously is to ramp up every site and have ordering physicians at every site. We do expect that will take a little while once we are able to engage them physically. We want to go behind these onboarding activities and we want to be able to then recruit the actual physicians within those sites that are ready to order and get them and encourage them to order. So today, we gave the number 17 patients that we had actually identified as positive that had changed their course of therapy. So that number we were public with today. So if you assume that about somewhere around 20% to 30% of the patient population that we see will be positive, you can kind of get to a number and that number is only reflective of what we were able to do during the pandemic. What I committed to everyone and we’ll continue to reiterate is at the end of Q2, once we have a much greater understanding of how – what the long-term impact of COVID is going to be, we will give you sort of a target for the end of the year in terms of what patient population that we think we can touch.

B

Q4

R. Scott Graham

Gregory F. Milzcik

Help me understand why you would retire right now.

Well, first of all, I'm really pleased -- I always say that though, if you leave the place in better shape than when you found it, you did a good job, and that's very satisfying to me. But I'm well into my seventh year at CEO, and I think it's healthy for the company, as well as for me, for a change. And don't forget, late '08 and '09 are like dog years, so it's equivalent to 17 years if you. Yes, I won't relive that. But I never truly intended to make -- being a CEO a lifetime career and I intend to continue working for the rest of my life, so when I say retire, that's just retiring from this particular position, but I will continue to make endeavors long-term. I intend in the short term to work with individuals and organizations helping to shape public policy in manufacturing in America, which I think is thoroughly needed. So that's why intend to do short-term.

TWI

Q4

Larry De Maria

Paul G. Reitz

Hi. Thanks. Good morning. It looks like sales and adjusted EBITDA obviously ended higher than expected than you maintain in the guide for next year. Just want to clarify, just looking 7 to 12 and 50 to 100 gains from where we ended the year imply from that 1.47 and the 72 million of EBITDA, that’s correct, right? So the new range on EBITDA is 108 million to 144 million. Is that right?

Yes, we’ll take the outlook issued in Q3 and apply it to the 2017 numbers that you referenced.

MPC

Q3

Phil M. Gresh

Gary R. Heminger

So if you were to look at something of a decent size, would that in any way influence your use of proceeds from the dropdowns, or, Tim, with the balance sheet, as you were describing, I mean, it does feel like there's room to be able to do both? Just curious how you think about that?

Well, first of all, we've always said, we will always maintain an investment grade credit profile. And then, it just depends on if something makes sense, how big it is – we illustrated that we certainly have the competency to be able to leapfrog markets like we did when we bought Hess when we went to the East Coast and we've been able to integrate the Hess assets very, very well into our system and exceed the synergies that we have planned. So, it just depends, Phil, on what the size would be. But I don't expect that we will deviate from buying back shares that we've discussed in the past.

HPE

Q4

Katy Huberty

Meg Whitman

Yes, thank you. I just wanted to follow-up on the server comments. Curious whether Intel [Indiscernible] product cycle is impacting the business yet or is that a catalyst that you think hits in calendar 2018? And then when you think about annualizing the Tier 1 base of business, when do you think the server category on a reported basis can get back to growth?

Great. And then listen, our Gen10 server, which is on the new Intel chip called Skylake, is off to a good start. There is some concern in the industry that because there is not quite the features and functionality advancement that there normally is in their tick-tock that, that might be a slower ramp, but thus far we are not seeing that. So, we are cautiously optimistic about Gen10. What I will say about – based on Skylake, what I will say about Gen10 is we have a real point of difference in Gen10 which is we have produced the most secure server in the world. Security is built in as a root of trust into the silicon. No one else has anything like this and this is making a real difference, because security continues to be an enormous issue for everyone. So let’s stay tuned on Skylake. We are not seeing any diminution of that tick-tock, but we will have to see how it plays out.

ASEI

Q2

Brian W. Ruttenbur

Kenneth J. Galaznik

August for Marine. And Army was?

Army has been renewed, and it continue to go on. I want to say that, don't quote me on this, off the top of my head, it was this early September conversation.

SMCI

Q3

Robert Maina

Charles Liang

Okay but if I look at the inventory levels still at fairly significant level relative to previous periods how much maybe of the inventory is related to components hard drives and memory. Thank you.

Like Howard just mentioned hard drive we already reduced $110 million. And overall inventory still high because we expect kind of good revenue this quarter (Inaudible) especially with FatTwin and our special workstation HFT optimizers solution we too need more inventory to prepare for the strong demand this quarter.

