Belden Inc. (BDC) Q2 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Incorporated Conference Call. Just a reminder, this call is being recorded. At this time, you are in a listen-only mode. Later, we will conduct a question-and-answer session [Operator Instructions]. I would now like to turn the conference over to Kevin Maczka. Please go ahead sir.

Thank you, Ebony. Good morning, everyone. And thank you for joining us today for Belden's second quarter 2019 earnings conference call. My name is Kevin Maczka. I'm Belden's Vice President, Treasurer, and Investor Relations. With me this morning are Belden's President, CEO and Chairman, John Stroup; CFO, Henk Derksen; and Chief Operating Officer, Roel Vestjens. 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 Q&A. 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, 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 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 Web site contain 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, CEO and Chairman, John Stroup. John?

Thank you, Kevin, and good morning, everyone. As a reminder, I'll be referring to adjusted results today. Please turn to Slide 3 in our presentation for a review of our second quarter performance. Revenues were consistent with our expectations across most of our portfolio in the second quarter. However, demand trends softened in some of our key industrial markets, with orders declining in the last month of the quarter. Trade disputes and uncertainty seem to have triggered this abrupt shift in industrial demand, and we now expect a more challenging demand environment in the second half. Therefore, we are reducing our revenue and EPS expectations for the remainder of the year. Despite this near‐term outlook revision, we remain extremely well positioned to benefit from a number of long‐term secular trends. Now, let's review the second quarter performance. Revenues in the quarter declined 4.1% on an organic basis to $637.5 million. As a reminder, results in the second quarter 2018 benefitted from non‐recurring revenue recognition timing. After adjusting for that impact, revenues declined 3.1% organically. EBITDA was $101.2 million, reflecting 15.9% EBITDA margins. EPS was $1.39 compared to the guidance range of $1.30 to $1.50. I am pleased to report further significant improvements in free cash flow, which increased 25% year‐over‐year in the second quarter. Further, free cash flow more than doubled on a trailing 12 month basis, from $112 million in the second quarter 2018 to $231 million in the second quarter 2019. Consistent with our plans, capital deployment has been balanced in the areas of organic growth investments, strategic acquisitions and share repurchases. Year-to-date, we deployed $51 million in capital expenditures to fund a number of attractive organic initiatives. As previously communicated, we completed two broadband fiber connectivity acquisitions in the second quarter for a combined purchase price of $51 million. These businesses complement our product roadmap and should enable growth and share capture in our PPC broadband business. We also initiated the share repurchase activity under our $300 million authorization, deploying $50 million year-to-date through July, including $23 million in the second quarter. Please turn to Slide 4 for a review of our business segment results. I will begin with our Enterprise solutions segment. As a reminder, our enterprise solutions allow customers to transmit and secure data, sound and video across complex enterprise and media networks. Our key markets include smart buildings, final mile broadband and live media production. After adjusting for the non‐recurring revenue recognition timing in the year‐ago period, revenues in this segment declined 6.6% on an organic basis to $369.9 million, in line with our expectations. Revenues in the smart building market were approximately flat on an organic basis with a decline in the APAC region, offsetting continued growth and share capture in the Americas. Revenues in final mile broadband declined 14% in the second quarter, as we expected, against a very challenging year‐over‐year comparison. We continue to see healthy demand with our fiber optic and outside‐the‐home products, which benefit from increasing broadband subscribers and network upgrades, but demand for products used inside the home remains weak. Following the two acquisitions that we completed in April, our broadband fiber revenues more than doubled in the second quarter. Further, our product mix continues to improve as the majority of our broadband revenues came from outside‐the‐home products for the first time in the second quarter. We continue to pursue a number of other compelling and organic opportunities that would allow us to further expand our fiber product offering and drive substantial growth. Revenues in live media production declined in the quarter. The first half performance in this business is consistent with our expectations for the full year. Enterprise solutions segment EBITDA margins were 14.5%. Turning now to our Industrial segment. Much like Enterprise, our Industrial solutions allow customers to transmit and secure data, sound and video, but in this case in harsh industrial environments. Our key markets include discrete manufacturing, process facilities, energy and transportation. Revenues in this segment increased 1.9% on an organic basis to $267.7 million. We continue to benefit from a balanced portfolio of industrial businesses. Demand remains robust in our process, energy and transportation markets, each of which increased at least 8% organically. However, growth rates reversed during the quarter in our largest industrial market, discrete manufacturing. Revenues in the discrete market declined 2% in the second quarter with order rates declining 7% in June. This was especially pronounced in Germany and in the semiconductor vertical. Given our recent order trends, the increased level of uncertainty in the global industrial economy and the lowest German PMI in seven years, we expect the pressure in discrete to persist in the second half. Cybersecurity demand trends remain very encouraging. Non‐renewal bookings, our best leading indicator of revenues, increased 11% overall and a very robust 37% in the industrial vertical. This represents the fourth consecutive quarter of double‐digit growth in total non‐renewal bookings. Our new cloud‐based solutions continue to gain traction with new and existing customers. We anticipate further solid growth in this business going forward as we continue to develop and launch new products to expand our comprehensive suite of solutions, specifically designed for industrial and enterprise applications. Industrial Solutions segment EBITDA margins were 17.7%. I will now ask Henk to provide additional insight into our second quarter financial performance. Henk?

