Earnings Call Transcript - BELFA Q1 2026

Operator, Operator

Good morning, and welcome to the Bel Fuse First Quarter 2026 Earnings Call. Please note, this conference is being recorded. I would now like to turn the call over to Jean Marie Young with Three Part Advisors. Please go ahead.

Jean Marie Young, Investor Relations / Moderator (Three Part Advisors)

Thank you, and good morning, everyone. Before we begin, I'd like to remind everyone that during today's conference call we will make statements relating to our business that will be considered forward-looking statements under federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2026. These statements are based on the company's current expectations and reflect the company's views only as of today and should not be considered representative of the company's views as of any subsequent date. The company disclaims any obligations to update any forward-looking statements or outlook. Actual results for future periods may differ materially from those projected by those forward-looking statements due to a number of risks, uncertainties or other factors. These material risks are summarized in the press release that we issued after market close yesterday. Additional information about the material risks and other important factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations is discussed in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our quarterly reports and other documents that we have filed or may file with the SEC from time to time. We may also discuss non-GAAP results during this call, and reconciliations of our GAAP results to non-GAAP results have been included in our press release. Our press release and our SEC filings are available in the IR section of our website. Joining me on the call today is Farouq Tuweiq, President and CEO; and Lynn Hutkin, CFO. With that, I'd like to turn the call over to Farouq. Farouq?

Farouq Tuweiq, President and CEO

Thank you, Jean, and good morning, everyone. We appreciate you joining our call today. We delivered a strong start to fiscal 2026. First quarter performance reflected broad-based momentum across the business and continued execution, both operationally and commercially. We also delivered solid profitability, supported by disciplined operational performance and favorable mix. Before we get into the quarter in more detail, I want to highlight an important step we took during Q1 to better position Bel for continued growth. We completed a business unit realignment designed to align our teams around how our customers buy and how we win, enabling greater customer intimacy, faster decision-making and a more coordinated approach to delivering our full portfolio of solutions across connectivity, power and magnetics. This structure strengthens our ability to bring more of Bel to each customer, expanding share of wallet through integrated selling, improved program execution and tighter alignment between engineering, operations and the commercial teams. Accordingly, Bel now operates two focused business units. First, Aerospace Defense & Rugged Solutions, or ADRS, which combines our legacy connectivity business with Enercon, focused on mission-critical applications across commercial aerospace, defense, space and rugged industrial environments. Second, Industrial Technology and Solutions, or ITDS, which integrates our pre-Enercon power and magnetics businesses, focused on data solutions, transportation and industrial markets where performance, reliability and scale matter. This structure sharpens accountability, accelerates decision-making and increases the speed at which we translate engineering into customer wins but also enables product-agnostic access to Bel's full portfolio, so customers engage with us as a solutions partner aligned to their end market requirements. In that context, I am pleased to share that we closed the acquisition of dataMate from Methode Electronics in March for $16 million. dataMate adds approximately $18 million in annual sales with margins in line with Bel and is expected to be immediately accretive. It will operate within our Industrial Technology & Data Solutions business unit. Strategically, this expands our ethernet and broadband portfolio in a highly complementary way and positions us to grow in data centers, industrial automation, smart buildings and broadband deployment. It also strengthens our U.S.-based manufacturing and engineering footprint. We're excited to welcome the dataMate team. They bring new customers, differentiated technology and strong talent, and we look forward to what we'll accomplish together. Turning to business performance. Within ADRS, results were driven by robust demand in defense and commercial aerospace with continued strength across key platforms and programs, supported by strong demand and stable OEM build rates. We also saw ongoing progress in space as production schedules and program content continue to expand. Robust bookings during the first quarter within ADRS were driven by both sustained program demand and continued traction with our channel partners, resulting in a strong foundation heading into the back half of the year. We're also beginning to see the fruits of our organic growth initiatives over the past year. In Slovakia, for example, we secured two new defense design wins that are progressing through final certification steps and remain on track to complete in the second quarter. The win was initiated by Enercon with ramping up the Slovakia entity to produce an Enercon design, highlighting our global ability to deliver to our customers locally. In addition, we achieved our first bundled Cinch and Enercon win on a new design in Israel, which is a great early proof point of what this broader integrated portfolio can do when our teams collaborate across the organization. Within ITDS, we continue to see healthy demand signals across networking and data infrastructure with momentum improving in data center connectivity and high-performance compute applications. Customer activity remains elevated as the industry invests in AI-oriented architectures, driving opportunities for power conversion and protection as well as high-speed interconnect solutions that support next-generation switching and server platforms. We are expanding our design win funnel and investing in engineering and operational capabilities to support these growth vectors, including manufacturing resilience and multisite capacity to serve global data center customers. As we think about the broader environment, we remain mindful of trade policy and tariff dynamics as well as demand variability by end market. We continue to work closely with customers to manage these conditions, including pricing and supply chain actions where appropriate. We are seeing some general upward pressure in certain material and logistics inputs, and we remain prepared to use the levers within our control — procurement actions, pricing discipline and operational execution — to support the overall direction we've laid out. With that overview, I'll turn it over to Lynn to walk through the financial results in more detail. Lynn?

