Earnings Call Transcript - BDC Q2 2024

Operator, Operator

Ladies and gentlemen, thank you for joining us. Welcome to Belden's Second Quarter 2024 Results Call. This call is being recorded, and you are currently in a listen-only mode. We will have a question and answer session later. I will now hand the call over to Aaron Reddington, Vice President of Investor Relations. Please proceed, Aaron.

Aaron Reddington, Vice President of Investor Relations

Good morning, everyone, and thank you for joining us for Belden's second quarter 2024 earnings conference call. With me today are Belden's President and CEO, Ashish Chand; and Senior Vice President and CFO, Jeremy Parks. Ashish will provide a strategic overview of our business, and then Jeremy will provide a detailed review of our financial and operating results, followed by Q&A. We issued our earnings release earlier this morning, and have prepared a slide presentation that we will reference on this call. The press release, presentation, and transcript of these prepared remarks are currently available online at investor.belden.com. Turning to Slide 2 in the presentation. During this call, management will make certain forward-looking statements in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. For more information, please review today's press release and our most recent annual report on Form 10-K. Additionally, during today's call management will reference adjusted or non-GAAP financial information. In accordance with Regulation G, the appendix to our presentation and the investor relations section of our website contains a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate. I will now turn the call over to our President and CEO Ashish Chand.

Ashish Chand, President and CEO

Thank you, Aaron, and good morning, everyone. We really appreciate you joining us today. Let's turn to Slide 4 for a summary of the major accomplishments we achieved in the second quarter and key messages I would like to highlight. As a reminder, I will be referring to adjusted results today. First, let me start by congratulating our team on another solid quarter in light of this dynamic environment. Inventory destocking continues in our markets; however, our performance was stable. For the second quarter, our revenue and EPS both exceeded the high end of our guidance as our solutions transformation continues to push forward. Revenue totaled $604 million, and EPS came in at $1.51. Second, I am pleased to report steady demand for the quarter, similar to what we saw in the prior period. Orders in the second quarter were up 9% sequentially, marking the third consecutive quarter of orders growth. We ended the quarter with a book-to-bill of 1.0 times, up from 0.9 during the same period last year. Our markets continue to experience headwinds, and I am encouraged to see steady execution resulting in performance exceeding our expectations. Finally, our business continues to generate meaningful cash flow, and we are deploying capital consistent with our capital allocation priorities. Trailing 12-month free cash flow was strong at $234 million, roughly in line with recent performance. With our ample free cash flow, our team continues to reinvest in high-return opportunities beneficial to shareholders. As we announced previously, we closed the acquisition of Precision Optical Technologies during the quarter, providing new product capabilities to further enhance our solution opportunities in the broadband market. Post transaction completion, our proforma leverage remains reasonable at 2.1 times. With ample free cash flow in the second half of the year, we have the opportunity to bring our leverage down closer to our long-term target net leverage ratio of 1.5 times as the year progresses. Now please turn to Slide 5 for a summary of our Broadband Solutions business after closing the Precision Optical acquisition. Let me take a moment to reiterate why we think the broadband and fiber markets are so attractive. Then, I will highlight some recent initiatives we have taken to strengthen our position in this key vertical. The broadband markets in the U.S. have experienced tremendous growth, with broadband data consumption more than doubling over the past five years. Many secular trends are supporting and driving that growth including increased reliance on home networks for work and entertainment, advancements in technology to increase both access and speeds, and heightened competition between providers to gain customers and market share for broadband services. These trends are expected to continue, further driving data growth and consequently requiring our customers to make significant capital investments. Fortunately for the industry, there are multiple government stimulus programs designed to support the expansion of broadband access. The most meaningful over the next few years is anticipated to be the Broadband Equity, Access, and Deployment or BEAD Program. As time passes and allocations are granted, we are learning more and more about the timing of the massive $42.5 billion BEAD funding initiative. Our best estimates now show the majority of that funding hitting the market between 2025 and 2030, with our business squarely positioned to participate in the development. Further, we see similar dynamics playing out in key markets globally, including in Western Europe. Now to share about the steps we have taken to strengthen our Broadband Solutions business and how we are positioned to capitalize on the massive increase in broadband infrastructure spending just over the horizon. As you recall, we have been on a multi-year path to broaden our fiber portfolio and grow our broadband business. Our focus has been on expanding into high-growth applications in the broadband network through strategic tuck-in acquisitions combined with organic growth initiatives. To date, we have acquired several businesses in the broadband market, with our most recent acquisitions of Sichert in 2023 and Precision Optical Technologies in the second quarter. These acquisitions helped us build a valuable portfolio of fiber products focused on the last mile of broadband networks and gain share with major MSOs as a trusted partner for their upgrade and expansion plans. Further, we have invested internally in new products and expanded our capacity, most notably with the Fiber Technology Center opened earlier this year in Tucson, Arizona. The new facility serves as a multifunctional hub where we house R&D, manufacturing, and distribution functions focused on advancing our leadership position and improving our optical fiber capabilities. Today I am happy to report that our Broadband Solutions business has grown considerably, and our product portfolio is positioned for high growth. On a pro forma basis, our Broadband Solutions business has revenues of approximately $660 million, of which half comes from fiber and fiber-related products. With our acquisitions and solutions framework, our business is much better positioned to win in the marketplace. As customers seek ways to quickly expand and upgrade their networks supported by massive government stimulus, companies like Belden who can rapidly provide comprehensive solutions will gain market share. I will now request Jeremy to provide additional insight into our second quarter financial performance.

