Good morning, and welcome to the Bel Fuse third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Jean Marie Young with Three Part Advisors. Please proceed. Thank you, thank you, Latonya, 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 law. Such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2023. 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 close 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 filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K for the fiscal year ended December 31st, 2022, 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 at the IR section of our website. Joining me on the call today is Dan Bernstein, President and CEO; Farouq Tuweiq, CFO; and Lynn Hutkin, Vice President of Financial Reporting and Investor Relations. With that, I'd like to turn the call over to Dan. Dan? Yes. Thank you, Jean, and thank you for joining us on our call today. We are pleased with our results for the quarter. We continue to execute our plan for growth and strategic improvement on profitability. As discussed over the past several quarters, the team has taken a multipronged and balanced approach to the way we do business in terms of customers we serve, products we sell, and markets we support, and doing it all in a most cost-efficient manner. Our third quarter sales continue to be healthy, driven by order patterns of our customers, whereby we saw different growth profiles across our diverse product offerings. We saw growth in certain markets such as defense, aerospace, eMobility, and rail that was offset in general industrial, premise wiring, and consumer. On the distribution side of the business, we see some pockets of growth. So however, the distribution channel continues to have elevated levels of inventory that have affected our new orders. As we look at our top-line trend, it's important to remember that we are an engineer-driven company first. We've been successful at supporting tomorrow's technology for over 70 years, and this is a testament to our ability to work closely with our customers' engineers. In developing the future products, there's a value associated with that. A few years ago, we were eager to support all customers at all costs, allowing us to engage in projects we felt were worthwhile pursuits, but which at times were less than great outcome for us. To be clear, our priority and focus will be aligned with customers who value the quality and technology of our products, and are not solely focused on price. We no longer have a problem walking away from these sales that fall below our gross margin requirements. It allows our engineers to work on more meaningful designs and open space in the factory floor to support our growing end markets, such as eMobility, medical, industrial, and rail. Our internal model in 2023 is building a better Bel, and this touches all areas of our business, HR, finance, product development, business development, procurement, and manufacturing. There isn't a single function or department within the organization that doesn't have an approved initiative to take place. Our collective actions have resulted in improved profitability and increased cash generation. This gives us financial flexibility to continue to explore various growth and capital allocation strategies, which could include a potential stock buyback, subject to market conditions, evaluation of acquisitions, and other strategic initiatives to support future growth of the company. As we approach our 75th anniversary on January 11, 2024, it's exciting to see the recent mindset and cultural shifts that have taken place internally, and the level of energy and dedication put forth by our global team as we deliver better value to our customers, shareholders, and associates. With that said, I'd now like to turn the call over to Lynn, for our financial update. Thank you, Dan. From a financial perspective, sales were fairly stable for our connectivity and power segments as compared to the third quarter of 2022, with the largest impact felt within our magnetic segment. While the magnetic segment was down from Q3 2022, we did see an almost 20% rebound from its low point in Q2 2023. Overall, third quarter 2023 sales were $159 million, as compared to $178 million in the third quarter of 2022. Of the $19 million decline, $8.4 million was attributable to reduced expedite fee revenue i n 2023 quarter versus Q3 2022. Gross margin continued to increase on a year-over-year basis for eight consecutive quarters and reached 35% in the third quarter of 2023, as compared to 29% in last year's third quarter. Margin improvement continued and was led by favorable product mix and the successful execution of a variety of cost reduction and efficiency programs. By product group, Power Solutions and Protection sales for Q3 2023 were $74.9 million, down 2.1% from last year's third quarter. Within the Power group, an $8 million decline in expedite fee revenue was largely offset by higher demand for our front-end power products serving our networking end market. Sales of our eMobility products also remained strong and helped offset declines in