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f63be0597961253818df065c63951000
Just had a couple of questions. First, I was wondering, was there anything one-time in the SAO margins that was a positive that may not recur as we move into next year? Or was it just mix and performance?
This is Tim Lain. There is nothing to call out. No kind of one-time items in this quarter.
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A
f743eefd41e029a7f4b8052096f17a86
OK. And then just as you look into the backlog and what have you, is there -- obviously, there's the sequential step down, we get that, but this is not -- if it were going to be potentially exceeding 20% as we move into the second half of next year? Or how do you feel about that today at SAO?
Gautam, this is Tony. I'm not sure, really, the specifics of your question. But as I said, I think 20% for SAO is the starting point. I mean we believe, as I said in my comments, there's more productivity we can get. I think we can do more with our relationships and our customers. Now will it be 20% every quarter going...
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B
0d5199fea1c19f635f4e00ab65d49759
That's helpful. And then if you could just talk a little bit about any additional Athens part qualifications you received in the quarter and maybe what the pipeline looks like with respect to additional qualifications.
I mean, as you know Gautam, not every specific qualification is -- has the equal weight, right? Some have -- there's differences in volumes, there's differences in supply chain complexity. So this past quarter, although we didn't announce any qualifications, we achieve significant progress on what I'd call high-profile...
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B
658aee81d78c9b6cc18558ccc44d6795
Tony, in the beginning of your presentation, I believe you attributed three things to the better operating performance at SAO. It was like mixed, the Carpenter operating model and Athens. My question is, is there a way we could think about it in terms of the contribution from each and maybe in percentages or numbers?
Yes, Chris. This is Tim. I'll take that. I mean, I think as you know, that's a difficult question to answer. I think where we are in this environment with the activity as high as it is, capacity makes a big difference. So by bringing those incremental capacities both through the operating model and unlocking incrementa...
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B
a510154a5e384862077261ea16c2187e
OK. There was a point where we used to think about Athens as a separate entity with utilization numbers. That seems to be merging with the entire, I guess, portfolio. How do I think about now, capacity utilization and your ability to take on existing contracts. Is there a way we can frame up the success of Athens?
Well, Chris, you know we tried in the past to give a utilization number. I think that was more confusing than helpful. You're exactly right, we now operate this as a fully integrated mill. Some of the parts that they moved to Athens may or may not be in this "VAP qualification mode." I think the key thing is to think a...
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A
75f1b1f3dcac392dd359a6aabb2aaef3
OK. That does, actually. And then just lastly, and I get what you're saying on the 737 Max program, and you're a little bit unique in terms of like -- it's a little bit tougher read. But what I'm trying to do is correlate near-term visibility with the communications that came from, I guess, Boeing yesterday or the day ...
Chris, I would look at it this way. There is a difference between production rate and booking rate. And with these products at these types of lead times, let's call them 35 to 40 weeks depending on the product, you're not going to change production rates just because -- and also, I would say, we've had increases in exp...
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B
eaf5fdd46456083f57f6702dafcc0d29
Hey, good morning. Congratulations on the quarter. Just touching on PEP, medical side seems to be growing pretty aggressively here. But how is the aerospace side on the titanium fastener and how does that look over the next couple of years.
Well, for us, aerospace is strong whether it's in the SAO business or in the PEP business. Right now, we talk about Dynamet inside of our PEP business because the medical area is growing quite rapidly over the last couple of years. We're expanding our two facilities in Dynamet primarily because of the medical market. S...
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B
f96bae10b64c6f13aec11d60f72f6391
And then within PEP, are there any franchises which don't necessarily fit the portfolio anymore? Or the strategies just moved away from?
Well, Dynamet, lets just go through each one of them. Dynamet is largest business inside of PEP. Where we are expanding, we're putting capital in to Dynamet and see a great future with that product in that business. It's very exciting that we just launched Carpenter Additives. So when I talked about that multiple times...
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A
4b130c1168417a01bc705bdab4e6c8d9
And then just one on the soft magnetics opportunity. What's the ASP of the current soft magnetic offering that you're in relative to the overall portfolio? And then do you have any new proprietary alloys as you build out this new strip mill that might even drive that ASP higher over time?
I don't want to give -- the answer to your second question is yes. To the first one, we're not giving you any specific, the average selling price could be as much as 5x the normal price.
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B
d2bfa69d168b87228353a7fdaf8efd03
Tony, just sticking with the engine discussion here and then I had a follow-up. Any color you can give us on growth and engine revenues either quarter over quarter or year over year?
Yes. No. I should have put that in my prepared remarks because I remember you asked me that every quarter. On the engine side, on sales, revenue was up 8% year over year and 9% quarter over quarter.
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A
a7d584a922364897b45c520bc425f6bc
OK. Good. And then are there any opportunities for repricing of any of your legacy engine contracts over the next several months, call it, 12 to 18 months with either -- with any of the major OEMs?
The one-word answer is yes.
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A
31be6e4b94bfff23fa91e561ae430f8f
And then also help me reconcile something. I think maybe it was Tim mentioned there was a writedown in the powder side of the business, and wanted a little bit of clarity on that given the fact that you're seemingly very bullish and very entrenched now and in the additive path to growth. So why was there a need to take...
Yes. Phil, I called that powder writedown. I mean, that -- one is in there of our existing powder business, not necessarily in the additive side. And two, it's getting normal, I'd say, it's normal -- given that we missed on PEP, we've got a explain a lot of kind of smaller dollar amounts. So we're calling that out, and...
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B
8f522603142fb8a1fed89f7e37b93041
My first question, I wanted to drill down into some of what you said in introductory comments, as I said that you're factoring in a bit more for financial inflation. Can you just expand on that and what changed in terms of your loss trend assumptions in the current quarter?
So we are constantly visiting and revisiting our loss picks and trying to refine them based on all the available information at any moment in time. I think from our perspective, it's pretty apparent that there is more financial inflation in the system today, if you will, then there was a year ago. And as we think about...
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B
b4d7c4eb9db70ed08f1be2179ac74c3b
Can you give us a sense of just the magnitude of the movement you guys saw in the quarter relative to your lines [Speech Overlap] --
Generally speaking, Elyse, we don't dissect our loss picks to that extent. But certainly, I can assure you that when we have factored it in, it has led us to raise some of our picks from what we have been using in the past.
