Okay, I had a spiel I was going to say, but I'm going to skip it and just dive in, just given the time. Give me your spiel. Hi, my name is Sari Borditzky. I cover multi-industrials here at Jefferies, including Littelfuse. We're really excited to have them here with us today. Abhi Khandelwal recently joined as CFO following some time at IDEX. A lot to talk about. As I mentioned, we'll just jump in. This is a fireside chat. If you have questions, you can feel free to interrupt me at any time. Thank you for joining us today. You settled into the CFO role in mid-June. What are you most excited about when taking this new role? What are some of your initial observations about Littelfuse's financial strength and some challenges that you see? Thank you. First of all, pleasure meeting all of you. I think I know some of you, but I'll get to know you over time. I'm really excited to be here. As I kind of think about where we are, we're really well positioned to be a leader in safe and efficient transfer of electrical energy. What got me here is a couple of things. As you've probably heard Greg talk about it, first of all, what we're really working through is sharpening our strategy. What that implies is, where do we win? What gives us the right to win? We're in the process of doing that work. As Greg and I spent some time talking about it, that's one exciting piece of it. Secondly, as you kind of think about the brand, think about what we do, we have a broad set of capabilities. What we're trying to do is position our commercial organization to go to market differently. What that implies is, rather than selling in silos, how do we go sell our company as a portfolio to our customers and help them solve their problems? Lastly, it's around operational execution. If you think about where we are, there are pockets of the company that are very well run in terms of operational execution, and then there are pockets that have an opportunity for improvement. If you think about our Asian facilities, they're very well run operationally. However, there are pockets of opportunity across our Mexican footprint. We took a gentleman who ran our Asian facility and made them the VP of Operations. What they're in the process of doing is deploying best practices from Asia into Mexico so that we can start to improve profitability. Going back to your other question on opportunity and challenges, I think the opportunity I just told you, challenges I talked about from a Mexico standpoint, how we're driving improvement. What really excites me is, you've sharpened your focus, you kind of work with the commercial team to go to market in a way where you're solving customer problems. We have the balance sheet to go deploy and really help us take the company from where it is to the next phase of this journey. As you mentioned, you kind of announced three new strategic priorities, the first of which is to better capitalize on some growth. Can you just talk through that opportunity, especially within the higher voltage and energy-dense applications? What can this add to growth going forward? You want to start? Yeah, maybe I'll start, Sari. Good morning, everyone. Good to see everybody and a lot of familiar faces in the crowd. I think Greg, as he laid out on the last couple of earnings calls, we have a pretty broad and diverse exposure. If you think across our vertical end markets, there is this pervasive trend of whether it's higher power or higher energy density. Certain end markets are certainly moving at a pretty accelerated pace of this kind of trend adoption and evolution. A couple of examples you've heard us talk about are electrification in automotive or the data center trends and everything around the data center ecosystem. Really kind of sharpening our focus on where these pervasive trends are, where is the higher voltage, where do we have the right to play, where are we winning with customers, and with our scale and technology leadership, going more aggressively after those opportunities. I think you guys talked about that new business opportunity funnel up double digits in the quarter. You know, what does that funnel represent? Is it near term? Is it long term? How do you guys define that opportunity? I'm going to look at it and tell you it's both, right? Some things are pretty near term, quick wins in terms of how our teams are approaching our customers. In fact, I'll give you a specific example. As Greg spent some time with our customers, it was pretty clear that, for example, two salespeople are calling on the same customer, right? They were a little confused. Now one of the opportunities we have is, instead of being inward focused, how do we change our focus and be more outward focused to think about what is the problem that the customer is trying to solve? We have a broad set of capabilities, a broad set of, you know, a pretty broad portfolio that actually fits into a lot of what they're trying to do. Part of this is changing the way we go to market, honestly. It's a combination, Saree, to your point. Some of these are short term, some of these are longer cycles. You know, as you get specced in, it's a longer cycle plan. I come back to our bookings. If you think about bookings exiting Q2, it's been the highest since first half of 2022. You're starting to see the wins of some of that play itself