Good morning, and welcome to the Bel Fuse Q1 2024 Earnings Call. At this time, all participants are in a listen-only mode. 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 go ahead, Jean. 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 the federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2024. 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. 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 the 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 filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K for the fiscal year ended December 31, 2023, 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? Thank you, Jean. Good morning, and thank you for joining our Q1 2024 earnings call. Overall, we were pleased with our financial results for this quarter. Our sales came in at $128 million, which is within the forecast range we have provided on last quarter, last quarter earnings call. It is encouraging to see our margin continue to track in the right direction, as Lynn will outline further. We continue to benefit from the diversity of our segments, with strength in connectivity on the sales side and impressive profitability from both our connectivity and power segments. These areas help offset the softness in the magnetic segment. These outcomes were all largely within our expectations. In late February, we announced the board approved a $25 million share repurchase program. Shortly thereafter, open market purchases of both classes of stock were initiated pursuant to the program's authorization. As of March 31, we utilized $6.3 million to repurchase a total of 109,000 shares. A 10b5-1 plan has been in place, ensuring the company's broker has the ability on an ongoing basis, including post-quarter and during our regular buyback periods, to make open market purchases in accordance with the company policies. As of April 24, our program to date repurchased a total of $11.1 million, representing 189,000 shares. We expect to continue executing this program with the internal guidelines that we have established. In March, the company announced the upcoming retirement of John Tweedy, a longstanding board member and audit committee member, whose term will end at the May 2024 annual shareholders meeting. On behalf of the board, I want to thank John for his many contributions to Bel Fuse over these past 28 years. John's insight and counsel will be missed, and we wish him the best in his retirement. With the upcoming vacancy, the board nominated Dave Valletta as the new director at this upcoming meeting. Dave brings 40 years of sales and growth experience with the electronic component industry, with companies including Vishay Intertechnology and EDX. We're excited about the potential of adding Dave to the board, given his tremendous wealth of knowledge in building winning and managing sales teams. Global organization of our industry. And from that, the experience will be instrumental to Bel Fuse to continue to implement our growth strategy. In addition to the change at the board level, as noted in our last earnings calls, there will be transition on the executive team in July, with the retirement of Dennis Ackerman and promotion of Steve Dawson to the power segment. With these transactions will come fresh perspective on the executive team and the board room. This will be welcome as we set our future strategy for growth to years to come. And with that, I will now turn the call over to Lynn. Lynn? Thank you, Dan. From a financial perspective, in summary, we saw continued margin expansion on a lower sales base when looking at Q1 2024 versus Q1 2023. Q1 2024 sales came in at $128.1 million, representing a 25.7% decline from the Q1 of 2023. The majority of the sales fluctuation was driven by our power and magnetic segments, as we will discuss further. Our gross margin increased to 37.5% in Q1 2024 from 31.1% in Q1 2023. ... and these profitability improvements were largely driven by our Power and Connectivity segments. Turning to some details at the product group level. Power Solutions and Protection sales for the Q1 of 2024 were $60.2 million, representing a 27.6% decline from Q1 last year. The decline in sales was mainly due to lower sales of our power products used in networking and consumer applications. However, we saw strength in sales of our rail products, which grew over 50% from Q1 2023, reaching $10.3 million in sales in Q1 2024. Despite the overall decline in sales, this segment posted a gross margin of 44% in the Q1, reflecting an 830 basis point improvement from Q1 2023. We are viewing approximately half of this improvement in power margins as being sustainable, as it was driven by more permanent factors, including cost reduction efforts, both on the procurement side and headcount side, the lower volume of low-margin expedited fees, and overall product mix. The balance of the basis point improvement in gross margin versus Q1 2023 relates to items that are either nonrecurring or, in the case of favorable FX, temporary in nature, and should not be factored into a normalized view of gross margin