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0938cf01fc5d930dd10c59d0a9b363d9
For FA just wondering, if you can say more about why FDA is not convinced MOXIe Part 2 single study results are supportive of approval. And when you'll find out and disclose to the public, if they view the crossover study as efficient.
Sure, Maurice. So we believe the data are supportive of approval. MOXIe was the largest placebo controlled mFARS study conducted to-date. As you know, it involved approximately 100 patients. We hit the pre-specified primary endpoint with a p value of 0.014. The FDA could have wanted a lower p value. Our lead investigat...
intermediate
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B
39adc973f860370b9a635589db6fe87c
Specifically like what aspects, it was helpful how you laid them out for Omav. So could you do the same thing for Bard? So that way we can understand, what aspects of the one year data they're not convinced by specifically? And then, what two year data would lead them to feel differently more positively?
Yeah. So as I mentioned, we provided pre-specified sensitive analyses, as well as post hoc analyses which they recommended, which would address their specific questions. And that was all formally submitted in the IND amendment. And now, we have a pre-NDA meeting, where we're scheduled to discuss the actual mechanics of...
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B
82b1d9bc08d1049b390bf01dd8c6998e
Just, I guess, from what it sounds like that regardless, the FDA is going to wait for that two year data, because it seems like they have some questions on that one year data. So can you please tell us first whether the Blackstone job is conducted before the Type C meeting? And if so, how does the delay impact the tier...
I'll take the first part of that. The Blackstone diligence was conducted after the reference Type C meeting for bardoxolone. There is no impact on the royalty from either of those, they remain same, in the Blackstone royalties are -- start at mid single digit and they can tier down to low single digit, or high mid sin...
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B
4ac5d2374f491f8702d2605120a79727
On the Omav regulatory update, can you talk about where the N1 division is coming down in terms of what they want in a single study for approval? I mean, it just seems like there's a lot of wiggle room here across divisions. And it's unclear, I mean, is their issue that they wanted -- that they normally want to lower p...
And so I think, they're just trying to follow the regulations they have for single study approvals. And so they told us that they wanted additional information. And so there's a few different ways to provide that, then discussions, they seem most receptive to the crossover design. So that's how we're proceeding to prov...
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B
6bbfe7344ef2358bade6ed5e3e4abd4c
And then, in terms of the timing for the year two data from CARDINAL, can you just help me understand in terms of trial design, why wouldn't you expect the data to be available pretty much one year after the one year date was announced last year on November 11?
Yes. That is the expectation. So our guidance is that we will have the year two data available in the fourth quarter of this year. We think its unlikely now to be affected by COVID-19 for the reasons I mentioned. And so obviously, in order to provide that to the NDA, there has to be analysis. We have to update the data...
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B
430bff09fbeea71130c446a138598006
This might be extremely naive, but given the sort of timeline you've outlined for Alport, the expectation of the second year data and 4Q and the planned submission for the NDA and 4Q, just wondering, I mean, at this point, assuming positive data just comes out, I guess why wouldn't you just go for the full approval in ...
Yeah. I think we agree with that. The options are to file and just seek accelerated or with the data coming, the two year data coming in the fourth quarter to supplement -- find a way to submit that data to the NDA. And there are multiple options for that. I just like to add that some of the thinking about this is evol...
intermediate
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B
7377cc953c98a07cae0e7003ab3c9f36
You did an amazing job discussing product opportunities, ways to expand your current portfolio, but I want to know long-term how you thought about services, which is something that CORSAIR has talked about. So basically, non-hardware revenue, what do you see as the opportunity? And is that something you're also conside...
That's a great question, Tom. And the short answer is, absolutely, we're looking at that. We look at, obviously, our strength in gaming hardware as a key set of assets that we can bring to bear on new categories. So hardware will continue to be of strong interest to us, and be able to leverage distribution, supply chai...
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A
7425c32dae15003e0c1cc1e6fb47e61c
So, Juergen, you said you're assuming the console market is down mid-single digits in '21. Does your guidance assume that you give back share, you maintain share, or you pick up some share? And then separately, you talked about a number of the drivers influencing gross margins. So if I have this correct, you're assumin...
Sure, Drew. Appreciate the questions. So for the console market, I mentioned that our working assumption, while it's a bit tough to call this year with all the puts and takes, and certainly, the strong start to the year makes it even more difficult to kind of judge, our working assumption is that the console headset ma...
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A
88537ba2d5bfecddf0f1c26e52029920
When you think about kind of mix of the business, console versus, we call, other, where do you think three years, five years, where do you think console as a percentage of sales you can see that kind of at 50% or even below. When do you think you could really see that revenue mix, that diversified mix? How aggressive c...
Sure. I think in the next year or two, we'll have more than 30%, 40% of our business outside of console. And I think in the next three to four years, we should be well over half the business outside of console. And that's not that we don't like the console business, by the way. That's just a matter of taking advantage ...
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A
b6c835424eb97aea10a224407f4784ef
Do you see kind of kind of the build versus buy -- and obviously, it seems that you're making small buys with brand and technology. But do you see the opportunity to leverage the Turtle Beach brand into other markets? Or are you going to leave Turtle Beach brand really the dominant console brand and really go with that...
That's a great question. One of the things I like and has been a pretty big change for us is up until 2019, we were a one-brand company. So everything we looked at from a market segment standpoint always had the complication of can we utilize the Turtle Beach brand into that segment? Or do we essentially then potential...
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A
d369e725a42d3ef1e162b3e665534b23
When we think about the model, kind of this 12% adjusted EBITDA target. Is that kind of a good number where we should model where we'd expect plus or minus maybe 100 bps or 150 bps quarter in, quarter out, or year in, year out. But is that kind of where you're pegging this thing and you're going to flow it all back int...
Yeah. Great question, Mark. So 12% is the mark that we set for 2021, and we would expect that to inch up over the next two to three years. Obviously, we're investing to drive growth. We want to get that engine moving here. But we do expect to increase that over time.
