Good day, everyone, and welcome to the Littelfuse first quarter 2023 earnings conference call. Today's call is being recorded. At this time, I will turn the call over to the Head of Investor Relations, Trisha Tuntland. Please proceed. Good morning, welcome to the Littelfuse first quarter 2023 earnings conference call. With me today are Dave Heinzmann, President and CEO, and Meenal Sethna, Executive Vice President and CFO. Yesterday, we reported results for our first quarter, and a copy of our earnings release and slide presentation is available in the Investor Relations section of our website. A webcast of today's conference call will also be available on our website. Please advance to slide two for our disclaimers. Our discussions today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review yesterday's press release and our Forms 10-K and 10-Q for more detail about important risks that could cause actual results to differ materially from our expectations. We assume no obligation to update any of this forward-looking information. Also, our remarks today refer to non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in our earnings release available in the Investor Relations section of our website. I will now turn the call over to Dave. Thank you, Trisha. Good morning, and thanks for joining us today. Let's start with highlights on slide four. Our global teams delivered strong first quarter results above our sales and adjusted EPS guidance within a tougher electronics environment. The continued resiliency of our business model and the strength of our execution drove strong overall profitability. During the quarter, we made significant progress integrating our strategy-led acquisitions to drive long-term profitable growth and secured meaningful new business wins in the global structural themes of sustainability, connectivity, and safety. I want to thank our global teams for their persistent commitment and execution to serve our customers. Moving on to slide five. As announced in February, we continued to invest for growth with our acquisition of Western Automation Research and Development Limited, a designer and manufacturer of electrical shock protection devices with a heavy focus on electrification. This acquisition accelerates our growth in e-mobility off-board charging infrastructure, particularly in Europe with its strong OEM relationships, and further expands our capabilities and diversification into higher growth industrial end markets like industrial safety and renewables. The integration is underway. We look forward to leveraging our combined capabilities to drive growth consistent with our five-year growth strategy shown on slide six. Before we get into business design wins, I would like to start with the customer and market dynamics we are seeing. Starting with our channel partners, as expected, we continue to see electronics distributors drive the reduction of their inventory levels during the quarter. We expect this inventory reduction will continue into the third quarter at current POS levels, which remain stable. Our electronics book-to-bill continues to run below 1, largely due to our reduced lead times. Our industrial distribution partners continue to hold inventory within normal targeted ranges. We have a healthy industrial backlog for the 2nd quarter. End market demand remains relatively consistent with what we said 90 days ago. We continue to see soft demand in consumer-facing and personal electronics end markets. End market demand remains strong across high-power applications like renewables, industrial automation and safety, medical, power supplies, and electrification of vehicles and vehicle charging infrastructure. Across transportation end markets, we saw continued inventory unwind at tier ones and OEMs and at distributors for commercial vehicle applications. In our passenger vehicle markets, we saw a solid content outgrowth across our product portfolio during the quarter. We continue to expect long-term double-digit content outgrowth based on significant design wins in electrification and electronification. Across commercial vehicle markets, we are positioned for long-term growth with the ongoing electrification and electronification in material handling, agriculture and construction equipment, and heavy-duty truck and bus. I am particularly proud of our strong first quarter performance as we successfully navigate this period of inventory rebalances and varying end market trends across our businesses. Our global execution continues to deliver strong financial results and company margins consistent with our long-term targets. Meenal will provide additional color on our financial performance and outlook. Let's move on to business design wins during the first quarter. The convergence of sustainability, connectivity, and safety is propelling meaningful opportunities across the industrial, transportation, and electronic end markets we serve. Our diversified technologies and capabilities play a significant role in the advancement of these themes, which is driving unprecedented demand for our innovative and reliable solutions. Our industry awards received this quarter recognize us as a top supplier of best-in-class innovative solutions, driven by our unwavering commitment to customers. We continue to capitalize on the design-rich environment, which will drive our long-term growth. Within industrial end markets on slide seven, we continue to play a critical role enabling high-power applications related to sustainability and safety. The diversity of our business wins highlights our ability to globally serve customers. In renewables, the strength of our product offering won a significant business for energy storage systems. Within industrial safety and power supplies for manufacturing equipment, our application expertise captured business wins. For industrial automation and