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40987ca23230bd225503560a2f9642d1
I think in 2015 and '16, your deposit cost were maybe -- total deposit costs were maybe half of what they are now. Do you think this is a type of environment where you can drive deposit costs back to that level over, I don't know, call it, a three- or four-quarter period? Or do you think funding is still so competitive...
We still operate in a very competitive funding market, but I like our chances. It's going to take time, particularly as it relates to our CD book, which is large and will be subject to repricing. But it all depends on the relative duration of the current zero balance policy. The longer it lasts, the higher our probabil...
intermediate
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B
e231f93f41d26833792bf3e630c3b641
And Paul, kind of given where you are with funding, would you anticipate using the fed facility to fund the PPP program? Or do you have other sources in mind on how you kind of plan to fund that? Obviously, it will somewhat depend on how long the loans stay there, but just kind of curious what your thoughts are around ...
We're fully operational on the PPPLF funding program with the fed, and we'll be -- we're effectively going to pivot our daily cash desk from previously being managed -- managing excess and/or capital needs to target through the FHLB that's kind of aligned to the PPPLF line of credit. So we'll be using it to the extent ...
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A
1b6b720d8e269e2198e7b53cf21cb6fa
Got it. And Paul, final question for me. I apologize if I missed this, but do you think you can kind of hold expense growth to kind of this low kind of single-digit rate in 2020, even if you incur some additional COVID-related or PPP-related expenses over time, etc.?
I think so. I mean, we're obviously being very mindful of discretionary spend, but we're being -- we're focused on, as we've always been focused on, kind of spending to support the business through this cycle. So we do think that you can expect, I think, spend to not vary too widely from current levels.
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f06e11c175aaab11812eaed8bf850870
Want to go back to the discussion around loan growth. And on the prepared remarks, I think there was a mention that the paydowns were elevated again in the first quarter as they were most of last year. Some of your peers have pointed toward a slowdown of the level of paydowns given the uncertainty. Did you see this tow...
Matt, no. I think the $200 million in paydowns was pretty reflective of the entire quarter. I don't think there was any peak or valley in the quarter. It was pretty consistent. So it may -- we may see something different in the second quarter, but for the first quarter, it was elevated. There were still some -- early i...
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9b8a583769ec7b42aa7bfb3568e59634
I guess, Ray, just in general, are you seeing some of the competition pull back just overall in recent weeks that would lead you to believe that the paydowns could slow this year?
The -- I would say that the paydowns would have been slow, at least the conversation around paydowns and anything non-PPP related. So core is probably has been shifted a little bit out. But whether that results in the outlook on the year, Matt, I don't have -- I don't know that. I think that there's definitely been a p...
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8cbbf953bfd6fab461bf3c27f2fa1d69
OK. And then just overall, you gave us some good details on your loan portfolio on Slide 13 from a risk management standpoint. You gave us hotels, the restaurants, the retail and the indirect impact of oil and gas, and that's helpful. I'm curious, how are you guys assessing the more riskier, the more dangerous part of ...
Well, one thing we can look at, Matt, is the deferrals associated with some of those buckets. So it's not that it's 100% deferral on those buckets. So there are -- we do have some, what sometimes Steve says, well-heeled customers that are in those segments. But the other ones, we are seeing deferrals. We do have some S...
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ed07c0e307ff4a25b856e64274d4f19f
Got it. And then just one more question. I guess, Paul, back to you on the discussion around the margin, can you just remind us what portion of your loans are variable versus fixed? I think you touched on this earlier, but I missed it. And then within variable, how much of those loans are now at their full rate?
All right. So you've got about a little under a third of our loans are in -- are variable-rate loans. And really, all of them -- just about all of them are at or through floors, so are supported by floors or are at floors. There's very few loans in our loan book that are -- that do not have floors. So appreciably, ever...
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a86c240fa726c3b00662a7609a7c2898
What is the average fee for Phase 1 of the PPP?
It's around 3%.
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A
fcba993c4056e8599775e9f77099c114
3%. And in Phase 1, you did $640 million. Any estimate on how active you'll be in Phase 2?
It will be less than $640 million. Yes. Sorry. I mean, we'll know here pretty soon. I think we still have a window. The window is still open as of today, right? Yes, Brady. It would be some -- I don't expect -- I wouldn't expect 50%. It would be -- maybe 25% to 50%, not more. Yes. Maybe a third of that level, Brady, in...
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A
0f61c8e9bae3ccc4a5c5c252d90f7c35
OK. All right. So about $200 million or so. And then what would have the CECL impact had been if you had adopted -- I know in the case, you talk about, I think, the reserves going up 25% to 50% with CECL. What would that January 1 adjustment have been with CECL?
I think you can probably take the midpoint of that range and be around there if I were to be estimating. But -- and that represents predominantly the effect of both purchase -- the adjustment on purchase accounting and then reserve for unfunded commitment. When we try to roll forward, we did run CECL side by side, obvi...
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6e1bf881dfe30b0e20992811cd330e95
Just following up on the PPP questions. I guess how are you looking at this program? Are you focused on existing customers only? Or are you using this as an opportunity to acquire customers and gain share? And I guess, how has that translated into maybe any deposit growth, thus far, in the second quarter?
I'll answer -- Okan and I will both answer that one. So on the way we've approached it, David, is you -- as you know, we've had a market share strategy approach for a long time. So we have in the last -- for '19 and '20, we have 13 producers hired in '19 and four more in '20. So this has been more of as a catalyst to t...
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eb5bcb5290e192511a98df66f30a5db1
That's helpful. And I guess, kind of along those same lines, I guess, has the way that you performed and the strength of your balance sheet and your -- just your overall culture, given the disruption in the market, has that created additional hiring opportunity for you or any other kind of opportunities?
We've had some folks on our radar for a long time. This -- how we've handled this may be able to attract those and now see how we performed. But it's been probably quiet on the hiring side during the PPP. And even if we did, the onboarding would be difficult doing it remotely to get someone set up. Yes. We've been pret...
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90fa6c1aae280e83743151e586ff1274
OK. That's fair. And then last one for me. Just wanted to follow up on the core NIM. I mean, I guess, in light of the seemingly limited downside on loan yields and pretty substantial opportunity on the funding side as you optimize and reduce costs, I mean, I guess, do you think -- exclusive of the PPP program, are you ...