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B
d09b1d186cc0323fad5087a15a337efa
Wondering how you view the somewhat early stage but booming eSports market opportunity and how Turtle beach can leverage the growth in audience and all the growth verticals that are within eSports in general. And I've seen you made some strategic partnerships as well in the space. So how do you view eSports in that opp...
Sure. So first of all, we are in eSports. We're one of the top gaming accessory providers. In fact, across the console and PC landscape, we are the top-selling keyboard, headset, mouse provider in the United States. So we are in eSports. We've been partnering with teams for years selectively. And so we're in it. We're ...
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B
fc03b11d605e21a4ffea5b19c4e25861
In terms of the revenue guidance, I know a lot of analysts have already touched on this, but just given your outlook implies positive growth on the top line despite console headsets being down slightly year over year or mid-single digits. So I guess that leaves growth from PC accessories and maybe the new microphone pr...
Sure. So with our financial model for this upcoming year with revenue growth, again, our underlying assumption is based on the console gaming headset being down roughly mid-single digits. That's not a small -- at half of the market share nearly, that's not a small number for us, by the way, right? So that's $10 million...
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B
2148adb5d404085db37c97df0c117622
Now that you have a much more expanded installed base, as well as more product categories, how do you think about gaining better insight on your consumer behavior on the way they upgrade or the way they use their devices?
Interesting question. So we do, as you probably know, extensive modeling of the markets and supplement it with consumer research. This is one of the ways that we, I believe, have done quite a good job forecasting what the underlying market in our core console segment is going to do. I know we're looked at as the bellwe...
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A
4b142e56c616e4fa256066723fe0f80d
Your expansion for ROCCAT, as well as any other PC or non-console product categories. Do you think there are any useful lessons you learned on ROCCAT's growth with which you could apply to Neat? Or is there a different category that requires a different growth tactic for you in the future years?
That's a great question. The Neat acquisition has gone quite well and largely to plan. So it would be hard for me to say that we learned some lessons in terms of especially things going wrong. We did make decisions early in the ROCCAT acquisition to stop some products that were generating revenues because they just wer...
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A
2add19924bdd42c80db82a8223dd7543
So you just mentioned about the pandemic accelerating or pushing the digital transformation of businesses. I think you'd also mentioned during the prepared remarks about how the companies are really focused on continuity rather than transformation, I guess, probably at the onset of pandemic. But have you seen any chang...
Yeah, sure. Thank you, Raju. So yes, definitely, in the last quarter, we have seen, as the businesses are coming back, the customers are prepared to build agile IT infrastructure, which can help them not only in a normal time, but also during pandemic kind of kinds of situations. So this is one. The second part is the ...
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A
696988546f723e331ed69b595e891dc1
Okay. So would you -- I guess, maybe how would you characterize your pipeline? Do you see a growing pipeline of opportunity for the company?
Absolutely. So the pipeline is significantly increasing in the data center hosting space, the cloud space and very interestingly, in the hybrid cloud space. Because every time a customer intends to move from their data center, it's an opportunity for them also to not to just shift from one data center to the other data...
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A
840f12e354a146e72a4970a37b7023b5
Yeah. Okay. All right. And I just wanted to also touch on some of the specific business units. So the Technology Integration Services, the growth there was a little bit better than we were expecting. Can you just talk about that business? What was driving that? Is project activity picking up there, and maybe what's the...
Yeah. So this is also related to what I mentioned. The customers -- because the Technology Integration Services is about creating custom-build infrastructure for clients. So when the customers are moving from one data center to the other data center or more from an on-premise environment to a hybrid environment, there ...
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B
97de8c4d918d37d38e505c999a6040d4
Okay. I guess -- so this part of the business was underperforming over the last couple of quarters, but it was a pretty solid bounce back this quarter. What's your outlook for the remainder of the year? Is the pipeline full? Do you have projects...
We have projects -- we have projects there. [Speech Overlap] discuss about the future. But as the -- coming out of this pandemic, like Kamal outlined, as the projects -- as this transformation is happening, this overall integration, technology integration where you integrate other provide [Phonetic] services -- produc...
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B
d2616c68cdc5fdb958bc007cafd9e0a1
Okay. And the Applications Integration Services, the decline there, was that tied to a specific contract maybe wasn't renewed, or around -- was it specifically around testing, or could you just describe what was driving the decline on that side of the business?
Yeah. So one of the portfolio in the technology -- sorry, in the Applications Integration Services are our online test, which, of course, has because of the pandemic situation and for most of the quarter, partial lockdown, it has impacted. So because that used to be earlier, a significant part of our revenue in that bu...
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A
a57fb706ffd11f79bac7c0b9ce64bd91
Okay. So it wasn't because of like a lost contract or anything, it's just because the pandemic's limiting testing?
Yeah. That's correct. Right. Right. The online tests, yes.
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A
ddd85362b76db66b975cc3f8babf6601
All right. And maybe could you give us an update on your at your data centers in terms of how many you currently have? What's the utilization rate? Maybe what are the plans in terms of adding extra capacity?
Yes. Yes, Raju. So as far as the data centers are concerned, we currently have 10 facilities, which are pan-India across six metropolitan cities. And these facilities are all largely contracted and revenue generating. The rest of it are either contracted and about to generate revenue or we have small capacities lift. A...
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5e4229debbe664ff3d40c7b73b7b655f
Great. Thanks. And what was the debt balance at the end of the quarter?
The debt balance is about $70 million.
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A
29111b59a35f586e9075600ea72c3792
Okay. And it looks like the interest expense went down a little bit in the quarter. Was there anything specifically driving that?
Two reasons. One is the interest rates in India have generally softened. And second is, we do have some interest credit, which we have got -- what you see is the net finance expense. So we received an interest credit for one of a tax refund. And as far as the interest on tax is concerned, given the uncertainty it'll be...
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A
bdad05f2f1e388c7c128e0ee0ad6d782
The first question relates to timing for the adult population in the US. So, as you convinced the bridging study and hopefully that will set you up to file maybe the middle of next year so, should we think about possible approval in Q1 of '23? Is that kind of an appropriate way to look at the timing?