our solutions, including those from our C&K Switches acquisition, secured business based on product features. In commercial HVAC, we won business with our deep relationships and broad portfolio. Our expanding product content and the rate of new business wins continues to grow with leading customers based on our capabilities and intensifying focus on enabling applications around sustainability and safety. Turning to our transportation end markets on Slide eight, our investments for growth are extending our global leadership position within customers. Our joint collaboration focused on sustainability, connectivity, and safety drove significant new business. In passenger vehicles, we continue to grow with major OEMs based on our early engagement, technical support, and breadth of high-voltage products. We won business with the ongoing electrification of platforms in battery management systems and onboard chargers. With an expanded focus towards sensors within electrification applications, we also secured significant new business in power management. Within electronification, we captured business in telematics and comfort and convenience applications. We also continued to expand our business in traditional low-voltage applications based on our proprietary technologies and superior designs. Our design wins and pipeline of business opportunities support the continuation of long-term double-digit content outgrowth. In electrified commercial vehicles, we leveraged our expanded capabilities from the Carling and Embed techno acquisitions to win global business with major OEMs. We won new business in delivery vehicles, trucks, and two-wheelers for battery management systems, power distribution, and body control modules. In rail traction for trains, we won business in high voltage power converters. In electronification of commercial vehicles, we won business in delivery fleet vehicles within GPS trackers and in construction equipment for digital switching keypads. In broader commercial vehicle markets, we increased our product content in heavy-duty trucks and material handling based on our global support and long-term quality. For off-board charging infrastructure, our engineering capabilities and differentiated range of products, such as our power semiconductors, electronic components, and fuses, secured significant business. We look forward to accelerating our long-term growth in off-board charging applications with our comprehensive offerings expanded further with our newly acquired Western Automation products. We are confident our investments for growth within transportation applications will strengthen our market leadership. Moving on to slide nine, sustainability and connectivity and safety are drivers for growth in the electronics end markets. With the ongoing push towards efficiencies, our responsiveness, global reach, and product features won us business in water meters and LED lighting. As it relates to greater connectivity requirements, our technical support and broad portfolio, including products from the addition of C&K Switches, won us business in communications infrastructure, home technologies, and power supplies for electronic devices. Our products are vital to safety and protection of human life as we secured business within critical life-saving medical devices. The pipeline of business opportunities is robust, and we are extremely well-positioned to expand our electronics content across a wide range of applications focused on sustainability, connectivity, and safety. Our new business wins represent a very diverse range of end markets, applications, and geographies. As we engage with our customers' engineering teams, our collaborations are accelerating next-generation product development and design-in activities. We fully expect the organic growth from new business activities, coupled with our acquisitions, will enhance and sustain our long-term growth. I will now turn the call over to Meenal to provide additional color on our financial performance and outlook. Thanks, Dave. Good morning, everyone, thanks for joining us today. Let's start with slide 11. We're pleased with our performance for the first quarter, finishing above our sales and earnings guidance range. Revenue of $610 million in the first quarter was down 2% versus last year and on a sequential basis was essentially flat. Revenue was down 8% organically versus the prior year, with acquisitions adding 7% growth and foreign exchange reducing revenue 1%. GAAP operating margins were 18.1%. Adjusted operating margins of 19% finished at the high end of our target range, and adjusted EBITDA margins were above our target range, finishing just under 25%. We drove strong margin performance, realizing the benefits from our portfolio diversification, continued efforts on price realization, and ongoing operational execution despite the challenging electronics environment. First quarter GAAP diluted earnings per share was $3.54, adjusted diluted EPS was $3.64. Our GAAP effective tax rate was 18.5%, adjusted effective tax rate was 18.8%, finishing within our expectations. We generated operating cash flow of $53 million, free cash flow was $28 million in the quarter, up 26% from the prior year period. We continue to balance continued inventory investments to serve many of our customers while reducing some inventories as supply chain challenges moderate in certain areas. As per our typical seasonal trends, we expect to drive stronger cash generation in the back part of the year. During the quarter, we welcomed the Western Automation team to Littelfuse. Incorporating this acquisition, we ended the quarter with net debt to EBITDA leverage at 1.4x below the low end of our 1.5x-2.5x target range. Our balance sheet remains strong with over $400 million of cash on hand and ample available capacity on our credit facility. We are well-positioned to