Q2 2025 Bel Fuse Inc Earnings Call

July 25, 2025

Operator: Good morning, and Welcome to the Bel Fuse Q2 2025 Earnings Call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded. I would now like to turn the call over to Jean Marie Young with Three Part Advisors. Please go ahead, Jean.

Operator: Welcome to the Bell Fuse second quarter 2025 earnings call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded.

Good morning and welcome to the Bel fuse second quarter 2025 earnings call.

If anyone should require operator assistance or in the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded.

Gene Murray-Young: I would now like to turn the call over to Gene Murray-Young with Three Part Advisors. Please go ahead, Gene. Thank you and good morning everyone.

Jean Marie Young: Thank you and good morning, everyone. Before we begin, I'd like to remind everyone that during today's conference call, we will make statements relating to our business that will be considered forward-looking statements under federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2025. These statements are based on the company's current expectations and reflect the company's views only as of today and should not be considered representative of the company's views as of any subsequent date. The company disclaims any obligation to update any forward-looking statements or outlook. Actual results for future periods may differ materially from those projected by these forward-looking statements due to a number of risks, uncertainties, and other factors. These material risks are summarized in the press release that we issued after market closed yesterday.

I would now like to turn the call over to Jean Murray young with 3-part advisors. Please go ahead Jean.

Gene Murray-Young: Before we begin, I'd like to remind everyone that during today's conference call, we will make statements relating to our business that will be considered forward-looking statements under federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2025. These statements are based on the company's current expectations and reflect the company's views only as of today and should not be considered representative of the company's views as of any subsequent date. The company disclaims any obligation to update any forward-looking statements or outlooks.

Gene Murray-Young: Actual results for future periods may differ materially from those projected by these forward-looking statements due to a number of risks, uncertainties, and other factors. These material risks are summarized in the press release that we issued after market closed yesterday. Additional information about the material risks and other important factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations is discussed in our findings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our quarterly reports and other documents that we have filed or may file with the SEC from time to time.

Thank you, and good morning everyone. Before we begin, I'd like to remind everyone that drink space cockpit, salt, we will make statements relating to our business that will be considered forward within statements and your thoughts. Such a statements regarding the company is expected to operating and financial performance for future periods, including guidance for future periods in 2025. These statements are based on the company's current expectations and reflect the company's views only as of today and should not be considered representative of the companies use as of any subsequent date the company, just claims any application to update any forward-looking statements, or Outlook.

Actual results for future care is Major for materially to most projected, by these forward list of statements due to a number of risks, uncertainties and other factors.

Jean Marie Young: Additional information about the material risks and other important factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations is discussed in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our quarterly reports and other documents that we have filed or may file with the SEC from time to time. We may also discuss non-GAAP results during this call, and reconciliations of our GAAP results to non-GAAP results have been included in our press release. Our press release and our SEC filings are all available on the IR section of our website. Joining me on the call today are Farouq Tuweiq, President and CEO, and Lynn Hutkin, CFO. With that, I'd like to turn the call over to Farouq. Farouq?

Gene Murray-Young: We may also discuss non-GAAP results during this call, and reconciliations of our GAAP results to non-GAAP results have been included in our press release.

Gene Murray-Young: Our press release and our SEC filings are all available on the IR section of our website.

Gene Murray-Young: Joining me on the call today are Farouk Tewiq, President and CEO, and Lynn Hutkin, CFO. With that, I'd like to turn the call over to Farouk.

Farouk Tewiq: Farouk?

Farouq Tuweiq: Thank you, Jean, and good morning, everyone. We are very pleased with our Q2 performance, which surpassed our revenue expectations and delivered gross margins at the higher end of our projected range.

These material risks are summarized in the press release that we issued aftermarket closed yesterday. Additional information about the material risks. And other important factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations. Just discussed in our finance with the Securities and Exchange Commission, including our most recent annual report on form 10K and our quarterly reports and other documents that we have Bibles for main file with the FCC from time to time. You may also discuss non-gaap results during this call and reconciliations of our Gap results to non Gap. Results have been included in our press release. Our press release, sends our FCC filings are all available on the IR section of our website. Joining me on the call today are through to it, president, and CEO, and Lynn hudkins CFO with that. I'd like to call turn the call over to Peru, Peru.

Farouk Tewiq: Thank you, Gene, and good morning, everyone. We are very pleased with our second quarter performance, which surpassed our revenue expectations and delivered gross margins at the higher end of our projected range. The Bell team really came through strong, aided, came through strong, aided by a few factors, including in-market performance and an uptick in our intra-quarter terms, which we have not really seen much of in recent quarters, particularly in our power magnetic segments. From an in-market standpoint, commercial air defense and networking led the way along with certain pockets of distribution sales within the power magnetic segment.

Peru: Thank you Gene and good morning, everyone.

Farouq Tuweiq: The build team really came through strong, aided by a few factors, including end market performance and an uptick in our inter-quarter turns, which we have not really seen much of in recent quarters, particularly in our power magnetic segments. From an end market standpoint, commercial air, defense, and networking led the way, along with certain pockets of distribution sales within the power magnetic segments. These trends signal that we are heading into recovery, as we have been anticipating following nearly 2 years of inventory destocking in the channel. They reinforce our confidence in continued growth as we move into the H2 of the year, setting aside some of the geopolitical noise around tariffs. During our last quarterly call, the potential effects of tariffs on our sales and margins were uncertain.

Peru: We are very pleased with our second quarter performance which surpassed our Revenue expectations and delivered gross margins. At the higher end of our projected range,

Peru: the belt team really came through strong aided, we came through strong, aided by a few factors, including in market performance and an uptick in our intra quarter terms, which we have not really seen much of in recent quarters particularly in our power, magnetic segments, from an in-market standpoint commercial air defense and net

Farouk Tewiq: these trends signal that we are heading into recovery as we have been anticipating following nearly two years of inventory destocking in the channel. and they reinforce our confidence and continued growth as we move into the second half of the year, setting aside some of the geopolitical noise around terrorists.

Peru: Working led the way along with certain pockets of distribution sales within the power and magnetic segments.

Peru: These Trends signal that we are heading into recovery. As we have been anticipating following nearly 2 years of inventory, destocking in the channel.

Farouk Tewiq: During our last quarterly call, the potential effects of tariffs on our sales and margins were uncertain. In retrospect, tariffs had a limited impact in the second quarter, accounting for about 2 million of our sales and having minimal effect on margins. Although we have slightly better clarity now, there are still many variables at play regarding tariffs, and we will continue to adapt to this evolving landscape in collaboration of suppliers and customers. Overall, we are encouraged by the strong results this quarter and are excited by the momentum building within the business as we head into the second half of the year.

and they reinforce our confidence and continue to grow as we move into the second half of the year setting aside, some of the geopolitical noise around tariffs,

Farouq Tuweiq: In retrospect, tariffs had a limited impact in Q2, accounting for about $2 million of our sales and having a minimal effect on margins. Although we have slightly better clarity now, there are still many variables at play regarding tariffs, and we will continue to adapt to this evolving landscape in collaboration with our suppliers and customers. Overall, we are encouraged by the strong results this quarter and are excited by the momentum building within the business as we head into H2 of the year. Looking ahead to Q3, we are optimistic about continued growth, with sales guidance in the range of $165 to 180 million, and gross margins projected between 37% and 39%.

Peru: During our last quarterly, call the potential effects of tariffs on our sales and margins were uncertain in retrospect tariffs, had a limited impact in the second quarter accounting for about 2 million of our sales and having a minimal effect on margins.

Peru: Although we have slightly better clarity. Now, there are still many variables at play regarding tariffs and we will continue to adapt to this evolving landscape in collaboration with our suppliers and customers.

Peru: Overall we are encouraged by the strong results of this quarter and our excited by the momentum building within the business as we head into the second half of the year.

Farouk Tewiq: Looking ahead to the third quarter, we are optimistic about continued growth, with sales guidance in the range of $165 to $180 million, and gross margins projected between 37 and 39%. Strong bookings in Q2 support our expectation of sequential growth for the remainder of the year, and we remain confident in our ability to deliver value to both our customers and shareholders.

Farouq Tuweiq: Strong bookings in Q2 support our expectation of sequential growth for the remainder of the year. We remain confident in our ability to deliver value to both our customers and shareholders. With that, I'll turn the call over to Lynn to run through financial highlights from the quarter. Lynn?

Lynn Hutkin: With that, I'll turn the call over to Lynn to run through financial highlights from the quarter. Lynn?

Peru: Looking ahead to the third quarter, we are optimistic about continued growth with sales guidance and the range of 165 to 180 million in Gross, margins projected, between 37 and 39% strong bookings. In Q2 support, our expectation of sequential growth for the remainder of the year and we remain confident in our ability to deliver value. To both our customers and shareholders.

Lynn Hutkin: Thank you, Farouq. From a financial perspective, sales for Q2 2025 have reached $168.3 million, reflecting an increase of 26.3% from Q2 2024. Strong performance in our A&D end market and improved sales in our Magnetic Solutions helped to offset the year-over-year decline in our consumer, rail, and e-mobility end markets within our Power Solutions and Protection during Q2 2025, compared to the same period of 2024. Turning to our product groups, sales of Power Solutions and Protection in Q2 2025 amounted to $86.8 million, representing an increase of 48.2% compared to the same period last year. This growth was largely driven by our aerospace and defense exposure, which contributed $32.6 million to the Power Solutions and Protection for Q2 2025.

Lynn Hutkin: Thank you, Parouk. From a financial perspective, sales for the second quarter of 2025 has reached $168.3 million, reflecting an increase of 26.3% from the second quarter of 2024. Strong performance in our AMD end market and improved sales in our magnetic segment helped offset the year-over-year decline in our consumer, rail, and e-mobility end markets within our power segment during the second quarter of 2025 compared to the same period of 2024. Turning to our product groups, sales of power solutions and protection in the second quarter of 2025 amounted to $86.8 million, representing an increase of 48.2% compared to the same period last year.

Peru: With that, I'll turn the call over to Lynn to run through financial highlights from the quarter. Lynn, thank you Peru. From a financial perspective sales for the second quarter of 2025 reached 168.3 million reflecting an increase of 26.3% from the second quarter of 2024.

Lynn Hudkins: Strong performance in our AMD and market and improved sales in our magnetic segment helped offset, the year-over-year decline in our consumer Rail and e-mobility, and markets within our power segment. During the second quarter of 2025 compared to the same period of 2024.

Lynn Hudkins: Million representing an increase of 48.2% compared to the same period last year.

Lynn Hutkin: This growth was largely driven by our aerospace and defense exposure, which contributed $32.6 million to the power segment for the second quarter of 2025. On the consumer side, sales decreased by $1.7 million in Q2'25 compared to Q2'24, primarily due to the trade restriction imposed on one of our suppliers in China, as mentioned in prior earnings calls. Additionally, given that e-mobility sales were still robust in Q2 of 24, we saw a $2.3 million year-over-year decline in this end market in Q2 of 25. Sales into the rail end market have been normalizing in 2025, coming off a strong 2024, resulting in a $3.3 million reduction during Q2'25 compared to the same period in 2024.

Lynn Hutkin: On the consumer side, sales decreased by $1.7 million in Q2 2025 compared to Q2 2024, primarily due to the trade restriction imposed on one of our suppliers in China, as mentioned in prior earnings calls. Additionally, given that e-mobility sales were still robust in Q2 2024, we saw a $2.3 million year-over-year decline in this end market in Q2 2025. Sales into the rail end market have been normalizing in 2025, coming off a strong 2024, resulting in a $3.3 million reduction during Q2 2025 compared to the same period in 2024. These declines were partially offset by a $2.3 million increase in sales to our AI customers, bringing total AI sales for Q2 2025 to $2.6 million. Circuit protection sales increased by $1.8 million in Q2 2025 compared to Q2 2024.

Lynn Hudkins: This growth was largely driven by our Aerospace and defense exposure, which contributed 32.6 million to the power segment for the second quarter of 2025.

Lynn Hudkins: On the consumer Side Sales, decreased by 1.7 million in Q2 25 compared to Q2 24, primarily due to the trade restriction imposed on 1 of our suppliers in China as mentioned in Prior earnings calls.

Lynn Hudkins: Additionally, given that e-mobility sales were still robust and Q2 of 24. We saw a 2.3 million dollar year-over-year decline in this end markets. Thank you to 25.

