Bel Fuse Inc.

Good day and welcome to the Bells Hughes Inc. Third Quarter 2021 Results Conference Call. Today's conference is being recorded and at this time I'd like to turn the conference over to Dan Bernstein, President and Chief Executive Officer. Please go ahead, sir.

Thank you, Catherine. Joining me on the call today is Farouk Tariq, our CFO, and Lynn Hubton, our Director of Financial Reporting. Before we begin the call, I'd like to ask Lynn to go over the Safe Harbor Statement. Lynn?

Thank you, Dan. Good morning, everybody. Before we start, I'd like to read the following Safe Harbor statement. Except for historical information contained on this call, the matters discussed on this call, such as statements regarding expectations concerning backlog and sales, our diversification strategy, expectations concerning our long-term growth and the impact of acquisitions, anticipated impacts of our business, and the estimated effects on our operating results of the ongoing material shortages and worldwide logistics situation, internal initiatives to improve margins, our expectations, plans, and intentions for fourth quarter and beyond, and with respect to our strategic focuses, strategic plans, community investment, environmental impact, and capital allocation, our forward-looking statements as described under the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Actual results could differ materially from Bell's projections. Among the factors that could cause actual results to differ materially from such statements are the market concerns facing our customers, the continuing viability of sectors that rely on our products, the impact of public health crises such as the governmental, social, and economic effects of COVID-19, the effects of business and economic conditions, difficulties associated with integrating recently acquired companies, capacity and supply constraints or difficulties, product development, commercialization, or technological difficulties, the regulatory and trade environment, risks associated with fluctuations in foreign currency exchange rates and interest rates, uncertainties associated with legal proceedings, the market's acceptance of the company's new products and competitive responses to those new products, the impact of changes to U.S. trade and tariff policies, and the risk factors detailed from time to time in the company's SEC reports. In light of the risks and uncertainties, there can be no assurance that any forward-looking statement will, in fact, prove to be correct. We undertake no obligation to update or revise any forward-looking statements. We also may discuss non-GAAP results during this call, and reconciliations of our GAAP results to non-GAAP results have been included in our release. I would now like to turn the call back to Dan for a general business update.

Thank you, Lynn, and thank everybody for joining our call today. Before discussing the quarter, I would like to thank our global manufacturing associates for their ongoing dedication to Bell, and it is their efforts that have kept all our manufacturing sites up and running in the third quarter. Turning to our results, we achieved a third quarter of meaningful year-over-year sales growth with new record highs in both quarterly bookings and in our backlog of orders at the quarter end. The increase in demand is, of course, all our major product groups and markets. Leading the way is Power Group, which had substantial growth from CUI, e-mobility, and the circuit protection division. Interesting to note, circuit protection, our oldest product line, had the best quarter in our history. Our backlog is at an all-time high, totaling $390 million at September 30th. Baruch will offer more details shortly. We are pleased to announce that our acquisitions of RMS and EOS are now fully integrated into the Bell family, and both were immediately accreted to our results, contributing a combined $12.4 million in sales and $1.6 million of net earnings since their respective acquisition dates. On the cost side, we do see increases in labor, material, and logistics, and our recent price increases will offset these costs going forward. The global parts availability and logistics have pushed out approximately 10 million of expected sales into Q4 2021. Rolling electrical blackouts in China is something we are closely monitoring. The quarter also marked a big milestone for us as we concluded our four-year ERP conversion project. combining five systems into one. Since the inception of this product, Bell has incurred a cost of $7 million, with an annual cost savings achieved of $2 million. We're excited about the data and analytic tools that the new system will provide in helping us better review and manage the profitability of our operations. For the fourth quarter, we will continue working on several funds to streamline and simplify the business to improve our margins. Yesterday, we announced Jackie Brito as a new addition to our board of directors. Jackie is currently CEO of HR Asset Partners, a company focused on organization, culture, human capital, planning, and leadership development. In addition, she has a long career at Rollins College Grummer School of Business, where she held positions as assistant dean of admissions, career development director of admissions, and adjunct professor of management. Our focus is on management, recruitment, selection, retention, and diversity in the workplace. We are pleased to have Jackie as a member of Bell's board as we embark on a variety of projects in the coming quarters, which include refreshing our strategy, our growth plan, ESG, associate engagement, and retention, and investing in the communities in which we live and work. I would like now to turn over the call to Drew and run through the financial updates.