out. You jumped ahead to my next question, but you know, you did talk about aligning the sales focus a little bit more. Is this something your customers asked for? Does selling complete solutions come at higher margins or higher growth? How does that work? I just gave an example of Greg talking to a customer, a couple of customers who said, "Hey, could it be better if one person called and kind of sold me the whole portfolio?" Part of this is customer-driven. Part of this is strengthened driven by the fact that if you look at our portfolio and we kind of go spend time with the different leaders, it's pretty clear as their sales team are selling their products, there's an opportunity to go get bigger watershare. It's a combination. Some of this is customer-driven, some of this is our own desire to go sell the portfolio versus each of the silos selling the individual product. Does it come with higher margin? I'd say this. I think first of all, I keep anchoring back to what we do, which is safe and efficient transfer of electricity. What that implies is there's got to be value creation, there's got to be a value proposition. I mean, if you think about us, we're a small part of the overall solution, so the cost of failure is pretty high. That's a big part of it. It ties back to our third strategic imperative, which is operational execution. As you start to improve your footprint, operational execution, when the top line starts to grow, you know, the business levers really nicely to 30%-35% long term, and you start to see margin expansion. One opportunity you've talked about with this go-to-market strategy has been data centers. I love data centers. Maybe just describe that opportunity, you know, how are you scaling that go-to-market opportunity and bringing more of your portfolio to that market? Yeah, maybe I'll start, Saree, and then hand it over to Abhi. If you think about our data center exposure today, we've talked about being a pretty meaningful growth driver. It's not double digits of percentage of sales, but still driving some nice volume expansion across our segments. Interestingly, we touch up whether it's an electronics segment, you think more on the rack, or industrial segment, think more data center infrastructure. It really goes back to the themes that Abby spoke to, which is safe and efficient transfer of electrical energy. You're seeing a lot of these data center architectures that have historically been lower voltage, 12 V, 48 V, kind of moving to those higher voltage architectures that presents a pretty meaningful opportunity for us across those business segments. Tie it back to that second opportunity that Abby pointed to, which is if we think about selling that product suite, whether it's an electronics segment or an industrial segment or a transportation segment product to those customers at a kind of funneled approach with a direct sales force, that's the opportunity to get into those next-gen architectures with the customers, which, by the way, we're already working with today, right? We're working with the leaders on the hyperscaler side or on the infrastructure side, most of the names that come to mind. We have the relationship. As we get more cohesive in our sales approach, it's an opportunity to further leverage that growth. I mean, I think just to build on what you said, David, I think this example in particular is a great example because all three segments touch that end market. If you go in with the united front in terms of, hey, here's the entire gamut of products that we offer, I think you have a real opportunity to increase your watershare. That's kind of what we're excited about. This is the one place where we actually piloted this. If you think about the wins that we talked about in our second quarter call, it was all tied to this, this part of the business. Just backing up, because you obviously go through distribution, how does this sales process look through the distribution channel as well? Yeah, and maybe taking a step back, if you think about the Littelfuse business today, about, let's call it, 60% using round numbers of our revenues flow through the distribution channel. What's interesting about that number is a lot of it is, let's call it, directed to distributors, meaning that you're already working with the OEM customer, whether that's a big automotive or industrial or broader transportation or data center customer. I think, you know, bridging back to the data center example, oftentimes we're working direct with the hyperscaler, with the infrastructure provider. It could end up flowing through distribution because, back to Abby's point, we tend to be a pretty small percentage of the bill of materials when all is said and done. The direct engineering relationship is there and frankly has already been there. That's kind of the ethos and the strength of the Littelfuse model is that engineering relationship. You referenced the opportunity for the Mexico factory footprint. Your third priority obviously is focused on operational excellence. You established a new global operations team in the second quarter. Just some early learnings of this team, what KPIs are they focused on? What's the margin opportunity there? Yeah, so look, I'll start with the last question because we get that a lot and I've gotten that a lot, especially given my background