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5271e6c120a3d6cd06f9c994f379644a | Okay. And maybe I just drill one last one in here. I appreciate your comments Rajiv about introducing some of the modular products over the next year or so, that's been coming for a while now. Well, it's finally working. Can you clarify maybe two things. One, has that project been pulled forward, thanks to COVID-19, we had more time to focus on it? I wasn't sure if your comment meant that you're going to be able to do as fast or better than your plans? And then perhaps secondly, are any competitors are really offering products like this that have this modular capabilities and are there any changes that you've seen in performance with these products, compared to the old versions? And any changes to how you fix them or how you service them? | As COVID impacted the development, I think, marginally, we've had our development center operating throughout the pandemic. A large number of engineers are working from home, which has allowed our testing centers to be reconfigured so that people can socially distance and complete our test. As -- and as normal development issues come along, you know they have resolved it. We do have a ramp introduction planned for this platform, and so it will progressively introduce new versions. The start of it, both in terms of models, but also in terms of geography. So we expect this products to be launched in as I -- first part of 2021 and then throughout over the next two years or three years, depending on geography and the types of models. So It's a pretty extensive program. It'll -- over the next five years it will replace everything we do. So it's very, very significant in terms of the investment the Company is making, but also the improvement it brings with it. And so I'll turn to that. We've -- the truck that we're designing are very customer-centric in two ways. Firstly for the operator, the productivity is greatly enhanced, the ergonomics is greatly enhanced. The power sources made available are varied, kind of from ICU to fuel cell, and different types of batteries. Then on the other side, the modularity side what it allows us to do is to configure the right solution for our customers' application and optimal solution, which invariably will give them the lowest cost of ownership. So the modular and scalable nature of this design allows us to do that. Do we have competitors who can do it? There are some competitors that have taken a modular approach, but we haven't come across any competitors that have taken it to the degree we have with our modular -- modularity and scalability, and the way we are applying it to our complete project range -- product range. | intermediate | [
"direct",
"intermediate",
"fully_evasive"
] | B |
3ad42cc481e2cb65704ef1fdcbe72cc4 | I was wondering if we could just maybe start at the growth -- gross margin line. And just talk about, I guess, one, maybe the benefits over the prior year, how much of that is maybe consumer? Now that that's a heavier portion of the mix versus the lower nut prices. And can you just maybe dig into that a little bit more? And then maybe as you think about whether it's the next quarter or the next 12 months, how that plays out in the lower tree nut prices into that margin line for the next year? | I'll take that, Chris. So as we mentioned in the release, virtually all the improvement on that line came from lower commodity costs. And as we mentioned, it's just about all the major tree nuts that we process, probably with the exception maybe hazelnuts. So it's pretty interesting. It's not something we can recall seeing in recent years where every tree nut is down pretty significantly year-over-year, and that's really what drove that. Going forward, we're pretty much locked in for the remainder of the crop year for the North American tree nuts. And that would pretty much take us through next summer. So our costs are fixed. We do have some more pricing actions to take in January as we typically do. And -- but overall, we think we'll see some margin expansion simply because of the lower acquisition costs. | intermediate | [
"direct",
"intermediate",
"fully_evasive"
] | B |
c36015b94d08af3bf753a0b34f043732 | Okay. And you said it's unprecedented, can you maybe just shed your insight? Obviously, you've been around it for a long time. Just maybe your thoughts around what's driving kind of the decline in the pricing? And how sustainable that is? | Chris, it's Jeffrey. So it's a combination of things. It's just been an extraordinary year -- a couple of years for growers. So there's been so much more planting of almonds, of walnuts, pecans in some places. So you've just seen an increase in the supply side because the growers have made so much money and it's been such a profitable industry to invest in over the last 10 years. And so now you're seeing the results of those increases in acreage planting. So you've got close to three billion-pound almond crop. You've got a record -- close to record walnut crop, record pistachio crop. Pecan crop in Mexico continues to grow as well as places like South Africa. And so you've seen just increases in supply. And -- but it takes a while for demand to catch up with that. So that's part of the reason you're seeing some of this price deflation today as a result of just larger crops around the world. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
72966f62e64c4508a9d430b41c15382e | That makes sense. And can you just -- thinking about the pandemic on your business, obviously, consumer, you've obviously benefited from -- I guess as things start to come back on the other two segments of the company, how do you see that playing out on the margin front? And do you want that to come back? Or -- I know it's still important, but this beneficial kind of -- it's obviously benefited the consumer more for you. Can you hold the gains on the other side, too, and a comeback you think in the economy? Just thinking about your portfolio, do you want to change it at all during the pandemic? | Yes. So as we've talked about, we've seen a shift to e-commerce. We've seen a shift to people eating and cooking at home. I believe as states reopen, you're going to see some of that shift back to, and we hope to see to shift back to food service, where people are going out to eat and traveling again. We expect to see that. I think some of the gains you've seen in consumers, some of that will stick. We're hopeful that we've -- consumers are now used to cooking at home and they've learned to cook at home. That increase we saw in our -- in the recipe program and even down that recipe aisle. And we're hoping that we can maintain some of that volume, even though the pandemic is -- once the pandemic subsides. And so we're hopeful that we can keep that recipe category growing strong, continue to educate consumers on how they can use nuts to cook and what to do with them. And I think the food service piece, our team has been really laser-focused on building distribution so that when states do reopen, we have our product portfolios in place to optimize the volume again in that channel. That's why I'm really confident once we do get back to some new level of normalcy, you'll see that food service piece come back again. It's just a matter of time when states start to reopen, and people are confident and comfortable to go back out to eat again and travel.
Chris, this is Mike. I would add that if we were to see a decline in, say, private label snack nuts and trail mixes in favor of food service, walnuts and pecans, where we're seeing a lot of decline right now, that would actually be a very positive development for us because, as you know, we're vertically integrated in those two nuts. We tend to have better gross profit per pound measures with the nuts that we shell. And that actually, I think, would be a positive for us if we saw that shift. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
1ccebe06459cf3469b2c88f583c1b13e | Okay. I really appreciate it. And just with some of the lost business on the recipe side, is there an opportunity to go back and get that? I know there has been some talk about that at times and just your confidence around that brand. And obviously, still -- obviously a strong position in that marketplace, but just the ability to go out and gain some more store space. | Yes. Chris, this is Jeffrey. So we absolutely believe there are opportunities to regain that distribution or some of it. Obviously, retailers are looking at brands every year, and they bid some out every couple of years. If you look at our velocity versus some of our competitors in the marketplace, it's so much higher. And I believe we really invest in our consumers, we invest in educating people on recipe nuts. I just think we have a very strong -- we have very strong brand equity with Fisher. And I think with the marketing efforts that we're making and some of the changes in our brand positioning, we're bringing value to retailers that carry Fisher. I really believe that some of the lost distribution, we can get -- we can regain that with some of the success stories we're having in other places. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
d308967fbbf3b70359d07eb75a349c4a | About maybe -- is there opportunities for M&A in this environment for you? And maybe just your thoughts around what maybe the confidence of the competitive landscape as well? | Sure. Sure. So we always look at M&A. We've talked about it periodically on this call. So we're always looking at companies. Nothing that has been that important or we felt was that strategic that made sense for us at this point, or perhaps pricing wasn't right. But we are continually looking at opportunities in M&A, whether it's a new capability that we currently don't have, it's a new product platform or it's got a brand that reaches a consumer that we currently don't reach. A lot of opportunities and strategies we have in M&A, and we'll continue to look at them. Just nothing that made sense up till now. | intermediate | [
"direct",
"intermediate",
"fully_evasive"
] | B |
e69c4d4836a77d65160a1982a000dcf5 | And maybe can you just talk on the competitive landscape at this point? Or I guess just the -- all the different changes, moving parts within the industry. Just how are they attacking maybe the consumer side? | Yes. So obviously, competitors are responding to the pandemic and just trying to understand the dynamics with consumption trends and consumer behavior. So we've seen some of our competitors, Diamond, for example, being very aggressive on building their recipe nut distribution. Planners has been aggressive investing in their brands and trying to continue to expand distribution. And so the brands are still there trying to play a stronger role at retail and on the shelves and try to mitigate some of the impact that these big private brand programs are having with shelf space. But we don't anticipate major changes with competitors. I just think you're going to see people watching what happens with the pandemic and continued changes in consumer behavior and respond accordingly. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
ac18f3df96e0af2c438dfff30d14e05b | Do you expect interest expense to decline over upcoming years as you pay down long-term debt to close to 0? | Yes. Basically, our average interest rate on long-term debt is about twice as much as it is on short-term debt. And all of our debt amortizes. So yes, we do. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
fd47682101ad27e0880c898c486275d7 | There were some capital expenditures with the pandemic. Do you expect capital expenditures to go down over time post pandemic? | The capital expenditures we made for the pandemic actually were a pretty small percentage of our total capex in fiscal 2020. Our plant was actually pretty well laid out. That allowed us to create a safer working environment without a lot of capex. The big increase in capex that you're seeing for fiscal '21, that we disclosed in our 10-K at the end of 2020, is really attributable to product line expansion. | intermediate | [
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"intermediate",
"fully_evasive"
] | B |
f062ec74ac284347b7d0bd992f4ca981 | That's great. You had near record sales and earnings and consumer sales were 82% of the base, which is huge. As the economy reopens, I think you said you believe you have enough capacity when food service and specialty retail sales and other areas open up and demand nuts from you. I believe you said you have enough capacity to handle that from these levels. Is that right? | That is correct. Yes. We've got an amazing infrastructure at all our facilities, Tim, and we've invested over the years. And as our business grew, we invested in new packaging, new capabilities, robotics. It just extraordinary investments we've made in manufacturing. So as we -- even if product line shift or volume shifts, we've got available capacity to meet those demands. So as food service comes back and we see that growth return, we've got the capacity to handle that additional growth, in addition to keeping the volume growth we've seen in the consumer channel. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
fbc28cf0f70a5482e03ff10d845b5eaf | That's terrific. Do you expect to sell the Garysburg facility? | We haven't made a final decision on that yet. But currently, we do have inventory there. We are doing some shipping and receiving. More than likely, we probably will put it up for sale in the fourth quarter, but we're still studying our options.
Yes, if you have a buyer, Tim, let us know. | direct | [
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] | A |
d033dbf67f35b1d2e0b3cb0b8f217407 | Yes. On their last call, Smucker indicated they had a solid Jif price increases due to higher costs and they thought those price increases would stick long term. Meanwhile, we have Conagra buying -- or selling Peter Pan and other nut lines to Post. How does this competitor activity affect your company? | Well, the peanut butter business -- the majority of our peanut butter business is private brands. We took some pricing activity early -- mid last year remember the timing?
Because of the crop.
Yes, because of the crop. So we did take some pricing in mid last year because of the pricing just as Smucker's and some other brands did. We anticipate -- I don't anticipate huge changes in the peanut butter segment. It's still a strong segment. I think you're seeing growth there as a result of kind of the current economy today. It is a low price, high-protein item for families. And so we've seen a lift with our current private brand peanut butter customers as well as obviously, the food pantries around the country. Huge growth and demand there. | intermediate | [
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a454e0c7aafb5c1ae34c50f27b96d8be | Hi, good morning everyone and thank you for taking my questions. Congrats on the endpoint change, it seems to make sense and could be an important update for the program. I'm wondering if you can talk more about the background of how the endpoint change came about. I guess, for example, was it based on feedback from advisors, FDA advice or from the broader market research that you did? | Yes. Probably, Maury, I can start answering your questions. So as you see that G-CSF is only standard of care currently for the last 30 years. Even with G-CSF, it's primary endpoint has been evolving in the last 30 years, starts with severe neutropenia rate, right? And Neupogen compared to no therapy, and later in 2000, when Neulasta has to be approved an NDA, actually spend a lot of energy also to get the new primary endpoint, which is the duration of severe neutropenia, as the primary endpoint because it's a very good biomarker. And also, you can have fewer patients to do the clinical trials, and they also have to spend time to correlate DSN with rate. So currently, as you see, the DSN is a very good primary endpoint for the non-inferiority trials, but it does have ceiling effect. With the TAC plus G-CSF, it's currently, the DSN is around 1.2 days. So there is a pretty high ceiling, and it's very hard to it is good, we can make it better than 1.2 day, but the gap is pretty small. So with our discussion with our key opinion leaders, and also probably also from our market research from the physicians, we had a discussion with FDA. Because as you know, G-CSF still did not meet the anemical needs of Grade four neutropenia. And Grade four neutropenia through literature research, it is directly correlated to infection, FN, hospitalization, and you can also test. And for G-CSF, the current [Indecipherable] is still at 83% to 93%. So that gives us a big range of reduction for our combination, achievable. So if we can achieve that, then you have a very good ANC number, like what the physicians are saying, which is going to maintain the defense for the immune system. And then also can enable the chemo dose for the optimum survivor benefit. So that was for the history and also our thinking. And then also, we have aligned with the FDA currently. So probably I can also ask Ramon to add a few words to this.