Thank you, Dan. Good morning, everybody. Sales by product segment for the third quarter of 2021 were as follows. Power solutions and protection sales were 60.3 million. That is up 26% from last year's third quarter. Our products that contribute to the mobility and market led the group with a growth of 115%, followed by CUI and fuses. As discussed previously, we continue to exit our custom modules business that was a negative contributor this quarter with weaker sales. Our power solutions and protection group finished the third quarter with their robust backlog, which is up 126 million or almost 200% from year end. Connectivity solution sales were 40.3 million, an increase of 5% from last year's third quarter. With the continued rebound of the commercial aerospace in market, which improved by 1.4 million, or 59% from last year's third quarter. Sales distribution channels were also strong, reflecting a 23% increase from last year's third quarter. The defense sales were challenged this past quarter, resulting in a 37% decrease. The backlog of orders for our connectivity products grew by $30 million, or 64% since year end. Magnetic solutions were 46.3 million, that is up 20% from last year's third quarter, led by higher demand for our integrated connector modules that are used in next-generation switching applications. Our backlog of orders for our magnetic products grew by $79 million, or 184% since year end. Preliminary gross profit margins by product segment for third quarter of 2021 were where power solutions and protection had a gross margin of 26.1 percent in the third quarter of 2021. That is up from 24.2 percent in last year's third quarter. The connectivity solutions gross margin was 24.8 percent, down from 29.1 percent in the 2020 quarter. And magnetic solutions gross margin was 23.1 percent, down from 28.3 percent in last year's third quarter. On a consolidated basis, gross profit margin decreased to 24.5 percent in the third quarter of 2021 as compared with 26.8 percent in the third quarter of 2020. Industry-wide increases on raw material pricing, higher labor costs, and unfavorable foreign exchange fluctuations during the third quarter of 2021 outpaced the benefits from pricing increases earlier in the year. The margin comparisons were also affected by $900,000 in the COVID-related subsidies received in last year's quarter that did not repeat. On the R&D front, costs were $5.9 million during the third quarter of 2021, an increase of $200,000 from the third quarter of 2020, largely due to unfavorable effects. SG&A expenses were $21.2 million, or 14.4% of sales, up $1.8 million from a dollar perspective from third quarter last year, but represents a reduction as a percentage of sales. The majority of the increase related to salaries and fringe benefits of $700,000 as compared to the third quarter of 2020, and higher legal and professional fees of $400,000. We also started to see an uptick in travel expenses compared to the third quarter of 2020. These factors resulted in income from operations of $8.9 million in the third quarter of 2021 as compared to $8.1 million in the third quarter of 2020. On the interest expense side, there was $1.5 million in the third quarter of 2021 that is up from $1.2 million in the same quarter last year. In connection with the refinancing of our credit agreement in the third quarter of 2021, we amortized the remaining deferred financing costs associated with our prior credit agreement. This resulted in $820,000 charged to interest expense during this year's third quarter. This was partially offset decreases in both LIBOR, the company's spread on its credit facility driven by EBITDA improvements, and the overall reduction in our outstanding debt balances versus last year's third quarter. We had a provision for income taxes of 1.5 million in the third quarter of 2021 compared to a benefit of 1.1 million during last year's third quarter. The benefit in the third quarter of 2020 primarily resulted from federal tax law changes related to GILTI and the expiration of statutes of limitation on certain tax reserves. Earnings per share for Class A was 44 cents per share in the third quarter of 2021, as compared with earnings of 57 cents per share in third quarter of 2020. Earnings per share for Class B shares was earnings of 47 cents per share in the third quarter of 2021, as compared with earnings of 61 cents per share in the third quarter of 2020. On a non-GAAP basis, which excludes certain unusual and other non-recurring items, EPS for Class A shares were 48 cents per share in the third quarter of 2021 as compared with earnings of 58 cents per share in the third quarter of 2020. On a non-GAAP basis, EPS for Class B shares were earnings of 51 cents per share in the third quarter of 2021 as compared with earnings of 62 cents per share in the third quarter of 2020. Shifting over to some balance sheet items. Our cash and cash equivalents balance at September 30, 2021 was $62 million, a decrease of $23 million from December 31, 2020. During the first nine months of 2021, we made net payments of $16.8 million in connection with the acquisitions of RMS and EOS, 4.3 million of net payments towards our outstanding debt balance, and used cash for capital additions of $4.2 million, dividend payments of $2.4 million, and interest payments of $1.7 million. These items were partially offset by $7.2 million in proceeds received from the sale of various properties. Accounts receivable were $86 million as of September 30, 2021, as compared with $71.4 million at December 31, 2020. The primary driver of the increase related to the higher sales volume in the third quarter of 2021 as compared to the fourth quarter of 2020. The 2021 acquisitions of RMS and EOS also contributed to the increase in AR from year end, accounting for $3 million to our receivables balance at September 30th. Days sales outstanding was 54 days at September 30, 2021, an improvement from 57 days at December 31, 2020. Inventories were $128.2 million at September 30, 2021, up $28 million from December 31, 2020. The increase was seen in raw materials, and work in progress was largely due to increased raw material purchases to accommodate our higher backlog of orders, as well as the inclusion of $2.6 million from 2021 acquired companies. Accounts payable. were $57.6 million at September 30, 2021. That is up $17.8 million from its level at December 31, 2020. The increase in AP was in line with the heightened purchasing volume of raw materials during the first nine months of the year. In addition, the 2021 acquired companies accounted for $3.4 million of this increase from year-end levels. Bell's total outstanding debt balance was $112.5 million as of September 30th, 2021, a decrease of $4.3 million since December 31st, 2020. We had previously announced a refi that was closed on September 2nd that results in overall lower interest rates and spreads while eliminating all fixed principal payments. And with that, I'll turn the call back over to Dan. Dan?