Lynn Hudkins: Sales into the rail End Market have been normalizing in 2025. Coming off a strong, 2024 resulting in a 3.3 million reduction, during Q2 255 compared to the same period in 24.

Lynn Hutkin: These declines were partially offset by a $2.3 million increase in sales to our AI customers, bringing total AI sales for Q2 2025 to $2.6 million. Further, circuit protection sales increased by 1.8 million in Q2-25 compared to Q2-24. The gross margin for the power segment in the second quarter of 2025 was 41.9%, representing a decline of 380 basis points from Q2-24. If you recall, we had pulled out in last year's second quarter that approximately 400 basis points of the power gross margin resulted from non-recurring items that were reported at 100% gross margin in Q224, such as cancellation.

Lynn Hudkins: Based declines were partially offset by a 2.3 million increase in sales to our AI customers.

Lynn Hudkins: Bringing total AI sales for Q2, 25 to 2.6 million.

Lynn Hutkin: The gross margin for the power segment in Q2 2025 was 41.9%, representing a decline of 380 basis points from Q2 2024. If you recall, we had called out in last year's Q2 that approximately 400 basis points of the power gross margin resulted from non-recurring items that were recorded at 100% gross margin in Q2 2024, such as cancellation fees. Adjusting for that, power margins were up slightly from Q2 2024 due to the inclusion of the higher margin Enercon products. Turning to our Connectivity Solutions Group, sales for Q2 2025 reached $59.2 million, an increase of 2.4% compared to Q2 2024. Sales for commercial air applications in Q2 2025 were $20.5 million, which represented an increase of $5.1 million or 33% from Q2 2024. Connectivity products sold into defense applications totaled $13.4 million in Q2 2025, an increase of 12% from Q2 2024.

Lynn Hudkins: Further circuit protection sales increased by 1.8 million in Q2, 25 compared to Q2 24.

Lynn Hudkins: The gross margin for the power segment and the second quarter of 2025 was 41.9% representing a decline of 380 basis points from Q2 24.

Lynn Hutkin: Adjusting for that, power margins were up slightly from Q2-24 due to the inclusion of the higher margin Enercom product. Turning to our connectivity solutions group, sales for Q225 reached $59.2 million, an increase of 2.4% compared to Q224. Sales for commercial air applications in Q2-25 were $20.5 million, which represented an increase of $5.1 million, or 33% from Q2-24. Productivity products sold into defense applications totaled $13.4 million in Q2'25, an increase of 12% from Q2'24. And sales into the space and market amounted to $2.3 million in Q2'25, the same level as in Q2'24. The gross margin for this group was 39.2% in the second quarter of 2025, representing an improvement of 30 basis points from Q2-24.

Lynn Hudkins: If you recall, we have called out in last year's, second quarter, that approximately 400 basis points of the power growth margin. Resulted from non-recurring items that were recorded at 100% gross margin in q224, such as cancellation fees.

Lynn Hudkins: Adjusting for that power margins were up. Slightly from Q2 24 due to the inclusion of the higher margin. Intercom products.

Lynn Hudkins: Turning to our connectivity solutions. Group sales for Q2 25 reached 59.2 million and increase of 2.4% compared to q224.

Lynn Hudkins: Sales for commercial are applications and q222 for 20.5 million, which represented an increase of 5.1 million million for 333% from Q2 24.

Connectivity products sold into defense applications total 13.4 million in Q2 25.

Lynn Hutkin: Sales into the space end market amounted to $2.3 million in Q2 2025, the same level as in Q2 2024. The gross margin for this group was 39.2% in Q2 2025, representing an improvement of 30 basis points from Q2 2024. This margin expansion was largely attributable to operational efficiencies achieved through facility consolidations completed in 2024, along with favorable foreign exchange impacts related to the peso compared to the 2024 period. These positive drivers were partially offset by minimum wage increases in Mexico that took effect in 2025. Lastly, in Q2 2025, our Magnetic Solutions group recorded sales of $22.3 million, representing an increase of 32.5% compared to Q2 2024, led by a rebound in demand from our networking customers and through the distribution channel.

Lynn Hudkins: An increase of 12% from Q2 24.

Lynn Hudkins: A sales into the space and Market amounts of 2.3 million in Q2, 25 the same level as in Q2 24.

Lynn Hutkin: This margin expansion was largely attributable to operational efficiencies achieved through facility consolidations completed in 2024 along with favorable foreign exchange impacts related to the peso compared to the 2024 period. These positive drivers were partially offset by minimum wage increases in Mexico that took effect in 2025. Lastly, in the second quarter of 2025, our Magnetic Solutions Group recorded sales of $22.3 million, representing an increase of 32.5% compared to the second quarter of 2024, led by a rebound in demand from our networking customers and through the distribution channels. This level of growth aligns with expectations discussed during last quarter's earnings call, where we noted this segment would be our highest percentage grower in 2025.

Lynn Hudkins: the gross margin for this group was 39.2% in the second quarter of 2025 representing, an improvement of 30 basis points from Q2 24,

Lynn Hudkins: This margin expansion was largely attributable to operational efficiencies achieved through facility. Consolidations completed in 2024,

Along with favorable foreign exchange impacts related to the peso compared to the 2024 period.

Lynn Hudkins: These positive drivers were partially offset by minimum wage increases in Mexico that took effect in 2025

Lynn Hutkin: This level of growth aligns with expectations discussed during last quarter's earnings call, where we noted this segment would be our highest percentage grower in 2025. The gross margin for the Magnetic Solutions improved to 28.7% in Q2 2025, compared to 26.4% in Q2 2024, marking an improvement of 230 basis points year over year. This increase in margin was primarily driven by the higher sales volume in Q2 2025, as well as improved operational efficiencies from the recent facility consolidations in China. R&D expenses reached $8.1 million in Q2 2025, a higher level compared to Q2 2024, primarily due to the acquisition of Enercon. Our annual compensation increases also now occur in March each year, and this also contributed to the higher expense in Q2 2025. We expect future quarters to generally align with the Q2 2025 expense.

Lynn Hudkins: Lastly in the second quarter of 2025 our magnetic solutions group recorded sales of 22.3 million representing an increase of 32.5% compared to the second quarter of 2024. But by a rebound in demand from our networking customers center of the distribution Channel,

Lynn Hudkins: This level of growth aligns with expectations discussed during last quarter's earnings call where we noted, the segment would be our highest percentage grower in 2025.

Lynn Hutkin: The gross margin for the Magnetics Group improved to 28.7% in Q2-25 compared to 26.4% in Q2-24, marking an improvement of 230 basis points year-over-year. This increase in margin was primarily driven by the higher sales volume in Q2-25, as well as improved operational efficiencies from the recent facility consolidations in China.

The gross margin to the magnetics group improved to 28.7% in Q2 25.

Lynn Hudkins: Compared to 26.4% in Q2, 24 marketing and Improvement of 230 basis, points year-over-year.

Lynn Hudkins: It's increased. The margin was primarily driven by the higher sales volume and q25 as well as improved operationalization fees from the recent facility consolidations in China.

Lynn Hutkin: R&D expenses reached $8.1 million in Q2'25, a higher level compared to Q2'24, primarily due to the acquisition of Enterprise. Our annual compensation increases also now occur in March each year, and this also contributed to the higher expense in Q2-25. We expect future quarters to generally align with the Q2-25 extent. Selling general and administrative expenses totaled $30.9 million, representing 18.4% of sales. Compared to the prior year, SG&A increased by $6.8 million in the second quarter of 2025. The increase was primarily driven by Intercom's SG&A expenses, which contributed $6 million in the second quarter of 2025, in addition to annual compensation adjustments that took effect in March 25, and higher-than-anticipated medical claims during the second quarter of 2025.

Lynn Hudkins: R&D expenses, reached 8.1 million in Q2 255 a higher level compared to Q2 24 primarily due to the acquisition of intercom.

Lynn Hudkins: Our annual compensation increases also. Now occur in March each year. And this also contributed to the higher expense in Q2 255,

Lynn Hudkins: Based affect future, quarters to generally aligned with the 2q Q2 25%.

Lynn Hutkin: Selling general and administrative expenses totaled $30.9 million, representing 18.4% of sales. Compared to the prior year, SG&A increased by $6.8 million in Q2 2025. The increase was primarily driven by Enercon's SG&A expenses, which contributed $6 million in Q2 2025, in addition to annual compensation adjustments that took effect in March 2025 and higher than anticipated medical claims during Q2 2025. One last item to note on the P&L side as we look to Q3 is the foreign exchange environment that we're currently in and the weakening US dollar versus each of the three currencies that BEL has exposure to, namely the Chinese renminbi, the Mexican peso, and the Israeli shekel.

Lynn Hudkins: 2.9 Million representing 18.4% of sales.

Lynn Hudkins: Compared to the prior year, sgna increased by 6.8 million in the second quarter of 2025.

Lynn Hudkins: The increase was primarily driven by intercoms sgna expenses which contributed 6 million in the second quarter of 2025.

Lynn Hudkins: In addition, to annual compensation adjustments. Extra effects in March, 25 and higher than anticipated medical claims. During the second quarter of 2025,

Lynn Hutkin: One last item to note on the P&L side as we look to Q3 is the foreign exchange environment that we're currently in and the weakening U.S. dollar versus each of the three currencies that Bell has exposure to, namely the Chinese renminbi, the Mexican peso, and the Israeli shekel. We have hedging programs in place for each of these currencies to help mitigate some of the financial impacts of the movements in these rates. But our gross margin guide for Q3 of 37% to 39% does factor in some potential downward pressure related to FX. Looking at our balance sheet and cash flow, we finished the quarter with $59.3 million in cash and securities.

Lynn Hutkin: We have hedging programs in place for each of these currencies to help mitigate some of the financial impacts of the movements in these rates. Our gross margin guide for Q3 of 37% to 39% does factor in some potential downward pressure related to FX. Looking at our balance sheet and cash flow, we finished the quarter with $59.3 million in cash and securities. During Q2 2025, we utilized $30 million of cash for repayment of long-term debt. This pay-down in Q2 alone results in a $1.7 million reduction in our annual interest expense. Other cash uses during the quarter included $3.9 million on CapEx and dividend payments of $800,000. These payments were largely offset by $20.7 million in cash flow generated from operating activities during Q2.

Lynn Hudkins: 1 last item to note on the p&l side as we look to Q3 is the foreign exchange environment that we're currently in, and the weakening US dollar versus each of the 3 currencies, that they'll have exposure to namely, the Chinese remedy, the Mexican peso, and the Israeli shekels.

Lynn Hudkins: We have hedging programs in place for each of these currencies to help mitigate some of the financial impacts of the movements in these rates.

but our gross margin guide for Q3 of 37 to 39%, does factor in some potential downward pressure related to FX

Lynn Hutkin: During the second quarter of 2025, we utilized $30 million of cash for repayment of long-term debt. This pay down in the second quarter alone results in a $1.7 million reduction in our annual interest expense. Other cash uses during the quarter included $3.9 million on capital expenditures and dividend payments of $800,000. These payments were largely offset by $20.7 million in cash flow generated from operating activities during the second quarter.

looking at our balance sheet and cash flow. We finish the quarter with 59.3 million in cash and security.

Lynn Hudkins: During the second quarter of 2025, we utilize 30 million of cash for repayment of long-term debt.

Lynn Hudkins: This pay down and the second quarter alone, results in a 1.7 million reduction in our annual interest expense.

Lynn Hudkins: Other cache uses during the Border, included 3.9 million on Capital expenditures.

Lynn Hudkins: And dividend payments of 800,000 dollars.

Lynn Hudkins: The payments for largely offset by 20.7 million in cash flow generated from operating activities during the second quarter.

Lynn Hutkin: That concludes our commentary on the Q2 results, and I'd now like to turn the call back to the operator to open the call for questions. Robert?

Gene Murray-Young: That concludes our commentary on the second quarter results, and I'd now like to turn the call back to the operator to open the call for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question at this time, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question at this time, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Thank you. Our first question today comes from the line of Bobby Brooks with Northland Capital. Please proceed with your questions.

Lynn Hudkins: That concludes our commentary on the second quarter results and I'd now like to turn the call back to the operator, to open a call for questions.

Speaker Change: Thank you. We'll now be conducting a question and answer session.

Speaker Change: If you like to ask a question at this time, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

Speaker Change: You may press star 2. If you'd like to withdraw your question from the queue,

Operator: One moment please while we poll for questions.

Speaker Change: For participants using speaker equipment, you may be necessary to pick up your handset before pressing the star keys.