Yes. Thank you, Lan. First of all, I would like to state that we are very confident that we will also see a benefit with DSN with the combination over monotherapy alone. But secondly, probably more important is that the concept of DSN not only has been poorly understood by the scientific and medical community, but also by the commercial community. DSN is a concept. It's very difficult to understand. The concept of having no Grade four neutropenia at all, avoidance, total avoidance of Grade four neutropenia and that you have more patients with total avoidance of Grade four neutropenia, with the combination of Plinabulin and Pactamycin, that is so much clearer for clinicians, scientific community, but also from a commercial perspective. It is not only clearer, but also more impactful. So those are very arguments that we are able to convey successfully to the FDA and hence their willingness to discuss with us this change in primary endpoints. | direct | [
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"fully_evasive"
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c12d99baea5aa3f6d077dab6d8524e03 | Got it. That was very helpful. And then the second question I had was, I just wanted to clarify in the press release yesterday, it said a robust plan will be submitted to the FDA to prospectively validate this new primary endpoint, I guess is that plan finalized? When will it be submitted? And will it be validated before you eventually file for approval, just to clarify on that? | Yes. So if I can just quickly answer this. This plan has been submitted, actually. So yes. So it's to validate that Phase I neutropenia or no Phase I neutropenia, how it's related to the clinical consequences of such as infection or FN or hospitalization and that those kinds of consequences. And we will be able to locate it from our prospective, from our 106 Study. And also, we will do the integrated efficacy summary to also look at this. | direct | [
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"intermediate",
"fully_evasive"
] | A |
1d5061aa3ef2b49373669baef0cbc6cd | Okay. And then the last question I had was just we're looking forward to the 106 update. And in your 3Q 2019 press release, you stated the study 106 readout would be a final readout in the first half of 2020. But in the press release today, it says the 106 update this quarter will be an interim. And so I was just wondering if you could explain the change and talk about what specifics we could see in the interim update this quarter? | Yes. So probably I can answer this quickly. Yes, thanks so much for the great questions. So currently, I think our time line is for the because of all of those very important time point to get to this interim analysis. As you also see there is the primary endpoint change. So currently, the time line is 106 Phase III interim of like 120 patients will be done this quarter, which is quarter two. And then the final will be done in the second half of this year. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
3cf9d4f3e99486dbc75160fd1d1b75b7 | Okay. And then the update this quarter, what should we expect what kind of specific measures should we expect in that update to be reported? | So well, at least you will see the the new primary endpoint, the avoidance and prevention of Phase I neutropenia in the primary endpoint with certain p-value, right? So we probably will save all the detailed data for a scientific conference. | intermediate | [
"direct",
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] | B |
503ac509f1d5ebc47256090af8ea95b4 | Excellent, thanks for taking my question. Hope everybody at BeyondSpring is well and staying healthy. And congratulations on a great year in 2019. So I have a couple, probably more related to the non-small cell lung cancer. So I think Ramon kind of talked about the first interim look and then the final analysis timing. Just wondering where you are in the second interim analysis? I think last quarter, you mentioned that the number of events actually trigger the second analysis. So any sort of information that you can provide would be much appreciated. | Yes. So probably I can start, and Ramon can add to this. So we have reached our second interim analysis for the non-small cell lung cancer at the past event. So we will have a DSMB meeting soon. And with that, then the DSMB of as a company, we really cannot it's blinded to us on the efficacy data. So with the meeting, they will advise us to go forward or not based on the efficacy and also the safety data. So that's all we can say. So Ramon, you have anything to add?
Yes. Thank you, Lan. I have nothing to add. | direct | [
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"intermediate",
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] | A |
779a04dab8d0f1052a97dc31202f22b8 | Okay. So I also have a related question and I don't know if this has been discussed before, but in the enrollment for DUBLIN-3, EGFR mutant patients are excluded and that's a little bit different from other second-line studies that we have seen, given the fact that they could have already received drugs that specifically address these driver mutations. So just curious about the decision to exclude these patients? | Yes. So probably I can start on this. So as you know that currently, TKI, the Tarceva, the Tagrisso, they are very good for the EGFR mutant population, right? So they are in our mind, they're really not the more severely unmet medical need. With the EGFR wild-type patients, if you look at the TAILOR study, Tarceva actually was worse in the overall survivor versus docetaxel in the EGFR wild-type patients. And meanwhile, EGFR wild patients wild-type patients is considering around 85% of the Western population. So in our judgment, we do think the lung cancer with EGFR wild-type are the more severely unmet medical need population. Those are the patients we need to develop the agent to help. So that's one of the rationale why we only focus on EGFR wild-type. And secondly, also, this is a global trial. There is a difference in the percentage of EGFR mutant or wild-type in the different solicity. So for the western patients, EGFR wild-type is around 85%. But in the Asian population, it's around 70%. And the patient with biomutant actually live much longer than the EGFR wild-type patients. So it's largely a global trial, if we do not get if we do not include if we do include the EGFR mutant patients, then so the data will be very hard to analyze. And also EGFR mutant, they are living much longer. So the study is going to be very long to conduct. So that's our reasoning why we are only targeting the EGFR wild-type patients. I don't know if I answered your question. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
c6381313b00861b6809cbc2fa6e1d4e7 | Okay. Yes. No, that's actually a perfect answer. So last question I have has to do with the endpoint change. So Lan, I think you kind of talked about the goal of kind of positioning Plinabulin as all cancers, it's basically a broad label. And so help us understand the endpoint change for 106. Is that going to impact 105 as well as you're waiting for the final analysis? I'm just curious because ultimately, you have to put all the data package together as one. So just curious if you're planning on continuing the duration for duration endpoint for 105 and then a new endpoint for 106? Or are you going to combine them together into one? | So that's a great question. So as you see that the 105 primary endpoint is not going to change because 105 is a non-inferiority trial, right? So DSN is a good endpoint for non-inferiority trial. So it's not going to change. Only is going to be changed in the 106 because that is the superiority trial with a new regime, which has potential to improve care, as in we need more a clinical relevant and more robust endpoint to measure the superiority. So it's only going to be changed in the 106. | direct | [
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"intermediate",
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d36420db60277b20b60637a3d257bf35 | Hi, good morning and thank you for taking my question. Congratulation on your updates, it's great progress. So number one, just to clarify, the change in the primary endpoint on Study 106, was that based on an FDA request? Or did you initiate this request? | I can yes, we did initiate this discussion with FDA. Because this is also a yes, it does. But we did discuss with them extensively. | direct | [
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"intermediate",
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] | A |
9957817c0d4757acfd44799c8858ecff | Great. In terms of also, obviously, Study 105, there's been an interim analysis and of additional data. Have you been able to look at that with respect to the new endpoint? I know it's a different study, it's not in combination, but in terms of prevention of Grade four neutropenia, have you any data from that 105 Phase III study that might be relevant here? | Yes. So we do look at well, so the 105 Phase III, if we look at the Grade four neutropenia rate in the first week, which is the we want to show the early onset of action, we do see a benefit there as well. We have less Grade four neutropenia percentage in the first week in the 105 study versus the Neulasta by itself. So you see a rapid offset as well. So that's like a better result. But for the primary endpoint, we're not changing, it's still DSN. | direct | [
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2e7346f5dad8a3bae6b27a96bada6fa5 | Got it. Okay. And then do you anticipate to also in your U.S. NDA filing include data from the interim data from 106 as well as, obviously, the 105, you'd, I think, previously planned to submit for approval? | Yes. So that's a great question. So it's always has for the U.S. FDA approval for broad label, we always have planned to submit 105 and 106 data together because it takes two studies to validate. So they'll both be combined to submit. | direct | [
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da040a77231dd80a0fa6495c40e2279d | Okay. And then just with respect to that then, on the 106 interim, will you report the DSN endpoint as well as your new primary? | Well, I don't know if we can at this moment because usually the interim, I think the well, I cannot I have liberty to say because this is going to be in discussion with the independent the decision. But we are confident that the Grade four neutropenia avoidance actually is more robust. And what if it needs, yes, I should meet as well. | intermediate | [
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] | B |
b5c08e62abf8bc41ea1141ab648c4bfe | Got it. Okay. And then any progress with EU regulators on the path? And how does this endpoint perhaps work with that process? | Yes. So EU, I think our strategy is to first file for U.S. and China. For that EU is we are planning to have meetings with EMA. And then talking to them about our studies. But of course, now with COVID-19, it's a little bit hard to meet with anyone. So but it's in the planning to discuss with the EMA. | intermediate | [
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"intermediate",
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] | B |
3b0da8b3522e10e43d6a5f358cd07d54 | Okay. Excellent. And then I guess you recently presented some new data that highlights Plinabulin's ability to prevent tissue iron overload. So is there any plan to initiate a clinical study around that observation? It's obviously helpful in several diseases and probably also relatively low-hanging fruit like CIN. Maybe walk us through how you might look to explore that data set more clinically? | Yes. So probably I can let Ramon to comment on this. Ramon has the most experience in this indication. Yes, Ramon?
Yes, thank you. Yes, we certainly have plans, as you indicate, this is low-hanging fruit for us. This is an additional benefit that Plinabulin offers in the chemotherapy setting. So with chemotherapy, as we know, a common side effect is neutropenia. And that's where the Plinabulin indication in CIN comes in. But equally important, as you know, a common side effect with chemotherapy is myelosuppression that often leads to anemia. So not only neutropenia, but also anemia. The anemia then typically in chemotherapy patients is addressed by blood transfusion. And most cancer patients, they have numerous and chronic blood transfusions over time. With blood transfusions, patients get iron overload because then the block in the patient degrades and the iron becomes freely available. Iron that sits in tissue, then creates iron overload and tissue damage. So Plinabulin has a very broad benefit in patients receiving chemotherapy. We the emphasis currently is on neutropenia prevention. But then we have all these additional benefits so with chemotherapy and anemia and the iron overload, Plinabulin then also will have that major benefit. This is very relevant. This is a very relevant finding with Plinabulin because we see increasingly that the trend is that cancer patients live longer. Now cancer patients also in cancer patients, we also combine chemotherapy with immunotherapy. Therefore, paces increasingly live longer. The trend now become for cancer patients to live longer. If then the patient had suffered, had been exposed to iron overload due to blood transfusions, that will impact the quality of life over time. So with cancer patients increasingly living longer, our attention will switch to how then can they live longer at a high quality of life with the lowest morbidity over time. Iron overload reduces morbidity over time, and we see here a benefit that Plinabulin also will address that. And therefore, it's a very big advantage looking forward. | intermediate | [
"direct",
"intermediate",
"fully_evasive"
] | B |
cff70f3c5b677e670e8f6b7884e84569 | Hi, this is [indecipherable] for Tom. Thanks for taking our question. I just have one on the oral SERD. With all the updates from the other SERD programs like the Sanofi's and Genentech's, has the bar for what has to be seen for rintodestrant changed? | Yes, thanks for the question. Really appreciate it. I would say our internal measure that we communicated of CBR24 for between 60% and 65% really remains. To your point, as more data comes out in the SERD class, both on the efficacy and the tolerability and side effect standpoint, we'll continue to monitor that. But we believe that we can match the safety profile and strong tolerability and hit a CBR in that range we'll consider this a good result. | direct | [
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"intermediate",
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] | A |
2821ea83ab4d8cf3890eeccd591c97b3 | Thanks very much. Soma, I appreciate the presentation and the color. But I have to ask, can you describe any payers that had a push back, but importantly how did -- how are the field agents able to actually deal with that push back? I think it's important as a lesson to be learned. And then the second question involves around in discussions that you've been having with payers, who has yet to sign contracts or incorporate COSELA within their reimbursement, again can you discuss where are the -- any rate-limiting steps that may be occurring at least to date? | Yes, sure Tony. Nice to hear from you. So on both points, so as I said in my comments, we have had very little pushback from payers at this stage. And so at this point, what's happening is physicians are choosing to write it. They're putting it in and they're not having issues. In fact, as you know, we have this, one-to-one service. So, the cases that have come through there, same thing, no problems. I think at this stage, it's PA to label.
And so, to answer your second question -- the second question around the policies is that the processes, those presentations that are given, we've done those presentations that cover about 80% of lives at this stage. They are well under way and then they all take their time to review the data, understand the data understand the benefit, and then incorp and then write the policy. And so as I said, we got the first policy from Anthem at the end of March. So we were very happy about that.
