Bel Fuse (BELFB) 23 Feb 232022 Q4 Earnings call transcript

Good morning and welcome to the Bel Fuse Fourth Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I'd now like to turn the call over to Jean Marie Young. Please go ahead, Jean.

Thank you and good morning, everyone.

periods. like forward-looking everyone expected statements financial for I'd call this operating begin, performance certain contains regarding future we to that remind conference and Before the company's current These expectations. statements on are the based company's expressed Actual results may and a by periods for other to factors. forward-looking due of or from statements differ these number implied materially future those risks

subsequent with Commission, discussed may time our Additional including in and Securities quarterly during of SEC yesterday's reports press non-GAAP in non-GAAP results discuss results is information about filings included annual the and this We recent factors included most the with that results and our time. could GAAP press in is report and been reconciliations other potentially our our to and release. XX-K filings Exchange results call, from impact our financial Form also our release to have on

available our Our are filings press IR all the and of our release at section SEC website.

call Bernstein, President today and of Relations. Joining Vice me Investor is Financial Hutkin, CEO; on President Farouq CFO; Lynn Dan the Reporting and Tuweiq, and

to the I'd like Dan? turn that, call Dan. over With to

to to Yes. Bel, all during finish team's we year Jean. record-breaking to that these a thank for at hard work chain reach and us Thank dedication milestones. We report a strong like a our We're off. very pleased even challenging with would a you, our year demonstrated supply where to environment, allowing paid has associates

line this group the XX% leading of sales increase a the groups Power our Each year way with double-digit product a year-over-year. growth three show with top in

our Power EOS 'XX. sales the respective materials and raw of over invoicing over have circuit reflecting levels. growth were of had digit Power all sales products protection XX% up and record in products double million XXXX, 'XX during CUI Sales $XX.X the 'XX, Excluding surcharge

[indiscernible] within SKU past a major group targeted profitability, acquisitions, Through of Even XX.X% 'XX years, expansion EV product quarter X thorough up every with showed at combination investments QX group a starting XX.X% sales and at in X, substantial Power a XX.X% group year, XX%. X, been $XXX closed this at the finishing quarter focus. fiscal 'XX in the has and of review of gross XX.X%. Over margin the X a in strategic this quarter in million margin quarter,

XX% this Our our revenue well With partners in segment, markets. Connectivity aftermarket saw closed and continued the sales with 'XX, Solutions distribution in some support a by 'XX on production. $XX as offsetting for 'XX. over group throughout million in 'XX revenue remain softness a strong commercial Shipments in aerospace network over jump up at as XX% highlighted year, new noted end through aircraft military our increase

XX% group networking demand a particularly half Transformer had increase the Dominican Our Republic an year business initiatives million sales year. increase our posted of the factory primary implemented in customers. first were of due 'XX during 'XX, from during due in this 'XX, versus largely high its to sales the Further, Magnetic Solution from in also at year. customers, Signal $X.X the in industrial medical price taken a and earlier higher increases Lead to demand Signal's in our

facility business is to in in going EBITDA the actions the a to group last to additional of a Solutions The consolidation a $X.X an year, costs third we be quarter million previously anticipate 'XX. restructuring The billion Magnetic in million in move this cost announced $X as X in of versus through incurred Through the quarter. recorded what of Asia million related in 'XX project of was resulted combination $X.X balance breakeven through these major 'XX. and

of is manufacturing practices continue is at going in providing 'XX. history, the project facility to improvement best side quarter double the approximately continuing done as is with more 'XX. headcount during from the The indirect and to this completed financial by knowledges. facility we end Even will associates the our and XXX transition XX% This staff new as [indiscernible] planned at the and forward, strive of we the work work be facility to currently program and results scheduled for recognize to on first over of agreed margin aided the BGX are QX new to be There our expect firm. our by being

of talent in around Head recognition had improvement company November. On Kozlovsky compensation side, People course program and and of joined Suzanne and development, a continuous retention. our the HR new been Global driving values the culture,