circuit protection and distribution sales. Gross margin for our Power group was 41.7% for the third quarter, a 930 basis point improvement from Q3 2022, primarily driven by a favorable shift in product mix, cost reduction efforts, and favorable FX. Our Connectivity Solutions group had sales of $51.8 million in the third quarter of 2023, an increase of 3% from last year's third quarter, with continued strength seen in defense and aerospace. Gross margin for this group came in at 35.8% for the third quarter of 2023, up from 26.1% in the third quarter of 2022. Lastly, our Magnetic Solutions group had Q3 sales of $32 million, down 37.2% from last year's third quarter. Gross margin for this group was 22% in the third quarter of 2023, as compared to 30.4% during last year's third quarter. We are happy to report that $6.9 million shipped from the new BTI site in China during the third quarter of 2023. At the consolidated level, our backlog of orders totaled $408 million at September 30th. Historically, our backlog typically represented approximately one quarter's worth of sales when lead times were eight-12 weeks. Our current backlog level continues to represent about 2.5 quarters worth of sales, and we view this as still being high. We expect our level of backlog to come down further in future quarters as lead times continue to normalize. Our consolidated book-to-bill ratio improved sequentially from 0.6 in Q2 2023 to 0.8 for Q3 2023. Of note, our Q3 bookings within our commercial air end market were $15.7 million, a new quarterly record high for us in this end market. Our selling, general and administrative expenses for the third quarter of 2023 were $23.7 million, or 14.9% of sales, up from $22.2 million, or 12.5% of sales, in the third quarter of last year. This increase was largely related to higher salaries and fringe benefits in the 2023 quarter, partially offset by lower sales commissions. Turning to the balance sheet and cash flow items. We ended the quarter with a cash balance of $100.2 million, as compared to $70.3 million at year-end. We generated $81.4 million in cash flow from operating activities during the first nine months of 2023. With capital expenditures of $9.7 million, this resulted in free cash flow generation of $71.7 million for the first nine months of 2023, an improvement of $53.3 million versus the same period of 2022. Our inventory level decreased by $29.3 million from year-end, resulting in improved inventory turns of 2.9 times during Q3 2023 versus 2.6 times from year-end. While progress has been made on bringing inventory levels down, this remains a company-wide initiative to restore our inventory turns to better align with industry norms. Looking at the third quarter of 2023, we generated $40.8 million in cash flow from operating activities. This translated into free cash flow of $38.2 million during the third quarter. From a debt perspective, our outstanding balance remains at $60 million and is effectively subject to a fixed interest rate of 2.5% through our swap agreements that are in place through 2026. I'll now turn the call over to Farouq for additional commentary. Farouq? Yep. Thank you, Lynn. Over the past month, I've spent quite a bit of time visiting Bel facilities in Europe and in the Dominican Republic, and what a big change I've seen from just one year ago. As I look at the mindset shift that has resulted in improved productivity and cost containment at the factory level, it has been nothing short of stellar. We continue, though, to challenge our facilities to improve globally and expect big things from there. We also have been devoting a good amount of time on our material spend to ensure we are aligned with vendors appropriately, matched for our size that we believe will ultimately result in a higher level of savings. Dan and I also attended our European sales meeting a few weeks back, and believe it's in great hands as it charts its path forward to further penetrate Europe. On a side note, Europe has been a strong performer for us this year, despite some of the challenges there, and we think there is more to be done in this region. Looking out to the fourth quarter, based on currently available information, we provided sales guidance in the range of $146 million-$154 million, with gross margins roughly in line with Q3 2023 levels. In addition to some voluntary trimming on the top line, as Dan mentioned, the channel continues to be over-inventoried, especially with our distributor customers. We expect the situation will continue for another two quarters or so before it returns to normalcy, though there are certain pockets of growth in the channel, which is good to see. From a supply chain perspective, there has been easing and availability of passive components, but we are still seeing longer lead times for others, mainly on the IC side. In summary, it's been a busy year on all fronts, with progress made in many areas of the organization. I'll reiterate my sentiment from prior quarters, and that is that we are on this journey of continuous growth and improvement. Change is rarely linear or immediate. We do know we are building a healthier organization that's more focused on the pursuit of growth and demanding operational excellence. These are all things that excite all of us. With that, I'll turn the call back over to Dan. Thank you, Farouq. At this time, we'd like to open up the call to any questions you might ask. Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove 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 while we poll for our first question. Our first question comes from Theodore O'Neill with Litchfield Hills Research. Please proceed. Thank you, and congratulations on the good quarter. Lynn, I know you said at the Jefferies conference that your debt's as low as it's going to get, but I was wondering if you could talk about either M&A or how you're going to deploy the capital, because at the time of the conference, you didn't have $100 million in cash, and you do now. And you're talking about bringing inventory turns down as well, so that would add to your cash balance as well. Yeah. So, I'll just jump in here, Theo. We did have a nice cash build this quarter. You know, I'd also point out that we're roughly on track to double last year's CapEx spend, internally here, as we look at kind of various growth avenues and investments. You know, as Dan had pointed out, too, we are obviously always on the hunt for M&A. We think that there's a little bit of a slowdown right now in the M&A market, given some of the global circumstances and kind of you know situations that we keep reading about. We do believe that will change. And, you know, as we build our cash here, obviously we're always looking for ways to invest in the future of the business for the long term. So, we think that there'll be a use for it. You know, history has shown that, if you look, you know, back to a bunch of years, quite frankly. So we do know that there'll be a use there for it. But as also Dan, you know, called out, we're always looking for ways to, you know, improve our capital allocation strategy. So I'll kind of leave it at that. Okay. In the eMobility segment, are you seeing any particular pockets of strength or growth in there? And could you comment just broadly about if you're seeing any inflation effects in the supply chain? Yeah, I mean, inflation is all around, you know, whether it be at the wage level, and obviously, that doesn't just impact us, it impacts all of our suppliers as well and our customers. So I think inflation is something that everybody's wrestling with and how to contain it. So as we think about automation, as we think about streamlining, right, there's a big emphasis on ensuring efficient operations. So it is definitely something that we are thinking about and managing as, quite frankly, as I mean, with our numbers, our facility consolidations will help us manage and, you know, some of this inflation. But it is a point of consideration, quite frankly, through everything we do, whether the customers we pursue, the products we pursue, our pricing, our operations, so it's definitely front and center. So we do think it is something that everybody's wrestling with, quite frankly. On the eMobility side, any particular pockets of strength there? Yeah. So on the eMobility side, you know, generally, maybe just a general comment on industrial eMobility. You know, these are big-ticket items. They cost more than, traditional, you know, let's say, ICE buses, as an example. So as a result of that, we're still seeing overall industry excitement, around the future of eMobility. I think, you know, some of the nature of our customers, we are seeing, there are called a little more startup in nature as they go through funding rounds. You know, those are points of consideration. But the good thing about our eMobility business, it's diverse, and it covers, you know, customers from startup mode all the way to kind of, mature household names. But overall, I'd characterize it as a very good end market. You know, but like any other market, a little bit of challenges there at the customer level, but I think for the most part, we're bullish on that, for sure. Okay. Thanks very much. Our next question comes from James Ricchiuti with Needham & Company. Please proceed. Hi, good morning. Maybe just to close the loop on the eMobility side. I think you said at one point that you expected this revenue to double this year. Is that still the case, or are you seeing some macro influencing some of the demand in that market? Yeah. So Jim, last year, eMobility sales were in the neighborhood of $20 million. For the first nine months of this year, we're at $22 million. So probably, we'll, we'll not be doubling this year at this rate, but we, you know, we, we've already been seeing, w e're already exceeding last year's full year eMobility sales. But we'll, we'll not double this year. Also, I think on the eMobility side, given some of the components, there was a little bit of challenges in getting product out the door earlier this year. So we do expect a nice finish here in Q4, but I don't think it will be at the double level. Got it. Sure, you know, there's a lot of moving