for this segment. Turning to our Connectivity Solutions group, sales for Q1 2024 came in at $54.3 million, up 1.7% from Q1 2023. Q1 2024 sales into commercial air applications amounted to $14.6 million, which is a level consistent with Q1 2023. Products sold into defense applications totaled $10.7 million for Q1 2024, up 3.2% from Q1 2023. The year-over-year increase in sales was despite the divestiture of Connectivity's tech business in June 2023, which previously contributed around $1.5 million per quarter to the segment. The gross margin for this group was 36.1% for the Q1 of 2024, a significant improvement from the 34.1% in the Q1 of 2023. This margin expansion was made possible due to the operational efficiencies achieved through facility consolidations that were completed in 2023, along with implementation of contract renewals on more balanced terms. These favorable margin factors were partially offset by minimum wage increases in Mexico that went into effect in Q1 2024, and the unfavorable impact of FX related to the peso. Lastly, our Magnetic Solutions group posted sales of $13.6 million in Q1 2024, representing a 62% decrease from Q1 2023. This reduced level of sales was generally in line with expectations discussed on last quarter's earnings call and largely related to lower shipments into a large networking customer as they work through inventory on hand. The gross margin for this group was 16% in the Q1 of 2024, as compared to 22.8% in the Q1 of 2023. This change in margin was primarily driven by the lower sales volume in Q1 2024, partially offset by lower fixed overhead costs resulting from the facility consolidations in China, which were completed in late 2023, and favorable FX related to the Chinese renminbi versus Q1 2023. At the consolidated level across all product segments, our backlog of orders totaled $350 million at March 31, 2024. Our selling, general, and administrative expenses were $24.9 million, or 19.5% of sales, down from $25.3 million in Q1 2023. Within SG&A, an increase in salaries, fringe benefits, and amortization expense were largely offset by lower legal fees. If you recall, we incurred $1.6 million of legal fees related to the MPS litigation in Q1 2023, and these expenses did not recur in Q1 2024. There were no unusual items of note contained within SG&A during Q1 2024. Turning to balance sheet and cash flow items, we ended the quarter with $121.2 in cash and securities, a reduction of 5.7 million from year-end. We generated $6.2 million in cash flows from operating activities during the Q1 of 2024 and had capital expenditures of $2.9 million. It should be noted that Q1 included our seasonal payments related to our annual bonus and corporate insurance premiums. From an inventory perspective, the downward trend that we experienced over the past several quarters has continued into Q1, reflecting a $5.7 million reduction from year-end. The lower inventory levels were primarily in the areas of raw materials and finished goods as we continued to work through our own inventory on hand. I'll now turn the call over to Farouq for additional commentary. Farouq? Thank you, Lynn. Good morning, everyone. As noted on our last earnings call, we anticipated the first half of 2024 to be on the slower side. Our Q1 results were in line with our expectations. The second quarter of 2024 is expected to be largely similar to Q1 in terms of sales volume, with margins expected to normalize a bit, given the impact of one-time items in Q1, as mentioned by Lynn. In summary, based on information available to us today, our outlook for Q2 is sales in the range of $125 - 135 million, with gross margins in the range of 34%-36%. There are several items to keep in mind when bridging our Q2 2023 of $169 million to the expected range for Q2 2024, and we'll discuss these here by segment. On the power side, our Q2 2023 sales included $5.7 million of expedite fee revenue that is not expected to reoccur in Q2 2024. Second, as previously noted on our last earnings call, Q2 2023 included an estimated $10 million of catch-up sales that resulted from past due orders, connected to the raw material shortage from 2022. These will not recur in Q2 2024. Third, our e-mobility business is softer this year, given the current interest rate environment, which is delaying capital investment projects at our customers and their customers. E-mobility sales in Q2 2023 were $8.5 million, and we anticipate this will be down by roughly $3 - 4 million in Q2 2024. The balance of the expected decline in power relates to a continuation of lower sales into our distribution partners and consumer end market, which, while similar to Q1 2024 levels, will represent a lower level from Q2 2023. On the magnetic segment side, given the current status of shipments into our large networking and distribution customers, we're projecting only a slight rebound in Q2 2024 from Q1 2024 levels, accounting for approximately $10 million of the expected decline from Q2 2023. Within our connectivity segment, we are estimating sales are largely in line with Q2 2023, potentially