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C
a35ad963640982ba22854c2d6addf651
Okay. And then my second question on you guys, also going back to some of your remarks. The expense ratio on 28.7% in the quarter and then you said it was 50 basis points from COVID, but it sounds like given the fact that there is a lot of leverage to the topline growth that perhaps this could be kind of the new run ra...
Sure. So what I would suggest you do is, if you sort of add back in the 50 basis points for COVID. But then you look at the momentum behind our earned premium in part by looking at our written and how that's going to come through. And well, yes, some of that expense is variable, commissions, boards, bureaus and so on. ...
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B
f7b6d88873b269cfc2195ae6e73df8c3
So the insurance segment, loss ratio ex-cat and COVID impacts, it looks like the loss ratio there back in that that was flat year-over-year compared to 2Q '20. But I think that you had some frequency benefits also that made 2Q '20 a little bit tougher the comp as you look at the whole numbers. So I want to see if that ...
Yeah, I'll give you my true sense and Rich may have some thoughts to add to it. I think the biggest piece was the comment that both Rich and I made around non-cat property-related losses being a bit more challenging in Q2 '01 [Phonetic] than what we saw last year. And I think that would be a leading factor and again th...
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A
5f7fb1c2cb10b9ef484911bcba237a22
Okay. So, I was going to maybe there was something last year that kind of dropped that loss ratio, but maybe not. So it's more just elevated this year from what you said. So, OK. That's helpful. Second question, Rob, did you approach the, I guess, the way you set reserves, the philosophy behind how you set reserves for...
Certainly, all of us, we as a team took note of the impact of COVID on multiple levels, some of it too, that was helpful. Some of it was not helpful. But probably the big piece that perhaps you're referring to is frequency trend and there were many product lines that benefited from COVID as it relates to frequency. And...
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B
07e65aa22b029dfc68bd01b49d82d68d
Okay, that's helpful. I guess, the reason I was asking Rob, because I think it's no secret that there is probably some cushion in the industry numbers. I'm not going to ask you about yours, but the industry numbers because of 2020 accident year. And I guess what I was getting at is, do you think there's any impact of t...
I think that different organizations have chosen to recognize that cushion at a different pace. I think a lot of that cushion came through primarily in the shorter tail lines, which would have been recognized sooner rather than later. And fundamentally, I think a lot of the drivers that are pushing this market to conti...
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B
83682f1a5c96665043acde0befbfaab1
So firstly on -- so the growth obviously strong. What do you see that coming back and kind of the pivot toward the growth? Does that change? How you see the loss ratio progressing? Maybe looking out over the next year relative to what you might have thought six months ago?
Yeah. From our perspective, again, nobody knows exactly what tomorrow will bring or there's always the unforeseen event. But when we look at the data points, you can see rate continuing to outpace our view on trend by and large. In addition to that, when you do the math, one needs to factor in the impact of terms and c...
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B
769324b62f410eedfde053bca3cb1584
Got it. And in my follow-up, and this is just a little bit of the reminder, obviously, Berkley has a lot of the individual underwriting entities and there was a -- these are pretty decentralized generally. So it doesn't work in such a way that those entities are kind of reporting up loss ratios to you guys. And you're ...
Yeah. So at the heart of our model, it's not an us and them so to speak. A model is much more of a collaborative one. So things such as loss pick using that as an example, that is certainly something that is a collaborative effort among really driven very much by the colleagues in the field, at the same time, it is col...
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A
558732d215e4ea5b0bf453ef06c9be6d
So please don't get angry, I got a tough question, but I'm sure you have a great answer. I look to you guys as the poster child for we recognize bad news quickly and good news, we left sort of, I guess, incubate some of your [Technical Issues] putting it in the numbers. I was just looking through the numbers and it see...
Well, I think the answer to the question, and again, we're happy to get into a more granular discussion with you offline is that we are looking at our picks. And we're looking at the historical data and we are looking at low frequency and we're looking at severity, and we're trying to adjust appropriately. I think we t...
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B
2a8f4938e02bb2fdf110fa4def50b987
Happy to do that. And the other question I had was about the arbitrage market. You guys let that fund get bigger, sometimes gets smaller. What's your outlook right now given where the market is and the opportunities there is? Will you be allocating more capital or less capital in the future to that in your minds?
I think if we take it one day at a time, we have some extraordinarily skilled colleagues that run that business and we have no shortage of cash as you would see from our balance sheet. So while it's been pretty steady, if they see more opportunity, we are certainly in our position to provide them more capital to manage...
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B
7e07d595824cc371a06849f3de37e9c9
So two quick questions. I think if I understand your response to at least correctly, you're talking about tweaking up some loss picks because of higher financial inflation. But if we take out the non-cat weather in the quarter, it looks like the underlying equity and loss ratio was better than in the first quarter. So ...
Well, I think obviously, we're in an industry where the -- you price your product before you fully know your cost of goods sold. And when we're thinking about the impacts of financial inflation, and what that may mean for our claims costs in the future, we're trying to make sure that we appropriately factor that in. I ...
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B
8a0b03070b2487b3ccda8ca1dd4428c7
Okay. The examples you gave for the financial inflation all seem to focus on short-tail lines. Are you seeing similar worsening inflation on the liability of the longer-tail lines?
Not as visibly if the shorter-tail lines is using a pretty broad brush, I would -- we will have to see the impact over time. Obviously, there can be an impact on things -- on certain things. But for us on the liability side, it tends to continue to be more of a social inflation discussion.
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A
eaacb1527154feaa23db4a3d0b95a75a
Okay, perfect. And then one last question, if I can. I assume that some of the employment costs you have are fixed costs. Is inflation there getting any worse?
I think generally speaking, there is wage inflation throughout the country, and there's likely to be more of that for at least the short-term. We'll have to see what it means over time.
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f63b6a2adfe3ab2f73a36d9a8a660dd2
The first one, just back to the fire loss you had in the quarter, I imagine you expect some level fire losses every quarter, right? And I'm just curious, kind of is there a kind of a -- is there -- is it above baseline, it was last year's fire losses abnormally low, just trying to kind of establish kind of what a good ...
Yeah, I would -- it was a series of losses. It wasn't just one loss. And I would tell you, I don't have the numbers in front of me. Rich, I would say it's a little bit of both of what Brian referenced. I think last year was a little on the lighter side, this year was particularly heavy and run rates probably somewhere ...