Speaker Change: 1 moment, please while we pull for questions. Thank you.

Bobby Brooks: Thank you and our first question today comes from the line of Bobby Brooks with Northland Capital.

Bobby Brooks: Please receive the Hey, good morning, guys, and congrats on the outstanding quarter. I was curious to hear a bit more about the trends you're seeing that underpin the guidance. The press release mentioned a rebound in networking and some other segments within distribution along with the strong Q2 bookings, which I think you said leads you to believe that you're going to see sequential growth in the back half. Maybe could we just expand on that? And is it old customers returning to normal ordering patterns? New customers coming into the fold or maybe something different?

Bobby Brooks: Hey, good morning, guys, and congrats on the outstanding quarter. I was curious to hear a bit more about the trends you're seeing that underpin the guidance. The press release mentioned a rebound in networking and some other segments within distribution along the strong Q2 bookings, which I think you said leads you to believe that you're going to see sequential growth in the back half. Maybe could we just expand on that? Is it old customers returning to normal ordering patterns, new customers coming into the fold, or maybe something different?

Speaker Change: Thank you. And our first question today, comes from the line of Bobby Brooks with Northland Capital. Please receive your questions.

Bobby Brooks: Hey, good morning guys and congrats on the outstanding quarter. Uh, I was curious to hear a bit more about the trends. You're seeing seeing that underpin, the guidance, the press release mentioned a rebound and networking and some other segments within distribution. Uh distribution along the the strong Q2 bookings, which I think you said lead you to believe that you're going to see sequential growth in the back half.

Lynn Hutkin: Bobby, what we had talked about earlier in the year is that orders had started to pick up in Q1, and we saw that trend continue in Q2. A lot of that had to do with the expected rebounding in networking, which largely impacts the power and magnetics groups, and also within the distribution channel. If you recall, within connectivity, distribution had been fairly stable over the last couple of years for the Connectivity Solutions segment, but it had been depressed with the overstocking situation in the Power and Magnetic segments. That's where we're seeing the rebound in orders, and that's what we saw coming through in Q2, and we continue to see that trend moving forward into H2.

Bobby Brooks: Maybe could we just expand on that? And is it is it old customers returning to normal ordering patterns, new customers coming into the fold, or maybe something different

Farouk Tewiq: Yes, so Bobby, what we had talked about earlier in the year is that orders had started to pick up in the first quarter and we saw that trend continue in the second quarter. A lot of that has to do with the expected rebounding in networking, which largely impacts the power and magnetics groups, and then also within the distribution channel. So, if you recall, within connectivity distribution had been fairly stable over the last couple of years for the connectivity segment, but it had been depressed with the, the overstocking situation in the power and magnetic segments. So, that's where we're seeing the rebound in orders and that's what we saw coming through in the 2nd quarter and we continue to see that trend moving forward into the 2nd half of the year.

Speaker Change: Yeah, so Bobby, what we have talked about earlier in the year is that orders had started to pick up in the first quarter and we saw that Trend continue and the second quarter.

Speaker Change: A lot of that has to do with the expected rebounding.

Speaker Change: In networking, which largely impacts the power and magnetic groups. Um, and then also within the distribution channel. So, if you recall, uh, within connectivity distribution, had been fairly stable over the last couple of years for the connectivity segment, but it had been depressed with the, uh, the overstocking situation in the power and magnetic segments. Uh, so that's where we're seeing the The Rebound in orders. And we're, that's what we saw coming through in the second.

Speaker Change: Second quarter, and we continue to see that Trend uh moving forward into the second half of the year.

Bobby Brooks: Got it. It seems like just kind of a return to norm there, not necessarily new customers or just any kind of commentary on maybe new business ones?

Bobby Brooks: Got it. So not necessary.

Farouk Tewiq: So it seems like just kind of a return to norm there and not necessary, not necessarily new customers or just any, any kind of commentary on maybe new business ones. Yeah, I would say, I mean, we remember, Bobby, we go through this fusion, there's some quick turn business and things like fuses, right? So there, you know, we do have new wins and customers that do occur. But for given our long cycle, on average design business, you need a return to growth, both from your OEMs and your Disney. Disney obviously does touch a lot of new customers along the way and some recurring.

Farouq Tuweiq: Yeah, I would say, I mean, remember, Bobby Brooks, we go through distribution, there's some quick turn business in things like fuses, right? We do have new wins and customers that do occur. Given our long cycle on average design business, you need a return to growth, both from your OEMs and your distie. Distie obviously does touch a lot of new customers along the way, and some recurring. When we look at the channels, yes, we do see some new business, and we had some really nice new wins in the quarter, programs in our aerospace defense business, for example. We do see new, but just given the long cycle down the business, you need your existing people with too much in the inventory to wake up and get going again. It's really an amalgamation of those factors.

Speaker Change: Got it. So, not any. So it seems like just kind of a return to Norm there and not neces not necessarily new customers or just any, any kind of commentary on maybe new business ones.

Farouk Tewiq: So when we look at the channels, you know, yes, we do see some new business and we have some really nice new wins in the quarter programs in our aerospace defense business, for example. So we do see new, but given the long cycle design business, you need your existing people with too much in the inventory to wake up and get going again. So it's really an amalgamation of those factors. Fair enough. That's a helpful caller.

Bobby Brooks: Fair enough. That's helpful, Colin. Then just maybe any strategic growth initiatives or kind of margin enhancements plans through the rest of the year that should be on your radar? Or is it more so just a continuous operational excellence in driving just general business efficiency? Maybe dovetail that with the Glen Rock, Pennsylvania facility sale. I think that was in the connectivity segment, but could you remind us kind of the rationale behind that? Is there any other facilities that you might be eyeing to sell?

Speaker Change: So we do see new but you, you just given the long cycle down the business, you need your existing people with too much in the inventory to wake up and get going again. So it's really an amalgamation of of those factors.

Farouk Tewiq: And then just maybe any other strategic growth initiatives or kind of margin enhancements plans through the rest of the year that should be on your radar, or is it more so just a continuous, you know, continuous operational excellence and driving just general business efficiency? And maybe Todd dovetails that with the Glenrock Pennsylvania facility sale. I think that was in the connectivity segment, but could you remind us kind of the rationale behind that? And is there any other facilities that you might be eyeing to sell?

Speaker Change: Fair enough that's uh that's helpful caller and then just maybe any any other strategy any strategic growth initiatives or kind of margin enhancements plans through the rest of the year. Uh

Speaker Change: That should be on your radar, or is it more? So, just a continuous, you know, continuous operational excellence in driving, just general business efficiency. It may be time, does tail that with, uh, the Glenrock, Pennsylvania facility sale. Can you remind me? I think that was in the connectivity segment, but could you remind us kind of rationale behind that? And is there any other facilities that you might be eyeing to sell?

Farouq Tuweiq: Yeah. Maybe starting off backwards here a little bit on the Glen Rock piece. I think we announced that Q1 last year or February call last year in 2024, if I recall correctly. We were looking to drive margin improvements and drive efficiencies within the Connectivity Solutions business, so, better align internal resources and the physical footprint space. That's kind of really the genesis of that. We've largely kind of moved out of the equipment, and we've had the building held for sale for a while. Obviously, just given the environment there, it took a little bit longer to sell because we also want to make sure we got good value for it. Here we are now. We announced that, which obviously allowed us to generate some cash from the sale and then also pay down some debt.

Farouk Tewiq: Yeah, so the maybe starting out backwards here a little bit on the Glenrock piece, that was, I think we announced that Q1 last year or February call last year in 2024, if I recall correctly, and we were looking to drive margin improvements and drive efficiencies within the connectivity business, so better aligned internal resources and a physical footprint space.

Speaker Change: Yeah, so the, uh, maybe starting out backwards here a little bit on the Glenrock piece. Uh, that was a, I think we announced that q1 last year, or February call last year in 2024, our 5 oclock correctly. And we were looking to drive, uh, margin improvements and and drive efficiencies within the connectivity business. So that are aligned and internal resources and a physical footprint space. Um, so that's going to really with the justice of that, um, and we've largely going to moved out of the equipment and we've had the building health for sale for a while, uh, but obviously, just giving the environment. There took a little bit longer to sell because we also want to make sure we got good value for it. And and here,

Farouq Tuweiq: In terms of other buildings for sale, nothing for us to talk about at this point. I think the buildings that we own have significantly gone down in number and count, because remember, we have one currently kind of held for sale, if you will. Nothing kind of new beyond that for the time being. When we look at strategic initiatives, we have strategic initiatives going on seemingly constantly across the organization of different scale and magnitudes. As we've kind of gone into this week here leading up to this call with the senior team and kind of hearing and talking about what we do in the business and the travels that we've done throughout the Q2, there's a lot of energy and excitement, and quite frankly, the team is very busy.

Farouk Tewiq: In terms of other buildings for sale, you know, nothing for us to talk about at this point. I think the buildings that we own have significantly gone down in number and count, because remember, we have one currently kind of held for sale, if you will, but nothing kind of new beyond that for the time being. As we've talked in the past, putting the margin expansion to your question, Bobby, obviously, we have a mixed issue, right, where magnetics is a lower margin business. Obviously, that kind of was a grower for us, so just putting that aside for a second.

Farouq Tuweiq: I think the north guiding star here is always for us is how do we grow and how can we grow more? We got to play to win and be efficient in our way to go for it. As we've talked in the past, putting the margin expansion to your question, Bobby, obviously, we have a mix issue, right? Where Magnetics is a lower margin business. Obviously, that kind of was a grower for us. Just putting that aside for a second, we always do challenge margins. Where can we do more? Where can we do better? How can we be better? I think we also need to be realistic in where we sit today on the margin side. We are probably industry leading, if not in the 80th percentile, 75th percentile here, if we're just going to throw a guess out there.

Speaker Change: Here we are. Now we we announced that uh which obviously allowed us to generate some cash from the sale and then also pay down uh, some debts in terms of other buildings for sale. You know, nothing for us to talk about at this point. I think the the the buildings that we own have significantly gone down in number and count because, remember, we, we we, we, we have 1 currently going to help for sale if you will. But, um, but nothing in a new beyond that, uh, for the time being, um, when we look at strategic initiatives, uh, we have strategic initiatives going on, you know, seemingly constantly across organization of different, uh, scale and magnitudes. Um, and as we've kind of gone into this week here, leading up to this call with the, uh, Senior Team and, and kind of hearing and talking about what we're doing the business, and the travels that we've done, and throughout the second quarter, there's a lot of energy and excitement and and quite frankly, the team is very busy.

Speaker Change: And I think the north guiding star here is always for us is, is how do we grow? And how can we grow more? Uh, and we got to play to win and be efficient in in our way to go for it as we've talked in the past um putting the uh margin extension to your question Bobby. Obviously we have a mixed issue right? Where magnetics is a lower margin business, obviously that kind of was a grower for us so just putting that aside for a second. Um we we always do challenge margins uh where can we do more? Where can we do better?

Farouq Tuweiq: We are in a very good place and a comfortable place. The question becomes is there might be some room to go here and there, we also have to be smart about it, make sure we don't dig out, because ultimately we have, let's say, a very high percentage of our OPEX in R&D space. We got to make sure that we are putting that part of our P&L to work. Yes, we're always minded on margins. There might be opportunity to push up. At the same time, we need to be smart about it. We're comfortable where they're at today on the gross margin side. We're trending a little bit more in the right direction on the EBITDA side. We just want to be careful that there's not another 1,000 bps expansion here, right?

Farouk Tewiq: So, yes, we're always minded on margins. There might be opportunity to push up, but at the same time, we need to be smart about it. So, we're comfortable with where they're at today on the gross margin side. We're trending a little bit more in the right direction on the EBITDA side, but we just want to be careful that there's not another 1,000 BIFs expansion here, right? Yeah, yeah.

Bobby Brooks: Yeah. Great commentary. I'll return to the queue. Thank you, guys.

Speaker Change: How can we be better? Um I think we also need to be realistic in where we sit today on the margin side. We are you know probably industry-leading if not in the 80th percentile. So if a percentile or if we're just going to throw a guess out there. So we are in a very good place in a corporate place. The question becomes is, can we? Uh, there might be some room to go here and there, but we also need to be smart about it and make sure we don't pick out. Because, ultimately, we have a, let's say, a very high percentage of our Architects and R&D sticks. We got to make sure that we are, you know, putting that part of our pnl to work. So, yes, we're always minded on margins. There might be opportunity to push up, uh, but at the same time, we need to be smart about it. So we're comfortable with where they're at today, uh, on the gross margin side. We're trending a little bit more in the right direction on the Adidas side. Um, but would you want me to be careful that there's not another, you know, 1,000 uh, bits expansion here, right?

