Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Inc. conference call. Just a reminder, this call is being recorded. [Operator Instructions] I would now like to turn the call over to Matt Tractenberg. Please go ahead, sir.

Thank you, Nikki. Good morning, everyone, and thank you for joining us today for Belden's third quarter 2013 earnings conference call. My name is Matt Tractenberg, and I'm Belden's Director of Investor Relations. With me here this morning are John Stroup, President and CEO; and Henk Derksen, Belden's CFO. John will provide a strategic overview of our business, and then Henk will provide a detailed review of our financial and operating results followed by question and answer. We issued our earnings release earlier this morning and we have prepared a slide presentation that we will reference on this call. The press release and the presentation are available online at investor.belden.com. Before we begin, I'd like to remind our audience that Belden will hold its 2013 Investor and Analyst Day in Boston on Monday, December 9, at 1 p.m. Eastern. At this event, we'll provide additional insight into our performance and strategy, as well as 2014 guidance. Please reach out to us if you'd like to attend in person. The event will be webcasted live for those of you unable to attend, and can be accessed via the Belden IR website. Turning to Slide 2 in the presentation. During this call, management will make forward -- certain forward-looking statements. I would like to remind you that any forward-looking information we provide is given in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The comments we will make today are management's best judgment based on information currently available. Actual results could differ materially from any forward-looking statements that we make and the company disclaims any obligation to update this information to reflect future developments after the call. For a more complete discussion of factors that could have an impact on the company's actual results, please review today's press release and our 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, we have provided a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate. This reconciliation is in the appendix of the presentation and has been posted separately to the Investor Relations section of our website. I'd now like to turn the call over to our President and Chief Executive Officer, John Stroup. John?

Thank you, Matt, and good morning, everyone. I'm pleased with our third quarter results, and I would like to thank the team for their hard work during the period. While Belden, like many of its peers continues to find revenue growth challenging in the current environment, our solid results highlight the resiliency of our portfolio and business system. I'm proud to report best-in-class gross profit margins of 36% and operating profit margins of 14.2%, within the range of our newly stated goal. And although stronger end markets would certainly be welcomed, our market delivery system is driving share capture and expected fall-through. Following the formation of Belden's 4 global business segments this year, our commercial and product strategies are easier to execute, and we continue to benefit from geographic and end market balance. Results in our industrial and broadcast platforms were solid, while market dynamics within our enterprise platform were challenging. Overall, revenue in developed markets, which represents nearly 80% of consolidated revenues, grew by 3.1% year-over-year. This growth more than offset softness and difficult year-over-year comparisons in China. We believe in our long-term secular growth drivers, but it's clear that customers remain cautious when contemplating capital investment. Please turn to Slide 3 in our presentation for a review of our third quarter highlights. As a reminder, I'll be referring to adjusted results today. I'm pleased with third quarter revenue, an increase of 12.3% year-over-year to $525.6 million. Income from continuing operations per diluted share totaled $0.95 for the quarter, up 43.9% over last year's $0.66 per diluted share. Gross profit margins increased 290 basis points year-over-year to 36% and continue to be best-in-class. Operating profit margins also increased year-over-year by 270 basis points to 14.2% and are within our newly stated goal of 14% to 16%. We attribute the…

Thank you, John. I will start my comments with results for the quarter, followed by a review of our operations and segment results, discussion of the balance sheet and close with our cash flow performance. As a reminder, I will be referencing adjusted results today. Please turn to Slide 6 for a detailed consolidated review. Third quarter consolidated revenues were $525.6 million. Revenues for the quarter grew by 12.3% from $468 million in the prior year. We benefited from the addition of Miranda beginning in August 2012 and PPC during December 2012 as compared to the year-ago period with an impact of $81.3 million. Additionally, the revenue from our consumer electronics business is no longer included in our results with an unfavorable impact of $24.3 million year-over-year. Organic revenues, adjusted for changes in copper prices and foreign currency, increased 80 basis points year-over-year. After further adjusting for changes in inventory at our channel partners and customers, revenues for the third quarter increased by approximately 2% year-over-year. As highlighted by John, results were favorably impacted by strength in our broadcast platform, as well as growth in industrial connectivity. These were offset by challenges in our enterprise connectivity end markets. On a sequential basis, after adjusting for changing copper and currency, revenue declined seasonally by 60 basis points from $532.6 million to $525.6 million. Best-in-class gross profit margins, now at 36%, increased 290 basis points year-over-year and 80 basis points sequentially. The year-over-year improvement was largely a result of inorganic activities, with an impact of 240 basis points. Sequentially, we benefited from productivity and lower input costs with a combined impact of approximately 80 basis points. Third quarter SG&A expenses were $94.6 million or 18% of revenue. R&D expenses for the quarter were $20.8 million or 4% of revenue. SG&A and R&D…

Thank you, Henk. Please turn to Slide 10 for our outlook regarding the third quarter and full year results. Belden's outstanding business portfolio and an improved organizational structure provide us with an opportunity to perform well in a variety of economic environments. We continue to emphasize our strategic initiatives, including our Market Delivery System and Lean Enterprise. The global macroeconomic environment is generally as we anticipated, and we remain confident in our ability to deliver consistent operating results as we finish the year. While our revenue is not immune to changes in copper prices or macroeconomic weakness, we are slightly reducing our full year revenue expectations. However, strong margins allow us to maintain our earnings per share outlook. We expect our fourth quarter 2013 revenues to be between $510 million and $520 million, and adjusted income from continuing operations per diluted share to be between $0.86 and $0.91. For the full year 2013, the company now expects revenues of $2.078 billion to $2.088 billion, and adjusted income from continuing operations per diluted share to be between $3.64 and $3.69. That concludes our prepared remarks. Nikki, please open the call to questions.