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2ec08dcfc742bd5022e9808ebdb78fa6
Perfect. That's helpful. And then another one just quickly on the underlying loss ratios. When you're growing your cash free [Phonetic] book pretty quickly right now. Is that mix of business going to kind of have some effect here going forward as we kind of looked at the combined ratio or the loss ratio, just because s...
I think that it is going to prove over time that the margin in the business that we're writing is very attractive.
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C
022c5fdc21a1456464728e7be9a120b8
Okay. Great. And then my last question. I'm just curious, you said you're concerned about wage inflation with respect to workers' comp. But don't you actually get premium for any type of payroll, isn't that based on payroll? So why would it be concerned?
Thanks for raising that, Brian. I may have mischaracterized it or misspoke. Actually it's the other way around. So when -- as you've had to listen to us whine for the past several quarters about the workers' comp line and how even though frequency may be the industry's friend and certainly it was the industry's friend ...
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A
4855e89b01ebe6cbe57870604d9de258
Yeah. Good afternoon. Let me start with just a small numbers question. Was there in fact any COVID expense within the catastrophe, the $44 million a catastrophe that you had this quarter? Or is that you're no longer looking anything?
So there's -- there was a relatively modest -- Rich, do you recall how much it was? Richard M. Baio -- Executive Vice President Chief Financial Officer Yeah, we had about 1.2 loss ratio points embedded in the current accident year cat losses for COVID. So just under $25 million.
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d5c4fdb38ffdc7d87f6026fe78dc7b3e
Okay. That's helpful. Thank you. And then the second question, and I'm tempted to ask you what the last thing you bought at Home Depot was what I'll actually ask you is -- in terms of competition across the industry, are you still seeing primarily rational competitive behavior, or are you seeing any signs around the ed...
There is nothing that leads us to believe. Let's put workers' comp aside for the moment. There is nothing that leads us to believe that the opportunities in virtually every other product line are not very meaningful today, and will be very meaningful tomorrow. We continue to see the opportunity to push rates further an...
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A
821c4a57a1b413505a1aaf362a3123a6
Can you just maybe update us on your thinking around the international expansion? Just how you think you're pacing relative to the multiyear projections that you guys have put out there? And just kind of remind us maybe how many markets you're in now and maybe how many you're targeting? Just a little update there would...
International is doing great. We're really excited about the progress we've made since launch. We are in currently 50 countries, and we feel great about those 50 countries right now. And the goal in each of those territories is to get deeper in terms of our distribution relationships. As Jon mentioned in his remarks, w...
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B
867d3b8e8dc42a77add721545105eccd
I wanted to ask about the Antebellum PVOD decision. I'm sure you're not surprised. How do you think about the sort of opportunity with that movie in a premium VOD window relative to your box office expectations? And how do you think about the returns available to the company? I see a lot of this is happening because of...
Sure, Ben. Thanks for the question. We listen, I would love to see every one of our movies released theatrically, and we certainly made this one with real theatrical aspirations. We have a great movie. It's a movie that is also particularly strong because it speaks to this moment in time. So just from a movie meeting c...
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B
37d8ab86cda7acc3e92c7a37ab2d22fb
One of the things we hear or you read is obviously talent wants their movie, both directors and also, I'm sure participants want their movies released theatrically, not only because they want it theatrically, but they also a lot of the economics are tied to box. Do you view that as a headwind to this model working? Or ...
Yes. I would start by saying we feel like talent. We like we want it in theaters, too. So we all would like that to happen, and we're all working aggressively. Now we're back in production already with the idea of there's a lot of appetite out there to feed. And so it's something that we're all looking forward to getti...
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B
028695cd04e53dfac17be8df3a76cc42
First, for Jimmy, leverage took a nice step down. And what we've seen with you and all the studios is that there's been a big pushback on costs till later in the year. Should we expect that reverses a little bit as the year goes on?
Yes, Alan. Listen, in terms of the leverage, thanks, you did note that we significantly delevered since last quarter. Look, we generated nice positive free cash flow after fully investing in our business, and we plan to continue to do that. I would say that on a net debt basis, we reduced net debt almost $100 million o...
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B
6bf4326ad85dbaae302bcb7d3a7b0fb2
Can you give us any sense of what the pricing is, whether the movie will run in theaters after the PVOD window if theaters are opened? And if there's a back-end share to the theaters?
On Antebellum, it is currently planned at $19.99, and with the idea that we'll play it all the way through the holidays. There is not currently a plan. There is not currently a theatrical plan. It is to really maximize the opportunity for in this moment for the biggest the widest possible audience to see it. If things ...
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A
a0fd4c9030ca9ba45f80673675e8ca44
Mad Men, did you recognize all of the syndication revenue, second cycle syndication revenue for Mad Men this quarter? Or do you recognize more after Amazon's exclusive window is over?
Yes. There's we recognize a significant portion of it this quarter based on the avails that were available on Amazon. There's some more vails throughout the year back half, but the majority has been recognized in the quarter.
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A
a41bfe444723ed17fbae1d6a36b35fbd
So domestic Starz network revenue has done pretty well. I think it's only down around 6% from where it was before the Comcast reset. So I was just wondering, are there any more fixed distribution deals coming up in fiscal 2021 that we need to think about? And do you think it's possible that you might end fiscal 2021 at...
It's Jeff. You've got a great question. We continue we continue to see great higher ARPU subs on the digital side coming onto the business, which is replacing some of the lower ARPU subs that we saw in the Comcast deal. We continue to work with Comcast. We saw a little slowing of the growth on the a la carte side durin...
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B
40ea1c808f9f5bb41ec968dfae7405e2
How many originals do you think is the right amount for Starz on a sort of cadence for your subscribers' basis? And do you intend to run those on a like one per week? Or might you do more of like a binge type of approach for the Starz content? And then just last one on Starz content, how do you think about having a big...
It's a great question. We have a very specific programming strategy as a premium service, which is a non-ad supported, very mature, very adult content that we like to say people are willing to pay for. We don't have to be as broad and try to service the home as some of the other newer launch services that we have. So w...
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d0c298793ce9d7515fd858d32cf6b6ea
I'm sure you saw NBCU and AMC signed an interesting deal, which allowed for a PVOD window of 17 days from release in return for some revenue sharing. Just wondered what your thought was of that deal? How important you think it is? And whether you're looking at any similar deals with your films?
