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Nike (NYSE:NKE)
Q3 2011 Earnings Call
March 17, 2011 5:00 pm ET
Donald Blair - Chief Financial Officer and Vice President
Charlie Denson - President of Nike Brand
Mark Parker - Chief Executive Officer, President, Executive Director and Member of Executive Committee
Kelley Hall - Senior Director, IR
Robert Drbul - Barclays Capital
Michelle Tan - Goldman Sachs Group Inc.
Michelle Tan - UBS
Kate McShane - Citigroup Inc
Sam Poser - Sterne Agee & Leach Inc.
Eric Alexander - CRT
Paul Swinand - Stephens Inc.
Michael Binetti - UBS Investment Bank
Robert Ohmes - BofA Merrill Lynch
Christopher Svezia - Susquehanna Financial Group, LLLP
Good afternoon, everyone. Welcome to Nike's Fiscal 2011 Third Quarter Conference Call. For those who need to reference today's press release, you'll find it at www.nikebiz.com. Leading today's call is Kelley Hall, Senior Director of Investor Relations.
Before I turn the call over to Ms. Hall, let me remind you that participants on this call will make forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the reports filed with the SEC, including Forms 8-K, 10-K and 10-Q. Some forward-looking statements concern future orders that are not necessarily indicative of changes in total revenues for subsequent periods due to mix of futures and at-once orders, exchange rate fluctuations, order cancellations and discounts, which may vary significantly from quarter-to-quarter. In addition, it is important to remember a significant portion of NIKE Inc.'s business, including Equipment, Nike Golf, Cole Haan, Converse, Hurley and Umbro, are not included in these future numbers.
Finally, participants may discuss non-GAAP financial measures, including references to total wholesale equivalent sales for NIKE Inc., businesses that have license sales, wholesale equivalent sales that include both reported revenue and estimations of sales by licensees based on the royalties paid. References to total wholesale equivalent sales are only intended to provide context as to the overall current market footprint for the brands owned by NIKE Inc. and should not be relied upon as a financial measure of actual results. Participants may also make references to other non-public financial and statistical information and non-GAAP financial measures. Discussion of non-public financial and statistical information and presentations of comparable GAAP measures and quantitative reconciliations can be found at Nike's website, www.nikebiz.com.
Now I'd like to turn the call over to Kelley Hall, Senior Director of Investor Relations.
Kelley Hall
Thank you, Operator. Hello, everyone, and thank you for joining us today to discuss Nike's fiscal 2011 third quarter results. As the Operator indicated, participants on today's call may discuss non-GAAP financial measures. You'll find the appropriate reconciliations in our press release, which was issued about an hour ago, and at our website, www.nikebiz.com.
Joining us on today's call will be NIKE Inc.'s CEO, Mark Parker, followed by Charlie Denson, President of the Nike Brand, and finally, you will hear from our Chief Financial Officer, Don Blair, who will give you an in-depth review of our financial results. Following their prepared remarks, we will take your questions. We would like to allow as many of you to ask questions as possible in our allotted time, so we would appreciate you limiting your initial questions to two. In the event you have additional questions that are not covered by others, please feel free to requeue, and we will do our best to come back to you. Thanks for your cooperation on this.
I will now turn the call over to NIKE Inc.'s President and CEO, Mark Parker.
Mark Parker
Thanks, Kelley, and hello, everybody. Before we get into today's results, I think it's important to acknowledge the incredible challenges going on in Japan. Like many of you, I've good friends there and Nike has many teammates who are dealing with this devastating event. And if you knew nothing about the Japanese people before last week, they've certainly shown what the term grace under pressure really means. Thankfully, all of our employees are accounted for and safe, and we're working with relief agencies to assist however we can. But I know I speak for everyone on this end of the call when I say our thoughts and prayers are with Japanese people.
Okay, coming back to the business at hand and the purpose of this call, I'll start by reminding you that everything we do at Nike is based on delivering long-term sustainable growth. At the same time, we're focused on delivering value to our shareholders in the near term. This is the balance you've come to expect from Nike, and it remains our commitment going forward.
We strike this balance by leveraging our significant competitive advantages, and chief among them are our authentic emotional connections with consumers, innovative product and retail experiences that lead the industry and a strong NIKE Inc. portfolio that gives us tremendous opportunities for growth and significant levers to drive profitability. These strengths are behind the solid performance we delivered in Q3.
NIKE Inc. revenue was up 7%. Gross margins, at 45.8%, were down, reflecting expected cost pressures. But despite the gross margin pressure, diluted EPS of $1.08 was the strongest performance of any Q3 in our history. I feel good about our Q3 results. And I know we have the potential to do even better. Specifically consumer demand for our products and brands is extraordinary. And we'll work even harder to fulfill that demand. That's one reason I'm so confident about our many opportunities going forward. As I look ahead, I'm confident about our ability to compete and win in today's changing global economy; confident and cautious. Many economies are seeing a vigorous return to growth, specifically, China, Brazil and other developing countries. Other countries like Japan, Spain, Italy and Greece are taking longer to regain momentum. Our largest market, the U.S., is somewhere in between. While the relationship between economic growth and consumer confidence isn't entirely predictable, it's clear that consumers remain under pressure from high unemployment and emerging inflation.
More immediate in nearly every economy worldwide is the topic of rising input costs. Higher cost for materials, labor and freight are here, as predicted, and are evidenced in our Q3 margins. While no one has a crystal ball, we do know that higher cost will continue to affect our profitability in the near term. We also know we are uniquely positioned to leverage our strengths, including scale, operational capabilities and pricing power to help mitigate those costs beyond our control. Over the longer term, I expect cost factors will continue to ebb and flow, albeit at different speeds.
Consumer-driven companies with strong brands and compelling products will be in the best position to maintain their margins, and disciplined companies who are lean and focused on how they use their resources and who are aggressively seeking new ways to grow will prosper. Those who don't won't. In that sense, the roadmap for success in the future is no different than it's always been, even as macroeconomic forces shift.
And while the headwinds we face are the same for everyone, the competitive advantages we have are ours alone, unique to the NIKE Inc. portfolio. Nobody knows sports and athletes better than Nike. We optimize how we design and develop our products, how we price them given current market conditions and how we present them to the consumer. And we do that more effectively than anybody else in our industry. We're leveraging success with our new store and online experiences by working closely with our retail partners to set the standard for brand presentation, reaching millions of consumers and transforming the marketplace.
We're using our size and scale to leverage our supply chain and negotiate costs to help maintain profitability in challenging environments. We have the financial strength and the operational discipline to allocate resources to drive growth and invest in the future. And we leverage these strengths across a family of brands that connect us with consumers, expand markets and build trust. And that trust has never been more important than it is today.
Finally, I can't say enough about our management team, which is the best in the business. As we say, we're on the offense always. These are the competitive advantages we use to optimize the business, connecting with the consumer and innovating to generate top line growth, leveraging our operational strengths and innovating to generate bottom line growth, all inside the power of the NIKE Inc. portfolio.
I also want to be clear that my focus will always fall first on innovation. I see amazing potential for NIKE Inc. and our industry. I look at digital technology and how it's expanding sport, a massive opportunity there. And then there's London, the London Olympics in 2012, and beyond in Rio. The impact of franchises like Lunar or Pro Combat, the Hurley board short and Chuck Taylor, and amazing new experiences at retail. These are just a few of the big ideas that animate this company, excite consumers and inspire me, personally. Whatever may be unknown in the global economy, you can be absolutely certain that we'll continue to invest in our single biggest competitive advantage, our fixation on innovation that benefits consumers and shareholders. And that's good for Nike and it's good for our industry.
With that, here's Charlie to take you through the Nike brand.
Charlie Denson
Thanks, Mark. Good afternoon, everybody. Well, Q3 demonstrates the strength and success of the Nike brand's growth strategy. Constant dollar revenues grew 9%, with growth in every geography except for Japan. We grew every one of our key categories, with five of those categories growing at double-digit rates. Our Direct-to-Consumer business delivered strong comp store growth in both factory and in-line stores and another quarter of double-digit growth online, and constant dollar futures are up 9%. As always, we're focused on managing the business for sustainable long-term profitability. For the Nike brand, that means staying laser-focused on innovation, first at the product and brand level to drive the top-line growth and also driving innovation and discipline into how we run the business.
Let's start with product. We have a long history of delivering new and innovative product for the athlete. And the product in the marketplace today is some of the best we've ever created. There are two very powerful words in our business: Nike launch. And we had some good ones in Q3. I'll highlight a few.
In basketball, we launched our second edition of the LeBron VIII. the Zoom Kobe VI, the Zoom KB III and the Air Jordan 2011. And by the way, The Black Mamba movie, featuring Kobe and Kanye West, has generated millions of YouTube views as one of the most talked-about digital shorts in the industry this year. Lots of energy around basketball.