continue our disciplined capital allocation strategy, prioritizing investments for growth while also returning capital to our shareholders. Let's move to first quarter segment highlights, starting with electronics on slide 12. Sales were down 2% overall and 12% organically, the difference largely from last year's acquisition of C&K Switches. Despite the sales impact from expected channel inventory rebalancing, operating margins finished just over 25%, while adjusted EBITDA margins approached 31%, both up sequentially. We continue to drive margins well above our historical target levels, a product of content growth, pricing discipline, and top-tier operational execution. Moving to our transportation segment on slide 13, organic growth was down 8%. Passenger vehicles were down 6%, commercial vehicles down 9% organically. As Dave mentioned, we continued to see customers and distributors reducing their inventory levels in the quarter. Operating margins were over 5%, expanding 160 basis points sequentially, while adjusted EBITDA margins grew 180 basis points to nearly 12%. We continue to drive additional price realization and have taken further cost reduction actions to align to the current business environment. We're also in process of some operational footprint adjustments and expect these activities will continue to drive an improving margin trajectory. On slide 14, our industrial segment drove another strong quarter of above-market growth with organic sales up 13%. We continue to prioritize higher growth areas such as renewables, energy storage, and industrial automation and safety. Operating margins finished above 20% and adjusted EBITDA margins above 24%, both improving significantly sequentially and versus prior year. Turning to the forecast on slide 15, market trends remain similar to what we saw through the 1st quarter. We expect continued growth across industrial and electrification themes with more modest growth across passenger and commercial vehicle markets. Certain electronics end markets remain soft, and we expect electronics distributor inventory rebalancing continuing into the 3rd quarter. We also expect a modest continuation of customer and distribution inventory reductions affecting our transportation segment. With this backdrop, we expect second quarter sales in the range of $607 million-$633 million. At the midpoint, we project sales to be flat versus last year with an organic decline of 7%. Sequentially, we expect growth in total sales across our transportation and industrial segments, partially offset by a decline across electronics. We expect adjusted EPS to be in the range of $3.20-$3.45, which assumes a 16% tax rate. Our second quarter guidance also includes higher stock compensation expense due to retirement provisions equating to approximately $0.25 of EPS. Slide 16 includes some additional views for the full year 2023. We expect foreign exchange to have about a $0.35 unfavorable impact on EPS and neutral impact to our sales at current exchange rates. We expect to maintain our company average operating margin within our long-term target range of 17%-19%. On other full year modeling items, we now expect $67 million in amortization expense. As noted last quarter, we are assuming $40 million in interest expense at current interest rates, a full year tax rate of approximately 18%, and we expect to invest $110 million-$120 million in capital expenditures. The ongoing resiliency of our business model and diversification of our portfolio were significant drivers of our strong Q1 sales and earnings performance, and we expect it to continue driving long-term value for our stakeholders. Looking through the uncertainties in the current macro environment, we remain focused on what we can control, balancing our execution through market choppiness while continuing to invest for the broad array of growth opportunities we see ahead of us. Thank you to our partners around the world for your trust and commitment to us and to our teams for driving value for our stakeholders every day. With that, I'll turn it back to Dave for some final comments. Thanks, Meenal. In summary on slide 17, we are off to a strong start this year. Our performance within this dynamic environment speaks to the resiliency of the Littelfuse business model and the strength of our growth strategy, the combination of which has delivered double-digit sales and earnings growth over the last 5, 10, and 15 years. Over this time, we have expanded our leadership presence in high-growth end markets, technologies, and geographies, which has diversified our business and improved the resiliency of our profitability. Our experienced teams have honed our playbook to successfully manage through dynamic environments. As we continue to manage through some near-term market challenges, we are confident that our ongoing execution, diversification, and strategic investments for growth will deliver sustained long-term value for all of our stakeholders. With that, I will now turn the call back to the operator for Q&A. Sure. At this time, if you'd like to ask a question. Generated operating cash flow of $53 million and free cash flow was $28 million in the quarter, up 26% from the prior year period. At this time, if you'd like to ask a question, simply press star followed by one on your telephone keypad. Our first question will come from the line of Joshua Buchalter with Cowen. Please go ahead. Good morning, Josh. Hey, guys. Thanks. Good morning. Thank you for taking my questions. Congrats on the resilient results. First one, I wanted to clarify some comments you made on the channel inventory situation in your electronics segment. It sounded like, Dave, you mentioned that there were healthy levels, but that the correction was gonna last into the third quarter. Could you just clarify, you know, should we expect, I guess, a down sequential in the