We think there's -- depending on the nature of our execution, there is potential to expand, but it's hard to model that as it currently stands, particularly given competitive dynamics that are shifting. We do know the opportunity for repricing liabilities from here on in. It's going to be a little bit more gradual sinc...
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ead1156b65ec512a964fada57a1766b6
Thanks management for taking my question. Congrats on a very strong results and rebound in travel demand. My question is regarding the resurgence of COVID-19 globally. International travel remains uncertain. So how will Trip.com prepare the strategy and focus in this environment? Thank you very much.
Thanks for the question. We have full confidence in the complete resumption of international travel. We have already seen the promising recovery of travel in some countries and regions with widespread vaccination rollout. Across all our markets, we are seeing domestic travel market rebound and gradually make up the los...
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8998b7df3a1c408c9e6741ec6e4aab43
Thank you, James. Jane, Cindy and Michelle. I guess, following on that recovery part, could management share just how we see the forward say few quarters and maybe into 2022, just how are we expecting that international recovery path may be, if not quantitative maybe qualitatively that recovery path and how will we pla...
Thanks for your question. We look at our business in three segments. The first one is domestic travel. The second one is for the areas outside of China, the domestic travel within each respective countries. The third one is cross-border travel. So first of all, for domestic travel within China, we have full confidence...
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b7798ba0a0fe1e42b625c5c1ffeb50aa
Thank you, management for taking my question. I would like to follow-up with Ronald's question, but from a slightly different angle. So I think ultimately COVID will be behind us, it could be at the end of this year, it could be mid of next year. When we enter into the post-COVID stage, how do you think about the more ...
Yeah. I think we are all very excited to wait for the pass of the COVID from our search results, our sites that pent-up demand is very strong. So we are confident, eventually the scientists around that the world will come up with very strong method to contain this virus and government also through the past year have ac...
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114d6be05cd9d904624e1faea1b2ccec
Hi, good morning. Thanks management for taking my questions. I have a question relating to the expense side. Given that we have done a lot of work to optimize the cost, how should we think about the trend in expenses going forward after COVID. Thank you.
Thank you, Thomas. Yeah, thanks to our largely flexible cost and expenses structure and efficient operating management. During past year, we actually further streamlined our operations across business lines in addition to certain adjustments related to COVID. Our improvement on content and cross-selling going forward w...
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3506f021497ba1c3eec63b346b99f2c4
Great. Thanks for taking my questions. My question is regarding advertising opportunity. I was hoping maybe, Jane, you always spoke about live streaming and Star Hub. They all sound very interesting. And can we maybe get an early sense about understanding the friction that you're experiencing with advertiser when they ...
Sure. From a long-term perspective, the content and also advertisement market currently is about RMB90 billion market. And by 2025, the market size is expected to be around RMB140 billion. And our target is that, if we work very hard to address about 3% to 5% of the total market, that can be quite significant for our t...
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63fca67f67b5acdd7af75aa2da2c035c
Good morning Jane, James, Cindy and Michelle, congrats on the very strong results this quarter. And thanks for taking my questions. My question is related to government's recent antitrust push. We have seen a couple of segment leaders recently being inspected. And also some of them even pay the penalties antitrust move...
Thank you. We fully support our government for their efforts to create a healthy and sustainable growth market. Our belief is that if we can create a market that is healthy and sustainable, the industry will grow in a very healthy manner. Secondly, our market share is quite small still. The market share for 2019 is aro...
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18b4f3b04cff97463c85c51f39cfff84
Good morning management. Thanks for taking my question. I have two quick questions. On the income statement, for the corporate travel, so I saw like, a year-on-year 100% growth and it's really outstanding. So I really want to understand what are the drivers behind the 100% year-on-year growth and what could be the futu...
Thank you, Tian. Ctrip is always the leader in -- especially in the business travel space. Of course, the 100% growth, the first reason is the comparatively low base of last year because the first quarter of last year is the outbreak of the pandemic. Basically there is a very low traffic, especially for the business tr...
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7241b616e56ce56374d93407914f14a1
Thanks management for taking my question. Congratulations on the solid results and the recovery. So with the strong recovery of the massive travel, management's expectation for following quarters by different segments, especially for upcoming summer break and the Golden Week, National Day. Thank you.
Yeah. The Golden Week holiday is very strong. As we discussed, the pent-up demand have driven the growth. As previously discussed, the volume growth for the hotel is more than -- it's a 3-digit growth for year-over-year. For 2019, it's also grew more than 50% year-over-year. For air ticket, the growth is also 3-digits ...
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e0f0c8e89d3c996fbffb4f4385e03ca3
Another strong quarter of strong general embedded wins. It's been a few quarters now where you've seen more general embedded wins than auto. What is -- how does the lifetime revenue stream look for some of these programs with respect to production royalties versus designs? Because I assume that some of these new wins i...
Generally embedded, you see the production being a lot sooner on average, probably a couple of years out versus six or seven, or five or six years. And typically, not as big in terms of dollar on the ASP, or it is a big organization like a hospital or medical devices, then the volume isn't as big as the car industry. B...
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afdce5fce9ba05c6f9d539a0143becd7
And then, on the headcount increase, I think you mentioned you guys are budgeting for an increase of 250 people this year. Just wondering where that's going. I think you mentioned 100 going toward cybersecurity sales professionals, where are the rest going?
To IoT. The IoT, a lot of them -- I mean, of course, the sales personnel, but also, we have a lot of backlog in professional services. So we need to fulfill those backlogs and get the revenue.
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d4ce2e8a294b15ec91f3c58e860997c9
Like what kind of activity was, say, before the Ukraine war and while we are in the war, you're getting a lot of interest in Cylance. Where is that interest coming from? Is it from U.S.-based companies or European-based companies or the whole world? Just provide us some anecdotal comments what you are hearing? I would ...
Thank you. So the cybersecurity world is -- there are a lot of more threats and attack. And we see demand growing -- raw demand growing. Like everybody else in the market have seen, the raw demand is really going very fast. There are also a replacement market for the older generation signature-based companies like McAf...
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56f4633724160683cfb31cd7e2c2324e
How do you bridge those two businesses from a go-to-market perspective, because the customer base is -- your competitive advantages within each seem quite divergent?