Yeah. If you follow the path of the regulatory path where other companies have followed. We believe the agency will also consider a fast track for us. We were planning to initiate that at the right timing and so based on that they're planning to file the BLA in the second half of next year. So sometime in 2023. Yeah, i...
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A
49c470c9e651cce060642449b47e9dc7
And then under your agreement with Bharat under a scenario where the US would like to purchase your vaccine to help distribute OUS, again because of its many attractive characteristics. Is Bharat precluded from selling the vaccine to the US for that purpose and you, exclusively have the right to sell the vaccine to the...
Yes, we have rights in the US and Canada and any procurement from the US government. Yes, they have to go through Ocugen.
direct
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A
831902036adf54d5bf9033e405a24df1
And then, for the most recent EUA filing for the pediatric, given that you're running the bridging study for adults how do we think about whether you'll need to run a bridging study for adults, how do we think about whether you will need to go on a bridging study for pediatrics as well before you could give any type of...
This is again, we have filed emergency use authorization. As we outlined in the two to five age group. Currently, there are no authorized vaccines are approved vaccines and there is a significant unmet medical need. And those things will be considered when you apply for emergency use authorization. So that's the reason...
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6ccce8f7d37ae25a6644fd96d787a3dd
One for Canada, how should we think about the potential timing there to get a potential approval? Having filed in Q3, what they're full -- at least anticipating a full review again as first-half '23 or '22, I'm sorry. Or maybe mid '22, the appropriate timing for that potential approval.
OK, you -- I think the process for Canada, again, as we stated, there is no -- deployment of emergency user authorization that's called intramotor, it expired. And the file got into NDS, which is a new drug submission process. And typically, it does take some time and I cannot comment on the actual regulatory time, ex...
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B
f575fbbc1146043d57a28a77644d1792
The first is just on the pediatric EUA, I was just curious if you're going to hear any kind of update on an acceptance of the EUA before a decision is made? Or your next feedback from the FDA will be about whether or not it is approved? Or should you expect something within a week or two from now?
So, good morning, Zegbeh. Again -- the review process, they accept us for review. So the process is ongoing. So when we get updates we'll provide updates to the market. At this time, I can't comment anymore.
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C
99f68fbe14d9cb1b65b61d95006d9925
So you'd not expect to get a letter about an acceptance or anything like that prior to an update on whether or not the EUA is approved?
No, they -- typically the EUA goes through the process that is based on the process other three companies have done. Typically, it goes to the outcome before it gets any market. And so that's a typical process. So we're working with the agency on that.
direct
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A
a9982d7cb1253a527a63313f370581dd
For Health Canada, I was just saying that, so far after your submissions you haven't gotten back any questions, or follow up, or you haven't had to submit additional information? Or anything like that? You are that just waiting to hear back from them.
Zegbeh, this is the normal course of the business review process? Any India or any submissions you do any regulatory agencies and the companies, as a part of the actual process you respond back-and-forth. And so that's again the normal course of business. That's what we are dealing with Canada too.
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B
6b138e552d643ac6dfd84aa140646c7d
Thanks, OK. So, you have had some back-and-forth with them. And then the next one here is just about the potential to expand your agreement with Bharat. I know, I think you have the opportunity to do so for more territories. But I was just wondering, what it is that you need to see before you make the decision to do so...
So just to make sure I understood your question correctly. You're asking about our opportunity to expand our territories with Bharat for other regions. And then what would be the catalyst for that? Is that correct? Yeah. Zegbeh, again, those options are always open. And again, we're really focusing on the US and Canada...
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22fd1516020a61691f6c7dfbe9210f90
Ok, and then, moving on to OCU400 really excited to see that IND gets submitted. I was just curious as to any updates about the study design or what we might see any kind of clinical updates or anything from that program.
Yeah. Once IND gets accepted and goes through the process, Zegbeh, we will be launching the information into clinical trials start out and I mean that will help all the stakeholders and potential patients and everybody else. And again, this is going to be a small trial just as other offline designation trials to the re...
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B
cb020f9b61b65879d0165f1726e4c745
OK. And I know you expanded the CanSino agreement to include 410. I was just wondering where you are in terms of the development? Is CanSino doing anything right now for 410? Are you doing -- IND-enabling studies? We're in the process, are you?
Yes. And CanSino started working on the development, just as the need for 400. And so we do have a roadmap from the FDA on OCU410 and currently, the team is in the process of executing those plans.
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A
acd507bc9b1ff9a2c001f363f04ec41a
My question has to do with the booster shots and the durability of Covaxin and whether there is data that might show any need or lack of need to have a booster shot six months or 12 months after vaccination. And I also was wondering if there was any data to show or any discussion of the idea of using Covaxin and follow...
So, Robert, the first question is about the longevity effect. Again, partners are generating some data. When the data is available it will be published. But however, the data-to-date clearly should one thing scientifically, people have to discuss more about cellular responses. The T-cell response, which creates a memor...
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B
9da5a3ac37b71b23cfbc611d6dceeb27
My first one is on the supply agreement with Bharat. So does that cover a potential commercial supply, if you're EUA for the pediatric population is approved? How much supply would you have access to and also in terms of the tech transfer to Jubilant? What's the progress on and the expected timeline on that?
Yes, upon EUA, our supply agreement does include adequate doses, Sean, and our partners have significantly increased that capacity this year. And also so that they don't how many restrictions for export. So we will be -- we'll get adequate supply whatever is needed post EUA in the US. And as for as technology transfer ...
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A
295c21566fcc88ff9779d9bec8ae0d74
Once the tech transfer is completed next year, would you need additional CMC validation from the FDA to show that the clinical batch and the commercial batch of the same?
Yeah. That's a normal part of the process when you add an additional site, you always have to show the compatibility and that would be the product process.
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A
72e1d09661ec3417a7ec2fad690f17cf
All right. And my next question is on the OCU410. So you showed some pretty good preclinical results from that program back in October. I was wondering what's the development time like on that and when can we expect that to go into the clinic?