on 80-20 and operational execution. Here's what I'll tell you. We're not ready to kind of talk about what the end answer looks like in terms of margin profile. What I am committed to, though, is we're going to do an investor in February. Excuse me. As part of it, what we plan to do is the financial projections for the next three years, along with our margin opportunity. If you kind of take a step back and think about where we are, what we did, as I mentioned, is we appointed a gentleman who was our lead for the manufacturing facilities in Asia to be the Head of Global Operations for Littelfuse. What they're focused on, as I said, is specific pockets of the company where there's real margin opportunity. They're focused on lean processes, they're focused on flow, they're focused on supply chain integration where, hey, you know, five factories are buying the same component. Is there a real opportunity to go drive cost out in terms of being able to leverage the buy, right? It's basic blocking and tackling, but we do believe there's real opportunity. If you look at our Q2 performance and kind of go through by segment, I think without answering the margin question, I do think there's a little color I can give you. If you think about industrial performance, they exited the quarter at about 19%. Really good margin profile. They had a nice growth for the quarter. One of the things I'll tell you about the industrial segment, for example, is we continue planning to invest in that business. At a 19%-20% kind of margin profile, we're really happy with the performance. Transportation has some work to do. Part of the Mexico facilities are tied to our transportation segment. As we start to see that get better, you'll start to see improvement in our transportation segment. Electronics is an interesting one because if I kind of think about the passive and the protection piece of the business, they're doing really well in electronics. What's dragging the performance down for that segment is really the pressure that we see in the power semiconductor business. That said, exiting Q2, as we talked about, we're starting to see an inflection in our orders. As that volume starts to come back, you're going to start to see the electronics business margin improve as well. Net net, what I'll tell you, there's margin opportunity for the two segments that I laid out: transportation and electronics, and overall Littelfuse. As we do investor there, we'll start to quantify that more and what that means in terms of goals over the next three years. You mentioned electronics margins, so I'll skip a little bit ahead. What's the right way to think about through cycle margins for electronics? How do we think about the margin contribution from operating leverage for some of the strategic initiatives you spoke about earlier? How do you think about managing costs for a business at such cyclicality? Yeah, so I'll kick it off and David, you can jump in. I think first things first, if you kind of think about the electronics segment, think about 2021, 2022, I'd say they were pretty, you know, normal years. I mean, the growth rates were 20+% for two years. What you then saw is an elongated, you know, correction, if you will, inventory destocking and, you know, correction of those two years of growth. At the average, we were about 21% EBITDA margins is what we saw. Now where we are today is nowhere close to 21%. We're in the 15% kind of range. Again, as I point back to the power semi piece, power semi is a big part of the drag in the electronics segment. As we mentioned, Q3 to Q2, we should see improvement in our power semi business. That business starts to come back. Our margins are going to start to uptick in the electronics segment. From a, I'd say from an operational flow-through standpoint, long term, I'd say the portfolio is about a 30%-35% flow-through on incremental sales. It can be higher in the early days simply because as you start to see revenue come back, you're not going to go invest dollars and cents. Long term, we're going to invest back in the business to continue that top line momentum. That's how I would think about it. David, anything from you? Yeah, I would just add to that point, back to that leverage of 30%-35%. Historically, our electronics segment, we really see strong kind of incremental conversion on volume growth and feel confident in the ability to execute on some nice volume momentum. Abhi spoke to some of the book-to-bill strength we're seeing. Confidence in our teams and electronics to deliver on that expansion. I'll just pause. If you have any questions, raise your hand. Okay. Given your background deploying capital at IDEX, how do you plan to approach capital deployment here at Littelfuse? How do you think about internal investments needed versus acquisitions, returning cash to shareholders? Yeah, yeah. First things first. As I said, we're in an interesting time, very exciting times in terms of really honing in on our strategy, honing in on where we want to play, what gives us the right to win. That is a big part of the work we're doing right now. As we start to think about that, from a capital deployment strategy, our balance sheet is pretty well positioned. We deploy or we generate free cash flow north of 100%. Quarter to date, we're at 114% conversion. As I think about our capital