Bobby Brooks: Great commentary. I'll return to it too.

Bobby Brooks: Thank you guys.

Speaker Change: Yeah, yeah, great commentary. Uh, I'll return to you. Thank you guys.

Farouq Tuweiq: Bye.

Bobby Brooks: Bye.

Operator: Our next question is coming from the line of Christopher Glynn with Oppenheimer. Please proceed with your questions.

Speaker Change: Bye.

Christopher Glenn: Our next questions come from the line of Christopher Glenn with Oppenheimer. Please proceed with your questions. Thanks. Good morning. So, yeah, just wondering, you talked about... know, improving orders trends in the first quarter, continuing to the second quarter. You also, I think, mentioned improving turns in intra-quarter. Sounded a little bit more like a pivot dynamic that you saw, I guess, perhaps shortly after the last earnings call. So just kind of wondering if we could dive into that cadence a little bit.

Christopher Glynn: Thanks. Good morning. Yeah, just wondering, you talked about improving orders trends in Q1, continuing to Q2. You also, I think, mentioned improving turns intra-quarter. Sounded a little bit more like a pivot dynamic that you saw, I guess perhaps shortly after the last earnings call. Just kind of wondering if we could dive into that cadence a little bit.

Speaker Change: Our next question is coming from the line of Christopher Glenn with Oppenheimer. Please just see you with your questions.

Uh, thanks. Good morning. Um,

Farouq Tuweiq: Yeah, when we look at normal times, which means you'd probably have to go back 4 or 5 years ago, but usually you'd head into the quarter with some expectation of go get. In those days, let's say, obviously, we have a lot of SKUs, but generally, your lead times are anywhere from 8 weeks to 12 weeks, let's say, right? The things that were a little bit more quicker turns, you would see some of that intra-quarter turn. Obviously, we headed into COVID and post-COVID years where there were extended lead times, so we didn't really see much of that intra-quarter turns. Then we head into over-inventory in the channel, right? Which just kind of slows everything down.

Christopher Glenn: So, uh, yeah, just wondering you talked about, um, you know, improving orders Trends in the first quarter, continuing to the second quarter, y'all. You also I think mentioned uh, improving turns in intra quarter, sounded a little bit more like a pivot Dynamic that you saw, I guess, perhaps, shortly after the last earnings call. So just kind of wondering if we could dive into that. Uh, Cadence a little bit.

Farouk Tewiq: When we look at normal times, which means you'd probably have to go back four or five years ago, but usually you'd head into the quarter with some expectation of go-get. In those days, let's say, obviously we have a lot of skews, but generally your lead times are anywhere from eight weeks to 12 weeks, let's say, right? So the things that were a little bit more quicker turns, you would see some of that inter-quarter turn. Obviously, we headed into COVID and post-COVID years where there was extended lead times, so we didn't really see much of that intra-quarter turns.

Farouk Tewiq: And then we head into over-inventory in the channel, right, which just kind of slows everything down. But today, especially in our shorter lead time businesses, for example, Fuses, we are seeing heading into the quarter and not having orders, and then all of a sudden the order comes in, we ship it out within the quarter. So that is nice to see, because that indicates a little bit more healthiness in the channel and overall the market. So it is an important indicator, I would say, that the market is functioning a little bit more than it's supposed to function, or more in the right way it's supposed to be functioning.

Farouq Tuweiq: Today, and especially on our shorter lead time businesses, for example, fuses, we are seeing heading into the quarter and not having orders, and then all of a sudden the order comes in, we ship it out within the quarter. That is nice to see because that indicates a little bit more healthiness in the channel and overall the market. It is an important indicator, I would say, that the market is functioning a little bit more than it's supposed to function, or more in the right way it's supposed to be functioning.

Christopher Glenn: Days, let's say Obviously, we have a lot of skus but generally your your lead times are anywhere from 8 weeks to 12 weeks, let's say, right? So the things that were a little bit more quicker, turns you would see some of that intra quarter turn. Um, obviously, we headed into covid and post-covid years where those extended, uh, lead times. So was we didn't really see much of that intra quarter turns and then we head into over inventory in the channel, right? Which just kind of slows everything down. Uh, but today especially in our shorter lead time, uh, businesses, for example, uses, uh, we, we, we, we are seeing, uh, heading into the quarter, um, and not having orders and then all of a sudden, the order comes in. We ship it out within the quarter. So that is nice to see, uh, because that indicates a little bit more healthiness, uh, uh, in the channel. Uh, and, and overall the market. So it it is a important indicator. I would say, um, that, that the market,

Market is functioning a little bit more than its supposed to function or the the more the right way. It's supposed to be functioning.

Christopher Glynn: Yeah, thanks. I imagine it's a little tough to bifurcate, but sense of actual end market improvement in networking. I know that kind of stage 1 of lack of destock and back to normal that you just described is powerful considering the depth and duration of the channel adjustments. Are you able to tease out, kind of the end market is pivoting there?

Christopher Glenn: Yeah, thanks. And I imagine it's a little tough to bifurcate, but sense of like actual end market improvement in networking. I know that kind of stage one of lack of D stock and back to normal that you just described is powerful considering the depth and duration of the channel adjustments. But are you able to tease out, you know, kind of the end market is pivoting there? Yeah, I think one of the challenges when we look at the distribution channel specifically. As a reminder for folks on the call, we do get POS data, right? So we're effectively seeing what our customers' customers are buying off the shelf.

Speaker Change: Yeah, thanks. And I I imagine it's a little tough to to berate but sense of like actual End Market Improvement in networking. I, I know that kind of stage 1 of lack of dto and back to normal that you just described as powerful considering the the depth and duration of the channel adjustments, but are you able to tease out, you know, kind of the

Christopher Glenn: Market is pivoting. Their

Farouq Tuweiq: Yeah. I think one of the challenges when we look at the distribution channel specifically, as a reminder for folks on the call, we do get POS data, right? We're effectively seeing what our customer's customers are buying off the shelf. When we look at what was coming off the shelf versus what we're selling to distribution, there was a mismatch, right? I would say when we look at our percentage decline in our businesses, it was more severe than what we would see, for example, the distribution levels. When you achieve a little bit of a normalcy, that's a little bit of healthiness. I think your question, Chris, is the numbers, even in the last couple of years, were not as bad as ours, if you will, because there was ordering patterns, and now it seems like we're closing the delta.

Christopher Glenn: yeah, I think 1 of the the the challenges when we look at the distribution Channel specifically

Farouk Tewiq: So when we look at what was coming off the shelf versus what we're selling to distribution, there was a mismatch, right? So I would say we, and when we look at our percentage of decline in our businesses, it was more severe than what we would see, for example, the distribution levels. So when you achieve a little bit of normalcy, that's a little bit of healthiness. So I think your question, Chris, is the numbers, even in the last couple of years, were not as bad as ours, if you will. Because there was ordering patterns, and now it seems like we're closing the delta.

Uh, as a reminder, for folks on the call, we do get POS data, right? So we're effectively seeing what our customers customers are buying off the shelf.

Christopher Glenn: So when we look at what was coming off the Shelf versus what we're selling to distribution, there was a mismatch right there. So I would say we and we're looking at our percentage of decline in our businesses, it was more severe than what we would see. For example, the distribution levels,

Farouq Tuweiq: We also see the inventory levels, those have come down to very low levels. Now you get to more of that parity where orders go out the door and you're more likely to get an order, is the way I kind of think about it.

Farouk Tewiq: We also see the inventory levels, and those have come down to very, very low levels. So now you'd get to more of that parity where orders go out the door and you're more likely to get an order, is the way I kind of think about it. Makes sense.

Christopher Glynn: Makes sense. Just want to ask about Enercon. You had your second full quarter here. I know you're out inter-quarter talking about it, and it sounds very good. Yeah, just curious progress on the integration on the commercial sides. I don't think there's a whole lot of operating integration intent there, but perhaps you could clarify that.

Um so when you achieve a little bit when normaly that's a little bit of healthiness. So um I think your question Chris is is the the the numbers even in the last couple years. We're not as bad as ours if you will. Uh because there was ordering patterns and now it seems like we're closing the Delta. We also see the inventory levels and those have come down to very, very low levels. So now you'd get to more of that pairing where orders go out the door and you're more likely to get an order is the way I can identify think about it.

Farouk Tewiq: And just want to, you know, ask about Enercon. You had your second full quarter here. I know you're out into quarter talking about it and it sounds very good. But yeah, just curious progress on the integration on the commercial side. I don't think there's a whole lot of operating integration intent there, but perhaps you could clarify that. Yeah, so I think it's going, you know, kind of as we anticipated, obviously, it's a great team, we're doing great products in a great end market. And given where they play in the product and supply and the way they go to market with it, it's been as advertised.

Chris: Makes sense and um, just want to uh, you know, ask about intercon. Um,

Farouq Tuweiq: Yeah. I think it's going as we anticipated. Obviously, it's a great team, doing great products in a great end market. Given where they play and the product they supply and the way they go to market with it's been as advertised. I think the broader comment, just to expand on your question there, Chris, is we think of just defense globally, right? We're seeing it in our connectivity business, and we're seeing that expand. We are in those markets today, which is a good place to be. I think the team is excited. We're, I'd say, collaborating better. I think we have some way to go. As you know, this is a long cycle design business and regulatory. The customers are very busy with some replenishment sometimes. We like the direction that we can go, but we could always do better, right?

Chris: You know, you had your your second full quarter here, I know you're out in your quarter, talking about it and sounds very good. Um, but uh, yeah, just curious progress on, on the integration on the commercial sides. I, I I don't think there's a whole lot of operating, uh, integration intent there, but, uh, perhaps you could clarify that

Farouk Tewiq: And, you know, I think the broader comment, maybe just expand on your question, Chris, as we think of this defense globally, right? We're seeing it in our connectivity business, and we're seeing that expand. So, you know, we're where we are in those markets today, which is a good place to be. You know, I think the team is excited. We're, I'd say collaborating better. I think, you know, we have some way to go as you know, this is a long second design business regulatory. Customers are very busy with some replenishment at some times. But we like the direction that we can go, but we can always do better, right?

Chris: Yeah. So so I think it's, it's, uh, it's going, you know, kind of, as we anticipated, obviously, it's, it's a great team. Uh, we're doing great product and a great End Market, um, and um, and, and given where they play in the product and supply, and the the way they go to market with it, um, it's, it's been, it's been as advertised, um, and you know, I think the broader comment it moves to expand on your, your question here. Chris, as we think of just defense globally, right? We're seeing it in our connectivity business and we're seeing that expand. So, you know, we're we're, we are, um, in those markets today which is a good place to be. Um, you know, I think the team is is is excited. We're we're uh, we're we're I'd say collaborating better. Um, I think you know, we have some some way to go as, as you know, this is a long so I can design business and Regulatory and the customers are very busy with some replenishment at sometimes. Uh, but uh, we we, we like to

Farouq Tuweiq: I think we're situated very well to really capitalize on that acquisition, and especially in that end market. We remain excited and bullish on it.

Farouk Tewiq: So I think we're situated very well to really capitalize on that acquisition, especially in that end market. So we remain excited and bullish on it.

Christopher Glynn: Great. Thanks for the color.

Chris: Direction that we can go, but we can always do better, right? Um, so I think we're situated very well to really, uh, capitalize on on that acquisition and especially in that end market. So, uh, we're we remain excited and, and bullish on it.

Christopher Glenn: Great. Thanks for the call. Thanks Chris.

Chris: Great, thanks for the caller.

Farouq Tuweiq: Thanks, Chris.

Operator: Our next questions are from the line of James Ricchiuti with Needham & Company. Please proceed with your questions.

Thanks Chris.

Jim Raschutte: Our next questions are from the line of Jim Raschutte with Needham. Hi, thanks. Good morning. So I just wanted to ask about the what was a modest sequential decline in the power solutions gross margins. Is that is that mainly a function of the sequential growth in the in the legacy power business? You know, the increase in Disney and it looks like they Lin if I heard you correctly, it looks like the inner contribution was roughly flat with Q1. The Enercon contribution was roughly flat with Q1, yes.