Yeah. No. 410, yes, that one again. We have a roadmap from FDA. We have to follow the typical process as other genetic products as we did for 400. So the two steps, which are very important to get to file the IND for that. One is developing and manufacturing the product. And the second part is the preclinical toxicolog...
direct
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A
89362f13e38516a41146820d2332306d
You touched on it in your prepared remarks, but if you could just kind of expand on your outlook for growth and margins for 22 -- fiscal 22 by segment, starting with Polyester, International. I know you said in Brazil, you dont expect those margins to continue. But finally, kind of touch on the outlook also for nylon?
The growth that we do expect -- we expect growth in volume across all of our business units, and it will be growth in revenue and in volume. The revenue growth will be partly as a result of the growing cost of raw materials that were passing on. But as we said on the call, we do expect the overall global growth rate to...
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B
f6e7ee36e4dd0fcd48c60d2d77ea0ee3
Next one on the tariffs. You touched on that coming to be a benefit starting in January. Do you expect to achieve the full $20 million revenue benefit in fiscal 22? Or is that more of a run rate benefit you expect to reach sometime during the fiscal year?
Yes. Thats more of a run rate benefit. And as we said, were installing new equipment. So well be ready from a machine capacity perspective, but we do expect that to ramp up as we move through the second half of our fiscal year.
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A
0e104c99be7431da04a973a198a412b8
With a lot of new entrants and emerging companies focused on recycling plastics, do you see the potential for increased demand and competition for Bayer bottles as an input? And what are you doing to ensure that you have enough supply?
Yes. Thats a question Id like to retarget specifically to the U.S. In Asia, we do not have any issues at all. But in the U.S., there is certainly, especially increased competition, especially from the beverage companies who are trying to put more recycled content into their containers. And in some states that they get ...
direct
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A
bcc577e27bb4bd6224f3a27eaf400a96
I just wanted to focus on Asia for a second. Vietnam is shut down, and they are a big producer of apparel and footwear. And I was wondering if that was causing any perturbations in your business there?
Thanks for the question. Most of our business in Asia is in China, but we do have some business, as weve talked about in the past, in Vietnam. This is certainly something were paying attention to as in our script. We know that COVID is not over. Were not sure exactly how its going to impact Q1 of this new fiscal year. ...
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B
2189fe7d734a3e71b51f77402a3be428
On the new texturing equipment that youre putting in your facility, is that a productivity or is it enhancing the product or both? Could you give a little color there?
Yes. I guess theres three reasons for doing this one, its going to give us more capacity, which we will need as we capture some import replacement business due to the anti-dumping initiatives that are going on. But its also, as Al pointed out in his comments, we know that its going to be more productive from a speed po...
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A
0b7f38afa530c0a06a5f75971bac0ff6
It seems like globalization is moving a bit in reverse. And I was just wondering, are you seeing any brands or new customers starting up businesses in North America that would shift revenue more to North America.
Yes. I mean, I think where were really seeing growth and a shift in supply chain is in Central America, this has been a -- this pandemic has been a shock to all of us and the logistics coming from Asia, not just a very costly, but its also very timely -- time-consuming. So what might have taken four weeks is now taking...
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B
c58388aeba838c7fc16311953adcf505
Okay. And would you service that from Brazil or from your North America plan?
North Americas because there -- whats called a yarn forward rule and somebody makes it garments in Central America. If its made from U.S. components or local components, it comes back into the U.S. Duty free. So theres a real advantage to -- from a tax perspective, duty perspective to make garments in Central America, ...
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A
18c6455de01a227679e152b14bd5d92a
In the sales guidance range for the full year, how much pricing considered into that given the raw material environment? And is that embedded? And is there more to come in that?
Ryan, we did anticipate in that initial guidance for 22, yes, we took into consideration the current level of pricing that were seeing. As weve noted, it has been on the upper rise here, especially as of late. I think we took into consideration what was happening now. We didnt try to project past what were seeing in th...
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b880a6fd224132fbbe2174fe1e0d4b18
Can you talk about the conversations you guys are having with clients and the ability to expand the raw material environment? Does that change the conversation at all? And also, does that -- with the recent Higg MSI scores, how do you guys compete in the marketplace?
Ill answer the second question first. I mean the Higg Sustainability Index is something weve worked on for a long time. One of the big attractiveness about Unifi is that were transparent, were traceable and were -- because of our fiber print technology. What this does is add another level of comfort to the brand that w...
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B
4ff9c70288364da7e813afcf3373a04e
Can you just provide some color on the texturing machines? And when will we see benefits from this project? If you could give some color on that? So well see benefit in 2022. My apologies.
No, thats good question. Yes, as weve mentioned, were really in the initial stages of getting those first machines into our operations. Really, well continue on that during the first half of FY 22. And it wont be really until the back end of FY 22 that well start to see some benefit, even though we will continue that m...
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A
fef2b69902e3ae862cd450622ba37a22
So you mentioned rising costs, I mean, I guess all along the supply chain, Im thinking more along the lines of petrochemical input prices or the oil price. I mean, I personally think $70 crude is just rest stop on the way to something a little bit higher. But across the cycle, recycled plastics, at some point, have to ...
Weve got a lot of things in there, David, but I just as on the general broad theme around petrochemicals, recycling traditionally has followed the recycling inputs that followed the virgin inputs. And theres generally a lag sometimes forward leading or not. But what I can say is that there has been a disconnect between...
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1230fed78bd60278dbf694d15ed49af1
I had a follow-up question maybe on your tax rate. So an effective tax rate of between 35% and 40% is what youre guiding to. And I mean, to me, thats one of the higher rates for the companies in my universe. However, I did notice in the cash flow statement here that there was a deferred income tax kind of benefit for t...
Sure. David, thats a good question. Yes. For cash taxes, we do -- we will get the benefit. We will get some continued benefit, specifically, as we mentioned in the call today, some of the changes with the indirect taxes and getting credits that we will utilize over several years. That will continue to push the cash tax...