Lynn Hutkin, Chief Financial Officer

Thank you, Farouq. From a financial standpoint, we had a solid quarter with continued sales growth, margin expansion at the gross profit line and healthy cash generation. Before walking through the results, I want to cover a couple of points of clarification related to our new segment structure. First, the realignment that Farouq mentioned became effective March 31, 2026. As a result, our Q1 reporting and all prior periods presented have been recast to reflect the new structure. Further, we filed recast segment information by quarter for 2024 and 2025 in an 8-K filed on April 6 for reference. Second, beginning in Q1 2026, our end market sales figures will capture all sales into a given end market, including both direct-to-customer shipments and sales through the distribution channel. In the past, distribution channel sales were called out separately in total rather than allocated to individual end markets. We will provide prior period comparable figures where appropriate to help investors evaluate performance on a consistent basis. With those points in mind, let me turn to the quarter. In the first quarter, total sales were $178.5 million, up 17.2% from the prior year period. Gross profit margin was 39%, up 40 basis points from Q1 '25. The gross margin performance improved due to leverage of our fixed costs on the higher sales volume, partially offset by higher material costs and impacts from foreign currency fluctuation. Below the gross profit line, GAAP operating income was $23.7 million compared to $25 million last year, while adjusted EBITDA was $34.5 million versus $30.9 million in the prior year period. Now turning to results by reportable segment. In the Aerospace Defense & Rugged Solutions, or ADRS, segment, sales for Q1 '26 were $99.8 million, up 20.1% versus Q1 '25. Growth was led by a $9.4 million increase in defense market sales, up 19% from Q1 '25, and a $3.9 million increase in commercial aerospace sales, up 22% from Q1 '25. ADRS gross profit margin was 41.5%, an improvement of 140 basis points from Q1 '25. This margin expansion was largely driven by improved leverage of fixed costs on the higher sales volume and a favorable shift in product mix. These benefits were partially offset by unfavorable foreign exchange movements, primarily related to the weakening of the U.S. dollar against the Israeli shekel and the Mexican peso. Within the Industrial Technology & Data Solutions segment, or ITDS, sales amounted to $78.7 million, up 13.8% from Q1 '25. Growth resulted primarily from AI-driven strength in data solutions, coupled with the continued year-over-year recovery of sales into our enterprise networking customers. This growth was partially offset by lower transportation sales versus Q1 '25, particularly within the rail and e-mobility markets. ITDS gross profit margin was 36.6% compared to 37.3% in Q1 '25. The margin decline was primarily driven by higher material costs, particularly related to gold, copper and PCBs, and unfavorable foreign exchange movements, particularly with the Chinese renminbi. Turning to operating expenses and cash flow. R&D expense increased to $8.5 million from $7.2 million last year, reflecting continued investment in technologies aligned with our targeted end markets. Of this increase in cost, we estimate approximately $400,000 related to foreign currency movements as we have a large engineering population in China and Israel. We anticipate R&D will run in the range of approximately $8 million on a quarterly basis going forward. SG&A increased to $36.7 million, up from $29.5 million in Q1 '25. Of the $7.2 million increase, we estimate approximately $3 million was one-time in nature, including acquisition-related costs related to dataMate, segment leadership transition costs and a prior year benefit which was nonrecurring in the 2026 quarter. The remaining $4 million of the increase reflects targeted commercial and infrastructure investments to support growth in addition to an increase in commissions on higher sales and unfavorable foreign exchange impacts. On a go-forward basis, we expect SG&A expense to run at approximately $33 million to $35 million per quarter. We ended the quarter with $59.4 million of cash and securities. Net cash provided by operating activities was $13.8 million, up from $8.1 million during the first quarter of 2025. Capital expenditures were $2.6 million, generally in line with the prior period. During the quarter, we closed the dataMate acquisition, investing $15.2 million. To help fund that transaction while maintaining balance sheet flexibility, we had $7 million of net borrowings from the credit facility during the first quarter of 2026. To close on the financials, we delivered a very strong quarter, driven by solid execution and healthy demand across the business. Looking ahead, we see continued strength and momentum for the balance of the year and remain confident in our ability to perform. We are also operating in an environment of higher input costs, and we're actively managing that pressure by focusing on the levers we can control: pricing discipline, procurement actions and operational efficiencies. At the same time, we're enhancing our focus on the cash conversion cycle, improving inventory turns, receivables and payables discipline as a key enabler to generate cash, strengthen flexibility and accelerate Bel's growth strategy. With a strong quarter behind us and clear priorities in front of us, we're executing with urgency and discipline. With that, I'll turn the call back over to Farouq.

