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00:06 Good day and thank you for standing by. Welcome to the CommScope First Quarter 2022 Results Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. 00:29 And now, it is my pleasure to hand the conference over to your first speaker today, Michael McCloskey, Head of Investor Relations. Thank you. Please go ahead.

00:39 Good morning, and thank you for joining us today to discuss CommScope's 2022 first quarter results. I am Mick McCloskey, Head of Investor Relations for CommScope and with me on today's call are Chuck Treadway, President and CEO; and Kyle Lorentzen, Executive Vice President and CFO. 00:57 You can find the Slides that accompany this report on our Investor Relations website. Please note that some of our comments today will contain forward-looking statements based on our current view of our business, and actual future results may differ materially. Please see our recent SEC filings, which identify the principal risks and uncertainties that could affect future performance. 01:20 Before I turn the call over to Chuck, I have a few housekeeping items to review. Today, we will discuss certain adjusted or non-GAAP financial measures, which are described in more detail in this morning's earnings materials. Reconciliations of non-GAAP financial measures and other associated disclosures are contained in our earnings materials and posted on our website. All references during today's discussion will be to our adjusted results. All quarterly growth rates described during today's presentation are on a year-over-year basis unless otherwise noted. 01:55 I'll now turn the call over to our President and Chief Executive Officer. Chuck Treadway.

