Good afternoon. My name is Trip Caldwell. I'm with the banking team at Wells Fargo, and we'll be hosting a fireside chat this afternoon with Ashish Chand, who is President and CEO of Belden. He's been in the role 18 months or so, almost now, but no stranger to Belden as a longtime executive with over 22 years with the company. Welcome back to the conference, Ashish. Thank you. Thanks for being here. Just quick highlights: Belden is a $3.8 billion market cap company based in St. Louis, about $2.5 billion of revenue, a global business serving a range of enterprise, industrial, and communications markets. Before digging into company-specific things, maybe, Ashish, just a quick summary in your view of the state of the economy globally, markets you're serving, just high-level observations about where we are. Yeah. I think, you know, the economy, obviously, there are things that are going very well, but there is an underlying fragility which comes from uncertainty in certain markets, right? But at the same time, if you look at the U.S. or much of Western Europe, there is this reindustrialization, reshoring phenomenon that's driving investments in talent, in technology, in capacity, right? So all of that is obviously, there's a shortage of labor, so you see technologies like AI coming up that can help. There's more automation. We benefit from that. There's obviously a need to upgrade infrastructure, including broadband services, ports, roads, airports, et c, et c. So that's good. But there is an underlying fragility that comes from geopolitical uncertainty. And I think as companies operating in the space, we just need to stay tuned, right? There's obviously, there are benefits of being global, but that has to be balanced. So I think in balance, I feel that the U.S. economy is particularly strong. Actually, for a long time, we were underappreciated for being long on the U.S. It's 65% of our business is in the Americas, and we were told that, hey, you don't have enough in East Asia. And now people say, hey, that's great, the fact that you're less exposed. So I think both can be true. I think it's what you make out of those market opportunities and how we use this period to transform ourselves. We'll talk more about that. Obviously, there's an interest in India. India is an emerging market. We've, of course, invested there for the long term, but I think it still has some stages to go through before it gets ready for us. Good. Yeah. Well, now turning to Belden, a company that's evolved quite a bit over your tenure there, and I guess maybe just some perspective from you on how that evolution has unfolded, and now you're focused on data networks, reduced a lot of the complexity in the portfolio. How have you ended up here? And I guess how do all these pieces fit together today? Yeah. So I'm going to take you back maybe more than just my tenure. So over 120 years, Belden's been making all sorts of high-quality communications products. And these products were used by a number of different solutions providers and their solutions, like air conditioning control or factory automation or security systems, etc, et c. And then about 10 years ago, there came a point in time broadly in markets where people said, hey, if these systems talk to each other, it'll be great. So for example, if my employee attendance system recorded fewer employees, then the air conditioning system should be turned down automatically or something like that, right? Or there was another problem where people said, hey, I have a big infrastructure project. There are too many networks here, and if I have cybersecurity issues, it'll be difficult. I'd rather have one combined backbone that I can protect more easily. So how do we get convergence here? So they started going to these system vendors and saying, can you converge? And they said, well, we talk different languages. We have different protocols. We are not really connected. And so customers started coming to companies like Belden and saying, you are part of the building blocks, and we see you as a common factor across these different subsystems. Can you help us? And initially, Trip, we started doing that more on a one-off basis, but it was a lot of effort. You had to really start every project from scratch, and it was very customized, not sustainable, not scalable. But then about five years ago, we said, well, there's a big opportunity here. If we can become the company that fetches data, sorts it, cleans it, scrubs it, and then presents it to the different software or hardware applications that customers have in mind, and we can therefore become that middleware company of hardware and software together, then that's a great opportunity because data is growing faster than networks, right? We started that process first in our industrial automation segment because customers were more vocal. Think about a factory that has a Siemens PLC, a Rockwell PLC, some other software for HVAC, et c, et c. They also have labor shortages. They're trying to combine all this data. They don't have the capital to invest in new capacity. They want more productivity. We kind of come in there and say, we can do all this plumbing for you, get all the data on a single screen, and help you make decisions. It sounds simple. It's actually quite messy and quite complicated, right? So that transformation has really helped us. We are now being appreciated by customers as a network and data solutions company. We obviously can provide the infrastructure to move data around, like the roads, but we can also supply the traffic