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Cree (NASDAQ:CREE)
Q2 2012 Earnings Call
January 17, 2012 5:00 pm ET
Raiford Garrabrant - Director of Investor Relations
Charles M. Swoboda - Chairman of the Board, Chief Executive Officer and President
John T. Kurtzweil - Chief Financial Officer, Chief Accounting Officer, Executive Vice President of Finance and Treasurer
Carter B. Shoop - KeyBanc Capital Markets Inc., Research Division
Stephen Chin - UBS Investment Bank, Research Division
Harsh N. Kumar - Morgan Keegan & Company, Inc., Research Division
Brian K. Lee - Goldman Sachs Group Inc., Research Division
Alex Gauna - JMP Securities LLC, Research Division
Daniel L. Amir - Lazard Capital Markets LLC, Research Division
Benjamin Schuman - Pacific Crest Securities, Inc., Research Division
Andrew Huang - Sterne Agee & Leach Inc., Research Division
Steven Milunovich - BofA Merrill Lynch, Research Division
Ahmar M. Zaman - Piper Jaffray Companies, Research Division
Jesse Pichel - Jefferies & Company, Inc., Research Division
Jonathan Dorsheimer - Canaccord Genuity, Research Division
Dale Pfau - Cantor Fitzgerald & Co., Research Division
Christopher Blansett - JP Morgan Chase & Co, Research Division
Amir Rozwadowski - Barclays Capital, Research Division
Scott Reynolds - Deutsche Bank AG, Research Division
Ramesh Misra - Brigantine Advisors LLC
Good afternoon. My name is Patrick, and I'll be your conference facilitator today. At this time, I would like to welcome everyone to the Cree Inc. Second Quarter 2012 Earnings Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, January 17, 2012. Thank you. I would now like to introduce Raiford Garrabrant, Director of Investor Relations of Cree Inc. Mr. Garrabrant, you may begin your conference.
Raiford Garrabrant
Thank you, Patrick, and good afternoon. Welcome to Cree's Second Quarter Fiscal 2012 Earnings Conference Call. By now, you should have all received a copy of the press release. If you did not receive a copy, please call our office at (919) 287-7895, and we will be pleased to assist you.
Today, Chuck Swoboda, our Chairman and CEO; and John Kurtzweil, our CFO, will report our results for the second quarter of fiscal year 2012. Please note that we will be presenting both GAAP and non-GAAP financial results in our remarks during today's call, which are reconciled in our press release and financial metrics posted in the Investor Relations section of our website at www.cree.com under Quarterly Results in the Financial Information tab.
Today's presentations include forward-looking statements about our business outlook, and we may make other forward-looking statements during the call. These may include comments concerning trends in revenue, gross margin and earnings, plans for new products and other forward-looking statements indicated by words like anticipate, expect, target and estimate. Such forward-looking statements are subject to numerous risks and uncertainties.
Our press release today and the SEC filings noted in the release mention important factors that could cause actual results to differ materially. Also, we'd like to note that we will be limiting our comments regarding Cree's second quarter of fiscal year 2012 to a discussion of the information included in our earnings release and the metrics posted on our website. We will not be able to answer any questions that would involve providing additional financial information about the quarter beyond the comments made in the prepared remarks.
This call is being recorded on behalf of the company. The presentations and the recording of this call are copyrighted property of the company, and no other recording, reproduction or transcription is permitted unless authorized by the company in writing.
Consistent with our previous conference calls, we are requesting that only sell-side analysts ask questions during the Q&A session. Also, since we plan to complete the call in the allotted time of one hour, we ask that analysts limit themselves to one question before reentering the queue. We recognize that other investors may have additional questions, and we welcome you to contact us after the call by e-mail or phone at (919) 287-7895. We're also webcasting our conference call, and a replay will be available on our website through February 1, 2012.
Now I would like to turn the call over to Chuck.
Charles M. Swoboda
Thank you, Raiford. Our second quarter results demonstrated the strength in our expanded lighting product line with strong growth in sales of both indoor and outdoor products. LED revenue was down 1% from Q1 due to a challenging competitive environment but performed better than the market overall. Power and RF sales were also lower due to continued softness in device sales for solar and RF applications. The current business environment has reinforced the value of our market leadership position in LEDs and lighting as well as the power of having truly innovative products that change the market and drive adoption.
Q2 revenue increased 13% from Q1 to $304 million, while non-GAAP net income increased 2% to $29 million or $0.25 per diluted share. Revenue and non-GAAP earnings per share were on the low end of our target range for the quarter, and the results included a $0.02 per share benefit due to a lower tax rate than we had originally targeted for the quarter.
Revenue growth in Q2 was driven by $44 million increase in lighting sales. This included the benefit of Ruud Lighting sales for the entire quarter and double-digit organic sequential growth in both indoor and outdoor products. This was offset by a $3 million decline in LED sales, as slightly higher XLamp LED sales were offset by lower high-bright LED and chip sales and a $6 million decline in Power and RF sales.
Non-GAAP gross margin was 35.3% in Q2, which is lower than our target range of 37% to 38%. The difference versus our target range was driven by several factors. LED margins were lower due to increased pricing pressure across the product range and lower LED factory utilization as we reduced inventory across product lines. These factors offset the progress we made on yield improvements and cost reduction programs. Indoor and outdoor lighting product margins improved, driven primarily by cost reductions. Power and RF margins declined due to lower factory utilization related to lower demand.
We continue to take a conservative approach on factory starts to reduce inventory while also trying to maintain flexibility to respond to short lead time expectations in the market. As a result, inventory declined by $16 million to 85 days in Q2. While this increased short-term margin pressure, it puts the factory in a better position to realize cost reduction and respond to future demand.
Cash and investments increased to $687 million due to solid profitability, improvements in working capital and reduced capital spending. With the productivity and yield improvements that we have made over the last several quarters, we're spending a fraction on CapEx versus previous years as our current LED chip factory has the capability to increase output 60% to 70% from current levels with minimal incremental investments.
We continue to qualify additional products on 150-millimeter but have slowed the rate of transition to take advantage of existing excess capacity. With some additional investment in 150-millimeter tooling and equipment, our current LED chip factories should be able to increase output by another 100%. In total, we have the ability to more than triple LED chip production output from current levels and are well positioned to support significant growth in LED lighting over the next 12 to 24 months.
Free cash flow was $58 million in Q2, and we remain in a strong position to continue to invest in our business and lead the market and accelerate the adoption of LED lighting. LED orders are tracking behind this point last quarter, as customers and distributors are trying to minimize their inventory and utilize short lead times. We saw a similar pattern in our fiscal Q3 each of the last 2 years for LED products, as the Chinese New Year holiday effectively reduced demand in the beginning of the quarter before a strong rebound post-Chinese New Year. We're currently targeting a good second half of the quarter once again driven by end demand, which will be a significant variable for the quarter. Q2 sales through our LED component distributors were similar to Q1 and channel inventories were essentially flat.
Lighting backlog is slightly ahead of this point last quarter, and we know that this is a typically slower quarter for outdoor products due to lack of installations in the winter months. We see a strong pipeline of new projects for both indoor and outdoor products and target overall growth in Q3, as we remain very encouraged by the success of this product line and our ability to drive adoption in the market.
I will now turn the call over to John Kurtzweil to review our second quarter financial results in more detail as well as our targets for the third quarter of fiscal 2012.
John T. Kurtzweil
Thank you, Chuck. I will be providing commentary on our financial statements on both a GAAP and non-GAAP basis, which is consistent with how management measures Cree's results internally. However, non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. A reconciliation of the non-GAAP information to the corresponding GAAP measures for all quarters mentioned on this call is posted on our website along with the historical summary of other key metrics.
For the second quarter of fiscal 2012, revenue increased 13% sequentially to $304 million, which is within our target range of $300 million to $320 million. Our revenue by category is as follows. LED products revenue was $194.2 million, which includes LED components, LED chips and materials. Lighting products revenue was $95.7 million, which consists of revenue from our indoor and outdoor LED lighting products plus traditional lighting systems. And Power and RF products revenue was $14.2 million.
GAAP net income was $12.1 million. GAAP diluted earnings per share were $0.10. On a non-GAAP basis, net income was $28.7 million. Non-GAAP diluted earnings per share were $0.25. Non-GAAP net income excludes $16.6 million of expense, net of tax, or $0.15 per diluted share from the amortization of acquired intangibles, stock-based compensation expense and the step-up value of the finished goods inventory related to the Ruud Lighting acquisition in our first fiscal quarter.
Q2 GAAP gross margin was 34.6% while non-GAAP gross margin was 35.3%, which excludes stock-based compensation of $16 million -- or $1.6 million and $0.5 million related to the final portion of the step-up value of the finished goods inventory that flowed through during the quarter. This was below our non-GAAP target of between 37% to 38% due to a $17 million reduction in WIP and finished goods inventory in the quarter and increased pricing pressure.