Sure. Thanks. Yes. Thanks, Doug. Look, we there's some things to really like about that deal. I think one of the things that, I think, is a real standout in it is that it treats all the parties as partners in the theatrical and PVOD space. And so it's trying to create a partnership model where everybody wins and figure...
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B
8856a9f75edaf2d0daea077f77af1697
Any color you can give us just on how to think about linearity this year for Starz subscribers? Obviously, we've got the COVID kind of engagement bump in the calendar second quarter, and then we've got an original slate that we don't have great visibility into yet, so that's going to ebb and flow a little bit as well. ...
Yes. It's Jeff. We have the fortune to be almost a year in advance in production. So we don't expect any interruptions to our slate through the end of the fiscal. And so we have, as we talked about the first Power Universe franchise coming on, on September 6, which obviously is a big driver of subscribers for us. And t...
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B
4f76161af66595afd1a2ff9dd9b0577d
Mike, you alluded to the process of sort of enhancing customer relationships. And I wanted to ask to what extent are you still playing defense, which is keeping what is figuring out what your clients want, what their perspective is versus offense? And how successful has the recent push to cross-selling been and so on? ...
Ashwin, first of all, good to hear you. On the customer relation shifts, the key thing is -- I like Page 13 a lot. That's where we show the enterprise technology stack. And the key testament to customers getting better are the fact that they're giving us more work. So I look at that. And the reason why I wanted to sho...
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bd0d5d1a787aa45d02146a0b938e1c87
So I guess the obvious follow-up then becomes, as you look at your emerging sort of business profile, if you will, post the divestitures, including the improving stack. Can you comment on what sort of a normalized margin profile might look like? Or at least help us frame that?
The way I would frame the margin profile is you've seen us all throughout this year continue to expand the adjusted EBIT margin. We also see that there are still levers we can pull. So when I mentioned the fact of what we've gone through over the next 30 days that we've sharpened our pencil on other areas that we can a...
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99d907e759517de52ce0183f5cfff0d8
Mike, building on kind of Ashwin's comments, obviously, you've done a lot to kind of reorient the business. You've highlighted multiple times stabilizing, and that's obviously, I think, been surprising to some people you've been able to do that so quickly. Sitting here today, though, as we look forward, how are you thi...
So James, good to hear your voice and thanks for the question. I have said before that when you look at the enterprise technology stack, I like the hand that we have. We've got good scope and scale across the way that our clients think about technology. So when you think about whether it's ITO, cloud security applicati...
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1ee579726eda17682c4b8608709fef1b
And then I know that you and Ken had both talked about preparing a broader presentation for the investment community at a future analyst meeting, etc., and particularly as it relates to capital allocation and returns. But as you think about those type of tactical tuck-ins, is that something that you think you can go th...
I'll stay, James, with what we said in our script, and that's the fact that we plan on coming back in Q4 and showing you our capital allocation strategy. So in that strategy, you'll see our thoughts on dividend, our thoughts on buyback and then our thoughts on investment. And with Ken having 60 days in the seat, 30 of ...
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bc704fc901de97bd526de2b4384ae901
Hey guys. Hey, nice incremental turnaround progress in the December quarter and you're guiding toward revenue stability. But guys, let me ask about the elephant in the room. You apparently just told Atos that its takeover premium was so inadequate that they walked away, even though it seems merging with DXC was Atos' b...
Rod, thanks. Good to hear your voice. So look, I'll cover three items. The first one is revenue stability. And again, all these things tie back to what we've been saying all along. So on revenue stability, we just delivered our second quarter of revenue stability and have guided toward the third quarter. So we believe...
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cdb5491b6b599ad13eab7880b440221f
All right. So great. So it's a good segue to my other question I wanted to ask on. Are you seeing real evidence that DXC's competitive position has improved? If I look at IBM, it's preparing for its spinoff, and that's been a distraction for IBM in the market. And Atos' behavior suggests that its organic prospects are...
So Rod, the first thing is, I'll continue to go back to the book-to-bill number. That's tangible evidence. I mean, keeping that thing up above 1.0 is huge. And then, look, it goes without saying. We recently engaged with a competitor. And when a competitor wants to engage with you, you can rest assured. They've seen, ...
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b40e1cd63a6103ba168651171916622d
Good afternoon. Good to hear your voices. First one, Mike, for you, yet another kind of follow-up on the Atos approach. I would imagine as you are that that's probably not the only one of those that you're going to be getting this year. So can you just talk more broadly about how you think about the pros and cons of a...
Well, look, in terms of what we can do on our own, we really like our chances, OK? We are confident in our transformation journey. And like I've shown, I've laid out a plan, and you guys can see that, Lisa, we're executing against that plan. It was never part of my plan to come here in 16 months and then all of a sudde...
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c4c932955c617d72da02ef3b39966f69
OK. And then my follow-up is just related to bookings and then also kind of linking that to the sequential improvement in revenues. Both of which, as you've highlighted, are very encouraging. Can you just talk a little bit about the mechanics? I mean bookings have now been running over 1.1 for about 12 months, which sh...
Yes. What we're saying is we just delivered the second quarter stability, right? So that stability marries what's happening with the revenue runoff because of the terminations with the positive 1.0 or greater bookings, OK? So just balancing that stuff out. So stability means, obviously, that we're not losing more than ...
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801d9d04e9dce3a9bf735bf2984d8db6
Hi. Thank you. Ken, welcome. I wanted to ask revenue trajectory around the ITO layer. So obviously, the improvement is encouraging here. And curious, whether there's anything notable in the client portfolio, any large deal renewals or impending price down risk to be aware of that would not enable DXC to maintain this ...
I mean, Bryan, I continue to talk about the fact and I gave the stats. I took virtual clarity and I went and studied our best clients. And again, what they told me was they aspire over the next two years to move another 20% of the existing work I'm sitting on to the cloud. Now after I took them through the analysis tha...
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9848ceda768a4ac18cb742ae3759f09e
OK. Makes sense. And then just talk about the workforce. At what stage of the talent refresh are you at? How are you thinking about headcount and hiring here over the next couple of quarters?
So look, I mean, I'm absolutely thrilled about our new leadership team. And when we hire a new leader, I always talk about the fact that they owe me 10 new hires. And we're going to continue to augment the talent that we have in DXC. So I think the leadership team has rebuilt. I want to get to the middle managers and ...