most people important the are asset. Our

in culture in to Based Bel and Changes an near take order thrive. we understand changes to our free 'XX fully now related term come formed restructuring operational and steady responsibilities. and to associates and management for progress that executive decision this more Suzanne time But interruptions our global day we session from of variety a that was our our to up on discussions take there's to on front discussed offsite the and to these In place from our debate throughout footprint difficult where in within speed. a team day long we assessment It dissonance. throughout of the assessed 'XX, late XXXX. strategies, was engaged 'XX, need made

and consolidation last year. facility this as progressing quarter completion all planned with later announced project targets The are four

as have Bel's in the business. we initiatives will be foundation further riding past that significant will the as identified the Bel's past and is on all been how this session our strategy continue of proud the line. years done collaboration be objective in fully bottom 'XX job that within end completed be The an associates Many results. our focused effort more into a focused We're such strengthening 'XX to by year progress should these a the This Our improving on that of future ship, a position company's organization. X of well to celebrated. translates focus now best of

call update on Lynn to over turn Lynn? I the At in would this like financials. time, point to now to the

Dan. the XX% for and led related $XX.X XX.X% quarter, $X.X XXXX. premium Protection quarter Thank of million, these By fourth sales EV compared prior. fourth increase to million to you, of from Of sales in of million $XX.X fourth and Overall, charges the of in primarily $X.X quarter higher year's by group, were sales sales Solutions on invoicing power were growth increase power Gross a materials. an products XX% up product million, quarter Power last increased from margin an $XX.X of sales. front-end our is $XXX XX% year of to increases, million products, million of industrial as

quarter, taken improvement from group this basis favorable XX% driven some shift point the 'XX, year and by benefits largely FX. mix, the favorable fourth a for product XXX of for impact was from past actions over in margin pricing the QX Gross a

of Our Power 'XX Solutions XX% backlog and quarter a and Protection fourth of group X.X the book-to-bill of million, ratio had XXXX of an during of increase $XXX orders a year-end. the from

Solutions for sales through Group. margin XX% an challenged market. of channels. the of Connectivity quarter, from due for fourth quarter XX.X% XXXX, the decrease our end slightly year-over-year in X% our quarter, fourth $XX be were a of last this at XX.X% strong mostly aerospace 'XX. resulting in this quarter rebound fourth in down Gross from past to Military increase group came in the distribution million, continued to and to sales year's Sales of continued Turning commercial the defense

X.XX orders Throughout of had by a to workforce had million the to in majority in air. quarter during related XXXX group accommodate December and inefficiencies $XXX this a backlog an of Solutions of the of at XXXX, XXXX the of ratio book-to-bill rebound increase year-end. XX% XX, fourth from of group impacted Connectivity commercial needed a ramp-up the been The the

year from year's this group million, group XX.X% fourth quarter. down actions our for quarter of lowered year versus taken prior. of this significantly in from XX% XXXX pricing labor in had the Lastly, exchange in improved last for Chinese our costs the the group past Gross dollar, Renminbi sales Margins U.S. the Solutions XX.X% favorable shift which XXXX. over Magnetic from fourth rate a versus to of $XX.X China QX margin and benefited a

Solutions down the orders worth they book-to-bill for backlog group networking the of products customers XXXX X.XX the largely from and quarter The magnetic on inventory finished ratio XXXX Magnetic backlog, as in year-end level. work Our of our during quarter driven demand by their of million is $XX reduction had from in XX% through a fourth with lower hand.

million which to At in orders the consolidated that component primarily there due of were were level, ship $XX availability. did to scheduled not QX,

salaries, of were but Within total year, last were a related expenses in administrative SG&A, or rep $XX.X and fringe slightly fourth the general and $XX.X million sales, sales. up increases commissions. of to percentage million as XX.X% selling, benefits from primary down the quarter Our

We items. million quarter flow year-end. cash increase $X.X of the from million, $XX.X balance Turning a and cash to sheet an the with XXXX ended of balance

$XX.X saw our increased Our working by a balance. million We capital during increase $XX.X in accounts million receivable XXXX.