Operating expenses for Q2 were $92.9 million on a GAAP basis and $76 million on a non-GAAP basis. Non-GAAP operating expenses exclude approximately $9.6 million of stock-based compensation expense and $7.4 million of charges for our amortization of acquired intangibles.
Non-GAAP R&D expenditures increased $1.3 million sequentially and were in line with our target for the quarter. Non-GAAP SG&A expenditures increased $7 million sequentially but were approximately $2.5 million lower than our target, primarily related to lower-than-planned selling expenses and legal fees.
Net interest income and other for the quarter was $1.7 million, which was in line with our target. The tax rate was 13%, which is below our target of 21.5% for the quarter. This is primarily due to a higher ratio of fixed investment tax credits relative to our pretax income. We target to be at this rate for the balance of the year.
We ended the quarter with $687 million in cash and investments. Cash from operations was $81 million, and capital expenditures were $23 million, which resulted in free cash flow of $58 million. Depreciation and amortization for the quarter was $36 million. We did a great job managing working capital in the quarter. Days outstanding were 46 days. Accounts receivable decreased $9 million to $156 million. Inventory days were 85, with inventory decreasing by $16.3 million to $187.4 million.
Capital additions were $23 million in the second quarter. We are actively managing this while continuing to invest in the strategic priorities to lead the market, drive adoption of LED lighting and accelerate cost reductions. Based on our prior capital additions, along with incremental investments, we are well positioned from a capacity point over the next 12 to 24 months to support significant growth.
We have updated our PP&E commitment target for the fiscal year to be approximately $75 million to $80 million. At this time, we target Q3 revenue to be in a range of $290 million to $310 million, which is comprised of single-digit growth in lighting, driven by strong growth in indoor and flat to seasonally lower outdoor sales; LED product sales down a few percent, which includes XLamp LED sales flat to down a few percent and seasonally lower high-bright LED chip and material sales, and Power and RF sales in a similar range as Q2.
GAAP gross margins are targeted to be 34% to 35%, and non-GAAP gross margins are targeted to be 35% to 36%, both of which are similar to the margins in Q2. These targets factor in benefits from cost reduction programs, which are offset by the competitive pricing environment.
Our GAAP gross margin targets include stock-based compensation expense of $2.2 million while our non-GAAP targets do not. We are targeting non-GAAP R&D expense to increase slightly in Q3. We target non-GAAP selling expense to increase by approximately $1 million to $2 million and for G&A to be up approximately $1 million. The decrease in selling is primarily related to higher -- excuse me, the increase in selling is primarily related to higher commissions due to increased sales of our lighting products through our lighting agent channels with the G&A increase primarily related to legal fees. We target asset impairments of approximately $500,000 for the quarter.
Our GAAP operating expense targets include non-cash stock-based compensation expense of approximately $2.6 million in R&D plus $7.3 million in SG&A and charges for amortization of acquired intangibles in the amount of $7.4 million.
Net interest income and other is targeted to be approximately $1.6 million. We target our tax rate to be 13% for both fiscal Q3 and Q4. GAAP net income for Q3 is targeted to be between $4 million to $12 million based on an estimated 116.4 million diluted shares outstanding. Our GAAP EPS target is between $0.04 to $0.10 per diluted share. Non-GAAP net income is targeted to be between $21 million to $29 million or $0.18 to $0.25 per diluted share. Our non-GAAP EPS targets exclude amortization of acquired intangibles and noncash stock-based compensation in the amount of $0.15 per share.
Thank you. I will now turn the discussion back to Chuck.
Charles M. Swoboda
Thanks, John. We're focused on 3 priorities to drive our business in fiscal 2012. Our first priority is to continue to lead the market and drive adoption of LED lighting. We're focused on developing innovative new LED lighting systems and LED components that enable our customers to deliver a more competitive payback versus traditional lighting.
Our lighting sales growth demonstrates that we have good momentum and are on the right track for both our indoor and outdoor products. The project backlog is growing, and we should see additional revenue synergies from a combined sales team, stronger agent network and expanded product line over the next several quarters. The new product pipeline is growing with several next-generation products in development that are designed to address large existing markets with improved performance, better payback and cost that results in a higher product margin.
We made good progress on the Ruud Lighting integration in Q2. We successfully transferred CR troffer production to Racine, which increases capacity and is targeted to provide cost leverage starting in fiscal Q3. We also transitioned all lighting-related customer service activities to Racine, which will provide our customers a common interface for indoor and outdoor products and should improve our ability to respond to customer requests.
On the LED component side, we recently announced the breakthrough next-generation XLamp XB-D LED component. This is the most important LED platform we have released in the last 2 years, as this product delivers twice the lumens-per-dollar of previous generation lighting-class LEDs. This new platform combines a new LED chip and optical system in the industry's smallest lighting class package and fundamentally changes the cost-per-lumen curve, which helps drive LED lighting adoption. The product is released to production, and we are working with customers on new design with the goal to have the first customer product in production during our fiscal Q4.
In addition to the XB-D announcement, we continue to expand our customer offering with new application-optimized components and services to enable our customers. We extended our industry-leading temple evaluation services with the addition of thermal simulation capabilities and advanced photometric testing. We also released a new family of high-voltage LEDs that can enable the use of more efficient smaller drivers to lower cost in compact lighting applications.
We released the LMH2 LED module family, which features Cree TrueWhite Technology and delivers 80 lumens-per-watt system efficiency combined with CRI greater than 90. We are seeing the benefits in our continued focus -- we're seeing the benefits of our continued focus on R&D with new products that can enable the next wave of LED lighting adoption.
Our second priority is to accelerate cost reductions and drive operational improvements to increase the profitability of our business. We made a lot of progress in Q2 on a number of cost reduction activities, but the short-term gains were offset by the aggressive pricing environment and low factory utilization. It will take time and increased volume to fully realize the benefit of many of these improvements.
We also continue to make progress on 150-millimeter qualification. However, as I said earlier, we're delaying the rate of conversion to take advantage of existing 100-millimeter capacity. This will allow us to better utilize the current factory to deliver the lowest cost in the near term while still doing the work to enable the full conversion as business needs warrant over the next 3 to 6 quarters.
We continue to work on operational improvements across the company and believe there is leverage in our existing infrastructure. However, the real profit leverage comes from innovation and we're not slowing down. Driving adoption with innovative systems, products and services is what drives volume and provides the opportunity to utilize our technology advantages to increase margins during what we target to be a tremendous growth opportunity over the next few years.
Our third priority is to grow the Power and RF product line and expand beyond niche applications. We continue to make progress in R&D while sales declined in both Power and RF product lines in Q2. The Power sales decline is due primarily to continued weakness in the solar inverter demand. We continue to see good design activity, but there appears to be several quarters of inventory in the supply chain. We continue to drive innovation in both diode and MOSFET products in an effort to open up new applications to expand the market. RF product sales declined due to a delay in the military program, but we believe this is primarily a timing issue and target incremental growth in RF sales for Q3.
As I explained earlier, Q3 total company backlog is behind last quarter's run rate. We see good trends in lighting, but this is a short lead time business and we know that outdoor lighting demand is typically lower in the winter quarter. In LEDs, we continue to operate in a very competitive business environment, and the Chinese New Year holiday is expected to result in a slow first half of the quarter, which makes it challenging to forecast the business.
Demand in the second half of the quarter will be critical to achieving our Q3 revenue targets of $290 million to $310 million, which is comprised of single-digit growth in lighting, driven by strong growth in indoor and flat to seasonally lower outdoor sales; LED product sales down a few percent, which includes excellent LED sales flat to down a few percent and seasonally lower high-bright LED chip and material sales; and Power and RF sales in a similar range as Q2.
We target Q3 non-GAAP gross margins in a similar range as Q2 at 35% to 36% as cost reductions are offset by the competitive pricing environment in the LED product line and low factory utilizations. We target R&D in a similar range as Q3 with higher sales and marketing expense to support the growth in lighting, increase sales through the agent channel and new product introductions.
G&A is also targeted to be higher, based primarily on the timing of patent-related litigation. As a result, we target non-GAAP earnings in Q3 of $0.18 to $0.25 per diluted share. Please note that our non-GAAP targets exclude amortization of intangibles, acquisition costs, stock-based compensation expense and related tax effects.
The near-term business challenges are a function of the competitive market environment and LED supply getting ahead of demand. Our success in this environment has demonstrated that our strategy is working, and we continue to see a path to revenue growth, higher gross margin and improved operating leverage. There will be variability along the way, which is the nature of new technology and emerging markets. However, our business outlook remains very optimistic based on a number of factors. The lighting market is big and LED adoption is low. This includes traditional renovation in new construction markets and also a tremendous upgrade opportunity. We are the leader. Our indoor and outdoor LED lighting products are winning today. Our new XLamp XB-D LED fundamentally changes the game with twice the lumens-per-dollar, and we have a pipeline of innovation to further improve payback which drives adoption.