second and third quarter in the electronics segment? Thank you. Sure, Josh. We've, we've obviously talked about the distribution in the electronics side of our business and our partners there. That remains elevated and above kind of our normal operating ranges that we would expect. The good news is that it is, in almost all categories, declining on a month-to-month basis so that inventory reduction is happening in the channel, kinda as expected. We do expect, though, it will take some time to bleed that down. The good news is the POS, the sell-through with our distributors remains pretty stable. We kinda model that, and we do expect that it's gonna take us kinda into or through the third quarter to really work our way through that given the current POS levels. Okay. Getting more healthy and there's still some work to do is sort of the takeaway? Yeah. We knew they were elevated. We've kinda built into our modeling and the guidance that we gave for the first quarter and into the second quarter that it will continue to bleed down. The good news is it's behaving kinda as expected. Okay. Got it. Thank you. Then, for my follow-up, I wanted to ask about gross margin. I mean, you did essentially flat revenue and margins expanded over 200 basis points. Can you walk through some of the drivers there? In particular, any update you can give on the pricing environment, it sounds like, and given the results, you're still comfortably able to pass along, higher input costs and that pricing remains firm. I would love to hear your commentary there. Thank you. Sure. Yeah, really around growth margin, right? It's, it's the nice balance that we have across our portfolio. Some, some good strength and continued elevation on the electronics margins, even despite, as Dave talked about, you know, we're in the midst of the channel rebalancing of inventory. Also, you know, some good uptick on our industrial business as well. You know, we've targeted, as we've talked about historically, high teens margin profile. The business continues to grow at an above-market rate and some good margin profile there that's coming through as part of that volume. Thank you. I'll hop back in the queue. Great, Josh. Thank you. We'll take our next caller, please. Your next question comes from the line of David Williams with Benchmark. Please go ahead. Good morning, David. Hey, good morning. Thanks for taking the questions, and congrats on the solid execution and navigating this environment. Thank you. Yeah. Maybe first, just kind of thinking, I wanted to ask, you talked about the footprint adjustments, and just curious if you could give us a little more detail there on what the expectation is and maybe what that incorporates. Sure. You know, we, with, David, with across our transportation segment and, you know, really across our business, given the size, given the number of acquisitions that we've been doing over the past few years, you know, one of the areas of synergies that we look at are just overall, when we think about the real estate portfolio that comes with acquisitions versus what we have. You know, we take a look at where are there opportunities for us to consolidate, whether it's non-manufacturing sites like sales offices, those are pretty easy. When it comes to more manufacturing supply chain locations, those take a little more planning, a little more time. You know, especially with our Carling acquisition that we made, pretty large acquisition, pretty broad footprint. There's some activities we're doing there. I talk about the normal course of business that we have as our business evolves and it grows. You know, we look at some product line movements that we do, again, ordinary course of business. Okay. Anything, in terms of magnitude of the savings you would expect to flow through? Yeah. You know, it's part of the overall progression that we're talking about as it relates to margins. You know, the margins improved for the transportation segment on a sequential basis. We continue to expect improvement as we keep going through the quarters. Not still not where it needs to be, but we're gonna make improvements, and this is a part of that. Okay, great. Just one last one real quick is just geographically, are you seeing anything in terms of maybe demand improving or where there's greater levels of inventory? Just kind of thinking about Asia and Europe and the U.S. Anything in particular to call out there? Yeah. I think maybe just a little color on that. If you look at obviously, we're kind of going through inventory rebalances and things like that, and there are some end market dynamics that are shifting. Certainly, if you look at our first quarter, you know, the region that was the softest and was down the most was Asia by a meaningful amount. That's driven by inventory rebalancing as well as some of the end markets. Think in electronics, some of the consumer-facing sorts of goods, which we've talked about for the last couple of quarters, that continues to be soft. Also, car builds were pretty soft in China during the first quarter as well. Asia was by far the region that was down the most. North America was also down, but not near as much as Asia was, and most of that really being driven by inventory rebalancing. Europe was actually up for us from an organic standpoint, so we saw some growth in Europe. Thanks so much. Appreciate your questions, David. We'll take our next caller, please. Our next question comes from the line of Luke Junk with Baird. Please go ahead. Good morning. Good morning. Good morning, Tricia. Thanks for taking the questions. Dave, hoping we could start with the sub segment trends in electronics. I'm thinking semiconductor versus passive products. You know, it seems like the semi piece is continuing to hold up well, whereas passive is, of course, where the inventory rebalancing is happening. Can you just drill