Farouq Tuweiq, President and CEO

Thanks, Lynn. As we look forward, our focus remains on executing our commercial and operational priorities while navigating the external environment, including ongoing tariff and trade-related uncertainties and demand variability across our various end markets. Looking ahead, we have a strong outlook for the second quarter. We are guiding sales in the range of $195 million to $215 million with gross margin in the range of 38% to 40%. This outlook is supported by robust bookings across the business in recent quarters and is driven by higher demand from our defense, commercial aerospace and data solutions customers. Before we open the line for questions, I want to recognize Pete Bittner on his retirement after 35 years with Bel. Under Pete's leadership, we strengthened our connectivity platform and delivered meaningful profitability improvement while deepening customer relations. We are grateful for Pete's contributions and wish him and his family all the best. With that, I'll turn the call back over to Kerri to open up the line for questions.

Operator (Kerri), Moderator / Operator

We will now open the line for questions. Our first question will come from Luke Junk with Baird.

Luke Junk, Analyst (Baird)

Farouq, maybe hoping you could just provide some comments on book-to-bill trends. You mentioned robust bookings were one of the things that is supportive of the guidance. And within that, if there'd be any end market highlights you want to call out as well?

Lynn Hutkin, Chief Financial Officer

On book-to-bill trends, I would characterize them as robust in the first quarter. That was really seen across the full business, in both segments and across most of our subsegments. I think the only exception would be transportation. But when it comes to aerospace, defense and data solutions, it was a very robust book-to-bill in Q1.

Luke Junk, Analyst (Baird)

Got it. Second, you mentioned that the ITDS growth was primarily AI-driven with strength in data solutions. Just hoping you could provide a little more color on what you're seeing. And I don't know if you're going to be speaking out the AI dollars specifically going forward. And Farouq, you mentioned serving global data center customers as well. I was hoping we can maybe double-click on that trend too.

Farouq Tuweiq, President and CEO

Yes. We have obviously seen our customers benefit from data center build-out and AI-driven demand. Everything we're reading in the market is additive to that effort, and we're seeing that across our portfolio. Specifically on the AI customers that we service, we're seeing a healthy pickup in their bookings and orders, and therefore that downstreams to us. We would characterize it as a very healthy environment. Bookings continue to be robust and the outlook continues to strengthen. I'll defer to Lynn for more specifics around that.

Lynn Hutkin, Chief Financial Officer

Luke, in the past we had called out AI-specific sales. As we enter 2026, things are getting more blurred. Last year we had AI-specific customers, but we also sold into our regular enterprise networking customers whose demand increased due to AI. Going forward, we will be talking more generally about data solutions. We did see strength across both AI-specific customers and our more general enterprise networking customers in Q1, and much of the growth was driven by that combined demand.

Luke Junk, Analyst (Baird)

Understood. Last question for me. Just curious to get your perspective on posture right now at U.S. and Israeli defense trends. It seems like there's a fairly obvious replenishment opportunity. How much of that is baked into the Q2 guidance sequentially? And as you look into the back half of the year, qualitatively, the potential for some additional upside or just clarity on that opportunity.