deployment strategy moving forward, we're going to continue to fund the organic investments, right? That's a no-brainer. The payback is pretty low. It's typically a pretty good payback, and we'll do that. M&A is a big part of our strategy. As you think about the work that we're talking about doing and the work that we want to share with the broader teams and doing investor day, M&A is going to be a big part of it. We're going to continue to deploy capital. Lastly, I'd say dividends are going to be a part of how we return share back to cash holders, coupled with strategic share buybacks. Nothing earth-shattering in terms of how we're going to do this. For us right now, what we're really excited about is really honing in on where we want to play and what gives us the right to win. Maybe we'll get a preview of the investor day here. What criteria are you focused on when evaluating some of your M&A targets? Yeah. How do you think about some white spaces? Yeah, so again, we will deploy capital in the areas that we believe are strategic to us. That said, when I think about our criteria, I think about our metrics that we care about. I mean, look, at the end of the day, what we're focused on is the ROIC of double-digit in three to five years. Part of this is going to come down to the acquisition. What I mean by that is certain acquisitions, if they're a fixer-upper, and all it is is you go take out a bunch of costs, you get there faster. Long term, over three to five years, our goal is to be double-digit ROIC. That's how we're thinking about, you know, return on capital, return on our M&A capital deployment. Leverage is pretty low currently. I think under 1x net debt to EBITDA. How do you think about the optimal balance sheet? I think for the right M&A, we'll go as high as 2.5. The good news is, even if we push this slightly higher, we generate enough cash that we'll pay it down. Ideally, 2.5 is the ceiling, and that's where we would want to be. To your point, we're way below 2.5, so we have ample capital to go deploy. The good news is our cash flow is pretty robust. As we deploy capital, we'll continue to delever as we move forward. It's a good position to be in. It's a great position to be in. I'd rather have this problem. How do you think about the pricing opportunity here at Littelfuse? Is there opportunity to increase price within the businesses? What's your philosophy on price in general? I'll start again by coming back to what we do around safe and efficient transfer of, you know, or safe and efficient electric transfer. I think that is the core to who we are. The work that we do is pretty critical. The cost of failure is super high. As you kind of think about exiting Q2, what we talked about, just given the world we're in, we said we're price-cost neutral is our goal. At the end of the day, it comes down to, hey, what value are we creating? What problem are we trying to solve? You know, we stay on top of it. Our philosophy is we're going to be neutral to slightly positive as we move forward. At the end of the day, again, the advantage or the place that I love that we are at is we're a small part of the overall solution, and the cost of failure is pretty high. You mentioned some recovery on the power semiconductor side, I think, into the next quarter. Can you just talk about the normal electronics cycle and how you're thinking about growth across the product lines? Is there anything about this upcoming cycle that's different from the past? Yeah, maybe I'll start with that one, Saree. I think I'd almost flip the last question on its head and say the last three to four years have been very different. 2021 and 2022 in electronics, a pretty robust and unique growth cycle in terms of golden screws, right? Unique pricing environment, a lot of interesting things going on at the time. The flip side of that, 2023 and 2024, pretty what we call elongated down cycle, right? I think depending on when exactly you stop and start your stopwatch, maybe eight quarters of an inventory correction in electronics. Historically, a normal correction in electronics has been four to five quarters. It's certainly a bit unique going into what's been a stronger recovery in passive electronics for the last couple of quarters. We don't know exactly what the future holds other than it's been a unique past four to five years. I will say on the power semi side, things turned a bit later versus passives. We've seen the same thing happen in the recovery. Passives again, end of Q4 last year, we started to see some pretty nice momentum, have had strong book-to-bill, strong order flows, improved visibility in that business. In power semis, we talked about on the earnings call, starting to see some improvement there as well and feel good about the sequential momentum into the back half of the year for our power semis business. Maybe switching gears to transportation. It performed better than expected, or at least that we expected, with strength in commercial vehicles despite what appears to be a pretty weak market. Just talk about your positioning across auto and commercial vehicle and how we think about market outperformance going forward. You want to start? I think historically you've heard us talk quite a bit about kind of mid-single digits above production in our auto business. I do think Greg's spoken