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f06a9befa5a14f285adb472a7ef29277
And last one thanks for giving us much time here, but on the remodels planned for the year, are those changes to kitchen and design operation focused on improving the performance within your existing markets or are those more changes made with the mind toward testing out to see what might work outside of Florida?
Yes, it's really both. I mean it's definitely in existing markets. As Rich said, as we have identified remodels we'd like to do. We want to try to incorporate some of the new elements from our research to try to get an early read on those elements before we start opening new stores.
direct
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A
ca31e5c922e8370c33e728883ad59516
Great, thanks for taking the question. And gentlemen thanks so much for all the great detail today. I wanted to start off with a clarification. Understood on Pollo Tropical in terms of it getting back toward some of those, I think you said 2019 levels. I wanted to see if you could clarify your comments on Taco Cabana. ...
Sure. So the quarter performance was negatively impacted by winter storm Uri. So that, that's this first quarter. So we tend to try to break it. We've broken it down by month, which is why we reflected it in the press release as such. So as we look from January and February into March, April, May, we're definitely seei...
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A
3551c81917cb10a820e49aded463b785
Okay, thank you for that. And I think previously we talked about expecting positive growth in 2021, driven in part by the growth initiatives and then just overall increases across the different segments in terms of traffic as consumer mobility got back to normal. Is that still the outlook. And if you sort of color -- a...
Yes, I mean that is still the outlook. And as we indicated in our prepared comments, I mean, both brands are moving toward flat to '19 with Pollo, a little bit ahead of Taco. Pollo basically is flat to '19 at this point. And as we said, I mean Taco had a fantastic Cinco de Mayo holiday and so May is off to a great star...
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A
a56ebbae7af716397957e3e468e14703
Great, thanks for that. And wanted to shift over to some of the qualitative research you were doing which only the takeaways there perhaps just underscores some of the learnings and/or some of the brand attributes and things that we've already known about the brand, but maybe it gives you a different perspective or may...
Yes, Joshua it's Rich. I'm not ready to publicly disclose it in terms of what the results are. But we've been pretty excited about the results so far. We definitely have strong assets [Phonetic] especially in core, but we are analyzing not just core but also out of core and also potential new markets as what the people...
intermediate
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B
a3cea8a0aa4a93564617cdc2b3126be6
I appreciate the monthly sales trends, but can you help us level set where average weekly sales, volumes are for each brand. I just want to make sure we are on the same page trying to work through the one week of calendar shift and the two-year stacks that you disclosed?
Sure. I mean we -- so this is -- I'm giving broad strokes here but, overall our average weekly sales trend sequentially from the fourth quarter for Pollo improves in the high single-digits. We haven't published the average weekly sales numbers, but you can get to the average sales numbers from using the information tha...
intermediate
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B
752bcced7b40ff675dd1679eaa381cbd
All right. So on the Taco side, I think the math is a little over $30,000 a week for the first quarter. Obviously the winter storm Uri had a big impact there. Can you help us with where we are in March and April, on average sales?
We are not -- I mean, what -- our view of all this is that the reason that we're publishing comps compared to 2019 is really to try to get back to what we think is a comparison that that kind of takes out the impact of COVID. We're certainly willing to disclose average weekly sales, consider that if that's an important...
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C
bb5a997bb466735630337fdf2613c4ce
All right, fair enough. And last one for me, just on G&A. What's a reasonable number to expect for this year on the G&A line given all the moving parts. And I think you are in the low $50 million range. But, so it's worth on streamlining your G&A costs. But just ballpark the G&A expectations for the year?
Yes, I mean I think we mentioned on the last call that we -- our goal is to really try to keep G&A as a percentage of revenue flat as we head into '21 against '20. So that's our goal and I think we believe that that's achievable.
intermediate
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B
bce7f37febee27d113373f9e0cc18371
I notice that EQT is building their own water infrastructure. I believe they mentioned in earnings. I'm just wondering maybe if there is any conversation to have that constructed by you guys and what the relationship is kind of going forward with the Chevron assets.
Hi, good morning. This is Justin. Just touching on EQT's plans, so we have a lot of our water assets in Pennsylvania and some in Ohio, but our focus has really been on leveraging those existing water assets in Pennsylvania going forward. EQT does have some existing water assets in West Virginia, and they'll likely be a...
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A
60ffadc812e21aa7f2a14879e93a9ce1
And then, just looking at the capex, I think 2020 came in a little below what you guys guided to. I'm just wondering what the moving pieces were there, if there was anything pushing to 2021? And then, just on the gathering side, is that just well connects, given EQT is kind of operating at maintenance mode and that's j...
Sure. 2020, we started to realize some of the benefits of the EQT gathering deal and the capital efficiencies built into that arrangement. As we look at '21, most of it is well connects. I do want to mention also of the little over $300 million in gathering capex that we do have. We also have about $50 million of compr...
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A
6fc4f0ab980c1b5babbcbf8dd40dc178
Wanted to ask about the FERC amendment request process. So, you filed that last week. Looks like there was about 120 bores to do. I know you can do a lot of these in parallel and some will take more time than others. Just wondering if you can share any more detail on when you expect to be able to start that and then re...
So let me just take that as an opening. Hi. This is Diana. And maybe I can answer everybody's MVP questions all at one time. So, we have two primary types of construction work remaining. We've the uplands in the Jefferson National Forest and parts of Virginia, and then we have the water crossings. We've completed the c...
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B
338d2f673f176a4508ec7aa524adb605
Can you just talk a little bit more about the -- so that -- you mentioned the boring process. But for the individual permits, just what that process actually looks like? And maybe if you can share anything on your conversations with Virginia at this point?
Sure. So for the individual process for the permits, the agency will follow a very well-established Section 404 permitting process. It includes analysis of open-cut crossings and public input. There is a well-established process to receive the 401 water certificates. We have to get that from West Virginia and Virginia,...
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A
7a51c4e452371c1c30794df75d0cd44a
Just in terms of [Technical Issues] it's helpful on the time line for six months for the agencies to work that out. Just curious in terms of the goalpost that we should be looking for. I know there's a public comment period, a lot of back and forth around things like that. Could you just, for the benefit of the people ...