down on that semi piece and just expand on it to the extent you think what we're seeing right now is sustainable? Thank you. Sure. Lots of moving pieces in that kind of that world and that analysis. So our passives business is certainly an area that had begun to rebalance on inventory, you know, a couple of quarters ago, and that continues to go through that rebalancing. The protection portion of our semiconductor had held in very strong and can continue to be quite strong. That has begun to now go into a rebalancing mode. The power semiconductor portion of our business there has not been over inventory. That's an area where there's been a little more challenge with the demand cycle over the last couple of years. In that case, we continue to have very strong position there. Inventories, if anything, are a bit light in the power semiconductor world. A bit of a mixed bag and moving pieces within that. A similar question for transportation would be great to get some additional color on pass car versus commercial vehicles. You know, especially the latter, I think you mentioned some destocking at distributors in the commercial vehicle market. Sure. you know, we've been seeing that a bit in the last couple of quarters, particularly in the passenger car side of the business. We continued to see inventory rebalancing in pass car in the first quarter. The good news is we think we're through the bulk of it in the passenger car side of the business, we think that's largely behind us. There might be a little bit of noise, but for the most part, that's behind us. Commercial vehicle is an area where certainly customer inventories, end customer inventories as well as distributors have been a bit heavy, we saw that declining in the first quarter. We do expect that to continue to decline and have correction in that inventory balances over the next quarter or 2. Thank you for that. If I can just sneak in one more. You know, it'd be great to get your perspective on the margin improvement that we're seeing in transportation initially. It is picking up sequentially consistent with your expectations, but what about the rate of margin improvement? How is that performing versus your expectation for margins sitting here in early May? Should we be thinking that double-digit margins are still on track for some time in the back half? Thank you. Yeah. No, a great question, Luke. Here's what I would say, right? We talked about sequential improvement in one of the earlier questions. I would say there's two pieces to the equation. There's what's going on in the market, there's actions that we're taking. You know, Dave just highlighted some comments that with some of the destocking going on, that, of course, impacts our volume, our production levels, that's a bit of a headwind for us when that happens. Just in general, when it comes to the automotive market, while, you know, while sometimes we feel good about the low 80 million car projection, car build projection that's out there, it's still quite a bit lower than, you know, back in 2019. I'd say the market still remains a bit of a headwind for us in a few of those quarters. At the same time, we are gonna focus on the things that we can control. There are several things that we're doing. I talked a little bit earlier about some of the footprint consolidation work, whether it's manufacturing, supply chain and other areas. We continue to move forward on that, which is helping us. I've talked the past several quarters about price, and, you know, we've made good progress when it comes to discussions with customers, pointing out our value that we bring to the table, and then, you know, in terms of price that we've gotten and still in select areas, price that we're going after. Overall, when we think about the synergies that we're looking at with the collective commercial vehicle businesses, we've added Carling in the past year, I think there's continues to be good opportunities there of things that we've done and continue to do, both from a growth and just leverage perspective. I still feel good about the trajectory that, you know, that we expect to have going, you know, into the coming quarters. Thank you for that. I'll leave it there. Appreciate your questions, Luke. Thank you. As a reminder, to ask a question, simply press star one on your telephone keypad. Our next question will come from the line of William Kerwin with Morningstar. Please go ahead. Good morning, Will. Hi, all. Hi, good morning. Thanks for the question. I was hoping to ask a little bit of a longer term one about the competitive landscape in electric vehicles, particularly in China. I'm curious, you know, how you would look at your positioning with Chinese or Asian OEMs versus those in North America and Europe, and then also how you view the risk of disruption, maybe from upstart competitors entering the electric vehicle space out of Asia. Sure. We've talked about this in the past, the content opportunity for us in the high voltage side of an EV is significantly larger than in the overall 12 volt side of things. The good news is in EVs, the 12 volt systems largely remain intact, so therefore our strong position in the low voltage side will continue. We don't see that kind of shifting or changing at all. We do expect, and we're having great progress on getting design wins and shipping into the EV, the high voltage side of the business. We've been open about the fact that we don't expect to have the same market share in the high voltage side as we do in the low voltage side. And we're seeing that kind of play out as expected. You know, we're not the only people who are aware of electrification. There are more competitors focused on that. Therefore we expect that lower, you know, market share. We still expect to be the leader in protection in the electrical systems, including the high voltage side, and we're seeing