parts on the sales line. Just, yeah, you're exiting some—you've exited some low-margin business. You have these raw material surcharges that impact. Is there any way to think about what the revenue growth was organically, you know, nine months or Q3? I'm just trying to get a better fix on the top line. Revenue excluding PPV? Yeah, I mean, you know, Farouq, I guess we can discuss this offline. It's just, you know, I know that you're de-emphasizing some low margin business, so that's coming out. There's an impact from from the raw material surcharges. But, yeah, is there on an organic basis, yeah, are you seeing growth? Clearly, there's some overhang in the channel, the distribution channel. I think we all get that. Hey, hey, Jim. I think because of the long lead times that were faced over the past 24 months, our pricing that we put in place, really, didn't affect it. You know, we didn't lose out because of, you know, price increases. I think going forward, that might change as lead times come down. So, and, you know, as I said, over the past 24 months, our new strategy on looking at margin and not just taking business to take business, hasn't really, you know, we haven't seen the effects of it at all because of the lead times. So most of it is coming from PPV, PPV. Okay, and maybe just moving to the facility consolidation. You gave a little bit of color on some of the early benefits. How do we think about the balance of that rolling out over the course of 2024? Is that expected early in the year, or is it gonna be spread more evenly over the course of the year? I'd say, the way I think about it, Jim, is, you know, it's a kind of a phased rolling approach. So we start seeing a little bit of benefits in Q2, more in Q3. We expect to see more in Q4. My guess is, you know, if I were just gonna hedge it a little bit, my guess is that there will still be a little bit maybe cost that dribbles into Q1 next year. But I think largely, we expect that this will be behind us in 2023, maybe with a little bit of overhang into next year. But I think for the most part, you know, we've made some pretty good progress here. So, so yeah. So I think we'll largely see the benefits of that, you know, throughout all of next year. Okay. Just to circle back quickly on your question about the expedite fee revenue. We do now have in the earnings release, it itself, in the non-GAAP tables, GAAP net sales and what the expedite fee revenue is, along with the non-GAAP adjusted net sales. So for the nine-month period, you know, the numbers are noted there. So on that basis, year-over-year for the nine-month period, it was a $22 million increase in non-GAAP adjusted net sales, which was just under 5%. Thanks, Lynn, for pointing that out. And then just, in terms of that, some of the business that you de-emphasized, have you put a number to that through the nine months? I mean, we talked about in the last quarter, you know, there was kind of a slug of roughly $9 million that we talked about. Right. The way I would also tend to think about it, though, Jim, it's really at a SKU, at a order level, right? So when the orders come in, we kind of, you know. Or when we quote stuff, we're gonna quote a price that works for, you know, Bel Fuse, right? But maybe we'd ultimately not get there, so we could walk away. So I tend to think of that as regular way SKU maintenance, as opposed to kind of big, grandiose walking away. I think we're, you know-- You know, I'd say we're largely probably behind some of these kind of grandiose things, and it's gonna become an order-driven event. And remember- Sure. Orders could be, you know, you know, small as, you know, cost $1,000 or smaller, and up to, you know, hundreds and thousands of dollars. So it, it really is gonna be done at that kind of line level. No, that's clear. Thanks for that. Lynn, I just want to make sure I'm clear on one other thing on commercial air. You gave a bookings number, and I just want—Did you say what the commercial air revenues were in the quarter? I think my recollection is the revenues from commercial air were $15.9 million in Q2, or was that a bookings number? No, you're correct. So the commercial air sales in Q2 were $15.9 million. For Q3, they were down a bit. They were $11.3 million for the quarter. Okay, but generally, it sounds like you're still seeing pretty healthy demand in that market. That's right. So as we mentioned earlier, we did have a record bookings quarter for that end market in Q3. So the bookings for Q3 was $15.7 million. I think, Jim, the way I kind of think about these end markets, you know, like, defense, kind of, I mean, it just, the ordering patterns, and shipping patterns kind of, are a little bit maybe more, more lumpy. So I think that's why, true, as Lynn noted, with the bookings and kind of as, you know, on obviously, the conversations we're having with the, our various customers, it's kind of what gives us that sentiment of positivity on outlooks. Got it. Thanks very much. Congrats on the quarter, by the way. Thank you. Thank you. To ask a question, please press star one on your telephone keypad. Our