So, I don't know that there is anything. Obviously, the Virginia and West Virginia approvals from the DEQ and the DEP will happen within there. And then, the FERC will ask whatever questions and whatever additional information they need from us. We'll get that back to them. There are some comment periods in both proces...
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B
91a1570f4f604510f46d50925e457387
Just in terms of thinking about that six months or under six months to complete the water crossings, is that [Indecipherable] clock start once you have the permit in hand? Or is there preliminary work you're kind of doing ahead of that? And so, really, once you get the permit, it's something less than six months or wel...
So it's well inside of it. Obviously, we can be doing the open-cuts with certain crews and we can be doing the bores with other crews. So those two things, they don't have to be done in some kind of series. They can all be done in parallel as long as -- and I don't think we're going to have any problem getting crews as...
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A
58211405065aca51b8041bea2a52fce1
Guidance for 2021 seems to imply a stepdown in EBITDA generation for the back three quarters as opposed to the first quarter. And so, just curious what's driving that decline in the latter part of the year? And really, what I'm getting at is, how much of that is you being conservative versus kind of firm gas [Phonetic]...
So as far as volumes, we did see an uptick in fourth quarter volumes last year, and we're certainly happy to see that. Right now, we are guiding to flat, which is what we have been hearing from our producers. We did see some curtailments due to pricing last year. So as we -- it's still kind of relief for us to be more ...
intermediate
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B
1152765955f82c2226130150bb773798
On the gas gathering agreements, my understanding that if MVP is not online by 1Q '22 that you could see the optionality for a $200 million cash payment or to lower its cost structure. Could you guys provide some color around potential payment? And could this potentially reduce G&P and/or transportation fees on MVP?
Yeah. That was related to the shares that we repurchased from EQT. So if you recall, we bought back 25.3 million shares of E-Train. So the payment they would receive is really consideration for those shares. So, as the agreement sits today, once MVP is in service, EQT would be entitled to two years of rate relief as co...
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6c539898cb44e2aeece45129fefd0d25
Would it be just cash consideration? Or is there, I guess, any type of color around how that payment would happen? Would it happen on January 1? Or is it kind of still in a negotiation period?
It would be a cash payment. I believe they have one year to exercise that option. So, I think EQT will just have to make a decision if MVP is not in service starting in January. They can elect that option if they so choose.
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A
970b2fcca7cab76cd78fb0670db24c9e
Is there a resolution to Hammerhead? Or ultimately, does that come with more clarity around MVP in-service timeline and kind of negotiation with EQT ultimately?
Yeah. This is Tom. There's no resolution yet. Hammerhead isolated issue is in arbitration and it will run its own course completely separate from all the other activity that we have going on with EQT and separate from anything having to do with MVP.
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A
0e2b0372eda1c9de46b329e1c1b9c0f3
Could you just kind of go through the -- kind of how maybe AFUDC accounting changes for this year? And secondly, just a couple of your partners kind of have elected to impair their investments in MVP. I'm just kind of wondering kind of what -- how -- is there a difference of opinion? Or is this just really a call based...
Yeah. This is Kirk. So if I can remember them, I'll try to go in reverse order. So if there were an impairment, there's -- it doesn't create any problems in any of our indentures or credit agreements or anything of that nature. On the impairment, we've been consistent in our approach on how we look at the impairment, a...
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A
be16e4eaee31ed9acbe48d8fe5308adc
It seems like you've probably been working with the agencies to make sure that you've got fulsome applications. Does it feel like just the kind of the tone of conversations is pretty constructive? And it feels like these are very kind of straightforward approval processes. I'm just wondering if there are any kind of pi...
Yeah. So it's a pretty comprehensive filing. The data is all there. This is a normal standard course of business permit that -- as far as the water-crossing permit goes that everybody gets not -- just not gas. So it's -- renewables ask for the same kind of individual permits, electric and power sectors. So it's somethi...
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B
348fc3a5f5781c1c20727dbf7c7e5b8a
Maybe just a quick one around the conversations with credit agencies. I think EQT mentioned that it sold down storage [Phonetic] capacity. You talked about some of the partners taking impairments. I guess, just how -- and obviously, this wholesale [Phonetic] application that you just filed with the Corps and the FERC. ...
Yeah. We stay in dialogue with the agencies. The treasury team stays in communication with them and tries to keep them updated, and we don't surprise them. The agency's big focus with us is -- and just basically continues to be what it has been, which is MVP. So that's what they're really watching. They haven't given u...
intermediate
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B
518d9ee41f424b11f775fd9caa702806
If we do see a FERC commission sort of the majority change for the mid-year, does that kind of change how you guys think about how these -- how the applications can get reviewed?
No. It doesn't really change the review process. We've been in close contact with FERC and staff and understand what they need as far as the application. And we've had good comments as far as -- from FERC commissioners as to meeting the permits and then being able to proceed.
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A
70f42385920567cd95b588aa9c2d5eab
EQT talked about being able to offload some of its capacity on MVP. Just curious if you guys might be able to share who was taking that up? And I know they're running the process, but really anything else on that front that might be helpful.
Yeah, John. This is Tom. No, we can't share anything beyond what EQT has said in that regard. And clearly, we're well aware of the activity and are, in fact, supportive of it. I think it's -- we shouldn't read too much into this. Historically, it's been the natural progression of long-haul pipes that they were initiate...
fully_evasive
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C
0d4f9bd219c5d974c00905f29057d027
Back to EQT, there should be some other development from West Virginia -- or sorry, to West Virginia from Pennsylvania. Does that have any impact on you guys this year? Is that baked into guidance, or could that be upside?
That's baked into guidance. That's part of the new gathering agreement that we signed with them, that dedication. So it's well in our plans.
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ec944b35c44811f15797a2b059c9f027
Question just with respect to the Oil Business. It sounds like things are tracking better than you were expecting exiting 2020. And you had given some color about operating margins, I guess, during the first half of 2021. And Mark, I think you were saying in the mid-teens. And I'm just wondering -- I may have missed it...