up a bit given recent contract renewals. Looking to the second half of 2024, we remain optimistic that some level of recovery will occur, though the degree and speed of rebound will likely vary by product line and end market. Overall, we do not anticipate a quick flip of a switch, and instead, expect it will be more of a slow and steady recovery as certain customers and end markets resume their normal level of shipments upon inventory depletion. Shifting our view to medium-term growth drivers, two areas that we are excited about, I wanted to highlight are space and AI. Let's first discuss the end market of space. This is an end market that is a very harsh environment and takes years of design work to get into. Up until recently, the volume of product going into space applications for anyone was limited. Bel has successfully had its product in space since the 1970s. As a result, we have already proven ourselves as a reliable supplier of connectors and components that can withstand the harsh environment, and we're benefiting from this legacy today. To that end, our connectivity segment has been successful in securing significant design wins in multiple commercial and military satellite platforms, as well as ground-based support applications for both copper and optical connectivity products. We believe these design wins will accelerate connectivity's growth in the space market, with 50% year-over-year growth in that market expected in 2024. To provide some context, in the full year of 2023, we had sales of $4.5 million into space applications. During the Q1 of 2024 alone, we shipped $2 million of product into this end market and are forecasting $77 million for the full year of 2024. Similar to our e-mobility business, this has a longer development cycle and will take time to ramp up, but we believe we are hitting a breakout point for space applications in 2024. We also continue to invest in this key market to grow our portfolio of space-related products and expand our internal capabilities, allowing us to support our customers' most extreme connectivity requirements. The second area of note is in the area of AI. While we do not have meaningful sales directly tied to AI today, our potential future benefit is becoming more clear. Of our three segments, we view our power segment as the biggest possible beneficiary of the industry's transition to AI. While we have products in each segment that support general networking applications, the systems that will support AI consume significantly more power than a traditional system. Even if the number of data centers that we currently participate in remain the same, the power supply dollar content per AI server is expected to be 2-8x higher. Another item of note here is that our existing products and capabilities will support this future need. There's no need for major new product designs for us to support AI. It's just additional volume of our existing power products or perhaps some minor modifications. While still in the very early stages, we're seeing an increased level of activity and discussions happening with our existing networking customers and also with specialty customers in high-performance computing. We're just starting to see early production volume orders from many of these customers, which is exciting for us. The last item I'll touch on is the M&A market. The volume of M&A opportunities available to us in 2023 is fairly limited, and we are definitely seeing a shift here in 2024. This is consistent with what we've been talking about. There appears to be a more robust pipeline of opportunities becoming available, and we continue to assess those that may be a good fit for us. There's nothing to report here today, but we're actively reviewing a variety of potential targets. Overall, beyond the near-term uncertainties surrounding timing and scale of recovery, there are many areas that the team is energized about for the long term. Bel has a long history of evolving over the years to support new end markets, and we believe we are at that next pivotal point of evolution. Space, AI, e-mobility are viewed as the next new end markets for Bel's products. We're excited about our current position in each of these areas and the growth potential they bring to Bel's future. With that, I think we can open up for questions. Thank you. We will now be conducting 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 that your line is in the question queue, and 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 please, while we poll for questions. Thank you. Our first question comes from the line of Theodore O'Neill with Litchfield Hills Research. Please proceed with your question. Thank you very much. Farouq, I think you covered this a bit in your prepared remarks, but your last quarter miss was primarily related to a single customer. It seems like it's a slightly broader inventory issue now. Does it concern you that GDP growth rate for Q1 is sequentially lower than it was for Q4? Yes, I think, thanks to you for, for the question here. I think you're referencing, the Q4 numbers