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Please stand by. Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Reports first quarter 2024 results call. Just a reminder, this call is being recorded. At this time, you're in a listen only mode. [Operator Instructions] I would now like to turn the call over to Aaron Reddington. Please go ahead, sir.

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

Thank you, Aaron, and good morning everyone. We really appreciate you joining us today. Let's turn to Slide 4 for a summary of the major accomplishments we achieved in the first quarter and key messages I would like to highlight. As a reminder, I'll be referring to adjusted results today. First, let me start by saying that once again, the key theme for the quarter is stability. For the first quarter, our revenue and EPS both exceeded the high end of our guidance and our solutions transformation continues in this dynamic environment. Revenue totaled $536 million and EPS came in at $1.24. Demand was stable, similar to what we saw in the prior period. Orders in the first quarter were up 5% sequentially, resulting in a book-to-bill of 1.03 times, up from 0.96 in the prior period. Our markets continue to experience headwinds and I am encouraged to see steady execution resulting in performance exceeding our expectations. Second, I am pleased to announce that we just recently signed a definitive purchase agreement for Precision Optical Technologies, Incorporated for approximately $290 million in cash, subject to customary closing conditions and regulatory approval of course. Precision Optical Technologies is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components. I will go into further detail on the acquisition shortly, but let me summarize here by saying that we are very excited to add the team and product set to our solutions and believe this acquisition will create new opportunities for our Enterprise segment and broadband markets, particularly in the passive optical network or PON market. Third, our business continues to generate meaningful cash flow, and we are deploying capital consistent with our capital allocation priorities. Trailing 12-month free cash flow was strong at $241 million, roughly flat with what we produced in the same period last year. With our ample free cash flow, our team took steps to reinvest in high-return opportunities. For the quarter, we returned over $58 million to shareholders mostly through share repurchases with approximately 700,000 shares purchased in the first quarter. Further, our leverage remains low at 1.6x, roughly in line with our targeted net leverage ratio of 1.5 times. Finally, whilst it's not reflected in our Q1 figures, our team plans to deploy capital towards the acquisition of Precision Optical Technologies, which we expect to close in the second quarter. Now please turn to Slide 5 for a summary of a few noteworthy solutions wins. As we do every quarter, let me take a moment to describe two recent customer wins to provide real-world examples of our solutions in action. In the first example, our team was awarded a $10-million-plus project to help with a rail network in India. In this example, we were working directly with Hitachi Rail STS India as the systems integrator, and Chennai Metro Rail Limited, our end customer. Chennai Metro was looking for a reliable and secure backbone network to ensure passenger safety and security. Reliability and in-house expertise in deploying complex solutions were top priorities for our customers combined with a proven product portfolio. Our solutions consultants held multiple sessions with Chennai Metro, including a proof-of-concept test utilizing cutting-edge wireless and wired network components. The Belden-designed network proved successful in testing to increase operational efficiency by reducing communications-based train control outages. Further, the Belden solution also enabled IoT-based predictive maintenance functionality for a connected track system. Our team of solutions consultants, along with Hitachi Rail STS India, were able to add value to Chennai Metro and build a network to solve critical KPIs and improve passenger experience. In the second example, our team was awarded a multi-million dollar project to assist in the redevelopment of a major hospital facility in the Americas. With a focus on better patient outcomes, our solutions consultants were able to recommend core data infrastructure components including our leading-edge DCX cabinets and high-flex cabling to support a robust network and allow for leading-edge use cases. The result for our customer is a more reliable system, utilizing a smaller footprint, combined with reduced complexity to allow for a more streamlined network capable of supporting our customer's critical KPIs. I am proud of our solutions team as they worked to gather highly reliable Belden products and put together a complete solution for our customer, ultimately winning their trust and business. Again, we highlight these solutions to further emphasize that Belden is winning in the marketplace with our solutions transformation and that our value-add to customers spans beyond the high-quality products we produce. In fact, as an example, we recently launched three solution capabilities: network resilience, edge computing and data interoperability targeted at discrete manufacturers. These capabilities are enabled through Belden Horizon, which brings together hardware, software and services in a single software platform. Our Horizon platform enables real-time management of complex industrial and enterprise networks and assists in the delivery of data-related services in a simple and highly secure manner. I point this out to highlight that at Belden, our focus is on solving customer problems and deepening our relationship with customers. Our high-quality products, Belden Horizon software platform, and our dedicated team and consultants are making our solutions incredibly impactful for customers and are keys to our success. Now please turn to Slide 6 for a summary of the Precision Optical Technologies acquisition. Based in Rochester, New York, Precision Optical Technologies is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components. The company's products are core elements in fiber infrastructure deployments, expansions, and network upgrades, benefiting from multiple secular tailwinds. Precision Optical Technologies' strong position in the optical transceiver market will be highly beneficial to Belden as we look to grow our solutions offerings in the Enterprise segment and broadband markets. As networks are upgraded, and bandwidth demands increase, Precision Optical Technologies' products will be critical components as fiber deployments accelerate. Further, combined with Belden fiber and network products, our solutions teams will now have enhanced passive optical network or PON components and will sit deeper in the fiber network allowing for additional use cases and opportunities with MSOs, telcos, data centers, and enterprise customers. Precision Optical Technologies will be a great addition to the Belden team and will help us further drive solutions in our Enterprise segment. On a full year basis, we expect the company to generate 2024 revenue of approximately $150 million. With exposure to optical transceivers and PON networks, we anticipate growth in the mid-to-high single digits over the next few years. We anticipate closing towards the end of the second quarter and will provide updates as appropriate. Post-close, the acquisition will be immediately accretive to our financials, and after being fully integrated, we expect the business to provide adjusted EBITDA margins comparable to the rest of Belden. Precision Optical Technologies is the perfect example of the types of deals that are most attractive to us, as we are always excited to add good people and products to our team that further enable our solutions offerings. I will now request Jeremy Parks to provide additional insight into our first quarter financial performance.