Yes, to be clear, we're definitely updating. We -- based on what we had at, or what we knew back then when we announced Q4 earnings, we had guided to that mid-teens. And you heard Brian in his prepared remarks, guide to higher. And we have clarity, at least for Q2 and into Q3. We don't know how far into it. So it reall...
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A
b828025ddeaa8ec74730ca309af52793
And you alluded to inflationary pressures, and I'm just wondering if that extends into other parts of the business. And Mark if you could also talk a little bit about what --- how we might think about corporate SG-and-A over the balance of 2021?
Yes, I'll touch on maybe some broad macro on what we're seeing from an inflationary standpoint. We are seeing commodity prices way up. I mean, Mark talked about hydrocarbon crude prices being up. We're seeing chemical prices up. We're seeing supply shortages too. I am worried about supply chain issues. If we continue t...
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A
2b7ac05fd342fa4040fd66a7f58459b2
Could you just maybe, you said there are 45 days built into 2Q, I think, for maintenance. Can you talk just kind of utilization targets for 2Q? And then what other maintenance you have planned for 3Q and 4Q and what the utilizations might look like?
Yes, I think on the fourth quarter call, we signaled over roughly 28 days of maintenance. We're still in that 28, maybe a couple of extra days, because we are running at pretty hard right now. From a production standpoint, we expect to see base oil production in the -- I'll just give you a range, 11 million to 12 milli...
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B
12c1fa1e580e9260c502fcacb6444db9
Okay. That's helpful. And when you think, I guess, the spread and the margin volatility, I mean, you expect the strength to kind of continue into 3Q. What maybe the right way to think about this business longer term with the spread? I mean, obviously, you had a very nice move to the spread. But when you get back to a n...
Yes, I mean, obviously, Brian, we'd like to think it is. We certainly don't think it's going to be a mid to high-20s business. But we do think we'll begin to see some impact from IMO 2020. We're not seeing the large aggregations of used motor oil. Matter of fact, we tried to sell used motor oil at one of our RFO plants...
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A
0f4437c6f6bd3321d1dfbe4c8b2741bd
Okay. And then I guess you touched on M-and-A in your prepared remarks. But could you give maybe a little bit more color on kind of -- what's kind of your capacity or desire for size in what -- what types of -- what you're kind of looking at, I guess would be the best way to say?
Well, I mean obviously, we're being very aggressive. We're seeing a significant increase in our pipeline, driven by the potential for the capital gains taxes to change. So not a shortage of potential targets. Most of them are unfortunately smaller in nature and tuck-ins, but great companies for us, because it continues...
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A
481a5c24a81d2332f9e9f83ceb5fc6c0
All right. And then you mentioned the kind of the balance sheet and the leverage, all of your debt going to 0. Can you give maybe a little thoughts, just high level, what are the targets for kind of leverage? I mean, is the goal to be at 0 debt or is there a right amount of debt that you think Heritage can carry?
I'll give a little bit of color. No, we're not happy. We would have loved to have some leverage. That means we've been able to do a deal or two. I don't like the fact that we're, again, 0 net debt and cash in the bank and we haven't been able to pull off a larger deal. So that's priority number one. In terms of leverag...
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A
6ceebbde9dabf5be610b38d7c4b96922
So you -- you called out the impact on ES growth from the large field services project in the year ago quarter. Did you take a crack at kind of trying to figure out what the impact of weather was on ES growth in the first quarter?
We had about 70 days. I think Brian mentioned that, that we were down total branch days and again your average branches couple of million bucks a year. You can do the math on what that means. But that's kind of the only detail that we've done. We haven't gone any deeper than that. But our guess, whenever we have weath...
intermediate
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B
3d25a90a4d8b0efccc727f5aff419fdd
Yes. No, no, that's helpful. That's good color. I think in your prepared comments -- Mark, correct me if I'm wrong. You talked about containerized waste, a negative pricing product mix dynamic. There might have been one other business there too. But can you just kind of talk about what you're referring to there?
Yes, some of that is -- I mean, overall, there's a great story of probably one of our businesses were most optimistic about along with our wastewater and vacuum business, but really good growth. We mentioned for probably a couple of years now, and you've been covering us long enough to remember about our push to -- in ...
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A
1a3bc940c4e4f6b2664d7a8aa8ae9442
Okay. All right, got it. -- And you -- I think you said also that you brought in more third-party used oil this quarter and maybe versus a year ago. I mean, is that -- was that a function of maybe lower collection volumes due to the weather or kind of what drove that?
I think a lot of it was -- I was wanting to be prepared. Again, you've been covering us long enough. You know that those winter months can be most challenging in that collection part of the business. Yes, there are challenges in running a plant when -- if there's cold weather. Everyone nationwide has experienced that....
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A
c7095938c9240860969cf6e537ee425c
Okay, great. Yes, that makes sense. Over the longer term, is the goal still to continue to increase your internal used oil collection volumes at the expense of third -- buying in third-party used oil?
Yes, I mean I think that's the ultimate goal for us. We certainly value our third-party customers and we'll continue to support them. But it's critical for us from a cost standpoint to increase the route density of our oil trucks. I think I mentioned earlier that we're launching an automotive program specifically to he...
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A
5b00914aec619b30d71f1e8b98800242
Yes, absolutely, you are right. That makes sense. How much of a margin lift is still available from improving used oil route collection density? And you kind of need to improve that meaningfully to get to that mid-teens, yes, Brian, in OB margin on a more sustainable basis?
Yes, we don't need meaningful improvement on where we're at. We are already running at better efficiencies than we had pre-pandemic and we've been able to -- it's certainly the pandemic has been terrible for basically everybody on the planet. But we have grown stronger through some of it. And we have a more efficient r...
intermediate
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B
d85d3be682833a41a48cf40f23602a63
Okay, got it. And then just lastly, did you give the rerefinery utilization number on the call?
No. We didn't. It was 107.1%.
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A
d9d501bd6e3d537d7e2cea03b1349c19
Jennifer, your conversion was 195% in the first quarter. Why only 100% for the year?