That's a great question. So we now have three go-to-market teams that is coordinated under -- by region under one senior management, and so -- because of John G. And so, the three market -- go-to-market team are the -- think about it, strategic accounts, which are the large government, as well as banks, regulated indus...
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f83d6b2cdfb5ca87361e959fefc81eaa
Just a second question, just on the sale of the patent portfolio. To the extent that you can, can you just walk through some of the assumptions in terms of like the longer-term outlook that went into that arriving at that price? Because one of the things that investors look at as you look at the revenue in that segment...
Oh, OK. So I would say, there's still a lot of potential for this noncore set of patents. But two things obviously you know. One is, time is ticking down in the validity of the portfolio. Although we have a very young -- we typically have, even with the noncore, somewhere around eight to 10 years type average lifetime ...
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08de467a7adcec40bdcbf14af06f193d
Maybe starting at a high level here. Just curious about ACE's evaluation of the new clean energy opportunities. How is that progressing? And how is work tracking toward project announcements?
We continue to evaluate opportunities across the spectrum in solar and storage, similar to how our approach was on the wind side. We're looking at both operating assets all the way to the early stage development. So I would say that we see this as a critical focus for ACE. We see it as an important diversifier and grow...
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d1c42d81d8e18479934784db2c899130
And then, real quick on the '21 guidance -- it sounds like the taconite upside offsets some of these ACE 1Q and 2Q hits. Is that a fair summary? And just are there any other moving pieces to think about since the 1Q update?
Yeah, I think, you've characterized that accurately. So the Diamond Spring polar vortex event is gonna be offset by our positive outlook on the taconite production. Of course, our original guidance says 35 million tons; now we are seeing full production. So that's going to offset that, of course.
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1262ff2054a5034a8666528dd72ab6c2
The 2022 outlook, do you need to see Minnesota interim rates before addressing that? I'm just curious, because I believe the build, transfer opportunities remain outside of the outlook?
Yeah, I think you're right on that. The build on transfer opportunities, of course, are related to ALLETE Clean Energy. And we're certainly working on our rate case right now. We don't have the rate case pulled together enough to estimate exactly what that will be. But it is factored into our preliminary guidance for 2...
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cbf33792e4f6b443f19a0a14f9c6d4eb
Sorry, just to be clear there, the build, transfers are outside of the outlook?
They were.
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d5c78c0caa846d9537202e3cd67d264c
But a view on interim rates at Minnesota Power is incorporated?
Yes, interim rates are in that number. So those build, own, transfer projects were announced after we came out with that preliminary guidance. So they are not in that number.
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26f94fb35b10d0ffa421cbaf6d6005c1
So just to focus on industrial sales a bit -- so it sounds like you're tracking above the 6 million to 6.5 million kilowatt hours you had originally projected for the year. So just curious if you're seeing that as progressing on the trajectory back to more of the pre-pandemic kind of over 7 million kilowatt hours per y...
It is, Peter. It's Steve Morris. It is for 2021. So our guidance had 6 million to 6.5 million megawatt hours, if you will, we're probably around that 7% for 2021. So keep in mind, when we had full production and Verso in there, we were around 7% to 7.5%. And of course, Verso is not running this year, so we're looking m...
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f947b0d137c52863d9cb7050dc56ad1f
OK. And is the expectation that that sustains into 2022?
Thank you, Peter, Frank Frederickson here. So as we're looking ahead into the future here, we have -- as Steve mentioned, we came out of a pandemic here in 2020, where we saw about 30 million tons of taconite sales. And we've issued our guidance for this year, around 35 million tons on a recovery, and we are very pleas...
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766080c5e80d005b7fbb6e916b03c18e
OK, great. And then, just as a follow-up, can you just remind us, how does the industrial sales load get set for the upcoming rate case? I know it's a 2022 test year, so just curious if that's more management discretion or based on actual load from 2021.
Thanks. So Frank again here. And so we do put forward our forecast for the test year in the rate case, utilizing information we know about our customers and the markets. And then, that does get debated throughout the course of the rate case. And I know, as Steve's mentioned on past calls, too, that we are considering a...
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8e04c826ace82a398b1d6b2b03f0dfcc
Frank, can you talk about the taconite situation? I understand that the international market is pretty strong. But is the industry sort of filling in a gap here with the exports, while the domestic steel industry still is ramping up as a temporary measure? And do you see that transitioning more toward taconite producti...
Thank you, Chris, for that question. So we do -- I think, you summarized it right, that we do see, and our customers have been public about leveraging the seaborne markets for sales. And they've also been sharing, too, that there is a robust domestic demand for steel in our country and supported both by strong durable ...
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c56cfb5e99c31f2309c7a6be3bea13d9
So it seems like the underlying fundamentals for iron ore are particularly strong. There's steel shortages. So do you envision a market where there is domestic and export? And does that suggest that you would see potentially volumes mined rising back to that sort of 39 million-, 40 million-ton a year kind of level in t...
Thank you for that follow-up, Chris. So on a historic average, over the past 10 to 20 years, it has averaged closer to 35 million tons throughout all the ups and downs over the past 15 to 20 years in terms of taconite production. One of the things that we do know and we do see is that steelmaking in America is the clea...
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cc817aa309618c40e26cefad5b7220dd
Steve, can you talk a little bit about the reduced wind output that you've been seeing? Is that coming from the heat? Or is there some other dynamics that's affecting wind output?
It could be a combination of all that, Chris. And it's not just, certainly, ALLETE Clean Energy; it's across the spectrum, across the country; and especially in the Midwest here that we are seeing lower-than-expected wind. It's about consistent with last year. It's just slightly lower. It's just lower than our expectat...
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ded7c1299200d0cf1423c314105f7bb4
And so that preliminary 2022 guidance, you were assuming more like whatever you consider normal conditions? And have you got any thoughts on whether this year's conditions might have some read through to next year?
Yeah, I think for 2022, we have factored that into our guidance, a little bit more normal wind as we've seen in the past three to four years versus using, say, the model, A P50. And some of that is reflected in the preliminary guidance for 2022 that we came out with earlier in this year. Yeah, Chris, this is Bob Adams...