[Operator Instructions] Matt Tractenberg, your first question is from Shawn Harrison with Longbow Research.

This is Chris Dankert calling in for Shawn. Guys, I was wondering if you could give us a little bit more color around the enterprise business. And did you guys see any negative impact from Brazil? Was there anything beyond the U.S. government shutdown that was really driving that? And I got one quick follow-up.

So our enterprise business really started off the quarter fairly strong. And then what we saw towards the end of the quarter was just a reluctancy for certain customers to pull the trigger on CapEx. Our win rate continues to improve. I think the team's doing a great job. Unfortunately, we can't force our customers to spend their CapEx sooner than they would like to. From a geographic point of view, we actually did better in the Americas than we did outside of the U.S. I think we could have done even better in a better macroeconomic environment. But after adjusting for changes in channel inventory, our growth in the Americas in the enterprise business was 5%, which I think is a clear outperform compared to the information we've seen from other folks. So that gives us optimism as it relates to the team's ability to take share, and more importantly, driving growth in the higher margin product categories to expand margins.

Great. And then, I guess, could you give us a little bit of color, I know you can't comment directly, but is there any traction on the M&A front? Is it pricing right now? Is it the complexity of the deals? I guess can you give us some kind of sense of what's happening in the pipeline there?

Yes, I can say that we're active. We're always active, of course. But I feel like we've got a number of attractive opportunities that we're hopeful for. From a environmental point of view, I think, as you can expect, pricing is a bit of a challenge. But I think compared to the folks we compete with, we've got some interesting levers to pull. Our commercial synergy execution on our most recent deals have been very good. And as Henk mentioned, we often acquire companies with balance sheets that are not as efficient as ours and that creates another lever for us to pull. So even in an environment where pricing is challenging, I think we're uniquely situated to prevail.

And your next question comes from John Quealy with Canaccord Genuity.

First, some housekeeping. On industrial IT, the large China project, is that done now in Q3? Or is there going to be some lingering into Q4?

No. The large project, industrial IT in China, was in Q3 of 2012. So it was a difficult comp with an impact of $2 million or $3 million.

Okay. And then I know you don't comment usually by segment, but generally speaking, as you close out the year here in Q4, do you expect the growth trends to continue as they did in Q3, again, normalizing for copper, currency and tough comps? Are we going to see relative outperformance or underperformance by sector in Q4? How should we think about Q4?

I don't think there's anything significant that we would expect to change in the fourth quarter on a year-over-year basis compared with what we saw in the third quarter. Our broadcast platform performed well in the third quarter. I think we expect the same in the fourth quarter. Sequentially, our PPC business does see a decline, Q3 to Q4. But on a year-over-year basis, that would be an impact. So I think you should expect more of the same. I think the comp for industrial connectivity is a little tougher in the fourth quarter maybe than it was in the third. So that might be a bit of a headwind on a year-over-year basis. And as Henk said, the comp on industrial IT is probably a little bit easier in the fourth quarter. But I think these are minor, minor adjustments, nothing significant. And on a consolidated basis, I think our guidance sort of projects that we expect similar-type activity.

And then lastly, John, you mentioned enterprise started strong and it seems like it was very strong in the Americas. Obviously, maybe some channel pause around what we had here from sovereign issues. But can you comment what you've seen post? Is it a normal seasonal pattern thus far in enterprise? Or is it maybe a little bit more of a pickup given that lag?

Sure. So what we've seen so far in the month of October is the sell-through data that we've seen is slightly better in enterprise than it was in September and consistent with the guidance that we've issued for the fourth quarter.

And the next question will come from Noelle Dilts with Stifel. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Not to beat a dead horse, but I wanted to go back to enterprise connectivity. You provided some nice color by geography. I was hoping you could comment a bit on the markets, what you're seeing in LAN, what you're seeing in data center, if you're seeing any specific trends in data center by size? Any color you could provide there would be great.

So activity in data centers continues to be better than it is in LAN. And as you know well, it still represents a smaller portion of our total business, but it's been helpful to both growth as well as margins. And we do tend, I think, to do a little bit better in the small- to medium-sized data centers than some of the larger data centers, really no change there. I would say that the real challenge for us in enterprise, which I think is not unique to us, is the fact that customers are just very -- it's very difficult for us to predict when customers are going to let orders. And I think it's really just a matter of their companies watching capital spending, free cash flow tightly. And I think the situation in the United States in the third quarter made that just more difficult. So I feel really good about what's happening at Belden. And we remain cautious with regard to what the end markets look like. Obviously, some of the leading indicators around ABI and non-res point to some recovery in '14, but how many years have we said that? So we're just going to watch it carefully. Noelle C. Dilts - Stifel, Nicolaus & Co., Inc., Research Division: Great. And just quickly, I'm just curious if you have some just early thoughts on China in '14, your thoughts on both the fundamental growth outlook for the market there and just your growth outlook?