02:00 Thank you Mick, and good morning everyone. I'll begin our -- on Slide two. I'm pleased to share that we've delivered core net sales of $1.73 billion and core adjusted EBITDA of $230 million for the first quarter of 2022. I'm encouraged by the strong top line performance delivered by core CommScope growing net sales 10% from the prior year. Our focus on capacity expansion and organic growth is clearly paying dividends. 02:30 As discussed in our February release, our margins remained under pressure in the first quarter as we continue to work price increases through our backlog. We've made strong progress on our pricing initiatives and expect to see margin improvement for the core portfolio in the second half of the year. 02:48 Although the environment remains challenged, including COVID challenges in China, based on current visibility, we maintain the expectation to deliver core adjusted EBITDA in the range of $1.15 billion to $1.25 billion for the full-year in 2022. For consolidated CommScope, which includes our Home Networks business, we reported net sales of $2.23 billion, up 8% and adjusted EBITDA of $253 million, down 13%. 03:20 Now turning to Slide three. Before I discuss some of the business highlights behind the first quarter, I'd like to remind you about our new business segments we mentioned on our last earnings call in February. Portfolio optimization is the key pillar to our CommScope NEXT transformation and as such, we believe that our new segmentation will create more focused and streamlined businesses. This will allow us to better serve our customers and drive accountability and efficiencies deeper into the organization. 03:51 Under our new reporting structure, our four core business segments are as follows: Connectivity and Cable Solutions; Outdoor Wireless Networks; Networking Intelligent Cellular and Security Solutions; and Access Network Solutions. Our largest segment is Connectivity and Cable Solutions or CCS and is led by Rick Johnson. CCS combines all of our connectivity and cabling assets, as well as our PON technologies. After a thorough evaluation of our entire portfolio, it became very clear that this is crucial to manage the entirety of our connector and cable operations under one single segment. This was to match CCS as one of the largest of its kind in the marketplace, leveraging a tremendous portfolio of scale and intellectual property, unlocking true global leadership in connectivity and cabling that few others can match. 04:47 Our next segment, Outdoor Wireless Networks or OWN is led by Farid Firouzbakht. OWN remains largely the same, a provider of everything, but the radio. At the macro site, in addition to Consumer solutions in the metro layer to densify mobility networks. 05:07 Moving to our next segment, Networking Intelligent Cellular and Security Solutions or NICS is led by Markus Ogurek. NICS has combined RUCKUS, DAS, Small Cell and Security Identity Solutions to create a pure play business focused on intelligent connectivity applications. NICS will provide industry leading vertical solutions enabled through software and cloud, capturing emerging growth trends in security, IoT, analytics, public and private networks. 05:39 Access Network Solutions or ANS is led by Guy Sucharczuk. ANS it takes the active product portfolio that was formerly in Broadband Networks and establishes a more streamlined and focused segment. ANS offers service provider solutions from the head-end to the edge of their networks and will continue to leverage its installed base and product offering in software, CMTS, head and optics, nodes, and amplifiers to service its customers. And before turning to our business highlights for the quarter, I would also add that Home Networks remains entirely unchanged. 06:17 Now turning to Slide four for a review of our first quarter. As mentioned in my opening remarks, core and consolidated CommScope delivered strong top line growth during the first quarter. Connectivity and cabling solutions led the way with net sales of $838 million, an increase of 24% from the prior year and most notably in our fiber product lines, which grew 38%. We are continuing to see significant strength across all of our end markets. Our investments in capacity continue to ramp helping fuel the impressive year-on-year growth. Gross margins remained under pressure as a result of the timing of our price increases and start-up costs relating to our new capacity expansions. 07:01 As mentioned on our previous call, we continue to work price increases through our backlog and expect margin percentages to improve sequentially throughout the year. Outdoor Wireless Networks also drove strong top line performance with net sales of $390 million, growing 20% from the prior year. Carriers continue to invest in their 5G networks worldwide and OWNs, everything, but the radio portfolio, saw growth across all its business units. 07:32 However, while the top line performance was very strong, margins remain challenged as inflation continues to impact our key input in logistics costs. Networking intelligence cellular and security solutions delivered net sales of $188 million, a 2% decline from the prior year. Our DAS and small cell business performed well in the quarter and while demand was strong in RUCKUS, there were constrained by chip availability. RUCKUS backlog continued to increase and ended the quarter at $583 million with a book-to-bill of 1.8 times. DAS has built a healthy and growing backlog in excess of $100 million, and OneCell is continuing to progress through the qualification process needed to be approved in all three major US carriers. 