management to make sure that there's order and there's a meaningful outcome. So I know it's a kind of, I've tried to pack a lot of journey into a few sentences here, but that's the change at Belden that we've been trying to drive. In an evolving marketplace, how do you find that Belden wins today? Why do customers choose Belden over any specific competitor in your different verticals? What's the differentiator? Yeah. So first of all, I think people still see us as a very high-quality manufacturer of those products we built our solutions out of, right? So cables, connectivity, copper, fiber, switches, routers, protocol converters, all kinds of different software, security software, network management software, so all of that. So they know that a Belden product is high quality. I think the other thing is when you think about this data integration challenge, right, where people have disparate sources of data and they need to feed different destinations of data, this challenge needs a combination of hardware and software. Some of our competitors have attempted this only with software, and they say, hey, if you can fetch the data to us, we can give you amazing insights, okay? Some other competitors have tried only the hardware, and they said, we can fetch the data, but they don't end up doing the value-added stuff. So by combining this, I will say this, we are not the best software company or necessarily the best hardware company, but as a combination, we are fairly differentiated, and that's what allows us to stay ahead in that game. I think the other thing is just the way we engage with customers has changed a lot. Actually, we had to build a different selling process. So today, we go to customers and we don't ask them, how do you want to move your data from point A to point B? We ask them, what will you do with your data once it gets to point B? So the first few people that typically Belden sends to a customer, they're trained not to use the word Belden. They go in and they try to understand the KPIs of the customer and what is the workflow and the data flow that would support those KPIs improving. At that stage, our chances of winning are the same as pretty much anybody else's. But then if the customer likes that, we send in the solutions consulting team who will build a solution. Frequently, that path gets them to one of our Customer Innovation Centers because some of these solutions are complex. They're difficult to imagine. So people want to see them and feel them and test them. So they come into the Customer Innovation Center. We mock up the environment. It's a validation lab. Typically, people who've done a proof of concept, that win rate now suddenly shoots up from like 30% to 75%-80% because that's a lot of commitment from their side also. So we have changed the way we go to market, and I think a lot of people imagine, Trip, that we've simply changed all the products we sell. Actually, that's not true. I think we've maintained the same high-quality products. Of course, we are innovating in them and changing them all the time, but we've not changed the product categories, but we've changed the way we go to market and we've changed the partners we work with, and that's been really, it's been very gratifying, actually. It sounds nice, this journey from product-centric to solutions, but how have you done it? Through what investments have you made? And on the human capital front, where are you on the journey? Because it's not easy to take a product salesperson and turn them into a solutions. Yeah. Yeah. So I think there were three steps, frankly. First, and let me tell you the steps we took in the industrial automation business, and I'll talk about how do we bring this to enterprise. But on the industrial automation side, when I first started my role as segment leader, we had nine different business units with nine P&Ls and nine teams. So imagine that. A lot of G&A, not enough sales and marketing or R&D spend that our customers really would have liked, and a lot of difficulty in customers kind of bringing stuff together. So in fact, if anything, we were forcing customers to build their own solutions using our Lego blocks, right, versus putting a Lego set together. So then we combined those P&Ls. We created a single P&L structure. We had to make a big investment in sales and marketing, as you said. Literally, just about a third of our original salespeople survived in this new role. We built new kinds of specializations around Digital Automation Consultants. The people who first go in and they don't talk about Belden; they're called Digital Automation Consultants. We had Solutions Consultants. We had Solutions Architects. The trick was choose a few verticals where the data problem is more acute. So power transmission and distribution, especially with energy transition and smart grids, data was becoming more important, right? Consumer packaged goods because of lack of labor or material handling, right? There are safety issues and you want to be careful with labor and so on and so forth. Mass transit, right? Very critical. Any data error in a mass transit system can cause injury, right? It's a big deal. So we chose certain markets. We actually chose seven markets at that point. We said, for each of these markets, we will build a hardware and software backbone, which actually, if you look at different customers in those markets, the same backbone can be repurposed. The data map for automotive manufacturing company one and company two is the same. You may have to cut the cloth a little differently. So