So our view so far on '14 is that the macroeconomic environment in '14, we think, is probably going to be similar to 2013. We don't see any reason to suggest that things are going to change dramatically. We do think that Europe is bottoming out, as I've mentioned. So maybe the absence of headwinds there is positive. I think that growth rates in China are going to be in that kind of 5% to 7% range. That seems to be the most reasonable forecast. And I think that 2014, we're probably all going to be living in an environment that's pretty similar to what we lived in, in 2013. Obviously, we'll provide guidance for '14 when we're together in December, but those are some of my initial thoughts.

And our next question will come from Gary Farber with CL King. Gary Farber - CL King & Associates, Inc., Research Division: Just a couple of follow-up questions on Europe. Can you talk about how much Europe was as a percentage of revenue in the quarter? And then if you do enjoy sort of a shallow recovery, will the -- will you be in sort of noticeable operating leverage in the numbers as you head into next year?

Yes. So I think our European business was approximately 17% of our total revenue in the quarter. And the leverage that we get out of Europe is equal to, if not slightly, better than the consolidated results because of our mix of business. I don't have it handy here in front of me, but I know from the prior structure, and you may recall when we were organized or segmented by regions, the margins in Europe were always higher because of the fact that it was a little bit richer mix of products. So if Europe is going to recover or at least not have the headwinds that we had in the past, that's going to be favorable to top line and the margins. Gary Farber - CL King & Associates, Inc., Research Division: Right, okay. And then just one other one, given your commentary regarding sort of the tentativeness of the customer base, can you just offer your perspective given your extensive experience how this recovery compares to other ones that you've sort of worked through?

So it's unlike any other recovery that I've worked through in that it's a recovery, I think, without this typical kind of aggressive snapback that you would typically see. So I think it is different. I think that we're obviously dealing with many things we haven't had to deal with before. And I think that's why it makes it difficult for people to predict. But I think the most likely outcome, unfortunately, is that GDP on a global basis is going to be low. I think we're looking at 2%, 2.5% kind of global GDP numbers. And so I think it just means that companies need to really focus on making certain that you got a good portfolio, which I think we have. I think geographic balance is important. And I think execution is clearly at a premium. And fortunately for us, I think that plays into what we'd like to do anyway. Gary Farber - CL King & Associates, Inc., Research Division: Right. And then just lastly, on the acquisition front, you talked about the pricing environment being sort of challenging. Can you talk about -- I mean, what are the options? Is it the fact that private equity's involved, are there companies with significant balances? Are some companies thinking about going public because the public market's been pretty strong?

Yes. I think it's predominantly the multiples that you see in public markets either directly or indirectly having an impact on sellers' expectations. So if they're large enough that a public option is available, then clearly that's the scenario. But even if a public option isn't available, then they sort of look at that as one benchmark. And clearly, the cost of debt that's available to PE makes the engineering favorable. So I think it's as simple as that. And I think that if you look at the difference between the multiple of a transaction and the multiple of public companies, including ourselves, that delta really hasn't changed. It's just a matter of sort of the rising tide and getting comfortable with the fact that our disciplined approach around ROIC has nothing to do with multiples. It has only to do with whether we get a return on invested capital. So that discipline, I think, is the underpinning of how we think about transactions. And I think that discipline's good.

[Operator Instructions] The next question is a follow-up from Shawn Harrison with Longbow Research.

It's Chris again. Just quickly, given the understandable uptick in SG&A rolling in all these acquisitions, can you highlight what we should really expect for SG&A moving into the December quarter? And then on a couple of calls recently, we've heard a couple of green shoots, very green shoots in the non-res market. Are you guys starting to see the tide turn in that area, if any, at all?

So on the first question, I think you should expect that our SG&A in the near term on a sequential basis is going to be unchanged. And that over the long run, over the next 3 years, you should expect that our SG&A costs will increase half as fast as our top line. And that's very consistent. And that's how we manage the business. And that's the way I would model the business going forward. In terms of green shoots in non-res spending, I think that if they exist, they're very early. And I think it's just -- it's not prudent for me to suggest that we're experiencing a recovery. Obviously, we'd love to have one. But at this point, there's not data that would suggest that we're experiencing a robust recovery.

Matt Tractenberg, there are no further questions at this time. Please continue.

Great. Thank you, Nikki. That's going to conclude our call. Thank you, everyone, for joining the call today. If you have any questions, please reach out to the IR team here at Belden. Our email address is investor.relations@belden.com. And we're always happy to help. Have a great day, everyone. Thanks for joining.

Thank you. Ladies and gentlemen, this concludes our call for today. You may now disconnect from the call, and thank you for participating.