Belden Inc

NYSE:BDC

Ladies and gentlemen, thank you for standing by. Welcome to this morning's Belden Reports First Quarter 2025 Results. Just a reminder, this call is being recorded. [Operator Instructions]

I would now like to turn the call over to Aaron Reddington. Please go ahead, sir.

Good morning, everyone, and thank you for joining us for Belden's First Quarter 2025 Earnings Conference Call. With me today are Belden's President and CEO, Ashish Chand; and Senior Vice President and CFO, Jeremy Parks. Ashish will provide a strategic overview of our business, and then Jeremy will provide a detailed review of our financial and operating results, followed by Q&A. We issued our earnings release earlier this morning and have prepared a slide presentation that we will reference on this call. The press release, presentation and transcript of these prepared remarks are currently available online at investor.belden.com.

Turning to Slide 2 in the presentation. During this call, management will make certain forward-looking statements in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For more information, please review today's press release and our most recent annual report on Form 10-K. Additionally, during today's call, management will reference adjusted or non-GAAP financial information. In accordance with Regulation G, the appendix to our presentation in the Investor Relations section of our website contains a reconciliation of the most closely associated GAAP financial information to the non-GAAP financial information we communicate.

I will now turn the call over to our President and CEO, Ashish Chand.

Thank you, Aaron, and good morning everyone. We appreciate you joining us. Let's turn to Slide 4 for a summary of our major accomplishments during the first quarter and key messages I would like to highlight. As a reminder, I will be referring to adjusted results today. First, let me congratulate our team on another solid quarter and a great start to the year. We once again executed well and delivered results ahead of expectations.

For the first quarter, our revenue and earnings per share both exceeded the high end of our guidance, as our solutions transformation continues to progress. Revenue totaled $625 million, up 17% compared to the prior year, and earnings per share came in at $1.60, up 29% compared to prior. Profitability was strong with gross margins at 39.8%, up 140 basis points year-over-year. Adjusted EBITDA margins came in at 16.6% for the quarter, up 80 basis points year-over-year.

Before I move on, I want to quickly point out that gross margins of nearly 40% are the highest we have achieved since reshaping the business with our strategic solutions transformation in 2020. Performance like this highlights the benefits of our solutions transformation and gives a roadmap for future opportunities, as solutions expand across the organization.

Next, demand for the quarter was steady, with performance modestly ahead of expectations given the heightened uncertainty. Overall, our business grew organically by 11% for the quarter, led by strength in the Americas, which saw organic growth of 14%. Orders were up modestly sequentially for the first quarter and up 18% compared to the prior year. We finished the period with a book-to-bill of 1.05, compared to 1.03 in the prior year period.

Finally, our business continues to generate meaningful cash flow, and we are deploying capital consistent with our capital allocation priorities. Trailing 12 month free cash flow was strong at $220 million, aligned with our expectations. With a ample free cash flow, our team continues to invest in high-return opportunities beneficial to shareholders. We continued buying back our stock, deploying $100 million to repurchase 1 million shares so far this year.

Our balance sheet remained strong, allowing us to enhance shareholder returns in multiple ways. We will continue looking for acquisitions that support our solutions transformation and, when appropriate, return capital to our shareholders through buybacks.

Now please turn to Slide 5. I'd like to share a customer success story that underscores the long-term value of our relationships by illustrating how solutions open the door for deeper engagement with customers and the power of our broad product portfolio, which spans industrial and enterprise applications. Today's example involves a long-standing solutions customer in the North American automated warehouse space. Our relationship began with deploying OT components, specifically, our industrial wireless products and applications to improve operational efficiency.

From the start, the customer saw immediate benefits to their most critical KPIs and was impressed with our team's expertise, capabilities, and product portfolio strength. As the partnership deepened, our solutions team continued identifying new ways to enhance their operations and drive meaningful improvements to KPIs through network infrastructure upgrades. The customer faced challenges with inconsistent physical infrastructure, which led to downtime, functionality gaps, and supply chain disruptions. In response, our team engineered a robust physical OT layer that complements the Belden products already in place.