Thank you, Ashish. I will start my comments with results for the first quarter of 2024, followed by a review of our segment results, a discussion of the balance sheet and cash flow performance, and finally our outlook. As a reminder, I will be referencing adjusted results today. Now, please turn to Slide 7 in our presentation for a review of our results. First quarter revenue decreased 17% year-over-year and was down 17% organically to $536 million, exceeding the high end of our guidance of $520 million. As expected, we experienced softness in Industrial Automation with revenues decreasing 17% organically and Enterprise Solutions revenue decreasing 18% organically. Orders were up 5% sequentially, with strength in Industrial Automation partially offset by typical seasonality in Enterprise Solutions. We ended the quarter with a book-to-bill of 1.03 indicating a more stable order environment for the quarter. Gross profit margins were 38.4%, decreasing 20 basis points compared to the prior year as favorable mix benefits helped to offset lower volume. EBITDA came in at $85 million with EBITDA margins down 160 basis points to 15.8%. Decremental margins for the quarter performed as expected, in line with our target of 20% to 30%. Net income was $51 million, down from $73 million in the prior-year period. EPS was $1.24, above the high end of our guidance range of $1.10. Turning now to Slide 8 in the presentation for a review of our business segment results. For the quarter, performance by segment was aligned with our expectations. Orders were soft but stable as our markets experienced continued slowness due to the impact of destocking. For the first quarter, revenue in our Industrial Automation Solutions segment was down 18% compared to the prior year. EBITDA margins were 19.5% in the quarter, down from 20.1% in the prior year. Orders in Industrial Automation were up 12% sequentially, and down 5% year-over-year. For the quarter, we experienced weakness in our discrete end markets, particularly in the EMEA region, which continues to exhibit customer destocking. For the first quarter, revenue in our Enterprise Solutions segment was down 15% compared to the prior year. EBITDA margins were 11% in the quarter, down from 13.5% in the prior year. Orders in Enterprise Solutions were down 4% sequentially, and down 11% year-over-year. As expected, we continue to see customer destocking in both the smart buildings and broadband markets. Next, please turn to Slide 9 for our balance sheet and cash flow highlights. Our cash and cash equivalents balance at the end of the first quarter was $507 million compared to $597 million in the fourth quarter of 2023. Our financial leverage was 1.6 times net debt to EBITDA at the end of the first quarter. As we communicated before, we intend to maintain net leverage of approximately 1.5 times over the long-term. We plan to fund the acquisition of Precision Optical Technologies with cash on hand. On a pro forma basis, we estimate that our net leverage ratio will be around 2 times after close. With our ample free cash flow generation, we have the ability to quickly delever. As a reminder, our next debt maturity is not until 2027 with all of our debt fixed at rates averaging 3.5%. Through the first quarter, our trailing 12-month free cash flow was $241 million. During the first quarter, we repurchased approximately 700,000 shares for $58 million with $115 million remaining on our current repurchase authorization. Please turn to Slide 10 for our updated outlook. For the second quarter, we anticipate customer destocking and other temporary headwinds to continue. Relative to the first quarter, end demand is expected to be stable with revenues up slightly, in line with normal seasonal patterns. For the second quarter, assuming current market conditions do not deteriorate further, we expect sales in the range of $565 million to $580 million, and adjusted EPS in the range of $1.30 to $1.40. The acquisition of Precision Optical Technologies is not included in Q2 2024 guidance. The close date is subject to certain regulatory approvals and customary closing conditions. We will provide updates, as appropriate. That concludes my prepared remarks. I would now like to turn the call back to Ashish.