DSO XX, XX Our at from Inventories XXXX, days increased XXXX. days December XX year-end. December were $XX.X last compared at by million to XX,

during extent While to XXXX, it a half to second investment inventory compared of in half the of continued there first was lesser was the XXXX.

year other addition included of cash $X.X capital, we payments program, dividend capital of In $X.X and of to expenditures million. flows changes XXXX million where for continued working our made items full in impacting

Cash payments taxes and million million. was paid $XX.X XXXX interest income for $X.X during totaled

outlook on additional XXXX. call the turn for Farouq? now I'll over and to Farouq color

speak with Thank everybody. Lynn. everyone, you, to and nice Hello,

XXXX and is across point contribution Bel Looking this deck back all tremendous of has team we efforts to locations. and our XXXX, gone journey. and in really members an work at into amount on hands recognized global getting our that This

in we're and and and to a mentioned, Dan happy XXXX head at with pursuit. XXXX direction our sense close with focus sharpened our of into As wind out backs beyond the

we improvements. amount both in XXXX, to a and certain good opportunity out for growth areas margin look we As see of

in managing lean pursue inflationary easing products we certain long-term to and our restrictions capture plans, constraints While will position tailwinds to the to our continue supply in related broadly announced certain chain out markets, and consolidation the positive end Bel pressures, China facility continued growth in COVID structure speaking. components, cost previously

for enter Pivoting -- XXXX we to backlog as XXXX.

they a in saw versus thought working the to we factory. in our out sub-X book-to-bill what reducing working and we getting deliveries today months it as the our X their get X customers time rationalized on We're for been to months ago. to with XXXX, lead as This this a related while have first needs quarter, times

factor is of in While we their adjusting high most the to customers we products. work our This in see the end inventory and [indiscernible] to for of markets, through magnetics. demand levels case lead needing in believe reduction particularly softness across consumer-facing is some times larger here the

bookings the demand areas we noted magnetics end a that are coming in higher we're all On Power growing, down To that On are slowing. our other steady, and relatively e-mobility. flat. orders is and and that contribution military in certain is backlog lead coming of areas in hand, while coming and In where margin. seeing connectivity and areas aerospace, seeing robust Lynn, other commercial, are the new the as increasing is of are when added by times from. on been short, has rotation bookings quality are together

a as the first, point starting normalized Using raw to alluded $XXX revenue backlog be minus we the assumption surcharge flat either in for closer or base, want the earlier and as pieces knowledge $XXX outlook, was of given level million. of the to when million basis invoicing, of we to was revenue as of But To XXXX XXXX total to moving our it the either digits commentary. direction. number using our on side revenue that, was the the single for some material top expect set in to low million. plus best on line $XXX

positions on, little a year one key business commercial of you more coupled overall key areas, be some of highlight our of are few give given growth growth. with To a should our leaders and insight air this we

XXXX, acquisition to in into margin a in air double-digit sales million, XXXX XXXX has commercial QX up sales cycle of we up growth top key and direct from $X capture be Our side. set very grow in the were XX% customers to to RMS expect QX and in line territory. early nicely, this us on both the

is end This their team great and and a strengthen our aerospace Bel's ability testament the commercial position market. to on

to side, been Europe the years a low On in beneficial order following current affairs the of few defense have global us. volumes,

top the for We full as line in our year be to the segment well. expect Defense in double-digit XXXX zone growth

spent have year both them For time commercial sit of as and we defense, improving they air within a connectivity our group. lot last

our previously year. adversely As impacted significant you about ramp margins recall, in XXXX that that QX we have in spoken the last throughout headcount occurred

a have off. pay team's to reversal XXXX, and work For expect meaningful we hard here see the

XXXX We and doubled committed in On had in XXXX expand the not we demand. this XXXX mobility side, double $XX XXXX meet another surprised we in to to if new dollars and growth be again have would million. over CapEx nearly robust the production

on where if doubled also certain we retained. stake in have strategic to now the ability We a with minority our down are investment ownership profitability innolectric, thresholds X/X expand

the consists in to a focused Bel team and very highly which They're customers for fast-charging use. of commercial technology Innolectric similar skilled on engineering terms we believe is the right onboard vehicle market Through revenue looking welcome jointly synergies. road focus, exciting to to place want forward our we to this real partners an new to partnership, and ahead. and be. expect We channel grow of are

the market chain for has tailwinds we group. out backlog. since fewer overall all networking center in the there But this Power slowdown seeing given as On remain the the both this We are XXXX, XXXX. digests of this and The an the magnetics see out components are reduction end and of in given serve ramp Magnetics term, and we our in is it in where data we longer-term product side, that smoothed set, in growth market. the will supply bullish secular medium

year. magnetics our products times of what time they Lead this XX for which weeks, half running last about are were currently is