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d21ab70d28c78db9157ae5efb9f9c22b
Just wanted to ask about the organic decline in electro-optics. It was weak in H2 '20 as well and I just wanted to get a sense of when growth might return in that business and how to think about the conversion of the recent $41 million Night Vision contract with the U.S. Marine Corps?
Well, we have seen a temporary delay in some of the development processes at Elbit Night Vision. This has been already solved and we expect to see the results of that in the revenues of the second quarter and on. So that is regarding your first question. The second question is just an ongoing multi-year program with ov...
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50fc43ecea979334b415a2202970a115
Butzi, it sounds like the global demand environment is very strong right now. You mentioned Europe and Asia-Pacific, was just wondering if COVID is still sort of slowing things down at all particularly with India being sort of a COVID hotspot? Are you seeing any problems closing deals because of COVID still?
We see an improvement in the overall situation, which is related to COVID all around the world. We are starting to travel and to meet customers. However, in some countries like in India and in Brazil, for example, it is still difficult to meet customers. And because of that, there are still some delays to deliver progr...
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53c34bbd877041b93e1db96730b78554
Okay. Understood, understood. And then any color on what drove the sequential improvement in backlog, it looked to be up nicely. I wasn't sure if the Greek deal got booked in the first quarter or if that won't get booked into the second quarter?
The Greek -- the $1.6 billion contract we got from the Greece Ministry of Defense is not yet in the backlog of the first quarter. We got it only in April, so you will see it as part of the result of the second quarter. It is -- the same answer is also relevant for the two acquisitions we made, the Sparton as well as th...
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b9825918885a4371d0f3c23a10ae3941
Okay. And then, on the headwinds to gross margin from the shekel strength, should we expect maybe another one or two quarters of headwind there before things kind of level out, what's the right way to think about that?
Hi Pete. We expect this over the year, over the rest of the year to improve our gross margins gradually. We expect to have an improved number in the second quarter. As you know, we do not give guidance, so we'll not say anything about the specific number, but the improvement will come.
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e342e62ef8a21aa1f55f97349131c654
Okay, got it. I guess Yossi, just a couple more for you. The decline in marketing expenses this quarter was fairly substantial for that particular line. Was that just kind of a one-off spending save there or do you expect that spend to return to kind of that $70 million or so per quarter level or is that more of a perm...
No, this quarter it was an extraordinarily low number, low travel, low marketing expenses, essentially no meetings face-to-face and no shows and so on and so forth. So, looking forward we see that we will catch up on this in the second, third and fourth quarter, gradually grow over the year. And essentially I would not...
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13b65f496d3fe7051dc0cfd56d260d51
Okay, OK. Got it. And then just last one from me on the IMI payment that you mentioned in the quarter, is that the last payment for IMI? I had actually modeled a payment in 2022, so I wasn't sure if you had one more left or not?
Yes. This payment that you see that we did it in January, we paid it on January. Initially it was planned to be paid in December. So it moved a couple of days into this year and the next payment will be toward the end of 2022. It may move also into 2023 but right now it's planned for the end of 2022. And that is -- yes...
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33ee4be22395e1e8d076d8fb7a91817b
I have two questions. My first question is, if you can tell us a bit about the civil aviation regarding the COVID-19, do you see any recovery in this field?
Yeah, well, the worldwide expectations and plan right now is that the recovery will be gradual and will come back to the levels of 2019, somewhere in 2024. And that is overall opinion of most of the analysts of that business area. In our operation in the U.S. we do see some recovery. It is not yet at the rate that show...
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f0ee67a7a42aa477a1f9914d767b79f2
I understand. Thank you. And then the second question can you tell a bit about IMI implementation, what about it, where does it stand?
Organization. Hi Dina. We combined -- as you know we combined IMI with the land division in Elbit. So in this division we are producing platforms like howitzers and mortars and upgrading tanks. And we are also developing and delivering guided munitions. Recently we announced reorganization in Elbit and under this reorg...
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492db84a541b70a786ee6bab21a9f447
Hey, good afternoon. I have also a couple of questions. The first is what immediate or long-term impact if any are you seeing from the recent operation in Gaza and the results on the local scene and maybe results concerning potential exports and will it affect in some way to think when bookings from local and foreign c...
As you know, Israel customers' IDF is a very important customer to Elbit and we are working with IDF to develop and to deliver new systems for many years. And of course we supported our troops during the [Indecipherable] in Gaza. I'm happy to say that the solution that we provided was relevant and effective. And we con...
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6eaa0bced5f77a918c4e5efcd9d5565a
I have a question if you don't mind. I know that the army is very much waiting for this high-power laser. When do you think, I mean, roughly it will become operational, is it about two years, three years, or is there any deadline?
No, this is more or less the timeline. We are actually waiting for the defense budget, for the Israel defense budget to continue the development and the production. I hope that this budget will be formed soon. And I believe that everyone is convinced right now that there is a need to find a way to finance this program ...
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0740b66b1a0d6f9912ed54bfdd799a9d
In a few years you mean more than two? There is no besides the deadline. Okay. And I have another question, actually more on price surroundings and I really would like to learn from your experience, because as we all know here locally in Israel, the Israeli shekel strength is hurting most exporters in Israel. But not o...
Hi, Ella this is Yossi. I would give you two aspects of that answer. One is on contracts that we have. In quite a lot of them we have elements of indexing so that they do protect us, maybe not a 100% but quite significantly material protection against inflation. It depends on the customer and on the currency. So it var...
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ba45a4da539395e2736f80804bd5dfb9
Well, first it's good to hear that many aspects are protected because the exchange rate changes were quite dramatic as we know here. And on the other hand, do think we'll see also the time you're collecting payments from your customers becoming shorter or because you mentioned as far as one of the companies with the lo...
No, I think we did complete -- that's the strategic cycle that you referred to about using the payment terms as marketing tool. We stopped that actually or significantly reduced that last year already. And then came corona, that's right. But one of our major customers, the Ministry of Defense here in Israel did pay nic...
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0f1d80ebe5b125ea62ba1ac0bae94289
Oh, OK. Thank you. It's not that important. I just was late in reacting on the call. So, I would like to ask you about factoring as we spoke about cash flow actually, how -- are you still using it and is it still a -- is it a higher rate now than you used to use it or it's the same level more or less?