Thank you, John. I will start my comments with results for the quarter, followed by a review of our segment results, a 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 5 for a detailed consolidated review. Revenues were $637.5 million in the quarter, decreasing $33.9 million or 5.1% from $671.4 million in the second quarter of 2018. Revenues were favorably impacted by $9.4 million from acquisitions and negatively impacted by $15.9 million from currency translation and lower copper prices. After adjusting for these factors, revenues decreased 4.1% organically from the prior‐year period. Please note that the prior‐year period was favorably impacted by $7 million related to previously disclosed non‐recurring revenue recognition timing. After adjusting for this impact, revenues decreased 3.1% organically on a year‐over‐year basis. Gross profit margins in the quarter were 38.2%, decreasing 180 basis points compared to 40.0% in the year‐ago period due to unfavorable product mix in our Enterprise and Industrial segments. We expect mix and gross profit margins to improve in the second half. We were pleased with the expense control in the second quarter as operating expenses of $154.9 million, or 24.3% of revenues, improved 170 basis points sequentially. EBITDA was $101.2 million, decreasing $21.4 million compared to $122.6 million in the prior‐year period. EBITDA margins were 15.9%, decreasing 240 basis points year‐over‐year. Net interest expense declined 6% year‐over‐year to $14.2 million. As a reminder, our debt is entirely fixed at an average interest rate of 3.5% with no maturities until 2025 to 2028. At current foreign exchange rates, we expect interest expense of $57 million for the full year 2019, down from $62 million in 2018. Our effective tax rate was 13.7% in the quarter compared to 24% in the second quarter 2018 as we benefitted from a number of discrete tax planning initiatives. For financial modeling purposes, we recommend using an effective tax rate of 19% for the third and fourth quarters and 18% for the full year 2019. Net income was $64.4 million compared to $72.6 million in the prior‐year period. Earnings per share was $1.39 in the quarter compared to $1.52 in the year‐ago period. Please turn to Slide 6. I will now discuss revenues and operating results by business segment. Our Enterprise Solutions segment generated revenues of $369.9 million during the quarter, decreasing 7.5% from the prior‐year period. Revenues were favorably impacted by $9.4 million from acquisitions, and negatively impacted by $6.7 million from currency translation and copper prices. After adjusting for these factors, revenues decreased 8.2% organically on a year‐over‐year basis. Excluding the revenue recognition impact in the prior‐year period that I mentioned previously, revenues decreased 6.6% organically in line with our expectations. EBITDA margins were 14.5% in the quarter, declining 310 basis points year‐over‐year but increasing 240 basis points sequentially. The year‐over‐year decline resulted primarily from lower volumes and unfavorable product mix. The Industrial Solutions segment generated revenues of $267.7 million in the quarter, decreasing 1.5% from the prior‐year period. Currency translation and copper prices had a negative impact of $9.2 million. After adjusting for these factors, revenues increased 1.9% organically. EBITDA margins were 17.7% in the quarter, declining 190 basis points from the prior year period due to unfavorable product mix. Revenues declined 2% in our discrete manufacturing market, which typically generates above‐average margins. We continue to make strategic investments in new products, which are expected to drive growth in future periods. We are already seeing positive results from some of these important investments, such as our cloud‐based cybersecurity solutions. We are very encouraged by the strong momentum in our cybersecurity non‐renewal bookings, which increased 11% in the second quarter. That marks the fourth consecutive quarter of double‐digit non‐renewal bookings growth. If you will please turn to Slide 7, I will begin with our balance sheet highlights. Our cash and cash equivalents balance at the end of the second quarter was $295 million compared to $261 million in the prior year period. Working capital turns were 6.0 turns compared to 5.8 turns in the prior quarter, and 6.4 turns in the prior‐year. Day sales outstanding and inventory turns were consistent with the prior year period at 64 days and 5.1 turns respectively. Our total debt principal at the end of the second quarter was $1.48 billion, consistent with the prior quarter. Net leverage was 2.6 times net-debt-to-EBITDA at the end of the quarter, down from 2.7 times in the second quarter of 2018 and in‐line with our target of 2.0 to 3.0 times. Please turn to Slide 8 for a few cash flow highlights. Cash flow from operations in the second quarter was $67.7 million, improving $13.2 million, or 24% compared to $54.5 million in the prior year. Net capital expenditures were $27.2 million for the quarter compared to $22.1 million from the prior‐year period as we continued to invest in the development of new software products. Free cash flow in the quarter was $40.5 million, improving $8.1 million, or 25% compared to $32.4 million in the prior‐year period. Further, free cash flow more than doubled on a trailing 12 month basis from $112 million in the second quarter 2018 to $231 million in the second quarter 2019. We are very pleased with these significant gains, which resulted from improvements in our working capital and capital structure. As a result of our reduced EBITDA expectations, we expect free cash flow in the range of $200 to $220 million for the full‐year 2019. Finally, we are very pleased with our balanced capital deployment towards organic growth investments, strategic acquisitions and share repurchases. Year-to-date through July, we have allocated $51 million of capital expenditures to fund our attractive growth initiatives, $51 million for acquisitions to advance our broadband fiber strategy and $50 million for share repurchases at very attractive prices. That completes my prepared remarks. I would now like to turn this call back to our President, CEO and Chairman, John Stroup, for the outlook. John?