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Bob, can you talk about -- we've sort of been anticipating that ACE might have some more acquisitions over the last couple of years. Can you talk about what you're seeing in sort of the existing project acquisition market?
Yeah, so a couple of fronts I would speak to -- first of all, our focus on acquisitions, outright acquisitions of existing portfolios. That remains a focus. We're very mindful of the characteristics of the portfolio we're building, as you know. So back to the center of it, credit quality -- continue to take a hard look...
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Obviously, there's been some regional interest here in wood and paper products. Is there something about the Verso plant that makes it harder to convert? Or is it merely coincidental that you're seeing some kind of resurgence in the industry there, and maybe Verso gets redeveloped for paper purposes later?
Thanks, Chris, for that question. Frank, Fredrickson here again. So the company that acquired the Verso Duluth mill is ST Paper. Their intentions is to leverage what that site has intact already in a recycled fiber facility to make recycled tissue products. So they have announced that they are planning to convert the p...
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d3d47e6a25d92de54b12363f66897cdf
The commercial business was impressive quarter-on-quarter. I'm curious if you could just drill in and talk to a little more of the drivers from direct sales build-out to the IBM partnership to bringing Palantir to everyone. Can you maybe just give us a little more color in terms of what's driving this and how you think...
Absolutely. Thanks, Brent. I'll start there. You're seeing the effects of our investment in the direct sales force here. We are really happy about the 100 or so folks we hired in the first half of the year here. They're ramping well. We're getting a lot more account coverage here, some really big logos in the quarter, ...
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Can you talk about revisiting the question around the percentage of TCV that's coming from the strategic partnerships? How do you expect that to evolve? What are the duration of some of these contracts? That was a pretty striking metric that I think it was 50% of your TCV was from these strategic partnerships. So just ...
Yup. Sure. So we break down the numbers a little bit here and Dave mentioned less than 1% of the revenue came from this program in Q2. Additionally, of the $925 million of total TCV in Q2, $543 million from the program. To your question, the long-term strategy, the deals are very long term as well. So we expect some lo...
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When we think about the 20 net new commercial customers, can you give us a sense of how many of those came from the strategic partnership program? And then second question, kind of more product-related. I know you guys have been doing a lot of work to increase the modularity of the overall platform. Can you talk to us ...
Absolutely. Thanks, Keith. Yes. So seven of the 20, I believe, came from the strategic investment program. The -- and on the product side, we absolutely are continuing to invest in the modularity there. Very excited about that. I discussed some of the evolution of Edge AI. We showed some of the video earlier on. Hopefu...
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c65086f14a629f94fad08e9bbf0796ba
When thinking about the guidance, were the last three quarters of over 30% operating margin kind of artificially high? And then could you provide some details on the operating margin guidance for the third quarter? Are there particular line items that are expected to ramp up? And is the low to mid-20% range that we sho...
Thanks, Mark. And thanks for pointing out the last three quarters above 30% and this quarter -- last three quarters, about 30. This quarter, above 31%. And I think we're doing that while we are investing in the business, right? And so if you look at the first half of this year, we had 100 salespeople. Shyam talked abou...
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My question was just around the turnaround. So thanks for providing a lot of details on the call and some color on what to expect for 2020 and 2021. But I was just wondering if you plan to put out like a midterm guidance and how quickly should we see the organic-growth improvement and margin expansion?
So we have already begun the activities that will lead to improvement in our organic growth and in our performance. As you know, this is a business where righting the ship is time consuming because of the way the -- you have a disappointing show; it takes time to return that portfolio to growth. Very difficult for me t...
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b512d172c50ebf723adc37276ff495e9
And then just a question on the value-based pricing that you mentioned. Have you had a chance to evaluate that with exhibitors, and what has been the reaction like? Any early reactions that you've seen? And maybe any kind of color that you can provide on how should we think about the value-based pricing and does that h...
Yes. I first instituted it approximately five years ago when I was at UBM. It's in use across most of the major exhibition companies, so exhibitors by and large are not unfamiliar with this concept. My experience, and the industry experience in general, is that it leads to increases in revenue and increases in customer...
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And maybe one final question, if I can, just around how do you plan to drive more exhibitors to the show. And maybe all the data initiatives that you've talked about will definitely help. But I was wondering if you're also planning to reach out to more exhibitors or essentially drive more exhibitors and get them to spe...
Yes, absolutely. So we are fortunate in that our renewal rate is actually quite good, so we have a good renewal rate on existing exhibitors. The challenge we face is in attracting new exhibitors, and the plan that we're already putting into place is better use of the marketing tech stack and better use of the sales tec...
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Yes, this is Ryan Leonard on for Manav. Just a question on the visibility in the business. Obviously, at the time of the IPO, the visibility was obviously one of the points that I think was brought up a lot. On the first-quarter call, it seemed like there was a higher expectation for the second-quarter results. I was ...
Thanks, Ryan. I'll start off and then I'm sure Sally will add to it. So we've always maintained we have pretty high visibility on the booth revenue components of our revenue, which is 70% plus or minus of our total revenues, and particularly one or two quarters out. What we have is less visibility on the nonbooth reven...
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b60ee8ca0aaba1a80a20500e8b4c2a05
And then on the Outdoor Retailer, can you maybe provide more color there? This is a show that at the time you talked about there was such demand for it. And now it seems like that has gone away. How exactly does something like that happen? Are there ways to schedule maybe smaller shows to start? I'm just surprised to s...
Well, and I'll start because I have some of the background, and Sally, I'm sure, will contribute, too. So OR's historically had two very strong kind of almost tribal shows in January and summer -- well supported, vibrant shows. And the industry strongly indicated a desire for an earlier winter season show. And we liste...
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2fd3e44cec74c2a980c0378d91f181bc
And one more, if I could sneak it in. Sally, coming in and taking a fresh look -- does this portfolio of events look right as currently constituted, or are there areas you think should be expanded on? Are there areas that should be maybe revisited and shrunk? Just kind of your initial take.
Yes, it's hard to gauge that at this point, because the things we're doing that impact how the business operates benefit horizontally across the entire business. In addition, as you know, we've brought in new talent and created a new structure where, for example, all of our retail shows are together and where all of ou...
