Tim Lenze - IR John Stroup - President and CEO Henk Derksen - CFO.

Shawn Harrison - Longbow Research Steven Fox - Cross Research Noelle Dilts - Stifel Nicolaus John Quealy - Canaccord Genuity William Stein - SunTrust Robinson Humphrey.

Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Incorporated Second Quarter 2016 Earnings Release Call. [Operator Instructions]. 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 Tim Lenze.

Please go ahead sir..

Thank you, Tracy. Good morning, everyone and thank you for joining us today for Belden's second quarter 2016 earnings conference call. My name is Tim Lenze; I'm part of Belden's Investor Relation team. With me here this morning are John Stroup, President and CEO, and Henk Derksen, Belden's CFO.

John will provide a strategic overview of our business, and then Henk will provide a detailed review of our financial and operating results followed by Q&A. We issued our earnings release earlier this morning and we prepared a slide presentation that we'll 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.

I would like to remind you that any forward-looking information we provide is given in reliance upon the Safe Harbor provisions of the Private Securities Litigation Reform Act of the 1995. The comments we will make today are management's best judgment based on information currently available.

Actual results could differ materially from any forward-looking statements that we make and the company disclaims any obligation to update this information to reflect future developments after this call.

For a more complete discussion of factors that could have an impact on the company's actual results, please review today's press release and our annual report on Form 10-K. Additionally, during today's call management will reference adjusted or non-GAAP financial information.

In accordance with Regulation G, we have provided a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate. This reconciliation is in the appendix of the presentation and has been posted separately in the Investor Relations section of our website.

I'll now turn the call over to our President and CEO, John Stroup.

John?.

Thank you, Tim, 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 highlights. After a solid first quarter, we are extremely pleased to report strong results for the second quarter.

Revenue and earnings growth, margin expansion and cash flow generation were all robust. I’d like to thank our associates for their commitment to aggressively executing our strategic plan. On an organic basis, we grew revenues by 2.6% to $603.4 million.

We benefitted from a number of attractive secular trends and captured share in the majority of our businesses. In addition to continued success in our enterprise platform, our broadcast platform generated broad-based double digit revenue growth in the quarter, and we are beginning to see order stability within our industrial markets.

EBITDA margins expanded 120 basis points from the prior year period to 17.9%. This is nearly within the range of our long term goal of 18% to 20%. The improvement is a result of leverage on organic growth and strong productivity from the affective application of our lean enterprise system.

As a result of the solid revenue growth, margin expansion and effective tax planning, EPS grew 27% to $1.54, compared to last years’ $1.21. After adjusting for the tax rate differential, EPS grew 16% on a year-over-year basis.

In the first half of the year, we have generated an additional $57.5 million in free cash flow compared to the prior year, which is a testament to the quality of earnings and the efficient use of working capital and fixed assets.

We are on plan to deliver free cash flow in excess of net income for the full year, and we expect to exit 2016 with a net debt-to-EBITDA multiple of 3.0. Finally, given our strong results, we are once again increasing our revenue and earnings outlook for the full year. Please turn to slide 4 for a review of our business segment results.

Broadcast revenue in the quarter was $193.5 million, as compared to $174.9 million in the year ago period. On an organic basis, revenues increased 10% year-over-year. Grass Valley generated substantial organic growth of 12%. This was due in part to a stable US dollar and increased domestic advertising spend.

As a result, International growth was 16% and United States growth was 6%. Additionally, our IT introduction continues to gain traction, with leading broadcasters around the world, as we shipped nine IT systems during the quarter.

Our Broadband business also continues to perform well with growth of 8%, as our customers invest heavily to keep up with the consumer demand for increased bandwidth.

EBITDA margins for the platform during the quarter were 15.2%, increasing 210 basis points from the prior year period, due to leverage on growth as well as the productivity initiatives implemented in the prior year. I’m obviously pleased with these results, and I expect growth between 3% and 5% for the full year.

Enterprise platform revenues were $160.4 million. On an organic basis, revenues increased 4.8% year-over-year. June was a record order month and orders for the quarter increased 8% year-over-year. This was a result of a strong project pipeline and healthy win rates.

EBITDA margins of 18.4% were consistent with the prior year and we are now within the range of our long term goal of 18% to 20%. We are on track for another strong year with mid-single digit revenue growth and solid margin expansion.