On power certain given on demand the and the constraints here IC's, robust. remains side,

testament tale to product also market to in cities of We this us a strategy of business. strongly for net-net, our prospects So is diversity. X This in a the is this believe medium- long-term XXXX.

highly and Of course, is trends to business and our is with areas. adverse secular while certain economic business no diversified in immune aligned cycles, megatrends

depth down growth. areas breadth see profitable deep our continue and portfolio, the customer Looking key ahead, our we doubling our in to and in continued as strength cost takeout of collaborations, Bel underpinning initiatives

believe Today, be start over XXXX. For we QX QX XXXX, good strong to off a XXXX QX numbers. with mid- to it's digits will single up January high

on compared from the the the impact We to from expect New XXXX, performance to business. QX as down though better our to seasonal due well margin QX XXXX Chinese side usual Year

also end For markets, announced XXXX on areas diversity our macro look continuous while to an our about it perform product previously of improvement XXXX, a consolidation we're in sum improvement. offerings to focused believe we're fruition uncertain great and for To continuing on and backdrop. focus with of plan well up, position getting to we're to excited due and even

call With over back that, turn the Dan. to Dan? I'll

Sorry. we the Claudia, open questions, can up call for please?

from The Research. [Operator Instructions] first question comes from Hills O'Neill Litchfield Theodore

Not customer Congratulations on innolectric. the the clear, good them you are questions quarter. is to this both? a or Couple or of selling about product

software that with of it is would a packaging nice the and of sales ownership on product set. We a customer So, lot business. of an manufacturing complementary side great They its business. but have we a set a of complementary stake. skill bring side set an we a terms And product it product. and in in and they took They own be manufacturer and are think the business a connectivity It's operations equity stake marketing, additive. have capabilities,

a I'm sorry. just bit it's Farouq, little --

call Just bit a as it more this a in sales. little building technology their more the a at wouldn't process product portfolio. We now clarification. time. up it of They're I manufacturer see

going portfolio We our So their very they're align strongly at initial that felt forward. product product will portfolio nicely stage. with very an

R&D in. So the capabilities of the marketplace an going that for us, participate and extension and have in it believe forward best was where EV they our more R&D of we we products their how

you company? investment what further And to are of for That sort Okay. in stake looking makes sense. the milestones take

Yes.

revenue it key the certain guiding a and be there. will profit post it's So thresholds, really

have leveling talking revenue year sort out of $XX be was and mentioned would not? of the margin you et about this expedited there part Farouq, for of how revenue business. the high would was cetera, And super it those year. in there costs, Okay. about million thought Was the like I

than It's our margin. not of lower margin. margin gross actually it's No, kind

really I to moneymaking paying, expedite just fees, convenience in. of partnering to actually times the given door, a these unnatural we This high-margin a say, product our us out are percentage with customers as be intended would get sales. we're of So the -- But down fees and a it thing. is trying say not brings let's

sales, a from of dilutive. no, actually percentage they're So

Okay. is in $XX availability, And component that to due that million ship Lynn, some orders the specific area? didn't in

it's -- largely That's really much magnetics, in connectivity side. on not across board, Probably Theodore. the power the and so

from James Ricchiuti next comes The Company. from question & Needham

bit relatively little get of away color And dissipating go gradually this raw was where is quarter? eventually the the hoping as to Are that this we material assuming through and going on still I the just level then there's a you surcharges QX that see case high a more QX, in QX? you outlook. year

a slow Yes, thought we amount in QX, this last We would down year. in didn't. but QX QX, seeing really start Yes. say I would actually it noteworthy it into

to tough business. of are really around but doing predict way going the they because are think here we it's part be normal So to not these don't that, of