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3df7196b73ed85da0f929bf2a1b2da66
I actually wanted to follow up on that last question. Sally, I think I heard you say your aim is to sort of accelerate new show launches and things like that. Can you just talk about whether you're changing your kind of return thresholds or the way you look at ROI on introducing new shows or how we should think about t...
That's a great question, Seth. Thank you. So my focus is really on saying where's the white space? And if we look at our markets collectively with joint knowledge across retail, with joint knowledge across design, it gives us an opportunity to identify the white spaces and the opportunities that are there. In addition,...
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And then I guess on the flip side of that, though, would you be more aggressive in exiting shows that are underperforming? Would you be more likely to act more quickly, do you feel like, going forward, than the company has been historically to kind of just take shows out of the rotation?
Yes, I think that's an important question and one that I can't answer yet. But yes, as we develop our sort of longer-term strategic plan, that will be absolutely one of the things we're looking at. And as I said today, I think mostly we are in really good places, and we're doing things that will make all ships rise wit...
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95afc2dcb11c57aba63859baec02cd10
OK. And then I guess just a related question. The other marketing business continues to be soft. Is there -- is that core to the company going forward? Is that part of the go-forward framework for the company, or is there some decisions to be made there?
So we really need to do a little bit more work about that. I think around that, I think it actually provides a huge opportunity for us because the content that we create has significant value to the rest of the shows we're producing. And one of the new people that I'm bringing in, one of the senior execs that I'm bring...
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2cc2d16d60e2bcfbe769042550afb3b8
On the building products -- for the building products segment, would you characterize the growth is coming from market share gains or primarily from larger gains or from category expansion that you've been thinking about for the last couple of quarters?
Yeah, Greg, let me, I'll comment on that. I would say first of all, just to think about the quarter, we had expected growth kind of in the mid-20% range and that was consistent with our Q4. And mid-quarter remodel retrofit really accelerated and orders were up 55% as I said, year-over-year in the first quarter. It's d...
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Is there any way to quantify maybe how much bigger the -- how much the category can grow if you move from two thirds [Technical Issues] from that 40% to two thirds of [Technical Issues] in the new construction market. Like what each maybe percentage point equals in terms of maybe revenue potential or market expansion?
Greg, over the long term, I mean, if we were able to move from less than 40% of homeowners putting in a fire place in new construction to that 66% or 67% this is a must-have feature, that would be worth like 50, 60 points of growth for the industry as well as us. So, it's very meaningful. It's going to take some time t...
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99a62f64f7f09c74b90bc79ac45fde01
On the workplace side, is this kind of typically what you see coming out of a recession, the supplies, the SMB moving forward and then you see the contract piece following through, is this kind of following to go pattern where it gives you confidence that you do see those contracts -- larger projects coming through?
You know Greg, let me comment on that. Typically, I'm going to do it with an asterix. The answer is yes, but some of it's similar and some of them may be a little different. Typically, we do see that because the shorter-cycle business and it comes out first in the contract market is a longer sell cycle projects are mor...
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So just to follow-up on the building products piece, and I hate to beat a dead horse, but is -- you guys are clearly growing faster than any other categories at least that I know of in the building products space. How much of it do you think you attribute to the fact that you guys have been able to execute and have the...
Well, Ruben, that's a good question. I think that our model is going to continue to perform well. That's why we're so optimistic. It's a little tough to figure out how much is share gain, we do believe there's definitely share gains there. I can't really speak to the competition and where they're at in their cycle, the...
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461d49c046121d6f2338b89ade0dd50e
And maybe a follow-up, like some of those growth initiatives that you mentioned, like the inserts and electric, are you guys kind of first movers? Or do you have an advantage in those spaces? Is -- are your products better and that's why you're growing faster? Or do you think the whole category is seeing substantial gr...
Well, I think a lot of this is unique to us, Ruben. Obviously, the insert sales, that's one of our early growth initiatives, a little more mature than some of our other ones. And we're definitely seeing momentum there. The website traffic is absolutely unique to us, and we're definitely driving awareness, consideration...
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ce441145f5ea401358cc206de8029ed7
Got it and then on the workplace side, are you seeing the same kind of trends in small businesses versus contract in each of your geographies, in other words, in like New York and LA are the smaller businesses may be returning to the office faster because it's just easier to get a small office open up than it is for a ...
Yeah, I think that -- it's a good question, I think, I would probably lead with geographic locations. New York is a little unique, but any major metro with mass transit is still kind of locked up even on the smaller to mid-size. So, this is probably a little bit more geographic-driven based on what we look at.
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Perfect, very helpful. I'm going to sneak one more in, you called out investment in the press release as a reason or relative to the year-ago period, any way to quantify what -- how much you're investing there? How much of it is in building products and some of the things that you talked about already versus maybe in w...
Yeah. Reuben, this is the continuation investments that we've been making for the last couple of years. We're continuing to add to that ramp them up. About half of our investments are going into residential building products and the other half workplace furnishings. The categories are the same, it's digital, and data a...
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b73dd33032bbce855a50a198298f47bc
Hi, thank you for taking my questions today. First, focusing on your residential side of the business and with harsh. With so much focus on outdoor living, could you give any color on orders or placement of your products in outdoor living spaces? And how have those orders trended versus kind of the more standard indoor...
Yeah. It's emerging, it's a small piece of our business, but the orders are good, and that's another area that we're looking to expand in.
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Have you sized up what that opportunity could be?
Not really, not totally because it's so dynamic right now. I mean there's a lot of focus there. So, we're just trying to kind of keep up with the piece of the business we do have. But I think there's definitely a longer-term play in the outdoor space that we can be -- take advantage of. But we're still -- we don't have...
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Okay. In your workplace segment or legacy, it's good to see better relative trends sequentially improving off of the last couple of quarters. And I want to dig a little bit more into e-commerce. I mean, one, how much of the acquisition of Design Public Group, how did that help e-commerce sales specifically in the quart...
Well, Kathryn, the simple answer to Design Public, we added approximately $6 million of revenue to the first quarter. We're expecting to add $40 million to $45 million for the full year. So, we're very excited about the integration. We're seeing lots of opportunity and it's somewhat complementary to contract. I don't k...