UNVR

Q1

Ryan Berney

Carl Lukach

Great, thanks. And then Carl, could you just give us your latest thoughts on where you think the right leverage target is, and maybe where you see that trending over the next year or two?

Sure, Ryan. Our comfort -- I call it comfort versus target, is at three-and-a-half; we think that the stability of the cash flow that we have can support that much leverage. An ideal capital structure would be in that area. We're at 4.8 at the end of this [technical difficulty], but over the next year, year-and-a-half, I see that coming down, I'd say, on its way to 4 over that 18-month period that you mentioned. I think that's a reasonable expectation.

POWL

Q4

Craig Bell SMH Capital:

Pat McDonald:

Thinking a little bit longer term, if you look at your business in terms of your growth prospects, looking forward do you think it's equally weighted among your industrial utility side or is it going to be more getting greater penetration on the utility side while growing the industrial is a little bit slower?

I would say that's probably a pretty good statement at the end. We definitely want to increase our penetration into the utility market space and still continue to grow our industrial.

GME

Q3

Michael J. Olson

J. Paul Raines

Okay. And then are you experiencing more mobile competition that could impact that business? I know there continues to be some new entrants in the space from time to time. Were you pressured to do more aggressive promotions there, which may have impacted mobile margins because of more competition in the space? Or were you just doing them to kind of drive share gains?

I'll let Tony -- Tony runs that business for us but I would -- one comment I would make about the mobile business is we were early in that. There are a lot of new entrants into it, but we continue to be uniquely positioned in terms of our retail footprint and our refurbishment capabilities. And our play is how do we continue to leverage that and bundle it with video game promotions. But Tony, you want to talk about mobile promotions and trades and so forth?

KONA

Q1

Mark Smith - Feltl & Company

Christi Hing

And just for modeling, can you give us a reminder on your expectations for pre-opening?

Mark, for pre-opening typically about $400,000 of cash pre-open cost and then anywhere between $50,000 and $100,000 of the non-cash rent cost?

PM

Q3

Jonathan Fell:

Hermann G. Waldemer:

Okay. With regards to your own business, there's no -- the reason to believe that shipments and offtakes should match each other more closely in the fourth quarter.

Absolutely. We had no disruption. We just delivered a little more than we usually did. But we kept our business going all through, but there is nothing of that nature on our business.

BJRI

Q2

Nicole Miller

Gregory Trojan

Thank you. Good afternoon, two quick ones. Earlier in the discussion you talked about softer weekends, I believe, where do you think that customer might be going; at home waiting for you to deliver to them, are they going to a peer group, or is this a broader macro-comment about people staying at home?

You know I don't think we know the answer to that Nicole, to be honest, and I think one of the things that we take a close look at and want to make sure is that our value doesn't get out of balance, right? So, we've been driving so much value both at dinner and during the week with the -- you know, with the one, two punch of both happy hour value and Brewhouse Specials. You know, we've -- we've been with the -- with the introduction of slow roast and prime rib which is a weekend only, you know -- was a weekend only launch and is a weekend only product. We -- we've been balancing that well, historically, right? And so, you know, that's -- that's -- the pushes and pulls of our business is that, you know, we may -- we may need more news or more value on the weekends relative to the investments that we've made during the week. I don't say that with certainty but as we're looking at these trends, that's something that we're looking at.

GLW

Q2

Amitabh Passi

James Flaws

I was wondering if you could comment on LCD demand trends in some of the other geographies, particularly Europe and North America.

North America has been good, driven by sizes, for the most part. Europe has been weak. Japan has fallen to a pretty low level. We think actually Japan television will probably be flat for the year now that we’ve anniversaried that. These are in terms of units. We’re seeing good growth in the other Asian markets in Latin America and the Middle East in terms of units.

LBRANDS

Q2

Omar Saad

Sharen Jester Turney

So you're seeing no disparity between your younger consumers and then -- and older consumers, if you will, under 18, maybe over 18?

No, we are not.

RH

Q4

Zach Fadem

Gary Friedman

Quick one. One thing you haven't mentioned today is the art curation initiative with General Public. Just curious if you can talk about this a little bit, and how you see fine art as a potential opportunity for your business.