heading into Q2, correct. We did miss, largely with one, but remember that heading into the Q1, which is seasonally a little bit weaker, you know, distribution, which touches obviously a number of folks, is a little bit fall in inventory, so we look at it as more continuation of inventory digestion. So I would say from a Q4 to Q1 perspective, we-- let's say we still see the challenges from the same set of people that we largely saw in Q4. So there hasn't been any, call it, new struggles, if you will. Do you- The question in regards to the GDP side of the things, I mean, obviously, GDP is, you know, we all are hoping for it to kind of move more so in the right direction. I think the, you know, the impact, obviously, will impact a little bit of our customers, but ultimately, you know, given that we participate in more of a technology solution industry and our customers do, while it's not gonna be disconnected from GDP, you know, we do think that there's a different value proposition there. Following up on that comment, would you mind repeating what you said about the dollar value for the power supply transformers in the AI space? Was it 2-8x? Correct. Okay, thank you. Yep. Our next question comes from the line of Jim Ricchiuti with Needham and Co. Please proceed with your question. Hi, good morning. Apologies if there's any background noise. But a couple of questions. Just with respect to— Yeah, normally, when you come out of Q1, there's a bit of a seasonal pickup, you know, just related to the Chinese New Year. Is that less of a driver for you this year, just given the current environment? Yeah, so Jim, that's historically been the case, but this year, because our magnetics business was so low in Q1, that's normally the area where we do see the pickup from Q1 to Q2. But it's just magnetics is at a depressed level right now as we're waiting for this, you know, these large customers to turn around. So we're just not seeing that same seasonal pickup from Q1 to Q2 within magnetics. A little bit, but not the same degree. Did you- Got it, and helpful, Lynn. Thanks. Remind us again, as we think about the back half of the year, when did you see the really sharp falloff in sales in the networking sector? Because, you know, just in terms of, I guess what we're trying to get to is, when do the comparisons really get easier? When do you start lapping that? Are you talking specific to magnetics? Well, it sounds like the weakness in that market sector also touches a little bit on power, but, you know, however you want to characterize it, we're seeing a pretty big—we've seen a big falloff in that part of the business. Did that happen in Q3 of last year? Did you start to see the real sharp decline? Yeah, so if we're just talking about magnetics first, we started seeing a decline in Q2 of 2023. It declined further in Q4. I think the most recent drop-off occurred in November of 2023. So there were basically, you know, call it two months of that drop-off in Q4. We felt it in full in Q1, and this is what we're projecting here for Q2, to still be in a similar environment. On the power- Got it. Last question. Go ahead, please. Yeah, so on the power side, that was very strong on the networking side in Q1 and Q2 last year. We didn't see as large of a drop-off, but it did start going down a bit in Q3. ... Okay, that's helpful. And maybe if we, you know, just this last question just relates to the whole environment in terms of destocking. And maybe if we try to break out the magnetics piece, put that aside for a second, how would you characterize, you know, what you're seeing in terms of, you know, distributor inventories and the whole destocking and the rest of the business? Has that improved much, or are you or do we still have a couple of quarters where we might have to see that? I, you know, I think, this is Dan Bernstein. You know, it's always, they always push back six months. But, you know, I was in Europe, and I was visiting some of our key distributors, and the feeling is that we hit rock bottom in February, and things should start to improve. But they are, they're, they're all saying today, it might change, that by the end of the fourth quarter, all the inventory should be flushed out, and they go back to normal ordering processes. And I think, Jim, we also just hit on that as well, right? So it's not like a flip of a switch, so it'll be kind of a rolling type pickup there. So to Dan's point, some may come earlier, some may come later. But you know, gotta be mindful it's not gonna all clear out on day one. No, I think we understand that. Thanks. Thanks, Dan. Appreciate it, guys. Thank you. Thanks, Jim. Our next question comes from the line of Hendi Susanto with Gabelli Funds. Please proceed with your question. Good morning, Dan, Farouq, Lynn. Hello, Hendi. Morning. So, yes, I would like to get more insight on how to think about your gross margin. I think given the lower scales, Bel Fuse has demonstrated resilient gross margin. So how should we be thinking of gross margin when, let's say, market recovery has taken place, and then the