In football, we launched new kits for the French Football Federation at the France-Brazil Friendly in February. They're the lightest, fastest and most sustainable kits in that team's history. In men's and women's training, five incredible new Nike Free shoes, four of them Nike+ enabled, another great example of taking a category-specific technology and broadening its reach to new consumers.
And finally in running, we introduced our award-winning GPS running watch at the Consumer Electronics Show. Tremendous buzz around that as we head for the retail launch in just a few short weeks.
These are all breakthrough products that offer genuine performance. They are resonating with consumers, and they play a significant role in creating the brand strength that is so critical to Nike's leadership position in the industry.
As you know, innovation at Nike is not just about product. It drives how we run every part of the business, and it's especially valuable in the current global economy. As we look at conditions around the world, growth is indeed uneven, yet we delivered a solid Q3 in both developed and developing markets.
Today, I'll highlight two of our geographies, the two markets that will be bellwethers for us over the next several quarters and central to our long-term success: North America and China. North America continues to see incredible brand strength. With revenue up 9% in the quarter and up 10% year-to-date, I see two things at work here. First, there's a real consumer desire for amazing products and experiences from the brands that consumers trust. And Nike is delivering both. We continue to transform the marketplace with new retail experiences. Our new Nike brand and category stores are performing above early expectations. Our executions with Dick's, Foot Locker and Finish Line are helping Nike and our partners deliver great and strong results. And there are more on the way.
The second thing happening in North America, but not just in North America, is the never-ending and compelling passion for sports, competition and fitness. Our brand's always associated with the greatest moment in sports around the world. It's that presence, combined with our unique connection to youth culture, that makes Nike such a powerful global brand.
And then there's China. The big story in China is the continued growth we see in revenue, EBIT and futures. And these are increases off of a very large base. It demonstrates the potential we've talked about in the Chinese marketplace for the Nike brand. In fact, it's useful to recall our approach to the Beijing Olympics that we were focused on the long-term brand's position and strength and not just the event itself. And now, we're seeing that investment and approach starting to pay off. Our business and brand continue to flourish with the Chinese consumer. We're seeing genuine separation from our competition, both globally and locally. And our futures continue to come in at a double-digit rate. We're well positioned on all fronts, brand strength, product innovation and retail experiences, and on track to double that business by FY '15. I remain very bullish on our potential in China.
That isn't to say that we don't face challenges in the business. We're still working to meet surging demand for our products, and the rising input costs we've been anticipating certainly have arrived. But we believe we're well positioned to meet those challenges. Mark highlighted many of the strengths that the Nike portfolio offers. Going forward, we'll continue to focus on leveraging our product innovation and the strength and the scale of the Nike brand to help mitigate the impact of higher input costs. In addition to a number of ongoing supply chain initiatives, you'll see us increase prices for many of our products to help offset some of the downward pressure on gross margins. Over the coming seasons, we'll approach these pricing actions on a style-by-style, market-by-market basis. And we'll do what's right for both our near-term financial health as well as our long-term growth and competitiveness.
One last topic, and that's inventory, which has grown significantly, but only in comparison to last year's historically low levels. I feel we are well positioned to capitalize on our brand strength and expect ongoing demand to spur some growth in our overall inventories going forward, but it should level out over time. And as we demonstrated in the past, overall profitability and a healthy marketplace are central to how we manage inventory, and we'll continue to evaluate it with both discipline and opportunity in mind.
And finally, just because we're extremely disciplined doesn't mean we're going to hold our breath. We'll continue to invest in the power of the brand and the innovative products that serve athletes, inspire consumers and drive our growth. That's what we always promise and what we intend to deliver.
Now here's Don to take you through the financials.
Donald Blair
Thanks, Charlie. On our last call, we outlined three key themes that are currently shaping our financial outlook. First, that our business strategies are working in the marketplace, laying a strong foundation for future revenue growth. Second, that we expect to face gross margin headwinds with the rest of our industry, but we're in the best position to mitigate their impact on profitability. And third, that we'll continue to invest in our business for the long term and deliver strong returns to our shareholders. Our results so far this year and our future expectations reinforce these themes. So let's take each one in turn.
The first and most important is our confidence in our business strategies and our ability to execute them. Our year-to-date revenue growth, the continued strength of futures and the success being enjoyed by our retailers prove that our strategies are working. We continue to connect with our consumers, deliver industry-leading product innovation and create compelling retail concepts in-store and online. And that's true across the brands, categories, markets and products that make up the NIKE Inc. portfolio. Particularly, while world economies are in various stages of recovery and consumer confidence remains fragile, the ability to connect with consumers around the globe is an extraordinary, competitive advantage, and we've only begun to realize the potential of our portfolio. Our pipeline of product innovation remains robust. Our brands still have vast, untapped potential, and we've just started to extend new category retail concepts around the world. We're confident that as we execute these strategies more broadly and deeply, we'll generate strong revenue growth for years to come.
The second theme shaping our financial outlook is cost inflation. As we expected, in Q3, we began to see the impact of rising input costs, such as oil, cotton and labor. We also continue to experience higher-than-normal levels of airfreight to meet tremendous consumer demand for products such as Nike Free, Lunar and Nike Pro. We expect these headwinds will continue through most of FY '12. As Mark and Charlie both noted, we have a number of tools to mitigate the impact of these headwinds. The most significant are leveraging our supply chain and raising prices.
On the supply side, we'll continue to manage inventories carefully while working with our suppliers to increase capacity and reduce costs. While inventory for Q3 grew significantly to support strong demand, we continue to experience capacity shortages for some technical products. However, as a result of the work we've done to consolidate our supplier base, our factory partners had the financial and operational ability to build capacity and reduce product costs. To address the current shortages, our suppliers have added new footwear and apparel production lines over the last nine months and have committed to significant additional capacity expansion through the next fiscal year.
On the pricing side, we intend to raise prices across a wide range of footwear and apparel styles to help mitigate the overall impact of higher input costs. In the past, we've taken a fairly surgical approach to pricing. Beginning in spring 2012, we'll take more significant price increases across a broader range of styles. As always, we'll carefully consider each pricing action to maintain a competitive consumer value proposition.
The final theme isn't new. It's actually the foundation of our financial management philosophy. We manage our business to create long-term value for shareholders. That requires that we invest in future growth and deliver strong financial performance in the near term. We're confident in our business strategies. They're working well in the marketplace, and we'll continue to invest in them even in the face of profit headwinds. At the same time, we'll pull levers on our business model to continue to deliver profitable growth in the near term.
With that context, let me review the highlights of our third quarter results. NIKE Inc.'s reported revenue increased 7% as currency-neutral revenues increased 8%. NIKE Brand revenues grew 9% on a constant currency basis, somewhat lower than the futures growth we reported last quarter, due primarily to lower off-price sales and modestly higher cancellation rates versus an unusually low rate last year.
Revenues for our other brands grew 1% as double-digit growth at Converse and Cole Haan was largely offset by lower revenues at Umbro and Nike Golf, which both faced difficult prior year comparisons. NIKE Brand futures orders scheduled for delivery from March through July increased 9% on a currency neutral basis, reflecting growth for the summer and fall seasons. This was despite challenging comparisons to last year's World Cup, particularly in the emerging markets in both European geographies.
On a real dollar basis, we estimate futures orders will be 11% higher than the prior year. Third quarter gross margin declined 110 basis points versus FY '10, due primarily to higher product and air freight costs and lower license revenues. These factors were partially offset by a higher mix of full price sales, product cost reduction initiatives and strong growth in our Direct-to-Consumer business.
Diluted earnings per share grew 7% to $1.08 as SG&A leverage and a slightly lower share count offset the declining gross margin and a slightly higher tax rate. Free cash flow from operations for the first three quarters of FY '11 was $658 million, and we've raised our trailing 12-month ROIC 200 basis points to 21.2%.
Inventory at quarter end was 18% above unusually low levels last year, driven by higher demand, growth and replenishment programs for high-turnover styles and prebuilds to maximize the productivity of factory capacity. We're comfortable with our inventories as growth is driven by in-line product and closeouts are actually a smaller percentage of total inventory than last year.
While we expect inventory levels to grow faster than revenue for the first half of fiscal 2012, we expect inventory and revenue growth to come back into line as new factory capacity comes on-stream. Rather than reiterate information you already have, I'm going to focus my discussion of segment performance on the key points. We'll be happy to address any detail not covered here in the Q&A.
For the quarter, revenue in North America increased 9% on a currency neutral basis as all categories except sportswear grew versus the prior year, led by double-digit growth in running, men's and women's training and football. Futures increased 11%, reflecting growth across all categories. Direct-to-Consumer sales increased 20% for the quarter as comp sales in Nike-owned stores increased 13% and online sales increased 28%.