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39ca698d64d19199418c103b3184f8fb
A question on the -- just on the non-accrual, well, the NPAs in general, if you could just kind of break out what the increase in non-accrual and OREO linked quarter, what was legacy, what was acquired?
Largely look at the non-accruals, it was actually if you look at it from an NPL standpoint, we actually had a reduction from a legacy Heartland perspective of almost $4.5 million. So when you actually take them together, what we really saw was the overall increase that you're seeing today, which is a little bit closer ...
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3e12c4857fca4a227468bd57bed33ebb
Maybe just an overview on capital then. Saw the dividend increase, you've got these deals working. I guess and I got your comments on TCE, probably looking to preserve that in the short run, but just thoughts on -- I heard about the M&A pipeline, but do you digest this -- what do we look for in '21 in all types of capi...
Yeah, I think, Jeff, you had it pretty much right. I mean we'll grow back up, as I said, through 8.5% just with earnings projected for next year and the balance sheet growth that we have projected. Now that excludes any acquisitions. And with acquisitions we typically issue stock as part of that. So I think you might s...
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50331dc6cc8e7d80b365bd6308460a43
Just, I didn't hear a total non-interest income. I think you piecemealed it, but is there a run rate with kind of all-in acquired loans what you are looking for in the first quarter of the non-interest income?
Yeah, I think -- just shuffle piece of paper here. If you kind of look at the core, so if you back out the gains and losses, I think the core is about $30 million, which really is about the same as what it was a quarter before. So we've been running about $30 million of non-interest income. Two more months of Aim and J...
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2768da4199212325c5ef30697c314f72
Just wanted to touch base on the loan growth forecast. I know in recent years, growing organically has been a little bit challenging. Some of that has been by design though. I mean what gives you confidence, what are your borrowers telling you right now so that it gives you confidence that you'll hit mid-single digit g...
Yeah, I'll take that one, this is Bruce. Our pipelines are reflecting that there is significantly increased activity. We did get organic growth in the fourth quarter in the commercial portfolio. We also are running and focusing on the consumer portfolios. So we don't think that we're going to run into those headwinds a...
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58fd28ec022434b1df886f7f04b94983
Bryan, just on your margin outlook, what does that assume for I guess liquidity there. I mean that can be such a wild card and a driver of it. I mean I guess what's the right average earning asset types we're using. What are you guys seeing for deposit flows and yeah, how large of a balance sheet should we be looking a...
Yeah, I think the balance sheet will go up a little bit, but remember there is PPP in there that we'll be paying off and then some will come back on. So it's really -- I would say, slightly growing. Going to grab my budget here real quick, but I think we're up you know, net of -- I would say we're going to probably be ...
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4a8d3d82f7cfd96750be66d024586cc3
Hi, if I just look at Heartland's stock, it's up 50% almost exactly since the end of September and my question is what are pricing expectations for banks that are $1 billion to $3 billion of assets that kind of fit that criteria. Have pricing expectations kind of corresponded with publicly traded bank stocks?
Terry, I would say they have moved up. It was pretty tough going there when we were at our lows, but I do believe people are starting to say, if you are trading at x times earnings and x times tangible book, then can't we expect something in that range or better.
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6814ddddeaa9f3c767c46281c3792f8e
And Bryan, just want to clarify the margin guidance of 3.50% [Phonetic], that incorporates the remaining PPP fees from round one as well as a step up in anticipated accretion from the deals that closed in the fourth quarter?
Correct. Yeah, I wouldn't have any PPP too because I'm not sure what that is yet. So that's correct.
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2a7e338288301fc0eb8ce274faca23c8
Okay and then just last question here. I mean, in the press release, I've got here charge-offs could be elevated given that they were just 1 basis point here in the fourth quarter. Any thoughts on charge-offs, I know Bryan, you talked about the provisions, but the elevated, I won't say it scared me, but it caught my ey...
Yeah as we continue to work with our customers and really look at the cycle, kind of what's coming, we do realize and it's certainly our allowance has been elevated to account for that. We maintained a very conservative approach, but I don't know if the word elevated is probably being used in the right term. We're real...
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f61b4f021981768444b234ca7797d51a
Hey, good afternoon guys. Hope everybody is doing well these days. A lot of my questions have been asked and answered, but just maybe broadly speaking on the outlook for M&A, do you feel like the dialog with potential targets has been increasing and is it reasonable to expect one or maybe two deals that could be announ...
Yeah, Damon, I would think that you could expect maybe two deals announced, but we would only have the Aim conversion, which is going to take place mid-February and then probably anything else would be converted in the third quarter. We might have two announcements, but we probably push out the next announcement into t...
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70c5b6c6d348d11ad9c586a1d3cb1c3f
Got it. And with respect to geographic focus, is one area of the footprint more attractive these days and present better opportunities than others.
Well, we actually have relationships across all of our markets as well as new markets, but as I've said in the past, we really are focused on in-market transactions. They provide greater synergies and they give us more market dominance in the markets we're in. So the one we're working on right now is Midwest and the ot...
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afa675d2c4450309e836230de382585f
Good morning, John, and Brian, and Todd. Couple of questions for me, first starting with liquidity, I think you just touched upon the $875 million in cash left from the draw down. When you think about the next two years, I think you just said, plenty of liquidity through 2022, how much of that is question? I mean, if y...
Good morning, Bryan. Thank you for that question. Yeah, I think if we do nothing else, we think we have enough cash to cover the $500 million that becomes due in August of '22. We think we'll be able to cover the capex and start building cash from operations in the latter half of this year and into next year. So barrin...
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fb0cbd86dd7c68e0ba0a4bbda27de56d
Yeah. And when you look back at the last five or six months with the transitions, what has been the biggest challenges there? And do you foresee with a much bigger Sonesta, the opportunity to maybe convert some unhappy other brand owners to the Sonesta brand over the next couple of years?
Hey, Bryan, it's John, I'll take that one. I think, the biggest challenge is that there is a notice period when you decide you're going to transition hotels or terminate an operator and obviously neither Marriott nor IHG were happy about the fact that they were losing hundreds of hotels from their system. So they stop ...