Jeremy Parks, Senior Vice President and CFO

Thank you, Ashish. I will start my comments with results for the second quarter, followed by a review of our segments, a discussion of the balance sheet and cash flow, and finally our outlook. As a reminder, I will be referencing adjusted results today. Now, please turn to Slide 6 in our presentation for a review of our results. Second quarter revenue decreased 13% year-over-year and was down 13% organically to $604 million, exceeding the high end of our guidance of $580 million. Orders were up 9% sequentially, with sequential growth in both segments. We ended the quarter with a book-to-bill of 1.0 indicating continued stability. Compared to the prior year, we experienced softness in both Industrial Automation Solutions, with revenue decreasing 13% organically, and Enterprise Solutions, with revenue decreasing 14% organically. Gross profit margins were 38.2%, increasing 10 basis points as favorable mix benefits helped to more than offset lower volume. EBITDA came in at $99 million with EBITDA margins down 130 basis points to 16.5%. Decremental margins for the quarter performed as expected, in line with our target of 20% to 30%. Net income was $62 million down from $82 million in the prior-year period. EPS was $1.51, above the high end of our guidance range of $1.40. Turning now to Slide 7 for a review of our business segment results. For the quarter, performance by segment was aligned with our expectations. Orders grew modestly for the third quarter in a row, in spite of continued slowness in our markets. For the second quarter, revenue in our Industrial Automation Solutions segment was down 12% compared to the prior year. EBITDA margins were 20.3% in the quarter, down from 20.7% in the prior year. Orders in Industrial Automation were up 6% sequentially, and flat compared to the prior year. For the quarter, revenue in our Enterprise Solutions segment was down 13% compared to the prior year. EBITDA margins were 11.6% in the quarter, down from 14.1% in the prior year. Orders in Enterprise Solutions were down 6% year-over-year but increased 14% sequentially. As we moved into the seasonally stronger second quarter, Broadband Solutions orders grew 18% sequentially, with Smart Buildings up 11%. As expected, we continue to see customers destocking in our markets; however, it’s worth noting the pace of destocking has moderated over the past few quarters. Next please turn to Slide 8 for our balance sheet and cash flow highlights. Our cash and cash equivalents balance at the end of the second quarter was $565 million compared to $597 million in the fourth quarter of 2023. However, please note that the cash consideration for the Precision Optical acquisition was transferred shortly after the quarter closed. On a pro forma basis, we ended the quarter with $273 million in cash, net of the payable to sellers of Precision Optical Technologies. Our financial leverage was 1.5 times net debt to EBITDA at the end of the second quarter. On a pro forma basis, net of the payable, we ended the quarter with net leverage of 2.1 times. As we communicated previously, we intend to maintain net leverage of approximately 1.5 times over the long term. As a reminder, we generate the majority of our free cash flow in the second half of the year, which gives us the opportunity to continue to reduce leverage and further deploy capital. Year-to-date we have deployed approximately $350 million towards M&A and share repurchases. We currently have $115 million remaining on our current repurchase authorization. As a reminder, our next debt maturity is not until 2027, and all of our debt is fixed with rates averaging 3.5%. Through the second quarter, our trailing 12-month free cash flow came in as expected at $234 million, roughly in line with previous periods. Please turn to Slide 9 for our updated outlook. Order patterns remain steady across our markets as customers navigate this dynamic environment. Relative to the second quarter, end demand is expected to increase modestly with revenues up sequentially. For the third quarter, assuming current market conditions do not deteriorate further, we expect revenues in the range of $635 million to $650 million and adjusted EPS in the range of $1.55 to $1.65.