Thank you, Jeremy. To close, let me reiterate, the first quarter for Belden can best be described as stable. We came in anticipating a dynamic market environment with many customers continuing to reduce inventory, and it played out as expected. Looking forward into the second quarter, we see steadiness in our business and are hopeful that conditions improve in the back half of the year, resulting in an uptick in demand from current levels. Longer-term, the secular drivers and investment cycles remain, and after we get on the other side of this weakness, we expect to see higher revenue and EPS through the next cycle. Reindustrialization is just beginning and our products and solutions are aligned with many secular growth drivers. We are well-positioned to take advantage of the growth opportunities ahead of us, and our balance sheet is strong to enable our expansion. Our team will continue to execute through this temporary weakness and will look for opportunities to gain share where possible. I would like to take a moment and recognize the contributions of our associates this past quarter. I appreciate your efforts and would like to thank you for your support as we continue to transform Belden through a challenging environment. Thank you for your hard work. That concludes our prepared remarks. Operator, please open the call to questions.

[Operator Instructions] And our first question will come from Mark Delaney with Goldman Sachs.

Morgan Leung on the line, asking a question on behalf of Mark Delaney. Thanks for taking the questions. We were just wondering if you could give a little bit more color on what you're seeing with orders; understand the messaging is around stability, but we just wanted to dig into more of like when you think the inventory destocking will end and how that's going to impact gross margins in 2Q relative to 1Q.

Thanks, Morgan. Yes, I think the key word is stability. We saw that, we witnessed that in Q1. If you go below the hood a little, orders in Industrial were up about 12% sequentially, down 5% year-over-year. And on Enterprise Solutions, orders were slightly down, led by smart buildings, although broadband orders were up sequentially. And I think if you look further below that we saw POS, so sell-out from our channel partners was as expected seasonally. So I think what we can conclude from this is that things are starting to normalize. Now, every destocking is different. Historically, it takes about four to six quarters, and we are now halfway through that. And we also know from history that typically Industrial comes back faster, which we are also witnessing. So I think we stay very firmly focused on the longer term or the midterm outlook here, which is driven by reindustrialization, consumption of more broadband bandwidth and even the fact that smart buildings, whilst certain core commercial real estate markets are slower, there are many other markets that are emerging, for example, material handling, hospitality, health care, data centers, etcetera. And we see all of those receiving investment or starting to receive investment now as part of the broader reindustrialization phenomenon. So yes, I mean it's really, we expect to see more positive trends in the coming cycle. I can't precisely predict when that whole inventory situation will turn because like I said, every destocking is different.

Right. That makes sense. That's really helpful. And then as a quick follow-up, it looks like you reiterated the $8 EPS target by 2025. So just kind of thoughts on if you're on track to still hit that and the contribution from your progress with selling more full solutions. Thank you.