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7edcb0b905bcb21fc254508eadd8ab4d
Great. And just one more quick one from me, if I might, and then I'll hop back in the queue. Have you guys like kind of narrowed down with the cost per property is to convert from Marriott InterCon to a Sonesta, kind of the hard cost on signage? And then kind of a follow-up to that, I've noticed some signage at previou...
Thanks, Bryan. I'll take that one. To answer the latter part of that I think a lot of what you're seeing if you see a temporary signage is just the timeline it takes to get permitting and get those dollars out there to put the permanent signage up. So I don't think it's really the latter of whether or not we're going t...
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d42eed8dc7ae041a01321a74bfeb3e87
Thank you. I'd really like to follow on initially really on that same question about the operating expense cost to transition. In this quarter some $19 million of transition costs and Q4 $14 million of transition costs. So assuming that Hyatt -- that you continue with don't Hyatt transition, I guess, the first question...
Assuming no conversion of Hyatt, I think from a income statement standpoint, we've captured most of it, if not all of it to date. I don't think there'll be much of a bleed into the future quarters.
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4448d1b6682c340d8835e90a079fe349
Okay. And then secondly, you provide a very helpful detail regarding the calculation of hotel EBITDA and adjusted hotel EBITDA providing good line item detail on the expenses, and then you deduct to get to the adjusted hotel EBITDA $19 million of transition-related costs. Just looking at kind of those line items on a c...
Yes, that's correct. That's why we showed that as an add-back to strip out those one-time expenses. We don't think they're recurrent costs, so that's why we're adjusting them out. Yeah.
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4b2f2dfdac935ef1ac3bbf90c01ec765
Okay. And then you had mentioned the employee severance in connection with the Marriott transition. So, I wonder if you could help us understand number one, when the hotels were branded Marriott and branded IHG, where the employees of the hotel subject to union contracts? Number one. Number 2, with the transition to So...
Yeah. So there are a handful, maybe a dozen hotels in our portfolio that are union hotels. Two of them are still closed. The other 10 are spread out around the country, but there is a concentration in the New York, New Jersey and Philadelphia markets, and if they -- and Chicago as well. If the hotel was union when it w...
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cc0a77d329d3559a1c54e29847fb971e
I think that was cited in the prepared comments said about $8 million of the transition costs were for severance agreements. So, do those arise because of the employment agreement that Marriott has with the employees and does IHG or does Hyatt have a similar type of agreement with a similar type of expense, if you were...
The -- a lot of the severance costs that we saw with Marriott related to employees that have been furloughed for a substantial period of time, and there are a lot of nuances to -- if you're not planning to bring furloughed employees back initially, if operations are still negatively affected by the pandemic. And so the...
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f81325b0a77e0cd5f65f86bb4d68899f
Okay. And then just on one specific line item, management fees, on a sequential quarter basis, they more than doubled here in the first quarter from the fourth quarter. And I don't know if that had anything to do with the -- if any of the transition costs were on that line item or not or is that a result of the Sonesta...
Yeah, Jim, that's directly correlated to the Sonesta contracts, the historical contracts and these contracts related to transition hotels are the same. So, full service hotels Sonesta earns a 3% management fee, for extended stay 5%. So, I mean, that's directly tied to revenues. So as revenue grow that fee will grow acc...
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f0e96dcd252028b099c787254248c7f3
Okay. And then that kind of leads to the final question, which is obviously you've given very helpful information on top line trends by month here, in terms of ADR, occupancy and RevPAR. Under the Sonesta agreements should we be assuming that as you -- as the portfolio recovers hopefully to the pre-pandemic revenue run...
I mean, as Brian indicated the management fees will -- base management fees on the Sonesta will be an operating cost. So in that respect, there'll be added expense, or at least that's the way it looks up superficially, but the fact is that when the credit support ran out with IHG and Marriott, and we talked about possi...
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7666602c91e19c8d86e5b923014105f3
Of these dealers that you're adding, Alex, how does this break down between the franchise and independent segments of the market?
We've actually seen solid uptick on both segments of the market, franchise and independent dealers. If you look at our opportunity, obviously, we have plenty of room to grow in both. And I think what we're seeing on the solutions side, certainly, is most of that growth is coming from franchise dealers, both for FUEL an...
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60cd6249b998d8e24bd8d9cd7a93e4f7
In terms of Online Shopper and Conversations, you gave some statistics of the penetration for Q4, I believe. And what were the comparison percentages there? And what were those versus Q3?
Both of these platforms are low penetration today because we're adding websites at a brisk pace, Gary. So even though the penetration rates that -- we used in the script are roughly in the low 20s as website sales grow, that penetration rate can grow with it. We certainly see tremendous upside in our solution strategy,...
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f8e8dd8a4f13035a4d2b33cec26fd33b
OK. And that -- those percentages were as a percentage of your websites, right?
Correct. So again, if you're looking at the total market, the opportunity here is even greater.
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1e2302caa730fe14e819cc74a8f4940a
OK. And then just lastly, you gave -- talked about website referral traffic that you guys are clicking through at a much higher rate. Is that kind of a new measure of attribution that you're going out and using with the dealerships?
It's always been there, Gary, but I think what's happening is dealerships are really evaluating what's driving their sales. So many dealers are using digital retail tools today. And the fact that we're able to deep link our users directly into their digital retail systems, the dealers are starting to see the qualitativ...
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1faaeb90e819c8aa7d3e94cba0ab086e
It sounds like you guys are maybe considering or have already started sort of maybe retilting your marketing mix a little bit more in favor of brand-centric spend. So could you maybe just elaborate a bit more on kind of the rationale behind that shift? If indeed, it is a shift? And maybe how we should think about kind ...
Absolutely, Tom. I'll start on the marketing mix and then Sonia will add color. First of all, it's hard to not just comment that we had just an incredible year on the traffic side, following a really robust 2019. And so our traffic was up 8% year over year. Our UV is up 5%. And importantly, our leads up 13% in 2020. An...