quite a bit about the transportation segment as a pretty diversified set of vertical end markets and a lot of meaningful opportunities to build automotive into commercial vehicles, into areas like material handling and logistics, where again, back to this idea of safe and efficient electrical energy transfer, it's pervasive of any vertical market that's quote unquote on wheels when all is said and done. I do think, yes, automotive, it's been more mid-single digits. Many of you have heard us talk about high voltage electrification is a nice trend for us, electrification. Broader than that, we see some pretty meaningful opportunities. You heard us talk about on our earnings call some of the commercial vehicle growth that we've seen in the last couple of quarters, despite what we would consider some continued soft underlying commercial vehicle end market trends. I think to build on what David said, this is one area where you can truly see a couple of things play out. First of all, I think this is not a story of market. This is a story of focus. This is a story of how are we aligning our commercial organization to really go understand our customer needs. If you kind of think about the margin performance in Q2 and the work that the teams have done, this is early days, but you really start to see the operational improvements start to play itself out in the transportation segment, especially given the margin improvement that we saw on a year-over-year basis. You know, EV was kind of one of the things that people were very focused on, let's say, even a year ago. Just how are you thinking about that demand as we potentially enter a weaker EV market, at least in North America? Yeah, fair question. I think a couple of things that really position us relatively well from whatever the EV market ends up looking like. One, if you think about our auto exposure today, and by the way, we talked about our transportation segment, which is mentioned as automotive and commercial vehicle markets. Automotive all-in is maybe 20% of Littelfuse revenues, but it's a global business. We're a scaled supplier and partner to OEMs, whether in North America, Europe, or in China as well. I think to your point, one of the trends that we've seen, it's pervasive throughout the market, is continued strength in China from an EV growth standpoint and softer trends in North America and Europe. What has helped us is having those global relationships and a pretty diverse customer base with all said and done. The last thing I would add is, automotive electrification is trend. Electrification tends to benefit us as well. If you think about things, let's call them in the cockpit, the infotainment system. Again, more electrical energy transfer really brings higher value opportunities for us when all is said and done. You know, transportation, I think you guys mentioned achieved mid-teens margin in the quarter. Is this a good steady assumption? How should we think about the puts and takes there? Is there opportunity to expand margins, maybe to reach electronics and industrial levels at some point? There is opportunity in the transportation segment. What you see, again, as I mentioned, is early work tied to our operational execution. I will tell you, again, without putting a number to it, there's definitely room for margin enhancement. The other thing you're seeing in our transportation segment is the work that we're doing to simplify our business. What we're trying to also do in the transportation segment is look at the tail of customers, look at the tail of customers that we serve. For customers that have complexity, but really no profitability, it's a large list of customers, but a very small amount of top line. We've simplified that business, walked away from some business, quite frankly, so that we can improve profitability and our profitable growth. More to come on that, but I do believe there is room for further improvement in margin on the transportation side. Sounds very 80-20. Maybe I should pause on end market stuff and talk. What's the 80-20 opportunity here, and how do you think about applying that? Yeah, so look, the transportation piece, especially the commercial vehicle part of the transportation segment, is run by a gentleman who's well versed in 80-20. I've actually worked with him in a prior life. We've done some work there. Again, early days, there's definitely opportunity. The size and the magnitude of it, we're still working through. That's one place you really start to see the margin enhancement driven by not just top line leverage and the operational execution, but it's also simplifying the business, applying some 80-20 work. On the major industrial markets, you've seen some robust growth there this year. Is that all related to end market demand? Are you benefiting from any restock there? Just how is the growth across some of your high-value markets, such as energy storage? Yeah, I'd say industrial is a good example of broad-based strength with the exception of construction and MRO. I think what you're seeing in industrial is a couple of things. First of all, it is end markets, but part of this is about the work that we're also doing in terms of higher energy, higher density, and the focus that we put on it. It's this whole go-to-market conversation that we just had. I think if you look at the