Yes. And sorry, I might have missed one aspect of your prior question, which was around gross margins in Q2. We actually don't expect any significant change in our gross margin levels. I think we've shown that those are fairly consistent. And on that note, then, as we think about the 2025 EPS, yes, $8 is still our target. We certainly have multiple levers to pull, including organic growth that is led by solutions, M&A, share repurchases. And I think the mid to long-term trends at this point make us comfortable that as we continue to invest, we will see clear progress towards that goal. The -- it just will not be as linear as we previously expected, right, when we first articulated the target because there is this destocking cycle that we need to get through. But yes, we feel good. And I think the announcement we made about Precision Optical Technologies is a good step in that direction.

Very helpful. Thank you.

Thanks, Morgan.

And our next question will come from William Stein with Truist Securities.

Great. Thanks for taking my questions. Congrats on these results considering the environment didn't sound so good relative to the derivative reads. First, I guess I want to ask about that. At least among other types of component companies we've heard about similar end markets that you're exposed to, in particular, industrial automation and broadband, that sounded really negative heading into the quarter's result, yet you all exceeded the guidance that you provide us and then you got a Q2 well. So can you maybe put that in context, what do you think is the difference? Is it the end market exposure is more nuanced or were you suddenly uber-conservative in guidance? Or maybe there's something else going on? Thank you.

Thanks, Will. First of all, I appreciate your positive comments. I think it's a little specific by segments. So maybe we start with industrial. So as you know, Will, we've been on this journey around solutions. And what that does very uniquely for us versus our competitive set is, we are providing a combination of hardware and software to solve real KPIs, and we don't really focus on a rip and replace type of solution, but we supplement whatever digital assets customers have. So for example, if somebody is not deriving the OEE from their plant, we can go in and supplement whatever network and data solution they have to make that happen. So really, in times like this, when capital is expensive, productivity is required, wages are high, really our solutions become very useful. And we've demonstrated various examples where we can very quickly lead to an outcome for a customer. So I think we are seeing a differentiated share gain in our industrial markets. And that has become obvious to us from not only the results but ongoing customer conversations. It also helps that we are exposed to certain infrastructure markets versus some of our, let's say, the component-providing peer group that you referred to. Chennai Metro is a good example where we can go in and do a fairly comprehensive infrastructure solution, in this case, a communication-based train control solution, which is very different from procurement driven component purchase cycle, which is at a different level. So I think that's clearly on the industrial side, the combination of software and hardware, the approach with solutions and the markets we are exposed to is helping. On the broadband side, remember, we've referred to this previously, too, our exposure is more to the MSOs who are still very positively investing in expansion of their DOCSIS expansions and just passing new homes. It's been more consistent than the telco market, which has a step function driven seasonality. So that exposure is certainly is helping us. We've consistently also grown the fiber content in that business. Again, Precision is a good step to help that. But that makes it a little more secular too because it's more outside home and less inside home. And I think that is certainly helping the broadband market. And then even on smart buildings, it's interesting. Versus our competitors, we are developing three points of leverage that I think differentiate us. First, the access we have to markets like material handling or discrete manufacturing or intelligent traffic systems, thanks to our industrial expertise. But remember, all those markets also need buildings. And so our competitors don't have easy access to those markets, but we do. Second, we've built this whole solution selling process, which we can leverage now on the enterprise side or the smart building side. And third, part of what we do on the industrial side is that since we are providing active equipment, data orchestration and management, we have earlier conversations with customers at a higher level. But those same conversations are also allowing us to pull in some of our spot buildings infrastructure. So differentiated from competitors in all three markets. But obviously, we want to be modest in terms of -- so to your point, I don't think we were ultra-conservative in our guidance, but I think we were thoughtful when we guided, and we are glad that we exceeded expectations.

Okay. Really great. If I can have one follow-up, and that's on Precision Optical, the announced acquisition. If you, the company detailed a pretty robust change in the way it's contemplating M&A at the last Analyst Day. And I'm hoping you can put this acquisition, really the origins of it, how you found out about this company and cultivated relationship and wind up coming to an agreement, can you put that in context, how did that unfold? Thank you.