Our LED expertise and vertical integration enables us to develop innovative lighting products to open new markets first and then use our LEDs to enable other lighting companies to win with their own products.
While LED market dynamics have reduced our operating results over the last year, they have also accelerated the price-per-lumen curve, which should accelerate adoption and will likely pressure the weaker players to consolidate or exit the market. This process is healthy for the market and should provide an improved business environment for market leaders like Cree going forward.
We remain confident that innovation drives payback, payback drives adoption and adoption expands the market for our own lighting products and our customers' profits. We'll now take analyst questions.
Question-and-Answer Session
[Operator Instructions] Our first question comes from Chris Blansett from JPMorgan.
Christopher Blansett - JP Morgan Chase & Co, Research Division
Chuck, I had a question related to new product launches, which you mentioned in your comments. Are there some -- maybe some timelines or thought process throughout the year when we should expect waves of new products to hit the market?
Charles M. Swoboda
No, Chris, there's no specific timeline in terms of -- there's not like a regular schedule. Right now obviously, probably the biggest thing happening is the XB-D so that product that's launched this quarter really won't see -- really won't have a chance to get that design and then start driving the business until sometime in next quarter, if there's a design cycle, obviously. We've got to go through there. So I think what you'll see is -- the way I think about it, the LED components kind of come at some fairly regular interval. If you look at last quarter, I think there was 4, 5 products. I think you can continue to expect us to innovate there. I think in lighting, there's no set schedule. We do have the 2 big lighting shows coming up, so my guess is you could expect to -- if we don't release them at least hear announcements about new products a lot more here later in the spring as we go through the Light+Building show in Germany and then the Lightfair, I don't know if it's in -- I think it's in Vegas next year. So I think it will be -- those 2 will kind of be the next big milestones. That doesn't mean we won't do some new products between now and then, but those are kind of the next big time.
Our next question comes from Brian Lee from Goldman Sachs.
Brian K. Lee - Goldman Sachs Group Inc., Research Division
My question was on volumes. This is about 3 quarters in a row where revenue has been flat after adjusting for a full quarter of Ruud Lighting last quarter. So I'm wondering, when you say your future business outlook remains optimistic, does this apply toward all the segments of the business? Or are you specifically talking to the system segment? And I guess, what are you seeing specifically over the next 12 months or so that give you confidence that this might be the bottom and you'll see a recovery in growth?
Charles M. Swoboda
Yes. So Brian, first of all, on the lighting, we had organic growth in both the indoor and outdoor lighting product line, so part of the optimism comes from lighting. We've obviously had some pretty consistent sales momentum growth there over the last number of quarters on the indoor. And over the last 2 quarters with the acquisition of Ruud, I think we've seen, not just the addition of the acquisition, but the actual business itself is gaining momentum. So lighting momentum is the first piece. And then the second piece is that, if you look at the LED business, which is really driven by the XLamp product line, as we look at new products, XB-D, we're talking about twice the lumens-per-dollar. That's a pretty dramatic change in the marketplace. And so I see things like that plus the fact that, as I said in my comments earlier, the cost-per-lumen curve is lower on a broad market basis than probably we would've expected a year ago. And I think the combination of products that we can push into the market and the general trends, that's going to push adoption, which I think then drives volume in the market. So that's where my optimism comes from those -- both of those pieces. And we just go to work through the short-term operating issues to get there.
Our next question comes from Dale Pfau from Cantor Fitzgerald.
Dale Pfau - Cantor Fitzgerald & Co., Research Division
Chuck, I've got a housekeeping question and then a real question. Could you please give me your stock-based compensation for both R&D and SG&A, if you could? And then my question is, on the 150-millimeter transition, about what percentage of your products are moved or on to that now, Chuck? And then could you give us an indication on what the utilization was in the quarter?
Charles M. Swoboda
Yes. Dale, I'm going to let John try to figure out your stock-based comp number, while I'm answering your second question. But on 150-millimeter, it's increased slightly. I don't have an exact number for you. I would say that it's going up, but it's relatively small percentage overall. What we're actually doing is, while we are qualifying additional products, we're not converting a large piece of production just because we have the capacity available today. And that really gets to your second question, which is the -- if you look at capacity across the company, it's a little hard to give you an exact number. But if we just use the wafer fab, it's probably the highest capital area. It ran at about 60% utilization last quarter. And, John, do you have the number for Dale on that one?
John T. Kurtzweil
Yes. The stock-based comp, it was about 9.6 total for OpEx, of which 2.2 was for R&D.
Our next question comes from Harsh Kumar from Morgan Keegan.
Harsh N. Kumar - Morgan Keegan & Company, Inc., Research Division
Chuck, a quick question for you on gross margins. It sounds like, listening to your commentary, the driver here is pricing. But I'm also curious where Ruud is qualitatively, if you can talk about where it sits relative to corporate? And how long do you think or what do you have to do to get it up to corporate? And how is it going relative to your original plan now that you had it for a quarter?
Charles M. Swoboda
Yes. So, Harsh, on the margin question, I think, first of all, if you look at where we were from last quarter, if you look at kind of the delta, they got to keep 2 things. I think part of it is pricing-related, but I think part of it is, is when you -- we burned, I think, $16 million in total inventory. That definitely impacted the quarter. So I'd say a piece of that, a big piece of that, is the inventory burn, and part of that is pricing a little more aggressive than we expected. So that's kind of what's different than we thought. I think if you look at the lighting segment, both indoor and outdoor margins improved last quarter, so quarter-to-quarter, we saw an improvement in both. I think that lighting margins are a little below the corporate average, but they probably have improved the most recently. So I'm feeling that it's going to take a little bit of time. But as we do new product designs that are designed to take advantage of how we get system costs down, I see an opportunity for improved margins on the lighting side. And frankly, I see it on the LED side as the new products come out that help us drive volume.
Our next question comes from Jesse Pichel from Jefferies.
Jesse Pichel - Jefferies & Company, Inc., Research Division
You mentioned you're holding back on the 150 transition because that would just lower your utilization. How long would it take you then to convert all of your capacity to 150, should demand pick up? And what type of cost down would that allow at this point?
Charles M. Swoboda
Yes. So, Jesse, right now we're running at about 60% utilization, which says we got a lot of upside in the existing capacity, and we are running. We do have some 150-millimeter on but it's a relatively modest amount. Timing-wise, I would say that the goal would be able to drive that utilization up and then we'll use the 150 conversion, which will be -- there is some additional costs. Part of that is bringing in some 150 equipment, but part of it is converting the 100-millimeter equipment. And that's cheaper than adding new capacity from the start. But how fast can we do it? I think as we get through the end of this year, it will be kind of then our choice. I mean, my guess is it's probably a 3- to 6-month time frame if we really want it to go fast, but I don't see that that's a near term, not even near-term stuff that I'm thinking. I mean, if we can add 60% of the volume with what we've got today, I'd focus on how to drive that up first, but that's where you kind of get that 3x number I threw out in my comments earlier. That's the kind of leverage we have, the combination of using our existing factory and then converting the 150. Cost leverage? I think we're going to get more cost leverage in the near term from cost reductions, yield improvements, productivity, utilization and the new products. There is a lot of leverage in those 5 areas, and that's what the focus is. And then as that volume comes up, what we've said in the past is that we had targeted that at a equivalent level of utilization. 150 gives you somewhere in the 30% to 40% cost leverage beyond that. But right now, we're focused on those other levers, and I think that's where we got to be.
Our next question comes from Andrew Huang from Sterne Agee.
Andrew Huang - Sterne Agee & Leach Inc., Research Division
So, Chuck, you talked repeatedly about XB-D giving you twice the lumens-per-dollar, but maybe you can give us a sense of how much lower your production costs are for XB-D.
Charles M. Swoboda
I would say that XB-D, we would anticipate that it allows us to double the lumens-per-dollar in terms of what we can sell it for, and it should allow us to do something similar from a cost level.
Our next question comes from Ahmar Zaman from Piper Jaffray.
Ahmar M. Zaman - Piper Jaffray Companies, Research Division
Chuck, you mentioned pricing as sort of a culprit for gross margins, weaker-than-expected gross margins. Can you give us a broader color as to regionally where you saw the pricing pressure? And also, was it more indoor versus outdoor lighting or on components? Any color you can give on where you saw the pricing pressure.