I think different insurance company basically handle about in different ways and take time on different timelines. So we feel that might take anywhere between -- it could take six months for all of them to come on board write their individual policies. Some of them came on, Anthem came on very early in the -- on the progress. But I would say overall, this is not an area with the payers, where we're seeing a lot of pushback on an issue. And so even to answer your question about how the reps are handling it, the reps aren't really having to handle it, because it hasn't really present much of an issue to-date. Again, we think we're fairly priced fit. We think people understand multi-lineage that they're getting, the benefit of not just what they got with others, but they're cutting the other pieces and I think that goes a long way in terms of the value proposition on COSELA, but we've very encouraged by the progress on the payer front today. | intermediate | [
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d861e541a6bd497fba4ed60b48b8a852 | Great, thanks for taking my question and thanks to the whole team for all the added color today and like my predecessor analyst, a special thanks to Soma for all of her color. Soma, I may need to replay parts of your prepared remarks today at two-third speed so I can absorb it all. And our ability to process information clearly slower in years, but if we could just dive into a couple of things, I'm trying to get a hold on. So -- and I get it so we're talking about the very earliest days. It's a very flash time point than the launch. Things do sound like they're going well, but $600,000 in sales through that very end of March. I believe if I have my notes down correct, you guys are estimating that's about 30 patients that you've treated maybe some context on that number. I know it's a month's of early data but like are we 2%, 20%, 40%.
And then you also, I believe, again, I've got to read my own piece of written notes, but 60-40 on the community academic breakdown and 60-30-10 on the net D the commercial and government breakdown like, can you give us some context on where those are and where we think they need to be, like I mean again, right. So, it's just the first few weeks, we're all going to over analyze it. That's what we do, but sort of where are we on those, if you could give us some? | Yes, absolutely. So yes, I tend to be a fast talking orator as you may now. So, appreciate that, so -- but interestingly you've got all the numbers correct. So that's the first thing. So on the 30-patient so what I can tell you about the 30 patient is it is an estimate. It has the way that the data comes into us as we see different accounts. We first of all, we see accounts and so accounts will order and will be able to see. Okay that person, they ordered five vials, that's probably a second line patients; that person may they ordered 6 vials, that's probably as our first line patients.
So we're doing a little bit of math to get it our best estimate around the patient, but we just think it was important to be able to get a perspective on how many patients we think went on drug and we think it's about 30. Of that 30, we think about half of those are definitely first line patients. We think about 25% of those might be second line and then about 25% of them we're just not sure based on the way the order and came in.
So that's a little bit of coloring, at least on the patient piece and in terms of where we think that is we think that's very positive. We think directionally 30 patients was great for four weeks. This is a disease when you think about it, there is only 30,000 patients are present in a given year. Out of those 17,000 to 18,000 are first line, about 10,000 are second line and the kind of the remainder are thereby decisions don't really make it through multiple lines of therapy.
So, when you think about that on a -- so you take that number and you kind of do it on a monthly basis, the number of patients walking in every month is not that big. And so for us we thought 30 patients with a good number for the first month of launch. That's the first thing. The other number that you mentioned the 60-40 can be in any split, we actually think that's going to move closer to 70-30 over time.
We think that what might have happened in this instance, is that the community -- sometimes the community institutions are larger practices. They have longer processes to kind of pull it through and the whole process I talked through about cutting TNT and opening it up from the top, sometimes that talks us a little bit longer and some [indecipherable]. And then, some of the academic accounts that just goes faster, because they can get access to the things they need to, that might be why it weights little bit heavier on academic than what we've-- I think what we expect to see in steady state, which in my mind would be more or less 70-30.
But on the payer mix of 60-30-10, that's actually what we expect to see. So that was actually right in line with our -- exactly how we expected to come in. Again these patients the average age is 65. So, we know that the heavily Medicare population. So, it would seem to us about 60% is reasonable, 30% commercial and then 10% kind of VA, DoD and others. So in general, we think this is actually the patient count again it's an estimate, but we feel very good about the patient count is and where we we're able to get to in the first month. And as I said, the other two metrics I deal are very in line with what we thought we would start. | direct | [
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f5bb94ae1820af880a17dd158eda22f5 | Hi there. Thank you for taking my questions. First one, just on the P&T approval process given kind of the COVID pandemic time frame, what's the average time from sort of initial presentation to the hospital for it to get through the P&T committee?
And then second, is it possible to use COSELA concomitantly with other GM-CSF products in clinical practice? I know in clinical study, we saw obviously reduced need, but is it still reimbursable after launch? | Thanks. Thanks, Joe. I'll quickly address the first one and then I'll put the second one over to Raj. In terms of what your typical P&T timeline. To Soma's point, this is really very individualized that's on an account by account basis depending on either the institutional or top-co institution versus a large community practice. So, a team is monitoring this. We've got a good sense for a lot of them when they will occur. But to be honest the duration of when they start and how long take really does vary account by account. But the team is heads down executing on this and making sure they have the information they need to be able to, hope we move to their processes as quickly as possible. Raj, you want to take the second question?
Yes, happy to. So in our trials we allowed the use of G-CSF and what we actually found was a substantial decrease in the need for G-CSF when when COSELA, but there were no safety issues with giving both COSELA and G CSF. So we think in practice because of the proactive approach with COSELA, prescribers will initially use COSELA and also having the multi-lineage benefit and could have the option of using G-CSF if needed down the road. | intermediate | [
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bc9601f7d4495f5b0cd363ca093c19a1 | Good evening. Thanks for taking my questions. Thanks for the update on rinto. Just wondering if you can briefly review your strategy there again? And has there been interest from partners for that product? And then a quick question for Jen, just that the cash runway into 2023, does that include the 70 million left from the Hercules deal? | Good to hear from you Ed. I'll answer the first one and flip it over to Jen to hit your second question.
In terms of rintodestrant, we are still on the same path that we communicated last year, we believe, given the competitive nature of the class, the cost of the Phase III development programs, let alone the significant investment to commercialize, we think the best use of shareholder capital is to partner that. To your point, we have had interest in it and have had discussions, obviously as we released the data at ASCO that will be the next in the logical milestone here will follow-up, a lot of those discussions, but we're still on path to be able to partner there and really fully deploy our capital behind trying to development plan. Jen you want to take the second one?
Sure. So how -- when we're giving guidance we run it a number of different ways that's for early stages of revenue looking at a bunch of different options, but we are not utilizing the full $70 million to get to 2023. So, hope that answers your question. | direct | [
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94f8bb0dbf4b39772f958f1b2b4fae6d | First off, just to start off with what you're seeing in the current macroeconomic environment as it relates to your workforce and retaining that workforce through the weakness you saw in the fourth quarter in this fiscal year? And more specifically in regard to the restructuring of your sales and engineering teams, how do you feel about the current staff that's in place as you look to expand your capabilities into high-speed data and also high-voltage cabling applications? | Okay. So I think I understood the question, this is Pat. Good morning, by the way Chris. As far as retaining workforce, I think as Tim mentioned in his prepared remarks, we have seen a steady improvement in that condition, especially as production has leveled through the year in most of the places in which we operate. So it has reduced our expenses from attrition and recruiting for the most part across the company and I think help stabilize those costs and frankly improve productivity. We've been -- we've been seeing improved productivity across most of our operations. So that's a general statement as far as workforce.
Now, there have been some special considerations certainly in China during February and March, but even then we've worked very closely with all of our employees through a lot of government required actions as well as the well-being of our team there, they've been able to help and facilitate people in getting back where they need to go. Travel and whatnot was restricted for some period of time and as we mentioned, things are starting to return to a normal operating at least up to where we're at today and what we see for the foreseeable future.
From a sales and engineering standpoint, we have made pretty dramatic changes in particular in the Electrical arena. And that's in both parts of that business on the Electrical, electronic side as well as in the interior trim and injection molding chemical based process side of things. And for the most part, we implemented a new organic growth process across that -- across that segment. That included analyzing and revamping how we -- how we go about reacting to new customers. Over time, as you have six or seven large customers with similar characteristics and needs and requirements, our systems have adapted to their systems. And as we try to bring in new customers and approach new segments, we have to be more flexible in how our front-end systems work. And so we have been moving through the process since -- really since the fall to modify those processes to be more open, more flexible and faster responding to be able to quote new business and take on things that don't fit neatly into the processes that we have. What we found is that that is a different skill set.
So you've heard the analogy about hunters and gatherers add, when you have very large core customers that you've had for many years you tend to migrate toward the types of individual that is more of a maintenance and core customer-dependent. So that necessitated changes for us in some personnel and the type of personnel and also additions because we did not want to decrease our focus on the core customers. And so we have split organizations and changed the structure, we've brought in new talent, some of it has -- some of those folks come out of industries that are more electronic -- electronically proficient and have a deeper understanding of the direction of some of this evolution that we're currently experiencing.
And so we're pretty excited about changes we've made, some people are new. They come -- they have come on board in the fourth quarter, we are probably still evolving those actions. We've implemented new quoting systems and methodologies that allow a much faster response time, being much more flexible to customer needs and some of this, we're learning from the FSE acquisition. Their business is modeled in a more discreet order and project-based fashion requirement to be faster. And so, that's how we've been structuring our business. I am encouraged by some of the results we're seeing as far as the amount of opportunities and the way that we analyze those opportunities quickly just deciding where they fit into the strategic funnel or not so -- and thanks for asking the question that's something that I think we're, we're very eager to announce results and those actions are taken because we feel, we feel like we're going to see some positive results that we'll be able to talk about shortly. | direct | [
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0e5a2479d229815fdc1109d1fe67fe8b | It's interesting. And following up on some of your comments in regard to FSE, I have Slide 7 of the deck in front of me. Can you talk about the level of visibility you have for this next fiscal year as it relates to cross selling opportunities, potential new businesses coming online as well as the synergistic opportunities here? And assuming the noise in the Global Markets continues kind of a worst case scenario, does this change at all your capital allocation or preservation activities? I know you mentioned the $94 million of liquidity on hand in case of emergency, but how should we think about that as it relates to your potential for accretive inorganic opportunities or investments in the current Electrical systems business? | Okay. Let me talk about the first one, which is how much visibility do we have. We -- that business is different than our other businesses, it tends to be discrete project oriented orders, but from some of the same repetitive customers and similar type products. And so we have a pretty good visibility to the pipeline through the first six months of 2020 in the form of hard orders. In the back half of 2020, what we're seeing is very positive indicators from many of the same customers on pending orders that they are seeing in their business, which would result in orders in our business that's kind of how it works.
Let me give you a flavor of the types of customers, I not prepared to talk specific customers because I don't know that we devolves that publicly, but I will say the businesses that we're helping to support in industrial automation includes all of these new logistic automated warehouses that are expanding across tied directly to online sales, last mile deliveries and not just in North America, but that business is blossoming globally. Our customers are international customers, they have that capability. Today, we're predominantly supporting them in North America, but that's another longer term opportunity for us, but my point is that particular business is continuing to grow and speed is critical for them and so the faster that we can help produce those programs for our customers. So we're down in the change. So we're like a Tier 2 supplier into that chain making electromechanical assemblies as well as the electronic control units for those electromechanical systems. So that business has been blossoming.
Second major industry segment for them is defense, the defense side. And in particular the electronics and the communication modules for the defense side. And you can, you can see that what we can tell for the next few years that business is it looks robust. So that's our visibility on FSE's direct business.
On the comment about cross selling opportunities, some of those same customer dynamics I just described are opening up opportunities for our tier -- for our customers who are tier ones into that industry who have capacity issues. So they are, they are struggling with capacity issues and they're looking for opportunities for us to be able to support them and we are evaluating those now. We have had to get different certifications in some of our facilities, in the case of one facility we've recently gotten UL certified officially and we've got customer audits and things planned over the next 30 days to 45 days, assuming that some of these restrictions related to COVID-19 don't inhibit any of that activity. So we see near-term opportunities and we also see some longer term opportunities for us inside that cross selling action. I don't -- we're not prepared to put any timing or magnitude to it yet because it's early, we're pretty excited about the speed at which they move. It's a much faster selling process than what we see in most of our businesses.
Well, if -- this is -- this is Tim, Chris, if the question is in regards to the company's ability to continue to invest in growth organically, more specifically in the Electrical systems segment, we had at the end of the year total liquidity approaching $100 million and cash flow has been pretty static so far this year. So there hasn't been an issue at all. Of course look, I mean it's no -- there is a tremendous uncertainty now in the near term with respect to the global economy, but especially our economy here in the United States because of this virus. So I can't pretend or begin to anticipate what that might mean for us. But setting that aside, I believe that we have today adequate capital to continue to invest organically in the company's business -- inorganically, I'm sorry. Okay. I'm going to get to that. Continue to invest organically in the business.