sales has gained meaningful recovery? Like, how much gross margin expansion can we expect? Or should we expect that the sensitivity on the scale of revenue is somewhat not meaningful enough? So Henry, I'd say a couple of things to that, right? Mix really plays a part, right? So if we start seeing, and when we start seeing, recovery in, let's say, magnetics, right, that's a lower gross margin business. So by definition, it will compress your gross margin, right? But obviously, when our magnetics business is running healthy, it has really nice operating profit and EBITDA, right? So while the gross margin may not be, you know, the best out there, it's a real nice contributor, you know, on the profit line. So one is mix will play a factor, right? Two is, within, you know, each of our product groups like power and connectivity, that there is also some mix that we need to be mindful. So the way we tend to think about it is, you know, we guided to 34%-36%, right, at, at, at our current levels. If there is increased revenue, that's gonna be operational leverage, and we expect that that would be additive, right? The way we tend to think about it, guiding to 34%-36% at the current levels and able to deliver on our EPS, we look at that as, as a great move that shows the durability of what we are doing here, and anything more above and beyond that should be positive to the upside. That's very helpful. We called out a little bit of the kind of fluctuations here as Lynn covered in her commentary. Yeah. Okay. Yeah, that's very helpful, Farouq. And then would you be able to give more color and insights about the exciting growth opportunities in space and AI? Like, specifically, could you talk about which application, which end products, let's say for space, like, should we pay attention to, like, LEO satellites or, like, or should it be, like, satellites in general? And then for AI, like, do you have more presence in networking versus computing or, like, I think any insights will be helpful. For space? I think, you know, for space, we're working very closely with Amazon. We do have product on the Amazon satellites now, and we're looking to build a relationship with SpaceX. Yeah, so I'd characterize our relationships as given our legacy there, it's a broad base and all kind of the household names that you hear, both on the commercial and on the military side, is where we participate on the orbit. So we have things obviously going up in space, as evidenced by our revenue growth. These are long design cycles. This is business we've been chasing for years, but generally on the satellite, like I said, both commercial and military. So some things we can talk about, some things we're not able to talk about. But as we think about space as an end market and, you know, more is going up there, we know that there's gonna be more overall fundamental drivers that will be beneficial to us. On the AI side, you know, when we look at AI, we do know that, you know, there is the fundamental requirement side of things, right? So there's a need for higher power, need for more power density... and also just more kind of custom management. So where we succeed is developing these exact products. We've been doing it for years. You know, we have very high, if not highest power density on some of the shelves. We also have really good relationships with the wafer scale chip manufacturers. And also, you know, that's kind of where we play. But when we look at where we find it specifically, there's kind of the big cloud giants, kind of the big four that we everybody kind of hears about. You know, that will be not necessarily our focus, given the heavy commoditization there. So where we will be more suited better is on the networking players. So, where we have existing relationships, and we have been developing for time. There's also, on the compute side, there's some new and emerging players there that have better, quite frankly, you know, bigger and more powerful chips, than maybe some of the headline type folks out there. So it will come. For us, we look at it as two-pronged approach. There's the new players on the compute side and then our existing customers, maybe a little bit new ones as well, on the networking side. And the contents of these systems obviously have really kind of shifted and kind of expanded. So we expect exciting things from there. Similar to Space, we'll be able to talk maybe more about that a little bit as time goes on here. It is nice to see. The one thing I would also say about AI is, you know, we kind of talk about identifiable AI and unidentifiable AI. What I mean by that is because of the general purpose nature of our power products, we know, right, or, you know, we send it to our customer, we may or may not know it's going to AI because of the general purpose nature of it. But then there are other applications that we know we can identify that this is specifically to AI. So we do know that there is a good amount of unidentifiable AI, but we will generally limit our conversation to things that we can speak to with clarity. The other thing