Sure. No, Will, that's a great question. So I think Precision is just the kind of acquisition we would like to do as we go forward with our solutions transformation. So let me first speak quickly to the technology, and then I'll talk about the process. So basically, Precision Optical Technologies, they are experts in transceivers, right? So these are devices that convert optical signal to electrical and vice versa, right? And they use the SFP or the small form-factor pluggable transceivers. And effectively, one way to think about this is that if you think about, let's say, the broadband market and at the two ends, you have these transceivers and everything else in the middle, which could be up to 30 miles, 40 miles, 200 miles, there's a lot of other infrastructure that we currently provide a portion of but obviously, now it's an end-to-end solution in the real sense because we are covering both ends. And we can participate in technical discussions, for example, around how will signals lose intensity over time. So what's the linked loss budget? And that discussion allows us to pull through all our other components more convincingly than if we were only selling those components standalone, right? So it does help us in those broadband markets with those accounts. The same technology is also showing up more and more in data centers, obviously. So that's something helping that's good for us. If you think about server switch, storage interconnects, they are all based on transceivers. And then this market, obviously, is growing. Transceivers as a market is growing faster than our portfolio, right? So it's growing faster than even fiber. So this is a good, it's a gap-fill, which also expands our capability with existing and new customers. So it's good from that perspective. When we articulated our new M&A approach, we said, we are not looking at transformative acquisitions, Will. We said we would be focused on bolt-ons that help us with solution sales or technology gap-filling. And in this case, of course, we do both. So it showed up pretty high on our funnel, right? So we said, okay, this checks the boxes on both sides. The process was really us approaching them, which I think is a good way to do this. So it is not really a competitive process in that sense. We had good long discussions. They were not really up for sale per se, but they appreciated how becoming part of the broader Belden solution platform would help them and grow their franchise. So a very positive outcome. I think we're very excited about welcoming those employees into Belden. They're very solutions-oriented, very technology-focused. And I think this is really going to supercharge our broadband business.

Thanks so much.

And our next question will come from Steven Fox with Fox Advisors.

Hi, good morning. I had a couple of questions as well. My first question was kind of a follow-up to Will's question on the quarter. The answer you gave was great, it went through all the big picture issues that are driving outperformance. I'm just curious, if you dialed it into what specifically happened in Q1, how would you sort of force rank what drove the upside? And then I had a follow-up.

I think there were a couple of things going on, Steve. First of all, like I said, on the industrial side, we continue to take share in a differentiated manner. Also remember, I talked about the fact that in past destocking cycles, industrial typically goes down faster but comes back faster, right? So you've seen that phenomenon I think play out in Q1. I think on the enterprise side, we witnessed a little more inventory reduction in Q4 than what was healthy because suddenly, people had service level problems and outages. And I think there was a little bit of rebalancing in that, and I think you saw that in the broadband business quite a bit. So a little more normalized approach to how our customers were managing their supply chain and inventory versus maybe an overreaction, let's say, in the second half of 2023. So I think that was next. And I think third, like I said on smart buildings, it is true that some of the traditional markets are not growing at this point. But we've been able to pivot fairly successfully, right? Look at the health care example I talked about, and we were able to go in there with a full solution that allowed them to not only lay the infrastructure but also to monitor the data flow on that infrastructure. And that's the combination of our portfolio from across automation into smart buildings. And I think that gives us some unique growth opportunities. So I think that's the kind of rank ordering: industrial share gain, bounce back, broadband, more normalization, smart buildings, really more share gain.

Great. That's helpful. And then just on the pace of the recovery in terms of channel destocking in the industrial markets, it seems like a lot of companies are sort of taking a more conservative outlook in terms of how long it's going to take to sort of recover -- get inventories clear and start to recover towards more better growth. I know you mentioned three to six quarters, but is there anything right now that makes you either agree with that assessment or makes you think that things can clear more within that time range? Any puts and takes versus prior cycles would be helpful. Thanks.