So as we look out to the rest of the year, we've had very strong cash flow in the first quarter and a lot of that has been driven by our contract advances. So those were providing cash of almost $30 million in the first quarter. As we look toward the rest of the year, we'll be working some of that down, so that's going...
intermediate
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B
8477a6b7bdeb4273e2329841ad916434
John, your aircraft sales, your military aircraft sales looked huge, the OE. Could you give us a little more color in terms of what drove that?
Well, it was three things, Cai, that really are driving the increase. It's the F-35. A little bit of that is timing related. As we've talked about in the past, it depends on when you've got contracts materials usage because, of course, a lot of it is long term contracts. So F-35 was very strong in the quarter. We had s...
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A
59fd56ba859e64c2dde9eb503bb03c99
And therefore we should look for strong gains for the year in military aircraft?
I think we'll continue to see a strong year, but I don't think -- for the full year, it's probably going to be a bit up from last year. That's what we said all along, we think military -- the whole defense business will remain strong for the year. I don't think we'll continue at the pace of the first quarter, but it wi...
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B
df5c5800ab0749a1d379eae72457fcdb
You had that huge increase in backlog. Maybe give us some more color on that and particularly the aircraft programs where you signed up for 10 years and whether you feel the contract terms are a little better than they've been in the past?
So these are, as I mentioned, they're in our A&D business. We did find some multiple supply agreements for long term periods. We aren't going to comment on the specific terms or customers that we've had. We do believe that the terms are mutually beneficial, both for our customers and then for us.
fully_evasive
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C
38c2a0af3a0dd06a995ace81255188d2
I wanted to first ask on the aircraft controls, really nice sequential improvement in the margins in that business, John. I know you called out mix as a benefit. But can you provide any more detail on your expectations for margins in that business? It sounds like maybe they stepped down a little sequentially into the s...
Yeah. You're right, Ken. So we did see a nice -- very nice sequential improvement. If you adjust the margins in the second half, there was some unusuals in the fourth quarter, but the margins are running 4% to 5% in the second half, and they popped up over 9% in the first quarter. But as I said, we have a seasonality i...
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A
8b1863ac79bc6b583e107cbe83e75453
There's been some initial commentary from the Biden administration about pausing some international sales. Considering sort of the margin benefit there, do you see any risk to any of your, I guess, in '21, longer term perhaps, who knows? But is there any risk in '21, specifically, you see around F-35 or other programs ...
I -- so we don't know all of the details of what that might mean at this stage, Ken. We're not anticipating any significant risk as we look out over the balance of '21. As you say beyond that, things would change. But given the lead times on most of the types of things that we do, typically, the next 6, 9, 12 months ar...
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A
5f34b01b88915f92a2af013b0addec2f
In your space business, really nice growth against, obviously, very difficult comps. The rest of '20, you put up 30% to 40% growth in the space business. Do we see a step down sequentially in growth in the space business, or are you able to maintain the growth against, obviously, the really strong growth in '20?
So we went from fiscal '19, we did about $220 million in our space business. Fiscal '20, we did almost $300 million. We're anticipating that we'll see some additional growth this year but not that type of growth percentage. I mean that was an enormous growth. That was a 30% to 40% growth. So we anticipate that we might...
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c41af68190258cfb9ab032dc75096189
Were you surprised by the first quarter growth in space, because it seemed to be a bit ahead of expectations?
No. I mean, because the backlog, the contracts in these businesses tend to go out quarters or sometimes even years, Ken. So it's relatively -- it's not too difficult to look at the contracts that you have in backlog and what you think is coming in to predict the sales over the next couple of quarters. So to say that th...
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529ac94b2024906132070b0c264df910
Maybe just to kind of go back to Ken's kind of original question on the margins. Can you maybe just -- obviously, the second half was pretty depressed. You got this mix up this quarter. But as I think about aircraft, maybe going back, I guess it was mid-'19, you had the operational challenges that you disclosed. It see...
Sure. Yeah. So a couple of years ago, Michael, as you described it, we kind of hit a real challenge in the aircraft business. And we kind of took a step back and said, look, we built a business that was designed around a component supplier and we've now become a system supplier, and we've discovered that our operationa...
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454eef6e518043a284c3ae149a962ca0
Got it. That's helpful. So I mean, as we look at margins emerging from this downturn, obviously, the margins were challenged into the upturn, barely scratching that kind of 10% level. Do you envision structurally higher margins even if maybe the 787, A350 kind of hold these rates, if we don't get back to the narrowbody...
I think if we can stabilize the demand, of course, we've got factories that are sized for 10 or 12 A350s and 787s a month that's physically that size. So you end up, no matter how you do it, you end up having underutilization in some of those factories. But we've resized the staff, although, we continue to look at that...
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26e9671d2f70ace6de99dbe61cf72a00
When you look at the cadence of affiliate fee growth, a cable, it decelerated from 13 to 11, to 4 to 3. And the questions people have new companies what drove that deceleration. And when you look ahead some new fiscal year, what's the cadence of 38% of the new deals coming due to maybe reaccelerate that growth. So that...
Michael on cables, I think as we mentioned at the Investor Day, the way we see affiliate, we see it in the round. So the split between Cable and Television is less relevant to us because we negotiate all the contracts in one bulk Group. And so we would, we finished Q4 versus Q4 was a plus 7% growth rate across the whol...
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I wanted to come back to the comment you made around digital advertising at $500 million growing healthily, can you give us a little more color on what is that business, how much of it maybe video versus display, how sustainable you see that growth rate being especially as you head into what will be a political and ele...
On the digital advertising front, we're very pleased with its growth. We think we can aggressively push it even further. If you look at that, it's over 200 million unique users of our digital products, and as I mentioned sort of 10 billion views. If I take for instance just at foxnews.com, we are now often doing over 1...
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So, on advertising. Lachlan very helpful to get that color on how you did in the upfront, it's it so strong. What are the drivers besides lack of ratings in the industry in general. And can you talk a little bit about how you're selling differently with everything under Marianne's umbrella, is everything cross platform...
So on advertising, like we estimate this is the strongest advertising upfront in 17 years. So it's an extraordinarily robust result we've had certainly in both pricing and in volume, pleasingly the scatter market since the upfront has been even stronger. And we are in scatter doing double digits pricing premiums to wha...