Apparel revenues grew 18%, driven by new category presentations at Nike-owned retail stores and at retailers such as Foot Locker, Finish Line and Dick's. Footwear revenues increased 7% driven by strong demand for Lunar and Nike Free running products as well as men's training models.
EBIT for North America grew 5% as revenue growth and OpEx leverage were partially offset by lower gross margins and higher demand creation.
In Western Europe, Q3 revenue grew 6% on a currency neutral basis, reflecting broad-based growth across nearly every dimension, territory, category and product. On a reported basis, Western Europe revenues declined 2% and EBIT fell 19%, primarily due to unfavorable foreign exchange. Growth in Central and Eastern Europe continued to accelerate in Q3 as revenue grew 11% on a currency neutral basis driven by double-digit growth in Russia, Turkey and Poland.
From a category perspective, running and football powered the growth. EBIT for CEE increased 24%, fueled by higher revenues and SG&A leverage, which more than offset lower gross margins and unfavorable foreign exchange.
In Greater China, third quarter revenues increased 18% on a currency neutral basis, driven by expanding points of distribution and double-digit growth in sportswear, running, men's training and Action Sports. Currency neutral futures grew 13% including double-digit growth across most key categories. EBIT for Greater China increased 21% driven by higher revenues and gross margins. During the quarter, we also opened our China Logistics Center, one of the largest, most sophisticated and most sustainable facilities of its kind in China. While commission and costs will reduce gross margins in China for the next few quarters, we expect this facility to deliver both financial and commercial benefits for FY '12 and beyond.
Our emerging markets geography continues to deliver impressive results, with third quarter revenues up 15% on a currency neutral basis. Every category and every territory except South Africa posted higher revenues with Mexico, Argentina and Korea driving the largest share of the growth. Currency neutral futures were up 18% as all categories grew except football, which reflected difficult comparisons to the World Cup. EBIT for the emerging markets increased 36% driven by strong revenue and margin growth as well as SG&A leverage and favorable FX.
In Japan, third quarter results continue to be challenging as revenue declined 16% on a currency neutral basis while EBIT fell 23%. Japan was obviously a challenging business environment, even before the catastrophic events of last week, and while our organization and assets in Japan have not been significantly affected, the implications of widespread damage to the nation's infrastructure, consumer confidence and overall economy remain unclear. It's too early to fully assess the financial impact of these ongoing events on our business, and we have not done so in our guidance, but we do anticipate there will be a negative impact on our revenues and profits for this geography.
Third quarter revenue for our other businesses increased 1% on a reported and currency neutral basis, reflecting double-digit growth at Cole Haan and Converse, offset by sales declines at Nike Golf due to shifts in the timing of product launches, and Umbro, which faced comparisons to strong World Cup sales last year. EBIT for the other businesses decreased 19% as lower operating margins reflected unfavorable product mix and SG&A deleverage.
As we look to the next few quarters, we expect continued strength in consumer demand as well as intensifying gross margin pressure from input cost inflation and from airfreight. As a result of favorable hedges in the first half of FY '11, gross margins will also face an FX headwind in the first half of FY '12. Specifically, for the fourth quarter of FY '11, we expect reported revenue to grow at a high-single-digit rate as Nike brand futures growth is partially offset by lower at-once and off-price sales. We expect gross margin for the fourth quarter to be at least 300 basis points below last year's record, 47.4%, as the downward pressure from the input costs continues to intensify, and we don't expect to see the benefits of pricing actions until later in FY '12.
For the full year FY '11, we continue to expect gross margin will be at least 50 basis points below the prior year. As we anniversary investments in last year's World Cup, we anticipate demand creation for Q4 will decline at a mid- to high-single-digit rate, yielding mid-single-digit growth for the full year. Fourth quarter operating overhead should grow at a low-single-digit rate, reflecting ongoing investment in our Direct-to-Consumer business, offset by leverage in our core operating costs.
For the full year, we continue to expect operating overhead will grow at a mid-single-digit rate, delivering operating margin leverage. We expect other income and expense for Q4 will be insignificant, and the effective tax rate for the full year should be roughly in line with our year-to-date rate. Although we haven't yet completed our planning for FY '12, we can provide some of our initial thinking. We expect to see full-year revenue growth at or slightly above our high single-digit target range as strong consumer demand continues and we see the benefit of higher prices concentrated in the back half of the year. However, higher input and air freight costs as well as FX headwinds will continue to drive gross margins lower on a year-over-year basis. We expect this downward pressure on gross margin to more than offset continued SG&A leverage. As we develop our plans for the coming year, we'll provide more visibility to our FY '12 expectations when we report our year end results.
I'd like to close by returning to Mark's opening thoughts today. We're focused on sustainable, profitable growth, and we're confident that our current strategies will deliver on that commitment. All global companies operate in a constantly changing environment, and we've demonstrated our ability to effectively manage our business under a variety of conditions. We'll continue to leverage the power of our portfolio to drive revenue growth and profitability, mitigate risk and, most importantly, create value for our shareholders. We're now ready to take your questions.
Question-and-Answer Session
[Operator Instructions] Our first question comes from the line of Kate McShane with Citi Investment Research.
Kate McShane - Citigroup Inc
If I could just focus on inventories for a second, I wondered if you could break down the inventory growth in units versus price and if there are any particular geographies where you're seeing the biggest inventory build?
Mark Parker
Well, first of all, most of the growth is units, although there is some price increase in there as well. I don't actually have a split on that right now, but what I would say is when you look at this from a geographic standpoint, the two largest drivers of the growth are North America and China, which is what you would expect. Those are two pieces of geography where the brand and the business is very strong, and we've made some very specific decisions to position ourselves for growth in some very profitable categories. One other thing I'd point out is this really is a more normalized level of inventory. Last year was one of the lowest we've seen. And this year's inventory level is actually only the third-highest February in the last seven years. So this is really more of a normalized inventory level.
Charlie Denson
I'll add just a little bit more commentary on that. I think part of the footwear growth is driven by a pretty good increase on in-transit. That's just in preparation of trying to chase some of the demand that we've been talking about. And then in apparel, as Don talked about a little bit, North America really primarily is driving the apparel increase, which is where we have the strongest increase on a year-on-year basis in sales. So back to some of the commentary I had in the prepared remarks, I mean, we still feel pretty comfortable about where we are.
Kate McShane - Citigroup Inc
And of the capacity that is coming online over the next 12 months, at what point do you think that the capacity being added will start to, I guess, tip the scales in terms of offsetting some of the inflationary pressure?
Mark Parker
Well, I think we're going to see air freight begin to ease in the very back half of FY '12. So we think for spring and summer, we're going to start to see a different balance in supply and demand, which will certainly take some of the pressure off gross margin.
Our next question is from the line of Robert Drbul of Barclays Capital.
Robert Drbul - Barclays Capital
The first question I always like to ask is when you look at the futures stream, was it consistent throughout the next order period? Or did you see a major deviation from the first half of the period to the second?
Mark Parker
It's a little bit stronger in the back half, and that would make sense because the World Cup overlap is more in the front of that window.
Robert Drbul - Barclays Capital
Great. And then the second question I have is when you look closely at the North American business, the Footwear growth versus the Apparel growth. Is that -- is that impacting your gross margin, all the mix piece of it? And when we look at the growth of those two segments, should we expect Footwear to continue to grow at a slower rate than Apparel?
Charlie Denson
Yes, Bob. This is Charlie. I would say yes on both questions. I think the mix has a big effect on the North America gross margin, as Don pointed out in some of the prepared remarks. And right now, we've got a very robust growth curve going in Apparel that we feel pretty good about as a sustainable piece of the business. That being said, we still feel pretty good about our Footwear business as well.
Robert Drbul - Barclays Capital
And on the Footwear side of it, when you look at the competitive set, do you still feel comfortable with your market share position? Are you gaining or losing share in the North American footwear market based on these numbers?
Charlie Denson
I think we're still gaining a little bit. I think it's category by category. I think we still feel very good about our Running business. We still feel very, very good about our Basketball business. Men's and Women's Training is coming online, and Action Sports, still doing very well. So overall, I think you have to break it down category by category, but on an overall basis, I still feel confident that we have the ability to gain share.
Our next question is from the line of Chris Svezia of Susquehanna Financial Group.
Christopher Svezia - Susquehanna Financial Group, LLLP
So just I guess first, my question is when you look at that capacity that's going to be coming on over the next nine months, I guess instead of thinking about the opportunity to reduce air freight, could you maybe just talk about what the, I guess, cost per unit or the cost structure of this new capacity as it comes on, what it means for you guys as you look at your overall business? Is it actually lower? Is that fair to say?
Charlie Denson
Well, first of all, we have a pretty strict set of standards around when we bring up a factory in terms of quality and consistency with our code of conduct and so on. So we would expect this factory capacity certainly to be cost-competitive. As we bring on new factories, in some cases, we do bring in some of our lean practices. Some of these factories, for example, are conversions from other brands. So I would say overall, competitive, not materially different from the existing sourcing base.