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And I guess that is kind of that -- and very helpful. Marshall, I guess it speaks to the bigger change we seeing more complementary sort of melding versus a pure contract, the melding of the e-commerce with the traditional and it was really just getting a better sense of how you see that world, are you seeing any trend...
Yeah, I know what you getting at, I think, Kathryn, we haven't really seen that yet. I think that's a rational possibility down the road, but right now, we haven't seen -- it's early days. I think the most of the e-com we've seen is work from home kind of stand-alone as it relates to contract product, maybe going into ...
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c4381618bf538f30647582a6595a1ffa
Okay. And final question is on supply chain, which has been a focus and the construction industry in general and also the ripple impact of the Texas freeze in the quarter. If you could give color on basic raw materials or any categories that are being impacted with you be it steel -- we're even hearing foam for seats h...
Yes, I would say, you're absolutely right. I think the supply chains for most manufacturers and is in a lot of categories are tight. I think the pricing or inflation cost, but we've been able to maintain most of the categories pretty well, the foam is unique. You are correct we have seen -- were on some allocations on ...
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Just a question I guess for Howard, on the rebound in origination outlook and so forth. Can you give us I guess your high-level thoughts on how much a lot of this is pent-up demand versus a more sustainable shift in the demand for private credit?
Sure. I mean, I don't know if -- so I think the activity has been very robust versus historical standards. So it's hard to say that it's like a permanent shift at a higher level. That said, there are some secular things that are happening that seem to suggest that it can stay elevated for some period of time. So one is...
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And can you give a -- just second question also sort of a high level platform level, can you give a update on generally the direct funding, the middle market side that is at Apollo with MidCap and so forth that the BDC invests with sort of the allocable capital or sort of fund complex that we're co-investing with at th...
Sure. It has been -- and we mentioned a lot of volume, a lot of transaction volume, large pipelines across the sort of the whole Apollo Direct Origination business. And actually, across a whole sort of the full array of products. So that's lender finance, that's our real estate business, which we don't see all through ...
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4f9785a3908782479175aaf3ff001d3e
Really it sounds like Merx is kind of out of the woods. You talked about growing revenues to AINV going forward. Can you give us any sort of -- recognizing there's a lot of uncertainty remaining, but give us a sense for the potential magnitude and also the form, whether it be dividend or interest income?
So let me just sort of take a crack at it. I mean, I think last quarter, we talked about sort of like the earnings capability of the -- or sort of really not the earnings capability, sort of the earnings momentum of Merx, and that is in sort of the ballpark of the low $30 million across the whole investment, let's put ...
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c51eb69273988f606e92efd2bc5fb934
And then in terms of credit performance, I know nonaccruals were stable. It looked like leverage came down a bit in the portfolio. I recognize 2021 is a unique year in terms of comps in terms of revenue and EBITDA growth, and I'm sure it's all over the board depending on the company. But can you just give us a sense fo...
Yes, sure. And I assume -- I'll assume, Kyle, you're really getting at the underlying economic fundamentals. Keep in mind that these valuations are, by and large, the March quarter of 2021. And so you're clearly comping against only a portion that was COVID-affected. And so in that respect, you, in this quarter, actual...
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c0b96bfbfe9eab18968ee227c7c4e00c
Has the rise in COVID cases in the U.S. and the delta variant, has it slowed the recovery at Merx versus kind of where we sat maybe three months ago?
Yes. I would say, the recovery was never going to be linear. Obviously, the delta variant is something that everyone is looking at and scrutinizing very, very heavily. It is still too early to judge whether that's a meaningful change. Certainly, on the margin, people are very cognizant of it. But I wouldn't say it's ch...
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From the perspective of shareholder returns, how does AINV balance higher target leverage versus peers to your cost of unsecured debt currently?
Well, I will say this. We felt like this offering was very well-priced for the investors overpriced and certainly versus the relative risk of our peers. But we also felt like that there was a lot of interest in us from all our constituencies. Our equity constituency -- our equity holders ask a lot of our investors, the...
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00a18d740191efaebb7b2d1fe63f20ff
Hi. Thanks very much for your time and sharing. It's very clear. So we've got two questions. First is on the plans and priorities in the next 12 months. For example, on professional and STEAM. And more details on how the company has reorganized so far accordingly, for example, how many percentage of the organization ca...
So we believe under the current policy guidelines, we are the first online education company to formally adopt the online teaching services for three- to six-year-old children. And we are the first education company to fully stop all the traffic acquisition spending on the free channels. And I believe we might also be ...
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b1b6cda05c842c0bb85b248b10ac37d7
The second question is regarding not-for-profit organization. So the MOE has published a document specifying the measures of online education reregistration. So would you mind sharing the company's registration progress so far? And if registered as not-for-profit organization, how will that impact shareholders, for exa...
On September 16, the MOE and other six government ministries jointly announced a guidance stating the online education institutions needs to change from the registration-based regime to an approval-based regime. And for compulsory education service provider, like all the service providers need to be approved as not-for...
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5ebd3cb3a50b6eb86deafcead5ceefc5
May I ask a question on the staff optimization, given the big change of our focus from the subject-based tutoring to the other area? How big would the staff optimization? And when would you think it would last? And what would be the cash impact to the -- over RMB 5.5 billion of cash we have on hand?
So we reacted in the shortest time right after the double reduction policy was released. So the restructuring was already done back in July and August. We closed certain operating centers outside of Beijing, and we also paid for the severance costs for some of the employee layoffs. So it's a tough decision to make. But...
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21d9d71e9f87898144ce25d79ba2c84e
May I know what's the number of TA we have at this moment?
After all the restructuring for our employees, we still maintain sufficient tutors to support the learning service for our first semester students. So the number fits of our current company size. And we will adjust the employee scale and led the skill to fit the future development of our company.
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I know the past few quarters you've talked about some of those internal capacity constraints and supplier bottlenecks. And Jeff, it was helpful to hear you talk through the steps you're taking to improve there. But can you kind of talk about what inning you're end to bring that capacity online, more in line with underl...
Yeah, that' s a great question. Yeah, I am more of football guy. So I'm going to say we just finished the second quarter and were in half time as we -- again order rates are incredibly strong and our teams are literally jumping through hoops to meet demand and increase capacity. I did layout some initiatives we've emba...