Yes. I actually agree with the broader thesis around markets in general taking some time to come back and normalize. I think, however, there are opportunities for being differentiated. And those are derived from two main areas, Steve. One, I think, is geographical exposure. So some of the companies that you were referring to also have a larger exposure in the East Asian context. And as you know, right, some of those more OEM export-oriented markets are sluggish at this point, whilst our exposure is more in markets like in the U.S., North America, Western Europe, where there is a need for reshoring, reindustrialization and more projects seem to be taking shape as people build out capacity. In fact, I would argue there are markets where, because of labor shortage, people are not able to build out their projects as fast as they would like. So I think we are going into these markets geographically that need reindustrialization and because they can't deploy new fixed assets, they need to make their existing assets more productive. And our solutions fit right in into that opportunity. So I think there's some differentiation by geography. And then I think linked to that, there is some differentiation by technology because if you think about the data and network solutions we provide, they have a large portion of data orchestration and management or the active products you provide, which is again a little differentiated from some of our competitors. And that is really, that is not really seeing the same sluggishness or the same inventory cycle as some of the other components. So I think the combination of geography, solution and the split in that industrial stack is allowing us to grow faster, whilst overall, I think macro uncertainty is indeed true. I think on the four to six quarters question, I think past cycles have shown us that, that's the cycle. But this situation is a little different. I think geopolitics are different at this point. So it's not that easy to predict, but we will continue, I think, remaining differentiated versus competitors in this space.

Great. That’s super helpful. Thank you.

[Operator Instructions] And our next question comes from David Williams with Benchmark.

Hey good morning everyone. Thanks for taking my questions and congratulations on the stability of the business here. I guess 1 question on the acquisition. Just kind of thinking about the optical device suppliers and their upbeat commentary about the opportunity around AI that that's driving, at least near term. Just kind of curious how much of this acquisition was really driven by capturing maybe that opportunity of demand, in particular in the data center and then if that's an area that you anticipate to play in through this acquisition.

Thanks, David. I think that's certainly a very important aspect of the acquisition, right? So our modeling around Precision Optical Technologies is based on the markets we currently jointly serve around broadband solutions. But like I said before, right, the whole high-speed interconnect market driven by server storage, switch connectivity in data centers being really accelerated by AI trends is something we are keenly looking at. And I think this is where Precision will allow us to also serve our data center customers in a way that we haven't been able to do before. So yes, we think of ourselves more as the second derivative beneficiaries of AI because we don't actually sell products that directly enable AI. But if we are a provider of network and data solutions, we must enable that AI. And I think we've been certainly gaining share because of that on the industrial side because we do data orchestration and management. And now I think on the enterprise side, Precision will certainly help us with that. And you're right. I think when we look at how the broader market is thinking about that, and I know you have maybe companies in your coverage universe that focus on those markets, we feel very positive about that growth momentum.

Okay. Fantastic. And then do you anticipate this to be more of a captive solution with internal consumption? Or will it be used to have an opportunity to sell outside those components to maybe your existing customer base?

It's going to be far less captive actually. We, at this point, it's still going to be more part of a broader product bundle approach, right? But we will build more captive solutions over time. But I think for the foreseeable future, it would be more -- it would be less captive. And I think that's the right approach in this market right now because this is going to be part of a broader solution on the broadband side, where a number of kind of providers come together to serve these MSOs and telcos. So we are happy to be part of that. But yes, especially for data centers and for certain other applications, think about interoperability or resilience, we will certainly start building this into our captive solutions.

Fantastic. And just one more, if I may. Can you speak to the magnitude of the destocking that you're expecting? And maybe any colors around areas that have improved or maybe deteriorated? And apologies if I missed that earlier, I joined a bit late. Thank you.

Yes. David, this is Jeremy. So with respect to the magnitude of the destocking, I think one of the elements that's made it difficult to quantify as a discrete item is the fact that we are seeing destocking not just at distribution but at end users and OEMs. So it's the -- our distributor’s customers in some respects are taking down inventory, and we don't have great visibility. I think from our perspective, if you look at the drop-off from first half to second half last year, and then obviously, we're still behind first half last year, I think a significant portion of that is related to destocking in all markets, in industrial and broadband and in smart buildings. So I think from our perspective, it's obviously a key storyline and the number one Pareto item, the number one driver behind the reduction. But I can't give you -- I can't quantify a discrete number for you.

Thanks guys for the time. I appreciate the help

Thank you.

And that does conclude the question-and-answer session. I'll now turn the conference back over to you for any additional or closing remarks.

Yes. Thank you, operator, and thank you, everyone, for joining today's call. If you have any questions, please contact the IR team here at Belden. Our e-mail address is [email protected]. Thank you.