Asked for inorganic. About 15 months ago now, we made a conscious decision to develop a corporate development function, which as evidenced by the acquisition of FSE was -- I think a wise investment and a successful investment. We're very, very happy with, with the first source electronics. We -- notwithstanding you know the downturn here in the markets and the contraction in the company's business somewhat, we intend to -- tend to continue to make this investment in corporate development to explore inorganic activities. If we are so fortunate as to find the right opportunity with the right set of products, the right customers, the right cash flow profile, we will consider how best to finance that opportunity at that point in time. Of course, it will depend on the capital markets, the construct of the cash flows, etc. etc., but I believe that if we find the right, the right opportunity, the right fit for our company, the right set of cash flows and if the capital markets are open I think that we have a fair shot at getting it financed. And so we're going to continue to pursue corporate development opportunities. | intermediate | [
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1a14af8a168cf16ac8ca5aa6efc6dec3 | I was wondering if you can give us a sense of the seasonality, you think of the truckload schedules in 2020, perhaps maybe just in general and then also, have you seen any changes in the last few weeks or so and the order patterns or the build schedules based on the COVID-19 situation? | You know as far as our expectation, initially going into the year 2020 for truck builds were that there was going to need to be some correction in the builds which unfortunately started in earnest in the fourth quarter and continued in early in the first quarter and we -- our expectation, and they were communicating clearly were to reduce build rates down to lower daily build rates and allow us to align our daily build rates with theirs. That has -- the intent was to correct the inventory levels and whatnot resulting from lower order rates and so that is really how we expected the year to proceed and clear about the second half of 2020, but that's how we expected the first half.
And you know there haven't been any large impacts related to the COVID virus from the North American truck build at this stage that we've seen related to order patterns. So the orders have been a little bit erratic in the first quarter, but not related to anything other than correcting for the market dynamics. So I think that is -- that is to be seen. I mean obviously to have been changing daily here over the last week or two in North America and we will adapt as required to what their needs are. Globally, interestingly, we have continued to see orders along the ways that we have planned in our other operations, which are support a couple of different other industries in addition to some of the commercial trucking but as well as construction and others. So -- so far we've not seen any knee jerk reactions. Now what's going to happen over the next few months and few weeks, you know, is uncertain. | intermediate | [
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d327bc41aa0f346784cabb4f9221af14 | Wanted to just switch over quickly to some of the things you said on EVs. You mentioned that there were some units coming out in 2021 and 2022, hopefully you're working closely with those OEMs, are those heavy vehicles or medium and do you have any sense as to whether the content per vehicle from CVG will be higher compared to diesel? | Okay, sorry. So electric vehicle. Yeah, I mean I think the exciting and the interesting thing about that emerging market space for us is related to the fact there are some new entrants, right. So there are new entrants who need support, they need help, they need -- they need suppliers who have wherewithal across the multitude of product portfolios because they are trying to launch companies and we have found that there is opportunities for us to support them in that process. And while things are still new and emerging in that arena, we are encouraged by the activities and the activity level we have across our product portfolio.
It varies Mike, to answer your question on content. Obviously, if we can put a multitude of products on a vehicle we get -- that's a good content per vehicle for us, if we're strictly trying to look at apples to apples in particular related to the electrical content. I'd say it's equivalent because what we see going away -- and let me characterize that a little differently. It's equivalent if the vehicle and the powertrains and everything are just swapping electric for diesel. But what we're seeing is there is an evolution of increased electronic electric -- electrically controlled sub systems in these vehicles. And so that is driving an inflation we're going technical inflation, all right. And so what we're seeing is in particular in the two new products that I mentioned, high voltage and high-speed data is each of these sub systems have to talk to each other. They have to be powered and they have to have high speed data coming to and from them. You've got cameras, you know in places where you didn't have cameras and is multiplied and what that's doing is that is dramatically increasing the amount of content opportunity for our electrical group, OK. So that's really where we see the content change is the type of systems that they're putting in. So where they have today hydraulic or electrical mechanical system. They're converting that to either an electric system, which needs power and data or it's at least electronically monitored with sensors and data generation and communication. So that's where we're seeing the content growth. | intermediate | [
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3a458cbdb02082dc243719abcffb7a5a | There are two major truck OEMs that are in the process of possibly emerging right now. One I know is your customer, other one I'm not sure about, can you give us a sense as to whether there is an opportunity there? They've already been trying to work together on their supply agreements, but is there any kind of opportunity for CVG cashless and more business going forward from the tie up? | I assume you're referring to VW and NAV. And you know, we have a long history and relationship and they are a major customer for us and Navistar in North America. We work with Volkswagen predominantly through Skoda in the Czech Republic on the passenger car side and a little bit on a little bit on the truck side, but not a lot. So the opportunity for us would be able -- would be to have access into that European side of things. That would be the major opportunity for us. You know it's an inflection point, and but they've been actually working together, at least on the procurement side pretty closely for I think the last 12 months. But we've been interacting with I think Navistar with support from Volkswagen since they took a bigger stake about a year ago. | intermediate | [
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72afd2f29593fa48006c53398db351ef | I just wanted to start off with -- just looking at the Packaging segment. It seems like, obviously, there's some potential headwinds and maybe in pharma or beauty, but I really want to get into the Home Care, just from looking at some of what the CPG's are saying, it seems like at least some of them feel there's a potential for just elevated levels of cleaning supply purchases beyond -- as a result of the pandemic even beyond the pandemic and certainly, the -- your guidance makes sense and that it's hard to tell at this point and like you said, those customers are holding off on purchasing. So clearly, they're trying to be conservative, which again makes sense, but do you see that as a possibility? Could you -- is it possible that this could then grow even at this higher level if some of the behaviors around cleaning shared spaces and homes maintained itself beyond just 2020. | Hey, Brian. Good morning and thank you for the question. It's really a great question. Currently, for our packaging business, Home Care is a smaller percentage of our revenue. That being said, it's an important part of our business and we had really an outstanding year last year in that product line and what we define in that product line would be caps and closures, push pull caps as well as some trigger sprayers and some other products. But certainly, when we look at that product line, we do expect to see continued activity going forward, more potentially for the longer-term, more uplift opportunity.
So yes, we expect to expand our presence in that area. We did an acquisition, actually a little over a year ago that landed us in that product line. So that was timed quite well. So we're pretty pleased with that product line, and we do expect that to continue to grow. | intermediate | [
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9d03160ac61f5956a6d2509eb7f68e9b | Okay, great and then going off that, I guess, where within packaging, would you see maybe more of a headwind? I know a competitor of yours called out pharmaceuticals as being a tougher comp this year because of just the reduction in cold and flu this year. Is that an impact on you guys as well, or is your -- are you -- do you play in the different areas as well there? | Yes. We're largely in different areas of pharmaceutical and nutraceutical and again, as we look at that business, it was impacted negatively last year and so as we look at it this year, we're going to keep our eye on it, but we don't see a particular undercurrent we're worried about it. To be specific, when we look -- our sales in 2020 were inordinately high in the areas of lotion pumps and foamer pumps and you can imagine that's what's used to dispense sanitizers, soap and then as hands get dry lotion as well. Those are the product lines that we expect might pull back a little bit, and we're planning that they'll pull back a little bit into 2021, but when we look across most of our other product lines, we don't see -- we didn't see as much of an uptick in 2020 as we did with those product lines and that's why we're, at least from a planning level, being very cautious on those product lines in 2021. | direct | [
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f7a7bd416afa3b2b29770cbfd17a6d1e | I was just curious if you could talk a little bit more about some of the margin expectations across the various segments, particularly for Arrow in the first quarter. Obviously, you're guiding revenue up sequentially from fourth quarter. Maybe just talk a little bit about how much of the margin impact that you saw this fourth quarter was from just lower cost absorption and just whether or not you think you can get back to the high single, low double-digit type of margin profile for the year? | Yes, Ken, thank you. I think the absorption question is one that is most challenging because we did take sizable cost actions as we moved through 2020 in response to the impacts of the pandemic and the balance we're trying to strike there is to reduce cost to the greatest extent possible. But at the same time, not to jeopardize our ability to continue to serve these customers longer-term because, frankly, in the Aerospace business, we're playing for the long game.
And -- Tom mentioned the fairly significant distributor stocking orders we received for certain of our higher-end fastener products and that's a great example where if we had just taken a machete through the garden and chopped heads indiscriminately, we might not be in a position to, A, have secured that order, B, let alone fulfill it and so we're cautiously optimistic as the volumes of that ramp up, we will see better absorption, but again, as we move into the year, I think the counterbalance to that good news is we're sort of further removed or down the supply chain, and it's hard for us to see what level of inventory destocking may continue to occur in 2021, which, of course, goes against the volumes in our, well, we'll call it our core products.
So that's sort of the balance we're trying to strike, and we look out at this point in time, we're trying to be conservative in the sense of how much of that destocking might hit us until we move further through the year and have evidence that it's either more or less of a headwind versus what we plan for. | intermediate | [
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58aebaea9b8894125923d35ec94581d7 | Right. So if I think about that kind of in the context of, obviously, I think everybody did put some costs out, both structurally and temporary at the height of the pandemic. As I think about just the idea of improving margins potentially is on better absorption. Should we be aware of any of the temporary costs kind of coming back in? Or how should we think about the timing of flow-through of those temporary costs reentering the enterprise? | I think they'll only reenter to the extent volume upticks justify adding those costs back and they're variable and in that sense, we'll scale or conversely not depending on how volume of production goes.
And I'll just sort of offer up as well, Ken, maybe not specifically related to your question, but what we're trying to do during this period of low demand are -- make some structural changes to our manufacturing footprint, which, frankly, we could not have even come close to in 2019 given the high demand and pull rates in many of our facilities. So the benefit of that, prospectively, we believe, as the markets start to recover ultimately in the future is gaining some nice operating leverage out of our Aerospace business.
Now that's not this year. It's probably a few years out, but our business for that type of gain and to take advantage of some early wins as markets recover. | intermediate | [
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ea3dc1ab6298fcd4dd44a700cc1fd16d | Understood. Just one more for me and then I'll jump back into the queue. Obviously, the balance sheet still looks like it's in really good shape despite a lot of expenditures for acquisitions and obviously, still under your 2 times leverage portfolio, or target, I'm sorry. Can you just talk a little bit to the M&A pipeline and where you're seeing opportunities? Are there still deals out there for PAC that are more packaging focused? Are you seeing any assets on the Aero side that are looking a bit more appealing? | Yes. Look, last year was tough, right, because there was certainly a number of months where folks hunkered down and deals were pulled or anyone even thinking about a deal, just had to focus on their business first. So we're glad that period is behind us. What we're starting to anticipate are some deals that were -- that traded about three or so years ago that are in the hands of private equity right now and by definition, private equity is temporary capital. So our expectation is that we could start to see some assets come back to market as the pandemic -- as operating in the pandemic becomes a little bit more stabilized and predictable that were acquired a short period ago. So we're keeping our eyes open on some of those assets as well as some more niche plays that we're aware of and that would be -- that would augment our current product line.
On the Aerospace side, again, a little bit -- still a little bit challenging. But yes, we're -- there's a number of smaller companies. We're looking for some bolt-on type acquisitions there that we're working on. But the challenge is, as you can imagine, owners of those businesses are coming to grips with different valuations given performance levels. So it's a process. We're working on it. It's part of what we call programmatic M&A to grow TriMas for the long run, and we expect, over the coming few years, to continue to remain active, especially as you said, with our balance sheet. | direct | [
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7d4b27317324736a19b5a3d0fe3b01c9 | Hey, thanks again. This is Ken Newman, one more follow-up here. I just wanted to ask a little bit about the longer-term margin profile for packaging. Obviously, you'd already talked at length about the headwinds that you expect from an organic perspective within that business and now you've got potential headwinds from the lag in price increases for the material pass through, but as I kind of think about that and weigh it against maybe a more normalizing mix back toward your industrial side of your business, then, of course, the impact of acquisitions from Affaba, which I think were still pretty good from a margin perspective.
Is there any way you can kind of help us think about year-end margins being either up or down or even flat year-over-year, just given all the moving pieces? | Yes. I would think we're going to be pretty consistent with the margins that we have been performing at in that business. I mean, you do have, as you point out, the higher-margin business associated with Affaba & Ferrari. At the same time, that's counterbalanced with lower margins in Rapak.