08:20 In this segment, we continue to invest in future growth. We continue to make significant investments in RUCKUS and OneCell and are encouraged by market interest in our capabilities. Our investment in OneCell will continue to have a negative impact on our EBITDA for the remainder of 2022. However, as we continue to manage our chip supply challenges, input costs, and pricing, we expect the overall segment's adjusted EBITDA performance to improve throughout the year. 08:47 Active Network Solutions generated net sales of $317 million, a 16% decline from the prior year. As we've mentioned before, the performance in this business is heavily influenced by the timing of deals, especially software license sales and can vary significantly from quarter-to-quarter. During the quarter, ANS was also substantially impacted by chip and other supply constraints. 09:11 In addition, we continued to expect the margin shift in this business as operator investment focus moves further to the edge of their networks to accommodate distributed access architecture and amplified replacements. And to round out consolidated CommScope, Home Network net sales of $496 million were essentially flat to the prior year, and adjusted EBITDA improved 20% or by $4 million. Home benefited from driving price increases to offset inflationary pressures at the beginning of this year. However, in the second quarter, Home expects to be more heavily impacted from chip supplier decommits, and overall visibility in their chip supply remains uncertain. 09:54 That said, we continue to work with our supply base to improve chip availability and introduced substitutes where possible. As a result of our limited visibility to chip supply and our near-term performance, our efforts to spin off the Home business remains on hold. 10:10 Now turning to Slide five, to provide an update on CommScope NEXT. One of our major priorities for CommScope NEXT is organic growth. As I referenced earlier, our capacity investments are paying significant dividends as evidenced by the 24% year-over-year growth in CCS. We brought capacity online in the fourth quarter and in the first quarter, and there will be additional capacity, continuing to come online throughout 2022. In addition, we are evaluating our next round of capacity expansions in the CCS business. 10:43 As part of our CommScope NEXT organic growth initiative is continued innovation. We continue to increase our investment in technologies that will fuel growth for CommScope for years to come. In 2022, the core businesses will invest approximately $600 million in R&D and new product introductions. And recently, we've had several significant innovation advancements I'd like to share. 11:08 During the first quarter, CCS further expanded the release of our NOVUX connectivity product line. Our NOVUX fiber connectivity range allows operators to maximize their network and respond quickly to changing market conditions and high volume demand. These solutions deliver unprecedented ease of installation today with the flexibility to ensure that the network meets tomorrow's needs. 11:32 Earlier this week, we announced our next generation XGS-PON solution suite from which we expect meaningful revenue starting in 2023. CommScope is in a unique position to offer this solution as a pioneer in PON-based broadband access solutions. The new suite of XGS-PON products will provide -- will power access networks with 10 gigabits and beyond for future application of broadband services and is capable of supporting 5G and next generations of wireless network deployments. 12:04 Just a few weeks ago, OWN announced Mosaic, our active- passive antenna platform that will drastically reduce the footprint at the top of the tower, conserving space by combining active 5G and passive 4G technologies into single presence. We have multiple trials of Mosaic in the planning stages and expecting to be completed starting in Q2. 12:26 As I mentioned, in NICS, we continue to invest heavily in our small cell technologies through our OneCell brand. OneCell has already progressed through qualifications at two of the major U.S. carriers, and we are working on approval with the final major U.S. carrier. Once approved, the OneCell with its four radio modules can provide both public and private networks in a single radio point. The ability to carry all three major U.S. carriers in addition to CBRS in a single radio point is a truly unmatched capability, dramatically simplifying indoor networking. During the quarter, our progress to deploy OneCell for 4G continued. In addition, during the quarter, we received our first approval from a major U.S. carrier to begin deployments for OneCell 5G. Finally, as we look to the next evolution of HFC Networks, our ANS segment will have an important role to play in the advancement from DOCSIS 3.1 to DOCSIS 4.0. We are close to finalizing agreement with a leading service provider on a joint development partnership for DOCSIS 4.0. 13:32 Our refocus in that investment and technology and capacity expansions coupled with the strong demand environment and our pricing initiatives, positions CommScope well for growth and improved profitability in the upcoming quarters. 13:46 And with that, I'd like to turn things over to Kyle to talk more about our first quarter results.