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Steve, you mentioned very robust free cash flow and you also mentioned 85% conversion for the full-year last year. Should we take that 85% to be consistent with very robust? And Lachlan, John, Fox Nation has come up a few times on this call and I think it was mentioned that growth in subscriptions was a driver, any con...
Thanks, Doug. So on free cash flow, I think 85% probably a bit choppy from what we expect to convert this, the current fiscal year we're in. And the thing that will be a bit of a drag versus where we've been over the last quarter has been essentially the build out of the Phoenix Broadcast Center, which I think I said a...
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Lachlan you brought up low cast. So I just want to ask you, can you walk us through the timeline. Now that this is filed. What's next? And then, I understand the permanent injunction was requested not a temporary one, I was just curious as to why that was? And then second, for Steve with your capital allocation policy...
Thank you very much, Marci. And I'll turn it over to Steve for your second question. On low cast. I am -- I fleshed out as much as I could. What I can say in my kind of prepared comments and I hope I was punchy enough as I tried to be. But on legal advice and seeing at this case is now sort of before the courts, I'm be...
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Lachlan, if you could maybe talk generally about the soft ratings that we've seen in the news network business, really the last couple of months, not just obviously Fox but just across the industry, what you attribute it to is it news fatigue? And I guess how quickly do you think it can turnaround. And then on the subs...
I'll answer the last part first, which is the easier. But starting from the beginning, new ratings are softer when you compare them year-on-year. Historically, though, I think they are still incredibly high. We are an extraordinary new cycle. And so Fox News has lost less ratings or the less audience are relative to ou...
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So interesting on these late-stage Tier 1 opportunities, did you say that they were with Cloud & Edge customers, one. And also maybe what regions are they in?
Yes. So I was referring to the IP Optical, Mike, not in Cloud & Edge in that commentary. And it's in multiple regions. I think I mentioned Russia, specifically North America, specifically, and the Asia Pacific as well. So a number of different opportunities well down the pipeline basically to comment on them now. So.
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Yes. And are they with current Cloud & Edge customers that are also looking at this? Or is it independent of it?
Yes. So several of them are not all of them, but more than half of them.
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Ok, right. And then it sounds like in India, obviously, a lot more restrictions. I guess you sort of factor that into your guidance here, right, that you're assuming it is a little tighter for a while?
Yes, exactly. I know -- well I commented on the first quarter was pretty consistent with what we saw in the second half of last year. So it is more robust than what it was in the first half last year. But certainly not anywhere back to full deployment velocity. If you look at the deployment that we're seeing right now,...
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And just the last one. At one point, you commented on voice traffic volumes relative to pre-COVID levels. I think you said they were like 30% above -- recover at one point last year. I guess any update on kind of what you're seeing in terms of traffic volumes?
I don't have an updated quote on that, but I will follow up on it, Mike, and see if I can get some more detail on kind of latest traffic levels. I just don't have anything in front of me here right now.
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440f86fc16d7bd2033cf37fd590b2a79
Thank you. Good afternoon. My first question is regarding the chip situation. Any impact on your first-quarter results or second-quarter outlook?
There was nothing substantive, Dave, that impacted Q1. It was obviously tight. We've definitely seen lengthening lead times and challenges on a variety of different types of components. But like many, I guess, we saw this coming. We're trying to get out in front of it as much as we could and had sufficient for Q1. And ...
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Also, somebody -- another equipment vendor reported earlier this morning talked about margins getting hit because the prices are going up. What about you guys any margin impact because of increasing prices?
There is a little pressure on prices. Certainly, on logistics as an example, we've seen some elevated costs around that. which will -- which impacts a portion of our business. Of course, a lot of what we sell is a software as well. So the direct effect on the overall profitability for the company might be a little less...
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Got it. And then I did have a question about India. So it's running about 60% pre-pandemic. When do you expect India to fully recover back to the pre-pandemic level? Are you assuming the second half? Or is there something beyond the second half this year?
Well, so what we believe happens is the second half of the year begins to strengthen from where we're sitting today. Obviously, it's a little hard to tell exactly when we're back to pre-COVID levels. And it's a combination of factors around funding for new projects and budgets, et cetera, but then just the logistics in...
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And can you remind us what India was pre-pandemic? Was it about 10% or?
Yes. So for ECI, it was about one-third of the business prior to merging with Ribbon. So call it in the mix $125 million a range -- annual run rate range, something like that pre-COVID.
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3767d34ab7831ee1a744a9233d4a7664
I've got a couple of questions. One to start with India, just to try to bins. When you -- Bruce, when you talk about -- if I saw in the prepared remarks, you're talking about meaningful improvement in the second half. And I guess what I've just heard you say sounds a little bit different than that. But if I could press...
Well, with the larger service providers we're working with within India, we have a pretty tight planning relationship given where lead times have gone on products and whatnot. We have to have good visibility and we sell a portfolio of products. There's a whole variety of different configurations that we sell, and you'v...
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Bruce, given that the spike in the pandemic appears to be a relatively recent vintage. I recognize it didn't just start yesterday, but it's also not three months or six months old. Have you had real-time communications in the last week or two that would inform you as to whether there's been a change in their deployment...
Well, given the timing of earnings and providing guidance, we do a pretty thorough job in a couple of weeks leading up here to make sure we've got a reasonably accurate view. And we're not projecting significant growth in the second quarter here in India. If things tightened up dramatically, it would have an effect, I ...
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31bd8da8195bed45003bfbf559a73b05
And Bruce, again, my apologies. One last question on India. Looking beyond the second quarter into the second half of this calendar year, has there been any change in their deployment plans in the past couple of weeks because of this spike up in COVID?
Not that I can put my finger on right now, Paul. But yes, that's the best I can answer the question. I think.
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e373edba1d4dfb00eda28faa8b22b777
No, I appreciate that. And Bruce, to be clear, you're expecting a healthy, strong increase in the second half of the year relative to that 60% number?
We are. We are. We're projecting the second half stronger than the first half. Part of it is projects or parts of the network that were already being deployed in and part of it is new wins that we're anticipating given opportunities for market share gains in the market.