As expected, our industrial platforms experienced soft market conditions in the second quarter, combined revenues of 210 million were down 4.1% organically from the year ago period. The organic decline was a result of weakness within the oil and gas markets as well as Latin America broadly.

However, orders were flat year-over-year and improved throughout the quarter. We expect that the combination of our two industrial platforms will experience organic growth in the second half of the year and generate attractive year-over-year margin expansion.

Industrial connectivity had revenues for the quarter of $147.8 million, down 5.9% organically from the year ago period. EBITDA margins were 18.3% for the second quarter, up 50 basis points in a solid outcome given market headwinds. Industrial IT had revenue of $62.5 million, an increase of 80 basis points organically from the second quarter of 2015.

EBITDA margins of 20.3% increased to370 basis points from their year ago period as we together realize the benefits of productivity initiatives announced last year. And finally, our network security platform generated revenues of $39.1 million.

Second quarter results included the impact of a few large projects that didn’t close in the expected timeframe. Excluding the impact of these larger deals, non-renewal bookings increased 20% sequentially.

We are confident in the strength of underlying business drivers as well as the advanced solutions we continue to develop to address the sophisticated threats our customers face every day. During the quarter, Tripwire did win a multi-million dollar factory project with an existing Belden industrial customer.

We expect this trend to continue which Belden is uniquely positioned to address the critical security issues facing industrial facilities and critical infrastructure. Despite not having the benefit of revenue growth, EBITDA margins improved 220 basis points from the prior year to 24.3%.

I will now ask Henk to provide additional insight in to our second quarter financial performance. Henk.

Thank you John. I will start with comments and results for the quarter, followed by a review of our segment results, a discussion of the balance sheet, and close with a cash flow performance. As a reminder, I will [addressing] adjusted results today. Please turn to slide 5, for a detailed consolidated review.

Revenues in the quarter were $603.4 million, an increase of 80 basis points or 598.5 million in the second quarter of 2015. Lower copper prices and currency translations reduced revenues by $12.9 million, while a small bolt-on acquisition announced in the first quarter increased revenues by $2.1 million.

After adjusting for these factors, revenues increased 2.6% organically from the year ago period. Sequentially, revenues increased $59.6 million or 543.8 million, exceeding difficult seasonality due to improving demand in our Broadcast end markets. Gross profit margins for the quarter were 41.8%, increasing 10 basis points from the year ago periods.

Sequentially gross profit margins declined 50 basis points both in the normal range of variation. Second quarter SG&A expenses were $120.1 million or 19.9% of revenues. SG&A expenses declined $5.1 million from the prior year period, driven by the productivity programs announced in 2016.

R&D expenses were $36.2 million, consistent with the prior year and prior quarter. EBITDA in the quarter was $108.1 million, an increase of $8 million from the prior year period and 19 million sequentially. EBITDA margins were 17.9%, an increase of 120 basis points year-over-year and 150 basis points sequentially.

These significant improvements were broad based with margins expanding across our platforms. While approaching our long term goal of 18% to 20% and expect to be within this range for the full year. Net interest expense of $24 million for the quarter were $700,000 lower compared to the prior year period and $350,000 lower sequentially.

This was a result of a debt pay down of $200 million in the first quarter of 2016 and fourth quarter of 2015. We expect interest expense to be approximately 23.5 million for the third quarter and 96 million for the full year.

The adjusted affective tax rate for the second quarter was 9.5% compared to 18% in the prior year, mainly a result of successful implementation of tax planning initiatives. Year-to-date, the adjusted affective rate is 13.9% compared to 18.4% in the first half of 2015.

For financial molding purposes we recommend using a 20% effective tax rate for the third and fourth quarter resulting in to a tax rate of 17.4% for the full year 2016. Earnings per share was $1.54 in the quarter, an increase of 27% from $1.21 in the prior year periods. Sequentially, earnings per share grew 53% from $1.01.

Compared to the prior year and prior quarter, our tax planning initiatives provided a benefit of $0.14 and $0.18 respectively. Please turn to slide 6; I will now discuss revenues and operating results by business segments. Our Broadcast Solution segment generated revenues of $193.5 during the second quarter.

Revenues increase by $18.6 million to $174.9 million in the prior year periods. Copper and current translation and an unfavorable impact of $1.1 million, while a small Bolton acquisition contributed 2.1 million. After adjusting for this, organic growth in the quarter was 10% year-over-year.