Charles M. Swoboda
Yes. So first of all, I want to clarify, I would say the margin delta is 2 pieces. It's inventory is -- the inventory burn, which lowered utilization and pricing, were about equal parts of the delta so I want to clarify that. But in terms of the pricing piece of it, I would say not as much a regional issue as it was an application. I would say that the area that was off the most was really the LED bulb segment. And what we saw there is, not on the next design, but really on the running designs where they're going through comps and design revs, that there is probably where we've seen the most aggressive competition, and it's an area where it's, not just high-power LEDs, but you also have mid-power LEDs competing in that segment. So that's really where I would say -- I mean, pricing was more aggressive generally, but that will be the one segment that probably was different more than we expected.
Our next question comes from Vishal Shah from Deutsche Bank.
Scott Reynolds - Deutsche Bank AG, Research Division
This is Scott Reynolds for Vishal Shah. So I just wanted to get an idea of what the utilization rates look across the industry. And also, could you guys possibly quantify what the impact to gross margins were from the underutilization in the quarter?
Charles M. Swoboda
So I don't have an impact on the underutilization for the quarter. Across the industry, obviously, there's people reporting a variety of different things out there. I've heard people talk about running at 50% to 60% utilization. I've heard some people say a little higher, some people a little lower, but that's kind of the number I know. There was an industry report that I think came out in the last couple of days that said that they thought the industry was running at around 55%. Now you have to be a little bit careful. Not all capacity is equal and it can't all serve the same markets. So the fact that there's excess capacity doesn't mean all those same -- that capacity can't all serve, for example, the high-power market versus the mid-power versus the low. There was a mix and matching, but I think that's the broad brush of the industry.
Our next question comes from Steve Milunovich from Bank of America.
Steven Milunovich - BofA Merrill Lynch, Research Division
So the guidance is a flattish gross margin again. So are you, for now, kind of in a Catch-22 where you need to get to the 6-inch wafers to get the cost down but you can't get there because utilization's too low and you, I think, roughly halved your CapEx plan from what you said last quarter and you're not talking 3 to 6 months off, I guess, or at least a couple of quarters away? So is it kind of how the short term looks here until demand comes back, utilization goes up and then you can move quickly to 6-inch wafers?
Charles M. Swoboda
Yes. Steve, the way I think about it is, Q3, we had targets 35% to 36%. I think in Q4, we don't have enough visibility to give you any insight one way or another. Obviously, I think I commented earlier, my more longer-term outlook is fairly optimistic both for lighting and components. But I think the way I think about it is there is leverage in utilization on its own. I think there is -- clearly, 150 gives us a lever beyond that, but given where we're at today, there's more cost leverage in the near term by just driving up utilization and the cost reduction programs in the new products. So I think to some extent, 150 is going to be there. I see that as an opportunity, but the fact is that the way we start to get improvements in the near term is really the focus on drivers at hand, which is volume gives us some additional utilization, that's tremendous leverage for us. We've got new products coming, that's leverage. And then frankly, when you have the -- when utilization, then your cost reduction programs kick in further because now you're not just improving yields to increase -- or offset by utilization, you can get the full benefit of them. So my sense is 150 is still important. I think I said that I targeted more, the 3- to 6-quarter range now, but at the end of the day, using the 60% to 70% of burst that we have right now is probably where we're going to get more near-term benefit.
Our next question comes from Ben Schuman from Pacific Crest.
Benjamin Schuman - Pacific Crest Securities, Inc., Research Division
How about in terms of the process development on 150? Would you say for the stuff it's at, production scale, your cost is below what you were doing on the 100-millimeter?
Charles M. Swoboda
Yes. Ben, if we had equivalent utilization the 150 gives us, we have enough experience now. We know it gives us a benefit. I'd say the problem though is that if I run more of it, I would just -- utilization would offset whatever benefit that was. And frankly, there would be some capital costs to do that, so there's no -- obviously, that is where the lack of a near-term reason to do it is.
Our next question comes from Daniel Amir from Lazard.
Daniel L. Amir - Lazard Capital Markets LLC, Research Division
Can you give us kind of where you believe you want your target inventory days to be compared to where it is right now? And how should we look at kind of CapEx potentially for next fiscal year?
Charles M. Swoboda
Yes. So if I look at inventory days right now, John, I would say at similar range, some are right here. I mean, plus or minus from here, we're okay. I think it's a pretty healthy place. And if you think about it, we're vertically integrated from the beginning to the end, so I think it's -- I don't know that it would go significantly lower than here, but I think that this level gives us lots of flexibility. I think it's -- first, CapEx for next year, it's a little early. The way I'd put it this way is, as I laid out earlier, our current factory was a little -- was incremental. CapEx gets us 60% to 70% more volume at the wafer fab. Now, obviously, we have to add some packaging capacity and other things but -- so that's kind of the first lever. Once we get past that, then there's a conversion to 150 that will cost us. It will require more capital but at a lower rate than we saw over the last several years because fact is there's parts of that -- a lot of that capital was simply conversion of 100-millimeter. So I'd say it's likely to be at least in the near term lower than it has been, and it's really going to be a function of volume when that starts to pick up again. And we don't have a great -- good enough guidance for you to tell you when that is in terms of what quarter or what half of the year at this point. We're focused on what we can do to drive that adoption and get the volume moving.
Our next question comes from Jed Dorsheimer from Canaccord.
Jonathan Dorsheimer - Canaccord Genuity, Research Division
I have a 2-part gross margin question, Chuck. First, just a follow-up to a previous question, I think it was Harsh that asked this, but your answer on the Ruud's gross margin is slightly below corporate. And if I go back, that was the same comment that you made when you bought Ruud, but the problem was gross margins were at 38% at that point. So the first question is or first part is, are you seeing this severe type of pricing pressure? Because I thought the reason for the gross margins coming down was really on the utilization. And then sort of as a follow-up to that, on the utilization, I used to ding you when you built inventory, and now I guess I got to give you the benefit here. So if we keep utilization flat or keep inventory days flat, gross margins should have been about 37.5%. So basic question on the guidance of 35% to 36%, what are you assuming if you keep -- if you're comfortable with the inventory days where they are? Why not a higher gross margin there?
Charles M. Swoboda
So the way to think about that, Jed, is that a portion obviously of the inventory depends on what fixed variable you do and where that inventory is across the factory. So inventory at a lighting fixture versus inventory at a chip has a very different effect on the business. What I commented earlier was that gross margin from where our targets were, about half the delta was inventory-related and half was pricing. So I think you'd have to factor that in to kind of -- to your thinking there. So it wouldn't have been 37.5% as you'd just suggested. But you're right, it's a piece of it, roughly 1/2 is my guess. If I think about it going forward, what we've built in is we're not targeting -- obviously, if you look at the revenue guidance, we're looking at relatively flat revenue, lighting up a little bit, LEDs down a little bit. So while we won't have an inventory burn, we will have a little bit lower LED volume. So we're roughly planning for effectively similar utilization levels as last quarter. So if the utilization's relatively similar, then what we're counting on is -- which is low, then we're counting on the fact that our cost reductions will offset the pricing on the other side. That's kind of how you get your head around the gross margin. As far as Ruud goes, look, we're not breaking up to 2 pieces. What I can tell you is, from Q1 to Q2, both indoor and outdoor, gross margins did go up. They are tracking below the overall company gross margins. And a function of that is, overall is, as we do have lower utilization as higher costs flow all the way through the factory. So I think they're having an effect on the overall business but it is getting better, it's tracking a little bit behind. And obviously, our targets are, as you know, to continue to drive that up, not only the corporate average, but hopefully have both of them increase going forward.
Our next question comes from Alex Gauna from JMP Securities.
Alex Gauna - JMP Securities LLC, Research Division
Chuck, earlier you answered that the worse of the pricing pressure is being experienced in the bulb component, and I think earlier in the call, you'd also talked about high-bright product areas being more under pressure. Are there any new developments in terms of the bulb players, whether out of Korea or China, that are impacting that or some of the Tier 1 guys? I believe I've heard that you guys are coming up with similar packaging and bonding and things to make yourselves more competitive. Is there any dynamic there? And then in terms of getting gross margins moving more favorably in the other direction, is there any risk to this mid-tier percolating up to challenge some of your XLamp, your XB-D product lines? Are you in a position now where the XLamp and XB-D can start driving some of those midrange players back out of the market?