13:51 Thank you, Chuck, and good morning everyone. I'll start with an overview of our first quarter 2022 results on Slide six. For the first quarter, consolidated CommScope reported net sales of $2.23 billion, an increase of 8% from the prior year, driven by growth in our CCS and OWM segments. 14:14 Adjusted EBITDA of $253 million declined nearly 13% as a result of input cost inflation, more than offsetting strong top line growth. Adjusted EPS was $0.26 per share, declining 28% from prior year. For core CommScope, net sales of $1.73 billion grew over 10% from the prior year and adjusted EBITDA of $230 million declined 15%. 14:47 As mentioned, the decline in adjusted EBITDA against the backdrop of rising sales was attributable mainly to inflationary cost pressures. As implemented price increases work through our backlog, we expect to recover margins, but this will be weighted heavier in the second half of the year. Core CommScope backlog continued to increase and ended the quarter at $3.6 billion, an increase of 21% versus the end of last year. Core book-to-bill for the quarter was 1.4. As Chuck mentioned previously, our demand environment remains healthy, particularly in our CCS business. 15:29 Turning now to our segment highlights on Slide seven, starting with CCS, net sales of $838 million increased 24% from the prior year, with particular strength in network cabling and connectivity. Based on our strong demand, more capacity coming online, and price increases, we expect continued growth in CCS. 15:55 CCS adjusted EBITDA of $99 million declined 7% from the prior year, primarily driven by cost inflation. As mentioned, we have implemented price increases in CCS that will improve margins throughout the year as we work through our backlog. Margins will also benefit from operational leverage in our manufacturing plants as the business grows. 16:21 Outdoor Wireless Networks net sales of $390 million increased 20% from the prior year and across all business units. OWN adjusted EBITDA of $71 million declined 4% from the prior year as commodity and freight inflations more than offset increased volume and operating expense reductions. Although we've had success in achieving price increases in this segment, OWM margins will remain under pressure as we continue to work with service providers to fully offset input cost increases. 16:58 Networking and Intelligent Cellular and Security Solutions net sales of $188 million declined approximately 2%. From a business unit perspective, growth in both DAS and Small Cell was offset by a decline in RUCKUS. While demand in RUCKUS remained strong, the first quarter was challenging due to chip supply constraints. Although we have line of sight for improved RUCKUS chip supply through the remainder of the year, we expect continued volatility. 17:31 NICS adjusted EBITDA of negative $14 million improved $3.6 million from the prior year, primarily driven by stronger gross margins. Our improved margins are result of favorable mix and continued efficiencies. Additionally, it is important to remind you that NICS is our most R&D intensive business. We are making significant investments today in products such as OneCell and RUCKUS. Our investment in OneCell during the first quarter was an annual run rate of $48 million. 18:06 Demand remains very strong in NICS as we ended the first quarter with a backlog of $675 million, an increase of 22% from the end of last year. Access Network Solutions net sales of $317 million, decreased 16% from the prior year and across all business units. ANS adjusted EBITDA of $74 million, declined 31%, primarily driven by the mix and timing factors Chuck discussed earlier, which essentially represent a shift in our customer spending towards more hardware-centric and lower-margin products like our nodes and amplifiers. 18:51 Finishing up the segments with Home Networks. Home net sales of $496 million were essentially flat from the prior year. From a business unit perspective, growth in the broadband gateway business was offset by declines in video. Home adjusted EBITDA of $23 million improved over 20% or $4 million, driven by margin improvement and reduced operating costs. 19:20 While the Home business maintained over $1 billion in backlog, their ability to deliver on those orders remains constrained in the current chip supply environment. Based on our current visibility, the supply environment will continue to be volatile through the year, which will have a direct correlation on Home's results. We expect the second quarter to be a more difficult quarter for chip availability. Therefore, we would expect sequential net sales and EBITDA declines from the first quarter to the second quarter. Due to the continued uncertainty and depressed adjusted EBITDA, our plan to conduct a spin-off of Home remains on hold. 20:01 Turning to Slide eight for an update on cash flow. For the first quarter, cash flow from operations was a use of $15 million and adjusted free cash flow was a use of $24 million. During the quarter, our working capital usage was driven by our growth in top-line, resulting in an inventory increase of $74 million and accounts receivable build of $61 million. 20:26 As mentioned on our previous call, we continue to expect inventory levels to remain higher than normal until supply chain conditions improve. Additionally, we expect cash flow generation to improve in the second half of the year, consistent with our EBITDA improvement. 20:46 Turning to Slide nine, for an update on our liquidity and capital structure. During the first quarter, our cash and liquidity remains strong. We ended the quarter with $315 million in global cash, total available cash and liquidity of over $1 billion and no outstanding draws under ABL revolver. We made no incremental debt repayments during the quarter beyond the required $8 million of term loan amortization. The company ended the quarter with net leverage of 8.2 times, an increase from 7.8 times at the end of the fourth quarter. With the previously mentioned pricing actions taking full effect later in 2022, we remain committed to meeting our year-end target of net leverage in the 6.8 times to 7.2 times range. 21:37 I'm now turning to Slide 10, where I will conclude my prepared remarks with some commentary around our expectations for the remainder of 2022. Although our external environment remains challenged with issues such as chip supply, inflation, and COVID lockdowns in China, we maintain our expectation for the core business to deliver 2022 adjusted EBITDA in the range of $1.15 billion to $1.25 billion. 22:07 We expect modest sequential improvement of core net sales and adjusted EBITDA in the second quarter and much stronger improvement in the second half as we see the full impact of our price increases, project-related orders, improved supply position, and capacity expansions. As we continued to scratch those result of project timing and mix, our business should be viewed on an annual performance basis rather than quarterly. 22:36 And with that, I'd like to give the floor back to Chuck for some closing remarks.