After on-site validation of our solution, the customer was so confident in our capabilities that Belden has now been officially specified in their physical OT infrastructure. As the customer expands their footprint with new Automated Warehouse deployments across North America, we are well-positioned for ongoing and incremental revenue opportunities, which will be meaningful for our business. It's also worth noting that our initial engagement started with traditionally industrial products and has now expanded to include elements more commonly associated with enterprise environments. This new spec position and order illustrate the IT/OT convergence opportunity for which Belden is uniquely qualified to supply.

Combined with our industrial wireless products, our new order for copper cabling, fiber solutions, various connectors, and our IDF cabinets, positions us as a provider of a nearly complete end-to-end solution, helping to address our customers' most critical KPIs. This example highlights two important points. First, our solutions driven approach allows us to build strong, enduring customer relationships that lead to repeat business and strategic spec positioning.

Second, it enables us to deliver comprehensive, end-to-end solutions that draw on the full breadth of a product portfolio, a capability unique to Belden. As our solutions strategy continues to evolve, we expect to further bridge the gap between industrial and enterprise applications by offering unified, high-value solutions across both spaces. We're confident that our solutions provide superior value in the marketplace, and new and existing customers are increasingly seeing the positive impact on their operations as we grow and expand.

I will now request Jeremy to provide additional insight into our first quarter financial performance.

Thank you, Ashish. I will start my comments with results for the first quarter, followed by a review of our segments, a discussion of the balance sheet and cash flow, and finally our outlook. As a reminder, I will be referencing adjusted results today.

Now, please turn to Slide 6. Revenue for the quarter was $625 million, up 17% year-over-year, and exceeding the high end of our guidance of $620 million. Revenue was up 11% organically on a year-over-year basis, with Automation Solutions up 16% and Smart Infrastructure Solutions up 6%. Orders for the quarter were up modestly sequentially and up 18% year-over-year, with both segments exhibiting strong growth. Automation Solutions orders were up 22% year-over-year, and Smart Infrastructure Solutions orders were up 13% year-over-year.

Gross profit margins were 39.8%, increasing 140 basis points compared to the prior year. Margins in the first quarter were strong, reflecting both normal seasonal patterns and a favorable business mix. First quarter margins are typically higher due to segment mix, as our Smart Infrastructure segment is seasonally slower early in the year, helping lift overall margins. EBITDA was $104 million with EBITDA margins up 80 basis points year-over-year to 16.6%. Net income was $65 million, up from $51 million in the prior year quarter and EPS was $1.60, up 29% and above the high end of our guidance of $1.53.

Now, please turn to Slide 7 for a review of our business segment results for the quarter. Despite policy uncertainty, performance for our segments was slightly ahead of expectations. Revenue in our Automation Solutions segment was up 16% compared to the prior year period, with EBITDA margins of 20.9%, up from 19.5%. Orders in Automation Solutions were up 22% compared to the prior year with a book-to-bill of 1.09.

For the quarter, we saw strength in our more traditional industrial verticals, including Discrete and Process Manufacturing, which both achieved double-digit organic growth. From a regional perspective in Automation Solutions, we saw continued strength in the Americas and APAC. While EMEA was our slowest growing region, it did achieve organic growth for the quarter, a welcome improvement from the prior year.

Revenue in our Smart Infrastructure Solutions segment grew 17% compared to the prior year, with EBITDA margins of 11.4%, up from 11%. Orders in Smart Infrastructure were up 13% compared to the prior year, with a book-to-bill of 0.98. For the quarter, we saw strength in targeted verticals including healthcare, education, and hospitality. These verticals present a compelling opportunity for us going forward as we look to integrate our traditional industrial and enterprise businesses into a combined solutions offering.

Broadband revenue was up year-over-year, led by strength in fiber, which was up 9% organically. Our markets remain stable, with most customers taking a neutral stance in the short-term as they await greater clarity on policy decisions and resulting implications on supply chains and end demand.

Next please turn to Slide 8 for our balance sheet and cash flow highlights. Our cash and cash equivalents balance at the end of the first quarter was $259 million, compared to $370 million in the fourth quarter of 2024. Our cash position reflects typical seasonality and capital deployment towards share repurchases during the quarter. Our financial leverage was a reasonable 2.0 times net debt to EBITDA, consistent with our expectations.

We intend to maintain net leverage of approximately 1.5 times over the long-term; however, we will fluctuate from time to time as we pursue strategic opportunities consistent with our capital allocation priorities. For the trailing 12 months, our free cash flow was $220 million and 9% of total revenue. Year-to-date, we repurchased 1 million shares, further reducing our share count, which is now more than 10% lower than it was at the end of 2021. We currently have $240 million remaining on our repurchase authorization.