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And these are primarily or exclusively optical deployments?
No. It's a combination of the IP MPLS portfolio and the optical portfolio.
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497f730d9eeac82d9e951a3357582cc6
Ok. I appreciate that insight. Let me move on. In terms of opportunities, you've referenced Huawei a couple of times during the call, and I want to make sure if I understand. It sounds like you've already secured at least one particular deal. I think you characterized it as $3 million. And I think it was on the voice s...
Yes. So first to answer the first part, you characterized it correctly. I referred to a voice replacement opportunity in Cloud & Edge and also referred to a kind of close to the finish line on a replacement opportunity in IP Optical. The opportunities we're seeing are both in the optical portion of the network as well ...
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f747c54d39cfb25da4834cfc36fca377
Bruce, while I appreciate it's not dozens and dozens. Is it over a dozen or would it be more like 6% to 12% or even lower than 6% in terms of total potential opportunities that you look at?
The meaningful ones in the short term are under a dozen. There's real focus around these things. It's not kind of a shotgun in a broad array.
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I appreciate that. Beyond Huawei, what are you -- if you had to tier what you're most excited about in terms of driving revenue growth specifically, what would be No. 1 and No. 2 and No. 3?
Well, the Top 2, our Huawei opportunities. Well, Top 3, Huawei opportunities. The second is the recovery in the Indian market. And then the third is success in North America that we've talked about and the growth that we're targeting here in the North American market. Those three things, all focused on the IP optical p...
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All right. I've already asked you about two of the three of those. I just have one question on the -- well, actually a broader question just in North America. And I think I already say you've got a number of opportunities for service providers around the world, Russia, the U.S., etc. Again, trying to get some granular ...
Well, let me come at it a different way. I think the second quarter is going to be fairly significantly stronger in North America for us on IP optical. So we have a number of projects that are in flight already today that we'll recognize revenue on in the second quarter. So I think we'll see some meaningful improvement...
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Yeah, coming out of the third quarter, there was a fair amount -- I think it was like $17 million worth of sales that kind of got caught up because some of the supply chain is [Audio gap] Q4 into Q1.
Yeah, you faded out, but I'll guess your question, and I'll restate it. Are you asking about the deferral of the revenue that we talked about? That deferral continues on. That deferral continues on. I mean, there are supply chain challenges in the industry and there are significant deferrals. So the strong revenue is d...
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Got it. Can you tell us how much is being deferred or, at this point, it's going to be an ongoing thing?
It's an ongoing thing. It's going to be an ongoing thing right now, Scott. It's unpredictable. It's hard to measure because some get caught up and then additional deferrals come in. So I think it's just a fundamental right now in the industry. I think the whole industry is experiencing this. But the industry needs thes...
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dfb387ca9cfd7d475bf1c1c97a4de051
Got it. And just in general, I know that we can all look at the -- your customers and look at their retail sales orders there. Comparable sales numbers, they just continue to improve. Can you talk about what you're seeing, do-it-for-me versus do-it-yourself? I know that miles driven have been definitely improving conti...
Yeah, so, you know, it started out as a big recovery in the DIY and a boom in the DIY. But we're now seeing it at the DIFM as well. So, you know, you've got to, you know, just a lot more people relying on their vehicles, used cars that were in parking lots that are now being driven, and the professional stores are busy...
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Got it. And just lastly before I jump back in the queue, I appreciate that a lot of volatility right now, hence the no guidance. But is there anything you can give us just as far as high-level expectations, well, you know, expectations of growth in 2022 just from a sales perspective margins, earnings, just some high-le...
We expect our margins to be accretive as the year progresses based on the things we mentioned in call, price increases, and hopefully, we'll have more stability in the supply chain. The supply chain is very unpredictable as you know. There are ships stuck in ports. Product is not being manufactured. There's reoutbreaks...
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e58ce7665faa25f56b59c337455975f8
My first question, I think it's a bit of a follow up to the -- to prior question, but I'm asking is I guess more from a color standpoint. But as the economy, you know, market by market has been opening now, and we're heading toward this hopefully post-COVID world. What are you seeing as far as demand trends? And I -- w...
Yeah, you know, what's interesting is, again, without announcing specific customers, I had a cross-section of conversations with various suppliers for the professional installer market. And, you know, some of them were quoting 70% gains over the prior, you know, pre-COVID revenue levels. Some of it's hard to explain to...
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373eaf2e22adc0429fa82680d549b7b9
The second question I have is also bigger picture in nature. We've talked a lot about, you know, the push on the part of your company to EBIT, talking available market today about it. At what point does that become a real needle mover for MPAA, this EBIT push?
I tell you, I expect 100% growth in the business this year. Again, it's not in -- it doesn't move the needle. But, you know, we've got some exciting things that there -- in the works. We haven't announced them publicly, so I'll stay away from any specifics. But we think that there's an opportunity to keep that growth r...
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bb0b81f3e86bfc33f7149afc16d3409b
Got it. And then just one final question for me just on -- I didn't catch if you talk about this in your prepared comments, but I was looking at consumer probably. I mean, inflation is a massive topic right now. What are you seeing in terms of your business as far as inflation, either from your cost perspective or, you...
Yeah, I mean, I will tell you, our margins are lower than [Audio gap] a little bit this quarter. Even, you know, when you look at the various considerations that affected it. And so we've implemented price increases. And we're one of everyone that has implemented price increases. Costs are up. And it's my expectation, ...
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Hey, good afternoon and thank you for taking my questions here. Selwyn, it looks like you're building working capital. And, you know, clearly, it's going to look like a drag on operating cash flow. So -- and you're highlighting you have inventory increases for the anticipated business growth in this fiscal year. And I ...
Yeah. Well, I'll start with the free cash flow. We definitely expect free cash flow this year. It will come a little later in the year. As you can see, we invested fairly significantly in inventory in the quarter. Our receivables are growing, you know, because of the increased sales. We expect bigger demand for the yea...
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Yeah. No, that's helpful. I think another interesting point is, you know, you said inventory should plateau barring some big wins. I guess, can you maybe talk about which categories you're maybe gunning to win some more business. You know, I think your traditional kind of core business that we're aware of, right, proba...