Charles M. Swoboda
Yes. So let me talk first a little bit about bulb and see if I can address kind of your thought there. It's -- so I think in the bulb segment, what we're seeing is that there is competition, both from what I'll call kind of a Tier 1 and more traditional high-power guys selling into that application, and you have mid-tier guys coming up. And it's really in the consumer segments. So we have to be a little careful on bulbs because bulbs really have a commercial component, and a consumer. And where you see the biggest deltas is in the consumer side where they're not going for efficiency. They're not actually trying to even increase the performance. They're trying to take existing 40-watt or 60-watt designs and squeeze a little bit more cost out. That's where we're seeing the dynamic. As far as how does that affect the rest of the business, I would say that the fixture markets that we sell into were tracking much more in line with what we had targeted for the quarter. There is more pricing pressure, but I'd say the bulb segment is significantly different than the rest of them today. And so what it tells me is, and we've seen this in our new products, is there's definitely still segments where the high-power LEDs, in fact, quite a number of them that are mostly fixture-based, where the high-power LED does drive differentiation at the system level. And so you have a different pricing dynamic there. As far as beating back the mid-tier guys, I think for certain applications, it's going to be an interesting choice going forward. I think right now you have people throwing excess capacity at the market, and some of those guys are the same guys reporting negative operating margins. So I think we've got to realize that there's a pretty aggressive approach. What we're trying to do is invent products, I think, that will allow us to compete in these segments with a cost structure that is also a rational one going forward. So I like our chances with some of the new products, but I'm not going to -- I mean, we're going to wait and see how we do going after some of those applications. And frankly, bulbs has always been kind of a piece of a business where we like to participate in. It's nice for some pieces of volume, but at the end of the day, it's not the most important segment. And we're more focused on driving the core fixture market.
Our next question comes from Stephen Chin from UBS.
Stephen Chin - UBS Investment Bank, Research Division
Chuck and John, I wanted to follow up on that new CapEx spending plan. Can you help us quantify what quarterly sales you think this new CapEx plan can support? I think, Chuck, you said you can get about 60% higher volumes for this from the factories. So can Cree hit these higher sales levels of, say, $500 million a quarter even the smaller CapEx plan?
Charles M. Swoboda
Yes, we don't have -- that's going to vary dramatically based on mix, if we sell, where the products get sold at, if those are LEDs that end up in systems versus LED, if we sell those LEDs at their high power versus mid power versus chip sales. So there's no good way to give you an exact correlation to what that means in revenue. Obviously, it's a lot of volume, but I can't give you a revenue equivalent of that.
The next question comes from Amir Rozwadowski from Barclays Capital.
Amir Rozwadowski - Barclays Capital, Research Division
If we think of it, Chuck, some of the levers that you folks have to manage your expenses, it seems like you have enough levers in the event that demand recovers to the growth level that you expected to, to sort of help boost sort of your gross margin trajectory from the current level. What I'm trying to assess is, what are we missing? I mean, we generally see the opportunities for LED penetration of the general lighting market, but it does seem as though the adoption curve is taking a bit more than expected. And I'm just trying to understand, you folks seem to be doing what you can from the cost side. I'm just trying to understand what we need to look out for that can either give us some level of visibility that this inflection point and is it least upon us in the near term.
Charles M. Swoboda
Yes, it's a great question, I wish I could answer that exactly. Here's how I think about it. As the best leading indicator we have is we have an indoor and an outdoor product line that are in the North American fixture business every day. And the indoor product line, I think, for every quarter for the last 3 years has been growing but started at a really small base. And the outdoor product line that was part of Ruud, it was our beta LED product line, that's now part of our combined business. It's essentially been growing over the same time period. So we're coming from a market where no one had heard of LEDs and it wasn't out there. And so at the end of the day, we're winning business. Obviously, you can see on the revenue growth there is success. The question is, how do you take it to some fundamentally higher level? And what we believe is you've got to get the cost performance to where the payback or the ROI, however you want to look at it, makes it easier for the customer to make the decision today. There are still many cases where the traditional lighting is winning and because not much of the lighting is bought on first cost, so a lot of what we're dealing with is to getting people to think about lighting as a cost of ownership. What most people don't appreciate is, if you were building a new parking garage today, you could buy cheaper lights that aren't LED. But if you did, you'd be losing money over the next few years pretty quickly because LEDs have that good of a payback in that example. But the problem is there's still a lot being done that way. So there's a lot of market training, a lot of building the channels and a lot of product choices got to be created. If you look at a lighting catalog, there's tens of thousands of products. It's, in fact, the reason why it may be frustrating that it doesn't go faster. We're actually happy with what we're able to do with our own product line. But also, I think the market is harder for other companies to penetrate because you are going after so many different applications at the same time. So I think lighting is our leading indicator, it's why we're optimistic. I think we see success with our other customers. The key is how do we give them -- how do we make their value proposition of their products better to get that customer to say yes to LED versus the other technology. And that's just about moving down the curve. And where that inflection point is? I think we're all going to know it about 6 to 12 months after it happens.
The next question comes from Carter Shoop from KeyBanc.
Carter B. Shoop - KeyBanc Capital Markets Inc., Research Division
I was disconnected earlier, so excuse me if one of these questions have been asked before, but my first question is on the potential stock buyback, obviously, the reduced CapEx need going forward. Any thoughts there? And then also, the second question is on SG&A going forward. If you look at kind of your guidance from March 2012, you compare that to 2 years ago, your SG&A and R&D combined is growing almost 3x faster than your sales. Can you talk a little bit about your outlook for that? Can we keep SG&A growth in line with sales? Could we keep it below? And what are some of the drivers there?
Charles M. Swoboda
Yes. On stock buyback, we're not -- no real speculation at this point. Obviously, we have an authorized program out there, we'll evaluate it and we'll generally report it after it's happened. On the other side, I think you look at SG&A, 2 things to consider over the last 2 years. There has been growth for 2 things. We've launched the lighting business, which required a brand-new channel and a whole lot of infrastructure to basically get into -- to make indoor lighting happen. And then with the acquisition of Ruud, we acquired that as well, and it's a different cost structure style business from an SG&A, relatively speaking. But with that being said, is there leverage? I think if you go back and you look at 2008 to 2010, you'll see the exact opposite trend. You'll see pretty tremendous revenue growth and very little SG&A increase. So I do think there's leverage. I think it's about making the core investments in the channel to drive the business. And then I think when you start to see adoption in nice chunks, then you get paid back on the other side. Obviously, it's nice to say right now when that hasn't happened yet, but that's the belief and that's how we're managing the business.
Our next question comes from Ramesh Misra from Brigantine Advisors.
Ramesh Misra - Brigantine Advisors LLC
In regards to your capacity comment about being able to almost triple capacity with relatively modest CapEx and this modest transition to 150-millimeter, would you say that that is similar -- that that's a similar case in that of many of your other competitors under which circumstance that even if we have a modest uptick in demand, well, there will still be a kind of capacity chasing that modest uptick?
Charles M. Swoboda
I think -- the answer is I think it depends on where the demand is. If the demand is in lighting, not all the demand can serve us today. We know that there are building a lighting class LED for most applications. Not everyone's capacity can get there, so I think it has probably more to do with the dynamics and the companies, the tier 1 suppliers, that can service that segment of the market. And so I think that's one piece out there. 2, we made a lot of investments to get to 150 ahead of the curve that we never fully implemented. So that's one of the reasons we're in such a good position today. I know that there's probably some other companies who've done that, but I think the majority of companies that I'm aware of are still -- are not nearly as far down that curve. And so I think you're going to be looking at -- you're going to have to make a choice of where that extra capital has a value to it. And I think the thing that's kind of -- coming out from the other side is there's a number of companies out there that are in a pretty tough position from an operating margin standpoint, so I think they're going to be kind of pressured from the other side. So my sense is, yes, there is available capacity out there. I think you have to be a little careful using the 150 numbers on a broadbrush on the industry because, effectively, that's buying new capacity. Maybe it's a little cheaper than buying standard capacity but it is effectively new capacity. And those capital dollars, my guess is, will be somewhat a function of people's ability to generate profits from them.
Our next question comes from Brian Lee from Goldman Sachs.
Brian K. Lee - Goldman Sachs Group Inc., Research Division
Can you elaborate on the typical seasonality that you see in the lighting segment and I guess more specifically the trend off of Q1 because it seems like you're suggesting this could be a low point in the year for your lighting business?
Charles M. Swoboda
Yes, Brian. So what happens is that in our indoor business, it's been growing pretty consistently, so it really hasn't had a seasonality to it at this point. It's the outdoor business though that the guys in the -- the team in Racine has had a pretty good experience that, especially in outdoor-based lighting products, this quarter is the seasonally lower quarter. So typically, it's our fiscal Q3. The winter quarter is where you're going to typically see lighting. And in most cases, it's going, to be down from Q2 and then up again, so as they -- and that's really just a function of there's not as many installations. What we're targeting for this quarter is that could be flat to maybe down a little bit, and that reason we have a slightly different view is that we're just looking for strength with some of the LED projects to offset some of the seasonality there. And obviously, on indoor, we're targeting that to continue to grow.
Our next question comes from Dale Pfau from Cantor Fitzgerald.