Farouq Tuweiq, President and CEO

We discussed geopolitical events earlier; from an A&D standpoint these trends are helpful and additive for us. We have significant exposure to the missile side of the business — whether deployment systems or launchers — and replenishment cycles and national stockpile replenishments are additive. We believe a replenishment cycle has been in motion since the Ukraine situation, and usage of stockpiles has increased; we expect replenishment to be a medium-term growth vector. We're also seeing more investment into new platforms and technologies in the A&D complex, which brings new opportunities. We see these trends not only in the U.S. but also in our European and Israeli businesses. Overall, we see more shots on goal and an expanding funnel of opportunities, both for replenishment of existing platforms and for new programs.

Operator, Operator

Our next question comes from Bobby Brooks with Northland Capital Markets.

Bobby (Robert) Brooks, Analyst (Northland Capital Markets)

It was great to hear about the first Cinch Enercon package win. Could you just discuss more how that win came about? And maybe what you felt was the piece that pushed the customer to give you that order?

Farouq Tuweiq, President and CEO

I don't believe there was one magical solution or single change that drove the win. We sell highly engineered, complex systems, both at the component and system level. Our organization and our customers are busy, and the A&D environment is stretched. We began partnering to deliver more holistic solutions. When we acquired Enercon, we discussed using our Slovakia facility to become our A&D footprint into Europe. That process requires certifications, sharing drawings and ramping up capabilities, including some CapEx investments. We were able to get the Slovakia facility up and running to serve a European customer who wanted on-continent manufacturing. The customer visited the facility, saw signal capacity and reviewed Enercon engineering and products. The facility and the combined portfolio impressed them, and we received purchase orders thereafter. That was one of the pathways to the first bundled Cinch and Enercon win. The other opportunity involved pairing an Enercon power unit with a Cinch connector and cabling solution, which solved multiple problems for the customer by delivering both power and connectivity. The win demonstrated the art of the possible and, more importantly, showed improved collaboration across ADRS. We're seeing more awareness of the full portfolio within the organization and better cross-team collaboration. Additionally, some A&D customers are looking for more hardened industrial solutions, and our non-Enercon products can fill those needs. Overall, the opportunity was a strong team effort across engineering, operations and Enercon support in Slovakia that convinced the customer to award the work.

Bobby (Robert) Brooks, Analyst (Northland Capital Markets)

Just curious, is that like, first, is that a specific drone company or...

Operator, Operator

Bobby, your line is open. I think he's taking a phone call.

Farouq Tuweiq, President and CEO

I'll continue to answer your question. The other opportunity was taking an Enercon box, a power unit, and adding a Cinch connector and cable solution. We ended up solving several customer problems by providing both power and cable connectivity together, which the customer appreciated. More importantly, it validated internal collaboration across ADRS and showed customers the integrated capabilities we can offer. I don't know if you're back, Bobby, but I hope that answers your question.

Operator, Operator

Our next question comes from Christopher Glynn with Oppenheimer.

Christopher Glynn, Analyst (Oppenheimer)

I'm going to ask a question and try to stick around. Just if there's background noise, tell me to mute it, please. So continuing with defense because it's such a large proportion of your business and such a dynamic area: with these initial greenfield design wins in the defense sector in Europe, is that consistent with the timeline you anticipated from an integration pathway, or are you pulling ahead a little bit? I'm curious about actuals versus expectations.

Farouq Tuweiq, President and CEO

I'd say slightly ahead or on time. When we announced the Enercon acquisition in Q4 2024, we thought we wouldn't see meaningful results until at least 2026, likely toward the end of 2026. Now, in Q1, we're seeing some of the early wins. What took a bit longer than expected was obtaining certifications and facility approvals, since A&D is heavily regulated and moving things globally requires approvals. The approval process in Slovakia took longer than anticipated due to increased investment activity in the country, but as of April we had some nice wins and customer visits. So overall, I'd characterize it as roughly on schedule to slightly ahead.

Christopher Glynn, Analyst (Oppenheimer)

Makes sense. Given the dynamism in defense procurement and hot regions, are these design wins to revenue conversions pretty quick?