Yes. Well, this is an idea that Portia de Rossi came to us with and she's really the entrepreneur behind it. She figured out the technology and the 3D printing or - what does she call it? It’s called yes, xenograft. It's like a 3D printing. Like - you can look at a beautiful textured hand painted piece of art. And this - it replicates it perfectly. Like, you'd need a real art expert to be able to tell the difference. And her and her partner, Ellen, Ellen DeGeneres, they’re big art collectors. They've got great taste and style. Their homes are fantastic. And they just have incredible taste in art. And I think Portia is art history major. It was one of the things she studied. And she's just very, very smart entrepreneur. And she had a big idea about this. And she kind of came through some friends, made a connection to talk to me about, here's my idea and it’s what I'm doing. She just kind of got it started. And we loved the idea. We loved her taste and style. And we said look, we think we can be the platform that can amplify your idea. We can be your best partner. And that's what we've done. And she's working on ramping production and expanding the assortment. And the great thing about Portia like you just always know like what she's going to show you, you're going to want to buy because she's got such incredible taste. Except I'd say, she's probably listening to this conference call, there’s dog pacing but she came to me a few years ago. I know, I was joking around. So it's better actually, now I really like them and we're going to probably ask them. But I’m just joking around in case she ever hears this conference call. But no, I think it's an incredible opportunity for us. When you think about all the walls in a home and all the opportunity, there's more square footage on the walls than there is on the floor. And so yes, and it’s one of the reasons why initially years ago some of you may remember, we tried RH Contemporary Art and then we pulled back and we may try it again. The tough thing about we RH Contemporary Art was you only get to sell the item one time. So if you had it like a best seller, you had a great piece, you use that transfer of happiness happens one time. And then you're like, okay, we sold it and then now what do we do? Like I got a thousand people that want that piece of art and they sold it. So, the great thing about Portia's strategy, she said - what was her line? Great art for general public - I can't remember. She has this whole great view about it is - like her thing is this, imagine if the great books in the world there was only one that you couldn't publish another copy. Like that was her whole - I thought that was just brilliant. Right. Like imagine, like every book was just a collector's item and only one person could have that book. It makes no sense. Right? And so her idea and what - and the great thing about her, she's just tremendously persuasive. So she's great with all the artists. Because a lot of the artists are trapped in the old school of like I've made this and that's my piece. And now like this one person in the world owns that piece. It's kind of goofy. Like when you think about it. If he like, a fashion designer designed like one dress or one coat and no one else could enjoy that except for one person. So she's got this different view and the way she's framing it. And because she's a credible - her and Ellen are really credible art collectors and they've got incredible taste. And they've been advocates for the art community for a long time. That people trust her, and I think she's breaking through and she's getting better and better people on the platform. And she's convincing them like why only print one copy of your work. Like great novels there's not just one copy, right. And so people are starting to get that. And I think it could fundamentally change the art world permanently. So, that's the idea.

TTE

Q4

Biraj Borkhataria

Patrick Pouyanne

Hi, thanks for taking my question. First one, just a clarification on trading. You mentioned $1 billion, I think you referred to integrated gas benefit in 2021. But I recall last quarter, you called out a $500 million benefit. I guess, implying that the trading contribution for gas -- integrated gas was the same in Q4 when I would have expected it to be better. So could you just run through those numbers again? And also, if you could quantify the electricity side trading gain there, that would be helpful. And then the second question is on Libya. I believe there's a some kind of one-off or catch-up tax payment due in 2022? Is there any details you can provide on that?

Okay. I was wondering -- I mean, catch-up tax payment. Trading in -- no, the one -- what I think just -- have you seen the results from iGRP for Q4 are quite exceptional, I think, $6 billion, if I remember. We just end the warning but we consider there is somewhere in the $6 billion, it's reported as recurrent results, a $1 billion which has been clearly given by the, I would say, exceptional trading. I remind you that in Q2 2020 our all trading, we made the same warning. So I just to tell you because the base for me is more $5 billion for quarter and $6 billion, $5 billion and $6 billion [ph]. So you can consider -- take it like that. And it's gas and power team which -- because iGRP includes everything. I will not give more detail on that. Yes. Libya. Yes, in Libya, there is in our, I would say, working capital. We had an amount of around $1 billion, a positive... End of '21, I will be very transparent to you, end of December 2021, there is $1 billion which is in all balance sheet which has been transferred in Libya to the Libya government. Why it was in our balance sheet? Like it was with all the partners is that there was a debate to which institution we should direct the $1 billion. And obviously, we were all very careful together with our colleagues, partners on the Waha field, not to direct that to the wrong institution. We wanted that to be sure that it was a central bank of Libya and the right account, not to be accused of mismanagement. So it took a little time to clarify the paperwork and we received the instruction, a clear and valid instruction in January. So the $1 billion which is in our working capital has disappeared now, end of March, it will not be somewhere there. But there are other good elements by end of March, margin calls and things like that which will compensate working capital. So yes, it's true but it's not a major point. We did not use it to make buybacks, so it's okay.