Dale Pfau - Cantor Fitzgerald & Co., Research Division
Could you talk a little bit about what was your percentage of LED sales into the distribution channel? And you mentioned that you thought distribution channels were about the same as last quarter. Could you talk a little bit about that and then how you see that developing?
Charles M. Swoboda
I don't have a percentage for you, but I can tell you, the percentages were roughly the same as Q1. Inventory levels were about the same, so it's really pretty much what we sold, they sold through. It's fairly consistent. Distribution is running, leaner -- significantly leaner, than it was a year ago at this time. I think that's -- one of the other factors that's probably different is that we have distribution having less inventory than a year ago, and we know that our customers have less inventory. So the dynamic we're managing right now is that the customer is expecting the distributor to have inventory or for us to be able to ship extremely fast. And it's one of the reasons that's leaving the whole visibility. So if the lighting applications keep going, demand will be there, and if there's not a lot of inventory, we're targeting the sell-through. But that's kind of how we're modeling it right now. And distribution continue to be an important piece, but it's an -- it's relatively similar level of importance to the direct business as it was the last couple of quarters.
Next question comes from Chris Blansett from JPMorgan.
Christopher Blansett - JP Morgan Chase & Co, Research Division
Chuck, I wanted to follow up and a quick question about the subsidies that are coming online from a lot of the utilities in the U.S. and how you see this rolling out throughout the year and how you think this impacts the adoption of LED lighting products.
Charles M. Swoboda
So, Chris, it's going to obviously vary dramatically by region and utility. So we've already seen the benefits today. You know that there are consumer level rebates available on our CR6 product that is sold through Home Depots as an example. I think as these rebates come out though, you're going to see -- what we've seen is there's clearly demand. I think the key is what products meet those product needs, what products meet the specifications required. So they typically -- they're not always general. In some cases, they are product specific; in some cases, they're more efficiency-based specific, and it's going to vary. I think it's a net positive, but it's hard to give you one answer because pretty much every utility or every subsidy that's out there, wherever they're coming from, that's pretty unique to the local market. So it's a matter of getting your channel to be able to adapt to what the market's offering and connect the products with that. But it's a net positive but not like a broadbrush one. You got to work each of them in each region.
Our next question comes from Andrew Huang from Sterne Agee.
Andrew Huang - Sterne Agee & Leach Inc., Research Division
So if you could roll back the clock to the beginning of 2011, what one decision would you have made differently?
Charles M. Swoboda
Wow, Andrew, that's a pretty philosophical question for earnings guys. I think I would invest at even more money in R&D sooner. Because the only thing that drive -- at the end of the day, it comes back to the same story throughout Cree's almost 25-year history. If you drive the innovation, it's what changes the market and that's what drives the business and whether you're selling LEDs for lighting, you're selling LEDs for backlighting or video screens or car dashboards or any of those things. And I think we're always hesitant to remember that it starts with the innovation and that's what we've got to drive.
Our next question comes from Harsh Kumar from Morgan Keegan.
Harsh N. Kumar - Morgan Keegan & Company, Inc., Research Division
Chuck, now that you had the lighting business in its current shape for a quarter or so, how do you see the growth for -- what do you think is the growth rate for that business? Are we talking double digit consistently every quarter sequentially? Or maybe just you can give us an annual run rate that we should be sort of bogging for.
Charles M. Swoboda
Wow. So, Harsh, I don't have a good number for you. I can tell you that if you -- you got to keep in mind that we're going to assume that our Q3, the winter quarter, is going to typically have the lowest rate just because we have some seasonality. But if you get outside that quarter, I would certainly like to see double-digit growth rates on the LED portion of the business. The non-LED portion of the business, I wouldn't expect to change dramatically, but I think that would be a good target. I think it's going to vary from quarter to quarter. I think if you get -- we'd have to be careful just saying that's what it will be because I think you're going to see it come in chunks. So new products that open up new applications can drive some pretty significant growth, but in between product cycles, I think it will kind of ebb and flow. But on an average, I'd say it's a 3 to 4 quarters that's not -- it's a good guess, but again, it's a little early to call to get to any specific targets.
This ends our Q&A session. I will pass it back to management for closing remarks.
Raiford Garrabrant
Thank you for your time today. We appreciate your interest and support and look forward to reporting our third quarter results on April 17. Good night.
Charles M. Swoboda
Good night. Thank you.
Ladies and gentlemen, thanks for participating in today's program. This concludes the program. You may all disconnect.
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Spreading The News
adventures of baby bock
Well, we are ecstatic to finally announce that we are expecting! It's still a little hard to imagine that we are here. We are pregnant and there will be a tiny babe in our arms before the start of the new year - crazy! I can honestly say that I was convinced (stubbornly convinced) that getting pregnant was going to be a long process and we did learn that we are not in control. The planner in me so wanted to be in control, but alas, God has a bigger + better plan. And so here we are - here I sit, writing about our pregnancy and the lil lemon (babe is the size of a lemon this week) growing inside of me. The entire process is a miracle and God does not make mistakes!
We decided Tackk was the perfect medium for my ramblings and would please some of our family and friends who can't see us all the time to stay up to date on the baby and pregnancy. Plus I'm sure our moms will read it religiously so at least we'll have a couple loyal followers (hi moms)!
At 14 weeks I am feeling very good. A painful right hip and getting exhausted easily but my nausea is all but gone, smells aren't bothering me and my only weird symptom is a constant clogged left ear that I cannot get to pop - so annoying! I am so excited for my belly to pop and first feeling this little one move! Shout out to my amazing husband who has kept our house clean for showings, kept me fed with crackers when it was all I would eat and generally put up with any pranginess (a story for another day). You are going to be the best dad!

subset: commoncrawl


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Two Unidentified DWI Victims of Bizarre Accident, Bayou Body Count Nos. 180-181
Two men involved in a fender-bender called the cops, but as they were waiting for officers, they were struck and killed by a second vehicle driven by a drunk driver Saturday morning, HPD says.
The names of the two male victims -- one 64, one 45 -- were not released pending notification of family members. The incident occurred in the 11200 block of the Northwest Freeway about 1:45 a.m. Saturday, HPD says.
The two victims were in a blue Chevrolet Silverado when they were hit from behind by a black Ford Explorer, police say. As the drivers exchanged information, the men in the Silverado found cause to believe the Explorer driver was drunk, cops say.
"[S]o the driver of the Silverado got back into the truck to call police," HPD says. "As he was on the telephone, a black Lincoln Navigator struck the two vehicles involved in the first accident. The 64-year-old male passenger from the Silverado and the 45-year-old male driver of the Explorer, who were outside the vehicles, were struck during the second accident and died at the scene."
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Ewa-Marine U-BXP 100
(indicatief 15 werkdagen)
Online voorraad
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- Veilig kopen met BeCommerce
- Groot assortiment & 2 showrooms
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The U-BXP 100 is a special version of the ewa-marine U-BXP underwater camera housing.
It has a wider frontglass and allows in combination with the C-A 77 adapter (supplied with the housing) and C-A 82 (available as an accessory from your dealer) adapter the use of lenses with a filter thread of 77 and 82mm.
This means you can use your professional digital SLR camera like the Canon EOS 1D, 1Ds Series as well as the Nikon D1, D2H, D2X, D200 and similar cameras, with most of the professional wideangellenses currently on the market.
This enables you to use wideangel lenses with a focallength of 16mm (full format chip)without problems. SLR cameras which have a smaller chip can even use the 10mm wideangellenses.
please note: all lenses used with this housing must have a internal focus.
Lenses with a smaller filterdiameter can also be used in this housing as long as they have internal focus. You just need the right step-up ring.
The autofocus adapter (AV110) is not included in delivery as it is not needed for this housing.
If the optional BF1 lead weight is inserted into the housing, underneath the camera, it becomes even easier to reach the maximum depth. Experienced photographers have confirmed, that the auto focus and flash both continue to function perfectly. As you descend, the air is pressed into the camera. Due to this, the pressure inside the housing will remain the same as the surrounding water pressure. (this is the reason why ewa-marine housings are so safe to use: implosions are impossible). Due to this, we have to start the dive with a suitable amount of air inside the housing. The foam pads supplied with the housing are part of this air "reservoir" and additional air should also be blown into the housing, via the valve at the rear, to ensure that the maximum potential volume is being utilised.
The U-BXP100 housing is manufactured from double laminated PVC and has an integrated, optically neutral flat glass port. The external flash that is commonly used on SLR cameras fits into the specially designed section on the top of the housing.
It has a pair of non-corrosive and seawater resistant clamping rails which fit together for perfect sealing. They tighten by means of three screw knobs.
It is supplied in a handy yellow carry-case which has a water-proof interior and zippered side-pocket.