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e56248a8c2ed84a0a272a0691d5a6a58
I guess, two, as you win new dealers using the dealers via websites, I mean, is there -- where are these dealers kind of in the curve of adopting more of the solutions Cars.com offers? I mean, is there kind of still quite a bit of runway to get kind of more spend to the advertising products? And then I guess the second...
Thanks for the question, Nick. Well, first of all, I think one of the things that COVID did was it accelerated dealers' desire to invest in digital solutions and platforms. And we certainly see this in our DI website business. It went from a business where we were doing more outbound sales to we had a lot more inbound ...
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e1fa67d5733db5972b1f9737ff29af48
Can you just kind of follow-up a little bit just on sort of the philosophical way that the whole space attacking the market here. Obviously, the common refrain now is channel conflicts between dealers developing their own digital tools on the digital retail side. And then obviously, you have some competitors that are t...
Dan. Well, first of all, I think on the channel conflict side, it is not a new phenomenon that dealers want to convert sales on their own properties. That's been a consistent since the dawn of our business. And I think that's why we've played an active role in helping show dealers that we're a demand-gen platform for t...
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d23a56ec577c8767a9c4d2c17bf42ed2
So great to hear, again, the retention rates are very strong. If I missed that, I apologize. But could you just talk about how your prospecting is going, the inflow of new customers and how their efforts are going in terms of recapturing dealers that -- churn during the COVID period?
Well, two things, Marvin. I'm glad you noted that the record retention rates, we think, is a function of our great traffic growth and our organic concentration of traffic, right? So dealers know that this is traffic that they can't buy elsewhere. And that is part of our strong retention. But as we noted, we had strong ...
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c23fa6d1e2784efc90301f3409287c83
And then my follow-up, I just wanted to drill down a little more on the DI business. So the customer base, up 38%. I think you said, Sonia, the revenue was up 22%. And obviously, I understand the lag effect as you're onboarding. If you could just update us, I mean, how are pretty much all the GM dealers onboarded now? ...
Yes. So we still actually have a number of the original 800 GM dealers still in the pipeline for launch in 2021. I think, overall, from a growth perspective at DI, we think there's still a very substantial opportunity for growth here, just on the basis of kind of where the existing business is. If you think about the l...
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b2c3325fa6ec07fc2a3d6db30e430cc7
Sonia, just to clarify on the dealer count, 18,372. The -- when you talk about 4,400 DI websites, I assume that is not 4,400 dealers per se. And is that in the 18,372? Or is that separate?
Yes, So website customers don't necessarily translate one to one to dealer count. However, the 18,372 does include all of the DI dealer customers.
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86552092ed51d96da63837847aca44e2
OK. Because based on the 38%, it looks like it was about 3,200, give or take. A year ago, up to 4,400. But again, it's not one to one, as you say.
Right. There are going to be some customers, right, who use DI products, as well as our marketplace customers. So we effectively dedupe the two groups to get to the 18,372.
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e54dac54267dbebcc8b99f2c7b00a0ef
OK. OK. And then just a clarification. I mean you were pretty clear on, obviously, margins for Q1. Can you just reiterate what you said about sort of the dealer -- the revenue trend in Q1 year over year?
Yes. So I think as we talked about, really, really pleased with the performance we saw in the second half of the year and the momentum that we're bringing into Q1. But nevertheless, it is a challenging pre-COVID comp for us. And I think from a revenue perspective, maybe I'd highlight two of the areas that make it a lit...
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64e37761c2c350716325458ac3977ded
I wanted to ask about LVT for the year. I think previous guidance was $50 million for 2018. I think last quarter, you guys said you were on track or maybe even a little ahead of that pace. Just wanted to see where that came out for the full year? I assume you hit the target, maybe even exceeded it? Any color on how tha...
Yes, we didn't exceed it. You probably know the product lines aren't a reporting category for us. But I'll give you a couple of data points, Brian, to -- so you can triangulate that. I think we said previously, that we did $25 million in 2017 of LVT. And that LVT represented roughly half of our 7% organic growth this y...
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e544400752ce1574a6ec44bbd6b2bbcd
Gotcha. I think that addressed my next question, that would have been, what would the target be for 2019? But I guess, it was $60 million this year, looking at $100 million in 2020, straight line would be $80 million for 2019. Is that a rough way to think about it?
That's a good way to think about it. And I think that we're well on track to be on those numbers.
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f2d569b585f9438d42b47e0c5c2d968e
Gotcha. And last one for me. For the organic guide for 2019, similar to the same question, could you add any color on how that breaks out between LVT and carpet? Whether that's even between the two? Or is LVT kind of really driving the sales and carpet is steady? What does that look like for you guys?
So Brian, this is Bruce Hausmann. It's relatively half-and-half. That's our expectation is we're going to get about half that growth out of carpet, about half that growth out of LVT.
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06e8504a96e573fa188977cdb24eafbe
Can we dig in on the first quarter and the investments that you said you'd come back to in the Q&A section? Just provide some elaboration and then I'll have some follow-up questions.
Sure. Well, as I said, there were three things that we did in the first quarter that brings the -- our EPS outlook down from the $0.25 we delivered last year. One was this Global Sales Summit. So we brought our people together to really fully integrate nora into the Interface family. So in most markets around the world...
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0529104be52d70ac9b0cf801a3afbe6f
OK. I realize you've gotten away from reporting orders, but could you talk about just general trends and whether you're seeing acceleration or deceleration?
We actually did put that in our press release because we got a lot of push back in not reporting orders. So fourth quarter... At the end of the fourth quarter, we -- orders were up 4%... Yes. So -- and quarter over quarter up 4%, organic.
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8283d78e25921e2c9e79a94fc7d64d3a
OK. And what percentage of your wins this quarter would've included LVT? And how does that differ from a year ago?
Well, it continues to grow. I'll say that as a starting point. One of the things we're finding is, LVT is really helping us open doors, particularly in education. So we're expecting to have a big education year in 2019, which is one of the reasons why we're more bullish as we head into the second quarter. And we're see...