James Ricchiuti: Hi, thanks. Good morning. I just wanted to ask about what was a modest sequential decline in the power solutions gross margins. Is that mainly a function of the sequential growth in the legacy power business, the increase in disty? It looks like, Lynn, if I heard you correctly, it looks like the Enercon contribution was roughly flat with Q1.

Speaker Change: Our next question is from the line of Jim Rudy with Native & Company. Please just use your questions.

Speaker Change: It looks like the intercon contribution was roughly flat with q1.

Lynn Hutkin: The Enercon contribution was roughly flat with Q1, yes. Jim, are you asking about power margins from Q2 last year to Q2 this year, or Q1 to Q2?

Lynn Hutkin: So Jim, are you asking about power margins from Q2 last year to Q2 this year, or Q1 to Q2? No, Q1 to Q2. And so I'm wondering if it's just a function of the legacy power business picking up sequentially. That's correct. Yeah. So, it's right. So, the growth was related not to, and consequentially, they were flat quarter over quarter from Q1. But it was the legacy power business, which historically, you know, is a lower margin. product groups and the recently acquired underpump.

Speaker Change: The intercon contribution was roughly flat with q1. Yes.

James Ricchiuti: No. Q1 to Q2. I'm wondering-

Lynn Hutkin: Okay

James Ricchiuti: if it's just a function of the legacy power business picking up sequentially. Has it?

Lynn Hutkin: That's correct.

Speaker Change: uh, so Jim are you asking about power margins from Q2 last year to Q2 this year or q1 to Q2 No 2 2 1 to Q2 and and so I'm wondering if it's just a function of the, the Legacy power business, picking up sequentially,

James Ricchiuti: Okay.

Lynn Hutkin: Yeah.

James Ricchiuti: And just to-

Lynn Hutkin: Right. The growth was related, not to Enercon sequentially. They were flat quarter over quarter from Q1. It was the legacy power business, which historically is a lower margin product group than the recently acquired Enercon business.

Speaker Change: For that correct. Okay. Yeah. So it's

Speaker Change: related.

Speaker Change: But it was the Legacy power business. Which historically, you know, is is a lower, uh, margin

James Ricchiuti: Got it. Thanks. You talked about some wins in A&D. It may be still pretty early in where we are with this, but is there anything you can point to in terms of sales synergies as it relates to Enercon? Are these just wins separate from what your ultimate plans are to drive more sales synergies with this business?

Speaker Change: Product group than the recently acquired underground business.

Jim Raschutte: Got it. Thanks.

Jim Raschutte: Um, you talked about some wins in A&E and It may be still pretty early in where we are with this, but are you seeing, is there anything you can point to in terms of sales synergies as it relates to Enercon, or are these just wins separate from what your ultimate plans are to drive more sales synergies with this business? Yeah, so if we think of, you know, our connector team and the Energon team, they're both kind of winning on their own, I'd say, merit today. The joint wins, and we've seen some opportunities kind of cross the wall here and there, but as a reminder, Jim, we've said we don't really expect any revenue sooners in 2025, and 2026 is probably our best bet, probably in the back half of 2026, I think is more realistic, because these are long-cycle design businesses, it's a risk-averse customer base, and then also, as we think of just ability to manufacture, there's a fair amount of backlog on the Energon side that they need to get to, so it is a little bit of a belly full, but really it's driven by the customers' long design cycles, and also we talked about You know, kind of figuring out, well, what customers are we talking about?

Speaker Change: Got it. Um, thanks. Um, for you. You, you talked about some wins in AMD and, um,

Farouq Tuweiq: Yeah. If we think of our connector team and the Enercon team, they're both kind of winning on their own, I'd say, merit today. The joint wins, and we've seen some opportunities kind of cross the wall here and there. As a reminder, Jim, we've said we don't really expect any revenue synergies in 2025 and 2026. This is probably our best bet, probably in the back half of 2026, I think is more realistic because these are long cycle design businesses. It's a risk-averse customer base. Also, as we think of just ability to manufacture, there's a fair amount of backlog on the MRAC side that they need to get to. It is a little bit of a belly full, but really driven by the customers' long design cycles.

Speaker Change: Hey, maybe it may be still pretty early in in in where we are with this. But are you seeing, is there anything you can point to, in terms of, uh, sales synergies, as it relates to intercom? Or are these just wins separate from, from what your, your ultimate plans are to or drive more? So sales synergies with with this business,

Farouq Tuweiq: Also we talked about kind of figuring out, well, what customers are we talking about, right? For the Europeans, we need a little bit of a different playbook where we really kind of leverage some of our European manufacturing footprint to service those guys. I would say the market is just a long cycle design business. The good news is here, the teams on their own prerogative are seeing some nice wins.

Farouk Tewiq: Right. So for the Europeans, we need a little bit of a different playbook where we really kind of leverage some of our European manufacturing footprint to service those guys. So I would say it's it's, you know, we the market is just a long cycle design business. But the good news is here is the teams on their own prerogative are seeing some nice wins. Good.

Speaker Change: Yeah, so if we think of, you know, our our connector team and and and the Enterprise team, they're both kind of winning on their own. Let's say, Merit today, uh, The Joint wins, and we've seen some opportunities to cross the Wall here and there. But as a reminder, Jim, we had said, we don't really expect any Revenue, Sooners in 2025 and and 2026 is is probably our best bet. Probably in the back. Half of 26, I think is more realistic because these are long cycle, design businesses. It's a uh risk averse customer base. Um, and then also, uh, as we think of just ability to manufacture, uh, there there's a fair amount of backlog, um, on that side that that they need to, uh, get to. Um, so it is uh, a little bit of of a belly full, but really, it's driven by the customers alongside design Cycles. Um, and also we've talked about, um, you know, kind of figuring out. Well, what customers are we talking?

James Ricchiuti: Good. Last question from me, just on commercial air. Again, if I heard you correctly, Lynn, it sounded like you had some nice growth in that part of the business. What are you seeing there, and what kind of expectations do you have as you look out beyond the quarter in that part of the business?

Speaker Change: About right. So for the Europeans, uh, we need a little bit of a different Playbook, where we, uh, uh, really kind of Leverage, some of our European manufacturing footprint to service those guys. So, I would say it's, it's, uh, you know, we the market is just a long cycle designed business, but the good news is here is the teams on their own prerogative are, are seeing some nice wins?

Lynn Hutkin: Last question from me, just on commercial air. Again, if I heard you correctly, Lynn, it sounded like you had some nice growth in that part of the business. What are you seeing there and what kind of expectations do you have as you look out beyond the quarter in that part of the business? Yeah, so Jim, on commercial air, if you recall in Q1 it was just under $13 million, in Q2 it was $20.5 million, so nice sequential growth there. You know, I think the outlook for commercial air is still robust. We do tend to see a bit of, you know, patchy ordering patterns, if you will, in that business.

Speaker Change: Good. Um, last question from me um just on Commercial are um again if I heard you correctly Lynn it sounded like you had some some nice growth in that part of the business. What are your what are you seeing there? And you know what, kind of expectations do you have as you look out beyond the quarter and that that part of the business?

Lynn Hutkin: Jim, on commercial air, if you recall, in Q1, it was just under $13 million. In Q2, it was $20.5 million. Nice sequential growth there. I think the outlook for commercial air intent is still robust. We do tend to see a bit of patchy ordering patterns, if you will, in that business. Will it be the exact same level as Q2? Unclear at this time, but we do expect it to be robust.

Lynn Hutkin: So will it be the exact same level as Q2? You know, unclear at this time, but we do expect it to be robust.

Speaker Change: Yeah. So Jim on Commercial are, uh, yeah. If you recall in q1, it was just under 13 million in Q2, it was 20.5 million. So nice sequential growth there. Uh, you know, I think the outlook for commercial air and 10, it's uh, still robust. Um, we do tend to see, um, a bit of, you know, patchy ordering patterns, if you will, in that business. Um, so will it be the exact same level as Q2, you know, unclear at this time, but we do expect it to be robust.

James Ricchiuti: Thanks a lot.

Jim Raschutte: Thanks a lot.

Thanks a lot.

Operator: The next questions are from the line of Greg Palm with Craig-Hallum Capital. Please proceed with your questions.

Craig Palm: The next questions are from the line of Craig Palm with Craig Hallam Capital. Pleasure to see you. Yeah, good morning. Thanks. And congrats on the results. Going back to the last call that that 8 to 10 million of, you know, so called paused revenue coming out of China, how much of that was recognized specifically in the quarter and the assumption that, you know, the entirety gets, you know, recognized over the course of Q3, whatever wasn't in Q2? Yeah, so we took a look at that, Greg, and it was about two-thirds of it ultimately got shipped in the second quarter, and the balance is expected to go out in the third quarter.

Greg Palm: Yeah, good morning, thanks. Congrats on the results. Going back to the last call, that $8 to 10 million of so-called paused revenue coming out of China, how much of that was recognized specifically in the quarter? Is the assumption that the entirety gets recognized over the course of Q3, whatever wasn't in Q2?

The next questions are from the line of Greg Palm with Greg Helm Capital. Please receive your questions.

Lynn Hutkin: We took a look at that, Greg, and it was about two-thirds of it ultimately got shipped in Q2, and the balance is expected to go out in Q3.

Greg Palm: Yeah, good morning. Thanks uh, in in, congrats on the results. Um, going back to the last call that that 8 to 10 million of, you know, so-called paused uh, Revenue coming out of China. How much of that was recognized specifically in the quarter and the, the assumption that, you know, the entirety gets, you know, recognized over the course of Q3 or whatever it was. And in Q2

Lynn Hutkin: We took a look at that, Greg, and it was about two-thirds of it ultimately got shipped in Q2, and the balance is expected to go out in Q3.

Greg Palm: Okay. Farouq, I think you made a comment at the end of your prepared. You said, expect sequential growth for the remainder of the year. Are you saying you're expecting sequential growth in the December quarter, in Q4 as well over Q3? I just wanted to clarify that.

Greg Palm: Yeah, so we took a look at that where I get and it was about 2/3 of It. Ultimately got shipped in the second quarter and the balance is expected to go out in the third quarter.

Craig Palm: Okay, and Farouk, I think you made a comment at the end of your prepareds, you said expect sequential growth for the remainder of the year. So are you saying you're expecting sequential growth in the December quarter in Q4 as well over Q3? I just wanted to clarify that. Yeah, that's a good question. I think when we just look at the second half, we expect more of us. I think, you know, that's a good point there, Greg. As a reminder, just for everybody on the call, usually Q1 is our weakest quarter of the year, and our strongest is usually Q2 and or three, but usually they're kind of the strongest quarter.

Farouq Tuweiq: Yeah, that's a good question. I think when we just look at H2, we expect more robustness. I think that's a good point there, Greg. As a reminder, just for everybody on the call, usually Q1 is our weakest quarter of the year, and our strongest is usually Q2 and/or Q3, but usually they're kind of the strongest quarter, or sometimes they move around a little bit. Then Q4 is somewhere in the middle. Where there's the Golden Week out in Asia and you get into the holiday seasons, and so on. We're not ready to sign up for sequential Q4 at this point. Obviously, we have to see the orders coming into Q3 to get a better read on it.

Speaker Change: Okay, and for Farooq I, I think you made a comment at the end of your prepared, uh, you said it expects sequential growth for the remainder of the year. So are you saying, You're Expecting sequential growth in in the December quarter in Q4 as well? Over over Q3, I just wanted to clarify that

Farouk Tewiq: Sometimes they move around a little bit. And then Q4 is somewhere in the middle, you know, where there's the golden week out in Asia, the holiday seasons, and so on.

Farouk Tewiq: So we're not ready to sign up for sequential Q4 at this point. Obviously, we have to see the orders coming into Q3 to get a better read on it. But we do expect, obviously, overall, by definition, right, given the strong number in Q3 that we guided to, and Q4 is divided by Q1, we expect the second half to be better than the first half overall. Yep, okay, that makes sense.

Farouq Tuweiq: We do expect, obviously, overall, by definition, right, given the strong number in Q3 that we guided to and Q4 is driven by Q1, we expect H2 to be better than H1 overall.

Greg Palm: Yep. Okay. That makes sense. I guess just sort of broadly speaking in terms of what you're seeing currently, how do you know that some of this is not pull-ins ahead of tariffs? What's your visibility levels to suggest that none of this is sort of pull-in orders to get ahead of something that's maybe coming?