Occasionally we use it. In the first quarter we had a relatively low level of factoring. And if you look at the trend, compared to last year we have lower level in overall, and we plan to have a lower level during the year as well. In assessing -- in our assessment, the payments from the customer will come in time and ...
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f6401ef48bab7ba47ca466ddbb82ddd6
I wanted to ask about your ASPs, your average selling prices. It seems like earlier in the year, they were holding up a little better than maybe I expected, even with this kind of similar backdrop, and it seems like the levies on selling prices might have kind of broken a little bit harder this quarter. Can you just tr...
Yes, I'm not sure that we can answer the question exactly as it was -- as you asked it. But let me say that it's been highly competitive all year on -- it didn't change during our fourth quarter and it's driven both by domestic competition and import competition, and I think one of the underlying realities is that stee...
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2dba88edf26e45cd358eac50c960a575
Okay. That's helpful. Mike, would you happen to have the 2019 gross profit drivers kind of unchanged from last year, or there is any -- anything to highlight there?
No. I mean, in term -- are you referring to just the relative impact on the quarter or... Right. Yes, we will actually be posting an updated presentation later today that will provide that detail. But when you look at the changes in the components, you'll see there is a shift with the raw material percentage being a l...
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3aa9e0b05c52e154ff92570e03ace17a
Okay. And just maybe one and I'll hop back in the queue is just, can you maybe talk about how weather has trended maybe throughout the first few weeks of October?
Yes, I mean still, it's been spotty. I mean there has been some markets that have experienced some rainy stretches. But overall, I think we're still back down closer to normalized levels from what we experienced through the first three quarters. And yes, I think, if you look at the Q4 weather data, just from a precipit...
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45a3b3942c1e3ea10d01bb22d1e13529
When we went through the period of dollar strengthening as we saw a plus, the pending tariff increases by another 5%, does that create an exacerbation of the problem that you had seen in the prior quarter, and does that provide any -- somewhat or a little bit of relief as we go in, if those metrics aren't in place as t...
Certainly, the strengthening dollar has an influence, but I would say it's moderate at best. And the tariff increase you're referring to is not applicable to Section 232 steel tariffs that's affecting Insteel, it's probably the 301 tariff, that is a China issue. So I would just tell you that the dislocation of steel pr...
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54850385f12592a6c7b08d1829ce6314
Okay. Mike, you talked about 500 basis point reduction due to the inventory and pricing. Obviously, you can't attribute all of that to the 30% that's affected directly by the imports. Is there a way to try to splice that to see where the true impacts came from?
Yes, I don't know that we can drill down to that level. And I think just getting back to my comments on the spread compression that we've experienced over the course of this year and truly it is the function, the timing being behind the curve, aside from the increased import pressures just as the matching of the higher...
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977b0260dfcd4c42cf72957e6b8711da
Okay. There have been reports of a potential pullback in the FAST Act that could be implemented in July 1 of 2020. Do you have any further color or commentary that you could provide in regards to those reports that possibility of $7.6 billion being taken back out of the original budget?
Now we have seen some references to that action and concerned about the potential impact. But I think of greater concern is just what comes out of the budget process in D.C., where we're back to operating under a continuing resolution that runs through November, and you may recall that when there was a two-year budget ...
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f0a8a2944ac9f288c71464edd398b66a
Hi. I'm trying to get a better understanding of the tariff situation. Can you be specific on any responses you have received related to your efforts to get the 232 tariffs extended?
Well, as I said in my prepared comments, we have been successful in providing extensive data on the impact of imports on our performance, and I think it's clear that there is an unintended consequence, I think the administration appreciates that there is an unintended consequence. And the question is whether there is a...
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49a52ff10d089e7b0cd699eb15e65ba0
I mean it would seem like there would be a formal process. You file a complaint and they're required to reply you in writings. And that's just not the situation right?
That's not the situation at all. This is a matter of administration prerogative, and that's how the tariff was implemented and it will be administration prerogative to change it.
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3e0da5833d16b1299380fbce2b3a7541
Okay. I mean, is the problem also that you're not trying to get tariff relief, but you're trying to get tariffs applied to others, and they just -- there is just not a real mechanism to deal with that.
You are correct, that we have not -- we have not advocated for termination of the Section 232 tariff. We have advocated for recognition of independence of the supply chain where you can't tariff upstream products and not tariff downstream products without creating exactly the situation that we are confronting right now...
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827e05bb225041edf1b5710896fd4982
Just 2 quick topics here. First, it sounds like you guys have a really good handle on the storms as it kind of relates to policy decisions in Austin are there sort of any potential opportunities for CenterPoint as we think about the plan as presented this morning and just remind us, is there sort of any impact to Cente...
Yeah, well, appreciate it. Let me take the, maybe the first part of your question, Jason can take the second part. As you can imagine, there is a lot of dialog going in Austin, even as we speak here, the legislature is in session so everyone in the political sphere is in Austin at this point in time, but I guess as I l...
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661ea47396d8992580214e4df12fd800
And then just lastly on the Midstream exit, can you just remind us Dave on sort of the various exit options you're thinking about is, ie., exercising your demand writes, the most viable path versus slow triple or piggybacking and I know the exit is going to be obviously satisfactory to utility investors, which clearly ...
No, I think a good question, and I'll let Jason clarify, but before you can exit you have to minimize and so I think what we've done with this transaction, it has allowed us to sort of minimize our exposure and now and when the transaction closes, we'll pivot very quickly to exit and believe me it's top of mind in term...
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9fc9e24b80dc920455b32e4b7fc38c26
My first question is back to the Texas weather event. First, I just wanted to confirm your comments that the guidance of 2021 does include whatever drag is associated with the financing to cover the cost immediately. And then, just related to that when we think about your thoughts on the recovery and the recovery perio...
Yeah, let me answer the first one, I'll let Jason answer the second one. It seems like we have a routine working here, but absolutely the guidance we have out there does include the drag of the storm, as I said in my prepared remarks, there'll be some extra interest pressure on there, but I view that as a headwind to m...
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2eb0466b88b7f33ccfbbc8cc69506d30
And my only other question is in for 2021 guidance and the assumptions that are embedded in it, it seems like there is nothing major related to any COVID related items. Is that correct.
That's correct. You know as we articulated toward the end of last year. It's our responsibility to manage the ups and downs the headwinds or tailwinds of this business. COVID remains a small headwind, but we have every confidence that we have the tools to manage through it. And one of the other things that I'll just co...