I would say on the AI is there is a whole ecosystem that supports a lot of the direct players, you know, through various testing equipment. So we'll have a secondary impact of AI, because we do supply a lot of stuff into the test equipment that's required by the AI. So we touch it from a few different angles, Hendi. Yeah. Then Farouq, given the rapid speed on AI development and investment, I think they, I think speed is their number one priority now. How should we be thinking about the AI opportunity will be toward, like, second half of 2024, or will it be beyond, like, 2024? So, I just wanna be careful with this, Hendi, right? So, nobody's saying- Yeah. You know, we're gonna make $100 million of revenue in the next three quarters. I I just wanna be a little bit careful here. We started seeing from these, call it, you know, what we talked about, the compute guys, we started seeing some nice orders in Q1 and more coming into Q2. And also, some of the networking guys. So we expect it to be, let's call it, a steady climb. I think as the year goes on, we would probably expect to have more meaningful percentage jumps, you know, from 2025 over 2024 and 2026 over 2025, and so on. So I think we just wanted to kind of reveal a little bit more, but, you know, we will talk more about AI once we start, you know, feel a little more comfortable with that. Yeah. And then one more questions. Given the weaknesses in EV, any update on your milestone and expectation on the innolectric investment? Yeah. So I would say, you know, the innolectric is largely kind of seeing the same things as our EV business. With our innolectric investment, obviously, I would say from a milestone perspective, it's largely on track. When we did this investment early last year, we knew it was not a 2023, 2024 thing. The reason is some of the development that's going on, so there's some interesting products that are being worked on and developed. So as we think about those in terms of coming out, you know, an ideal world, we kind of get through this bumpiness of 2024 out in the market and, you know, we expect their products to be ready for market in 2025. So from the... We look at it as on track and not, but we do see some of the same challenges within their customer base. I see. Thank you. Yep. Our next question comes from the line of Bobby Brooks with Northland Capital Markets. Please proceed with your question. Hey, good morning, guys. Thank you for taking my question. So very strong buyback number, right? I think that surprise that came in far above where my expectation was. So I guess what I'm wondering is, should we assume that it kind of stays around that level? And just maybe more broadly, how should we think of the pace of the buyback going forward? Obviously, Dan, you mentioned, you know, as of the April 24, right, it was—you guys did repurchase an additional $4 million. So that's kind of beating the pace that you did in the Q1. So I'm just trying to get a gauge on how to think about that buyback going forward. Do you stay at that pace, if the stock stays in the $55-60 range? Yeah. So the, the way to think about it, Bobby, is, is obviously, you know, these are always moving, right? So we've got to kind of assess this a little bit real time. Our expectation is in terms of getting through the program is, is a 2024 event. Obviously, if, if things move, then, then they, that may extend a little bit, but our expectation is to be largely through that in 2024. We're roughly $11 through the 25 million program. As Dan also noted, that we're in our blackout period, so the, the purchase program is a little bit on autopilot. We come out of our blackout here in two to three days, and we'll take another look at it. Our buyback program has, you know, depending on the price, you know, fluctuates a little bit of how much being bought back. So maybe a long way of answering your question is, we expect to be done with this program through end of the year, but it may change a little bit in terms of the pace we're doing it at, depending on how the market and stock price is doing. Got it. And then maybe just to follow up on that, are you guys, in terms of, you know, you just mentioned in terms of how the market is doing, is it something where you're comparing Bel Fuse to, you know, a peer group in terms of stock, year-to-date stock performance? Or are you more so basing it off of, you know, the broader indices? Or is it more so just looking at, you know, a certain range of, a certain price range? And you know, you don't need to give that price range, obviously, but... Or is it more based on kind of Bel Fuse's stock price relative to where you think it is in, kind of, in isolation? Yeah. So really, you know, it's amalgamation of factors that would lead us to triangulate to where we need to be at. But I would say, you know, obviously, we're aware of the market, we're aware of, you know, where the industry is. But I think one of our views always has been, is our stock price is not really reflective of the value. So I would say that is probably our north guiding star in terms