Speaker Change: Of the year and our strongest is usually Q2 and or 3, but usually they're kind of the strongest quarter or sometimes they move around a little bit and then Q4 is somewhere in the middle. Um, you know, there's the golden week out in Asia in the United States of the holiday seasons, um, and and, and, and kind of and so on. So um, we're not ready to sign up for sequential Q4 at this point. Um, obviously we have to see the orders coming into Q3 if you get a better read on it. But uh, but we do expect obviously overall by definition, right? Given the strong number in Q3 that we got it to and Q4 q1. We expect H the second half to be better than the first half. Overall,

Craig Palm: And I guess just sort of... Broadly speaking, in terms of what you're seeing currently, I mean, how do you know that some of this is not pull-ins ahead of tariffs? Like, what's your visibility levels to suggest that none of this is sort of pull-in orders to get ahead of something that's maybe coming? I mean, listen, if we're to look at one singular order somewhere, that sure, I mean, we could see that, but it's not a pervasive thing that we've seen. The other thing I would keep in mind, right, as we said, is we got really good bookings in the quarter.

Yep. Okay. That that, that, that that makes sense. And I guess just sort of

Farouq Tuweiq: Listen, if we're to look at one singular order somewhere that sure, we could see that, but it's not a pervasive thing that we've seen. The other thing I would keep in mind, Greg, as we said, is we got really good bookings in the quarter. Just by definition, you're going to be beyond these deadlines that got placed. As we looked at July, we also continued to see robustness in the bookings, which would be beyond the, let's call it, moving deadline of tariffs, whatever it is now. Also when we look at where it's coming from, it's coming from really all parts of the business. Also if you remember, our revenue that we talked about on the last call, roughly 10% of that from the previous year was kind of China, but we're seeing it across the business.

Speaker Change: Broadly speaking in terms of what your your scene currently. I mean, how how do you know that? That some of this is not, you know, pull lens ahead of tariffs like, what's your visibility levels to suggest that none of, this is sort of pulling orders to get ahead of, you know, something that's maybe coming.

Farouk Tewiq: So just by definition, you're going to be beyond these deadlines that got placed. And as we looked at July, we also continued to see robustness in the bookings, which would be beyond the, let's call it, moving deadline of tariffs, whatever it is now. And also, when we look at where it's coming from, it's coming from really all parts of the business. And also, if you remember, our revenue that we talked about on the last call, roughly 10% of that from the previous year was kind of China, but we're seeing it across the business. The other thing I would say on the tariff commentary is when we look at the tariff levels today and kind of where they're shaking out at, I would say the market has digested that, so it's no longer the boogeyman in the room like when it was in the hundreds in terms of tariffs.

Speaker Change: I mean, listen, if we're to look at 1 singular order somewhere that sure, I mean we we could see that but it's not a pervasive uh, thing that we've seen. The other thing I would keep in mind Greg, as we said is we got really good. Bookings in the quarter. So just by definition, you're going to be Beyond these deadlines that I got placed. And as we looked at July, we

Speaker Change: Also continued to see robustness in the bookings, which would be beyond the let's call it, uh, you know, moving deadline of tariffs, whatever it is now.

Farouq Tuweiq: The other thing I would say on the tariff commentary is, when we look at the tariff levels today and kind of where they're shaken out at, I would say the market has digested that. It's no longer the boogeyman in the room like when it was in the hundreds, in terms of tariffs. I think the market has recognized that. I think they're okay with these lower levels of tariffs. We're seeing it come from different parts of our business. It's not just people that are usually kind of exposed to Chinese tariffs. That's where the orders are coming from. It's much more pervasive than that.

Farouk Tewiq: I think the market has recognized that. I think they're okay with these lower levels of tariffs, and we're seeing it come from different parts of our business. It's not just people that are usually going to be exposed to China tariffs, and that's where the orders are coming from. It's much more pervasive than that.

Lynn Hutkin: Just to add to that, Greg, we did survey the global customer service team, who would have their finger on the pulse there, to see if there were pull-ins, right? In order for someone to actually have something pulled in from its regular scheduled ship date, they would need to put in that request that would go to our customer service department. We did not have any material input from that survey as well.

Lynn Hutkin: And just to add to that, Greg, we did survey, you know, the global customer service team who would be kind of have their finger on the pulse there to see if there were pull-ins, right? In order for someone to actually have something pulled in from its regular scheduled ship date, they would need to put in that request. That would go to our customer service department. So, and we did not have any, you know, material input from that survey as well. I would caveat the answer by saying there's a handful of primes, for example, in the U.S.

Speaker Change: So, uh and also when we look at where it's coming from, it's coming from really old parts of the business. Uh, and also if you remember our Revenue that we talked about in in uh, on the last call, roughly 10% of that kind of from the previous year, was kind of China, but we're seeing it across the business. The other thing I would say, on the Tariff commentary is, um, when we look at the Tariff levels today and kind of where they're shaking out at, I would say, the market has has digested that so it's no longer the Boogeyman in the room like when it was in the hundreds, in terms of tariffs. So I think the market is recognized that, uh, I think they're okay with these lower levels of tariffs and we're seeing it come from different parts of our business. So it's not just, you know, people that are usually kind of exposed to sheriff and that's where the orders are coming from. It's it's much more pervasive than that.

Speaker Change: And just to add to that, uh, Greg we did survey, uh, you know, the the global customer service team. Uh, who would be kind of have their their finger on the pulse there, uh, to see if there were pull-ins right in order for someone to actually have something pulled in from its regular scheduled ship date. They would, they would need to put in that request, that would go to our customer service department. So, um, and we did not, we did not have any

Greg Palm: Okay. Yeah, appreciate that color. Last one for me, A&D, which has become the biggest, most important end market. You covered commercial aerospace well, but in terms of defense, and maybe this includes Enercon or outside Enercon. Can you remind us either programs, end markets, applications? I know it's broad-based, but is there anything that you have maybe outsized exposure to in the defense side specifically?

Speaker Change: You know material uh input from from that survey as well.

Speaker Change: Okay, yeah, appreciate that color. And last 1, you know, for me, you know, AMD which is, you know, become the biggest most important and Market you covered commercial Aerospace. Well, but in terms of defense, and maybe this is includes undercon or outside. Undercon, just can you remind us like what, you know, either programs and markets applications? Like what, what do you have? I know it's broad-based, but is there anything that you have maybe outsized exposure to and the defense side specifically,

Farouq Tuweiq: I would caveat the answer by saying, there's a handful of primes, for example, in the US and in Israel, right? Is there a technical customer concentration? Sure. Really what matters is the program concentration, right? When we look at the program level at a broader, let's call it Bel Fuse A&D, I don't think there's kind of a singular high level of concentration. It's a pretty diverse program business. It's not like a commercial air where there is some concentration, right? It's a pretty diverse business.

Farouk Tewiq: and in Israel, right? So is there a technical customer concentration? But really what matters is the program concentration, right? So when we look at the program level at a broader, let's call it Belfuse A&D, I don't think there's kind of a singular kind of high level of concentration. So it's a pretty diverse program business. So it's not like a commercial air where there is some concentration, right? So it's a pretty diverse business. Got it.

Greg Palm: Got it. You have exposure to missile defense, I guess where does that sort of stack up in terms of programs or?

Speaker Change: I mean, I I would say cavity on the answer by saying, you know, there's a handful of primes, for example in the US and in Israel, right? So, is there a technical customer concentration? Sure. But really, what matters is is the program concentration, right? So, when we look at the program level at a, at a, at a broader, uh, let's call it belt, use a and d. I, i, i don't think there's, um, there is kind of a singular, uh, kind of high level of concentration. So it's a pretty diverse program, um, uh, business. So so it's not, you know, it's not like a commercial are where there is, you know, some concentration, right? Uh, so so it's a pretty diverse business.

Craig Palm: But you have exposure to missile defense, I guess, where does that sort of stack up in terms of, you know, programs or... Missile defense in total, I would say, not sure we added that all up, but I would say we're generally heavier lever towards munitions. And generally, I would say things that fly, we obviously do other things as well, but just general munitions and planes is kind of where we're on average leveraged. Got it. All right. Appreciate all the color. Thanks. Thank you.

Farouq Tuweiq: Missile defense in total, I would say, not sure we added that all up, but I would say we're generally heavier levered towards munitions. Generally, I would say things that fly. We obviously do other things as well. Just general munitions and planes, is kind of where we're on average levered.

Speaker Change: Got it it but you you have like you have exposure to missile defense. I guess how, where does that sort of Stack Up in terms of you know, programs or

Speaker Change: Missile defense in total. I I I I would say not sure. We we added that all up, but I would say we're generally heavily heavier lever towards munitions.

Greg Palm: Got it. All right. Appreciate all the color. Thanks.

Farouq Tuweiq: Yeah.

Speaker Change: Got it. All right. Appreciate all the caller. Thanks.

Operator: Thank you. The next questions are from the line of Luke Junk with Baird. Please proceed with your questions.

Luke Young: The next questions are from the line of Luke Young with Baird. Hi, good morning. Thanks for taking the questions.

Luke Junk: Hi, good morning. Thanks. I'll take my questions. Farouq Tuweiq, maybe hoping to start with the Q3 guidance. Beat the high end this quarter, obviously at the midpoint, you're implying a few million of sequential improvement into Q3, but you were at that high end. It'd be another 7 points of growth into the Q3. Where should we think that upside leverage is in the model? Is it networking or should we think it's more broad based, I guess I'm gearing to your comments about the orders being robust overall, I don't know if there's any book-to-bill context you could give us also. Thank you.

Speaker Change: Thank you. The next questions are from the line of Lucian with beard. Please receive your questions.

Luke Young: Ruth, maybe you're hoping to start with the third quarter guidance. So, beat the high end this quarter, obviously. At the midpoint, you're implying a few million of sequential improvement into 3Q, but you were at that high end. There'd be another seven points of growth into the third quarter.

Farouk Tewiq: Just where should we think that upside leverages in the model? Is it networking, or should we think it's more broad-based, I guess, than gearing to your comments about the orders being robust overall and I don't know if there's any book-to-bill context.

Speaker Change: Hi, good morning. Thanks for taking the question. Um, Ruth maybe hoping to start with the um, the third quarter guidance. So beat behind this quarter. Obviously, at the midpoint you're implying a few million of sequential Improvement into 3Q, but you were at that high end. It'd be another 7 points of growth into the third quarter. Just where should we think that upside leverages in the model? Is that networking or should? We think it's more broad-based? I guess in Gering to your comments, about the orders being robust overall? And I don't know if there's any book to build context so you could give us also. Thank you.

Lynn Hutkin: Hi, Luke, it's Lynn. As we look to Q3, it's really continued strength in aerospace defense and then the rebound in networking and the distribution channel. If we're looking at Q2 to Q3 and potential growth drivers sequentially, it would really be more in the areas of networking and distribution coupled with strong defense. I think the range is to take into account the potential for more intra-quarter turns. They're still not at the level that they were at historically, but we did definitely see an improvement this quarter from where they had been. Depending on the level of intra-quarter turns, turning back on that kind of is the broader range on the higher side.

Farouk Tewiq: Hi, Lucas. So as we look to Q3, I mean, it's really continued strength in. Aerospace Defense. And then the rebound in networking and the distribution channel. So if we're looking at Q2 to Q3 and potential growth drivers sequentially, it would really be more in the areas of networking and distribution. coupled with strong defense. And I think the range is to take into account the potential for more intra-quarter turns. So they're still not at the level that they were at historically, but we did definitely see an improvement this quarter from where they had been. So depending on the level of intra-quarter turns turning back on, that kind of is the broader range on the higher side.

Speaker Change: Hi, Lucas Glenn. Uh, so

Speaker Change: Strength in. Um,

Speaker Change: Aerospace defense.

Speaker Change: And then the rebound in networking and the distribution channel. So if we're looking at Q2 to Q3 and and um, potential growth drivers sequentially,

Speaker Change: Uh, it would really be more in the areas of networking and distribution.

Speaker Change: Coupled with, with strong defense. And I think the the range is to take into account the potential for more intra quarter turns. So there there's still not at the level that they were at, uh, historically, but but we did definitely see an improvement this quarter from from where they had been. So, depending on the, the level of inter quarter turns, uh, turning back on that, that kind of is the the broader range on the higher side.

Luke Junk: Okay. That's helpful. Thank you. Maybe taking a step back, just bigger picture, I'm thinking of the efforts you've taken in terms of salesforce-led efforts, be it leadership, be it the incentive structure, and just the timing of starting to see some of that bear fruit relative to your longer design cycles and the sales cycle. Farouq Tuweiq, maybe if you just give us a snapshot of some of the progress markers that you're seeing as of midyear here that maybe aren't obvious in the business, from the outside looking in, but maybe contribute later this year into 2026.