QX, As really guess for that we but seeing PPV surcharges to it's still take in a some there, hard at would are be. what

usual. know are that we to try So guess going given generally to is we not do this not it,

Got it.

e-mobility of growth is You've trying not see the you to e-mobility. it, one have sales current the business like this business, further quarter, at, it good for as you some areas of but look is into this the in the sounds opportunities only the about the outlook us but able some may that which clearly, And 'XX. you did pretty in have percentage been thinking we're -- given quarter? level get I you what missed how in quantify of growth to the I'm

take can one. I Jim, that So,

up clarify, quarter. just last we of throughout $X group e-mobility go additional sales are sales the million, $X.X that from out these year's QX did actual into applications. and and EV And million were numbers e-mobility but to at just in have that looking was products year, for So our fourth

So $X million QX QX, last $XX and $XX on it right for year. million year's versus million versus annual an million was $X.X around basis, in last

pretty to fair of has just sight the business, in feel prospects this with for the Is line respect an business And year. growth of is you that have some say? like you still area to this sounds this it good

prospect have do We for big a growth this Yes. here.

it for year. the think we this would double -- definitely it I be not again potential see to

We have our component bit a think from help capacity. side that ideally door. And we get committed need little just CapEx help stuff I dollars to to the to out expand of will production get that shortages the us

So insight it's a very rapid my if insight. kind growing any sure. line more on Dan, that's you I know, that, but for don't have of

No.

will Got it. wondering what I have And takes group, you area. guess And some to that have And be working is, just I sense Magnetic are some through these when have? quick on obviously one customers there they that inventories in Solutions of I'm the the puts and a as follow-up.

I one, with really are are -- hands people. because that we again, get their hands networking their they tied it's deal the -- can't On tied think from ICs. of us basically, And the a with Okay. supplies lot with in power

best us still customers side, months X the us, are think long to think a have more can't get on I time X hand, flush lead case, We at we canceling magnetics worst months from X there. X the that other to magnetic because But we the So are properly. least be the case. out for in ICs probably there's fees months. out it'll months we inventory expediting probably to mean,

just do on demand the you're power in from the business begin market. things the that Is of as to And part we do think clearly it. this see -- is still there the about how follow-up level demand side bit? to a segment Got good slowing potential the normalize, of pretty the you this seeing that of

IC I instead the year, we a a our Again, think, order see during of us now difference I gives is again, gives bar think the orders -- of the the year. the us X now sales -- backlog think because bar constraints, X I

leading more to Power the the we of side, strong. lot the backlog, a bookings. NPR we of the still opportunities from on standpoint. have going We that's staying think -- been acquiring from pretty plus with forward compared So going really of that's spent lot And where that on real focused the CUI that -- think engine a is We is backlog time growth sales do that's do great the EV, a growth Power growth. a has

from The next question Hendi comes Susanto Gabelli Funds. from

over reasonable to Like your go on it to we commercial versus the can things think baseline should assume current is past the then the be the level. Lynn, based where level? aerospace rate pre-pandemic I that the or run new And than back is baseline, for math Farouq acquisitions, when go pre-pandemic market? higher

the and year On -- the side, customers. commercial into air are these we direct finished sales

commercial last So this distribution. was air were up into million. going through That year. $XX million sales excludes from Year-to-date, anything $XX

XX% and So million, If it for range, we combined. in that increase. a $XX look million Cinch pre-pandemic at was business RMS levels, and the our that $XX around was

back not have past that comments? certainly or are we get would if not next We So hope year I the say. X, in sure you I'm Farouq, level to additional any that yet. at

surpass into we'll Hendi. your Yes, point,

think a baseline. I be new there'll

the that ago So is X number, I million baseline. kind $XX think X, of year the

discovering we're think is. that baseline do I So what

defense historical rate share the what similarly would the versus market, for And able then current you to be baseline? run

Sure.