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That's fine. Yeah, that really helpful. And then secondly on gross margins on -- the 1Q pressure was pretty much in line with what we were expecting based on inflation headwinds, but you've got price increase coming out later this quarter. So how should we think about that flowing through? And when do you expect to be ...
Yeah, I'll just speak in generalities. I'll get Brad cover the actual detail of it. But we look at pricing just to pass along our costs. We're comfortable with the margins we make in the market. We think our customers and dealer base are comfortable with those margins as well. So the cost inputs -- the headwinds we've ...
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fd54c7cab7953401b9c8b419d06bf5bd
Lots of demand. It's kind of whack a mole here on cost, labor capacity coming on mind, but it feels like despite all the new platforms you've added to the business., West, NewSouth, etc., you have a lot better handle on it. Then I think the industry saw over well over 13 as demand was so painful to bring on new labor p...
Yeah, glasses, I would say is not an issue for us at the moment. Adding that capacity has definitely definitely helped us stay ahead of the game. The only thing and it's going to affect a lot of folks is inner layer capacity. There have been some inner layer suppliers that have issued letters that they're going to cut ...
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786628d4ffc3af2136809aeba0661bd3
And then you talked about you the extrusion side coming in. I mean, how is that going forward? It seems to me like the industry is so tight, demand is high, supply lines are tight. So you're getting price, your supplier is getting price, everybody is getting price quickly. So 2Q will be a little light. Obviously, when ...
Right. Ken, that's a very good insight, first of all. So there is still aluminum pricing up, pressures out there. Aluminum price is up and that's obviously industrywide. So we're going to have to tackle that into 2022. Now, do I think our pricing actions we've taken will help that? Most definitely -- and most definitel...
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Right. And then do you think your -- the thoughts around the back half, all the things Brad you just took into consideration. What does that say about, I mean, does that seem like a stable area where you'd be exiting the year into '22? All else equal or is there some initiatives that we might not necessarily know about...
Yeah, I think it will be, Ken. There, obviously, actions we're always doing to help drive sales and to expand our footprint profitably. And as we enter the back half of the year, there's various initiatives we've got going on here locally, with production expansion, capacity, capex investments. In our Western business ...
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0540d091e62b2b7c566dc565f7642429
Given the slowdown in the second quarter, could you elaborate more on the third quarter-to-date trends and also your outlook on the second half, given currently like the frequent negative publicity and also regulation environment? And then my second question is on the expansion. So could you actually tell us about how ...
So as of now, e-vapor products remain underpenetrated among adults in China. So our company believes that harm reduction products, including e-vapor products, are better alternatives for adult smokers in China. We remain committed to the trend of adult smokers converting from cigarettes to e-vapor products, and we are ...
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First of all, I want to ask about the performance of your products in different categories like the premium products versus the mainstream products, which you launched about a quarter ago. So how does that develop so far? And my second question is regarding the retail price. As we observed some of the competition in ce...
So regarding the first question is on our product front. So we have been providing diversified product portfolio with various price points from generic and features. So you do see that more and more users adult smokers with different sets of user group, trying to use our products as their harm reduction alternatives. S...
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4c46b196a561b15151771000a763298d
My first question is regarding on store opening subsidy. We noticed that some of our peers have offered more store opening subsidy in the past couple of months. Maybe now what is the management view on that as well as our approaches on store opening subsidy? Second question is regarding on the raw material cost pressur...
So on the first one is on our subsidies, given our competitive landscape. So you do see that our store subsidies have remained consistent and our subsidies per store have decreased consistently since we have introduced our branded partner stores model back in early 2019. We have been assessing and grand store of these ...
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f978ee295fd3923ca3feb00a11d8fbb1
The first one is we know that there are many -- there are more and more e-cigarettes in the market. How would the management estimate the future competitive landscape among Chinese e-cigarette brands? And my second question is, since many similar vape captures are in the market, which can also be used in our devices li...
So I mean, on the first one is on the competitive landscape of the Chinese e-vapor markets. So we believe the competitive landscape of the market will be increasingly complex, requesting each brand or market participants to put more efforts and further innovate in aspects such as commercial strategy, product innovation...
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So firstly, I know that we actually set up an electronic cigarette clinical trial lab several weeks ago. So what is the major purpose or the potential benefit of this? And secondly is about the regulation of the potential impact, so what will happen is the whole industry is under the regulation of China tobacco?
So for your first question is on the lab and trial mentioned in the opening remarks. So our trial is actually the first e-vapor clinical trial project in China for e-vapor products that have passed both ethical and expert reviews and have been approved for implementation. So we believe that this laboratory and research...
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Hi, thanks for the question. The color on the 1Q to be Local billings was pretty helpful. It seems like the trend seem to be generally consistent with the 4Q results. Was there any change in cadence in late January, February in North America broad, was January, improved in the US before. We had a heavy winter weather i...
Thanks, Trevor. Sure, I'll provide some additional color on our Q1 performance quarter-to-date. So thus far in 2021, we are seeing year-over-year billings performance for North America Local, had a few points better than Q4 levels. And in North America Local billings are tracking at around 50% of 2019. So as you would ...
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That's really helpful. And just I guess bigger picture. Are you starting to see merchants set up campaigns for late spring in summer to be prepared for what seems to be the expectation of like pent-up demand coming to market, particularly here in the US. It seems like there is a potential tailwind for both local and tr...
Thanks for the question. So as we look to recovery, we're looking on both the customer and merchant side and really confident based on what we're seeing. So, I'll give you a couple of examples that I think will help you understand. As Melissa mentioned, some of our categories such as home and auto and Beauty & Wellness...
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Thank you so much for taking the questions. Maybe two, if I can or two part of, coming back to the inventory trust and what you learned in the four markets, what surprised you to the upside in terms of the test? Are that produce sort of the rate of change versus which were initial goals have been going in -- in terms o...
Thanks, Eric. I'm happy to hear both parts of your question here. And I appreciate you asking about our strategy. This is where our focus has been. While you look at our business overall, we see these two important horizons, one, recovery. At our low cost base just the recovery to 80% was up more EBITDA in 2019 and at ...
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Hi, good morning. Thank you very much for the time and the question. I was just wondering if you could talk a little bit more about the removal of deal restrictions. Statistically you talked a little bit about how the value proposition for both the merchant and the consumer might change a little bit as a result of that...