Thank you, Henk. As I mentioned previously, we are reducing our revenue and EPS expectations for the remainder of the year to reflect more challenging conditions in some of our key industrial markets and the likelihood that our channel partners will reduce inventory levels to meet lower demand. We anticipate third quarter 2019 revenues to be between $620 and $645 million, and EPS of $1.32 to $1.52. For the full year 2019, we now expect revenues to be between $2.485 billion and $2.535 billion compared to our prior guidance range of between $2.52 billion and $2.595 billion. We now expect full year EPS of $5.38 to $5.78 compared to our prior guidance range of $5.65 to $6.15. In addition, we are nearing the completion of a comprehensive review of our portfolio of businesses. We are considering adjustments that will allow us to deliver on our long‐term commitments to shareholders. That concludes our prepared remarks. Please open the call to questions.

[Operator instructions] John Stroup, your first question is from Noelle Dilts with Stifel. Please go ahead.

I know that in the in the past when you've experienced some weakening in your end markets, you've tended to respond pretty quickly with cost adjustments where you can? Could you speak to how you're thinking about that now? And just generally, give us a bit more detail if possible on how you're thinking about segment margins as you look into the back half of the year?

Yes. So in the near term, Noelle, the teams have put forward a forecast where costs will reduce sequentially from where they were in the first half, that's contemplated in our guidance. I think a broader question, though, would be over the next, say 12 to 36 months what should we expect from a macroeconomic point of view. We're obviously going to hear later from the fed today. But as it pertains to a more comprehensive portfolio review, we are also looking at the cost structure of the business to make certain that's appropriate. We're not pleased with the margins in the quarter, the EBITDA margins are not where we want them to be. We're obviously challenged a bit as it relates to revenue headwinds in a couple of our higher margin businesses. So I think what you should expect is that the high margin businesses that are growing nicely, like Tripwire will continue to make the investments in R&D that are necessary for us to continue to win. And in the businesses where the margins are not within our range or guidelines, we'll be aggressively attacking the cost structure. And I would expect, Noelle, that we would be in a position here over the next 90 days or so to be more specific with you and the rest of our investors with regard to the kinds of things we're planning to do.