22:41 Thank you, Kyle. As we shared with you during our December transformation update and on this morning's call, despite challenges in supply, constraints and inflation, we maintain our expectation to deliver on full-year 2022 adjusted EBITDA targets and margin improvement as we progress towards our overall CommScope NEXT transformation goal, exiting the end of 2023 at a run rate of $1.6 billion of core adjusted EBITDA. 23:08 This goal is supported by our three key pillars of driving organic growth, operational efficiency, and portfolio optimization. We are investing in capacity expansion, innovation, and new product introductions to drive organic growth. Our recently implemented general management model and new segmentation, a better aligned what was a complex legacy matrix organization. We believe that this decentralized operating model will enhance overall efficiencies and drive greater accountability, visibility, and a performance-driven culture throughout the entire organization. 23:45 With the health in our end markets and tremendous backlog, our success through CommScope NEXT has positioned us for significant EBITDA improvement in the remainder of 2022 and solid progress towards our goals in 2023. We continue to appreciate your interest and support, and I'll now turn it back to our operator to start Q&A.

24:07 Thank you, sir. We will now begin the question-and-answer session. Your first question is from George Notter with Jefferies. Please go ahead.

24:31 Hi guys. Thanks very much. I guess I wanted to start out by kind of talking about pricing a bit. It seems like pricing is certainly the safety valve in the business at this point, but if I go back, you guys were raising pricing in December. Obviously, the war in the Ukraine broke out subsequent to that. I think you guys were going back to raise pricing again. But can you talk about that? Have you raised pricing again subsequent to that situation? And then how much are those pricing increases? And then also, are you able to reprice backlog and maybe talk about kind of the picture around pricing? Thanks.

25:10 Sure. Thanks for your question, George. And what I would say is as we said at the beginning, our goal is to offset inflation with price. Our tools and processes are improving. We've had solid relationships with our customers and partners and are working with us through this. And we continue to expect to offset the cost increases with price, and we are continually working with our customers. And like I said, our tools and processes are improving and help us give a lot more visibility as we go through it.

25:47 Got it. Any sense for magnitude on pricing and then also timing?

25:55 Yes, I think the way we presented it and feel comfortable with is that we will see all of our pricing get through in Q4. Yes, second half of the year and we'll see the margin improvement sort of in the second half as we sort of get back to the historical levels on margins.

26:19 Got it. Okay. And then customer receptivity, obviously, no one likes pricing going up. I think I would imagine customers understand given the environment we're in, but are there places where you're finding it more difficult to raise price?

26:36 Look, I'd say every everything is special and unique depending on the customer, but I would say in general, I mean, we have very solid relationships, we're key service provider for them or let's say component supplier for them, and I think that they've been very supportive of us so far.

26:55 Great. Okay, I'll pass it along. Thank you very much.

26:57 Thank you.

26:59 Your next question is from Steven Fox with Fox Advisors. Please go ahead.

27:06 Hi, good morning. Couple of questions from me. Just first of all, just can you level set us where you think you are on the connectivity and cable solutions margins relative to the potential, obviously like you mentioned, you guys are a leader. But I'm just curious how much opportunity from where you are now and how you drive it, maybe just near-term and then maybe over the longer term? And then I had a follow-up.

27:33 Yes, so as I just mentioned, I think the plan that with the growth in that business with our price increases, we feel like we're going to get back to the historical levels. There is a fair amount of continued room to move those margins up as we move through 2022. I think the other component that will help our margins as we move forward is just the operational leverage that we will get as we grow the business and take advantage of our cost and the leverage that we get as we grow the business. So I think there is a fair amount of room for us to continue to work off of our margins from a Q1 basis as we get the capacity, we get the growth, we get our price increases, and we get the operational leverage.

28:29 All right, I understand all that. Conceptually, I was trying to put some numbers around it though, like from on an EBITDA margin basis.

28:36 Yes, I mean, the way that I would look at is I will go back and look at historically where we were, and I think we can get back to those levels that we saw back in 2020.

28:47 Okay, that's helpful and then just in terms of how you're managing through some of the chip shortages. Obviously, there has been decommits along the lines over the last year, but you also mentioned that you're a little more optimistic about Ruckus, because you expect to get better chip supply. Can you sort of talk about your confidence level around that? And then how it sort of works through in terms of like accelerating the growth in terms of working down that backlog you mentioned. Thank you.