Thank you. So, in our suite of inventory products, we have deals, offers and market rate. And you were specifically asking about removal of deal restrictions, which is one lever that merchants have. We found that our merchants are very willing to remove the restrictions and that they are excited to be able to win custo...
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84ba5456ec083818a9f3df3f26491ee0
Great, thanks. You talked about rolling out new customer experience in 2Q to all North America users. Just one year little bit more about, what you're seeing in terms of the early testing there. And then secondly, just as you think about trying to make the business more kind of always on basically and getting toward mo...
Thanks. So as we put this in the context, again we're opening up the marketplace on both sides. So your first question you asked about the customer side and so we'll point out the -- we got the results that we got in our test without any changes to our CX. In fact, when you look at our homepage, it hasn't been substant...
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Hi, everyone. Good morning. First question on -- looking at origination, it was strong this quarter. It sounds like the outlook is good. But of course, the credit look back takes down, what would be your incentive fee, sort of a modeling question here really. Are you effectively approaching or above your high hurdle se...
Sure. So as we look, Fin, at the future, there are a number of elements that point to higher earnings. We talked about several of these in our prepared remarks. One is higher base rates. And I think Jon and Gregory both made this point in their remarks, I think it's important enough to reiterate, the calendar Q2 result...
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Yeah. That's helpful. And I did miss the interest rate part in there so that's helpful as well. I guess a second question, I'll admit you, David, I've â this is a bit â the question for me is tiring a little bit. I've asked for a few quarters on the technology topic in the Golub Altman Index you put out, it is showing ...
So sure. By way of context again, those who may not be so familiar with it, Golub Capital publishes on a quarterly basis in an index called the Golub Capital Altman Index that details the median company in our portfolios growth in revenues and in EBITDA, and it also provides a breakout by sector. And what Fin is refere...
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04c2b91a6b44c9e7f346e4681506e91c
Thank you again. Just one small bonus question looking at my notes here. Chris mentioned, I think a post-quarter repay, was that part of a non-accrual or underperforming, or can you remind us of that, Chris, the context in which you mentioned the post-quarter repay?
Sure. If you flip to the page that -- details are non-accruals, which is on Page 14. We had at quarter end, $60.2 million at fair value of non-accrual investments. That included a $3.9 million position in a company called Paradigm, which paid off in full shortly after quarter end. This is actually a great Golub Capital...
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7d025be2e5f82b6dd78860132defa849
Good morning. Thanks for taking my questions. One of my questions actually answered from one of Fin's questions. But just wondering, as you mentioned that your pipeline has kind of slowed here in recent quarters, but here more recently in the last few weeks or so, we've seen significant turn in sentiment in the equity ...
Yes. It's a great question. If you look at Q2, overall deal volume in the industry was down in Q2. Our origination in Golub Capital was actually up year over year. And the second quarter of 2021 was a record quarter for us. So it was quite a strong quarter, the second calendar quarter of 2022. As I look forward into th...
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0b061b3067e64982e2debe8bba55c12b
Thanks for that, David. I appreciate that. That's a great answer. And I guess in addition to that, I mean, have you seen, particularly in this last quarter here in the second quarter, have you experienced any sort of benefit from, I guess, potentially broken bank deals or any sort of syndicated deal that just didn't qu...
It's a great question. We're often asked what's the relationship between the middle market and the broadly syndicated loan market? And the answer is that while on the one hand, they're different markets, they're distinct markets. On the other hand, one's influenced by the other. And so if you look at what happened in c...
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d3ee544080d76a6ef5d81c65e901608e
Hi, David. Just really following on to that question, I mean to your point, David, in the prepared remarks, you've talked about spread widening, which is ongoing in the private credit markets. But now obviously -- and it tends to lag the BSL market. The BSL market the spreads are tightly trading spread origination stil...
Again, great question, Robert. And one -- well, I'm not sure, I can give you an answer to that I have a lot of confidence in. I think it depends on a lot of factors, including new inflation numbers that come out, including new indicators of how the economy is doing, including funds flows in the broadly syndicated marke...
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b1614cfb58e172c96b32bb90ab57287c
I appreciate your thoughts. I realize it a tough question. Let's just call it a tough question follow-up, if I can. On coming back to the Altman Index, I mean, technology is still growing, consumers still growing and maybe surprisingly still growing earnings in the second quarter, but healthcare did see a decline in EB...
A couple of points I'd make. One, I think you're right that pressure on labor costs has been part of the reason for healthcare company margin compression. I think a second element is that, in many cases, healthcare companies need a bit more time to adjust their pricing and to have their new pricing reflecting inflation...
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9acc8997a3da410dbf6f0dc82df63b01
A few questions on my end. And I think I want to start on the Pursuit side of things. And just in terms of the border close between the U.S. and Canada, and I understand that nobody has a crystal ball, but just looking at the commentary from the government and the vaccine situation up there a little bit different than ...
Yes, Tyler, it's a good question. So a couple of things. One is, remember we did operate all through the summer last year during 2020 with a strong lockdown across Canada. So we were EBITDA positive across all geographies in Q3 of 2020. And we expect that we're going to be able to operate successfully even with the bor...
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0151553c90be98ff6c1deea8dce37ea5
Okay. And then in terms of the acquisition in that business, the Golden Skybridge attraction, can you expand a little bit more on the strategic value of that asset? Why it was a good fit within Pursuit?
Sure. And what's important to remember is it sits 90 minutes from Banff. It also -- the town of Golden sits in a circle surrounded by five national and provincial parks. It's on the main thorough fair that criss-crosses Canada, so the TransCanada highway. Unlike the U.S. Interstate system, there's primarily one route t...
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db5d73eba55719166796e86dd257537c
Okay. Switching gears to the GES side of things and I appreciate all the commentary there. Just in terms of your outlook for the second half of this year, has your confidence or your overall view on what you guys might look like in the second half of this year improved versus 90 days ago? Is it kind of stayed the same?...
Yes, Tyler, a lot's happened in the last 90 days since we last spoke. And as we get closer to these events, you start seeing more of the pacing of the sale of floor space for some of the events. And so we're -- we feel good about how that's tracking through the back half of 2021. You also see just the relaxation of -- ...
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