Ashish Chand, President and CEO

Thank you, Jeremy. To close, let me reiterate that the second quarter for Belden was once again steady with orders and end demand reflecting stability in our business. As expected, our customers continue to reduce inventory and operate cautiously in this dynamic environment. However, let's pause and reflect on where we stand in this cycle. In the third quarter of last year, we saw a sharp decrease in orders from our customers, with our orders reaching a post-COVID low. Since then we have slowly but steadily experienced marginal sequential increases in orders over the past three quarters, resulting in second quarter orders up nearly 20% from our low last year. Certainly destocking continues in our markets, but it is safe to say that the magnitude has come down. Over the past two quarters, our book-to-bill has been 1 or higher and I am encouraged by the execution of our team. I believe we have gained market share during this uncertainty thanks to our solutions transformation. Looking forward to the third quarter, we see continued stability across our businesses as customers remain watchful. Economic indicators such as inflation are encouraging, and manufacturing PMI figures are improving; however, they are not consistently back into expansion territory yet. As a short cycle business, our forward view is limited beyond the most current quarter, so it's difficult for us to estimate when these trends will dissipate. What I can say is that our business is positioned well for strong outperformance once we are on the other side of destocking, and we will continue to execute in a measured fashion, working to advance solutions and gain share. The long-term secular drivers and investment cycles remain intact, and looking forward, we expect to see higher revenue and EPS through the next cycle. Reindustrialization is just beginning and our products and solutions are aligned with many secular growth drivers. We are well-positioned to take advantage of the growth opportunities ahead of us, and our balance sheet is strong to enable our expansion. Our team will continue to execute through this temporary weakness and will look for opportunities to gain share where possible. I would like to take a moment and recognize the contributions of our associates this past quarter and welcome the Precision Optical team to Belden. I appreciate your efforts, and would like to thank you for your support as we continue to transform Belden through a challenging environment. That concludes our prepared remarks. Operator, please open the call to questions.

Operator, Operator

Thank you. Our first question is going to come from William Stein, Truist Securities. Please go ahead, sir.

William Stein, Analyst

Great. Thanks for taking my questions. First, I wanted to ask about the Smart Buildings order increase. That was a bit surprising to me, that strength, and perhaps it's just my memory that's fading as to whether that's a normal seasonal dynamic or if we should interpret that as a cyclical upturn in demand.

Ashish Chand, President and CEO

Yeah. Well, good morning, Will. I think we expected Smart Buildings to have a good booking score, given all the work that's been initiated on our core verticals that we've talked about non-commercial real estate vertical markets that really are seeing activity as part of infrastructure development that includes healthcare, hospitality, data centers, etc. So, we expected bookings to increase sequentially. Yes, this is a little better than our expectations. I think part of it is just that our business is gaining share in that whole area because of improving product mix, more fiber, and more solutions approach as we go and talk to customers. We've seen, for example, more customers in our CICs in Q2, talking about more Smart Buildings type of applications than we've seen previously, right. So if you remember, it's been more industrial in nature, our solutions approach and it's shifting, or we are adding Smart Buildings applications to that whole approach. So, that's also helped. So yeah, I think it's a mix of all of those things and we feel good that it's going to continue in that same direction.

William Stein, Analyst

This sounds more structural than seasonal. Thank you for that. The next, you sort of touched on it already, but I'm hoping you can update us on traction in the CICs. Maybe you can talk about things like your traffic close rates which have been very strong in the past, pricing strategies that you see there working for you, and that would be really helpful. Thank you.