(inaudible) increased revenue by 12%, and our broadband business grew at 8% from the prior year periods on an organic basis. On a sequential basis, revenues increased $22.2 million to 171.3 million. Broadcast EBITDA margins were 15.2% in the quarter, increasing 160 basis points sequentially and 210 basis points from the prior year periods.

The year-over-year improvement is a function of leverage and volume growth and improved productivity partly offset by an unfavorable product mix. Our Enterprise Connectivity segment generated revenues of $160.4 million during the quarter. This segment faced a $5.2 million headwind of lower copper prices and currency translation.

On an organic basis, revenues increased 4.8% from the prior year period. Sequentially, Enterprise Connectivity revenues improved 24.5 million or 135.9 million. EBITDA margins were 18.4% in the quarter consistent with the prior year period and increasing 90 basis points sequentially.

Industrial Connectivity segments generated revenues of $147.8 million in the quarter, decreasing $13.1 million from the prior year period. Revenues were unfavorably impacted by $7.5 million from currency translation and lower copper prices.

In line with expectations, our revenues declined 5.9% organically year-over-year, a result of softness within oil and gas and other positive applications, as well as oil based weakness in Latin America. Sequentially revenues increased $6.7 million from 141.1 million.

After adjusting for a $2.5 million benefit from currency translation and higher copper prices, revenues grew 3% in line with difficult season patters. EBITDA margins of 18.3% increased 50 basis points year-over-year and 200 basis points sequentially.

In addition to an improved product mix, we’re seeing the benefits of productivity program announced in December of last year. Industrial IT segment generated revenues of $62.5 million, an increase of 1.2 million from 61.3 million in the prior year period. After adjusting for currency, revenues increased 80 basis points organically.

We are pleased to see this platform return to (inaudible) after three quarters of challenging market conditions, and we expect it also continues for the remainder of the year. Sequentially, revenues increased $8.6 million from 53.9 million. EBITDA margins of 20.3% increased 370 basis points year-over-year and 430 basis points sequentially.

These significant improvements are a function of productivity year-over-year and leverage on volumes sequentially. Moving to our Network Security segment; revenues of $39.1 million declined $500,000 from the prior year periods and 2.6 million sequentially. EBITDA margins of 24.3% increased to [120] basis points compared to the prior year period.

If you will please turn to slide 7, I’ll begin with the balance sheet highlights. Our cash and cash equivalents balance at the end of the second quarter was $176 million, compared to 146 million in the prior quarter and 208 million in the prior year.

Our lean enterprise system continues to lever improvements in our inventory turns at fixed asset efficiency. Inventory turnover was 7.1 turns, an improvement of 1.2 turns sequentially and 1.1 turn from the prior year period.

Day sales outstanding was 60 days in the second quarter, consistent with the prior quarter and an improvement of four days year-over-year. PP&E turnover was 7.6 times, improving 0.8 times sequentially and 0.3 turns year-over-year. Our total debt principal amount (inaudible) by $210 million from the prior year periods.

Consistent with our commitment to de-lever, we paid down $200 million over the last nine months. That leverage was 3.6 times net debt-to-EBITDA at the end of the second quarter. We are on track to achieve a net leverage ratio of approximately 3.0 times by the end of 2016. Please turn to slide 8 to review cash flow highlights.

Cash flow from operating activities for the quarter were $47.8 million compared to 53.3 million for the prior year period. On a year-to-date basis, we generated $60.5 million, compared to 5 million for the prior year, an improvement of $55.5 million. Net capital expenditures were $11.7 million for the quarter, consistent with last year’s out flow.

Year-to-date, net capital expenditures were 25.1 million, down from 37.1 million in the prior year period. As a result, the first of the year, free cash flow increased by $57.5 million from a use of 22.1 million to free cash flow generation of $35.4 million.

We are on track to achieve free cash flow of [$235] million to [$245] million for the full year, an improvement of $53 million to $63 million from 2015. That completes my prepared remarks. I would now like to turn this call back to our CEO, John Stroup for the outlook.

John?.

Thank you Henk. Please turn to slide 9 for an outlook regarding the third quarter and full year 2016 results. Given our strong results, we are once again increasing our revenue and earnings outlook for the year.

We expect the broadcast, enterprise and network security platforms will continue to perform well and benefit from favorable end market conditions. And although our industrial businesses are down year-over-year in the in the first half, sequential performance, backlog and order rates suggest stability that will lead to growth in the second half.