And then again, as we look at the full year of what I'll call our core packaging Reiki business, we're not counting necessarily on a big recovery in industrial markets. Now if that happens, that will certainly be favorable to margins, but as long as we're more heavily weighted to the Beauty -- Home, Beauty & Personal Care side of the mix, I think the margins are going to be kind of in that low 20%, 21% range. | direct | [
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6ffa7831c79633ae862655f8fb8f50ef | Got it and then last one for me. I guess, switching back to the Specialty Products segment. Obviously, you've taken out a lot of cost there and the margin profile has been pretty good despite how volatile that market has been, is -- even with the revenue down sequentially into the first quarter that you're guiding, is low double-digit margins, kind of the new baseline for that segment? And just how do you see -- how much more work is there to do in that segment from a cost-out perspective? And how do you see the margin progression? | So if nothing changes, that's a reasonable assumption, but I would say that with modest uptick in the markets where our Arrow Engine, although it's a small part of our revenue base and specialty products and even TriMas overall, with a small uptick in those end markets, our margin profile will change rapidly because those are very profitable -- it's a very profitable business, and it is sort of weighing down the margin as well.
That plus activities that we have under way within our Norris cylinder business, we expect to drive margin in the future as well. So if nothing changes and we sort of stay at the area, the area we were in terms of sales activity for a prolonged period, then we'll continue to do some cost management, automation to move the needle a bit. But the major changes will come with higher revenue activity. | direct | [
"direct",
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] | A |
b6aa90cd74329a5ddca58783ce6f28ee | First of all, would you discuss the type of water locations that OBX is resonating with your customers and what geographies around the world that it's being used the most, if there is any area that's seen a higher level of activity? | Sure. I can tell you that the majority of utilization is for our -- what we call the shallow water OBX, which is capable of going down to about 750 meters of depth in water. There are some areas where they're using it that are very near that and so there is a transition that occurs on occasion to needing our deepwater unit, which will go actually over 3,000 meters in depth. But the primary utilization is of the 750 meter units. In reality, the utilization is across the globe. There aren't any specific areas. It's being used in the North Sea, it's using -- it's being used near Asia. So, it's not necessarily a prevalence of one area or another so geography isn't really entering into it very much. | direct | [
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] | A |
df88259f60828f65ed85f18dcf985919 | And Rick, following up on that water depth, do most of the -- of the shoots tend to be in the, I'm going to call it, deeper water range of that shallow water OBX so as opposed to it being in under 20 meters of water, you really are in water that's rather deep? | The majority are not near that transition depth of 750 meters, but they are typically deeper than 10 meters or 20 meters. So, go ahead. No, I was just going to say that the prevalent use is in shallower waters, but not real shallow waters although they are used there in that circumstance. | direct | [
"direct",
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] | A |
a48fb19f455d081438c82939d473c9d7 | So they do -- the unit is being used in more open water rather than swampy areas? | For the most part, I think so, yes. And those are used in those areas, but if you just want to statistically look at coverage areas, I would say that's true. | direct | [
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] | A |
433b22287e672b1553fd0d5c82ea0f08 | That's helpful. Thank you. And what interest are you hearing from your customers at buying the OBX units as opposed to renting? | Well, certainly that conversation is always had. But in the minds of the contractors, it's driven by the level of utilization they would have for that equipment. Clearly with these increased demands, it goes without saying that those utilization numbers are going up. I mean our entire fleet in essence is being utilized. So, it's much more likely that these conversations will get more serious about a purchase of these products, but we'll just have to wait and see. | intermediate | [
"direct",
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] | B |
46ccad2335a8eb8f7c718a47c3e9df5c | Thank you. And then lastly, the inventory obsolescence jumped versus the September quarter. That surprised us given that the business seems to be improving. Can you talk about what seems to be opposing dynamics there, please? | Yes. Bill, this is Tom. Not any specific inventory item per se, but just a general reserve that we felt was necessary based on the overall aging of our inventory. We have some inventory that's still old and continues to age and we felt like we needed some more reserves and so we put them there. So, it's not going to necessarily trend down in a smooth line. There's going to be some blips here and there, but we hope that this is the higher of the blips. | direct | [
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] | A |
5bc77bea0887ec5452697c419e304994 | Thanks, Tom. And so that sounds like that was one of the more subjective obsolescence numbers this quarter rather than the more formulaic that that you've often had? | Well, there's always a lot of subjectivity into it. Yes, we have a formula for calculating it, but there also has to be a lot of inputs into what the formula spits out. So, it's always a lot of subjectivity. | direct | [
"direct",
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] | A |
721e0f9f711f49892c9c694b8f89c34f | Regarding backlogs, did you speak to how they were shaping up? And also, I'm trying to understand your non-core seismic business and versus or including adjacent markets segments and looked like they are a good quarter product revenue wise. Could you speak to year-over-year progress in the adjacent markets segments? | Sure. From a backlog point of view, I mean in our core seismic -- oil and gas seismic markets, where we're seeing the pressure for backlog is the OBX system, that's our marine nodal systems. At present, our entire fleet is in essence spoken for and out for rent and we are in progress of extending our capital investments in those so that we can take further advantage of those markets. Regarding our adjacent markets, you're exactly right. I mean it was a good quarter for those. We have seen a steady improvement and increase in those markets. What those markets really represent is our manufacturing and technologies that we developed primarily in our oil and gas seismic products that we've been able to take into other industries where they solve similar problems in alternate industries. A large portion of that has to do with smart water meters that are being installed in a lot of municipalities and they need a nice tidy connector that is waterproof that's easily field deployed for those sorts of units and that market has seen an ongoing increased growth now in this quarter and there is a seasonality to some of those particular products. We did see a dip. But overall, we still believe that there's an increasing overall demand for those products. | intermediate | [
"direct",
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] | B |
437f8da58fe98eb6a2972da26049d29c | Question about the OBX rentals. Can you remind us what the cash on cash return would be from renting those out? | Well, as we mentioned earlier in an earlier announcement last year, two of those contracts are expected to generate over $20 million in revenue just on those two alone. Now we had another contract that we had entered into for 9,000 of those units, actually the quarter four I believe, and those are currently contributing to existing revenues. Going forward, those other two contracts and yet some others that are in negotiation that we're likely to land are going to add to those numbers. | fully_evasive | [
"direct",
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] | C |
208947fea9393d16fe85b72b309dc55f | And could you give us any sense for what sort of improvement you might see in operating cash flow? I mean you were positive this quarter before CapEx and I'm imagining that would only get better as you get some of the profit contribution from these new -- this new $30 million investment hitting the field. So, It'd be nice to get some sort of rough sense for what that could do. | Yes. Damon, this is Tom. And it stands to reason that as the rental revenue increases, which we expect it to in the coming quarters, that that operating cash flow will also continue to increase. | intermediate | [
"direct",
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] | B |
e18ce6474f298098a4fc38896ff8266b | Okay, great. And then on the GSX side, a little bit slower there still. Do you see recovery there? Is it really more about activity picking up or is there a substantial size of unutilized capacity you've already sold sitting out there that would need to be utilized first before you would see your revenues increase there? | I think you need see overall activity pick up there. I mean, there may be some unutilized assets that some of the contractors have, but for the most part, I think they're pretty much using what they have. You did see that as our traditional products, which really comprises mostly sensors at least with respect to the land side as you're discussing, that there wasn't a lot going on in that particular segment and that does indicate that they've pretty much got what they need to take care of the jobs that they have. On the wireless side with the GSX, we know they're using that equipment and they're using it effectively. It's always going to be operationally more efficient than the old cabled systems, but you're going to have to see some increased activity before you see that market pickup from our point of view. | direct | [
"direct",
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] | A |
4b865c7bda349dbbd8c434f4cfa3558f | Okay. And on the potential PRM tender, really nice to hear you could see some activity there. Would this be from what you know an existing customer or someone that's been in this market before or someone new? | This would definitely be a customer that has been in the market before and there's not a long list of those so you can begin guessing who they might be. | direct | [
"direct",
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] | A |
88f9eb00002949d1d23d471d4152d78f | Regarding the 9,000 stations that you delivered for rental last quarter, can you talk about what's the duration of that business. How long does that rental contract last for? | It's actually 5,000 that we just delivered this last quarter and it's six month minimum rental. | direct | [
"direct",
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] | A |
ae41f9c4f16d37872cd9c913cf80bf24 | Okay. Thank you. And then you talk about increasing -- you talk about your CapEx budget for this year and I know last year you discussed I think $30 million budget. Are you seeing more demand now or you think that that budget actually needs to be more than $30 million you had originally mentioned in that press release? | Right now we feel like the $30 million is ample, but a lot can happen between now and the end of the year so that could change, it could go up. But we feel like $30 million is ample for what we know now. | direct | [
"direct",
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] | A |
f6db2642410a738298bfeeb94f34a7b1 | Okay. And then in your 10-Q, you report how many stations you have in your rental inventory. Could you give us a sense for as we exit FY 2019, ballpark how many stations you think after the $30 million spend and what you have now, how many stations you'll have in your rental fleet? | It's going to be somewhere between 20,000 to 30,000 stations in the rental fleet. | direct | [
"direct",
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] | A |
111fe5eb411920caf6baa31ef50af12a | Okay. So, it's 20,000 to 30,000 stations additional from when you exited FY18. | I'm sorry. It will be 20,000 to 30,000 stations total. It's a big range, but I don't want to try to get too narrow on it right now. | direct | [
"direct",
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] | A |
d090187dbfe1f400a9e687bb99dcc06c | Okay. And is that $30 million CapEx, is that entirely geared toward the OBX product? | Not all of it, but a vast majority of it is. | direct | [
"direct",
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] | A |
2cd1f3806038afa1be7d2a26340109df | Okay. And then my last question is regarding the obsolescence -- the inventory obsolescence write-offs. If the land-based business were to come back, are those products at this point permanently impaired or can you reintegrate those products and use whatever work in process or whatever else is that you're currently comparing? | Yes. To the extent that we have reserves against our land-based products and in fact we do, they're not impaired from a functional standpoint. They can still be used. They are still workable and some of the components can be integrated elsewhere, but there -- it's not like they have a shelf life. | direct | [
"direct",
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] | A |
0d2c26e5760f658bc4aab5443d2e7bb2 | I was curious, Steve, you mentioned the acquisition market slowing down a bit, but thinking it will pick back up early next year. Was just kind of curious as you're kind of I guess reading the tea leaves here, do you think you can get back to kind of the acquisition levels that we saw in the first half of this year? Or just I guess hopefully a little bit more color on what you guys are seeing and expecting on the acquisition front? | Well, the issue is not somebody is outbidding us, simply that the whole -- we don't meet the whole values that the sellers have. They basically say, well, maybe it will be better next year, which has been a losing strategy for the last five years. So that's really what's going on. And we're not willing to overpay for the assets.
So I'm hopeful that next year, there'll be more rationality in the sellers. They don't want to really want to realize a loss on the asset sale. At this point, maybe they're raising a fund or something. I mean I'm hopeful for next year, but there's no way really to know. | intermediate | [
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] | B |
2e66da12f22c5f039560c4bf22132c39 | And my follow-up on the Giddings results here, you mentioned I think in the prepared remarks that the two wells are about 15 miles apart from each other. I was wondering if either of those were in any I guess close proximity to the first handful of wells that you guys first announced way back on the SPAC transaction? And then just kind of taking a step back, was wondering how you guys kind of feel about I guess your confidence level in the thousand or so locations that you guys had preliminarily quoted in the play, is there I guess an increased confidence given these recent results and upcoming? Or just overall I guess was hoping to get a little bit more qualitative thoughts on the prospectivity of the play given what we've seen here today? | Yes, these wells are fair distance from our other storage. We're not giving locations right now, eventually it will show up in the state records. But we're not giving locations right now because we might want to lease around it. There might be some -- I don't mean there's a company, but there might be some leases that we could buy, we could get at a reasonable price.
And we're not trying to be clever about it. We've gone to sort of a multivariate analysis in order to pick our locations. We started out sort of a simpleminded one, and then developed the one with a lot of data in the field. So our confidence level is rising.
These next three wells are pretty risky wells actually, a fair distance from other production. So we'll see how they turn out and see how good the multivariate analysis is. But I -- we're clearly feeling better about there's a lot of -- we could easily turn to a development program when we get ready. But I think we're a ways from that.