we got scalability. So that was the second thing, right? So first was reinvesting in R&D, S&M, reducing G&A, building more scalability by choosing a few markets, upgrading the sales force, as you just talked about. And then I think it became very important for us to have the show and tell centers, the CICs. We made a fairly large commitment because if people couldn't actually test it, it was becoming, I mean, if you were running a nuclear power plant and I said, hey, I have a new network solution for you, it's a little tricky to try it without testing it. So those were the fairly significant investments. It took us 3-4 years. The good thing was, Trip, that customers responded. Our gross margins in industrial automation went up close to 800 bps over that period. So it was good. People sometimes ask me if the same product, when it's sold as a solution, do we charge more? It's not that direct, right? Because in a solution, we charge for a bundle. It's a bundle of hardware, software, and services, right? But yes, when we do solutions, our margins are higher. And that's kind of how it's been working. We've been reinvesting a lot in that. So yeah, we had to make some massive changes in how we were thinking. In fact, even our CFO, he's not here today. He's in Asia, but even the redirect process changes when you do transactions versus longer contracts. Right. Right. Very helpful. Maybe changing gears just a little bit. The topic of destocking is one that's been ever present here today. Everyone seeing it across the board in industrial markets. What are you hearing from channel partners, machine builders, end users about the state of the destocking phenomenon? And how much visibility do you really have? Yeah. So let me first say that we have less visibility than we thought we had, right? And we learned that lesson. We took some medication in Q3 last year and we were surprised with the rest of the market. I think the destocking phenomenon is a little different by vertical market, Trip. So if I look at, for example, broadband end markets, the usage patterns have been fairly consistent. Our MSO customers, if you look at their added subscribers, if you look at the network upgrades that they report on their quarterly calls, as expected, it's essentially an inventory overhang issue in that market, right? But if I look at some of the industrial markets, it changes a little bit. There are certain markets like EVs, which got overheated. They bought a lot more raw material than they needed, right, because they were worried. We see that in some parts of semiconductor, although you can argue AI is growing, but certain other parts, we see that. On the other hand, power transmission and distribution, it's understocked. There's more demand, right? People are saying, hey, for electrification, especially as we build more data centers and manufacturing plants, et c, we need more power distribution. So there it's kind of the opposite. If I look at buildings, which is a third kind of big market, commercial real estate had already been in a longer-term decline, so people hadn't over-inventoried over there. But even there, there are certain markets like hospitality where projects got a little delayed. So I think if you ask me where are we in that destocking cycle, based on history, these cycles take about 4-6 quarters. However, each destocking cycle is different, so I don't want to put a stake in the ground just yet. I think we are halfway through based on history, more in some markets, less in some markets. But I can say this, from Belden's perspective, we've seen stability in the last couple of quarters. We haven't seen any incremental bad news. So we feel that it's heading in the right direction. Stability is a theme you have mentioned the last couple of quarters and you've emphasized in sort of public discussions. What are you doing in this kind of environment to position the business for either protecting share or gaining share when the market feels a little bit uncertain? Yeah. No, absolutely. So we've said that we will deliver incrementally better margins of 30%, decrementals of between 20%-30%. We've delivered 25-ish% decrementals in the recent quarters. So I think there are two things here. One, we want to balance our investment. So our gross margins have generally been sticky and I think slightly better than the competitive set, which allows us to, while delivering the right incremental EBITDA margins, we've been able to, so we have not cut all our investments, but we have focused a lot more, right? So there's more investment right now in building our data integration software, Horizon. There's more investment going into enterprise solutions, go-to-market right now. One thing we did, by the way, as part of our response to this situation, Trip, but I think it also made sense generally, we combined the go-to-market teams for two segments. We did that on 1st January 2024. The benefit is, apart from some cost management, is that now, for example, when we have people who are going to a typically industrial market like mass transit, they're also able to position the networking products that are required in the stations, apart from the trackside control automation. And similarly, when somebody goes to a hotel, they're able to position some of the backend automation required for waste disposal and alarm management, et c, versus only the in-room kind of cabling, right? So we've taken a broader view of this. We've obviously been thoughtful about also how do we deploy capital, right? So if you've noticed, we've been very