Farouq Tuweiq, President and CEO

Defense is not typically a fast-moving industry. If you win a program, you have to prove it out, perform testing, and then volumes scale over time. The key is getting in early. For existing products, you may get an initial order, but you might not see significant volumes for 12 to 18 months. For brand-new products developed by the customer, it could be longer. Getting the award is the critical step because programs may go through iterations before full-scale production.

Christopher Glynn, Analyst (Oppenheimer)

So the replenishment orders are more of the quicker lead-time drivers that you're seeing right now?

Farouq Tuweiq, President and CEO

Correct. Although defense historically has been slower, we are seeing pockets where things are moving faster. There are also regional nuances — Europe versus the U.S., and Israel may be faster. So timelines are changing a bit, but broadly speaking, defense remains slower compared to some other industries.

Operator, Operator

Our next question will come from Greg Palm with Craig-Hallum. Speaking for Greg, Jackson Schroeder is on the line.

Jackson Schroeder, Analyst (Craig-Hallum, on behalf of Greg Palm)

This is Jackson Schroeder on for Greg Palm. I want to start out with gross margin. You talked a bit about the cost pressures; curious how you're feeling about the levers you're pulling on gross margin. Any timing-related things we should expect through the year, especially as it relates to new bundled design wins and organic initiatives? Are you doing anything within those new contracts or investments to offset cost pressure going forward?

Lynn Hutkin, Chief Financial Officer

As we look across the full year of 2026, there's some disconnect. Mathematically, as sales grow we get better leverage on fixed costs in COGS, which should expand margin if all else is equal. This year we're seeing a rise in input costs, including material costs and some minimum wage increases globally. We're also in an unfavorable FX environment with the Mexican peso, Israeli shekel and Chinese renminbi moving against us. We're taking actions within our control — pricing discipline, procurement initiatives and operational efficiencies — but those take time to implement. So in Q1 and Q2, we're still paying higher input costs and haven't yet seen the full benefit of those initiatives.

Farouq Tuweiq, President and CEO

We have taken pricing actions to offset input cost increases, but we're mindful of backlog. For new business, we've implemented price increases, so we'll start seeing benefits of those changes over time, potentially some in Q2, but more in Q3 and Q4. Operational leverage and pricing actions together should help offset the input cost pressure as the year progresses.

Jackson Schroeder, Analyst (Craig-Hallum)

Got it. Super helpful. Also curious on the new business structure and how you're thinking about organic growth as you lap Enercon. Any commentary on geographic breakdowns or where we should expect growth by segment?

Farouq Tuweiq, President and CEO

We haven't provided long-term growth guidance. We're an end-market-driven business and expect robustness across our markets. ADRS has been growing for several quarters and we expect some of that to continue. ITDS — particularly data solutions, data centers and AI-related infrastructure — we expect continued strength. The industrial technology part of ITDS, including transportation and e-mobility, is later in recovery but showing encouraging signs. Overall, we expect continued top-line growth across these areas.

Operator, Operator

Next question comes from Hendi Susanto with Gabelli Funds.

Hendi Susanto, Analyst (Gabelli Funds)

Congrats on strong results. Farouq, I'd like to understand more about your data center footprint post-acquisition of dataMate. First, is dataMate a growing business? What kind of sales trend? Second, when you talk about data center and AI data center, are there new areas or product portfolios you want to address or develop?

Farouq Tuweiq, President and CEO

We bought dataMate expecting growth. We believe Bel is a better home for dataMate given our end markets, customers and go-to-market reach. In certain core products, dataMate had a strong reputation in the industry. We're impressed by their product development and engineering. The acquisition expands our U.S. manufacturing footprint and brings customers where we previously had less penetration. The carve-out and relocation complexities were handled well by the dataMate team and the integration has been smoother than anticipated. We expect to land and expand these new customers with our broader global sales organization and to leverage the engineering talent. Regarding data centers and AI, the drivers remain consistent: AI build-out, data center build-out, routers and switches. These drivers support our legacy power and magnetics businesses broadly. When we say AI, we see that as a floor rather than a ceiling because some demand flows into other channels, but the clear AI-related demand is robust and growing.