Therefore we are expecting all five platforms will generate organic growth in the second half. We anticipate third quarter 2016 revenues to be between $595 million and $615 million, and EPS is expected to be between $1.35 and $1.45.

For the full year, we now expect revenues to be between $2.355 billion and $2.385 billion from the prior guidance of $2.320 billion to $2.370 billion. The expected range of EPS is now $5.50 to $5.70. This compares to the prior guidance of $5.15 to $5.45. That concludes our prepared remarks, Tracy, please open the call to questions. .

[Operator Instructions] Tim Lenze your first quarter is from Shawn Harrison with Longbow Research..

I don’t want to be a bit dark cloud with the first question, but your commentary on industrials is more bullish than maybe we’ve heard out in the industrial distributor so far it’s not like fast nor MSV your grandeur of split up the world in terms of sales trends in industrial, and so maybe if you can just elaborate on the better booking trends you’re seeing in backlog and maybe regionally even they give you the confidence of that organic growth on the back half of the year.

.

So our performance in the second quarter on our Industrial businesses Shawn were very much as we expected they would be. We saw weakness in the oil and gas market, which we expected in both industrial platforms. We saw weakness in Latin America, we also expected that.

We saw a good performance in Europe and especially in discrete in Europe, and our Industrial IT business was actually up organically year-over-year in the second quarter, which I think is probably going to be surprising to some. And that has to do with; I think just really good execution and share capture.

I think both of these businesses continue to execute well, continue to generate share and are comparable on a year-over-year basis to get substantially easier in the third and the fourth quarter, particularly within the oil and the gas markets.

So we obviously just completed our business reviews to prepare our forecast for the back half, and if you look at our backlog, if you look at our pipeline of new opportunities, if you look at our historical win rates, they all support and lead towards organic growth in the second half..

Would you expect Europe again to be kind of may be the star region in the second half of the year, given what you saw in the second quarter?.

Well in the second quarter in our industrial businesses, our European business was up almost 7% year-over-year. Whether we’ll do that again in the back half I’m not certain, but I do expect that sequentially things will remain similar.

And I would think that our year-over-year performance within oil and gas which in the second quarter was down about 20%, I would see that improve a little bit in the back half just because the comparable are going to be a lot easier. .

And then just as a follow-up on broadcast I think you left a full year guidance unchanged after it was stellar second quarter and good commentary in to the third quarter.

I don’t know if maybe the shape of the year has changed for you a bit, if you’re seeing some other dynamics across broadcast or particularly Grass Valley because it looks like we’ve definitely seen acceleration.

So any kind of commentary on how it is shaping the full year change, may be you are just uncertain in terms of how the Olympics and the election will tail off in terms of demand, but any additional commentary would be great John. .

Sure. So obviously we increased our full year guidance both in terms of revenue and earnings substantially from our prior guidance, and the majority of that increase is what we’ve already done in the second quarter.

And therefore you can take from that that our expectations for the back half is largely unchanged from what we had communicated 90 days ago.

But there is no question that we entered the back half with quite a bit of momentum and in Broadcast in particular it was a great quarter, and we’ve seen broadband deliver a high-single digit organic growth for some time and we’ve been pretty consistent about how we expected that to continue for a number of secular trends around the need for more broadband and particular people using streaming as a method to watch video.

But the Grass Valley results were very strong and I think that some of that has to do with the Olympics. But I think more of it has to do with the fact that a year ago, we had a number of customers outside of the US that were struggling with exchange rates moving around, our International business was up 16% in Grass Valley in the quarter.

And then I’d say the other thing is that as customers are beginning to get more confident in the transition of technology in to IT, I think we’re also seeing that improve as well. I’m not sure, I think that there are some media companies going today, I’m not exactly sure who’s going today.

But I think that that is probably another interesting data point in terms of other market is beginning to look at the change in landscape of video in terms of how important this concentration is, and I think we’re right there for that. So lot of momentum going in the second half, we feel very good..

And we’ll go next to Steven Fox with Cross Research. .

Just have a first question on the Enterprise business. It sounds like you’ve seen a little bit of an acceleration based on what you talked about for orders in June. Can you just dig in to what you think is behind that and how much legs you think that has at least something (inaudible) and then I have a follow-up..

Yeah, that’s right Steve we had good results in the quarter with strong revenue growth, margin expansion, but we also had even stronger orders and we had a very strong order book in June. And I think it is just a consequence of the team doing a good job on managing the pipeline of new opportunities.