of where we think it should be. So we'll look at it as to where it is, and that's how we scale it up and down. That'll be kind of the different factor. And obviously, it kind of goes without saying, Bobby, you're right, I mean, we have a very strong cash position. you know, if anything were to change with that, that may change. But for the most part, we feel pretty good about it. For sure. Thanks, I appreciate that color. Then transitioning, you know, I wanted to kind of follow up on you guys's, and this is more, I wanted to follow up on your, you guys' early reads on the gross init- growth initiatives that you guys detailed on the fourth quarter call. I thought that was really, that, that was really interesting and positive. And, you know, kind of speaking to those initiatives, I'm kind of most interested in that, you know, the revamped European sales force. And I know, Dan, you've mentioned that you're just in Europe the past quarter, so curious to hear, you know, any early reads. I know it might take a few quarters for it to inflect on finances, but just curious about, you know, any early reads on those growth initiatives that you mentioned in the past quarter. I think, again, you know, as we mentioned last time, we put in a new sales director with a very strong distribution background. She was the distribution manager for Molex, so she has great entree and from a people standpoint and from a relationship standpoint with people like Arrow and Avnet. So for example, we have seen three opportunities that we've, you know, never saw before regarding fuses. Each opportunity is over $1 million. And I think we're pretty confident that we can capture two of them. So again, there's a lot of planting of seeds, but again, you know, it's a direct sales force that we have pretty well covered all through Europe. And so far, you know, things look very, very promising. It's definitely gonna take some time, but we're hoping, you know, like, again, if some of these fuse opportunities, and we're talking, you know, $1 million in fuses, that's a pretty big order you don't get too often in my lifetime. We have 3 of those opportunities coming to us. Very exciting. How well it does in Europe might change our position of how we look at Asia and how we look at North America. And I think to expand on Dan's comment as well, right? We live in a, I don't know, Dan, if you'd agree, but six-month to two-year design cycles, right? So we're a little bit long design cycles. So the key for us in this environment with inventory is we're seeing a lot more NPI development. So for us, it's kind of getting out there, better alignment with the customers, pursuing the opportunities, because once the inventory works through, we'll see some of the legacy product pick up, but we'll also see a more kind of rich environment of new products. And a side comment on Europe, I'd say, you know, our European business is definitely performed, I would say, above market for us in Q1, which I think is a testament to the team and our approach, and and how we're kind of getting out there. So we are excited about Europe. On the U.S. side, we have added a couple of strategic positions as well, and we're continuing to kind of build the team, but we're seeing some nice stuff coming out of that team there as well. That's awesome, color, I appreciate it. And then maybe just on the last point, touching on kind of circling back on the space. You know, you guys have given excellent color, and that's for sure an exciting end market where you guys clearly already have an edge, given the long history of reliability in a harsh environment. So what I was curious on is: could you discuss how you're planning to continue to grow that? And maybe is there a path where you could see doubling revenues, doubling revenues into that end market in fiscal 2025? Or maybe asked differently, what do you think the revenue opportunity is there over is in the space market over maybe the three-year outlook? Yeah, you know, it's moving pretty quickly as we look at the funding that's kind of going in there, so we know it's rapidly evolving. You know, we kind of internally joke about it that it's the new EV, right? Where for years, you're kind of testing and sampling and low volume, and then you start clicking pretty rapidly into the growth side of things. Obviously, space has a very different, you know, customer base and tailwinds versus the EV business. So I would just say there's a lot of funding going into it. There's a lot of increasing just sheer number of things going up in space. The nice thing about the space, as we think about specific satellites, there'll be a natural depletion rate, where there's a useful life for these things that ultimately will have to come back down to Earth and new ones go up. So as a result of that, you know, we think that will be both expansion in terms of number of satellites up there, but also replenishment rate. You know, to kind of maybe just point for this, maybe historically, I would say it was a low volume business. Maybe we'd call it $2 - 3 million a year at a high