Mark Parker
Let me add to this. This is Mark. Much of the increase in capacity is actually adding lines to existing factories as opposed to just opening new factories. And that's especially important in those factories creating the product that's in the highest demand. Lunar and Free and some of the other products, some of those items that are in specifically high demand. So there's a lot of additional lines being added to current factories.
Christopher Svezia - Susquehanna Financial Group, LLLP
And then just I'm just curious, as you guys think about the inventory piece, and I think, Don, you made a comment about as you look for the, I guess you're go into spring of fiscal year '12, you're not expecting that much at-once or at-once to be down. I'm just curious as to why that would be, given, I guess, the strength in the business and given the fact that you're air-freighting so much product. And if you had the inventory, why not more at-once? Just curious.
Charlie Denson
I think you might be referring to -- I think Don's comment was more on the closeout piece where our closeouts, as a percentage of total inventory, are down. I'm not sure. We have to go back and see exactly what he said.
Donald Blair
Well, I think first of all, Charlie is right. The major driver here is going to be less off-price, which we think is a good thing. That was obviously a cleaner marketplace. The other thing is we are very committed to the futures model and believe that a pull marketplace is the right way to run the business for maximum margin and capital efficiency. So making sure that we continue to focus on strong futures and keep the at-once business focused on those quick-churning styles. That's the way we think the best way to run the business.
Our next question is from the line of Michelle Tan with Goldman Sachs.
Michelle Tan - UBS
I was wondering if you guys can help us understand the magnitude of the air freight pressure versus the product cost pressure that you are seeing within the gross margin now.
Charlie Denson
Yes, for the third quarter, we were down 110 basis points. It was about 100 basis points or so on the input costs. About 40, 50 basis points on air freight. So those of you doing the math, we obviously are offsetting some of that with a lot of the cost initiatives we've had in place for quite some time. We continue to drive that, and we've also had some benefit from Direct-to-Consumer. So more than all of the gross margin decline actually came from input costs and air freight.
Donald Blair
And much of that is on the materials side. It's the largest percentage of that decrease, sort of the pressures is from higher input costs around materials.
Michelle Tan - Goldman Sachs Group Inc.
And when you look at fourth quarter and the 300 basis points you're expecting, is the mix of the pressure roughly similar in those items? Or is one of them intensifying dramatically relative to the other?
Mark Parker
Well, the input costs are definitely increasing in the fourth quarter. And one of the things we also spoke about is our China distribution center, which we'd just commissioned. We've got some commissioning costs, which we completely expected. But that also is one of the drivers in fourth quarter, but it's basically materials costs.
Michelle Tan - Goldman Sachs Group Inc.
Understood. And then as far as the timing of the pricing increase, I know you're look at more broad-based ones for 2012. But I guess any sense as kind of how gradually or immediately you kind of step it up to mitigate those product cost piece of this gross margin pressure? Like is it kind of a step-up already in the first half that's meaningful? Or is it more as we move through fiscal '12?
Charlie Denson
Yes. I think -- this is Charlie. We have been increasing price, albeit strategically and market-to-market, style-by-style, even in fall and as we move into holiday. What we're referring to is more of an across-the-board increase in order to make sure we maintain price-value relationship across the entire product line as we move into 2012. And that's where you'll see that the more significant impact on the overall P&L.
Michelle Tan - Goldman Sachs Group Inc.
And does that start in Q1, or is that more kind of a rolling impact in terms of the magnitude for the year?
Mark Parker
The bigger magnitude comes in the second half of the fiscal year. First half of the calendar year as we move into the spring and summer seasons.
And our next question is from the line of Robert Ohmes with Bank of America.
Robert Ohmes - BofA Merrill Lynch
A couple of quick follow-ups. I was hoping you could elaborate a little more on the timing and the benefits from the new China DC. Is it supportive to your gross margin as you get further out? Is it a way to accelerate your top line growth over there? Maybe more help on where the benefit is in sort of when we see it from that investment? And then just a follow-up question would just be if you look at the U.S. business and you see all this great momentum in running, is basketball momentum as strong as you would have thought? And just sort of your view on that would be great as well.
Donald Blair
Bobby, with respect to China distribution center, this is really a short-term commissioning and start up type of impact. We do expect to see some improvement in the back half of the year. And then in the long run, what we experienced with our distribution center in Laakdal, it's both. It really is a competitive advantage to have the capability to deliver against launches and footwear, apparel and equipment together. And also it's one of the things that over a number of years, you continuously improve productivity of the facility and drive improved gross margin. So we do believe that will fairly quickly be a real asset financially and commercially.
Charlie Denson
And Rob, this is Charlie. Could you repeat the question regarding the running piece?
Robert Ohmes - BofA Merrill Lynch
Yes, I was just curious if the running momentum, you called out a lot of the great new running styles that are doing, obviously, amazing right now in North America. And I was just curious if the tone of your Basketball business is as good as you thought it would've been? Because I forgot, but I recall you guys, I think, mentioning basketball maybe a little bit more in the call last quarter.
Charlie Denson
Actually, the momentum of basketball has been great, especially on the Nike side, where as you look at the Q3 numbers, Jordan only had one big launch. We mentioned the new Air Jordan. And so that number for the quarter was down -- it wasn't down, it was actually up but on a lower rate. But the Nike Basketball number was up solid double-digits. So we still feel very good about our basketball positioning and the excitement that is going on in that space right now.
Our next question is from the line of Eric Alexander with Stifel, Nicolaus.
Eric Alexander - CRT
In for Jim Duffy. I just had a question related around the capacity and inventory. To what extent do guys think that the restructuring over the past couple of years has influenced your ability to deliver to demand positively and any challenge you think you may have faced? And then as far as your state of inventories in the channel, do you guys feel pretty good about those in your major markets as far as a wholesale and DTC?
Charlie Denson
Well, with respect to the capacity consolidation, or the factory consolidations, that we did over last year or so, we absolutely believe that's one of the reasons why we are going to be able to support business going forward. That factories that we divested were factories that were less efficient and really weren't the ones that could produce the product that we're working to supply right now. So by consolidating our factory base, we consolidated with the most efficient, highest-quality producers that have the financial and operational capability to grow with us and produce the kind of product that we put in the marketplace.
Mark Parker
I will add, too, that the broader restructuring that we went through around the category focus has actually really helped us drive a more robust top line. And we're really seeing that actually click into gear. Some of the demand that we're chasing right now, as I said, was more around a number of really key styles and concepts, where the demand greatly exceeded even our expectations. So we've been chasing those. But overall, we feel very good about where we've netted out on the restructuring.
Charlie Denson
And then the second part of the question, it was around channel inventory, was that it?
Eric Alexander - CRT
Yes, that's correct, in your major markets. How you guys feel about that. I know your inventories are up 18%. You guys feel like that's coming off a low base year-over-year, but how do guys feel about just really speaking more to the mitigation of air freight and trying to just kind of frame that out?
Charlie Denson
Well, I'll call out a couple specifics in the U.S., I mean across the different channels, in distribution we feel pretty good. As I mentioned, the two bigger drivers in the inventory numbers were in-transit, which again, is kind of coming into a strong summer-fall period, and then the Apparel, we're very robust here in the United States on our Apparel business. And that goes across all the channels, Sporting Goods, athletic, specialty, department store, et cetera. I made the comment in the prepared remarks. One of the things we watch very, very closely is the overall health of the marketplace. I think it's one of the things that helps us support both the futures program and the ongoing gross margin management that we look at on a quarter-to-quarter basis. So we continue to keep a very, very close eye on all of that around the world. And as we continue to invest in our systems, both at the partnership level and the DTC level, it's giving us more and more transparency into those inventories and our ability to manage them.
Eric Alexander - CRT
That's very helpful. And then last question before turn it over. I'll give it a shot. I know Summer Olympics, you guys had historically used that as a platform to launch new innovations. Is it too soon to discuss any of those that you guys kind of have in the pipeline or anything of that sort? Give it a shot, again.
Mark Parker
Boy, that's the big tease. I'm tempted to dive in on that one, but it is a bit early. I will go out and just say I think some of the most exciting, new performance products we've seen in the history of Nike certainly is in the pipeline and getting ready for that massively important global event. And you're right. These are the events that we rally behind. There are sort of moments in time that we come together and show our best work. And I'm very close to the product engine here at Nike. And I can truly say that some of the most exciting product that we have ever had is currently in the works and getting ready to come out prime time for the Summer Olympics in London. So we'll be doing some fairly major events here in the coming 12 months to really highlight much of that. But it's a bit premature to really let some of those cats out of bag right now.
Our next question is from the line of Michael Binetti with UBS.