that play out. China specifically, you ask about and the difference between multinational OEMs versus local Chinese OEMs. Clearly on the EV side, there's been a very strong shift to the local OEMs winning and gaining share pretty meaningfully with customers like BYD and Geely and others. The good news is we have very strong working relationships there. We're not seeing a big negative shift for us in our opportunities there because of the shift from multinational to the local Chinese. We've been involved with them for many, many years, and we're continuing to have success with them. Okay, excellent. Thank you. Then, a light pivot for my follow-up, but I'm curious if you could comment on sort of off-board charging infrastructure, electric vehicle charging. It sounds like the Western acquisition plays into that a little bit, and don't think we've heard too much about sort of the charging station opportunity over the past couple quarters. Just curious if we could get an update on the strategy there? Yeah, no, absolutely. It's a, it's a great question and you're absolutely right. The Western Automation acquisition that we made, over 50% of the revenues in that business are being designed into and sold into EV off-board charging applications with particular strength in Europe. They're a European company, and so they have strong relationships with the European OEMs that are manufacturing these charging systems. So that was certainly one of the strategies for us in that acquisition, that it builds out a broader portfolio of components and modules that we can design into off-board charging. We're seeing great success there, and we're excited about the opportunity because it strengthens our relationships with the OEMs in Europe through Western Automation, and it broadens the technology offering that we can give to, you know, the remainder of our customer base, particularly where we have a lot of strength in North America and in Asia as well. We think that's a meaningful opportunity for us over time, and we're already seeing some success with that. Excellent. Thank you. I'll jump back into the queue, but congrats again on a good quarter. Thanks. Thanks, Will. Appreciate your questions. We'll take our next caller, please. Your next question comes from the line of David Silver with C.L. King. Please go ahead. Good morning, David. Yeah, hi. Good morning. Thank you. My first question is kind of a variation, I think, of some of the discussions on margin. If I was just to focus on the electronic segment, 25.1% this quarter, operating margin. You know, I believe, Dave has talked about maybe a mid-twenties margin as being quote-unquote sustainable. You know, I would just say the current environment is far from optimal, yet you're kind of at a level that you've described as, you know, long-term sustainable in the past. Just with that as background, I'm just wondering if the, you know, very strong margin performance in the current environment, is that a reflection of maybe one of two things, but one is that, you know, you are seeing some inventory liquidation and you talked about steady POS sales, I guess. Is there something about the current sales that are happening that are structurally or meaningfully higher margin than maybe the sales earlier in the pandemic when there were some buffer inventories built up? Or would you say, you know, across your electronics portfolio, it's just, you know, structurally more broad-based and not specific to, let's say, this phase of the overall cycle? Thank you. Sure. David, it's Meenal, and maybe I'll take this one a bit. You know, with electronics, and we've been talking the past few years where we've had some quarters with some very strong margins. I have used the phrase, "where all the stars aligned," right? Where, because we've seen in an industry that typically you typically see price downs every year we've gone after price realization because of inflation in other areas. Combine that price with the volumes that we saw the past couple of years, along with just that favorable mix coming through, and we've seen some very strong margins. At the same time, I also said that was not really a sustainable level for some of those areas. I said, really in this, I'll call it this bit of a rebalancing year, I expected electronics, the electronics margins to stay over 20%. We finished the quarter at 25%. Little bit stronger than we had anticipated versus 90 days ago. You know, Dave highlighted a couple of things that while we see the channel rebalancing going on as we expected, we saw a little better strength across our semiconductor side of the business that sells more into the industrial space. That's been a positive. Frankly, I'd say all the work that we've done over the past few years around operational execution, some footprint work, et cetera, has really added to that elevated margin level, whereas we used to talk about the margin profile being upper teens, and now I'm talking about it being over 20%. I'd say in, you know, for this year, for 2023, we've talked about keeping that average margin over 20%, and I feel good about that today. Okay. Oops. Okay, great. Thank you for that. I had a question maybe about the M&A side of things. You're currently integrating, you know, what I would consider, you know, 2 bigger than bolt-on type acquisitions, Western Automation and the bigger one, C&K, over the past, you know, less than 12 months. You know, everybody asks about maybe the project funnel, but I would like to maybe just ask you about, I guess, your bandwidth or your integration capability here. In other words, when you're, you know, discussing that you maybe have some dry powder based on net debt to EBITDA, are you also thinking that internally, you know, your integration teams or just your overall capability to deal with, you know, additional targets? I mean, do you have a capability