And so second, I was just hoping to dig into the industrial piece a bit more. You guys did highlight semiconductor in Germany as areas of weakness. But when you look at the street generally, is there anything else you can call out from an end market vertical within discrete that's softened materially? I'm just trying to get a sense of how much of this is isolated to very specific verticals. And if there's still more to come as you look out broadly at the industrial economy?

So as I mentioned in the prepared remarks, growth in process, energy and transportation, were all at or above 8%. And so the weakness in the quarter was isolated to discrete. It was especially pronounced in the semiconductor vertical in Germany. China was also a little weak. My view and I'm sure, Noelle, you've listened to commentary from a lot of other industrial companies, it seems to be a consequence of China weakening, the European economy depending substantially on exports to China. But we even saw the U.S. weaken a little bit. And so it's unclear to us, whether or not this is temporary or whether or not this is more permanent. I personally think it's a consequence of uncertainty with regards to trade policy. And I think until that clarifies, this will be with us. I think that the discrete vertical, in general, has had a really good run. We had 12 consecutive quarters of strong growth. And so, I think there's a possibility that this could be with us a quarter or two. But I think it's also a real possibility that this could be a warning sign for the general economy. So those were really the areas of weakness. The other areas, I would say, were pretty much in line. We've got a couple of businesses, as you know, that are exposed to machine builders in Germany. Semiconductor machine builders are largely in the United States. And they were weak. And they got weaker through the quarter. June was weaker than May and weaker than April.

Our next question will come from Matt McCall with Seaport Global Securities. Please go ahead.

So John, maybe you talked a little bit about industrial. Can you talk about some of the others markets and maybe some of the sub-segments of the business and your outlook there? Because it seems like there was -- mixed but maybe more positive trends going on there. Just the back half assumptions and how you see those beyond the next couple quarters? I feel like we've got a good handle on industrial, but what about the other businesses?

So the enterprise segment performed as we expected. Obviously, the results in the quarter within that segment are not what we would like them to be, but they were as expected. The Grass Valley businesses, as we expected. The broadband business was, as we expected. We continue to see strong growth in our enterprise business in the United States. That market seems to be doing well. I think our broadband business is close to recovering nicely as we continue to make investments in outside the home. So right now, I'm bullish on the future for our broadband business. I feel good about our enterprise business. Obviously, we've talked a lot about the fact that our Grass Valley business is underperforming. We're working on that. We hope to be able to share more with you soon with regard to that. And on the industrial side, I'd just reiterate that process synergy and transportation were very strong, so up 8% in each category. So the thing about this quarter, obviously, that we didn't expect is we didn't expect our discrete business to go from one of our strongest growers to actually go negative. And again that happened to us pretty late in the quarter. So that was the surprise for us. Really everything else, Matt, performed as we expected. And then as we've unfold Q3 and Q4 I think our guidance is appropriate. I think it contemplates what we saw in the second quarter. It contemplates cost control sequentially, which is prudent given where we're at. We are working really, really hard on trying to get clarity with respect to our portfolio adjustments. We hope to be able to talk to you more about that soon. And we're going to work really hard to make certain that we enter -- finish this year as committed and enter next year in a better position.

So the cost control that you're assuming sequentially that I think you referenced broader cost structure review. So that's pre any bigger portfolio, those are cost structure changes, correct?

That's correct. So this guidance contemplates what I would consider to be just normal prudent cost control, and environment where things appear to be weakening. Independence of that as it relates and in conjunction to our portfolio review, we're taking a really hard look at our overall cost structure. And I think that later in this year, we'd be in a position to share with you what we think is appropriate, because we take the commitment to our EBITDA margins very seriously. And given where we performed in the second quarter, we obviously have a lot of work to do. Team knows that. We're working on that. We'll be reviewing that with our Board. And as I said, we look forward to sharing more details with you when we can.