Going forward, we see the opportunity to continue deploying capital towards acquisitions and share repurchases. As our solutions offerings expand, our margins continue to strengthen, leading to increased cash flow. This steady flow of capital allows us to make strategic, high-return investments that further enhance our cash flow generating capacity. As a reminder, our next debt maturity is not until 2027, and all of our debt is fixed with rates averaging 3.5%.

Please turn to Slide 9 for our second quarter outlook. We have executed well amid ongoing challenges; however, our customers still face heightened uncertainty, as they navigate this rapidly changing environment. Assuming the continuation of current market conditions, revenues for the second quarter are expected to be between $645 million and $660 million, representing a 7% to 9% increase over the prior-year quarter. Adjusted EPS is expected to be between $1.67 and $1.77, representing an 11% to 17% increase over the prior-year quarter. We expect a tax rate of 17.5% in the second quarter and approximately 18% for the full year.

Finally, I want to quickly cover currently enacted tariffs as they relate to our guidance. First, it is important to highlight that our strategy for many years has been to produce within region across our business lines. This strategy served us well during COVID and has once again proven beneficial, as we navigate the current uncertainties. To date, we have taken a number of mitigating actions, including sourcing changes and pricing adjustments to offset the tariff impact. While the situation is ever changing, we want to assure you that we are on top of the complex environment and will adjust as needed.

That concludes my prepared remarks. I would now like to turn the call back to Ashish.

Thank you, Jeremy. To summarize, our first quarter performance exceeded expectations and set a strong foundation for the year ahead. Despite a dynamic and often unpredictable environment, our team executed with focus and consistency, delivering impressive results across the board. Organic growth came in at 11%, order growth reached 18%, adjusted gross margins were nearly 40%, and adjusted EBITDA improved by 80 basis points compared to the prior year. These results are especially noteworthy given current market conditions and reflect the success of our ongoing solutions transformation.

We are well-positioned to benefit from major global trends such as reindustrialization, digitization, and automation, trends we believe are still in the early stages. As we look towards the second quarter, our guidance implies that customers maintain a neutral posture, and we expect near-term uncertainty around trade policy to persist. That said, our long-term outlook remains optimistic. We continue to see meaningful upside once decision-makers have greater clarity.

In fact, we believe Belden is positioned to be a winner as this transition plays out. Whilst early phases often bring uncertainty and noise, companies like Belden that are well-aligned with the direction of change are best positioned to succeed. There are several reasons why we remain optimistic about the road ahead. First, orders remain steady, and we see promising signals of strength beneath the surface. Growth in key regions is healthy, particularly in the Americas and APAC and we believe that both Europe and China have likely bottomed, good news for our business.

Our end markets are also holding up well, with positive momentum in both our Discrete and Process manufacturing verticals. Second, after more than two years of contraction in global manufacturing PMIs, we're finally seeing signs of a recovery. U.S. manufacturing PMIs recently turned positive, and we're encouraged by Europe, as Germany's manufacturing PMIs edge closer to positive territory. These are early but positive indicators of a broader industrial recovery just around the corner.

Finally, we anticipate that a combination of key trends reindustrialization, automation, and the integration of IT/OT will have a positive impact on our business. As these dynamics gain momentum, we are strategically aligned to capitalize on them. The shift towards localized manufacturing will drive increased demand for automation, whilst the ongoing digitization of operations and IT/OT convergence will unlock new efficiencies and scalability. Our portfolio is purpose-built to support this transformation, and we believe we're uniquely equipped to support our customers as they grow and adapt to these

Evolving demands.

Our solutions transformation delivers results, drives incremental growth, and expands margins. With strong tailwinds from secular trends, and our continued push into innovative offerings, we see a significant runway ahead. We remain committed to operating the business with discipline and a focus on long-term value creation. Our capital allocation strategy is guided by the same principles, making thoughtful strategic investments and decisions that support our long-term commitments.