Our win rates are strong; I think the end market is behaving well also, so we’re benefiting from a good end market right now. Non-res is healthy particularly in the United States, and as you know, we’ve got a particularly strong product offering for land applications. We saw extremely strong growth by the way in our 6A product line.

Our 6A product line, I think on a year-over-year basis was up 15% and that is a very, very strong outcome for us. And so we are looking at I think a strong product line. We’ve always felt like our 6A product line was stronger that the competition.

We’ve got I think a strong commercial team in the markets that we play in, and the business is just been delivering strong results on a very consistent basis. So we entered the third quarter in good shape. .

So it doesn’t sound like from an end market standpoint we should attribute much of the acceleration to that it’s more of your own initiatives, is that fair?.

Well I think it’s both. I think our team is doing a great job, but from what we can tell the end market is healthy. .

And then just on the Network Security business, I’m a little confused by what happened in the quarter and then really what the guidance would be going forward for that business, whether you’ve seen some sort of setback that could last a couple of quarters or how you would sort of characterize your view of the growth for the business going forward versus say 90 days ago.

Thanks. .

So our performance in the second quarter with network security was not to our expectations. We ended up having less projects booked, large projects booked in the quarter than we had expected and ironically that follows a quarter where we had quite a bit more booked in the quarter of large projects than we expected.

So an extraordinarily strong first quarter, a slightly weaker second quarter, we consider this all to be timing. We are not concerned about it. We didn’t lose any big projects; we just had a couple of projects that moved in to the third quarter.

And I made a comment that if you exclude these larger deals, we actually saw order improve sequentially by 20%. So on a broad basis, we think the markets’ performing well. We just had - we are the victim of timing I would say in the first and the second quarter.

I would expect that organic growth for Tripwire in the third quarter is going to be somewhere between 10% to 15%.

So I’m not concerned about how the business performed or how it’s going to perform in the second half, but candidly going in to the quarter we thought that the business would have closed a couple of more big projects in the quarter, but we would expect them to be closed in the third. .

[Operator Instructions] And we’ll go next to Noelle Dilts with Stifel. .

Just expanding on the line of questioning on network security, it sounds like you’re making progress on penetrating the industrial market. But can you just give us a general update on how that’s progressing. .

We disclosed in our prepared remarks that we won a multi-million dollar project this quarter and a factory application.

This is a customer that has been a Belden customer for quite some time, and its I think a great example of how people are beginning to take aggressive actions to make certain that there are endpoint in their networks in their controllers on the factory environment are in fact secured. We had a number of other smaller wins in the quarter.

Also that existing Belden customers were there either securing critical infrastructure and industrial applications. So I feel like things are progressing well. I think we are making the kind of impact that we want to. I’m also pleased with our partnership that we announced with FireEye.

They’ve been bringing us in to opportunities, we’ve been bring them in to opportunities. So I would expect this trend to continue, and I feel very, very confident about how we’re positioned. .

And then secondly, as you hit your deleveraging goal by the end of the year, can you give us a sense of your, I guess two things, one is kind of three time leverages the level you’re thinking about with the long term, and secondly how you’re thinking about acquisitions your appetite for acquisitions in areas that you might be interested in. .

Sure. So let me start by saying that our funnel of new opportunities of acquisition opportunities is extraordinarily strong. So if you just look at the metrics that we track, whether it’s the unweighted funnel or the weighted funnel, it’s never been stronger than it is right now.

And independent of our leverage, we’re always active in the market cultivating relationships. Obviously our first priority is to add to the existing platforms, those are always the highest ROIC projects. We’re especially interested in adding to our industrial platforms, as well as network security platforms.

We have a number of opportunities that we’ve identified that we think are attractive and that’s not to say we don’t have opportunities at enterprise and broadcast. So a very, very robust funnel; as you indicated, our goal is to have our leverage at three times, and therefore we’re managing those two in combination.

But even a year ago when our leverage was higher than where we’d like it to be from a longer term perspective we continue to make investments in M&A opportunities and cultivating relationships. So I think we are well positioned to act on an opportunity when the right one becomes available. .

And we’ll go next to John Quealy with Canaccord Genuity. .

First, within broadcast can you comment within that EBITDA performance can you talk about the relative leverage you’ve got out of Grass Valley versus broadband connectivity. I imagine most of the uplift came from Grass Valley..