Ashish Chand, President and CEO

Yeah. So I think we've talked about last year on a full-year basis we did about 60 to 65 major validation visits, what we call proofs of concept visits at our CICs across the world. We also brought on stream more capacity because we inaugurated CICs in Bangalore, in India, and in Shanghai. So all of that added up, and we think we can do something like 250 to 300 real high-quality validation visits. We are tracking somewhere in that, about half of that rate right now, right? So in the first full year of capacity, that's where we are tracking. So it is an increase over what we did last year. I think it's fairly significant. Obviously, there is still a little bit of uncertainty, especially in European markets, so we see projects coming in for discussion that are still more long-term. So it does impact close rates as such as we measure for the next 12 months. So I think the pipeline increase is more than the increase in close rates, obviously that's improving too. And then pricing, I think in general, if you see our gross margins have continued to be, as expected, slightly better in spite of volumes being down, that's essentially driven by solutions mix. And so I think while, I don't want to call out pricing per se, it's a combination of mix and pricing, but that is obviously working well for us. So overall, I would say that our investments in the CICs have proven to be fairly successful. Our pipeline has expanded a lot. Our close rates are expanding, and I think pricing is holding up as expected.

William Stein, Analyst

Thank you.

Ashish Chand, President and CEO

I just want to emphasize that we are now seeing an increase in CIC visits for our enterprise solutions business, particularly in smart buildings, compared to what we have seen before. I am simply reiterating what I mentioned a few minutes ago.

William Stein, Analyst

I appreciate that. Thank you, Ashish.

David Williams, Analyst

Hey, good morning. Thanks for taking my question. I guess first, and forgive me if I missed part of this discussion earlier, but just wondering how you're thinking about the EBITDA contribution as the top-line expands. And I guess if we think about similar revenue levels, should we anticipate similar margin there, or how much expansion could we expect just kind of given the structural changes that you've had in the business?

Jeremy Parks, Senior Vice President and CFO

Yeah. Hey, David, this is Jeremy. So the framework that we've given in the past has been that as we grow organically, we would expect incremental EBITDA margins of about 30% on the incremental revenue. I think that framework still holds going forward. So I would use that as your guideline for modeling. The way that works out, by the way, is from an EBITDA margin expansion standpoint, if you grow mid-single digits, you get maybe 60 basis points of EBITDA margin improvement, I guess, for every mid-single digit growth in revenue.

David Williams, Analyst

All right. Perfect. Thanks for the color there. And then maybe just thinking about your bookings velocity, you talked about that being stable through 2Q, but when you think about the July quarter and what you've seen there, are you seeing customers that are still enthusiastic about their orders or maybe incrementally more positive, are you seeing any caution? We're hearing that there is a bit of caution at least in ordering patterns. I'm just curious if that's what you're seeing as well, or if there's anything, any puts and takes around that bookings? Thank you.

Ashish Chand, President and CEO

Let me start with a few qualitative comments, and then Jeremy can add his insights. Clearly, the destocking process has not yet concluded, and there is still some remaining. We have observed a turning point where conditions have begun to improve gradually. Conversations with customers indicate increased confidence in their planned projects over the next six to twelve months, with more specific discussions about timelines and details. This suggests that confidence is rising at the end-user level, particularly in the Americas, where we are noticing this trend. However, we are still experiencing some ongoing destocking in EMEA, especially in Germany, where the focus is on OEM machine builders that export their equipment. There are variations in the situation, but caution still exists.

Jeremy Parks, Senior Vice President and CFO

Yeah. The only thing I would add, David, is that if you look at the guidance sequentially, keep in mind that we have the acquisition of Precision in our third quarter guidance. So the real underlying growth in order rates, I would say, is pretty modest, and it's more reflective of continued moderation in destocking versus growth in the underlying economy.

David Williams, Analyst

Thanks so much for the help. Appreciate it. Best of luck on the quarter.

Robert Jamieson, Analyst

Hey. Good morning, Ashish and Jeremy. Congrats on the quarter.

Ashish Chand, President and CEO

Thank you.

Jeremy Parks, Senior Vice President and CFO

Thanks a lot and welcome back.

Robert Jamieson, Analyst

Yeah. Thank you. Good to be back. Hey, just wanted to go back to Bill's question, just on gross margin and the solutions progress there. I know longer-term, you guys are targeting to get to 20% sales over time, and this is something you're hyper-focused on internally. So just curious, like how this positions as the macro environment kind of starts to maybe improve over the next 12 months to 18 months. I mean, it puts you in a really good position. It sounds like still on track for that, and any update kind of where you are on that path would be great.