As outlined during our Investor Day, our long-term growth algorithm remains intact. We're targeting through cycle EPS growth of 10% to 12%, driven by mid to single-digit organic growth and steady margin expansion. Our progress in the first quarter and the opportunity we see ahead are testaments to our team's dedication and hard work. I'm proud of what we've accomplished and even more excited about what's to come. As we continue to execute our strategy, I have no doubt that we will reach new heights and create lasting value for all our stakeholders.

Finally, I want to take a moment to recognize the valuable contributions of our associates over the past quarter. Your efforts and commitment are greatly appreciated, and I thank you for your unwavering support as we transform Belden.

That concludes our prepared remarks. Operator, please open the call to questions.

[Operator Instructions] Our first question is from William Stein with Truist Securities.

First, Ashish, when I think about the changes that I think this administration wants to enable, namely more manufacturing in the U.S., it seems like Belden is very well positioned for that. And I wonder if you can comment as to whether you've seen incremental interest in -- in maybe reshoring, not just front shoring or nearshoring, but reshoring to the U.S. among manufacturers or perhaps the current environment has had the opposite effect and your customers and potential customers feel, I don't know, a bit trapped or unsure as to what to do given the changing policies. Any sort of comment clarifying this would be helpful.

Sure, Will. So I think it's more of the former. I think across our large customers, we see a lot more confidence about the long-term, especially in the U.S., bringing back more manufacturing capacity here closer to the points of consumption. And therefore, we see discussions around longer-term plans, this whole IT/OT convergence topic has been kind of pending for some time. People have talked about it for some time. This is kind of a catalyst here, Will, because if you were manufacturing offshore, the urgency around bringing IT and OT together was lower because you had cheaper labor and you were outsourcing a lot of that headache to somebody else.

Now as companies think about how do they manufacture in the U.S. with a lack of skilled labor, higher costs, they're really discussing this converged backbone solution with us. So we see a lot of interest in that. Our funnel for solutions has gone up. Now I will say in the near-term, there is some uncertainty around certain sectors thinking whether they will be able to continue friend shoring or not. Therefore, they're postponing certain decisions in the near-term. So -- but I think overall, the trends we see in terms of our discussions in terms of a funnel. And also, I think in terms of our initial bookings is that overwhelmingly, people are thinking about investing in IT/OT converged backbones to enable reshoring in the U.S.

Okay. As a follow-up, I'd like to ask about the book-to-bill in smart infrastructure, which was a little bit below parity. Can you maybe dig one level deeper? Was this in -- I forget if you still call it the smart buildings versus broadband? Between those 2, are you seeing noticeable strength or weakness in one or the other?

Yes. Let me take that, Will. So in terms of orders on a year-over-year basis, smart buildings orders were up about 8%. Broadband orders were up 18%. If you adjust for the acquisition that we did within broadband, I think orders were still up 12% or 13% within broadband. So I would say a little bit stronger in that business than in smart buildings.

Yes. The one thing I'll add here, Will, is whilst we are seeing the traditional smart buildings infrastructure is still a little slow. They're being still thoughtful about how they invest. We are seeing more and more cases, and we talked about one example today on the call, where we are able to take smart buildings products into our -- what we previously thought of as Automation Solutions. So for example, in material handling, for example, in mass transit. So we do expect that to keep improving in spite of the general environment. But yes, smart buildings has been a little quiet.

And our next question comes from David Williams with Benchmark.

And congratulations on the really solid execution here. Maybe kind of stepping back to Will's question just now. But on the reindustrialization, it clearly is a positive, and you talked a little bit about that. But is there a way maybe to quantify that the level or number of discussions and kind of the activity? I guess just trying to size how much the -- how much is being delayed and how much is actively ongoing in terms of maybe that potential to move back to the U.S.

Yes. I think, first of all, thank you. It's a little difficult right now to quantify from an exact bookings perspective. I will say this that within our overall sales funnel, we look at the portion that is related to these full solutions, especially around how we are focused on the reshoring of the infrastructure build here in the U.S. And that has gone up. It's like more in the high teens. We see that progressing pretty well. So I think there's a lot more discussion taking place now than there was even 6 months ago. So the leading indicators tell me that within the Americas, the solutions business should continue to grow in the high teens. But because of the short-term uncertainty and some friction, it's difficult to say exactly when that will land in terms of bookings.

Great. And then maybe secondly, just on the demand pull forward, do you feel like you're seeing a significant demand pull forward? Or is there any way to kind of think about what you're seeing there and maybe even into the second quarter or anything specific?