to continue to pursue opportunities here? Is there kind of a theoretical or practical, you know, limit on how many integration projects you want to handle at a particular time? Thank you. Sure. Thanks. Thanks, David. Clearly, M&A is a key part of our growth strategy, and it's an enabling part of our ability to drive growing and sustained organic growth of the business over time as well. We view it very, very strategic. First and foremost, we look at M&A opportunities from a strategic fit to our strategies within the businesses. Although we have made some meaningful acquisitions over the last couple of years, some of them are very much bolt-ons, like Western Automation is a fairly simple, straightforward, one location, you know, type of business that bolts right into a business unit. That's pretty straightforward. C&K is a little more complex and takes a bit more to kind of work our way through that. The good news is we're several, you know, months and quarters into that acquisition and seeing good progress there. As I step back overall, thinking about the bandwidth of the organization absolutely is a piece of our analysis and our thought process on whether we do acquisitions or not. What I would say is they're led by the business units themselves. We have business units which have lots of bandwidth right now to take on additional acquisitions, and we have other business units that maybe, for instance, like in electronics where they're working through C&K, it's a little more challenged, you know, on that piece of it to kind of work through, and it might take another couple of quarters before we feel comfortable with their bandwidth. Overall, I would say as a company, our bandwidth is in a reasonable position where we can take on additional challenges and additional acquisitions if the right ones come along and there's a good strategic fit. Very good. I appreciate it. Thank you. Appreciate your questions, David. We'll take our next caller, please. Our next question comes from the line of Christopher Glynn with Oppenheimer. Please go ahead. Good morning, Patrick. Morning. Thanks for taking the question. Sure. You mentioned overall portfolio resiliency. Would you describe electronics results as more resilient than expected? Dave, you mentioned stable sell-through. Can you describe how, you know, durable you view sell-through characteristics as we move through the rest of the year? Sure. Let me kinda start with the resiliency question. If we step back and look at the whole company, for sure, we think the resiliency of, kind of the business model that we've built out is actually improving. And the markets that we're serving and the diversity of the technologies and markets and applications that we're serving, it'll put us in probably a better position than maybe we were even five years ago when we went through kind of correction cycles and things like that. We think the resiliency of the business continues to be quite good. We also think within the electronics reporting segment, it also has improved, as Meenal kind of mentioned. You think about our power semiconductor portfolio that fits within the electronics reporting segment. That's, you know, a high percentage of that is being sold into industrial applications, which tend to be a little more balanced and not quite as extreme in the cyclicality. I think that helps balance things out in there. Yeah. Kind of moving on to the POS and stability of that, we watch that very carefully. You know, we don't have tremendous visibility of what that's gonna be a quarter from now or, you know, or six months from now. That's a little hard to call. But we've seen it hold up reasonably stable, and that's kind of across the regions and the markets that we serve. If we continue to see that stability, then we feel good about our ability to drive down inventories, you know, at a, at a pretty good rate. Okay, thanks. Maybe for a follow-up, and conversely, wondering how you view the results of transportation versus internal expectations heading into the quarter. Maybe you could elaborate on some the market dynamics there and what you think needs to happen to resolve, you know, the weaker top-line trends or if it's largely just an inventory issue. Yeah. First of all, I have to kind of remind everyone that when you look at, when we talk about passenger car and we talk about our Transportation segment, let's carve out the passenger car piece of it, which I think you're kind of asking mostly about. The passenger car side of our business, there's a meaningful portion of the revenues that we sell into passenger car applications that fall outside of our Transportation segment. They come largely out of our Electronics segment, but even some of it out of the Industrial segment. When we look at that and we talk about within Transportation segment what our kind of our content story and our growth levels are, we have to take a step back and look at how we're doing overall with pass car. If we look at overall on pass car, if we take out the impacts, small impact we had of FX, which is negative, and inventory reductions we identified, we still overall as a company across our portfolio had about a 6% outgrowth compared to car build. We still feel good about the content story and the outgrowth opportunity for us in pass car. Quarter to quarter, that can vary. Certainly there's inventory, you know, work that's going on right now and reduction of inventories. That has an impact on it. It also, it's unfortunately it's not clean enough. It shows up in other parts of the business as well. What it does is it reinforces our continuing belief that our outgrowth story remains robust. If you look over the last 3 years, we've had double-digit outgrowth. We remain confident our design wins continue to be extremely robust, with a heavy emphasis, of course, coming from the electrification side on