year hand, military was basis. that a the market, prior the around year. running years. the don't at $XX last the that from for that year-to-year down historical $X.X for on million down I XXXX-XXXX. has It looking view to slightly. the I So been know few million was back military And have about was low

if can I want. help Lynn, think I you, you

million, $XX correct. it's XXXX. I have your so million email, $XX 'XX for on you XXXX, million, and Based to I $XX was then If was go defense assume

year market some of expectation turnaround data second see on view? question in return inventories? customers whether XXXX calendar companies type Some growth one half then may be have any long digest will And their that to center the or the of how you Any market. an there expectation additional that

Maybe handle one. that I can

years people On Google. a and ago four three center us for where or Facebook market, the market supplied was substantial like we data

that However, during wasn't business, we the price us. made for portfolio it thought sense pressures we a saw in that

So markets it's is on don't we focused where have our of niche area, of more standpoint. for we we again, a -- what a are lot better cloud not we consider this But the market networking and now, become in other margins. from

I see. And then Dan...

Does you or that help no?

information think that's Any the data run for center I Yes, rate current helpful. on the market?

wouldn't I substantially. think I don't two four that or sorry, -- But three don't in enough breakout. I'm three Maybe it's it's -- key three have I mean, I can't or say. -- to needle I move the key or that -- four marketplace. customers

Okay. And how...

of Microsoft, the or Amazon, none not Google boys. Again, not Facebook. But not big

on Dan, then, And market? networking see. I any insights the

is is? center question big data your about exposure our Hendi, the to how networking

of networking like the state No, the market. no,

the I on down in think inventories. customers working their magnetic are networking,

the So customers networking like now data there's the market? in will outlook center their whether and when any market fully excess previously on then digest inventories

reflective. think be it I should But

-- data same everybody in there's looking think the problem, say, industry, months. six a they as our I said time is people where networking are Any months. X

Again, to everybody is didn't material. materials, inventories out that have So much next too the the brought the was I think ICs flush they problem but they to in over six build expecting the months.

ICs the and other other. go So each understand we now they're down other as material, the ahead. will with be working they -- ICs logged the the From materials get in, what

ahead. go Dan, Sorry,

it. that's No,

different that as supply That from supply going of market we sides public market reading, saying, side, of needle we're is the an kind okay. the simple maybe every Hendi, pointed to that smoothing The things magnetic to, chain end perspective, here, But just thread it you the product is seems from house. set. a out. just out was to more X I end be

So that them needed. we faster power and rate were were get them the than deliver able products they to to to able supplies they get at a

there magnetic So little still demand power. side sitting a us, there the of on over of with they're is the kind but in the inventory

because product product right? what's not on into issue that's a it what discussion it's bit it's a So as is depends it's nuanced in. going little as coming just much a it. of the So market

from Presidio The Asset comes question next Management. Kim from William

forward, seeing us job margins. you the And going for guys quarter. flow cash free cash statement year good to and if the idea earnings releases? quarterly wondering, was could you improve flow could of provide what was I give the a an And those for

Farouq?

Yes.

do to certainly going So that we before can forward. look

Let can year. you -- the me give so I just

cash was flows $XX.X from, the million operations by had So And of year, then for we provided million. CapEx. $X.X

So your is cash million. cash provided definition $XX of about it's less free operating CapEx, if $XX million, flow by

And numbers? it free perspective cash that flow earnings to a conversion, Okay. that going as considering that net there. Is assuming seems I we a flow guess think of how usage there's more about capital use lower guess, I'm I free from And net continue be earnings can grow? EBITDA to significant cash an you and perspective, cash is significantly than your even

lot P&L I of it, the of gone work 'XX would last say. So a in into side year

go inventory step and So some margins. the X. we the trying happen going as there, through that saw pretty overall the to get year. there. consumption our working just in sequentially think and on about investment And rampant That's capital of EBITDA profit we cash up saw issues we and Obviously, of kind

elevated I capital So we working would say have an number.

in So you should not normalized be kind that [indiscernible], if times, it cash of taking will.