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f4e090cfeb27611bae14de8a1daf4354
Hey congratulations team so perhaps just, just to stick with the cost question and cost allocation question coming out of the Enable transition here. Can you speak a little bit to how you're thinking about that evolution here a little bit more specifically just the cadence of addressing and minimizing that element. Whe...
Sure. Good morning. Julien. I think given the negative tax basis that we have in our current Enable units that will transfer over to Energy Transfer units. I think it's fair to characterize about 50% of the proceeds that we would receive upon sale of those common units would result in -- will be paid in taxes. And so a...
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9f0d63cd3ac5fc5a6a473d6900e4a39e
Can you elaborate at least preliminarily on how you think about winterization options coming out of the deep freeze here. Clearly some of your earlier comments on the call suggested the bulk of improvements seem to be more on operations but curious as -- as you perform your task being wires utility and the gas LDC, how...
Yeah, let me, let me take that one on, first, I think there -- there has been a lot of dialog across the state about a lot of the reason the generation went down is because it was not properly winterized and that includes both the wind, solar, and gas generators, but in fact, at one point, the big nuclear plant STP als...
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9aca7daa0259e56dfd6f0beaa633fde7
Thank you. Hey Dave, Jason, Tom, is it possible that you could break out the $2.5 billion by states.
Sure, I'll give you the 3 top states, kind of in Texas we have about $1.25 billion of incremental costs, in Minnesota about $0.5 billion and in Arkansas, we've got about $350 million and then the rest is spread fairly evenly across the other jurisdictions.
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1dd82eb32d4bb0a01fb94accfc2326de
Okay. And then when you talk about the regulatory mechanisms for timely recovery could that potentially include securitization of some of these costs.
I think it's really kind of early to get ahead of the regulatory process but securitization has been discussed and so whether it's securitization following -- the current recovery timelines are about 12 months in some of the jurisdictions, particularly those 3 that I mentioned, a year to recover may be too much for cus...
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a88c5643e480c4c51b1a428f3db6c885
Okay. And then I guess, maybe a question for Dave. So just for the layman percent, it might be hard to kind of separate CenterPoint as the utility versus the generators or ERCOT or others. So I'm just -- it's encouraging to see that the Mayor made you the head of this fundraising campaign. But just could you give a sen...
No, I would say generally, I think everybody gets and understands the roles that the generators, the T&D companies and the retailers basically play within Texas. We were very aggressive in our communication last week, putting out sometimes -- always one and sometimes two press releases every day, trying to inform peopl...
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87083c8dc9e200047b70e0a81f066902
Okay. And then finally just I know in the past you and the other utilities have proposed adding batteries on the utility grid and I'm not sure that would have helped here or not, but just, is that something that could come up as a potential thing in the legislative session.
Yeah, I think right now, almost everything is being considered up there, but I think our -- our pitch would be in an event like this, absent having your own generation, which we don't want to do, we were at the mercy of ERCOT. But I do think that around the edges and for sort of incremental ability to react to short-te...
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198830ce03d380b0b52b6d06b912cd65
Hi, good morning. Thank you for taking my question. All the questions about Texas and other pressure and issues have been answered. I just wanted to ask you about organizational morale. It seems like you guys are very focused on the O&M reductions and the perhaps you are asking lot of people within the organizations to...
Thank you. Yeah, I mean obviously this is a biased view and a personal view. But I think morale is really, really great in CenterPoint right now and I think if you, you got to look back over what this organization has gone through in the last 12 months and it's been a wrenching change. I am the 3rd CEO within a year, J...
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31a74a5c832c58a6594dc106c2de3e37
Hi. It's Roy for Jason. Thanks for taking our question. I had a few on the manufacturing bit first. I guess, can you just tell us the location of the current heparin supplier? Is Alcami -- just so I'm clear. Is Alcami we going to work with that supplier as well or just a new supplier? And then conversely, is the curren...
OK. Thanks, Roy. In terms of the API player, I think we're comfortable saying it's in Europe. Alcami will only be working with the new heparin supplier for the time being. That's the work stream that we are focused on. And the existing CMO will remain with the existing heparin supplier. And that's the current way we've...
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9f84f08290bac0ccb460443b7eb43065
OK. Great. And then if you submit the supplement at the end of 1Q next year, what do you expect to get for a review period, assuming it's accepted and then on the reimbursement bit for the outpatient part, do you guys have any examples of companies that have argued to CMS for the J code and now the TDAPA have been succ...
Well, to address the first question first on time lines, I'm going to turn that over to Phoebe. If you want to comment on review period. Certainly. Thanks for the question, Roy. It depends on what you're referring to is the submission in the first quarter of 2023. If as we hope the deficiencies can be addressed quickly...
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72096c4ff19872c552e15a8f0bec5850
Good morning. This is Lez on for Joon. Thank you for taking my question. Joe, I guess we'll start on the pricing. Thank you for that color that you provided. Can you provide a little bit more detail, I guess, on how this -- how do you expect to play out closer to approval -- and when do you think you'll be in a positio...
Well, look, we've listed WAC as part of our NTAP application. Certainly, we are not bound to list at that WAC. As we said in the prepared comments, we have to set one WAC even though we do expect to have different net pricing across different settings of care, we're not going to comment at this time on net pricing in t...
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ce42272a9546952df71fb0137a338806
Got it. That's helpful. And then in regards to the APA supplier, what kind of time frame is appropriate for resolution of the warning letter and then do you think the warning letter needs to be closed out before the NDA can be refiled?
Sure. Thanks, Les. It is a time line for resolution of warning letters totally depends on the interactions between the facility and FDA. And we're obviously not part of that process. And we are aware of information provided by the API supplier that they are working as fast as possible to get the issues resolved. And we...
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90c8d34c477dad82f218ec5f998bd908
That is helpful. On the with Alcami than you have similar capacity to the current EU CMO. And also, it sounds like you've identified the alternate source for heparin API supplier. How quickly could that be put into place? And will they just work alongside of Alcami at the same time?
Thanks, Les. So in terms of capacity, Alcami has sufficient capacity to handle our commercial needs should we need them to. In terms of the alternate -- or the additional API source, the time line would be similar to -- or identical to the time line of getting Alcami approved. Those would work in tandem. That submissio...