pass car. We remain confident in this double-digit outgrowth as we look forward as well. Okay, thanks for the color. I'll pass it on. Thanks, Patrick. Appreciate your questions. Again, for any questions, please press star one. Our next question will come from the line of Joshua Buchalter with Cowen. Please go ahead. Hey, Josh. Hey, thanks for letting me hop back in the queue. One follow-up. You know, we've heard from a few industry players about the potential for power semiconductors to replace some of the passive electronics in the vehicle, such as fuses and low voltage relays. Given your, you know, you're well known for your passives and fuses, but also you have a portfolio of power semiconductors, including MOSFETs. I wanted to hear, I guess one, is this a transition that you guys see taking place? And two, what are the longer term potential impacts of this on your business, given you've got business on both sides of that? Thank you. Sure. It's a good question. You kind of got to divide it up into pieces and applications within, in these markets. If you go back many years ago, there used to be passive components that were used to protect battery packs in a cell phone, right? That did transition mainly to solid state sorts of protection in those applications. There, there is some shift in the low amperage, low voltage side of the business in a pass car that has gone to a replacement for the relay, which we don't produce. Kind of a everywhere there's a relay, there's a fuse. Relay fuse combination, there's been some movement towards solid state solutions there on small amperage ranges. That happens to be a very small part of our business today. Will that maybe increase in amperage over the years? Perhaps. The growth of kind of where all of our growth, even in the low voltage side in automotive, is really coming from kind of the mid-level amperage and high amperage applications 'cause the content, you know, a very small voltage, small amperage device sells for, you know, a couple pennies, you know, as opposed to a device that's, say, a 30 amp device, which is gonna be significantly higher value. The bulk of our growth is coming from that mid-range and upper range in power, and we're not seeing shifts in that area. We do think in the high voltage side, over time, there may be opportunities for some applications to kind of move towards solid state away from some of the relay types of products. We have capabilities as our power semiconductor focuses on that medium high power side of things. There is, you know, opportunities potentially in the future as costs may improve to be able to do that, and that's an area where we would certainly bring capabilities to support. Appreciate all the color there, Dave. Actually, one more follow-up if I can. I apologize if I missed this, but can you let us know how much Western Automation was included in the second quarter guide, if at all? Yeah. I mean, overall, we talked about the business being about $25 million in annualized revenue. You know, you can think of it as, you know, mid-single digit revenue in there, but it's pretty small. Got it. Thank you. Appreciate your follow-up questions, Josh. Thank you. We'll take our next caller, please. Your next question comes from the line of David Williams with Benchmark. Please go ahead. Hi, David. Hey. Hey, hey. Thanks for letting me ask another question. I really appreciate it. Just wanted to kind of think about the customer tone overall and thinking about maybe the second half. It seems like things have been a little more pessimistic in terms of a second half, kind of a macroeconomic perspective. Do you get a sense that maybe the destocking levels could be approaching levels that may be below kind of normal trend line where we could get an opportunity for some replenishment above expectations if the second half does perform a little better than expected? The first thing I would say, you know, David, is that, you know, our visibility in the second half is pretty limited. It's a pretty dynamic environment that we're selling into these days. We really aren't giving a lot of color on what we see as the second half. Just hard to get a good handle on that and view of that. Clearly, we believe inventory rebalancing will continue into the second half. As much as I'd like to think it's done and we're back to, you know, through that, we still got some progress to make there over the next, you know, few months. Therefore, we do expect that into the back half of the year. You're absolutely right that inventory reductions, the inefficiency of the ability to build inventories and then reduce inventories in the distribution channels, picking electronics is a very inefficient process. When we do hit the bottom and get to the inventory levels where we need them to be, and if end markets begin to show any signs of improvement, for sure we'll see a bounce off the bottom. That will happen. When will that happen? I think it's difficult to call at this point. Okay. That no, that's very helpful. I guess from a customer's perspective, do you think they're being rational in the level of depletion that they're trying to get inventories to, or do you think that's falling below where you would typically see? No. It's, I think they're being rational, and it's, kind of as expected. Unfortunately, I've lived through a lot of these, situations where we've gone through inventory rebalancing, so the behavior is pretty normal and kind of as expected. Fantastic. Thanks again for for the time. I certainly appreciate it. Sure. Sure. We appreciate your follow-up questions, David. That concludes our Q&A session. Thank you for joining us on today's call and your interest in Littelfuse. We look forward to speaking with you during the May 8th Oppenheimer Industrial Growth Conference and May 31st TD Cowen Technology, Media & Telecom Conference. Have a great day.