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Black Diamond, Inc. Message Board

carne8ielaker 13 posts  |  Last Activity: Dec 12, 2014 1:40 PM Member since: Jul 24, 2012
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  • carne8ielaker carne8ielaker Dec 12, 2014 1:40 PM Flag

    I'm not on facebook, so it didnt allow me to respond...so if anyone cares to correct one of my pet peeves for me, I would appreciate it...you hoe a "row" not a "road"...and if I had a nickel for every time someone says it wrong, maybe I could buy one of those sweet TVs!!

  • while the stock has been weak today (and yesterday), it has been characterized by fairly low volumes, for example, today is only slightly ahead of avg. daily volume. To me this is not a sign that anyone knows anything, but rather a sign that people believe that the risk of a lackluster Q (in terms of PPS move down) is worse than the reward of a decent to good Q. But if you look at stocks that have been weak, but then post a good number and a solid outlook (SWIR is a good example today) then not only will the longs pile in, but the shorts will have to cover as well.

    My view (and backed up by a large position in the name) is that sales to Customer A (SME) will be down a tad sequentially...sales to Customer B (ie host sales that go through Nippon Steel) will be also be down a tad (both A & B driven by SME end market softness not by lost host sales, and importantly some of the handset losses will be made up in tablet sales) but the strength of LG's ramp (ie Customer C) will make up for the revenue lost to A. And since LG does not have a LT agreement (yet) the margin on sales to LG is significantly higher than the margins of like materials to SME. The key to look for is in the "royalty" line item. Since this is Q3, there will be NO license fee from SME, so the vast majority of the Q3 royalty will come from the "allocated" percentage of the sales$ that went to LG....So revenue will be in line or a tad light, but EPS will be stronger.

    Sentiment: Strong Buy

  • Reply to

    A question for the tech savvy here.

    by hajosy Oct 26, 2014 2:36 PM
    carne8ielaker carne8ielaker Oct 28, 2014 9:15 AM Flag

    Hey Dutch or perhaps Greta....Carne I can live with...laker is probably better...but Carnie?! Makes me sound like the guy with no teeth who works at the travelling fair...:)

  • Reply to

    A question for the tech savvy here.

    by hajosy Oct 26, 2014 2:36 PM
    carne8ielaker carne8ielaker Oct 27, 2014 11:45 AM Flag

    It think it all comes down to "risk reward" for the panel producer. With the first question being: Is the risk of being caught (and having product seized at a port and destroyed) worth the risk of trying to save a few percentage points on cost? More importantly, however, is whether the quality is the same and would it affect the production process? While I am not a chemist, I am pretty confident in saying that PHOLED materials are not like sugar or flour, where it doesn't much matter what brand you use. These fabs have VERY little tolerance for error/blemishes etc. Remember, if the PHOLED materials is, say, 5% of the COGS (which I think is way high) and you could conceivably save 1/2 of that with "bootleg" PHOLED and host (again, if PPG is producing a gazillion grams for legitimate users, their cost to produce is going to be much lower than some outfit trying to produce a few thousand grams...so the "saving" for "bootleg" might not even be possible) then you as the panel producer would have to be confident that your yield wont go down much, if at all...because if yield goes down by a point, you are not only wasting the materials that were used (both OLED and glass etc.) but also the fixed portion of costs need to get spread out into fewer units. In other words, if you lose any yield at all due to inferior materials, you have the potential to lose ALOT more than you will have saved on the price of the materials.

    And of course if 1 million panels are being produced by ABChinaPanel and ABC is not buying much PHOLEDs from UDC, methinks that UDC will be going after them hard!

  • carne8ielaker by carne8ielaker Oct 21, 2014 9:57 PM Flag

    the troubles for OCN could actually be a silver lining for WAC. While higher regulatory costs will affect WAC, it is clear that the price for new MSR deals will have to go down; especially since OCN is in no position to get approval from regulators...so if WAC can continue to be the "only buyer standing", then it is quite possible that we will hear about attractive acquisitions in the weeks/months ahead

  • Reply to

    Question on guidance

    by thefrickingreedglandishere Oct 21, 2014 5:55 PM
    carne8ielaker carne8ielaker Oct 21, 2014 6:57 PM Flag

    nope...guidance traditionally is announced with Q4 results...and then (historically) it has only been an annual revenue range...no profit guidance...but expense and margin guidance

  • Reply to

    2014 Investor Presentation Aug vs Sept

    by litespeed2011 Oct 11, 2014 6:20 PM
    carne8ielaker carne8ielaker Oct 13, 2014 10:24 AM Flag

    litespeed...thanks for calling out the changes; I don't think any of them is material, but always interesting to monitor. Two comments:"Customer C" is LG...the reason they lump customer A&B together, is that they are essentially Samsung...Customer A is Samsung Display (SMD), and Customer B is a Japanese firm NSCC, and UDC sells them the value add component of the host material, and NSCC then mixes it with their own more commodity material and sells it to SMD...that is also why the sales to Japan are as high as they are...really going to Korea but through Japan...

    As to your comment on Guidance (slide 30), I KNOW you cant infer anything from that chart....that is the chart they have been using all year, and in the conference calls they have reiterated the high end...that is not to say that they won't guide down a tad after Q3 due to the Samsung weakness, but you cant get there from looking at this chart.