Yeah. I mean I would say that, first of all, all the categories have big opportunities for growth. I think brake calipers, you know, we're probably looking at 70%, 80% growth for this year. So, a lot going on there. We're busy ramping up. You know, there's inefficiencies in the ramp-up in the beginning, but lots of opp...
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36a5e1ac294ae470b77428cca5ff69fa
First, could you guys provide some color on the revenue buildup for the quarter? And maybe talk about the momentum you're seeing in the rotating electrical category specifically?
So I can start out with the allocation of the sales by product line. This will all be available in the 10-K filed later today. For the fourth quarter, about 67% was rotating electrical, wheel hubs was about 19%. Regulated products was 11%, and other products was 3%.
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e8b61fe37a9ff3030d04840d9772b429
OK. Great. And in the fourth quarter, we saw new product start-up costs at $5.2 million, assuming that the Mexico move is mostly complete, should we expect this line item to move to zero? And if so, how soon?
Good question. So as I prepared in the -- as I said in the prepared remarks, in this new fiscal year, they're going to be diminishing significantly. So it will definitely go down to zero a little bit later in the fiscal year.
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7ce02a87b7a8e215bcae8d5ccbfd5630
Great. Thank you. That's Tieton Capital Management. So I wanted to ask, I know you just highlighted that you expect brake calipers to grow at 60% to 70% rate this year. And just wanted to take a step back and ask, if we were to look at the biggest dollar revenue growth drivers as you look at what you expect here this f...
Again, it's going to be hard to predict for the year. But we certainly -- again, I mentioned the brake calipers, I mentioned 100% growth in our EV business, and we expect solid growth in the other categories.
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c5576d58b6b6a8e301f9d80f47a6b0d1
Thanks for taking the question and congratulations on the quarter. A couple of questions, if I can. I guess the first question is, you talked to the -- toward the end of your comments around the outlook around the possibility of any kind of deal, large deal kind of pause as enterprises come back into the office. How wo...
Aaron, it's Brian here. Good to hear from you. So I think we're seeing consistency. We're encouraged by what we're seeing, especially on a year-over-year growth basis. The guidance that we're issuing is 14% year-over-year growth. If you strip out the hardware that's 20%. So that's a healthy year-over-year increase from...
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b8845e944a45e65d3b4837cfc33305fa
Right. And then the other question I was going to ask you that, it looks like you're kind of consistently on that growth trajectory that you laid out at your Analyst Day, back earlier this year, but operating margin leverage looks quite healthy. So I'm curious as we think about the progression of operating margin, mayb...
We're not going to change those near-term targets that we laid out, we feel good about those and confident in what we communicated. And again, in Q1, we are a little bit behind on our investments. We're going to catch up. We're already doing that in Q2. We would expect more leverage in the back half of the year, especi...
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270c82b76417704a50ffde3f2640653c
Hey, guys. Thanks for the questions here. So HP bought Zerto this quarter. Reminds a lot of us out here about what happened with Dell, kind of pre-EMC. What can you say about the impact here? What's the exposure to HP as a partner and how does the deal potentially change the possibility of this partner moving forward?
Sure. No, it's a great question. And I'd like to set out by saying that HPE and Commvault, we have a super strong relationship, we're very committed to each other as partners and nothing changes there. Interesting thing is that GreenLake which is a big part of HPE strategy, we were just recently named 2021 HPE GreenLak...
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0ce3371e1d8924cf836a7efe0011f562
That's great. And then you did, on Metallic, go-to-market versus the rest of the portfolio. Is there a different approach here at all? Is it -- and is it fair to say we're kind of nearing that $50 million run rate in the business yet?
Yeah. We'll share more details on on Metallic shortly. Not on this call, but shortly. Like I said, it's a rising star in our portfolio. We added roughly 300-plus customers quarter-on-quarter. Our feature set, our certification on FedRAMP, I mean we're putting a lot of muscle into this product, into this capability. And...
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528e5efe3682a14fffcb5dd575aa867d
Good morning. Thanks for taking my question. I want to see if you could provide some more color on the strength you talked about in the sub $100,000 deals. If you could just maybe elaborate on what products are resonating and how do we think about the expansion rates from that group of customers?
Hey, good morning, Jack, it's Brian here. So thanks for your question. So we saw a pretty broad contribution from both in the Americas and EMEA, and I think it really comes down to our unbundled product portfolio that's resonating with the channel. And we are seeing higher amount of velocity deals coming through our pi...
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30d6053be0751201aceb0584a6b008b7
Well, thanks. So maybe just a follow-up on that then. I mean, could you just speak more broadly to how this multi-product portfolio maybe changing your land and expand motion? I mean you also certainly had some strengths with large deal sizes at the high end. Are you seeing changes with ASP customers or perhaps startin...
Sure. So this is Sanjay. I've touched on this a little bit in my prepared comments. We're seeing -- first of all, we're seeing customers really embracing what we call the power of AND. The capabilities that our portfolio provides and the flexibility it provides between having an on-premise engine like HyperScale X comb...
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6d8c7f58a8d6163c186d6360a2a06ccc
Yeah, I wanted to focus on the operating expenses here. Just as we look out to Q2, first of all, I wanted to -- sorry, before we get to Q2, I wanted to make sure I understood the Q1-- one of the Q1 add backs. There was a small restructuring charge in the quarter. Could you explain that?
Yeah. Eric, it's Brian here. It wasn't really material for us in terms of the restructuring charge. We didn't really consider that to be something that we're focused on. It's really an ongoing thing as we move out, move resources to our Center of Excellence in India. And it's really just something that's going to be on...
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Okay. I think that may partly answered my next question, which was the Q2, would you expect the expenses to rise, where, obviously, Center of Excellence is one area, but is there direct sales, channel sales, where else are we investing in Q2?
Absolutely. We're going to be investing in go-to-market, Metallic, there's going to be some type of return of normalized expenses as we come out of this pandemic and also in the channel as well, and marketing.