29:14 Sure. I'll start by saying, we've spent a lot of time redesigning parts that are hard to get right now and making sure we have the right footprint in terms of the semiconductor size and what I would say related to Ruckus, the big push that we are seeing, I mean the big benefits what we're seeing there is commitments from our large suppliers, the Broadcom and the Qualcomm. Commitments there that we were not seeing in the past. We're seeing those now and as we're working through the rest is more ancillary parts, and we feel more confident that we'll be able to work around those.

29:53 And in terms of how it plays backlog?

30:00 Both, I mean, our goal here is to continue to push and get output out the door. I mean we're expecting increases in the second half just similar to what Kyle talked about. I mean we expect the second half to be better in those businesses as well compared to the first half.

30:19 Understood. Thank you.

30:27 Your next question is from Rod Hall with Goldman Sachs. Please go ahead.

30:47 Yes, thanks for the question. Chuck, I wanted to come back to your comment on the pricing process. You talked about changing and improving that process. I wonder, could you go into a little bit more detail on what you've changed there, and just curious how the process now works and how it manages through some of this? And then I've got a follow-up.

31:12 Sure. I'll start by saying we now have a detailed level of comparables at MiD level that we are exposing to our whole team, ensuring our whole team to see where we were and where we need to be. We also are looking at inflationary inputs and looking at all of our purchases on a monthly basis to look at where we are, where it is, what are we trending to get expectations and to be able to give that to our team as tools to help them work through their processes for price increases in their plans. 31:44 So I'd say it's much more methodical, and we have a really good way of measuring it at a SKU level of what we're getting compared to 2020 basis, and we're be able to use that to speak with the team, whether that's a weekly basis or biweekly basis, and we have very detailed monthly reviews on that.

32:04 And then on the inflationary inputs to the teams, is that you're just providing them the real-time data or do you provide them kind of your views of where commodities and things are going in the future?

32:17 We're doing both. At the end of the month, we see what we were actually impacted by and then at the same time, we have our commodity managers present to each of the business segments what they're seeing in terms of trends and what the commodities are looking like.

32:34 Great. Okay, okay. Thanks a lot. I appreciate that.

32:40 Your next question is from Sami Badri with Credit Suisse. Please go ahead.

32:47 Thank you. Can you give us an idea on how much benefit you're getting from RDOF or any federal ARPA funds? Are we starting to see those in revenues? Are they going into your backlog? And then the second question I have is, what is your 2022 expectation for free cash flow and any kind of debt pay-down plans for 2022?

33:12 Okay. So on the RDOF fund, I mean we sell through a lot of distribution partners as well as direct. We are seeing pickup in RDOF. I don't have that exact number in terms of where we are. I'm sure Mick can get back to you later on in terms of what we're seeing in RDOF, but we are seeing it pick up. And as you're aware, you know, Charter 1 significant amount of RDOF business, we're seeing that and we're seeing across the board smaller players as well, selling through our distribution partners. I'll let Kyle take the cash flow side.

33:45 Yes, so I think on the cash flow, you know as we work through the next couple of quarters, I think there’s two things we're clearly improving our EBITDA over that time, which will link to improve cash flow. The other piece of this is that we're in a business that's growing, which is going to require some working capital. So based on where we are from a growth standpoint and the EBITDA improvement, we'll evaluate debt pay-downs towards the end of the year as we look at all of those variables and figure out what makes sense as we work through the year.

34:27 Got it. Thank you. And then maybe just on federal ARPA funds, which as a category, there are a lot of explicit fiber and broadband initiatives that are going into a lot of federal policies and acts and anything beyond RDOF that you guys are seeing a benefit from?

34:46 I would say we are seeing huge increased demand and our backlog is growing at a tremendous rate, so I'm certain there is a lot of that in there. I just don't know exactly the numbers of that.

34:58 Yes, and I’d sat there is one comment that I would make on just the CCS, growth in that business with fiber. We still think we're sort of early innings relative to the RDOF on the infrastructure spending. So we feel like there's a fair amount of runway here.

35:15 Got it. Thank you.

35:22 Your next question is from Meta Marshall with Morgan Stanley. Please go ahead.