Michael Binetti - UBS Investment Bank
A quick question for you, and I have a quick follow-up after this, so it sounds like pricing is going to be the main approach to offsetting a lot of the gross margins. And with 300 basis points of pressure in the next quarter, I'm just curious, is there any reason not to get a little bit more aggressive on price early? Or even is there flexibility on it at this point that could be a way that we might be able to have, if we do see prices maybe rise in the retail channel, maybe we can get a little more optimistic on the May quarter, even from here?
Charlie Denson
Yes, this is Charlie. I think I mean we, obviously, with the large piece of the business being done on the futures program and those prices are already locked in and guaranteed, we don't have a lot of flexibility there. We do have the opportunity, to some degree, to see some pricing in our own Direct-to-Consumer channels. It's still not as material enough to offset some of the pressures that we're seeing coming in. So we don't see a lot of -- a significant impact short term.
Donald Blair
But I would say, to the earlier point, pricing's not the only lever we have. We certainly are continuing to work our supply chain, and that's something that we have seen benefits. Historically, we saw benefits in Q3, and we expect to see that in FY '12. And we also have pattern over the last several years of driving for leverage on our SG&A. So we're going to pull all the levers and as we always do, really aim at long-term profitability. And I think if you listen to what we talked about on the guidance, that's really an overall P&L model, not just on the pricing front.
Michael Binetti - UBS Investment Bank
Okay and then, I don't know, this is a question we usually get, the front half versus the back half in the futures window, and maybe if you can tell us what the ASPs look like in the 9% you reported today will be helpful.
Donald Blair
The ASPs are up slightly in Footwear and down slightly in apparel is what we have right now in the five-month futures window. What I would remind you of, as Charlie said, that would reflect only the very surgical price increases and not the increases that we expect to see more towards the back half of the year.
Michael Binetti - UBS Investment Bank
And any reason apparel is going -- the ASPS are down slightly there?
Donald Blair
I wouldn't take that as something that we see as a material trend. I mean, there's lots of moving parts in Apparel.
Michael Binetti - UBS Investment Bank
And then front half versus back half would be helpful.
Kelley Hall
More heavily weighted to the back half.
Charlie Denson
Some of the pricing on the apparel side is due to mix. It's a seasonal reflection of the mix.
Our next question is from the line of Paul Swinand with Morningstar Inc.
Paul Swinand - Stephens Inc.
Question on the EBIT disclosure that was materially lower in the United States. If the largest influence on that was the gross margin and the product cost, was the shipping what made up the difference between the other geographies, or was there a different mix there as well?
Charlie Denson
Well, first of all, I think I'm interpreting your question. When you say a material or EBIT...
Paul Swinand - Stephens Inc.
On the EBIT line, there was 5% for the U.S. but it was lower than the sales increase. And then in like, for example, in China, EBIT accelerated faster than sales.
Charlie Denson
Right. So as we called out in the script, there's really a couple of issues there. That is going to be the timing of demand creation will always affect the geography profitability. So that's one element. The other one is, you're absolutely right. The air freight cost is highest for North America. It's the geography where we have the fastest delivery windows against futures. And so therefore, when we have capacity shortfalls, it's the North America business that requires the more air freight to get the product on time.
Robert Drbul - Barclays Capital
But the input cost affecting the product that are shipped in the different geographies, is that mix about the same across geographies?
Charlie Denson
Roughly, yes. The products are going to be the same around the world. The only difference there would be just the mix of products. The one thing that is different, input costs are the same, but foreign exchange obviously has a huge impact. And if you looked at our reported numbers, the European geographies were most significantly affected by foreign exchange.
The next question is from the line of Sam Poser with Sterne Agee.
Sam Poser - Sterne Agee & Leach Inc.
I just have a couple questions. The inventory levels, I mean it looks to me like, just based on your guidance and with the reduced gross margin, your weeks of supply look like they're in fairly good shape. But I guess my question is, of the in-transit part of that inventory, was that late shipments from the prior quarter, given the delays and the need to fly goods and move goods and so on?
Charlie Denson
Well, first of all, overall, you're right. Your premise that we feel as if inventory is in good shape, absolutely. We feel good overall about the inventory level. With respect to where we are yet, the factories are delivering later than what we ideally would like it. It's not that they're slow. It's just that the demand is big. So it is the later delivery out of the factory to get it here on time, and, therefore, it needs to be sent by air freight.
Sam Poser - Sterne Agee & Leach Inc.
And then secondly, I was just looking ahead into 2012. You say that the gross margin pressures will continue to be there, at least in the first half, I gather. And when we think about the SG&A, the combination demand creation and the other parts of it, would we think about that the front half of the year, basically you're going to lever SG&A better than the back half given the roll-in to the Olympics and so on? And would we expect the same kind of investments in London the way we saw Beijing, given that you're a much more mature business already in the U.K. and so on?
Charlie Denson
Okay, so what I would say is that that's a plausible storyline, but you're way ahead of me here. We're not quite at that stage with our FY '12 plans to be giving quarterly guidance. But I do believe that, generally, that those thoughts are accurate in the sense that we will be investing in the European Championships and the London Olympics. Some of the London Olympics, of course, will fall into FY '13. So from a demand creation standpoint, you would expect to see some of that flow. With respect to gross margin, we are going to face input pressure all year, although we would expect to see more pricing offset in the second half.
Kelley Hall
Thank you, everybody. Operator, we're ready to end for the day.
Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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With energy security being the need of the hour, nations across the world are trying to reduce their dependence on perishable fossil fuels. With availability, accessibility and affordability of fossil fuels showing significant variations depending upon geography, nations have concurred that a switch to renewable energy generation would best serve their purpose of gaining energy security. Renewable energy is energy acquired from non-perishable resources in the form of heat, electricity or other forms. Some of the most dominant forms of renewable energy in the world today are wind energy and solar energy. There are other forms of renewable energy generation as well such as biomass, geothermal and ocean energy. Currently in terms of technology maturity, wind energy is by far the most mature form of renewable energy generation available in the market currently. This is closely followed by solar, which is currently witnessing a growth spurt in terms of annual installations globally.
Methods of generation such as biomass have been in existence since long back, and finds significant use in certain regions of the world. Geothermal energy is a form of renewable energy generation which is capable of supplying base load requirements: a quality which is mostly available from fossil fuel burning power stations. The ocean energy segment mostly comprises of wave and tidal energy. Other forms of ocean energy include salinity gradient and ocean thermal energy. Wave and tidal energy are likely to exhibit significant growth in terms of annual capacity installations, especially in Europe and Asia-Pacific. One of the major problems associated with renewable energy is the intermittent nature of generation is provides. This result in significant difficulties associated with integrating renewable energy generation into the utility grid. Another major restraining factor for renewable energy includes the fact that it generates electricity at relatively higher tariffs. Electricity being a price sensitive commodity is generally subject to merit order dispatch schemes under which the low cost generation gets the first preference in terms of feeding to the utility grid.
This is likely to result in difficulties for the renewable energy project developers in terms of recovering their expenditure and generating decent returns on investment. However gradually all of these issues with renewable energy generation is being addressed. Rapid technology development and manufacturing capacity up-scaling has led to rapid reduction in renewable energy generation equipments. Both the solar and wind energy sector are currently reaping the benefits of economies of scale and tremendous technology maturity. This trend is likely to be replicated in new forms of renewable energy generation such as ocean energy in the future. Another major problem with renewable energy was its intermittent nature which is gradually being addressed by a rapidly developing smart grid infrastructure and power storage technologies.
Also the requirements and mandates issued by various regulatory bodies around the world for reducing greenhouse gas emissions is also likely to significantly fuel the demand for renewable energy generation in the future. Regionally, the Asia-Pacific market is likely to remain the most attractive for renewable energy within the forecast horizon. Europe is likely to close follow and is also likely to emerge as the technology leader for new forms of renewable energy such as offshore wind and ocean energy. Some of the major market players in the renewable energy business include Vestas Wind Power A/S, Calpine Corporation, Enel Green Power, Pelamis Wave Power and Yingli Solar among others.
This research report analyzes this market on the basis of its market segments, major geographies, and current market trends. Geographies analyzed under this research report include
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Modern Principles of Economics / Edition 1by Tyler Cowen, Alex Tabarrok
View All Available Formats & Editions
Pub. Date: 10/09/2009
Publisher: Worth Publishers
From the authors:
See the Invisible Hand. Understand Your World. That's the tagline of Modern Principles and our teaching philosophy. Nobel laureate Vernon Smith put it this way:
At the heart of economics is a scientific mystery… a scientific mystery as deep, fundamental and inspiring as that of the expanding universe or/i>/i>
From the authors:
See the Invisible Hand. Understand Your World. That's the tagline of Modern Principles and our teaching philosophy. Nobel laureate Vernon Smith put it this way:
At the heart of economics is a scientific mystery… a scientific mystery as deep, fundamental and inspiring as that of the expanding universe or the forces that bind matter… How is order produced from freedom of choice?