- Materiaal PVC
- Afmetingen (BxDxH) 220 x 100 x 370 mm
- Gewicht 870 g
- Materiaal PVC
Ewa-Marine U-BXP 100
(indicatief 15 werkdagen)


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By the showÂ's third year ratings were high enough to give the writers and creators more leverage with the network and thus a bit less trouble with the censors. In addition, the showÂ's writers were more experienced with the TV format and had more in-depth knowledge of the characters. By this time they could also gauge how much serious material the audience would accept mixed in with their comedy.
But most importantly, between the second and third seasons Larry Gelbart and Gene Reynolds visited Korea, a trip that they say affected the stories in the third season.


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MST3K: Hobgoblins
Buy it!
RiffMeter (18 votes)
Hobgoblins surely vies for the title of Stupidest Movie We Ever Did, and wins. Period. Hands down. Full stop.
A bunch of kids are tormented by rubber puppets in the - aw hell, who cares. May as well describe the last bathroom Snapchat you saw 'cause it's better. A movie so bad that we dedicated the entire episode to how much we hated it, and included its horrible director Rick Sloane in effigy.
If what you love about MST is really badly-conceived, poorly-made, shamelessly plagiarizing sexist eighties dung, then this is your Citizen Kane.
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I am new to this board so I will give you a bit of my life. I am married and have 3 kids, Aiden,5, Carli,3, and Eva,1.Ā Both of my older kids are too smart for their own good. Aiden has just started kindergarten and already having problems. I have suspected for about 2 years that he is ADHD, but his pedi refused to do anything until he was over 5. He is absolutely OUT-OF-CONTROL. Friends and family say that it is bad parenting or that 'he is just a little boy', but I know deep down that it is so much more. DH (dear husband) works ALOT and the kids only see him for a few minutes in the morning and then on Sundays and Mondays, so 99% of the parenting is left up to me. Aiden is on the go constantly. He remembers everything. He doesn't sleep well. He does not like to be around alot of people. His hands are constantly moving. He studders. He is always making annoying and strange noises.I have tried rewards and punishments, time-out, spanking, yelling, ingoring, him, sending him to his room, taking away his bike and he really doesn't give a rip about anything.
At school, he gets his work done fast but then that becomes a problem because he has to find something to do QUIETLY while everyone else finishes. He takes his own lunch to school but then the lunchbox becomes a toy to throw up in the air and to swing arounf while walking in line. The vice-principal came to take him for a walk around school the other day and to 'talk' about how school was going. Aiden was so excited and told me all about it. So the teacher told him that everyday, if he could behave for small intervals, then he could go to the VP office and hang out for the last 15 minutes of the day. But he couldn't really care less. It doesn't bother him to see everybody else go to the treasure box for good behavior.
We went to see a behavioral psychologist on Friday but she doesn't want him on meds yet. I am at my witts end and right now I am desperate for him to be on meds. I can't go anywhere with him because it turns into total chaos. The car ride home from chool turn into a screaming match everyday because he is overly tired. He constantly fights with his sister and pulls hair and throws things all the time. I cant take it anymore and I am starting to think that I may be the one who needs help.
If you are still reading, sorry it is so long but I dont know where else to go


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Washington, May 20 : Scientists at Saint Louis University have found that a smallpox drug may harbour the cure for a common cold.
The drug, hexadecyloxypropyl-cidofovir or CMX001, currently under development by Chimerix, Inc. to meet the threat of smallpox or monkeypox viruses may be used to target adenovirus.
"This is exciting news and a major step forward in finding a drug to treat adenovirus infections in humans," said William Wold, Ph.D., professor and chair of the department of molecular microbiology and immunology at the Saint Louis University School of Medicine and the study's lead author.
"We are pleased to see that CMX001, a drug candidate showing broad antiviral activity that is being developed under a federal grant for smallpox, also has potential benefit against adenovirus," said George R. Painter, Ph.D., president and CEO of Chimerix.
There are 52 known serotypes, or strains, of adenovirus in humans. They generally cause acute upper respiratory infections including colds, tonsillitis and ear infections, but they can also cause conjunctivitis, gastroenteritis and bladder infections.
CMX001 is an oral pro-drug, or derivative, of cidofovir, a drug developed by Gilead Sciences, Inc. to treat a type of retinitis in AIDS patients. Chimerix licensed from Gilead the rights to develop CMX001.
Cidofovir has long been a possible candidate to treat a number of virus infections.
Scientists also claim to have identified an animal model with the adenovirus on which drugs can be tested.
There are currently no drugs approved specifically to treat adenovirus infections in large part because there has been no animal model.
Researchers have now found that adenovirus replicates in Syrian hamsters (also called golden hamsters) with suppressed immune systems in much the same manner as it replicates in humans whose immune systems are weakened.
Using the new animal model, the SLU researchers found that CMX001 provided protection from the adenovirus when it was administered prophylactically (before infection with the virus) or therapeutically (after infection).
The scientists found that the drug worked by greatly reducing the ability of the virus to replicate in key organs, mostly notably the liver.
The study is published in an early online edition of the Proceedings of the National Academy of Sciences.


text: Bike Race Guru - Unregistered September 12, 2011 10:52 AM Hardly seems right?? Hopper misses 3 races at Cadwell and is leading the championship.. Byrne and Lavery DNF in one race at Donnington and are virtually out of it.. Seems to be a bit lop sided to me?? I've followed racing to see the best man win over the course of a season for the last 38 years.. Now all of a sudden he may not.. I won't dispute that Hopkins is probably the best rider in the field and has been outstanding.. But Offs and Mechanicals and Crashes are all part of the season.. Or used to be until 2 years ago.. 27 agree 9 disagree


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If you give to one, surely you give to the other?(74 Posts)
Had a real issue with MIL this weekend over fairness. We were over with our DDs and their three cousins were also over. At the end of the day whe the three boys were off home, I caught her trusting £5 into their hands and asking them to 'SShhh!'. I assumed she wanted to surprise our girls with the same later when we left. The boys didn't Shh about it and told me and their cousins what they were going to spend it on. The girls didn't get their 'pocket money' and the Shhhing was obviously MIL trying to hide the fact she'd given them money. MIL is one of the wealthiest people I know and although I'd never expect her to give my girls pocket money, if she's going to give one set of grandchildren pocket money, in pretty much full view, shouldn't she give all of them? I felt really over protective of my girls and spoke with DH who didn't see anything wrong with it. To me it's really odd behaviour and it made me really cross, but maybe IABU...
Yfronts good idea but I think it'd wash over her. From the phone call, she didn't seem fazed that she'd been unfair or even recognised that she'd been unfair which is again odd to me.
MNETBPOOL I know it was wrong to get DD to ask but didn't want an outright confrontation about unfairness with MIL. The way it was done made it look like it was an innocent Q. She'd seen cousins get some pocket money and so naturally thought she'd get some. They are not the type of girls to ask, I would normally be cross if they did ask. It was my fault that happened but just didn't want to cause conflict and thought this was a way around it.
TBH I would swallow it and give your DD's a fiver each from you so they didnt feel left out, rather than have them ask.
I had a friend's husband give his daughter a grape in front of my 2 yr old. DS asked in his best possible voice if he could please have one and the bastard got up and left the room leaving my DS in tears (I no longer visit this friend). So I gave DS a grape myself from his own lunch box and make a loud point of doing so. MIL might have overlooked your DD's but you can always try and make it up to them instead by giving them something special yourself, better than what the boys got.
My family were unfair when I was growing up - gp and uncles seemed to favour either my brother or I. My mum told me later they had to top up/invent presents so that we wouldn't know. I'm glad she did - as an adult I can understand that sometimes adults just don't remember one child's birthday, or just see something for one child they want to buy, but children don't understand and would be hurt.
I think your MiL was very unfair and I don't like treating children differently.
However, you were very U in your handling of it - you don't like it, don't manipulate your children. And you are very U with because that's just me and most MILs pee their DILs off.
And I don't even have a DiL!
Also, it makes a far stronger point to your MIL for your DD's to be saying "mummy gave me a fiver!" rather than "Wheres my fiver, nan?"
I wouldn't involve them in disputes again, it's very confusing for kids.
Sorry Nanny Ogg Of course at times we all get cross with our MILs, don't we, whether reasonbale or not?? Plus I've already put my hands up to the whole unreasonableness of getting my DD to do my dirty work (minus the conflict I'll add). If you knew my MIL, you'd understand. She's a grand matriachal, domineering type. My Dh's reaction surely tells you something. She's not a monster but we have our issues.
Quornqueen I agree. I was wrong for involving the girls. I just felt so gutted for them to have to see that type of unfairness.
I always tell this story.
When we were kids, my grandfather used to bring money for us. £20 for my older brother, £10 for my younger brother and £5 for me. Every time. And every time my mum objected and he would say that he didn't have equal notes, but he would make it fair next time. But he never did.