I'd really like to define the field and maybe pick up some more acreage where we can see opportunity. | intermediate | [
"direct",
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] | B |
21995c22719290cbe4649a71e4e97a2c | I'm curious on 4Q, your commentary that fourth-quarter production should be similar to 3Q levels, but completions will be weighted more toward Giddings. How should we think about the oil cut trending within your 52% to 54% range for next quarter? I realize the early time data on the two new Giddings wells actually look slightly above corporate average, although Giddings on average tends to be gassier than Karnes, so curious how that all shakes out when you run those numbers through the calculator for a fourth-quarter oil cut? | Yes, predicting between a percent or so of oil cut is certainly beyond my skill level at my advanced age. So whether it's going to be 54% or 53% or 52%, I really don't know. It depends on how much gas is produced by the Giddings wells and when exactly the well gets turned on and that sort of thing. It's very similar to this quarter, could be a little more or little less.
The Giddings wells are not all that gassy, the new ones. Giddings is because there's historic production there that acts as a base, but the new wells are fairly oily. So I don't think it changes the mix very much. There'll be fewer wells turned in Karnes would probably have more effect than whatever happens in Giddings. | intermediate | [
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] | B |
d6129486ec1c9408fe52d564a38e811d | And then on those new Giddings wells, any changes to lateral length or completion design or anything like that we should be aware of compared to the older wells? | Well, as in how much older? But compared to the more recent -- the wells in last year, though, these are widely spaced wells, these are miles apart. And we have a lot of leasehold, so there's no reason -- we don't vary the lateral length very much. So there shouldn't be any difference, but they're far enough apart and in different areas, different counties, maybe a couple of counties apart that you're going to have an actual variation. That's more important here than how we complete the well.
Obviously we can botch the completion, but other than that... | direct | [
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] | A |
e73b03a9f62e691e74889b17536ad09c | On the -- you spoke to Karnes, the -- maybe not the bid/ask any wider, but the A&D market being a little bit seized up. Can you talk to Giddings, are you guys still seeing relatively little competition out there? And what do you think the running room might be if you have success on these next three? | Well, I mean we're looking for leases, not really an acquisition in the usual sense of the word. So we're not interested in buying somebody else's problems. So -- and a lot of the stuff that's for sale is real gassy. And it doesn't really fit the model that we're trying to do.
So we're looking for leases. If you've got information that other people don't have, I mean it's in our interest to use that information to lease up. So I don't really know how much, we already have 450,000 net acres out of 600,000 and some gross. Could you add 50,000 more net? Yes.
Could you double it? I doubt it. So we're looking for strategic adds, not necessarily a lot more acreage. We're looking for adds where we can put a large scale development program to work and really not move the rig at all because these acreage blocks that seemed to work at this point are fairly large contiguous acreage blocks and we're just looking to fill in and maybe extend them around the edges. | intermediate | [
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] | B |
c0b9abb5e8df39b4431894a2cb8d0c6f | And then so my follow-up, you mentioned that the lateral length and completion design are relatively similar on these -- the two new wells reported. The two vertical depths, is that substantially different? I mean is that something that will move the needle on the well cost or not so much? | No. Well, actually, I think we'll start to see the well cost reduce a little bit. Maybe a little less science fair project on each well, and rig costs have declined a little bit. So not huge, but -- so we should start to -- as we move into next year, we'll be focused on reducing the cost per well as we go forward, but it won't be anything other than that. | direct | [
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] | A |
8b6e7a9d0ae6df5ba72f3ac85e09207c | I wanted to start with new enrollment trends, clearly strong across both institutions. Can you delineate, I know it's hard, but how much that the pandemic impacting demand for online programs from a macro sense is driving that versus your internal investments in technology, AI, recruiting, retention, etc? I know it's difficult, but any color on that would be helpful. | Sure. Thank you. Yeah, it is a combination of both. We continue to see, as we said on our earlier remarks that, we continue to see good interest and I think that, again, the viability and the necessity of quality online education has helped improve the demand. So second, yes, I think as Ashish mentioned, we have been more effective in our technology and other applications that I think allow us to better serve our students and I think it helps them in their decision-making process. So again, hard to quantify how much, but I think, again, the strong demand in particular has probably had more of an immediate impact, but both have contributed. | intermediate | [
"direct",
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] | B |
b47148e723f5a0e033bdcbf17e9d8d69 | That's helpful. And looking forward guidance is usually typically conservative, obviously. But how much of an increase in investment spending in those areas? You just talked about tech, data analytics, academics, student experiences, how do we think about the -- either in dollar terms or percentage terms, year-over-year increase in investment spend that's embedded in the '21 guide? | Sure. And if we can, I can have Ashish respond on that second part. But yes, we felt like again based on demand and based on where we feel the interest is, that it was worthy of investing, more significantly than we have in the past, especially in certificates or shorter duration programs and also in our corporate partnerships. We are seeing good demand and we want to take advantage of that. But to do that, yes, it does take more investment than it has in the past and yes, that has some impact on your outlook because you are investing for the future. Ashish, I don't know if you want to add anything to that?
No, I think that's spot on. I think we have incorporated those investments around outlook and as we have consistently said, these investments are a little bit heavier this year compared to previous years, because of the specific opportunities that we have identified to further serve our students. We haven't given any specifics into the quantum of dollars of investments. But they are incorporated in the outlook and as always, will continue to balance and make sure that we have the appropriate investments for the long term, for our students. | fully_evasive | [
"direct",
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] | C |
5fe2e1ccad948ad59d5975a0c60101aa | Helpful. Maybe sneak one more in. Cash flows was exceptional, obviously over $180 million in cash flow from ops. Then you give a little guide on the capex side, so probably that will tick a little higher. But just from the cash flow from operations perspective, can you talk about the puts and takes and how should we think about 2021 versus 2020? | Sure. I think -- sure. From cash flow from operations, I think as you said, it was $180 million this year. Keep in mind, there were some timing related items that were positively impacted in that $180 million for the current year. So it's about -- $39 million to $40 million was timing for this year. But on a regular basis, there were no unique items in our cash flow. We do have capex at 1.5% and 2%. We had the Trident acquisition this year and we also had some share repurchases in the first half. So beyond that, there is nothing unique in terms of our cash flows. There is no significant lease liabilities on our balance sheet. So I think cash flow should have pretty much normalized trends, once you account for some timing differences. | direct | [
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] | A |
2acf1d674180df6c30524a21af38fd5b | Hi guys. Congratulations on the earnings beat, yet another. I got on the call late. I apologize. I am juggling a couple of calls tonight. But I was wondering what you had said about corporate initiatives and what impact that had on enrollment and revenue per student and EBITDA in the fourth quarter specifically, but in 2020 in general? | Sure. Well will just talk about it at a high-level first. What we are finding is, again, that there is strong interest at both CTU and AIU. As we said before, CTU has had more time to develop the process to work effectively with those students. And so again, as we said, it was -- at CTU approximately 20% of our students are now those types of students, ad AIU is a smaller percentage but it is growing. And that really what, Alex is, giving us the confidence to continue to invest in that. And as a result, I think that we are hoping that this year, we will see some positive enrollment in both of those. As far as the other part of the question, I don't know, Ashish, do you want to respond to that or add anything to that?
Sure. As far as the -- on the revenue per student, Alex, as we have said, the revenue per student on a quarterly basis will continue to fluctuate. But by and large, as we do add more corporate partnerships, obviously, the revenue per student is lower. But please recall and keep in mind, that those students typically have better retention and the cost associated to serve those students is typically lower. So those are the two things to keep in mind. | intermediate | [
"direct",
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] | B |
15d7829016294fe2c14d0608d874a070 | So less revenue per student, but the same or more EBITDA per student? Is that how I should think of it? | I mean, we don't necessarily talk in terms of EBITDA per student. But in the long term basis, yes, not immediately because those students do have a longer life, if you will and they retain better. So yes, over the long-term that is correct. | direct | [
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] | A |
bfc9ad8553b6afc6ea8ced6ee5979d64 | Okay. Great. And then I got to ask this question since the last call. There had been no -- it was shortly after the election, let's put it that way. So just -- we have had some nominations; Miguel Cardona as Secretary of Education, James Kvaal as Under Secretary. I asked you this question three months ago and I am wondering if you have any additional thoughts? | Well, again, we don't know a lot about them. We have read about their backgrounds and they both seem like -- obviously very experienced and good backgrounds and we really do look forward to working with them or the folks within the department that we typically have worked more closely with in the past. So we are looking forward to that. Again, we continue to watch for any information that's available, to see if there are any changes, if and when they would happen and what those would be. But at this point, again they seem to be very dedicated people to education, as are we and really do look forward to working with them. | intermediate | [
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] | B |
300d048879c063daf78e8c8bba25ff8d | Good. I am glad to hear that. And we did cover this topic on the last call. So I won't go into any further detail there. I guess the last question for me, just a few cats and dogs here is, the AIU campuses, the CTU campuses, are they open again? I know they are small, as a percentage but... | Yeah, it is small. At AIU, we have started that on a limited basis and we are excited to have that. And as of this point, Ashish, correct me if I am wrong, I know because we are getting close, but we haven't done that yet at CTU. But plans to move forward pretty soon on that as well.
That is correct. | direct | [
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] | A |
8fb56aff4a8aae22e60139662225e549 | Hi guys. Thanks for taking my questions. I just wanted to dig a little bit into just the margin differential at AIU versus CTU? I think we talked about higher corporate partnership, might be one of the things given it's a higher EBITDA at CTU. But can you just kind of discuss maybe what over the next couple years, now that you have Trident. So you have got -- you have gained some scale at AIU, what are some of the drivers that might be able to drive the margins closer -- toward closing that gap toward CTU? And then in addition, I know the student experience is your main priority at AIU, but just given the way you are structuring Trident as part of AIU, is that going to hamper the margins over the long term? | Sure. Great questions, Greg. And first, from our perspective, the top priority is really the student experiences. But having said that, AIU has -- we believe, has the potential to have margin similar to CTU. But it's really more focused on, again, if they are growing at a faster pace, they tend to not have as much margin as you would expect a growth company, versus one that's more flat.
Second is scale, and again, because we do invest heavily in our academic infrastructure, and you may have the same infrastructure for a student body that is significantly larger, again, because that's just -- again the way the government structure exists for academic institutions. So as AIU grows, and it will, it's margin should increase.
And as far as adding Trident to that, again in fact, if anything, we think that that actually and one of the reasons that we did that is, again it will allow them to increase the breadth and depth of their programs, which would again allow us to serve better the demand of potential students that we are receiving. So again, it takes time to get that, but certainly feel it has the potential to be similar to that. But again, the biggest factor, Greg, is scale, and then obviously the time, once you hit that for that to then materialize. | intermediate | [
"direct",
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] | B |
5ce6bd55c09009e9d9ebe943d70f67c9 | Thank you again. I was just hoping you could give a little bit more detail on the types of certificate and shorter duration programs you intend to invest in? | Yeah. And I think shorter duration is a better way to characterize them. But these programs really are, you find that there are a lot of students in particular in technology and in healthcare that want to again have a specific skill, reskilling, upskilling, to allow them to advance, because there's job opportunities there, and many of them already have a degree or again, they see an opportunity that really requires the skillset versus some of the general education associated with that. And we have again, with our curriculum, our faculty, we feel we can provide excellent, both curriculum and faculty for them to get the information they need to do that. But again, several different areas, but in particular those two areas is where we have seen significant demand. | intermediate | [
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"fully_evasive"
] | B |
c59f2fc54735451e108ae52c9318c487 | And do you anticipate the funding mix being any different in those areas than the mix of AIU, CTU today? | I am not sure, Dan, what you mean by the funding? There was the...
Oh, so corporate versus -- I mean, again, that's a good question. We think it will come from both. I think there will be those who are looking to change jobs or get a job in a particular field, and so it probably would come from the student. And there are those that are within the organization that offer tuition benefits that would help them, as they advance their skills. So we don't know the combination, we don't know the percentage of combination, but we feel that it would come from both. | intermediate | [
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43ee5e1302326e1d944c5e9a77a19bc8 | Okay. And lastly for me, just update on capital allocation priorities? Obviously, cash continues to build rapidly. Are share buybacks back on the table or might they be, and in terms of M&A, are you seeing more opportunities like Trident out there? | Well, first, I think that's always something that's there, if we feel it's the right thing to do for the organization. But again, I think with the opportunities that are out there, especially as we go into a new administration, we want to make sure that our strategy in an acquisition area is consistent with what or if they are going to be any types of changes. But I think hopefully that will develop soon or quickly as it has in prior administrations. And I think that obviously depends -- would impact your -- any type of buyback strategy you would have. But again, the priority really is to focus on those things that we do well, which is educating students. | intermediate | [
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f2c1d0a2e9edd82392065216546fa116 | First one is on ST-920 and Fabry. So for the patients you've enrolled and treated, can you provide any additional perspective on the patient status and their backgrounds too? So I guess are they ART experienced, naive, or pseudo naive? Anything else you could say about that the patients. | So, Maurice, we're being very careful to just state often that we wouldn't give the results of the study or the characteristics until the end of the study. Because I think that's going to be easier for you to better know our product. Bettina is there anything that we can see the patients are all well.