We want students to be inspired by this mystery and by how economists have begun to solve it. Thus, we show how markets interconnect and respond in surprising ways to changes in resources and preferences.
Consider, for example, how markets respond to a reduction in the supply of oil. Of course, the price of oil increases giving consumers an incentive to use less and suppliers an incentive to discover more. But an increase in the price of oil also encourages Brazilian sugar cane farmers to devote more of their production to ethanol and less to sugar thereby driving up the price of sugar. An increase in the price of sugar means a reduction in the quantity of candy demanded. So one way the market responds to a reduction in the supply of oil is by encouraging consumers to eat less candy! In analyses like this, we teach students to see the invisible hand and in so doing to understand their world.
Similarly, we offer a unique and simple proof of the amazing invisible hand theorem that without any central direction competitive markets allocate production across firms in a way that minimizes aggregate costs!
To understand their world students must understand when self-interest promotes the social interest and when it does not. Thus, Modern Principles has in-depth analyses of externalities, public goods, and ethical issues with market incomes and trade. Moreover, we always discuss economic theory in the context of real world problems such as the decline of the ocean fisheries, climate change, and the shortage of human organs for transplant.
Product Details
- 9781429202275
- Publisher:
- Worth Publishers
- Publication date:
- 10/09/2009
- Edition description:
- First Edition
- Pages:
- 900
- Product dimensions:
- 8.80(w) x 11.00(h) x 1.30(d)
Table of Contents
1. The Big Ideas
2. The Power of Trade and Comparative Advantage
Supply and Demand
3. Supply and Demand
4. Equilibrium: How Supply and Demand Determine Prices
5. Elasticity and its Applications
Appendix: Other Types of Elasticities
Appendix: Elasticities with Excel
6. Taxes and Subsidies
The Price System
7. The Price System: Signals, Speculation and Prediction
8. Price Ceilings and Price Floors
9. International Trade
10. Externalities: When Prices Send the Wrong Signals
Firms and Factor Markets
11. Costs
Appendix: Using Excel to Graph Cost Curves
12. Competition and the Invisible Hand
13. Monopoly
14. Price Discrimination
Appendix: Solving Price Discrimination Problems with Excel
15. Cartels, Oligopolies, and Monopolistic Competition
16. The Economics of Network Goods: Competing for Monopoly
17. Labor Markets
18. Public Goods and the Tragedy of the Commons
Appendix: The Tragedy of the Commons: How Fast?
19. Political Economy and Public Choice
20. Economics, Ethics and Public Policy
Decision Making for Businesses, Investors, and Consumers
21. Managing Incentives
22. Stock Markets and Personal Finance
23. Consumer Choice
Economic Growth
24. GDP and The Measurement of Progress
25. The Wealth of Nations and Economic Growth
Appendix: The Magic of Compound Growth: Using a Spreadsheet
26. Growth, Capital Accumulation and the Economics of Ideas: Catching Up vs. The Cutting Edge
Appendix: Excellent Growth
27. Savings, Investment, and the Financial System
Appendix: Bond Pricing and Arbitrage
Business Fluctuations
28. Unemployment and Labor Force Participation
29. Inflation and the Quantity Theory of Money
Appendix: Get Real! An Excellent Adventure
30. Business Fluctuations: Aggregate Demand and Supply
31. Transmission and Amplification Mechanisms
Appendix: Business Fluctuations and the Solow Model
Macroeconomic Policy and Institutions
32. The Federal Reserve System and Open Market Operations
Appendix: The Money Multiplier Process in Detail
33. Monetary Policy
34. The Federal Budget: Taxes and Spending
35. Fiscal Policy
International Economics
36. International Finance
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Palestinian Authority Prime Minister Salam Fayyad asked Arab League member nations in Cairo on Tuesday to make good on pledged financial aid, the Ma'an News Agency reported.
Arab League members agreed the P.A. should receive $330 million every six months.
"The importance of the meeting is that it has become urgent that the Arab countries meet their financial obligations, particularly given the looming possibility that the Palestinian Authority will be unable to pay salaries for this current month and the next one, which is Ramadan," P.A. Foreign Minister Riyad al-Maliki said beforehand.
At the emergency meeting, convened at the request of P.A. President Mahmoud Abbas, Fayyad said the P.A. needed $300 million to "overcome the bottleneck and deal with the financial crisis."
Fayyad told participants they'd received $331 million in 2011 -- of which $79 million came from Arab countries -- plus an additional $30 million from Saudi Arabia.
Earlier this month, Fayyad announced that government workers would receive half pay until the situation is resolved.
In May, Fayyad said the P.A. was not receiving foreign aid quickly enough -- particularly from Arab countries -- to cover its needs.
"The government has decided to pay employees half their salary due to the financial crisis that the Palestinian Authority is experiencing because of the failure of donors," Fayyad said, "including our Arab brothers, to fulfill their pledges.
"If this crisis continues, the government will have to take additional austerity measures," Fayyad said, adding that the aid received so far covered about one-third of the government's needs.
The Palestinian Authority depends largely on foreign aid in addition to tax revenues that Israel collects and transfers to the P.A.
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The Web Collection Standard Edition: Adobe Dreamweaver® CS3, Flash® CS3, and Fireworks® CS3: Revealedby Sherry Bishop Jim Shuman Barbara Waxer
This comprehensive introductory book provides step-by-step instruction and in-depth explanation on three of today's most widely used Web design and development programs: Adobe Dreamweaver CS3, Adobe Flash CS3, and Adobe Fireworks CS3. Readers gain practical experience with the software as they work through end-of-chapter learning projects and step-by-step tutorials. An integration chapter demonstrates how to move from one application to the other while creating a Dreamweaver Web site that incorporates both Flash and Fireworks files. Full-color illustrations and a user-friendly design combine to create a solid learning experience that reveals how to master the latest features of these popular applications.
Select your format based upon: 1) how you want to read your book, and 2) compatibility with your reading tool. To learn more about using Bookshare with your device, visit the Help Center.
Here is an overview of the specialized formats that Bookshare offers its members with links that go to the Help Center for more information.
- Bookshare Web Reader - a customized reading tool for Bookshare members offering all the features of DAISY with a single click of the "Read Now" link.
- DAISY (Digital Accessible Information System) - a digital book file format. DAISY books from Bookshare are DAISY 3.0 text files that work with just about every type of access technology that reads text. Books that contain images will have the download option of 'DAISY Text with Images'.
- BRF (Braille Refreshable Format) - digital Braille for use with refreshable Braille devices and Braille embossers.
- MP3 (Mpeg audio layer 3) - Provides audio only with no text. These books are created with a text-to-speech engine and spoken by Kendra, a high quality synthetic voice from Ivona. Any device that supports MP3 playback is compatible.
- DAISY Audio - Similar to the Daisy 3.0 option above; however, this option uses MP3 files created with our text-to-speech engine that utilizes Ivonas Kendra voice. This format will work with Daisy Audio compatible players such as Victor Reader Stream and Read2Go.


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Lenovo ThinkPad Yoga S1
Reviews for the Lenovo ThinkPad Yoga S1
Source: Notebook-Center.ru RU→EN
Positive: Quality magnesium alloy; excellent IPS-display; good performance. Negative: Weak speakers.
Single Review, online available, Medium, Date: 04/21/2015
Source: Notebook.cz CZ→EN
Positive: Slim; lightweight and rigid design; superior full-HD IPS display; convenient input device. Negative: Mini HDMI.
Single Review, online available, Medium, Date: 08/12/2014
Source: Itsvet HR→EN
Positive: Flexible Yoga design; extremely high-quality production; great performance; good autonomy.
Single Review, online available, Very Short, Date: 09/23/2014
For those unfamiliar with the Lenovo Yoga brand, these flexible devices allow users to fold back its screen 360 degrees, turning a laptop configuration into a tablet configuration. For those who were familiar with the previous iterations of the Lenovo Thinkpad Yoga, having the keyboard mashing against the hand in tablet mode was widely considered a design flaw. Now, the newest 12 inch Lenovo Thinkpad Yoga has a mechanism that will extract the keys back down into the body when the screen is pushed back into tablet mode, so that the keys aren't raised, and won't be able to be depressed. Lenovo has named this innovation a lift and lock system.
Weighing in at 1.578 kg, this device is on the heavy side for tablet, which is why having the built in kickstand (the keyboard) will come in handy. Users can stand their screen up in tent mode or stand mode to move the keyboard out of the way. For a portable notebook, it is light and the 12.5 inch IPS screen is in Full HD which should ensure a good viewing experience. Under the hood is the 4th generation Intel processor which should allow for good battery life. The Haswell chips are available in configurations that go up to i7 which should facilitate a wide range of user preferences. A good selection of ports will allow for a variety of business and entertainment uses.
Intel HD Graphics 4400:
ULV integrated GPU (GT2) with 20 EUs found on certain Haswell CPU models.