So mum just quietly removed the money ever time, and gave us a tenner each (or sometimes 8 if she was skint).
She never made an issue, because he would have enjoyed it. Because he liked the power of having us all hang on to his every word. He also enjoyed the fact that every time he came he thought I was hoping for the tenner or twenty. But I didn't care, because of my mum's dealing with it properly.
Your children won't care if you don't. They might notice, but they won't care.
Maryz Your mother is a wise woman and I have a lot to learn about diplomacy and how to deal with people with a warped sense of right and wrong. Thank you.
I still have a bit of a niggle inside of me about the fact my DH and PIL don't get what's wrong. I haven't even mentioned it to my friends or my side of the family as I know they'd be as flabbergasted and annoyed as I am. I don't want my girls first taste of injustice to be from people they are related to and care about!
Your last point needs to be my mantra!
OP my MIL is exactly the same! My little boy has 2 older cousins, and an older sister (my SD). She always always always treats my son differently; never offers to take him out to fun places yet always wants to take the other children, when she treats them she never treats him. I feel so unbelievably sad for him and I am extremely protective over him. He has a little brother who is 1 month old at the moment, and I can 1000000% guarantee that MIL will NOT be taking ds1 out in the future (if she ever does) and not ds2. If she buys something for one and not the other then she will be told her gifts aren't wanted.
I am sick of her and I am going to be very difficult in the future if she doesn't get her act together.
Hi Shelley,
My mil is exactly the same as yours. We have 2 dd's that she sees about once a week, normally mid- week she told my girls she was going to give them 5 a week each as their wages this was before Xmas. My girls have seen it about 3 times since then and only cause we happened to be over on a Sunday when her other 2 grand children are there. They visit every Sunday so get their money regardless.
My girls haven't noticed how she treats them yet but it's only a matter of time before my eldest does when this happens I will sit down with mil and tell her she needs to treat them the same or she won't see them because she won't do to my girls what she has spent a lifetime doing to my dh.
My dh also doesn't see anything wrong in what she's doing because since the age of 4 when his brother came along my dh has never been as good as his bro, not as intelligent, not as generous, not as charitable the list goes on and on. My dh has a job his bro has a career. My dh only has a house because of me. For 21 years this is what has been drilled into my dh and its only in the last 5 years since he moved in with me and we married that he has started to stand up to her a bit
I can't believe the way she treats my dh still now but I know we'll never measure up so I don't try anymore and please myself and dh is starting to come around to my way of thinking.
Maybe your dh is the same Shelley its not a nice thing for someone to do to a child and if your husband won't call her on it I would. I hope my dh will have copped onto the problem by the time my eldest notices and he will say something cause I will just loose the rag at her.
Hope that helps and things improve for you and your dc
Regards ,
Sounds to me like playing one off against the other OP.
My MIL does this and even tried it with me and other DIL. My OH and his brother visited a short while before Easter one year, other DIL had already broken off contact, so MIL waited for number 2 son to leave, which he didn't do before OH. Neither could work out why she was agitated and then the next weekend she practically summoned OH so that she could give him my easter egg and told him that she couldn't do it in front of number 2 as she hadn't bought one for his wife. At that stage OH still thought his mother was a nice person.
My gran was forever giving me (only granddaughter) presents/money, and would leave my DBro and her other 2 grandsons out. My brother would sob his little heart out and my parents would always end up having to get him something (that they could hardly afford, and gran knew this).
It actually caused a lot of resentment between us growing up, and I would always feel so guilty and try to share whatever she gave me, but it was always girly stuff he'd never be interested in.
It's a harsh lesson to learn so young just how unfair people/life can be, and I am so grateful my DPs and Mil treat all their grandkids the same. I can't believe anyone would think that sort of behaviour is acceptable tbh.
I must be in the minority here. I understand you are protective of your dc but I don't think I'd get worked up over a bit of pocket money.
I certainly wouldn't be rude enough to ask for it or encourage children to ask for their pocket money/treats etc.
If my mum spent more on one grandchild,I wouldn't necessarily notice but if I did I would not make an issue of it.
Are the children the same sort of age? It doesn't seem particularly unreasonable to give older children spending money in a way you'd not do for younger ones. Or to do different things with different children. I've certainly never spent any time thinking about whether my FIL (MIL is dead) is different with my children than dh's sister's children, but they are quite a bit older.
Sorry but YABU. I don't like the kids being treated differently but there could be reasons for it. Maybe your DDs have had extra presents that the boy cousin didn't get and the fivers was to even that up. Maybe your DDs got more spent on them for xmas, if the presents your PIL bought cost more for your DDs than for the boys - not to be unequal, just how it works out sometimes. Maybe the boys are being rewarded for something you don't know about - pulling their socks up at work, behaving well at home. Maybe they're going on a school trip so when your DDs do they'll get it.
I completely agree that things need to be equal but you don't know for sure if they aren't. Your DH will know if it will equal out in the long run and he says it will. I think you were terribly, disgustingly grasping telling your DD to go and ask her GM where here money is. Unbelievable. If my DD had seen cousins get money and she didn't I would have told her what I've put in my first paragraph.
Basically it's none of your business what MIL does with her money.
Based on that one incident you don't know things are unequal between the grandkids. If it's a constant then yes it needs to be talked about but based on that one incident you don't know that they are being talked about. The best thing you could have done is sweep over it - if you don't care your kids won't but to tell your DD to go up and ask for money, unbelievable. I know my GM wouldn't have given it to me based on that rudeness alone.
YANBU to feel annoyed by it. My DSIL used to favour my oldest DD in really obvious ways, e.g. she turned up at my DS's birthday to give him a card and then produced a massive doll for my DD because she'd seen it in the shop and 'thought DD would just love it!' I took it immediately and said how kind DSIL had been and that I would wrap it up for DD's birthday (in two months). And then I gave her the extra present I had wrapped up for DS, in front of everyone, and said, 'It's so kind of you to buy presents in advance for ALL the children!' so she had something to give him.
After that incident, my DH and I discussed it and he told his family that it was wholly unacceptable to single one child out like that, that it would cause bad feeling and resentment, so it wasn't to happen again and if it did the gift would simply be returned. There was a fair amount of chuntering about us being too controlling, but it didn't happen again and it's far better to get these things sorted out when the children are young than to let it fester into adulthood.
Yanbu. It is unfair to treat kids differently. If they hadn't been there at the time then fine but to do that when all the kids are there is so unfair.
I have had this with my SD. All my family treat her exactly the same as my nephews. We had a family thing once and I invited some friends of the family who we have known all our lives. They gave my nephews a fiver each and nothing for my stepdaughter. The boys thanked them for the money and they were not even embarrassed that they hadn't given to my SD. Also the female part of the couple could hardly bring herself to talk to SD, and got annoyed when her husband was taking an interest in my SD and her drawings.
They have always been people that I really like as we grew up with them as our 'aunt and uncle' but that really disappointed me. Luckily my SD didn't make a big deal of it and appreciates my family treating her the same. I was more upset about it than she was!
Message withdrawn at poster's request.
My mum has always treated people in the family differently. One set of nieces and nephews have always been given more time, attention, money, gifts than the others - and still are even though they are now adults.
But, you reap what you sow, and now mum sits alone day after day lonely and in need of help because the family members who live closest to her are the ones she ignored growing up. They have no time for her and refuse to get further drawn into more family rifts. Sadly she can't see that the situation is one that she created.
this is horrible. my grandparents paid for everything for one set of cousins and nothing for the rest of us (driving lessons, car etc). when they died and we sorted the house, there were only photos of the special cousins, nothing to even suggest the rest of us existed. Sad thing is, my other grandparents obviously favoured my other cousins too (same with pictures, didn't come to my wedding as too much hassle, but travelled further to theirs etc). So i grew up knowing i wasn't special to either set of grandparents.
My exMIL used to lavish much much more time and money on her youngest son AND his kids than either of her 2 older son's - or their children. (Three of which are my DDs.)
The youngest sons first baby was unplanned, and although he and the baby's mum stayed together, and lived together in a decent flat my exMIL took it upon herself to virtually raise the child at her's, and feed and clothe it for the first 2 years while they
carried on like teenagers ''sorted themselves out''. They had another baby together and moved toa bigger house - still my MIL carried on as if her son and his GF were destitute teens living in a cardboard box! Paying for their holidays and buying loads of expensive stuff for their kids.
Her 2 other sons (one of which was my DH) just had to get by on their own with their families.
Fair enough.
But what really grated on me was the way she would simper on about 'fairness' to all her grandchildren. And how she 'always treated them all the same'. (one such lecture to my DDs was on the same day she sat and showed them photos of her youngest sons kids holiday to Disneyland Florida - paid for by her) .....
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