Thank you, Sandy. So the patients are well, we have enrolled, as I mentioned, three patients, those three patients. So cohort two enrollment is ongoing with subsequent patients. And as Sandy mentioned, we expect data will be shared toward the end of 2020 after we've completed the dose escalation part. | fully_evasive | [
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0e8efec6140493934d89db84f889cf61 | And then second question is on the Kite-037 and TX-200 cell therapy programs. Just wondering if you can comment and whether there are synergies between these two programs from a manufacturing standpoint? And is there any additional insight you can provide into gating factors prior to starting the studies for both -- for one or both of the programs? | Well, that's an interesting question. So both are progressing. Kite Gilead have guided that they will be moving forward to IND and into clinic very soon with the CAR-T. And for the TREC program, we have said that we will dose a patient in the second half of this year and are moving forward with great momentum to there.
Your background question is more interesting. It's about what do we learn? And there are learnings across it. Jason, I wonder if you can comment about the difference between CAR-T, CAR-TREG and the learnings in what we're trying to do.
Sure. Both of these programs are very exciting. We're excited to be working with our partners at Kite. And we're also tremendously excited about our engineer TREG program. There are certainly synergies around our understanding local site engineering and the use of our finger platform in both T-cells in the type program and in TREG for our program. So I would say that's where the biggest synergies are.
As you probably know Kite is doing the manufacturing for their product and we own the manufacturing for our TREG program. And there are some real differences between TREG manufacturing compared to affect their T-cell manufacturing for CAR-T and oncology. And that's where we've really heavily invested and I think our work is paying off in building the process development and manufacturing for regulatory T-cells, which has lots of nuance and it can be quite different from CAR-T, but it's a critical part of our program and why we're so excited about it.
Yeah. So we believe that our manufacturing capability can provide a competitive advantage. So we're building a balanced and necessary capacity to achieve our in-house manufacturing, as well as securing access through our partnerships with contract manufacturers. We're investing in manufacturing process and analytics and beginning to lay the foundation for developing a strong supply chain. | intermediate | [
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e9ed79f29e18ccfc8ba9a06e2525cc3c | Just a couple quick ones from us maybe a little bit more high level, but for the -- first on the TREG technology, maybe you could talk about what these steps are from -- moving from an autologous approach to getting into the more allogeneic side? What are some of the gating factors steps for you to do to get into allogeneic? And then, I would love to get your thoughts on some of the non-AV based delivery mechanisms that have been studied for gene therapy hemophilia A. | Yes. Thanks Sandy. Yeah. So the differences between autologous and allogeneic are many and there are two main aspects of it. One is the engineering and the biology that needs to be done to move from an autologous product to an allogeneic product, which by definition is a healthy donor's cell in a patient and we need to avoid rejection of those cells. So there's a lot of complex engineering involved there cell engineering using our dual finger [Phonetic] platform and it requires that we understand how that engineering to make themselves more immune silent is affecting their biology and making sure that we still have a potent and effective product.
And then on top of that, once you have the strategy for engineering the cells, you also have to then bring that more complex engineering strategy to a scale, which can allow delivering the medicine to patients. So both of those areas are places where we're investing a lot of effort. Yeah, those are the key places.
And the importance of allogeneic for TREG is allows us to move into larger population diseases, such as multiple sclerosis, inflammatory bowel disease, even rheumatoid arthritis, where the patients want treatment more urgently, and also the price point for normal treatment is different to that an oncology.
Your second question was about other treatment -- other delivery modalities and delivery is really important to us. We are based on a view at the moment, both are constantly scanning the horizon to find other ways to deliver. LNP is look encouraging. It's a complicated area. It's a complicated pattern state. It is a complicated interconnection of companies, but we are always on the lookout to find other ways to deliver, particularly beyond the liver, but also non AVV ways into the liver. | intermediate | [
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b05e122c23ef89fde6a847497b8626d6 | I guess with the resurfacing of oncogene concerns from competitors in sickle cell, can you share your thoughts or update discussion, there have both on Sanofi on the [Indecipherable] as it contributes to oncogenesis? And should the source be traced to the conditioning step? Can you share your thoughts on forward with the program on using reduced intensity conditioning as an option or is there any other changes that a trial design that you may want to consider? | Thanks for your question. And it's very difficult to comment on the safety data coming from our friends at Bluebird. We know several people there -- we know they are the kind of company that does the right thing. We know that they'll be making sure that they're understanding the patient journey. We're also confident that we have not seen anything similar with our medicine, and are doing our very best to understand what it is appropriate for our patients. We and Sanofi have a great relationship. And we'll be watching, listening and learning from the discussion that goes on about what happened with Bluebird, but we feel confident that we're doing something quite different.
You asked another question about conditioning regimes. And once all of us work out a path to efficacy, I am sure that we will try and understand how to optimize conditioning rate regimes. I'm sure the technologies we're using now are the first generation. And we'll continue to learn about what the best thing to do is. | intermediate | [
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2e742562569eec16af7d6925bb27597a | First is regarding Fabry program. Just wondering do you have the freedom to choose the dose based on the data you've seen so far say from Cohort one to cohort to cohort three, based on the data. I mean can you choose certain dose when you dose up? And the second question is, how often do you measure Alphaga A in a substrate and as well as AV26 vector shedding? | Yeah. Thank you, Sandy. And thank you, Gina for the question. So for now, what we have disclosed on our dosing strategy for the three cohorts that we're looking at a low and a medium and a high dose. And that's how we are looking at our dose escalation. As of now we are, as you point out, collecting Alphaga A and substrate levels throughout the study. And we're doing that at regular frequency. And those are data that we expect to be sharing toward the end of 2021. As I mentioned earlier, we are going to be waiting for dose escalation to share that data.
That's right. Viral shedding as well. So we're also collecting viral shedding and we look forward to sharing that data with you as well at the appropriate time. | intermediate | [
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81a795f8a0e3e2d6ada8027ec41db9d4 | And my second set of question is regarding the TX-200. Just wondering any additional improvements regarding the TX-200 as a construct since the completion of your TX cell acquisition, and also for the second half of this year what will be the initial data sets you will be collecting for the kidney transplant? | And then you ask the second question about TX-cell, we found from the acquired TX-cell that they have gotten really good process we haven't, we continue to work on it and understand TREG's, but there's nothing fundamental that we have done since the acquisition. And that was why we acquired them because we believed in them and we believe they were good at developing TREG. | intermediate | [
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a23a8bdce2e2d6f0a5ca8f0d384dbf1b | So first a few questions maybe just a couple of questions on the Fabry disease program. I think you said the second dose cohort has treated the first patient. How many patients are to be treated in a second dose cohort? And how many patients in total are in the dose escalation cohorts? And that by year end when you present data, would we see all patients from these dose escalating cohorts and any chance to see those expansions cohort as well as at year end. | Yes, of course, the first cohort had two patients. And as far as cohort two and cohort three are concerned, we are expecting to dose at least two patient per cohort, we will need two patient dose in cohorts two to then move on to cohort three once we've accumulated sufficient data from those first two patients. We do have the objective of recruiting up to four patients in cohort two, and we will also have the possibility of going beyond two patients in cohort three.
Obviously, as you can imagine, the commitment to presenting data at the end of the year will be also COVID dependent, but we are confident to be able to share as things are looking right now. Data from the three cohorts after dose escalation at the end of the year, how many patients that will be -- will really be COVID dependent and whether we will have patients from the expansion cohort enrolled by that time as well. We will see.
Rob here, now, less than four weeks into my journey in Sangamo, so I'll keep my comments at a higher level. We'll move as fast as we can, as the data allows, we're completely data driven, and feel the urgency about getting treatments to patients as quickly as we can as the data allows us to do that. So we're looking at this very carefully and look forward to sharing what we've learned at the end of the year.
And we're planning for success. We're planning for expansion cohorts, Phase 3 that is one of the main focuses of the company to ensure that we're ready when this medicine hopefully works to drive forward into Phase 3. And as Rob says, get us into patients. | intermediate | [
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01c6a9fad86d375e78792850966ef45e | Two quick follow ups to that. One, what treatment duration you think that you'll have across the cohort when you pick your expansion dose and two, when you enter the expansion dose, are you going to be in a good shape, CMC wise to say that that is your final commercial product? | We did create the first patient in cohort one around Q3 last year. And so we will have a year's worth of follow up by the time we report out toward the end of this year for the first cohort.
And as regards the manufacturing processes, we're continually working to improve that it's when one dose in this field. And we do not see this as something that is gating moving into Phase 3 and beyond. | intermediate | [
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96e7c416a898fa62f8990efc32a8571d | I wanted to ask also another question about the TX200 program. I guess how do you think about dosing in the TX200 program? And do you expect CAR-TREG cells to expand? I really just am trying to get out like what's the expectation for efficacy in low dose cohorts in the Solid Organ Transplant study. | So we never guide to -- the first dose of any study is always a balance between prudence and hoping that piece of that patient will get some benefit, but until you do the study, you don't know. Jason, TREG expansion or what happens to TREG when it's given?
Yes. Thanks, Sandy. We definitely expect the TREG to expand in the patient upon encounter with the cognate ligands for the CAR receptor that we are engineering the TREG with. So, we certainly anticipate and that by design, that when the TREG get to the tissue, where the antigen is expressed, they will be activated through their core receptor. And that will trigger them to proliferate and to acquire their immuno regulatory and suppressive properties. So that's what we expect to see. And that's what we've seen in the preclinical data that we've shown and the preclinical data that our partner Mabe Levin [Phonetic] are active in partner Mabe Levin [Phonetic] to the public. So we definitely expect expansion.
And if I may add something to what Jason has summarized. In terms of initiating the study this year, we do intend to initiate the study. But Similar to other genetically engineered cell therapy approaches, patients will undergo a leukapheresis procedure from which the TREG cells will be isolated and engineered and preserved. And the HLA to negative patient will subsequently undergo transplantation surgery. And then following a recovery period will receive the personalized TX200 drug candidate and so as a result of this detailed process, we expect that dosing of patients will occur several months after their enrollment. And as such dosing may be this year or next year. We're not committing to dosing his year but certainly to initiating the clinical trial this year. | intermediate | [
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dcc0246b0bd0fb0dcb6778010d6f59fb | I also just wanted to see if and apologies if I missed it, but if you could provide any additional color on the timeline for selecting candidates under the Novartis collaboration. | We know their targets. They made the choice to instead of coming up with a laundry list of 10 potential targets that they would decide on three, and they shared them with us. So we know their targets and are working closely with them. | intermediate | [
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09eb45632eba336eb758e3e896251b32 | Two questions. And I know, everyone's asked about Fabry. But just what can we expect from updates throughout the year? How regularly would we be getting them with daily milestone based updates on selection etc.? And then, just broadly speaking, on partnerships, and how you guys are thinking about those who've done an excellent job in the past, and how are those discussions progressing? And any thoughts on additional indications etc. | We've said that we won't give any more indication of the Fabry trial, either doses or efficacy or the safety profile until we've dose all three cohorts. So it's -- it will be the end of the year before we see anything significant. Mark, do you want to talk about partnerships?
Sure. Thanks, Sandy. So, we've had the opportunity to see multiple collaborations with blue chip pharma companies that we believe reinforce the promise of our science and our platforms. Most recently obviously, with the Biogen and Novartis deals completed in 2020. These collaborations have really important financial and strategic benefits for us. They've provided about $850 million in upfront in milestone payments. And we've got a potential across these partnerships to earn about $7 billion in milestones, in addition to royalty payments.
The way we look at partnerships is where they can bring a therapeutic or clinical experience or expertise, I should say, as well as their commercial resources to more rapidly bringing these medicines to patients, then we would look at those and in many ways, the way we take a look at this as an expansion of our R&D portfolio. So in many cases, they're coming to us with targets within disease areas that they're experts in and have identified things that our team has not even thought about applying our technology to.