Non demanding games should be playable with these graphics cards.
» Further information can be found in our Comparison of Mobile Graphics Cards and the corresponding Benchmark List.
Intel Core i7: The Intel Core i7 for laptops is based on the LG1156 Core i5/i7 CPU for desktops. The base clock speed of the CPUs is relatively low, but because of a huge Turbo mode, the cores can dynamically overclock to up to 3.2 GHz (920XM). Therefore, the CPU can be as fast as high clocked dual-core CPUs (using single threaded applications) but still offer the advantage of 4 cores. Because of the large TDP of 45 W / 55 W, the CPU is only intended for large laptops.
Haswell-based ULV dual-core processor clocked at 1.8 GHz with Turbo Boost support up to 3.0 GHz. Offers an integrated HD Graphics 4400 and a dual-channel DDR3 memory controller.» Further information can be found in our Comparison of Mobile Processsors.
This screen diagoal is quite large for tablets but small for subnotebooks. Some convertibles are also represented with that size.
Large display-sizes allow higher resolutions. So, details like letters are bigger. On the other hand, the power consumption is lower with small screen diagonals and the devices are smaller, more lightweight and cheaper.» To find out how fine a display is, see our DPI List.
1.6 kg:
This weight is typical for very big tablets, subnotebooks, ultrabooks and convertibles with a 11-13 inch display-diagonal.
Lenovo: Lenovo Group Limited is China's largest and the world's fourth largest personal computer manufacturer. Lenovo produces desktops, laptops, servers, handheld computers, imaging equipment, and mobile phone handsets. Lenovo also provides information technology integration and support services, and its QDI unit offers contract manufacturing. Its executive headquarters are located in China and USA. It is incorporated in Hong Kong. Lenovo was formed in 1984 as a spin-off of the Chinese Academy of Sciences new technology unit. The company initially began as a reseller, distributor and later CM for foreign brands, including IBM, entering the Chinese market. In 1990, Lenovo started to manufacture its own PCs and by 1997 became the market leader in China. In 2004, Lenovo bought IBM's PC business for $1.25billion. Market share regarding sales of personal computers in 2007 (market research IDC): HP 18.9 %, Dell 16.4 %, Acer 9.9 %, Lenovo 7.5 %, Apple 5.7 %
» Further information can be found in our Notebook Purchase Guide.


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East Orange, New Jersey Business Lawyers and Law Firms
|» Step 1: Tell Us About Your Case
|» Step 2: Provide Contact Information & Submit
Start a Lawyer Search
Tell us about your case so that we can connect you with the right lawyers.
Turner Law Firm, LLC
Business Law & Civil Litigation Law Firm in NJ Since 1967
Address: 76 South Orange Ave - South Orange, NJ 07070
Phone: 973.763.5000
Morgan Melhuish Abrutyn
For over 100 years, Morgan Melhuish Abrutyn has been solving its clients' problems.
Address: 651 West Mount Pleasant Avenue, Suite 200 - Livingston, NM 07039
Phone: (973) 994-2500
Law Offices of Peter J. Lamont & Associates
The firm has built a solid reputation for delivering creative, effective, and valuable solutions to our clients' legal and business issues. We combine "big firm" knowledge and sophistication with the responsiveness and focus of a boutique firm.
Address: 623 Lafayette Avenue, Suite 2 - Hawthorne, NJ 07506
Phone: (973) 949-3770


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Two gadgets enter the ring, but only one can leave the champion! Each week Brian Tong pits two competing gadgets against each other to duke it out for the win.
Spoiler: The Surface Phone is doomed. Sorry, Microsoft.
Superior design and specs for the money make this Windows 2-in-1 a great option.
If you're looking for a simple way to add wireless audio streaming to a powered speaker or stereo system, the Logitech Bluetooth Audio Adapter is your best bet.
CNET's David Carnoy goes hands-on with Beats' first neckband-style headphone and is impressed.
Made from Lego bricks, the Flybrix toy drone is crash-friendly -- if it breaks you can just snap it back together.
The Moto Z Play features swappable accessories, a long-lasting 3,510 mAh battery and a $450 price tag.
CNET's Dan Graziano gives you a first look at Garmin's new watch.
The TV offers all of Samsung's newest conveniences, including the slick Smart TV system and the ability to control your gear -- and it looks sweet doing it. But in picture quality it doesn't match similarly priced sets.
In this week's news wrap: Yahoo says a state-sponsored attack led to at least 500 million accounts being compromised; Samsung announces its US recall is going well; And Google heavily suggests its introducing a phone on October 4.
Two gadgets enter the ring, but only one can leave the champion! Each week Brian Tong pits two competing gadgets against each other to duke it out for the win.
Crafted by our three UK-based, petrol-headed lunatics Drew, Alex and Nick, XCAR serves up the most beautifully shot, gorgeously made and lethally informative vehicular videos you will ever watch.
CNET Update delivers the tech news you need in under three minutes. Watch Bridget Carey every afternoon for a breakdown of the big stories, hot devices, new apps, and what's ahead.
CNET On Cars is all about the biggest piece of tech in your life: Your car. Brian Cooley gets his hands on all the high tech cars, reveals their new technologies and shows you how they perform in the real world.
Brian Tong breaks down all the good and bad inside the world of Apple with his unique style. It's the latest news, rumors, tips, and classic skits. Will you take a bite of the Apple?
Each week Iyaz Akhtar scours CNET's sites to see what people are looking at and talking about, and then counts down the most popular trends in tech.
Brian Tong delivers everything happening around Google with his high-energy style, covering the latest news, rumors, tips and tricks, and more.
Each month CNET's Brian Cooley takes a look at what's happening in tech and then cuts out the noise. What's left are a few key trends that show you how the near future is shaping up, with unusual clarity.


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Choral Potpourri: Choral Ethics; Bein' Highfalutin
"It is impossible, in our condition of Society, not to be sometimes a Snob." William Makepeace Thackeray Recently, I've become aware I am being referred to as Highfalutin, an Elitist, and a Snob. All those things are, apparently, bad things. In my own work, I suppose I am a bit
Let The Men Sing
Going Beyond Words w/ Stan Schmidt Show 2245 – Let The Men Sing This week on ACDA Radio we shift gears and join the men of song. Musical guests will be tenor Stefano Secco, The King's Singers, Choir Leoni Men's Choir from Canada, the Hilliard Ensemble, and the orchestra of voices from San Francisco,
Andrea Ramsey on Her Newly Commissioned Work, "But a Flint Holds Fire" in Support of the Flint Water Crisis
I was recently introduced to an article on the Michigan ACDA website (editor, Jed Scott). It was an interview with composer Andrea Ramsey about her recently commissioned work, "But a Flint Holds Fire." The piece was composed for a Chorus America consortium project and is part of an effort to raise awareness
7 Ways to Love Your Choir, with Ryan Guth
Click to listen to podcast version: 7 Ways to Love Your Choir Be the leader they need You wouldn't know this since I'm the guy who wrote "Your choir sucks because you suck", but I'm a sappy, open, and vulnerable choir director. It doesn't take much to get me all choked
Choral Potpourri: A Lesson in Creativity
"There is nothing more difficult for a truly creative painter than to paint a rose, because before he can do so he has first to forget all the roses that were ever painted." Henri Matisse I am creative. Whether I am programming a concert or making a meal, I can't
Mendelssohn and Brahms: A German Legacy
Going Beyond Words w/ Stan Schmidt Show 2244 – Mendelssohn and Brahms: A German Legacy Two of the greatest composers that make up the German choral legacy are Felix Mendelssohn and Johannes Brahms. Join host Stan Schmidt for Going Beyond Words as you hear the artistry of the Gächinger Kantorei, the Swedish Radio Choir,
CJ Replay: Vocal Colors in Women's Choruses
The September 2016 issue of Choral Journal featured an article by Philip Silvey titled "Coordinating Vocal Colors in Women's Choruses," which is intended primarily for high school and collegiate women's choruses and can also be applicable to adult women's choruses. The author states the following in the introduction: "When
Choral Potpourri: Choral Ethics; Rolling With the Punches
"When I wished to sing of love, it turned to sorrow. And when I wished to sing of sorrow, it was transformed for me into love." Franz Schubert Shawna* emailed me about a week ago. She originally emailed me earlier this summer. We were "back and forthing" about a situation
Requiem For The Living – By Dan Forrest
Going Beyond Words w/ Stan Schmidt Show 2246 – Requiem For The Living By Dan Forrest This week on ACDA Radio, host Stan Schmidt leads you to more touching music by American composer Dan Forrest. You will hear three interpretations of his Requiem, and new selections by this highly respected composer. Pieces include "Abide",
October Choral Journal Preview: Focus on Junior High/Middle School
The latest issue of Choral Journal is available online! ACDA members can log in with their username and password to view and download the newest version. You can also read our electronic version. Below is a preview of just some of the articles you will find in this issue. If you are not


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No one wants us.Great week for market and we are not doing great. I don't like the light vol on these big green NAS days.grrrrrr
This chart is CMTL vs the markets:http://finance.yahoo.com/q/bc?t=5d&s=CMTL&l=on&z=m&q=l&c=&c=%5EGSPC&c=%5EIXIC&c=%5EDJI
I like "up" any day. What's wrong with having the stock go up on low volume? I see this as a positive - the market recognizes the undervalued state of this stock. This is not a reaction to some pumped up news, just the correct direction for this stock. Up on low volume, up on high volume, I'll take either. I'm looking to get out in the high 30's - and we're going to get there.