We haven't seen anything that's material here, Dave, because remember, our products and solutions are more engineered. They're not really impulse-driven or consumer type. I know there are certain markets where that has happened more on the consumer side, maybe on mobile technology, et cetera. But we haven't seen anything really when customers think about deploying welded solutions, they typically work through schedule. It's very well planned. Now we do see -- like I said before, we do see a lot more people coming and talking to us about, hey, if we had to do some things quickly, will you guys be able to support us as we go forward.

So while we haven't seen demand pull in, we've seen kind of interest pull in. More people are talking.

And our next question comes from Mark Delaney with Goldman Sachs.

You have Aman Gupta on for Mark Delaney. I appreciate the color you gave on being in region for region and the tariff exposure. But could you maybe give a little more detail around what exposure you do have, if there is anything that's being done outside the U.S. that's coming into the U.S.? And how much of that have you been able to offset today? And how much longer would it take to offset the rest?

Yes. So I'll take that one. In terms of our exposures, our largest exposure right now in the U.S. is Mexico. But the majority of the products that we're importing from Mexico at the moment have exemptions under the USMCA. So I think we're well covered with respect to those imports. We don't manufacture anything in China for the U.S. We do have a couple of third-party suppliers that we utilize that do source products from China. But we are in a process right now of getting that sourcing changed or in rare cases, increasing prices where we need to with our customers to pass those costs on. So I think as you can tell from our guidance, the net impact is roughly 0 or neutral in the second quarter.

Appreciate that color. And as a follow-up, I know longer-term, you're still targeting that 10% to 12% EPS CAGR, but you had spoken previously to a goal of $8 in 2025. Any thoughts on where that stands? I know margins came in pretty strong in 1Q, but it sounds like some of that was maybe a bit of help from mix.

Yes. So we gave a detailed update on the path to $8 last quarter. I don't think we really have anything further to add at this point, and we're not guiding beyond the second quarter.

And we'll move to our next question from Rob Jamieson with Vertical Research Partners.

Congrats on the quarter. Just a couple of questions on margin. I wonder if you can talk a little bit more about the performance in the quarter between both segments. I mean, very strong from Industrial Solutions, but a little bit of a sequential step down in Smart Infrastructure. Just curious if there's anything outside of normal seasonality there and anything else that you can kind of provide some light on because it was a solid performance overall.

Yes. Hey, Rob, so agreed, the performance within Industrial, I think, was fairly strong. I think gross margins have held up very well in that business. And from a total company level, we get favorable mix in the first quarter because remember, seasonality disproportionately impacts the smart infrastructure business, which is lower margin. I think when you look at the particular segments, Smart Infrastructure in the first quarter, they have a larger drop in revenue from Q4 to Q1, which is really the main impact to their margins is just leverage on revenue. At the same time, we are continuing to make some targeted investments in that business. As Ashish said, we are working to accelerate solutions in that business and bring solutions into even some of our traditional industrial markets in a converged fashion. So we'll make investments, but the biggest impact sequentially from Q4 to Q1 is just leverage on volume.

And actually, just on the point on the combined sales force and what you're doing there. It sounds like the customer win that you highlighted, Ashish, was reflective of that decision that you made last year to combine the solution sales forces from both segments. Can you maybe expand on some of the learnings that the team had so far and how this may have already started to help the opportunity funnel for solutions as we look ahead?

Yes, Rob. So I think when we started this process, our ingoing hypothesis was that -- some of our customers will upgrade their entire IT/OT converged backbone infrastructure in one go. One of the learnings has been that it's -- that's kind of how it's going to work. It's going to be like a 2, 3-step journey. And typically, a lot of our customers are now saying that they want autonomy in their systems. So an example of an autonomous system would be where 2 different subsystems communicate with each other and without human intervention, a decision is made like a pipeline being shut down because the earthquake monitoring system detected a certain kind of a tremor or the air conditioning in a hospital emergency ward increasing because an accident was reported in the vicinity and people knew that the traffic to the emergency ward will increase. So it's stuff like that, which we think of as autonomous systems.