Well, yes, the Grass Valley business on a year-over-year basis, it grew faster than broadband and on a year-over-year basis we had quite a bit of productivity in Grass Valley from the prior year. And of course the margins in Grass Valley are strong.

I would say generally speaking the broadband margins on a year-over-year basis were unchanged, and the margin expansion in the platform in total came from Grass Valley. .

Okay, that’s fair. Within enterprise connectivity I think you hinted around this. The 4.8% organic growth rate, can you try to split that out for us between US and International or can you just bifurcate it a little bit more so we can get a better sense of what’s going on there. .

So let me look that up real quick. Our Enterprise business, in United States it was up about 5% and most of the regions grew. The only area where we saw some weakness was in the Middle East and I think that was predominantly a result of sort of the residual effect of lower oil prices. But the rest of the regions were strong.

Latin America was up 20%, Europe was up 20%, and the US and Canada together was up about 5%. So pretty consistent, the only outlier being the Middle East. .

In terms of channel fill in to the channel dynamics there is no major programmatic things going on, this was just cyclical demand?.

Yeah, so I would say the change in channel inventory in the quarter for Belden in total was just about the same as it was a year ago.

So, sequentially demand increases from Q1 to Q2 and typically our distributors bring their inventory up in anticipation of that and usually Q3 is sequentially a little bit stronger than Q2, so we have a little bit of seasonality in our guidance for Q3.

And I think the amount of inventory build in the second quarter this year was almost identical to what it was a year ago. .

And sticking internationally Brexit I imagine it’s the euro is the bigger impact, but it hasn’t really moved.

Is that right Henk in terms of FX headwinds if at all at the back half of the year?.

Yeah, that’s correct. Our euro assumption when we guys lost on is consistent with our current underlying assumption that’s about 1.11-1.12. So no change and our exposure to the UK is less than 3% of [leverage]. .

And we’ll go next to William Stein with SunTrust. .

Hoping if first I can get a clarification, Henk I think you mentioned something about a small acquisition.

Was that referring to an earlier quarter or the quarter that we just completed?.

No, that was in the first quarter, this was [any two] FX. .

And then John you mentioned that were nine IP based systems in broadcast in the quarter, can you confirm that. And then also put that in perspective relative to what you’ve shipped in terms of IP systems historically and what ratio that represents? Sort of want to get a sense as to how that trend is accelerating and how far long it is. .

So first all, yes, let me confirm that we shipped nine IP systems in the quarter. I think this is now the third quarter where we’ve been shipping IP systems. So the fourth quarter was the first quarter.

It’s still a relatively small percentage of our revenue, and for most of our customers this is going to be sort of their first installation their proof of concept. So I feel like we’re building momentum.

I think that the real breakthrough for us was that a year ago in the market there was a lot of confusion with our customers about which way to go, because there were vendors that were sort of battling standards.

And I think that partially due to our leadership and collaboration with other vendors in the industry, I think we now have a very good solution that meets customers’ needs and an open standard that they can rely upon and interoperability. So I feel like there is real market momentum now moving towards IT products.

I think customers feel good that their investments have sustained power, and so although it’s still a relatively small percentage, I don’t have the revenue percentage off the top of my head. I’ll see if we can get that for you later.

But I do see momentum building, and when we speak with customers it’s clear that they are gaining confidence in this solution. .

That’s helpful. If I could just have one follow-up, John, you mentioned that there was a success in terms of cross selling a large network security project in to one of your more traditional Belden customers, and I know that longer term there is some plan around bringing network security to broadcast.

I’m hoping you can give us some update as to expected timing of product and revenue in that sort of intersection. .

So thanks for the question, and now I’m reflecting that we probably should have included this in the prepared remarks, because we did have a substantial development in the quarter where we have in fact integrated the Tripwire technology in to our iTX Playout system which is an important part of the Grass Valley product portfolio.

This is a software based Playout system that’s used by the world’s leading broadcasters and we now have integrated the Tripwire software in to that system. We made that available this quarter. I think we announced it at [NAD].

I don’t have the revenue numbers off the top of my hand, but I think it’s an important development and it’s just one of the many ways that our Grass Valley business is differentiating itself from others. We are the only in the industry that has done anything like that. And I think it’s an important development. .

Tim Lenze, there are no further questions at this time. Please continue. .

Thank you Tracy 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.relation@belden.com. Have a great day everyone. .

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