end. And then in 2023, we saw it kind of go up to that $4.5 million, and we're kind of projecting, call it 7-ish this year. Again, you know, as we're also we went to see a little bit more wins coming our way. So we do expect that we'll have nice growth rates in terms of where it is. In terms of also kind of our commitment to it, you know, we're doing some things on the marketing side as we, let's call it, create a more targeted campaign for customer awareness and to drive us further into the space side of things, both via our website, but also just kind of, you know, trade shows and kind of, you know, more your typical way of expanding our reach. So we're planning on hitting that a few different ways. But, you know, we'll see where it goes. I mean, doubling is not, not off the table for us in 2025, but we'll, we're gonna see how the year progresses here. Yes, for sure. And then maybe just the last question on space. So, you know, talked about how historically it was a low margin, you know, $1 million, 2 million a year end market for you. So maybe could you -- is the new are these new orders, like, at a much higher margin because there's more technology in it? Or is it just kind of you guys's, you guys taking a more approach, where you're only working with customers who value the value, what you guys bring to the table, and therefore, you guys get better pricing? And then secondly, I guess just that point first. Yeah. No, it was never low margin. I mean- Oh, I'm sorry, I misheard that. Sorry. Yeah. Yeah, these are the, you know- But- We, you know, from a margin perspective, you know, obviously, these are... We definitely want more of this. I'll leave it at that. And so that's kind of the way we think about it. So the growth there will have a very positive mix, let's call it, from a gross margin perspective. Okay, thanks. I'm sorry, I misheard that. And then just that second point, or the second point I was gonna make was, so, right, you guys shipped 2 million. I think the number was you said you shipped two million of products in the Q1. Correct. Could you maybe give us a sense of, like, how much of that $2 million was towards, like, new product development or, you know, kind of small run testing stuff versus actual production orders? I would say it's probably a little bit of a mix, but I would say as well that these things are, they're ramping up, right? So we're definitely ramping up. So I'd say the majority of it is probably small runs. We do expect some maybe larger runs, call it into maybe, you know, Q3, end of Q2, something like that, as we head into Q4. So again, similar to the EUV business, you know, we are expecting bigger number of things to go into space. So it's a mix, I would say, but largely probably, you know, kind of a little bit low, you know, more diversity of customers, if that makes sense. No, that makes perfect sense. Thank you, Farouq and team. I'll go back to the queue. Our next question comes from the line of Hendi Susanto with Gabelli Funds. Please proceed with your question. Yeah, I have one follow-up. Dan, you mentioned that, based on your conversation with distributors, inventory flush out may vary, like some may take place earlier, some may take four of this year. Do you have any insight into what kind of pecking orders in terms of when inventory flush out may take place? Like, like, the one that will see it, like, sooner versus the one that will see it, like, later? Sir, is this in relation to Dan's distribution comment? Distribution. Yeah, yeah. Like, essentially, like, if there's any indication, like, with inventory correction may see completion, like, sooner versus the one that may see inventory correction, like, toward, like, late 2024? So, Hendi, are you asking specifically, like, by distributor or distributor type, who we think- Oh, no. By product groups or by areas. Yeah. I mean, ultimately, I think, Hendi, you know, it, it really depends down to the customer and the end market they're in. I think, you know, if you look at our military aerospace to distribution- That's strong. That's very strong. Where we're getting hit is more in the consumer from our CUI product group, our fuse product group, our magnetic product group. Things that go into networking consumer is really where they have the overinventory situation. And basically, that was based on, you know, there was a problem with semiconductors, and so people were ordering products thinking they were gonna get the semiconductors in. They never got the semiconductors in, but they received the passive components. So most of all, in our channel, most of the problem is coming from the magnetic group, circuit protection, and power supplies. I see. Okay, thank you, and then all the best for 2024. Thank you so much. Thanks, Hendi. Thank you. We have reached the end of our question and answer session, and with that, I would like to turn the floor back over to Dan Bernstein for any closing comments. Thank you for joining us today, and we're looking forward to speaking to you in July. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.