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328311e09ef6f0a734f23376195a1b3e
Okay. And second question for me, the repurchase program, it was relatively, just in comparison to Q4, you guys were $90 million in Q1, up from $62 million in Q4. Was that entirely driven by the seasonal cash flow spend, or is that, should we anticipate that to kind of sustain in Q2?
Yeah, we had a full quarter of activity in our fiscal Q1 of the share repurchases, remember? We announced that at the end of January. So we had two full months of activity in fiscal Q4, we had full three months in fiscal Q1.
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b9f7d9a097b06ecf135d1a1a56de8895
Hi, great. Thanks for taking my question. I just want to check on what you are seeing out there in the labor market. It sounds like there is some catch-up that you're are seeing in the quarter. But I guess, how is that also more broadly impacting customers and their ability to get deals done?
Yeah, I think I think over the course of over the last quarter there's been a lot of conversation within the company here. And we've got a really clean policy, but how we're thinking about our workforce in the future. And just generally for the folks we want to try and bring on board, where are we going to work, is it ...
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Okay, great. I mean, I guess, good to hear the catch-up in spending happening in 2Q here, or an ability to hire now. Just on the Metallic side and within the customer base, want to touch a little bit more on how you're thinking about driving expansion within that, within those customers and kind of additional adoption ...
So we've really not taken our foot off the gas by way of innovation around Metallic. Let me talk about the innovation loop for a minute. Since we brought the product out and really over the last four, five quarters we've just, whether it's geographical expansion, whether it's feature functionality expansion whether its...
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4e3416de6c3cee3ddd7c3bba290bac17
Can you guys comment on the significance of completing the certification for that 45-kilowatt engines that you remarked about?
So, you know to apply these engines in China, you have to go through two types of certification, one is at the engine level and the other one is at the vehicle level. The engine level certification is called SMVIC. And once that's approved, then you can start working with vehicle integrators to integrate those engines ...
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So the way -- based on the way things have evolved over the last year or so since you guys did the Analyst Day, how is your long-term outlook for Nuvera changed or has it not changed at all?
Our outlook for Nuvera is very good. We feel we are at the kind of right point for acceleration. If you have seen in the marketplace, there is hydrogen fuel cells starting to be talked about as the primary replacement for internal combustion engine, particularly in the short to medium-term for heavy duty vehicles which...
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e33d0028a17fd6c05fc1c08361209d7a
Great. And so, what should we be looking -- as investors, what should we be -- what milestones should we be looking for to track the progress of this commercialization and the revenue ramp?
Well, we will be reporting in our regular quarterly meetings on the level of orders and the kind of shipments that we think we may be seeing, now we will be very careful how we do that to make sure that the timing of those is fully agreed upon by not only us and our customers, but by the end users of the products. So t...
intermediate
[ "direct", "intermediate", "fully_evasive" ]
B
1d1b5d9ccb594fdbc2c0832319a85a4c
Okay. And just maybe two final follow-up questions. Do you -- given where you are now with the focus is shifting to commercialization, are you thinking about strategic partnerships or is Hyster-Yale the best entity to pursue the commercialization?
We're always thinking about alternatives to move forward in the best possible way. We wouldn't comment on those in advance except to point out that there are many segments in the total addressable market and that some sort of alliances would probably be necessary, including sales arrangements, dedicated sales arrangeme...
intermediate
[ "direct", "intermediate", "fully_evasive" ]
B
7891a201d5fc026f9b9f35644f1487cd
Okay. Just final follow-up. Given the increased attention to hydrogen fuel cells as a technology, do you have any thoughts on where Nuvera steps within the competitive landscape?
Yeah, maybe I can take this one, Al. So if you think about the fuel cell, there are some critical attributes that you need to have and we feel good about the attributes that Nuvera had. For instance, one of the critical one is power density, both from -- how much power a unit weight of fuel cell can generate or north o...
direct
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A
d1061c00fa022fec0127229ba30f0ad0
I guess, first of all, just a bit more on the opportunity in the US for some of the on-highway applications of fuel cell systems. I guess, do you have to get a different kind of certifications for any of your engines if you wanted to have them on US highways? That's my first question.
Yes, I'll take this. It's Rajiv. Again, certifications by region, so kind of a set of requirements to drive integration into commercial trucks in North America, a different set of requirements are driven by Europe, and in Japan, Japan has some set of requirement. And you do need to certify. There is a lot of consistenc...
direct
[ "direct", "intermediate", "fully_evasive" ]
A
7e8422c9c90a92740d4f389aae327c2e
Okay. And then I would love to hear your comments on the fuel cell -- fuel infrastructure across the US. Have you gotten any feel for whether there are any major companies out there that are developing the kind of infrastructure that you need to fuel -- a fuel cell truck all along a kind of long distance route? Or are ...
So maybe I'll take this first, and then I'm sure AI will have some comments. From my point of view, the way we should look at hydrogen is a number of stages. Firstly, hydrogen is widely -- it is an abundant material. It's in a large number, and it's in water, it's in a carbon field. So availability of hydrogen is not a...
intermediate
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B
5b2b37c23842f2000e72ecc53c2dd1db
Okay. That's great color. Thanks so much. Thank you so much for that. I wanted to also turn to from Ken's comment there at the end. You had mentioned you're just kind of tracking some of your suppliers during the pandemic as some new markets shutdown. Can you maybe comment on how your orders spared during October? And ...
Sure. Thanks for the question. So the -- what we have seen is continued market as we've made in our comments, some of that has continued into October. But we have started to see some impact, particularly in Europe, where as you know, some of the lockdowns have recently taken significant impact. And what we are seeing i...
direct
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A
b925a0a3b38c3b3d7ee21d37b17aae67
Okay. That's great color as well. Can I also ask about your parts and service business? [Indecipherable] in the quarter that you're seeing enough parts business coming in that you encouraged that your machines are being used in the fields adequately or appropriately and enough? Or do you think you've got some more to g...
We think that we're continuing to see good parts requirements in the marketplace. There is another way we can -- at least in North America we can have a good sense for what the demand is for our lift trucks in terms of their usage, because we have telemetry on around 50,000 units in North America, pretty much in every ...
intermediate
[ "direct", "intermediate", "fully_evasive" ]
B