Ashish Chand, President and CEO

Absolutely. In the medium term, we feel confident about the various factors influencing our business. Generally, we find opportunities in areas affected by legacy networks, data complexity, labor shortages, and high capital costs. These challenges are prevalent in the vertical markets we target, such as healthcare and material handling. Additionally, the push towards reindustrialization in the U.S. is beneficial for us. Over the past few years, we've invested in enhancing our capabilities, particularly in industrial markets. Recently, we've also expanded this approach to enterprise markets. The past year has been relatively slow for growth as we've been navigating a destocking phase. However, we expect solutions revenue to rise as rail growth emerges in these markets. We're targeting a revenue share of approximately 25% by 2028 and believe we're making good progress; we entered this year at roughly 10% and anticipate reaching the low-to-mid-teens by year-end. This shift has positively impacted our gross margins, which, despite lower volumes due to destocking, have continued to improve. While the increase has been more modest recently, it's encouraging, and our strategy in enterprise markets is gaining traction both in our company and with customers. Overall, as demand shifts, we believe we will be well positioned.

Robert Jamieson, Analyst

That's very helpful. And then I guess just to stick with enterprise solutions, I know this was announced last quarter, but just want to rewind and kind of dig into Precision Optical just for a moment here. Obviously, a nice increase to the fiber exposure to the portfolio, but how does this change your interaction with your customers, your ability to participate in the BEAD program? I mean, does it enable kind of a deeper customer relationship, earlier kind of conversations on maybe architecture versus just purely servicing what your providers need? And then I guess, lastly, is there an opportunity for a potential pull-through of like the core enterprise portfolio? Sorry, there's a lot in there, but any color there would be great.

Ashish Chand, President and CEO

I believe that was the strategic thesis. If you examine Precision Optical Technologies, they have dedicated significant time to establishing their role as a value-added supplier of optical transceivers, complete with proprietary software and configuration capabilities. This is a unique position. It's somewhat analogous to our active products on the industrial side. They possess a highly differentiated and sticky capability. Consequently, whenever a major MSO customer needs to deploy new infrastructure, upgrade, or make any changes, it typically starts at their data center where Precision is integrated. The discussions focus on architectural design, addressing linked loss budgets from end to end. Precision covers both ends while our Broadband business, prior to Precision, addressed the middle ground. Now, we’re able to connect everything from end to end, allowing us to engage more in systems architectural discussions. How is that progressing? It's still early, but the initial discussions between the two teams and with our customers have been quite positive. We've already identified several pull-through opportunities, and we are integrating the teams more swiftly than we have historically. We're combining our go-to-market strategies more effectively than before. Our customers, as I've mentioned in a previous call, supported us significantly during the acquisition process, and they continue to back us as we roll out these initiatives. In many ways, Precision Optical's acquisition will enable our Broadband business to enter solutions that would have been challenging to achieve organically due to the lack of that architectural pathway into those discussions. This represents a significant change for us.

Robert Jamieson, Analyst

That's really helpful context. Thanks very much and congrats again.

Ashish Chand, President and CEO

Thank you.

Operator, Operator

And our next question is going to come from Mark Delaney from Goldman Sachs. Please go ahead.

Mark Delaney, Analyst

Yes. Good morning. Thanks very much for taking the questions. First, I was hoping to better understand how the company thinks it's tracking toward the $8 earnings target in 2025, and if that's still on track, in your opinion. And maybe also help us better understand with Precision Optical having closed, what does that mean for 2025 earnings, and does that change the outlook at all for next year?

Jeremy Parks, Senior Vice President and CFO

Yeah. Hey, Mark. Let me take that question. This is Jeremy. So I would say, we've been talking about our progress the last few quarters and our perspective has been that we're on track. That's still the target and one that we think we can hit. Nothing's changed over the past 90 days that would make us think that's not the case. Obviously, it's contingent on getting through this destocking because we believe that once we get through the destocking, there's quite a bit of upside in both revenue and EPS.

Ashish Chand, President and CEO

With respect to Precision Technologies, we gave a framework for that acquisition last quarter. So if you're going to model it for 2025, you can assume $150 million of revenue plus, call it, mid-to-high-single-digit organic growth, and then EBITDA margins that are consistent with total company building. So call it high-teens EBITDA margins.