35:31 Great, a couple of questions from me. One just on OneCell, you noted qualification with two of the major carriers and kind of waiting for the third. Just wanted to get a sense of what you think the timeline for some of those deployments are, is it critical? Two, kind of get all three approvals before deployments really start or just kind of how you see the OneCell business progressing through this year and, you know, the next couple of years? And then again you know just if you wanted to call any kind of more specific Russia-Ukraine impact or just kind of inventory stuck at China ports, those things that are maybe a little bit isolated from just kind of overall chip shortages. Thanks.

36:20 Yes, so on the OneCell side, we are already approved by two major carriers, and they already have our product on their website, and they are able to sell it as it is, and their enterprise teams are going after that business and we're supporting with that. So we are starting to see revenue in OneCell already. What gets the benefit of getting the third carrier is that it could be pretty much deployed everywhere, because you have access to everything. We have customers actually reaching out to the third carrier to expedite that because of the benefits of what they're seeing with our product. 36:56 I think great use case for hospital is where you could have in one box, you have all three carriers and you have the CBRS in that box as well, which allows them to really look at all the instrumentation they have in the hospital at the same time as bill provide the three carrier services all in one box. So I think everybody is very encouraged with what they're seeing and that technology is really, really taken on, lot of interest. In terms of the timing of it, I wish I could call that, but I expect 2023 to start picking up. 37:38 In terms of Russia and Ukraine, I would say it's a minimal exposure to us. I mean, it’s -- we did $20 million in revenue there and so obviously, we can't do that and we're calling it out, and we had some employees there that we no longer do. I would just say it has also affected us a little bit with some shipping lane stuff where we used to take rails across China. We can't do that anymore. We can't across Russia. Obviously, we can't do that anymore. So I would say minimal impact to us from the Russia- Ukraine side. She has one more question.

38:25 Yes, I think on the China. Yes, I mean, our factories in China have not been impacted, but just like everybody, we've had some impact. It's something that's sort of evolving on a day-to-day basis at this point. There has been some challenges that we have. We're sort of working through those, but again, I think we are starting to seeing the beginning of this and or sort of evaluating it. At this point in time, we don't have any major issues, but there are clearly some challenges there for us to work through just like everybody else is dealing with.

39:02 Got it. All right. I appreciate it. Thanks, guys.

39:07 Your next question is from Matt Niknam with Deutsche Bank. Please go ahead.

39:15 Hey, guys. Thank you for taking the question. I just had two on core quarter adjusted EBITDA target. So first, the low end of the guide from core adjusted EBITDA still implies a fairly steep uphill path versus the $230 million this quarter. So I'm wondering maybe if you can shed some more light on how to think about the cadence of the ramp, and maybe what you would need to see to hit the upper half of that range. 39:39 And then maybe secondarily to that, can you help us think about what's embedded in the guide in terms of expectations around raw materials, freight, and shipping costs and really just trying to get a sense of whether you're embedding any relief on the cost side or are you sort of run rating what you're seeing right now? Thanks.

40:00 Yes. So I think as we've been talking about on the last two calls, we recall that we were going to have a softer first quarter as a result of the inflation and the timing of our price increases on our capacity expansions coming online throughout 2022. So yes, we expect to see sort of a ramp, particularly weighted towards the second half of the year. So yes, your math is correct. We expect some pretty strong quarters in the second half. 40:34 I think as we think about the assumptions that are going into that, we've built some incremental inflation in there. As we've talked about, we feel like we have the processes and the systems to go after incremental inflation, what's not built in is there, is any very significant change in the raw material markets in the commodity prices.

41:00 Kyle that's relative to what you're seeing sort of right now. Maybe exiting 1Q in terms of the cost inflation.

41:08 Right.

41:08 Okay. Great, thank you.

41:16 Your next question is from Simon Leopold from Raymond James. Please go ahead.

41:23 Thanks for taking the question. I've got two, the first one may be tricky to answer. I want to see if you could shed some light on building a bridge to the March quarterly gross margin and really what I'm getting at here is the mix was a bit different with the Home being bigger than expected and my view is that's the lowest gross margin business. 41:49 I'm trying to understand how much of the effect is due to mix and how much is really the input cost issues. And then my second question is just any perspective you can offer on the joint venture that Charter and Comcast announced around the Home Networks and Charter embracing the Flex streaming unit that comes from Comcast. How does that affect your Home Networks business? Thank you.