next question comes from Hendi Susanto with Gabelli Funds. Please proceed. Good morning, Dan, Farouq, and Lynn. Good morning. Hello, Hendi. So Dan, I would like to hear your insight into inventory at customer and distribution across various businesses. Like we have heard, like some, many companies reported a weakness, broadening weaknesses in industrials, and I'm wondering, like, how much we should factor that in going forward. And then if you look at Magnetic, can we assume that inventory correction or digestion is at the bottom of its market? And then I'm also wondering, like, when we may see a growth recovery in Power Solutions and Protection? Okay. I think, you know, when we talk more Power Solutions and Protection, a lot of it, again, is coming from the circuit protection area, and that's a very heavily distribution period business, where most customers buy, you know, circuits, you know, fuses through distribution because of the low price. From everything we understand, you know, from people like Arrow, Avnet, Digi-Key, and Mouser, that they still have to work through their inventory. They, they bought way too much inventory and at their highest level. We hope and believe, you know, all and most of it should be flushed out by the first or the middle of the second quarter, and we should get back to normal ordering at that point in time. So I would say, you know, middle of second quarter next year, everybody's predicting that, you know, lead time from an order process will go back. Your next question was? The next question. And then, sorry, what, what was the next question? I think that answered it, because you were curious about return to growth, right, Hendi? Yeah. Yeah, yeah. Yeah, and maybe just to also kind of supplement, as Dan kind of triggered my memory here. So as a reminder, generally, Q2 and Q3 are our strongest quarters. Q1 historically is our weakest quarter, and then Q4 is somewhere in the middle. So the way we kind of look at just kind of the guidance we gave out is kind of the normal cadence of Q4 with some of, you know, the holiday patterns and, you know, Golden Week in Asia and so on. So just wanna kind of throw that out there. Yep. And then, Farouq, how sustainable is the gross margin at 35% level now? Yeah, I mean, so I mean, if you look at it, right, we, we see. We do know that there is more cost improvements to be done, within the business. Magnetics, while sequentially up on sales, it is still down, on low margins, so we do expect improvements in the Magnetics side of the house. And, you know, so as I think about those two things, coupled with weakness, that we do see, you know, a little bit of power, as Dan mentioned, and also a little bit in connectivity. So, you know, we've yet to hit on all cylinders, right? So our expectation is, if we can kind of do this in some pockets of weakness, our expectation is, between cost and a little bit of recovery in across the business, you know, we do think it's sustainable. Now, does it mean that we may be impacted here and there? Sure. But you know, at the end of the day, I think our expectation is, at the gross margin level, we're at a consolidated level, we're kind of in the zip code of where we should be. But at the same time, we are working through a lot of, you know, things internally and externally here. Yeah. And then, the press release also call out, rail application. Would you refresh our memory, like, where the opportunity and then where your products are in rail applications? Rail. Excuse me. So maybe some on the rail business. You know, the rail business is really quality business. But as we know, rail, you know, I kind of think of it as a step removed from kind of defense in the sense of ordering patterns, the complexity and demanding nature of rail. It is a business that we've been in for, you know, I think over 40 years, so this is a great business for us. We've seen more investment coming just quite frankly, globally, but predominantly out of Europe and Asia, I would say, as they invest in their rail applications. So we're seeing increased orders there. Also, some of the new kind of products, and quite frankly, we've reassigned some more resources to focus on that market, so we're seeing the benefits of that here. I think we started doing that in 2021, or perhaps early 2022, to kind of really focus on that side. In terms of applications, you know, we tend to be on the passenger rail side of the business. And, you know, we have various applications throughout the car, anywhere from, I think, the lighting application, signaling, and kind of other kind of components. So it's a pretty diverse business product for us. In terms of size of that business? Yeah, so our rail sales in Q3 were $6.4 million, so it represented about 9% of the power segment. Got it. Okay. Yeah. Thank you, Dan, Farouq, and Lynn. Thank you. Thank you. At this time, I will turn the call back over to management for closing comments. Thank you for joining us today, and we're looking forward to speaking to you next year. Have a good day. Thank you. Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.