debt, And about regular around given times obviously, year, lot $XX we of which for million work going been a then This probably in bit our going. on. more spend a us. that's is, are rate and down taxes, and rate cash -- our paid dividends I'd we how interest environment, in -- we our we pretty which interest have all have Obviously, say our probably we've we'll little of consolidation again, right CapEx, know coming Historically, steady.

of. is more upwards But been to I and thing our would we're do and continue which we'll trying to margin the improvement, say we have get biggest profitability

our need I things bit bit. a work think that to down occur little inventory will position, little and we think we slimming on as normalize a

you about a Or working normalized of you talking the growth capital kind are you when environment? So normalized, slowing are say talking about environment?

supply the of chain I availability the and say easing of materials. would

finished -- $XX missing potentially we ship have or talking other think that that bill. million we some supposed as to about were because we're and as to parts had couldn't of about [WIP] Lynn of was ship, but didn't the worth we customers the have pieces We goods scheduled our

sitting So bigger amounts we up of inventory. end on

supply and of money of bring Obviously, because you the in and can it that becomes buy a we of your put in as it a inventory it down. where the partially of make chain lot years little up supply our the out, raw will more send build, eases materials, chain. couple and So the disruption predictable last

question from from next follow-up question James The & Ricchiuti Company. Needham is a

you could material alluded in some surcharges gross quarter perhaps to from impact the margins to. I'm if you of that the the size the wondering dilution of

think perspective, XXX points. from -- from gross gross It's basis margin than margin that's a perspective. a I it's less So

right bps. was margin that our gross rises different, I Yes, XX think if it's little it's would've as been it bps. out. of sales XX higher it bit. a And percentage say a Because

year, the overall make has the doesn't perhaps these extent could looking the pricing, broadly, what Farouq, the Bel think to maybe closely, about not And we into the and but sense pieces through way going makes portfolio, do environment. what sense. I going to through the characterizing think also the I more for pricing about what talked seeing and at as play wonder, SKUs business? maybe more you talk outlook product only you're

Again, pricing. I'll to our the want Farouq, overall very me simple do in you industry. that? do take

to longer firmer or pricing go tends lead higher. be times As out,

think just down, pricing our a pricing history. to on little any pressure times As product based there'll competitive. We're does see past lead bit some become it We starting in lines. don't overall come of be more

business power business, aerospace strong. look pricing be military we at think overall our should pretty you or firm our plus the If

the and magnetics face Protection pricing group, they that might they post-COVID the haven't Circuit going seen On pressure forward.

our know margin focus then properly? our of major and can maintain we of to And streamlining line structure. a getting now do really to everything if current we we're organization. job face are that, do to better is we our we that the address it we doing improve cost have So And

And again, not it then from of handle So walking we price a when something better. away pressures because in, do these lower can margins. lot come

more that? can to some you Farouq, add color

healthy focused cost I a that game. price Obviously, a covers We it's we're margins. think growth No, on understand profitable that it. and with

least price I business the profitability to profile on get cost of the part side it doing it. have do what calls, we lot not. where as At is already, to year. On we cost noted, lot and structure a we of last educated more phone if about a make on where the think, depending those the cleaner on decision do a an talked we Dan concede will We're

the maybe cases, in discussion maybe answer position. different And then Maybe cases, commodity-based sole not. In that's are and some of is we some stuff. a our some

of it's one But because Jim, diversity think cost in post try fits the size the we're the all. be SKUs. and order, know portfolio, XXX% add of our our successful get price is I guiding value downs. don't at customer not of a I we So going to our But think resist to to

turn to Dan like Bernstein now I'd closing Mr. questions. further for remarks. back no sir. are to there you, the call time, Thank this At

Thank you, Claudia.

just XX when of surcharges. bit a was clarification. of XXX was but bps. Sorry, under on the a I It said bps really the little question it had the misspoke gross impact asked was I margin, closer.

would bit removed. margin gross our So higher it was if a

just there. a point clarification So of

Dan, ahead. Sorry, go

our in good Thank And a problem. our everybody you April. No forward Thank today. weekend. I a wish report looking results day, for joining you. we're nice and call to

conclude much. very and today's this you Thank Ladies teleconference. gentlemen, does

your lines time, You this thank for participation. may and disconnect your at you