42:23 I guess I'll take the second one first. We don't see that really affecting our Comcast Home business.

42:36 I guess it's Charter that's embracing the Comcast architecture. So I'm trying to understand how it affects what Charter is buying from you.

42:45 Yes, yes. I would say with Charter, they're not that big of a client for us at this point. So I don't see that as a big effect related to the Home business.

43:01 Thanks. And on that gross margin question?

43:04 Yes, so on the gross margin question, without giving super precise answers, our view is the majority of the impact is the raw material versus the pricing timing. I would say the one business that there is some mix driven in there is in our ANS business, which based on projects and software licenses, that business will have a little bit of mix impact as you go from quarter to quarter. So if you think about where we are on a margin basis, the large majority of that margin, the challenges that we've had in Q1 are driven by the raw material components.

43:48 Thank you.

43:50 Thank you.

43:53 Your next question is from Amit Daryanani with Evercore. Please go ahead.

44:02 I have two as well. The first one, I think is going back to this EBITDA dollar math, I think in the first half, you should do around $500 million EBITDA and the back half of the guide, you're probably going to do $700 million. Let me just walk through this accelerates in the back half. How much of that is driven by an expectation for revenue uplift versus self-help levers from CommScope NEXT example, sort of bridge the gap in terms of how much of this you need more revenues for versus you can accomplish that even if you don't have the revenue acceleration.

44:37 Yes, I mean, we definitely have revenue growth built into the second half of the year that's coming from. I would say two major components. I'm talking about just the volume perspective of it. We have capacity coming online in CCS with a massive backlog. So we feel like there's a fair amount of growth that we're going to get in that business as we take in the demand side of that business as well as the capacity coming online. We started up a new plant in Mexico, for example, during the first quarter. 45:12 The second component of that is in a few of our businesses, as Chuck mentioned earlier, we feel like we've got some better visibility to chip supply and that should free up some revenue. And then in addition to that, as we've been talking about now for a couple of quarters, our pricing will ramp up as we move through the second quarter and into the second half. Yes, I mane, in that projection in the second half, we do have a fair amount of revenue ramp, which we believe is supported by the significant backlogs that we have.

45:54 Got it and I was hoping you could talk a bit more about Ruckus up. This is probably one of the place where you had more of a supply chain pinpoint which is not, but maybe talk about what does the backlog growth or revenue trajectory look like for Ruckus as you go forward and then if you could specify what the supply chain issues were on the chip side, that would be helpful as well.

46:16 Yes, so on the Ruckus backlog, we have over $500 million of backlog in Ruckus. We have a significant backlog. That backlog is growing on sort of a day-to-day basis. You know, I think the challenges that we have on chips, as Chuck had mentioned, is we have some suppliers on chips. Some of those, we've seen some decommits, better visibility in the second half. 46:48 And then on our sort of ancillary chip suppliers, we're sort of dealing with those issues as well. So I would say Q1 for us from a Ruckus standpoint, we feel it was not a great quarter for us from getting supply and as we work through the issues and we change out chips on hardware, we continue to have conversations with our key suppliers. We feel like we'll see more availability in the second half, which should drive our revenues up on Ruckus in the second half.

47:28 Perfect, thank you.

47:32 And our final question is from Jim Suva with Citigroup. Please go ahead.

47:40 Thank you so much for all the details thus far. So my question is probably easier. When you mentioned about working on pricing in the backlog, just to clarify, is that kind of for newer orders that are coming into the funnel on backlog or are you going back into the backlog and talking with your customers about the terms that were previously agreed, whether they be shipping or component costs.

48:10 Yes, when we talk about the backlog, we're talking about going back into our backlog and repricing backlog based on commodity or component price changes that we've had since we've taken the order.

48:24 Okay, got you. Thank you so much for the details.

48:27 Thank you.

48:31 So thank you all for your support.

48:35 Go ahead, sir. Thank you.

48:37 I was just saying, thank you all for your support and interest in CommScope and have a great rest of your week.