Lynn Hutkin, Chief Financial Officer

To add, within Data Solutions our AI exposure is largely within our power products. If we isolate data solutions just within power products, that increased by $4.8 million, or about 27%, from Q1 last year to Q1 this year. Much of that was driven by AI.

Hendi Susanto, Analyst (Gabelli Funds)

A number of companies have talked about the possibility of price increases in the second half. You mentioned pricing actions. What are the considerations around price increases in your industries and expectations for the second half?

Farouq Tuweiq, President and CEO

Nobody welcomes price increases, but there is broad understanding that input costs have risen. Pricing actions are part of the normal toolkit now. We have taken pricing actions for new business, and we'll need to be thoughtful about backlog and existing contracts. We've implemented price increases on new orders and will start to see benefits in Q3 and Q4 more fully, though some benefit may show up in Q2.

Hendi Susanto, Analyst (Gabelli Funds)

Got it. Any insight into market recovery in industrials, especially customers' and distributors' inventories?

Farouq Tuweiq, President and CEO

Distribution is broad and touches many end markets. We're seeing pockets of robust strength and pockets still recovering. When we stitch it together, overall strength increased as we moved out of the quarter and into April. Distribution recovery is additive to our overall business and aligns with our earlier comments about improved demand.

Operator, Operator

We will go next to Theodore O'Neill with Litchfield Hills Research.

Theodore O'Neill, Analyst (Litchfield Hills Research)

Congratulations on the quarter. Two questions. First, last quarter you talked about weakness in rail and e-mobility — has anything changed there? Second, the sequential strength in Q1 over Q4 is unusual; in the last 20 years you've reported Q1 over Q4 sequential growth only three other times. What was driving the strength here in this sequential increase?

Lynn Hutkin, Chief Financial Officer

On e-mobility and rail, it's relatively more of the same from Q4. On the e-mobility side, Q4 was probably the bottom; there was a slight uptick from Q4 to Q1 but nothing meaningful. Both areas remain depressed in Q1 similar to Q4. Regarding the sequential increase from Q4 to Q1, historically we saw declines due to the Chinese New Year production interruption in January and February when we depended heavily on China. As our end market mix shifts more toward aerospace and defense, we are less reliant on China and therefore less seasonal impact. In short, our changing end market mix is reducing seasonality and explains much of the Q1 sequential strength.

Operator, Operator

We'll take a follow-up question from Bobby Brooks with Northland Capital Markets.

Bobby (Robert) Brooks, Analyst (Northland Capital Markets)

I was just curious on diving a little bit more into the guide. Obviously really nice sequential growth. Even if you back out the benefit from dataMate, you're still looking at nice double-digit year-over-year growth. Could you expand on the factors that underpin that outlook? Do you have visibility with the strong bookings already year-to-date that this sequential growth can continue into the back half? Also, a quick question on M&A appetite: you guys have done a good job finding acquisition targets. Is there appetite for more M&A or a pause to let dataMate integrate?

Farouq Tuweiq, President and CEO

On the guide, our backlog continues to build from year-end and Q1, and we had a healthy quarter. We have orders scheduled to ship in Q2 that supported the guide. Not all backlog is for Q2; it extends into Q3 and Q4. We do expect a very healthy second half, though we do have seasonality in Q3 and Q4 to consider. Regarding M&A, there is no pause. We are always active on the M&A front. Despite the cash use in Q1 for bonuses, IT and the dataMate acquisition, we generated good cash flow and expect healthy cash flow for the rest of the year. We have access to capital and internal bandwidth to execute on acquisitions. We're open to M&A and actively looking; we just need to ensure each opportunity stands on its own merits and consider integration complexity.

Lynn Hutkin, Chief Financial Officer

To add on the Q2 guide: if you compare Q2 this year to Q2 last year, strength is seen across both segments. Within ITDS, Data Solutions, which is largely AI-driven, is a key driver. Within ADRS, commercial air, space and defense are running strong. Several end markets are running very strong right now, and the guide is supported by orders received.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the floor back over to Farouq Tuweiq for closing comments.

Farouq Tuweiq, President and CEO

Yes. Thanks, Kerri, and thank you, everyone, for joining us today. A very important thank you to all of our team globally that delivered this outstanding Q1 and what we think will be a very healthy balance of the year starting out with Q2. So thanks, everybody, and looking forward to speaking again in July.

Operator, Operator

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.