focused on tuck-ins, focused on technology gaps rather than trying to get out of our space. So I think this cycle actually has made us stronger from a solution standpoint. I think we've already taken some share from some of our competitors because they don't offer solutions. So think about this. In the enterprise segment, today, when we go to a customer, first of all, we can leverage the active products we have on the industrial side, and we can leverage the talent and the process we've built for solutions. Our competitors don't have that. So when they go to a hospital and we go to a hospital, we say, "We can give you a full data solution for healthcare," and they say, "We can give you a LAN solution," right? And I'll give you an example of how this is, why this is important. You can go to a hospital today and say, "Hey, I brought a patient with me. I want to get an ECG," and the receptionist says, "Have a seat. It's going to take 30-60 minutes." The reality is she doesn't know. She doesn't know where the mobile ECG machine is right now. She doesn't know if it's charged. She doesn't know what's the queue for it because all this data is not in the same system. But we can make that happen, right? Or if you go back the next day and say, "How's my patient doing?" They have to call somebody who has to call somebody. But actually, right in our CIC here in Chicago, we have a system that shows all the vitals of the patient on one screen because it's all digitized devices measuring the vitals. You just have to bring them together. So it's interesting how people are kind of responding to that here again. The last thing I'll say here on the destocking is, yes, there is a destocking phenomenon, but I also think there is a positive reshoring phenomenon. And I think at some point, the reshoring phenomenon will exceed the destocking phenomenon, right? So we are looking forward to that. Yeah. And I want to kind of double-click on that a minute. It's another theme I've heard in a number of discussions today, onshoring, reshoring, what have you. How are you in practice experiencing that today? And maybe some commentary on to what degree are mega projects and other stimulus that's available? How are you participating in that today? Yeah. I think the biggest challenge to reshoring is the lack of skilled labor. So today, if you really think about it, nobody really wants to have a tough factory job, right? People are looking for more value-added jobs. So one response to that is to make those jobs more value-added by putting more technology and automation into those facilities. So if I for one second, if I don't talk about the mega projects, right? But on a day-to-day basis, a lot of our customers are people who are coming and saying, "My management team wants more output from my existing facility. I don't have labor. Can you help me?" And I don't have capital to invest in a new plant, but I can make investments and improve this plant, right? This is a great project for us because we actually don't care if you are building a new house or you're retrofitting your old house. We'll give you the plumbing for the data either way. In fact, sometimes in the old house, it's even more complex, right? Because you have all sorts of legacy systems you need to connect. So that's good for us. And we are getting a lot of those kinds of projects where we're helping productivity, safety, et c, et ca. And then, of course, there are these larger mega projects, right? You think of semiconductor large factories, you think of EVs, you think of large data centers, and then you think of broadband. And I think in all these projects, it takes a little longer versus the other dynamic we see for the smaller retrofits. But these projects are obviously helping us. We had recently announced, I think it was last year, we announced a three-year contract worth $30 million for a warehouse automation project. It was one of those mega projects, right? So I think I would like to see the reshoring as 50%-60% driven by the smaller projects, which we find very, very interesting, and maybe 30%-40% driven by the mega projects. Right. Yeah. But still early innings of exposure to mega projects. I think it's 10, 20 years here onwards, right? That's great. It'll change, right? There'll be more and more technology coming into these projects, especially with AI. I think there'll be some changes to how they're built out. You mentioned M&A, so maybe we take a minute just to talk about the recent acquisition of Precision Optical. Can you tell us a little bit about the business, how it fits, what gaps it fills, etc? Yeah. So Precision, they are very focused on the broadband transceiver kind of market, plus they have made some recent investments in passive optical networks. The way Precision has been working is they've taken these transceivers, which are basically optoelectric devices. On the one hand, they convert optical to electrical. On the other hand, they convert electrical to optical, right? That's the way to think about it. So if you are a broadband provider, you have a data center, you have a transceiver number one, and that converts the signal to optical, and then you have a long channel. It could be 100 miles of fiber cabling, boxes, et c, et c. And then it reaches some kind of field terminal where it's reconverted back, right? So you have a second transceiver there. So Precision would supply those two transceivers. But they had a lot of software built into those transceivers. For example, you can have 48 channels for transceivers, and they had a tunable transceiver