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70f7d97ccfab430a8b0a8d826c9c688e
OK. And could you talk about your free cash flow expectations for 2019?
Sure. So David, we don't normally give guidance as a number, but what we do is, we give the building blocks. So if you take the building blocks of how to build the income statement that Jay spoke to and that's in our press release around the top-line growth, the margin structure and the SG&A, and then, obviously, inter...
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d420e18cc81259e9d89a1aab0d3e694e
OK. How are you thinking about future deleveraging of the balance sheet? And are there targets for 2019 and '20?
Yes, you know, I'm sure you did the math. On a pro forma basis, our leverage ratio is 2.5 times. And we continue to be in a great position to continue delevering down to a two-ish type of number by the end of the year. We feel really, really good about the strength of the balance sheet. We feel really good about our ca...
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1341617404022654e761a03a69486429
And then is it fair to say you're seeing improving order trends so far in January and February?
We're on track, yes.
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9584e221c93ab523171b756785762ed5
OK. And then just maybe your thoughts quickly on price cost in 2019. What's going on with benzene and labor?
What we're saying, the combination of productivity and pricing will yield about $20 million. We're anticipating about $10 million of inflation. So net-net, we're expecting from the combination of those three things about $10 million of improvement. And Ryan, that's the all-in number. That's benzene, that's all of our r...
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885fcb2086dc0cf499da925152b51093
This is actually Judy Ann in for Keith. And just follow-up on the last question, was your input cost inflation about where you thought it was in 2018, around $8 million to $10 million kind of similar to what you expect for 2019?
Judy, this is Bruce. I'm delighted to tell you that input cost inflation in 2018 was exactly where we thought it would be. There were no surprises. So we came in right on track. And again, we were able to offset that through productivity and pricing initiatives, which was a great outcome. And obviously, you can see tha...
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a98fa3f78d5e8fac2675302e611c2841
OK, great. And then in the fourth quarter, you highlighted the gross margin improvement, the productivity, and also, like the nora accretion. Can you expand on what the major drivers of -- you see for getting the 40% in '19? And the ultimate 42% goal for 2020?
Well, the primary driver is actually our U.S. manufacturing optimization project, which is, we're now in our third year of three years in doing that. So we plan to complete that project. That's a big driver of our savings for next year.
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757c9d3fcf48606db83ecb8ed4b4a660
Wanted to ask couple related questions. First, with regard to Myford and the, for example, the new water system that you're putting in. Is this to be considered sort of a course of normal business with regard to the costs or how should we view that with regard to costs going forward?
The Myford Waterford injection system is an enhancement to the overall systems and the utilities within our Myford facility. We do have the structure of a Waterford Injection system within our Franklin facility. It's just time for us to add as we continue to look at expansion into our Myford facility, which will also h...
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f31f7a18ad19a5f615f13d2eda754c40
And then with regard to your commentary with regard to scope of work, obviously, when you talk about the backlog number you've always stated that you don't include future potential work that you have projected, but that might not be signed as an example. How do you view the scope of work with regard to when you might l...
Right. So I believe you're referring to that 42,000 square feet of space in the Myford facility, which is located right next to the facilities that are built out already. So we're preparing contingency plans to build that out as soon as the demand is solid. It will probably based on continuing to increase the use of th...
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803f3030c9599c3ee54773c677719666
And then lastly, with regard to your overall corporate strategy, excuse me, Halozyme recently, for example, one of your biggest clients, they had some corporate updates/volatility. How are you prepared to sort of whether any volatility with regard to your biggest clients even though it appears that there was no impact ...
Right. That's a great question. We've obviously had significant discussions with Halozyme. As we understand it, we won't have any negative impact for the discontinuation of one of their products. Halozyme as they have stated will be very, very focused on their enhanced platform and the materials that we produce here at...
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cb8948a62a44b6c3a2a989e16529b8a2
We were modeling down sequentially given the planned shutdowns that you guys mentioned in Q1. Can you just talk a little bit more about the dynamics that you mentioned earlier in the call that led to the increase? And then kind of their weakness in the backlog in Q2 as compared to Q1?
Sure, Mike. Pleasure to speak with you. Thanks for the questions. The I guess how I would phrase the increase in revenues for the second quarter was truly based on us being able to find some efficiencies in the overall capacity of our facilities to bring in some of the manufacturing projects that were scheduled to star...
intermediate
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B
cddefbeb6460aaf096cfeeb47142c909
And then with the three-process validation campaign is complete, do you have any visibility from your communications with clients on when they expect to either file or hear decision from the regulatory agencies? And then those three commercial -- potentially commercial products, how does that compare to how many commer...
Sure. So obviously, we're in very, very active discussions with our clients about their future plans. They have certain things that they can control in terms of when they complete their submissions, and then once it goes to the agency, it moves a little bit beyond their control, there are certain waiting periods and th...
intermediate
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B
075e63850486fd037cf036292bc36c07
One -- maybe if you could help us a little bit given the efficiencies that you're able to find on the manufacturing side in Q2 that allowed you to either start some projects early from later in the quarter or even pulling from Q3. Are those efficiencies expected to continue meaning, will you be continuing to kind of pu...
Well, Matt, that's a great question. I think you're spot on. The reality is, as we continue to fill the pipe and to look at the remainder of the year, it's not necessarily all the backlog shifted forward, we had the opportunity to move some of those projects forward. But as far as looking for the rest of the year, like...
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B
2860afdeb44b1ba50c51588adacee387
Okay, all right. And then shifting gears to gross margin, very strong quarter, some of that was being able to get the facilities back up and running faster than expected. But as we look at the next few quarters for this year and I guess looking out a little bit further. How should we be thinking about gross margin? Whe...
Well, Matt. I'm not going to guide toward what the overall margin is going to look like, but I will say that our incremental margins going forward since we're a largely fixed cost business, our incremental margins going forward will be somewhere between the 50% and 70% range, so most of that will be dropping to the bot...
intermediate
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B