So going forward, we believe that there's an opportunity to create value for the industry and more importantly, to patients. And so we'll continue to take a look at where we can address markets, leveraging our partners, resources and expertise in those areas. But we really want to underpin that we have a real focus now on creating a portfolio of products, which are wholly owned, and will allow Sangamo to take these all the way through to patients. | intermediate | [
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] | B |
5715bbb7c32c6b570b22e19ced724199 | So on the Fabry program, can you talk about the types of patients you would expect to enroll in the treatment such as, are they perhaps not responsive to ERT? They have poor renal function or are there other sorts of these symptoms that may push them toward using a gene therapy, as opposed to perhaps remaining on ERT or going to ERT. | We haven't given any detail about the type of patient. It's because it's a very -- there are several categories of Fabry patient. And what you -- the one you choose for these studies is something that each of the companies is guarding carefully and thinking about with great input from outside experts. | fully_evasive | [
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843cb4725c2f55c92e8083229f92eba4 | And then if you can comment at all about if you incorporate any learning into the steroids regimen being using in the Fabry trial from the Haemophilia program. | We've learned a lot about liver function tests and use of steroids from Hemophilia and we have applied the learning to what we do in Fabry, but we haven't said what we're doing in Fabry. | intermediate | [
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] | B |
532c5f931cf2b6f3409504dbb3dc3f7d | I just want to start, Patrick, on the inventory clear out in CHP in the coming quarter. Could you maybe just give us some more color on what's being cleared out? Because I think previously, you said you were focused on WiFi 6, while others were focused on WiFi 5 and that's why you were losing share, but that would come around as the market shifts to WiFi 6. So I presume CHP inventory is WiFi 6 heavy. And why would you need to optimize that versus just waiting for it to sell through? Is there any ASP degradation in WiFi 6 or just a little bit more color on what's going on there? | Yes. So every channel partner has their own financial metrics and open-to-buy is based on their financial metrics. Even on WiFi 6, we have new products coming online very soon in the second half, involving some WiFi 6E products and involving some more new cable products. So we need to make way for these new products that come into the channel so that we could continue to improve on our margin profile. As you probably know, that I mean component cost has been going up. So this continuous renewal of product lineup is very important for us to improve on our margin profile. So that's why we prepare for these new products coming into the channel. Especially for the very important Christmas season, we intend to adjust the channel inventory of our partners so they will have a better open-to-buy for the Christmas season for these new products. | intermediate | [
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] | B |
1d18af2a1ec56c837bc1f6ba99f8e62c | You talked about expecting to achieve the analyst day operating margin for the fiscal year, and that's going to imply a big uptick in Q4. What gives you the confidence to go out that far right now, given what you're unexpectedly experiencing here in Q3? And maybe you can unpack the key drivers to that uptick. I'd imagine this channel inventory optimization is a big part of that. So if you could help us quantify that, that would be helpful. | Yes. You got it right there. I mean at this point, we said supply is still going to be limited for SMB. So we're expecting very modest uptick from what you saw in Q2. And we still reiterate that we will deliver the full $140 million of service provider revenue for the full year. So it's down to CHP. And as Patrick just kind of walked through the logic of why the channel needs to be optimized from an inventory standpoint in Q3, we think that's a Q3 phenomenon. And as I said earlier, it's going to certainly put some top-line leverage pressure on the Q3 result. With that being corrected in the Q3 period, moving on to Q4, we expect that we will regain some of that top-line leverage. So that's why we believe that we will hit that full year 9% to 10% operating margin guidance. | intermediate | [
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] | B |
1c0beacd00b527ad78b0957382527686 | It looks like you're clearing out inventory that typically generates cash. You already have over $10 a share in cash. I'd imagine there is going to be pretty significant downside volatility in the stock, given the forecast here. You had quarters in the past where you did like $50 million of buyback. Would you consider that sort of super-size type of buyback level to just defend the stock down here? | Well, we're going to continue to be opportunistic buyers of our stock, and we will factor in a number of things in. I think from this point for the balance of this year, we will probably be free cash flow neutral, given the timing of revenue and the implied move from Q3 to Q4 and some of our seasonal dating programs that occur in that fourth quarter. So I think we will be free cash flow neutral, more or less be about where we're at today. But yes, we're going to continue to evaluate all these factors in terms of how we allocate our cash. | intermediate | [
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b6c9d93ff56d7345629ceac9ef29e3d6 | It seems like the demand environment on the consumer side has changed a lot in the past quarter. Can you give us some insight on what you think changes and what gives you the confidence that there wasn't a lot of demand pull in during kind of the main part of the pandemic? | Yes. What we saw in the first half, especially in the second quarter when we had practically huge supply of the CHP products into the channel was the real market demand. So in the first half, the market grew about 40% over the pre-pandemic level. Now as we know, in the first half, there were still quite a few COVID restrictions and people could not travel. So in our planning, we were planning that it would be a 50% growth over 2019 first half. So that is certainly, I mean, because of the vaccine and all that, so a lower than our 50%, it turns out to be 40%. So the gap becomes extra channel inventory that we need to help our partners to optimize. Now going forward, we see the vaccine in operation has significant good positive effect on the reopening. And originally, we anticipated in the second half of this year the growth will moderate, because we factored into the reopening trade. We were thinking that in the second half, the market will grow about 35% to 40% over 2019 pre-pandemic level. Now a few weeks into the second half, the market seems to be pointing to roughly about 20% over the pre-pandemic level. Now clearly, we see a lot of people in the developed world, especially in the U.K. as well as in the U.S. getting vaccinated. And they are getting on the road to travel and to see their families as well as the occasions. As a result, the demand for the home networking is not as high as what we originally thought at 40% over the pre-pandemic level. So that's why we are also adjusting the ongoing CHP in-market sales expectation as well. But then the reverse is true. The reverse is because of the reopening is in the big wave that we originally thought, so the SMB business side gave us a positive surprise on the streaming, as we are probably surprised by the pace of new business start-up opening. I mean we read in many news reports that the business start-ups in the U.S. is the fastest in many, many years in the history. And they all set up WiFi as well as networking, and they are buying our products and units. And same thing when the reopening trade starts growing, we are seeing a lot of the sports, as well as entertainment venues, are revolutionizing their audio video systems with IP technology rather than the old analog technology. So for example, a lot of the sports events like ones of tens like NFL are now using our ProAV solutions to do umpiring. So these on the positive upside of SMB, is actually offsetting some of the downside of the growth rate of the CHP. So overall, so we got push and take, and that's how we see the second half is shaping up. | intermediate | [
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] | B |
dcf0266b9347331cdb49ddafcc3bd9da | As you try to optimize your inventory levels in the channel, how do you think about the increasing promotional activity and how that will impact your margins? | Yes. We are going to continue to be promotional. We talked about this heading into Q2. We see this as an opportunity to continue to gain back share, which is important in terms of keeping that mind share with our channel partners. But more importantly, for now and in the long run, it's our means for acquiring subscribers and aggressively pursuing that first major milestone, being end of this year, hitting 650,000 quickly after chasing that 1 million mark and then like follow on to the 2 million long-term target that we put out there. | intermediate | [
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] | B |
76c0567f25b60ecff56dbdcda973396f | So first off, I just wanted to ask about inventory, just given that you have increased it so much and the demand has dropped off more than you had thought. What kind of obligations do you have as far as the components that you were preordering earlier on this year or last year? And does that cause any kind of bloating as to WiFi 6 when the market is going to WiFi 6E? | Well, we believe that WiFi 6 is going to last for a long time, at least for another three years, four years. And WiFi 6E is at the very high end of that. So we don't believe that our booking of components will be wasted. So we are pretty confident. So that's why we were the first to get rid of the WiFi 5 products. And we do believe that WiFi 6 will continue to have a pretty long life from here on out. | intermediate | [
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] | B |
99a60dea4096cfa9c5ee7b1d1db2e50d | And then if the market was slowing down so much, why weren't you more aggressive with promotions in Q2? And are you going to be a little bit more proactive of promotions in Q3 to just clear out some inventory? | We actually did. I mean, as you probably know, still today, about 75% to 80% of products are sold in physical venues, brick-and-mortar stores. And those promotion plans were planned way ahead. You just could not turn on the dime and make it happen. So, I mean we executed our plan in Q2 as far as promotion is concerned. And then in Q3, of course, as you heard from Bryan, we continue to aggressively promote in order to acquire more users that will attach services and when they purchase hardware. | direct | [
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] | A |
883f49ef6d5b1cc2cd12c20817dfca0f | Are you seeing any competitive pressures given the slowdown in demand? | Well, I mean we don't see particularly any change of behavior from any of our competitors. As a matter of fact, throughout the pandemic, our competitors have been promoting WiFi 5 products heavily. And that's why we have been losing share until just the last two quarters that we will be gaining share and when we have better supply and in a better position to promote as well. So on the reverse, you could argue that our competitors are seeing our behavior change, and we stopped promoting for a while now we are back into the game. | direct | [
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948b829f6d75f3ba3d3d7bcb6660da4b | And last question on the SMB side, are you a beneficiary of some of your larger competitors not having stock, or is this a clear-cut better product, you are seeing natural transition to the NETGEAR brand in SMB? | So, there are two big growth areas on the SMB side. One is the work-from-home solutions. So, we are not really directly competing with American vendors because they are more focused on enterprise. So in this work-from-home environment, the only competitors are Asian vendors. But when you try to run a business at home or you do your corporate work at home, I think our brand is big. So that's why our 5-port, 8-port switches, 16-port switches, our wireless access point, our VLAN-based home network is far superior than Asian suppliers. And certainly, it's unique in the market, because none of the competitors own that kind of solution. So that's one area. The other areas for AV basically, is AV over IP. A lot of our major competitors have that pathway. So we are in a very unique position to capitalize on this industry transition from analog to IP video. | direct | [
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] | A |
abaaebbb33f2004217ea265e07b4e2a4 | To the extent the quarter doesn't offer strong affinity support for the overall market thesis, let me ask you the obvious question. If I look at the Dell'Oro market numbers, they are projecting a market $200 million of growth over the 5-year period from 2020 to 2025 for SOHO WiFi coming from $8.0 billion to $8.2 billion. That's with a 5 million unit decline over the 5-year period. And I recognize it's still early, and I recognize each iteration of WiFi is different. And perhaps with the different integrations of WiFi 6, this will be truly different in terms of more expansive in duration and in magnitude. But that's certainly not what a prominent industry analyst seems to believe when you look at Dell'Oro numbers. Now the question, Patrick, you are in the trenches. Given what you are seeing, why do you believe I mean, one would think, to the extent this quarter was a disappointment when we are still in the pandemic. I understand things are improving. I understand there has been some return to work. But one would think that if, in fact, the number is going to be meaningfully better than what Dell'Oro is projecting, you should have seen better growth than what you saw. What informs your view that the market, putting aside competitive factors, Google, Amazon, etc, but that the market is going to be stronger than what it appears to be and, to be clear, over a longer duration? | Yes. I mean the major difference is that we are really putting a lot of our effort in a segment that is created by us, which is what we call the premium WiFi. So if you look at the home network, either going down the traditional consumer route, which is the easy setup and just purely mesh, or you go for the more serious business route, which is a switch, a router plus a bunch of access points. So there are two paths. But in either way, we are providing systems that are $500 plus to even $1,000 plus. And that is a very unique space. And then we are basically targeting to a very unique segment, which is away from the Google and from the Amazon or the Asian vendors, who are all focusing on the $200 to $300 ordinary market. So our growth is giving the confidence our confidence of the growth is basically seeing how that segment is expanding. And that's why it is interesting, a year ago, that segment of $500 plus mesh system was only 8% of the market, but now it's become 34% of the market. So that gives us a unique position. It's just like on the SMB side, as I mentioned just now, going after a home office with switch and access points, mesh access points, is not anything our American competitors do. And going after ProAV is none of our competitors do. So we are kind of in a different segment that is very unique to our position. | direct | [
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"fully_evasive"
] | A |
93cedbcea6d7e3afe832718cebc0b8ab | Patrick, let me play devil's advocate. The mesh market goes from 8% to 34% year-over-year. It goes up 4 percentage points sequentially. To your point and recognizing that there is always the risk of a significant mis-extrapolation from one quarter's results. But in a vacuum, logically, why shouldn't this quarter have been not that it was bad, but why shouldn't it have been that much better for you, given your focus on premium, given that while you continue to expand your product set, you already have a rich offering of premium products, given the fact that there is limited competition at the premium end of the market and the percentage of the total market continues to shift toward premium. Why shouldn't the numbers have been better if what you say is an accurate view? | Well, first, let me clarify, that 34% is not of the total market. That 34% represents the premium segment of the total mesh market. Yes. So, that's the same. So 34% of a smaller pie is still less than 34% of a bigger pie. I mean that's basically what kind of the difference that we are seeing. And as Bryan mentioned in Q2 actually and if our supply was not constrained on the SMB side, we would definitely have much better results, both on the top-line and from the bottom-line perspective. So, we think that on the CHP side, we definitely are off the mark from the overall big market sizing. But then within that market, our smaller market size, however, the shift toward the high end, toward the premium end is on track. | direct | [
"direct",
"intermediate",
"fully_evasive"
] | A |
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