performance for the segment for Q2, we're up, what, 19% top line, 17% top line, and had really robust margins at 19%. Our goal is to continue to invest in the industrial segment, continue to move the organic needle forward. I think pretty excited about where we are with that. Yeah, and I would just add the industrial segment, you know, we're pretty diverse in our exposure. Again, back to the hitting on the same things, but safe and efficient transfer of electrical energy, whether it's grid storage or an example of, you know, we talk about industrial safety, right? Some of the increasing regulatory requirements around electrical energy transfer in a commercial kitchen, right? Think about a fryer in a fast food restaurant. I mean, these are really meaningful kind of growth trends for our business. Our industrial segment with some of the new product innovations they've had and kind of expanding and kind of developing these next-gen architectures with the customer base has been a good trend for us. One thing I was noticing as I went through my model to prepare for this is just kind of the uneven margin performance across the quarters within industrial. How do you think about the current target for high teens? Is there a way to reduce this variability or is it just part of the model? That is actually one of the biggest things that we talk about internally, the variability in the margins. To your point, we saw 19%. I will tell you, it's not linear. There are certain quarters that are lower than others, just given seasonality. You might see a little bit of variability. This kind of comes back to really honing in on the operational execution piece and making sure we're staying on top of it. Even as the volume starts to come down, we're delevering at a much slower pace than what we've typically seen. The operational execution piece is a big piece of how we're focused on making sure our margins are not as volatile as they've been. As you look in the business into 2026 and beyond, what are two or three key metrics that you're most focused on just to ensure the durable earnings growth? Organic growth, efficient allocation of capital, and this operational execution piece. The organic growth ties back to the two strategic priorities we've been talking about. Those are the things that we're laser-focused on because what we're trying to focus on is your earlier question, which is how do we have a model that is not so volatile, that earnings go up, earnings go down. We're trying to manage that by focusing really on the go-to-market and making sure we maximize our volatile share. One of the questions that we're super curious on and we're asking everyone is just as AI continues to improve operational efficiency and expand capabilities, how do you see that impacting growth or potentially margin expansion in the near term and then over the long term? Maybe I'll start there and work backwards, right? A couple of examples that Greg has spoken to is you think about, you know, and Abhi mentioned this earlier, our Asia manufacturing footprint. We're really efficient, kind of well-run. We'd call best practices that we're trying to deploy, by the way, throughout the global Littelfuse footprint. AI is an area where we've built some capabilities in those factories. The idea of kind of reducing lost times or defect detection improvements are a couple of areas that we've really seen some enhancements from the margin side. Again, I'd say it's today a little bit concentrated, but opportunities to deploy that throughout the footprint is a broader, within that broader realm of operational execution and excellence opportunities. I know we're running up the clock. Lastly, if you could just sum up, what do you think, especially coming from a new position or maybe coming from the side of the fence the other day, what do you think investors might be overlooking at Littelfuse? Looking ahead, is there an aspect of the business or strategy that you feel deserves more attention? Yeah, a couple of things. Look, I'll anchor back to the first question we started with. I think as we solidify our strategy and solidify where we're headed and lay out the details, a couple of things. First of all, I think we do have a pretty diverse set of end markets we touch, and we need to do a better job, honestly, of articulating where we play. Like the data center is a great example. We've been a part of that end market, but we've never been able to articulate clearly and we've started to do that. I think as we, again, as we sharpen our strategy, really hone in on go-to-market and drive operational execution, you should start to see that both on our top line and bottom line. We will, again, clearly articulate our three-year financial goals as part of the investor day. All that said, coupled with the balance sheet that we have, we're really excited about where we're headed. We expect to provide a lot more details and clarity around the end markets and our financial commitments as part of the investor day. David, do you want to add anything? Please talk to me. Yeah, I'd say just excited to have Greg and Abhi on board. I think if you think about the balance sheet of the company, the cash generation that Abhi pointed to, it's just a really, really strong foundation to support the strategic initiatives. I look forward to sharing more in the.