Mark Delaney, Analyst

Thanks for that. My other question is just on capital allocation from here. Now that you've deployed some capital for Precision Optical, hoping to better understand how you think about the balance of the different uses of cash. You mentioned your leverage ratio is in a pretty good spot. So imagine you have some flexibility to do M&A if it comes up, but maybe help us better understand how you're seeing the pipeline going forward. Thanks.

Jeremy Parks, Senior Vice President and CFO

Yeah. I think we have plenty of options. So in the past, we've been pretty balanced in how we've deployed capital, and I think we'll continue to do that. So from an M&A perspective, we've got a good funnel, and I think there are opportunities to do additional M&A, obviously, over the next 18 months or so, but I also think share repurchases are a good option for us at this point. So I think everything's on the table and no major changes.

Mark Delaney, Analyst

Thank you.

Chris Dankert, Analyst

Hey, good morning. Thanks for taking the question. I guess to dig back in on solutions a little bit but focus on industrial here. We've seen a pretty aggressive shift towards wireless architecture and industrial ethernet from kind of a legacy field bus approach I guess. From a technology perspective, are you guys completely agnostic to kind of what type of architecture customers are using? And is that transition kind of the biggest driver of some of these solution sales within industrial?

Ashish Chand, President and CEO

At a fundamental level, our role is to connect various sources and destinations of data, with the way data is routed between these points varying depending on the type of data and its acquisition method. This can occur through both wireless and wired means, with wireless being particularly significant. In some situations, customers might prefer not to use wireless due to associated risks, while in others it is essential. For instance, in warehouse management, we are increasingly utilizing wireless technology as it integrates with more automated guided vehicles and robots. However, in precision manufacturing, wireless is not yet as critical. Our focus is on handling multiple data sources and destinations, remaining neutral to what these are, but the technology used in the data architecture is crucial. Through our Belden Horizon platform, we aggregate data that utilizes various protocols, standardizing and normalizing it before delivering it to the applications selected by customers. While Ethernet is the most prominent protocol used for this purpose, there are others as well. We are also allocating more resources towards emerging wireless technologies and security, as many customers prefer to compute at the edge rather than transferring all their data to the cloud immediately for real-time decision-making. Our approach varies across different industrial markets, but we strive to optimize and secure the processes in between the data source and destination. This has set us apart, especially as we combine hardware and software, alleviating customers from the previous challenges of managing separate vendors.

Chris Dankert, Analyst

Thank you for the information, Ashish. I have a follow-up question. Is there a difference in the destock cycle from a distributor's perspective in industrial versus a utility perspective in broadband? Also, could you please indicate where you see destocking occurring in both areas of the business today?

Ashish Chand, President and CEO

In the Broadband sector, the procurement policies of the large operators have shifted, resulting in fewer major players and increased visibility. They communicate with us more directly, allowing us to better understand their situation. Their usage has generally aligned with our expectations, indicating a destocking phenomenon. On the industrial side, the landscape is more fragmented and less direct, as we don’t engage all end-users closely. Many are small, and some only have maintenance projects. We do engage directly with end-users for larger solution-based projects, but those discussions don’t usually involve their inventories; they focus on solution design. Furthermore, there are regional differences; for instance, OEMs in Europe are experiencing a different destocking cycle compared to contractors in the US. This makes us reliant on our direct channel partners for guidance, limiting our visibility compared to the broadband sector. Ultimately, the fundamental driver appears similar across both sectors, as customers initially purchased more than necessary due to concerns about supply chain issues, and this excess is now being reduced at a comparable rate overall.

Chris Dankert, Analyst

Got it. Thank you so much and best of luck in the third quarter here.

Ashish Chand, President and CEO

Yeah. Thanks a lot.

Operator, Operator

And that concludes today's question-and-answer session. At this time, I'd like to turn the call back over to Aaron Reddington for additional or closing remarks.

Aaron Reddington, Vice President of Investor Relations

Thank you, everyone, for joining today's call. I'm pleased to announce that we will be hosting an Investor Day this coming September 12 from our Customer Innovation Center in Chicago. The event will stream live, so be on the lookout for additional information as we get closer. If you have any questions, please contact the IR team here at Belden. Our email address is investor.relations@belden.com. Thank you very much.

Operator, Operator

Thank you, ladies and gentlemen. This concludes our call for today. You may now disconnect from the call and thank you for your participation.