where instead of keeping 48 different types of transceivers, you only keep one type, but you use a software app to tune it to 1-48 as you need, right? So it reduces the inventory burden on the user. Now, the problem that Precision had is they were supplying these transceivers, but they were not able to supply everything in the middle. They didn't have it. And for them to build that business would have been very difficult. We have most of those things in the middle, but we didn't have the transceivers. The problem, therefore, was that we were not taking part in some of the design discussions on the channel. We were responding to the RFP or the RFQ versus actually saying, "Hey, how do we design this channel for low loss throughput?" Now with both, we are able to go into the CTO's office and have that technology discussion saying, "Here are the two ends. Here's everything in the middle. How do we optimize this?" So really, that's the big opportunity with Precision. So we're very happy with that. The other thing is geographically, they were limited to North America or a part of North America, but there's no reason why we can't take them to Europe and Asia. Yeah. Maybe just a comment on broader M&A efforts and how you are sort of filtering the opportunity set. What is it you're looking for and how should this audience think about the scale of your ambition there? Yeah. So the one thing I'll say as a disclaimer is previously, Belden's done some very transformative kind of M&A. That hasn't worked out well for us. And we cleaned house and that's in history. I think since that point in time, what we've said is for each of the vertical markets that we want to focus on, we've built out what is called a reference architecture. How will customers solve their data problems today and in the future, let's say in power transmission and distribution or in healthcare? And then when we look at those reference architectures, we say, "Hey, there are some certain missing pieces. Should we get them through M&A or should we build them ourselves or should we get them through partnership?" So like a 5G antenna, we might partner with somebody because there's a lot of capital to be deployed in making that, right? But something which is on the critical path like transceivers, we would rather buy. So that's the filtration process. We've increased the size of our M&A team, Trip. Actually, we've more than doubled it recently because more opportunities seem to be coming out in the market. Last couple of years, it was a little quieter. And we have a fairly healthy funnel. I think you should expect us to keep looking for deals like Precision that are in that, I don't know, $100 million-$200 million category, small enough for us to tuck in, but large enough that they come with some scale and process. So specifically, enterprise solutions, one of the ways for us to improve our gross margins there is to improve fiber and connectivity content through M&A. The second, of course, is to do more solution sales, right? So for the most part, I think our industrial portfolio is fairly complete. So it'll be smaller, very specific deals there. But that's the approach we would take. So roadmap-driven, solutions-focused tuck-ins. Very helpful. I've sort of backed into a discussion about capital allocation and how you are thinking about priorities looking forward here over the next couple of years. So no real change, I would say, from what we've stated previously. I think our first priority, obviously, is on organic growth. Obviously, we are measuring that opportunity in terms of what's going on with destocking, et c. So we've been thoughtful. Second, there are the tuck-in deals that we've talked about already. And then third, given our current stock price, I think there's room for us to keep doing measured repurchases, and we have been executing on that. Our net leverage is 1.5-ish. It's going to go up a little bit once we pay for Precision, but we'll recoup most of that back in the next couple of quarters. So we'll be back to 1.5. So we have room to keep deploying capital, right? Then maybe just the last minute or two, financial framework. You've got second quarter guidance revenue of $565-$580, adjusted EPS $1.30-$1.40. How does that square with the sort of $8 a share target out there for 2025 and the path from here to there? So I think if you go back to when we announced the $8 target, we had said approximately 12% improvement in EPS. The first 2-3 years of that, we actually went faster than 12%. We did 15%, right? So we thought we might be slightly early. Now we think we'll be just on time. The way I would think about that, Trip, is that obviously, from Q3 2023 till now, there has been a destocking impact. If you expect that to start normalizing in the latter half and then you analyze, let's say, Q4 EPS, you start getting closer to that range. But also then you have to think about the capital we've deployed. So Precision itself, I know there are some models out there that have said about $0.35-$0.40 of EPS accretion. So I think that's the path to it. It's the combination of the capital deployment and the more normalized annualization. At this point in time, we don't want to get ahead of the skis, so we are only guiding for the next quarter, right? So we don't want to necessarily go out and say how the full year will look. But like I've said, there have been encouraging signals. Things are stable. There's no bad news. That's incremental. So we feel good about the $8. Great. We've got a minute or so left. Any questions from the audience?