And then last question I have is around your channel partner inventory comment. The -- I guess where -- did you see some adjustments? You said the last month of the quarter you saw some slowing industrial industry and discrete specifically? Have you seen the inventory levels adjust? Or is there more expected in the guidance?

So inventory levels in the second quarter really didn't change very much. So I think our channel partners were a little surprised by the demand in June. So they brought the material in with an expectation of demand in the quarter that didn't materialize. And we -- as you know, we have POS or sell through information. We have inventory level information. And based on where our channel partners typically operate as it relates to inventory turns, I think it's reasonable to expect that they would reduce their inventory levels in the second half. We also contemplated that in our guidance.

And we'll take our next question from Shawn Harrison with Longbow Research. Please go ahead.

John, just to be clear on that destocking, you're solely talking to channel partners associated with products that would go into the discrete marketers, or is it broader than discrete?

Well, I think it's largely discrete, Shawn, but my comments would be broader. So when we updated our guidance, we contemplated channel inventory in a broad context. So we didn't limit it only to discrete. But as I mentioned before, with 8% growth in the other verticals within industrial, we don't see the need for our distributors to have to reduce their inventory levels. So I would expect it would largely be in the product lines that we sell in discrete applications, but we took a much broader view. We looked at inventory as customers, in some cases. Our PPC broadband business, for example, has a number of customers that hold inventory, we always look at that. So we always, as part of our normal process, look at inventory levels. And what we noticed was, especially in the U.S., we had a couple of large distributors that, at the end of second quarter, had more inventory compared to their revenue than they would typically. And that's predominantly contained within the discrete vertical.

And then following up on this is discrete theme, I guess. July isn't over here. But you said bookings were down 7%, I believe in June what you've seen so far in July. Has there been a deceleration from the order rate following 7% or is it still around the same type of number?

It's around the same. Now the one thing though to keep in mind, Shawn, is that what is most important is the POS data from our distributors, and we don't yet have that. So we'll get that in another week or two. We'll be able to see what July POS looks like. But the fact that the orders are weak in July could be the fact that demand has continued to be weak. It could also be that they've already begun the destocking process. It's hard to be able to break those apart at this point. But we'll have a little bit better visibility in a couple of weeks.

And then last, I'm probably taking that something I shouldn't. But non-real bookings decelerated a bit in Tripwire and now they're up on a trailing 12-months basically significantly, just the non-industrial vertical. Is there just a timing issue? Would you expect an acceleration in the non-industrial non-renewal bookings in the second half of the year?

I think the Tripwire our business is set up nicely for the back half. It's not an area of concern for me right now. The products are being well received. I think the team is executing well. They had a really strong Q1. They had a couple of orders they booked in Q1 that could have easily been booked in Q2. So it's not an area of concern for me, Shawn. I think it's a business that's doing well. I think it will continue to do well. I'm more focused on other things.

We will take our next question from Mark Delaney with Goldman Sachs. Please go ahead.

First question was on gross margin for the completed quarter, it was down about 180 bps year-over-year, and there's a few reasons described already on the call. I was hoping you could be a bit more specific about what some of the drivers were of that gross margin decline? And I understand some of those would persist in the second half. But are any of these gross margin headwinds more temporary in nature and potentially alleviating as the year progresses?

Mark, most of our margin pressure on a year-over-year basis is mix. So unfortunately, the headwinds -- the market headwinds we've been dealing with have been more pronounced on some of our higher gross margin businesses, in particular Grass Valley. And also our discrete business tends to have higher gross margins also. So that was an issue for us in Q2. I think it was a bit of a perfect storm. But certainly, it's something we have to be able to mitigate. I think the team -- well, I know the team has been working hard to try to mitigate it through other factors, like manufacturing productivity, like PPV. But as we look at our business and we look at the gross margins, the portfolio, the growth rate expectations and the cost structure, those obviously all go together as it relates to how we consider adjustments to the portfolio and how we consider adjustments to the cost structure. So we're very focused on that EBITDA margin goal. A number of our businesses are at the EBITDA goal already. Some of which, by the way, have gross margins that are below fleet average. So that's certainly achievable for us. So I kind of view it as a more comprehensive review of the business in total. But specifically your question on a year-over-year basis, the issue is predominantly mixed.