    What is amazing about the stock action, is that while it may be true that Q3 MIGHT come in a little light, we have every indication that SMD (which is UDCs client) is expanding their own customer list beyond parent Samsung Electronics (SME) such that in the future, there will be other outlets for the panels....which is actually good news. After all, while SMD is your client, if SME is SMD's only client, then SME is in effect your client...but if SMD sells 60% of their capacity to SME and the other 40% of capacity to 4 other OEMs then UDC has expanded it effective customer list.

    The same can be said for LG's TV panel production...LG is producing for themselves, but they are also selling panels to other TV OEMs...not only does this diversify the customer risk, but it also expands the marketing message that will come out in support of OLED TVs.

    So if anything...the strength of 2015 revs should be must stronger; thus presenting an incredible buying opportunity....and one that I would think the company is taking advantage of with their share repurchase plan..

  • The problem with "trading around" positions is that you have to get your exit AND entry points correct, especially since you will be realizing gains along the way (and paying short term tax rates)

    For those who have held this stock for over 10 years, the problem 10 years ago was the valuation was stretched and the fundamental horizon was far away...the "valuation" didn't really start to jibe with reality until the Samsung deal was announced in 2011, and of course at $45 the company was brilliant to have sold more shares to fund future IP purchases (and give the company negotiating leverage vs deep pocketed customers). Bad for those who bought on the deal, but great for the company.

    So here we are in 2014, and the company has about $6 of cash on the balance sheet, and is making money every quarter...even without the SMD royalty Q's. We have customer number 2 ramping up fast and furious, and we have customers 3,4 and 5 etc. fast on their heels. The company will earn close to $2 in 2015 (if not more) and the market for their product is expanding (mobile phones to tablets to TVs to lighting) meaning that revenue should be able to grow in the mid double digit range (ie 30-50% per year) for the foreseeable future. Given the business model of selling IP and high value materials, the company's cap ex needs are minuscule, and the gross margin should stay north of 70% while the operating margin will continue to expand as the revenue ramps.

    So with all that said...you are going to sell the stock when it gets back to $40?!?! If you do, in 2020 you will ruefully be telling people that you HAD Universal Display...you SAW the potential...but you SOLD the stock....at a fraction of where it will be in 2020.

    Sentiment: Strong Buy

  • Reply to

    LG flexible OLED TV 2015

    by qtmmnutcase Oct 1, 2014 8:40 AM
    carne8ielaker carne8ielaker Oct 2, 2014 8:56 AM Flag

    I know you were being facetious, but one of the issues with 4K TV is "energy management"...a. 4K LCD generates LOTS of heat....further incenting manufacturers to focus on OLED.

  • Reply to

    LG flexible OLED TV 2015

    by qtmmnutcase Oct 1, 2014 8:40 AM
    carne8ielaker carne8ielaker Oct 1, 2014 11:38 AM Flag

    If LG reads these boards they really should figure out a way that when the TV is flat, that it sits flush against the wall, and then when it needs to bend, it comes out from the wall. I have always believed that it is more practical to have an additional "box" that houses all of the electronics/connections rather than trying to fit it all into the back of the set. After all, almost 100% of us also have to use a cable box, so adding another box to the stack is not a problem...then the only thing the TV will need is a cord to the box (and maybe an additional power cord, if the power cant come through this feeder cord)

  • carne8ielaker by carne8ielaker Sep 25, 2014 9:30 AM Flag

    This comes from OLED-Info this morning:
    "UBI Research estimates that the OLED lighting market will take off in 2015, and will grow to reach $4.7 billion in revenue by 2020. According to UBI within three years a 100x100 mm OLED lighting panel will cost under $5 to produce. This is assuming a large substrate (1270x1270 mm), a fast production process and a tandem structure."

    (interesting chart that one cant copy/paste showing percentage of costs...labor;materials;utility;investment...and how they shift over time

    "In such a scenario, the largest cost (over 80%) will be for the OLED materials. This means that at that stage companies will put most of their focus on lowering the material usage and cheaper OLED materials."

    So the question is: what % of that cost will be revenue for UDC? 80% of $4.7 billion equals $3.76 billion in OLED materials...under almost any assumption set UDC gets a LOT of revenue! And since the contribution margin for UDC is so high....the vast majority of that revenue will fall to the bottom line...

  • carne8ielaker carne8ielaker Sep 25, 2014 9:18 AM Flag

    I think that the implicit good news in this announcement, is that Aireon is getting a senior official from the FAA to join the Aireon team. I don;'t think he would make the jump if he didn;'t believe that the FAA was going to adopt Aireon...

  • carne8ielaker carne8ielaker Sep 25, 2014 9:13 AM Flag

    I think you are confusing what the real value of Aireon is...for ANSPs (the FAAs of the world) to be able to direct aircraft into flying lanes that are much more efficient. Right now, since there is no "radar" over the oceans, planes have to fly literally miles apart from each other, and thousands of feet apart in elevation, just to ensure that they don't inadvertently get too close/crash. Consequently, most planes are not allowed to fly with the most advantageous prevailing winds, nor the most direct route. In addition, because the ANSPs cant accurately predict when the plane will arrive in the landing pattern, pilots will fly their planes as fast as they can to "get into the landing queue" only to then have to circle the airport prior to landing. WIth Aireon, the plane will get an accurate landing time, and will then be able to optimize fuel burn/speed over the course of the entire trip. The combination of all of these will save airlines hundreds of millions in fuel savings (and passengers will have a more enjoyable experience since they wont feel like they are about to land, and then be frustrated that the plane is circling for 20 minutes.) Being able to find "lost planes" is just an added bonus of the system...not the primary purpose.

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