It's a hint of weekness. No momentum. Turning point blues. Let's hope it's just slow. Hope is what seems to be driving alot of stocks now adays. That's why we have selling rules.


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Coventya, based out of Cleveland, Ohio, recently appointed Rick Rauppius International Product Manager, Protective Technologies. Rick has more than 21 years in the metal finishing industry, working primarily in product management and technical support for protective and functional coatings. He holds a BS in Chemical Engineering from Georgia Tech.


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Tend to be Ceramics The brand new Should have with the food prep
Whether or not you think about your self the newbie with the food prep or even more of the fairly — expert cook, difficult France cookware is really a should in every present day kitchen area. Which range from add-ons in order to ovenware as well as ovum plastic trays in order to tableware, People through Portugal ceramics put in a comfortable, gorgeous however useful contact to each kitchen area. For all those food preparation enthusiasts, any kind of device you will need within a kitchen area you are able to most likely discover within ceramic, a far more appealing edition from the initial. For example, the garlic herb grater. An easy way associated with including a conventional, flavorsome component to a formula having a vibrant, simple to use kitchen area item.
Another ceramic with regard to cooking enthusiasts (who particularly really like Italian language! ) ceramic other container. A good way associated with maintaining your own preferred pasta in the ready in order to create a tasty spaghetti Bolognese or even Carbonara!. A brand new development for your kitchen area appears to be the actual ceramic ovum holder. The product is really a various method of attempting to maintain your own ova, along with a ways of obtaining upon display however searching appealing with the food prep. Numerous might state the most effective way to maintain a good ovum is within the actual refrigerator however it has been said which ova tend to be much better held beyond the refrigerator since the porous covers can make upward anything else through the refrigerator, be it pig or even cheese or even meats as well as poultry odors. Therefore having a difficult ovum holder your own children have been in good shape, held appealing as well as shown within an appealing owner.
For all those seeking to improve their own display with the food prep, perhaps a difficult helping dish may be the point to include a few living for this typical, each day supper. And even for your more youthful arranged, any kind of funkier bowlcould then add color!. Furthermore, if you would like some thing smaller sized however because helpful, perhaps choose a ceramic place relax; a stylish contact associated with sunlight to some kitchen area and another to make an ideal cuppa upon all those cold days!. France Cookware is definitely the useful however fast contact to a kitchen area. Ideal for each and every cook as well as house enthusiast as well, this particular Spanish pottery is really a ideal present for anybody for example family members, buddies, family members and even your self! And as well considering forward, ideal for Xmas!
Historic Chinese Artwork
A number of types of artwork happen to be affected through excellent philosophers, educators, spiritual numbers as well as national politics frontrunners. Earlier types of ability within Tiongkok had been created through pottery as well as jade inside the Neolithic time period, in order to that fermeté had been additional within the Shang Empire. The actual Shang tend to be the majority of kept in mind for his or her fermeté throwing, mentioned because of its clearness associated with fine detail. Pieces concerning pottery ships online dating through round the yr 9000 B. C. available at the actual Xianrendong (Spirit Cave) website, Wannian Region, within the state associated with Jiangxi symbolize a few of the very first recognized Chinese ceramics. The actual items had been hand-made through coiling as well as dismissed within bonfires. Home decor consist of amazed wire scars, as well as functions created by rubber stamping as well as piercing.
The actual actual Xianrendong website had been busy through regarding 9000 B. C. in order to regarding four thousand B. C.. During this time period 2 kinds of artwork had been created. The very first contains coarse-bodied items perhaps designed for every day utilize. The 2nd becoming greater, thinner-bodied items perhaps intended for practice utilize or even events. There is certainly archaeological proof recommending which each kinds of items had been created simultaneously at some time. A few specialists think the very first correct porcelain had been created inside the state associated with Zhejiang with the Far eastern Han time period. China's specialists highlight the existence of a substantial percentage associated with porcelain-building nutrients (china clay-based, porcelain stone or perhaps a mixture of both) just as one essential aspect within determining porcelain. Shards retrieved through archaeological Far eastern Han kiln websites approximated shooting temperatures ranged through 1260 in order to 1300°C, dating back to one thousand B . C .. At the beginning of imperial Tiongkok, porcelain continues to be released as well as had been processed to the level which within Uk the term tiongkok is becoming recognized along with top quality porcelain.
Throughout the Sui as well as Tang intervals (581 in order to 906) an array of ceramics, low-fired as well as high-fired, had been created. These types of integrated the actual well-known Tang lead-glazed sancai (three-colour) items, the actual high-firing, lime-glazed Yue celadon items as well as low-fired items through Changsha. Within to the north Tiongkok, high-fired, clear porcelains had been created in kilns inside the provinces associated with Henan as well as Hebei. Major describes concerning porcelain with a foreigner had been created through a good Arabian traveller throughout the Tang Empire who documented which: "They have within Tiongkok an extremely good clay-based areas along with that they create floral vases that are because clear because the cup; drinking water is observed via these individuals. The actual floral vases are made from clay". Tang Sancai funeral items have grown to be an extremely well-known with regard to concerning artwork. "Sancai" indicates three-colors. But the actual colors through the glazes utilized to beautify the actual items from the Tang empire are not restricted to 3 within quantity. Within the To the west, Tang sancai items had been occasionally known as egg-and-spinach through sellers for the utilization of Eco-friendly, yellow-colored as well as white-colored. Although the second option through the 2 colors may be much more correctly referred to as ruby as well as off-white lotion.
Ceramics styles: artwork as well as sex
windowpane drape draw, the actual household comfortable housing market a year ago, this particular year's product sales for your ceramic business to try out the tonic, person businesses are ready at nighttime tresses power within the arriving 12 months in order to generate 1 pours. To seize a bigger marketplace, miss item styles is not really sufficient. After that this year, ceramic items is going to be worth company to look as well as exactly what styles to pay for interest? Allow lots of sites as well as companies a typical eyesight totally pub.
Ceramics Tendency just one: Present projections Artwork Concept.
Ceramics with regard to every day take advantage of like a main furniture, recently through the business and also the user's interest. Re-decorating suggestions to ensure that home ceramics right into a prosperity associated with individual advancement street : people inside the business played the title into it: Japanese pottery "artistic. inch
The actual actual alleged creative, as well as describes the actual daily-use ceramic items in the prosperity associated with style suggestions as well as components. Through the outside design in order to color match up, without having exclusion, turn into a ways of daily-use ceramics display character. Mug arranged, tableware, floral vases, ashtrays, pencil…… to little items might be little, however it played a substantial part within the add on. It really is comprehended which, presently, rate of interest cap possess spent a number of superbly created display screen every day ceramics, Qingli elegant, broadly appealing, and it has the "fresh, exquisite, non-traditional, distinctive chic" type of design. Lots of photos concerning embellished ceramics offers arrived at the actual world associated with outstanding, wealthy color dream, dreamlike, graceful attractive, such as the middle from the planet lava put indiscriminately, it appears the ocean dawn elegance; the actual features of recent style design, every day just like protected having a gorgeous difficult Vibrant, traditional, style, classiness, luxurious. Within color over the daring development, the actual bravery to learn, to understand the entire benefits of the standard colored glaze, the actual colors is going to be excellent enjoyable obtaining incorporated straight into the actual clay-based areas, describes the actual "red fruit yellow-colored Eco-friendly blue-violet, focused launching Danmo complete affordable" impact. Family members pictures as well as a few households will likely be explained within the porcelain, you will find unique.
Ceramics Tendency a few: Gender-based.
Need to appreciate the actual ceramics with regard to every day take advantage of items, creative designers, their own utilization of gender-based differentiation, obstinately this unique little marketplace in order to grow once again. Unique in a number of as well as female's home ceramic items this year is going to be governed by a particular target audience interest and be the actual unique metropolitan public house add-ons. Monochrome grey and also a little bit heavy color, chilled qualified style design, for instance ceramics with regard to every day take advantage of items offers drawn many men customers really like; whilst commendable stylish good, damp consistency, volume associated with gorgeous problem, stylish colors, This kind of home ceramic items regularly bought through woman customers wish.