Okay, that's helpful. And dovetails into my follow-up questions about what's baked into margins in the fourth quarter guidance. And as I try to build out to the midpoint of guidance, it seems like margins either gross margins or EBITDA margins, are implied to be at least flat or not maybe up a touch year-over-year, maybe there's something with tax rate or something like that that's throwing off the comparisons. But I understand the Tripwire business is very good gross margin, and maybe that should be coming in. But are there other things that the company is expecting to become tailwinds in gross margin for 4Q in order to get to the full year guidance? Thanks.

So, on the full year guidance we're expecting that our margins are going to be very near 40%. If you look at the high end of our earnings range, we're going to need to be somewhere around 40%. And that's going to be a consequence of a few things that are headwinds for us. So in '18, just to remind everybody, we had the recognition of revenue of Grass Valley, which was very high margin. And that's a pretty big challenge for us to overcome. If you adjust for that, we're probably more at about 40%. And so some of these mix challenges I mentioned before, we're going to have to be able to offset through some of our manufacturing initiatives, which the team is working on. So I think that for modeling purposes, I would model the gross margin somewhere between 39% and 40%. And EBITDA margins assumed in this guidance are going to be somewhere around 17% roughly.

Our next question will come from William Stein with SunTrust. Please go ahead.

First, John, to help us prepare for the more formal portfolio review, it sounds like you're going to be in a position to update us on the next quarter. If you determine or is the company and the board collectively determines the path forward includes perhaps the divestiture of a significant business like the live video play out? What should we be thinking about the company's path forward with that cash? Would we expect another, let's say, a pivot in the portfolio to significant acquisition to displace it, or an accelerated share repurchase? Or any other comments on that would be really helpful.

So obviously, I don't want to get out over my skis. But we do have a meeting scheduled with our Board in August, a normal regularly scheduled board meeting. And this is the time of the year where we update them on our strategic plan. And it's a natural time for us to have a subset of conversation with them as we do every year with respect to our portfolio. If we decide to do something meaningful, I think you should expect that the proceeds would be used in a way that's similar to how they've already been used. I don't believe we'll contemplate a change in strategy with regard to a balanced approach to capital allocation. So I would expect that we would continue to invest in organic initiatives at around $100 million a year. I would expect that we would go after bolt-on acquisitions in the areas we discussed, in particular outside the home broadband, as well as industrial. And I think that we'd be in a position to allocate approximately $200 million a year in that regard. And then we would continue, I think, to buyback our shares when we feel like it's a good value. So when our leverage is within our desired range and when we're trading at a discount to our peer group and the DCF affords it, you should expect that we'd be buying back our shares. I wouldn't expect anything different than that. But obviously, we have a little bit more work to do before we'll be able to be in a position to share with you what our thoughts are more specifically. And obviously, we're not making a commitment today as to when that would happen. But I certainly do hope that we would be able to communicate our plans later this year.

Maybe one more, you touched on it before. I think you said China was a little weaker in the quarter. But I'm wondering if you can provide some greater detail, given at the end of the day, Belden is a U.S. company and that domicile maybe challenging in China these days. So any updates there'd be helpful. Thank you.

Yes. So at a consolidated level, our business in China was actually okay. Our business in China was up at a consolidated level by about 4%. It was weak in industrial and particularly discreet. So we had some pretty good growth actually in broadband in China, which was great by one of the few companies that had strong growth in China in the quarter. But if you look at our industrial business and in particular discrete, China was weak. And it has been for a little while and it's, for all the reasons we discussed. So as I think you know, China as a percentage of our total, is not substantial. So if there are continued areas of weakness in China, we'll be able to mitigate just fine. But it's clearly a very global and connected economy. So when China's industrial pattern gets weak, it affects our European machine builders and that affects our business in Germany, which is what we saw in the second quarter.

And Kevin Maczka, there are no further questions at this time. Please continue.

Okay. Thank you, Ebony. And thank you everyone for joining today's call. If you have any questions, please reach out to the IR team here at Belden. Our email address is investor.relations@belden.com. Thank you.

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