Luke Young: Okay, that's helpful, thank you.

Farouk Tewiq: Maybe taking a step back, just bigger picture, I'm thinking of the efforts you've taken in terms of Salesforce-related efforts, be it leadership, be it the incentive structure, and just the timing of starting to see some of that bear fruit relative to your longer design cycles and the sales cycle. Bruce, maybe if you could just give us a snapshot of some of the progress markers that you're seeing as of mid-year here that maybe aren't obvious in the business from the outside looking in, but maybe contribute later this year into the future. Yeah, I think given the diversity of our business geographically in markets and SKUs, I think it's hard to say this thing did exactly this thing.

Farouq Tuweiq: Yeah, I think, given the diversity of our business geographically in markets and SKUs, I think it's hard to say this thing did exactly this thing. And then we have had so many shots on goal that we're seeing the outcomes of that. For example, one of the comments you mentioned, Luke, was around the commission structure. We initially put that in place back in 2024. Then we modified it and enhanced it heading into 2025. The results of I think maybe some of the wins that we're seeing is probably a little bit of modification on the incentive structure, really starting out last year. As we also think around just setting targets and pushing out surprise and getting after things a little more efficiently, I think that mindset and then the we play to win type attitude, we're seeing that come through.

Speaker Change: Okay, that that's helpful. Thank you. Um, maybe ticking a step back, just bigger picture. Um, I'm thinking of the efforts you've taken in terms of Salesforce, so that efforts be it leadership, be it the incentive structure and just the timing of starting to see some of that bare fruit relative to your longer design Cycles, in the sales cycle through, maybe you can just give us a snapshot of some of the progress markers that you're seeing as of mid year here, that maybe aren't obvious in the business uh, from the outside looking in but maybe contribute later this year into uh, into 26.

Farouk Tewiq: And we have had so many shots on goal that we're seeing the outcomes of that. So for example, one of the comments you mentioned, Luke, was around the commission structure. So we initially put that in place back in 2024, and then we modified it and enhanced it heading into 2025. So the results of I think maybe some of the wins that we're seeing is probably a little bit of modification on the incentive structure, really starting out last year. As we also think around just setting targets and pushing out surprise and getting after things a little more efficiently, I think that mindset and then the we play to win type attitude, we're seeing that come through.

Farouq Tuweiq: Also remembering that for the sales folks to win, you have to be able to produce things in a cost-efficient manner. When we look at a facility footprint, we started that work maybe 2, 3 years ago at this point, where we've been investing a lot in CapEx and automation the last 2 years in 2023 and in 2024 to automate our factories and lean into more lean type concepts. We're seeing the benefits of that. If you have a sales team that's heading and shooting in the right direction, we have a manufacturing team that's doing great in terms of manufacturing effectively, but also procurement is very important, right? We got to make sure that we're procuring things at a good price point, especially places in our legacy power and our Magnetic Solutions group, right?

Farouk Tewiq: But also remembering that for the sales folks to win, you have to be able to produce things in a cost efficient manner. So when we look at the facility footprint, we started that work maybe two, three years ago at this point, where we've been investing a lot in CapEx and automation the last two years, in 2023 and in 2024, to automate our factories and lean into more lean type concepts, we're seeing the benefits of that. So if you have a sales team that's heading and shooting in the right direction, we have a manufacturing team that's doing great in terms of manufacturing effectively, but also procurement is very important, right?

Speaker Change: Yeah. I I think uh given the diversity of our business geographically in markets and skus. I think it's hard to say this thing did exactly this thing. So and then we have had so many shots on goal that we're seeing the, the, the outcomes of that. So, for example, 1 of the comments, you mentioned Luke was around the commission structure. So we initially put that in place back in 2024, um, and then we modified it and, and, and enhanced it heading into 2025. So, you know, the results of of, I think maybe some of the Windsor we're seeing is, is probably a little bit of modification on the incentive structure. Uh, really starting out last year. Um, as we also think around just setting targets and pushing out certain products and getting after things, a little more efficiently I think that mindset. And then the the the the the the the the we play to win uh as I've added to the we're we're seeing that come through but also remembering that, you know, for the sales folks to win

Speaker Change: You have to be able to reduce things in in in a cost efficient manner. So when we look at the facility footprint we started that work maybe 2 or 3 years ago at this point where we've been investing a lot in capex and Automation in the last 2 years in 2023 and in 2024 to automate our factories and lean into, uh, more lean Tech Concepts, we're seeing the benefits of that. So if you have a sales team that's heading in shooting in the right direction, we have a manufacturing team that's doing.

Farouk Tewiq: We got to make sure that we're procuring things.

Speaker Change: Rates in terms of uh manufacturing effectively but also procurement is very important, right? We got to make sure that we're procuring things.

Farouq Tuweiq: We want to make sure we're getting things at a decent price point so we can make our margins. That's also good. As we think, quite frankly, on the executive team compensation realignment, 2023 was the first year where we really set out clear-revenue and EBITDA targets for the team to hit, and now we're in our year 3 heading into 2025. As we look at the ranges of what drove this, I think it's an amalgamation of these things. I would say it's a robustness. It is a team effort. It's an orchestra, whether it be from customer service to sales to R&D to manufacturing to procurement, everything matters. I think that's kind of the mindset we're leading with. I'm generally not a fan of one trick ponies, because if that goes the other way, then you may get burnt.

Speaker Change: At a good price point, especially places in our, in our like Legacy power, and magnetics group, right? We want to make sure we're getting things at a decent price point so we can make our margin. So that's also good. Um, as we think quite frankly on the executive team compensation realignment, 2023 was the first year where we really set out clear um um revenue and even dot targets for the team to hit. And now we're in our year, 3 heading into 2025.

Farouk Tewiq: So I would say it's a robustness, it is a team effort, it's an orchestra, whether it be from customer service to sales to R&D to manufacturing to procurement, everything matters. And I think that's kind of the mindset we're leading with. So I'm generally not a fan of, you know, one trick ponies because if that goes the other way, then you may get burnt. I think what I like about it is the swelling of team effort to win. We're not perfect and we got room to go and get better. But we like what we're seeing. And obviously, I think some of the outputs of what we're seeing today is that work that we've seen in the last few years.

Farouq Tuweiq: I think what I like about it is the swelling of team effort to win. We're not perfect, and we got room to grow and get better. We like what we're seeing, and obviously, I think some of the outputs of what we're seeing today is that work that we've seen in the last few years.

That we're leading with. So I I I'm generally not a fan of, you know, 1 Rick ponies, because if that goes the other way there you may get burnt. I think what I like about it is the swelling of team effort, to to win, we're not perfect and we got we got room to grow and get better. Uh, but but we like what we're seeing and obviously I think some of the outputs of what we're seeing today is the that work uh, that we've seen in the last few years.

Luke Junk: Appreciate the color. I'll leave it there. Thank you.

Luke Young: Appreciate the color. I'll leave it there.

Speaker Change: Uh, appreciate the color. I'll, I'll leave it there. Thank you.

Farouq Tuweiq: Thank you.

Speaker Change: Thank you.

Operator: Our next question is from the line of Theodore O'Neill with Litchfield Hills Research. Please proceed with your questions.

Hendy Sassanto: Our next questions are from the line of Theodore O'Neill with Litchfield Hills Research. Please receive your question. Great, congratulations on the good quarter. Lynn, you sort of touched on this, but Connectivity Solutions was a... fairly significantly sequentially, Q1 to Q2. Were the trends any different there than what you're seeing here? So from Q1 to Q2 versus sequentially. I'm sorry, versus year, sequentially versus year over year. Right, so we did see, so if we're looking year over year, there was an increase in commercial air, not as pronounced, versus the sequential increase from Q1. So commercial air in Q2 last year was just over $15 million.

Theodore O'Neill: Yeah, great. Congratulations on the good quarter. Lynn, you sort of touched on this, Connectivity Solutions was up fairly significantly sequentially Q1 to Q2. Were the trends any different there than what you're seeing year-over-year?

Our next question is from the line of Theodore O'Neal. Let's let you feel health research, please receive your questions.

Speaker Change: Yeah, great. Uh, congratulations on the good quarter, uh, uh, Lynn, you sort of touched on this, but connectivity Solutions was up.

Speaker Change: Fairly significantly sign.

Speaker Change: To Q2 where the transit meet different there than what you're seeing here over a year.

Lynn Hutkin: From Q1 to Q2 versus sequentially? That's the question, Theo?

Theodore O'Neill: I'm sorry. Sequentially versus year over year.

Speaker Change: So, from q1 to Q2 versus sequentially.

Speaker Change: That I'm sorry versus your sequentially versus year-over-year.

Lynn Hutkin: Right. If we're looking year over year, there was an increase in commercial air, not as pronounced, versus the sequential increase from Q1. Commercial air in Q2 last year was just over $15 million, versus just under $13 million in Q1 of 2025, and then the $20.5 million in Q2 2025. I guess looking year over year, we did see a drop in their distribution sales. While we saw distribution waking up in power and magnetics during the quarter, we did see a slight setback in connectivity distribution. That was also a driver from Q2 last year to Q2 this year.

Speaker Change: So we did see. Um, so if we're looking year-over-year, um there was an increase in commercial are not as pronounced. Um, versus the, the sequential increase from q1, so commercial air and could you last year was, uh, just over 15 million?

Lynn Hutkin: versus 213 million in Q1 of 25 and then the 20.5 million in Q2 of 25. I guess looking year-over-year, we did see a drop in their distribution sales.

Speaker Change: versus, uh, just under 13 million in q1 and 25 and then the 2025 million in in q25,

Lynn Hutkin: So while we saw distribution waking up in power and magnetics during the quarter, we did see a slight setback in connectivity distribution, so that was also a driver from Q2 last year to Q2 this year. .

Speaker Change: Um, I guess looking year-over-year, we did see a um, a drop in their distribution sales. Uh, so while we saw a distribution waking up in power and magnetics during a quarter, we did see a slight, uh, step back and connectivity distribution. Um, so that that was also a driver from Q2 last year to Q2 this year.

Theodore O'Neill: Lynne-

Lynn Hutkin: Does that answer the question, Theo?

Lynn Hutkin: And on depreciation, it's almost doubled year-over-year, what's happening. So with the acquisition of Enercon in November, we brought on all of their P&E, and we had the step-ups, so depreciation and the amortization went up quite a bit year over year just because of the new tangible and intangible assets that we brought onto the book. Thanks very much.

Theodore O'Neill: Yes, sure. On depreciation, it's almost doubled year over year. What's happening there?

Speaker Change: And and Liz does that answer those questions?

Speaker Change: Yes, sure. And um on depreciation, it's up. It's almost doubled year-over-year but

Speaker Change: It's um, what's happening there?

Lynn Hutkin: With the acquisition of Enercon in November, we brought on all of their PP&E, and we had the step-up. Depreciation and the amortization went up quite a bit year-over-year just because of the new tangible and intangible assets that we brought onto the books.

Theodore O'Neill: Okay, thanks very much.

Speaker Change: So with the acquisition of intercon in November we, we brought on their, you know, all of their PPE. And we have the the step-ups uh so depreciation and amortization went up quite a bit uh year-over-year. Just because of the uh the new tangible and intangible assets that we brought onto the books.

Okay, thanks very much.

Operator: Thank you. Our final question is from the line of Hendi Susanto with Gabelli Funds. Please proceed with your questions.

Hendy Sassanto: Our final question is from the line of Hendy Sassanto with Gabelli Funds. Please receive your questions.

Speaker Change: Thank you.

Hendi Susanto: Good morning, Farouq and Lynn. Congratulations on strong results.

Speaker Change: Our final question is from the line of hendy Santo with gabelli funds. Please receive your questions.

Hendy Sassanto: Good morning, Farouk and Lynn. Congratulations on strong results. Thank you. Farouk, my first question is about the market recovery and inventory rebuild. Some sales will go toward inventory rebuild. On the other hand, like short lead times may not necessitate inventory rebuild to be done like in the past. And there's also some uncertainty on the tariff that may drive customers to be more cautious when it comes to building inventory. So let's say like in 2025, you will see some benefits on inventory rebuild. But at the same time, like how should we manage our expectation and what are some guideposts so that we are not overly optimistic because inventory rebuild may take some time?

Lynn Hutkin: Thank you.

Farouq Tuweiq: Thank you.

hendy Santo: Good morning, farro and Lynn congratulation on strong results.