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3735717b03b3a2a154a1d656d8bfcb7b
Got it. Thank you. And then last one for me would be on the -- you mentioned the trade name issues. Can you just clarify that a little bit more? What are your options here? Is there a potential for renaming? And has that affect any impact that you already have completed on your marketing efforts? And is there any issue...
Thanks, Les. There's really no issue here. It's not unusual what happens periodically when applications are under review. When they go in, there may not be any names that have sounded like complex. But over time, as new names get submitted, the FDA identifies the source of confusion, notifies both application holders t...
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78a68f0793f97c6594d9f31163767f7e
Hi. This is Rohit on for Serge. Thank you for taking our question. In terms of the NTAP reimbursement, there's a conditional approval by July 2023. Are you able to extend the date if the state can't be met and talk about the options there.
Thanks, Rohit. As I said in my prepared remarks, we're going to submit a duplicative application this October to get into the next NTAP review cycle with the expectation that we would still be eligible for approval as we were this year. So to the extent that we did not get final NDA approval by July 1, 2023, and this N...
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e2b8989bf8d464173ad7c3882f803a92
Thanks. And then another one regarding the prefilled syringe product. Just based on where we are now, how much of a priority is that? And then, I guess, how do you expect to move that forward? Thanks.
Thanks, Rohit. So I mean, I really see the PFS as more of a life cycle management. Obviously, it's nice to have. It's not critical to approval or to launch. We are focused on getting approval of the NDA. And we will continue to move PFS forward, but once we have final approval of the NDA.
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a0661d81ad1439d6c3a9822ebdc6b163
Given the CRL and continued delays on the regulatory side, could you walk us through what the commercial team is focusing on? What can we expect over the coming months?
Sure. Thanks, Dan. So there's a lot of, I'll call it, pre-commercial activities that still need to take place Certainly, on the infrastructure and systems side as we're preparing to be able to warehouse, distribute, ship product, collect cash. Those work streams all continue unimpeded. Then there's also a large number ...
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081ebf358743784557355cc9b9f0ce3e
What is factored into the current cash guidance when you say through 3Q of 2023?
Sure, no problem. In terms of the cash guidance we give today. This includes ongoing manufacturing activities, commercial launch supply and other commercial prep. Clearly, we would plan to moderate our cash burn to align with the time line for a potential regulatory approval, for example, the hiring of the field force ...
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A
48bebe92cc7df5335b26ec1affe55a1d
Does the company need to do a large financing to fund ongoing spend?
OK. Thanks for the question. We don't need to do a significant amount of financing given our cash runway takes us at least through the third quarter of 2023. As we have said in the past, CorMedix is always looking at a range of opportunities to fund our ongoing business and we have both the shelf on file as well as an ...
direct
[ "direct", "intermediate", "fully_evasive" ]
A
17d15a878807629172f04091b8e698f4
Good evening. So, I have two questions. The first one is about omni-channel strength. So, I would like to hear from the management team about their thoughts on the competitive environment, as well as the differentiation of JD in community group buy and new retail. And then secondly, I just want to get a sense on the F...
Thanks, Eddie. This is Sandy. Maybe let me take the things with related questions first and Xu Lei can comment on the omni-channel strategy. So, on Jingxi strategy, first of all, we believe this social purchase model is definitely a long-term initiative. There is a structure of opportunity for JD to further penetrate d...
intermediate
[ "direct", "intermediate", "fully_evasive" ]
B
4115f56ecd49791d5e6e828b710f6773
Thank you very much. Thank you, management. Thank you, Xu Lei [Foreign language], Sandy, and the team. My question is mostly on our investments and how we see the balancing between -- and growth of our core profitability and the investments, given quite a lot of our peers have been seen reinvesting a lot of their profi...
Thanks, Ronald. Let me take this question first. I think, first of all, we prioritize growth above the importance of profitability because across all of our business lines, we are still in high-growth stage. But, you know, each segment or each business line is actually in different development stage. So we have kind of...
direct
[ "direct", "intermediate", "fully_evasive" ]
A
7f9bd4ef517fdabeaf5ba300a7d112f6
Hi. Thanks, management for taking my questions. My question is more about user growth, as well as the penetration to lower-tier cities. Can management share about our strategies on how to further grow our users for this year after reaching the 500-million milestone? And on that front, can you also comment our strategie...
This is Xu Lei. Your questions on the users, we'll adopt a more flexible approach this year from two aspects. First, we will increase -- we will diversify the channels and the approaches for our new user acquisition. At the same time, we will manage more high quality -- we will manage our cost and the quality of the co...
direct
[ "direct", "intermediate", "fully_evasive" ]
A
b7d43d77b82dd1def450328cca476bb2
Hi. Thank you. Good evening, management. Thanks for taking my questions. Congrats on the strong results. I have a question regarding, you know, how should we be thinking about for the second quarter trend. I believe -- I think, Sandy, you previously mentioned, you know, we should look at on the first-half growth rate a...
Thanks, Alicia. You know, during the COVID outbreak had very significant and very different impact on the performance of our various categories last year. For example, I still remember that the home appliance category was extremely weak in Q1 last year but was extremely strong in Q2 when the pent-up demands were releas...
intermediate
[ "direct", "intermediate", "fully_evasive" ]
B
ddba1293eef3bf72aab037e17f68ee90
Maybe you could talk about how you guys think about free cash flow generation and its application to either paying down debt and the exploration opportunities at Rainy River/New Afton.
Yeah. Let's start with the exploration. I can tell you that we're absolutely excited and ready to go. I think at this stage, it's a matter of a permit completion. We do acknowledge and understand that in BC, there has been some prior to giving to permitting operating operations and others. I think it's a matter of time...
direct
[ "direct", "intermediate", "fully_evasive" ]
A
9b8c8ed980340a9f9bcf9a4969cb06e6
You mentioned in the slide deck a couple of times that you were pleased with gross margin with PTI margin progress, and you expect it to achieve industry-leading operating margins over time. Maybe you could shed a little light on that? Industry-leading for luxury vendors is 8% to 10% PTI. For Porsche, it's smaller, at ...
Sure. I've mentioned this before in terms of regulatory credit. We manage the business -- said differently, we don't manage the business with the assumption that regulatory credits will contribute in a significant way to the future. I do expect regulatory credit revenue to double in 2020 relative to 2019, and it will c...
intermediate
[ "direct", "intermediate", "fully_evasive" ]
B