The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: So with regard to the potential new regulations, I mean, certainly, the Japan one is, the duration is -- or at least when you're looking for it, it's actually
pretty soon. Like when do you expect to get an update on that? Because I would imagine you have to almost start production almost imminently
if you're talking a 2021 type time frame. So how should we think about that?
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: Got it. Okay.
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: Sure. No, makes sense. And then your confidence level on -- because I think it's the first time I've seen you guys at least try to quantify the timing
on China and Europe. I guess your confidence level that those happen roughly in that time frame? I guess where is that coming from? Is it just
recent conversations with some of the regulators? Is that how we should be thinking about that?
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: Got it. Okay. And then I guess to that, like -- and with the Japan one as well, potentially on the com, I guess, how should we think about how much
incremental capacity you would need to meet some of the demand here? I know you just put in some new capacity in China, so maybe that's not
an issue at least for any of the Tier 1, Tier 2 type potential growth. But I guess, how should we be thinking about that and what the cost might be
to put in any incremental capacity?
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: Got it. And the cost of extrusion capacity, I assume that's pretty minimal. Is that a fair way to think about it?
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: Got it. Okay. And then I guess, just the last question. So the margin progression that you guys have seen in the business over the last few years has
been pretty rock solid. I guess, as you look out over the next 2 to 3 years, when you kind of include the puts and takes of continued pricing and
potentially more volumes, whether it's coming out of Japan or Brazil, where that starts to roll in versus at the same time, maybe you do have to
give a little bit back around the patents just to keep customers happy. How should we think about the margin progression as you're looking out
over the next few years for this business?
Question: Paretosh Misra - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: Just curious, what is the difference between China 6 that they currently have right now and U.S. Tier 3, is it just the honeycomb or the quality of
the activated carbon also is different?
Question: Paretosh Misra - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: Got it. And how superior is your product performance. Is there a way to kind of quantify it, like in China, can your competitors make a product that
maybe is good enough for Tier 1 regulations or they're not there yet?
Question: Paretosh Misra - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: And the feedstock is the same between U.S. and China? Or is it different? The feedstock to make activated carbon.
Question: Paretosh Misra - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: I see. And, I guess, just a last one. Just going back to the long-term contract in the U.S. that you talked about earlier. I don't know if you tried to
quantified it like how -- what percentage of the U.S. volumes are currently tied to these long-term contracts?
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