Speaker Change: Thank you.

David Brown: Farouq, my first question is about the market recovery and inventory rebuild. Some sales will go towards inventory rebuild. On the other hand, short lead times may not necessitate inventory rebuild to be done like in the past, and there's also some uncertainty on the tariff that may drive customers to be more cautious when it comes to building inventory. Let's say, in 2025, you will see some benefits on inventory rebuild, but at the same time, how should we manage our expectation, and what are some guideposts so that we are not overly optimistic because inventory rebuild may take some time?

Hendi Susanto: Farouq, my first question is about the market recovery and inventory rebuild. Some sales will go towards inventory rebuild. On the other hand, short lead times may not necessitate inventory rebuild to be done like in the past, and there's also some uncertainty on the tariff that may drive customers to be more cautious when it comes to building inventory. Let's say, in 2025, you will see some benefits on inventory rebuild, but at the same time, how should we manage our expectation, and what are some guideposts so that we are not overly optimistic because inventory rebuild may take some time?

hendy Santo: Um,

hendy Santo: A question is about the market recovery and inventory. We build some sales will go toward inventory. Rebuild on the other hand, like short lead times may not necessitate inventory, rebuild to be done like in the past. And there's also some uncertainty on the Tariff, that may drive customers to, um, to be more cautious when it comes to building inventory. So, let's say, like in 2025, you will see some benefits on inventory rebuild, but at the same time, um, like how should we manage our expectation and, uh, what are some guideposts? So that we are not offering the optimistic because in terms of we build may take some time.

Farouq Tuweiq: Yeah. I would say, Hendri, that's a good question. I think maybe a couple of things is our industry, and Bel Fuse obviously has been in this trough for a very long time. The industry's been in there roughly 2 years. When we look at that 2-year context compared to history, that is a very long time. Now that we're coming out of a 2-year prolonged trough cycle, I think we do see customers being overall more cautious and hesitant. Quite frankly, we potentially thought growth would have come maybe end of last year or where we would have seen those really low inventory levels. We are operating from a customer universe where people are just more hesitant given tariffs and geopolitical concerns and the world we come in. At the same time, in a normal cycle, people are not necessarily building inventory, right?

Farouk Tewiq: Yeah, I would say that's a good question. I think maybe a couple of things is Our industry, and Bell Fuse obviously, has been in this trough. for a very long time. Let's call it maybe, the industry's been in there roughly two years. And when we look at that two year context compared to history, that is a very long time. So now we're coming out of a two year prolonged trough cycle I think we do see customers being overall more cautious and hesitant. And quite frankly, we potentially thought growth would have come maybe end of last year or where we would have seen those really, really low inventory levels.

Speaker Change: question um I think maybe a couple of things is is is our industry and Belleview is obviously has been in this in this uh trough

Speaker Change: For a very long time. Let's call it. Maybe an industry has been in there, roughly 2 years, and when we look at that 2-year context compared to history, that is, you know, a very long time. Um,

Farouk Tewiq: So we are operating from a customer universe where people are just more hesitant given tariffs and geopolitical concerns and the world we come in. But at the same time, in that normal cycle, people are not necessarily building inventory, right? They are trying to order things to make products and get it out the door. And it's true you build up some inventory along the way, but when inventory builds up, usually the system is not working appropriately.

Speaker Change: So and now where we're coming out of a 2-year, prolonged trough cycle. Um, I think we do see customers being overall more cautious and hesitant and and quite frankly, we we potentially thought growth would have come maybe end of last year or or is where we would have seen those really really low inventory levels.

So we are operating from a customer Universe where people are just more hesitant to give given tariffs and geopolitical concerns and the world we come in.

Farouq Tuweiq: They are trying to order things to make products and get it out the door. It's true, you build up some inventory along the way, but when inventory builds up, usually the system is not working appropriately. Now we're heading into, hopefully, the other side of the cycle where the system is working a little more appropriately.

Farouk Tewiq: So now we're heading into hopefully the other side of the cycle where the system is working a little more appropriately.

Speaker Change: And sure you build a simulator on the way but when inventory builds up, usually the system is not working properly. So now we're heading into hopefully the other side of the cycle where the system is working a little more appropriately.

Hendi Susanto: Okay. My next question is, the setback due to special Chinese supplier situation that has started several quarters ago, can we revisit that, whether it is now fully behind?

Farouk Tewiq: Okay, and then my next question is, the setback due to special Chinese supplier situation that has started like several quarters ago, can we revisit that whether it is now fully behind? I mean, it's fully, I'd caution with that because generally the Chinese supplier, we were selling, you know, some consumer end markets and, you know, and distribution. So with the weakness in that channel, it was a little bit, you know, obviously we lost the revenue and that hurt. So step one to rebuild that lost revenue is to find alternative suppliers. And the team has done a really good job at finding alternative suppliers.

Speaker Change: Okay. Um, and then my next question is um the setback. Do you choose special Chinese supplier situation. Uh that has started like double quarters ago. Can we revisit that whether it is now fully behind

Farouq Tuweiq: I'd caution with that because generally, the Chinese suppliers, we were selling some consumer end markets and distribution. With the weakness in that channel, it was a little bit. Obviously, we lost the revenue, and that hurt. Step 1 to rebuild that lost revenue is to find alternative suppliers, and the team has done a really good job at finding alternative suppliers. I think we've replaced, from a supplier concentration perspective, a lot of those SKUs. Now the question becomes is can we put those in the market and get them designed in, and therefore get the orders going? I would say the team has done a great job at rebuilding the supplier base. I would say that we're definitely more robust on that business as we look out to the year-end here, and we think we might recover some of that revenue.

Farouk Tewiq: So I think we've replaced from a supplier construction perspective, a lot of those skews. Now the question becomes is, can we put those in the market and get them designed in and therefore get the orders going? I would say the team has done a great job at rebuilding supplier base. I would say that we're definitely more robust on that business as we look out to the year end here. And we think we'll, you know, we might recover some of that revenue. So we'd like where we're going. And I would say they're a little bit ahead of schedule in terms of what we thought they'd rebuild that business.

Speaker Change: I mean, it's fully. I i, i, i i i caution with that because the generally, the Chinese supplier, we were selling, you know, some consumer and markets and, you know, uh, and distribution. So with the weakness in that channel, um, it was a little bit, uh, uh, you know, obviously we we lost the revenue and that hurt. So Step 1 to rebuild that lost revenue is to find alternative suppliers and the team has done a really good job at finding alternative suppliers. So I think we've replaced from A supplier of concentration perspective, a lot of those skus. Now, the question becomes is can we put those in the market and and get them designed in and therefore get the orders going?

Farouq Tuweiq: We like where we're going, and I would say they're a little bit ahead of schedule in terms of what we thought they'd rebuild that business into.

Lynn Hutkin: Hendi, just to add to that Chinese supplier, the revenue related to that, dropped off in May of last year. If you're looking at the year-over-year headwinds, that is behind us for the comps will be apples to apples starting in Q3.

Lynn Hutkin: And just to add to that, that Chinese supplier, the revenue related to that dropped off in May of last year, so if you're looking at the year-over-year... Edwins, that is behind us for the comps, will be apple to apple, gardening to grazing.

Speaker Change: I would say the team has done a great job of rebuilding supplier base. I would say that we're definitely more robust on that business. Um as we look out to the year end here and we think well you know we might recover some of that Revenue so we'd like where we're going and I would say they're a little bit ahead of schedule in terms of what we thought they'd rebuild that business into

Speaker Change: And Andy just to add to that, that Chinese supplier, the revenue related to that, uh, dropped off in May of last year. So if you're looking at the year-over-year,

Hendi Susanto: Yeah. Farouq and Lynn, would you talk about the pricing trends this year, whether there is some pricing decline embedded in the contract, and what is the usual timing of pricing trends, or whether or not you are able to sustain your pricing?

Speaker Change: That that is behind us for the comps will be able to avoid starting to increase.

Farouk Tewiq: And Farouk and Lyn, would you talk about the pricing trends this year, whether there's some pricing decline embedded in the contract and what is the usual timing of pricing trend or whether or not you are able to sustain your pricing? Yeah, I think that's a very big question, Hindi. And I think I want to caution, we're not, you know, kind of like more of a semi cycle where, you know, there's so much inventory and every price is down. Our products are designed in and it really depends what end market we're talking about aerospace defense. You know, we tend to think of that as a price flat price up environment, right?

Speaker Change: Um, and um, would you talk about the pricing Trends this year? Uh, whether whether there's some

Speaker Change: Pricing decline embedded in the contract and what is the usual timing of pricing Trends, or whether or not, you are able to sustain your pricing.

Farouq Tuweiq: Yeah, I think that's a very big question, Hendy, and I think I want to caution we're not kind of like more of a semi cycle where there's too much inventory and everybody prices down. Our products are designed in, and it really depends what end market we're talking about. Aerospace and Defense, we tend to think of that as a price flat, price up environment, right? Some of the other areas, sure, could be a price flat, price down. Overall, I would say we haven't really seen the pricing pressures. Generally pricing pressure has come in better markets where you will have also new products launching hopefully with higher margins. We tend to think about pricing, we're in maintenance mode versus we're heading through growth or not everything gets priced down, like maybe doing more of a semi side of things.

Yeah, I I think that's a very big question, Hindi. And I think

Speaker Change: We're not.

Farouk Tewiq: Some of the other areas sure can be a price flat price down. But overall, I would say we haven't really seen the the pricing pressures, but generally price pressures come in better markets, where you will have also new products launching, hopefully with higher margins. So we tend to think about pricing, we're in maintenance mode, versus, you know, we're heading to growth or, you know, and everything gets priced down, like maybe doing a more of a semi side of things. So for us, obviously, we're always mindful of it, you know, we'll have customers ask for it, sure.

Farouq Tuweiq: For us, obviously, we're always mindful of it. We'll have customers ask for it, sure, but we're also launching new products at higher margins, but we got some good defense business that is a usual price flat, price up environment. It's a big question for us given the diversity of our SKUs and pricing powers.

Speaker Change: So like more of a semi cycle where, you know, there's so much inventory and every price is down, our products are designed in and it really depends what End Market. We're talking about Aerospace defense. You know, we we tend to think of that as a price flat price of the environment, right? Uh, some of the other areas, sure. It would be a price flat price down. But overall I would say, we haven't really seen the the, the pricing pressures. But generally press the pressure is coming better markets, where you will have also new products launching hopefully with higher margins. So we tend to think about pricing, we're in maintenance mode, uh, versus you know, we're heading to growth or or, you know, and everything gets priced down like maybe doing a more of a semi uh uh uh side of things.

Farouk Tewiq: But we're also launching new products at higher margin, but we got some good defense business that is a usual price flat price up environment. So it's a big question for us given the diversity of our SKUs and pricing power.

Speaker Change: So for us obviously we're always mindful of it, you know, we'll have customers ask for it sure but we're also launching new products at higher margins but we got some good defense business. That is a usual price flat price up environment. So it's a big question for us given the diversity of our skus and pricing powers.

Hendi Susanto: Thank you, Farouq. Thank you, Lynn.

Hendy Sassanto: Thank you, Farouk. Thank you, Lynn. Thanks, Cindy.

Farouq Tuweiq: Thanks, Hendi.

Speaker Change: Thank you farro. Thank you, Lynn.

Lynn Hutkin: Thanks, Hendi.

Operator: Thank you. At this time, I'll turn the call back to Farouq for closing remarks.

Speaker Change: Thanks Cindy.

Farouk Tewiq: At this time, I'll turn the call back to Farouk for closing. Thank you everyone for joining our call here this morning where we are excited about the results that came in here and look forward to connecting with you again as we go through the second half of the year. I appreciate everyone's time and have a good day.

Speaker Change: Thank you at this time, I'll turn the call back to Farooq for closing remarks.

Farouq Tuweiq: Thank you everyone for joining our call here this morning, where we are excited about the results that came in here, and look forward to connecting with you again as we go through H2 of the year. Appreciate everyone's time, and have a good day.

Farooq I: Uh, thank you everyone, for joining our call here this morning. Uh, where we are excited about the results that came in here and look forward to, uh, connecting with you again, as we go through the second half of the year. Uh, appreciate everyone's time and have a good day.

Operator: This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator: This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Speaker Change: This will conclude today's conference. May disconnect your lines at this time and thank you for your participation and have a wonderful day.

Q2 2025 Bel Fuse Inc Earnings Call

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