So people want that, but they also appreciate that it's a 2, 3-step journey to get there. And typically, it starts with, first, digitizing the operations, like that example we talked about on the warehouse automation. Then second is extending that whole data infrastructure to -- between IT and OT. And then third, bringing in some software capability to start orchestrating that data. And we had to kind of redesign a process as we reflected on that learning. And it's a little slower. It's not the big bang approach, but it's far more sticky. And we have a number of customers now where we have installed base positions where we are able to take them to steps 2 and 3 in that process. And this is going to be a big deal in the U.S., especially because there isn't a lot of skilled labor available both for manufacturing, but also for maintaining networks.

So we see a lot of traction here. We are being modest about it in terms of just not necessarily highlighting it all the time. But below the hood, there's a lot of interesting action going on.

And then just one last one on free cash flow, Jeremy. Another solid quarter. You've been making a lot of progress here the last couple of years. Just curious, anything that you're working on in terms of managing working capital and just kind of some puts and takes on just driving better conversion as we look ahead.

Yes. So we -- so I think we continue to try to find improvements in our supply chain and managing inventory. I know inventory turns were down a little bit sequentially. That's typical in the first quarter. But on a year-over-year basis, we had nice improvement in inventory turns. I think the key driver this year is going to be EBITDA growth and just responsible capital investment. So we're trying to be, again, very targeted in the investments that we make in manufacturing and R&D. But I think the key driver will be EBITDA on a year-over-year basis. But our goal right now is to continue to improve that free cash flow margin or free cash flow as a percentage of revenue. We were, I think, 8.5% a couple of years ago. Last year, we were a little over 9% and we're working to continue to move that closer to 10%, so hopefully, we will see some nice improvement in 2025 as well.

We'll move to our next question, Steven Fox from Fox Advisors.

Off of some of the stuff that you already talked about with the potential to benefit on U.S. reshoring. I was wondering, as we think about how that plays out in the future, which I think it's going to happen with or without tariffs anyway, but like what's the low-hanging fruit look like? I mean, Ashish, you talk about sort of what seemed like a multiyear process to sort of improving on your content at one customer. But what would be like sort of an initial reaction from customers? And how would it drive specific product sales for you guys? And I have a follow-up.

Sure. So Steve, I think the low-hanging fruit is essentially the first layer, which is the complete digitization of operations across multiple verticals. So whether it's in manufacturing, whether it's in hospitality, healthcare, process. Right now, if you look across the U.S., there's a lot of legacy infrastructure that is sometimes analog, sometimes it's a combination. They've come from different suppliers. They're not really on the same system. So that's the low-hanging fruit. And really, it's happening -- it started happening even before the whole tariffs discussion came up. But I think it's accelerated because everybody appreciates that whilst they might have some kind of a reshoring plus front shoring strategy, the reshoring element is 100% definite yes, and that part is going to happen. So that's what we are seeing right now.

I think the next step for some of these customers will be when they start combining that digitized OT with their IT. And some of our customers are already at that stage. So that's why we called it out. And I think the bulk of our customers are still at the stage 1 where they are digitizing operations.

Great. That's very helpful. And then for a follow-up, I was just curious, I saw -- I understand the numbers now on broadband, but any other color you can add on just how the broadband markets are tracking to date and your expectations for spending for the rest of the year?

Yes. So I think broadband has been -- they did well on a year-over-year basis. Across the board, I think we've seen a little bit of channel inventory digestion. So there's been that at play, too. But if you look at our customers, they have talked about continuing with their DOCSIS rollouts, those programs are fairly intact. There's been some talk about will there be release of BEAD funds, et cetera. Now remember, that was not really part of our 2025 model. We expect that, that program will continue with some modifications as early announcements come out of that space.

So I think in broadband, our goal is to continue increasing our fiber content. And then we know that whatever channel -- from an access perspective, whatever channel is required to get to the user, we will remain part of that. And as you might remember, Steve, we acquired Precision Optical that allows us to be more involved in the electronics portion of that full end-to-end channel that goes to the user. So that allows us more visibility. So yes, it's a little bit of a mixed bag, partly because of the channel destocking. But I think that phase is over now. And from here onwards, we should see steady growth.

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

Yes. Thank you, operator, and thank you, everyone, for joining today's call. If you have any questions, please contact the IR team here at Belden. Our e-mail address is investor.relations@belden.com.

Thank you, ladies and gentlemen. This concludes the call for today. You may now disconnect, and have a great day.