TECD

Q4

Matthew Sheerin - Thomas Weisel Partners

Bob Dutkowsky

Okay. That’s helpful and then just, lastly, on the balance sheet, you’ve got a net cash position now. In theory, you should continue to generate some solid free cash over the next few quarters, what are the plans with the cash now?

And Matt, to validate that debt position, we did all three of those things over the course of the last year and continue to have that philosophy and strategy in play in both the Americas geography and in the European geography.

PDLI

Q2

Roy Buchanan

John McLaughlin

Right. Okay. I guess I'm not a lawyer, but it seems strange that they -- it seem like maybe they were looking to pick a patent fight by sending this fax, but they don't seem to really acted on it. I wonder if they're waiting for the resolution of the Nevada action and it just seems a bit odd like they opened a can of worms, some sense?

Yeah, don't know if I can help you much there. They don't usually share. I wish they'd share their legal strategy with us, but not so far.

CVU

Q3

Jeffrey Feinberg

Good morning. Can you guys please give some clarity in terms of the previous calls, I thought it was an excellent question in terms of where you think the pretax margin you have a lot of awards and strong contracts here. Can you help us understand at steady state, please, where the potential is in pretax margins?

I'd really like to answer it this way, Jeff. The - when a year or two ago, we were probably in the, what would you say, 11%, 12% pretax margins. I would think that, that is reasonable for us to attain again. We were on track, and that was really kind of - on track to achieve that this year with the assumption that WMI's pretax income contribution would be up to a plan.So I think it's - if - that is something that we could reasonably attain in short order. Beyond that, the improvements to the gross margin that I mentioned before, a combination of not necessarily expanding our SG&A expenses, there's leverage there as we grow. So maybe a percentage or two higher than that in 2021.

SXC

Q1

Brett M. Levy

Frederick A. Henderson

Yes, yes.

Oh, I'm sorry, you're talking about -- well, that's the dropdown transaction, $365 million is a 33%. Are you talking about the remaining 2%?

ROLL

Q4

Edward Marshall

Daniel A. Bergeron

Okay. And the number you provided though, that was for Sargent or that was for the entire business?

Entire business.

GVNC

Q2

Debjit Chattopadhyay

Mark Thornton

I was just wondering because by the time 92 events have achieved in the fourth quarter at least 75 patients would have been enrolled this year. Now, will the new patients skew the medium survival to the left? Because I don’t know how would you comfort somebody who has been on the trial for just three to four months, I mean, is that going to skew it to the left?

Well, the thing about survival analysis is that all patients are taken into account. And that adds to the robustness of the total data set. So, I don’t know necessarily whether enrollment in ‘08 matters substantially overall to what is going to come. The 92 events will be analyzed based on the survival, obviously of those 92 patients but also in comparison to the others. So, I don’t think that a wave of patients enrolled this year necessarily impacts the data all that much. I think, the upside of the trial with regards to the length of time it’s been filed for all these patients is that there has been a tremendous length of time to be able to properly analyze survival on a very substantial number of patients. And as we near the 92 events I think most of the robustness of the data has already happened. I think really, these final handfuls of patients are just probably not going to impact too substantially on the data. It’s probably already occurred or it’s not occurred based on probably the patients that gotten afraid in the last couple of years.

DELL

Q3

Amit Daryanani

David I. Goulden

And I mean, I guess maybe the part I was trying to get on was, do you think FX can have some sort of impact in the December quarter on a sequential basis?

On a year-on-year basis, which is perhaps the way to kind of look at it, quarter-end FX rates would give us a neutral impact in Q4. Obviously, they were a help on a year-on-year basis in Q3, so FX would make basically a couple of points of difference. We had about 170 basis points of help from FX in Q3. And currently, we expect no FX help in Q4.

IM

Q2

Andrew Hargreaves

Gregory M. Spierkel

I want to come back to the US real quick. It seems like the direct marketers were all seeing pretty strong growth. So do you think that's the situation where you are just exposed to some verticals that they are not for some reason, or are US VARs losing some share?

I think our VAR business still is relatively solid, and strong. Really it's more of the... it's really more the corporate space that we have seen relative... corporate and government space that we've seen have seen relative weakness in. But as we look at that space, because there is probably a lot of crossover in markets served, at least end markets served between the direct marketers and our VARs, that comparison is probably not too far off.