Thank you, Farouk. Catherine, at this time, would you like to open up the phone line for questions people might have?

Thank you. If you'd like to ask a question, please signal by pressing Star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. Again, that is Star 1 to ask a question. We'll now take the first question from Theodore O'Neill at Litchfield Hills Research. Please go ahead.

Thank you. Congratulations on the good quarter.

Thank you.

So I'm not sure I heard this right. Did you say that there's 10 million of sales that got pushed out of Q3 that are going to go into Q4?

Yes. That's what we stated. Basically, it was material shortage, also logistics, and then finally some customers pushed back orders because they didn't have all the components in at the same time.

Do you have any – significant customers that have closed recently due to COVID?

None throughout the world.

Okay. Now, historically, your fourth quarter has been down sequentially from third quarter in revenue. Is this push out of the $10 million enough to make it not seasonal this year?

I'm going to let Farouk answer that question.

Yeah, so I would say Q4 historically has been obviously lower sales versus Q3, really more about workdays available, holidays, ordering patterns, and just some of the things that are outside of our control. We certainly have the orders for it to be similar to levels to Q3, obviously, assuming you get the materials and so on. So I think, you know, to sum it up, historically, yes, a little bit weaker. We have the orders. It just depends on how much we can actually get out, assuming we get all the materials. Okay.

That makes sense. Thanks very much.

We'll now take the next question from Jim Ricciuti at Needham & Company. Please go ahead.

Thanks. Good morning. A couple of questions. You alluded to the price increases, and I just wanted to go back to some of the comments you made, I think, last quarter, where you said that a modest amount of the price increase was realized, I think you said around 15%, but you thought the remainder would be realized Q3 and Q4. So I'm just curious, is that playing out the way you thought? are you still seeing the bulk of the increases kind of split between Q3 and Q4?

I would say yes. We do have maybe 10% to 15% of the customers that do have yearly contracts with us, and some of those do fall into next year. But I think it's our goal that all pricing should be implemented by the end of this year, excluding that 10% of customers.

Maybe one thing I'll just also say, maybe just to build off of what Dan said, you know, you recall when we put the price increases earlier this year, it takes a while for it to work through the system. And obviously the world has continued to change and evolve as we think about all things cost. So this is definitely something we're monitoring on a case-by-case basis, but we'll definitely keep a close eye on it to see if any further action is needed.

Got it. Yes, again. I'm sorry, Jim, just on what Farouk said. We are looking at our pricing on a quarterly basis, not every six months, not every year. So we really are trying to stay on top of it to make up the difference if there are differences between the price increases that we are facing.

I'm wondering how you're dealing with your own supply chain issues. You're obviously dependent on suppliers. for various components. Are you experiencing any kind of decommits from any of your suppliers that might be exacerbating your manufacturing and deliveries? Absolutely, yes.

And it could be different suppliers. You know, I see manufacturers, you know, I think there's a lot of hanky-panky going on where some of our suppliers, even though we have orders on the book with committed deliveries, someone might come in and try to buy our orders from us. So it's a constant battle we face every day. And so far, we've done a pretty good job managing it. But that's definitely, I would say, definitely we see decommits weekly, and we try to address this based on our leverage and the relationships we have with our suppliers. But definitely, we see it constantly.

Is there... potential that the magnitude of the impact that you called out for Q3, that 10 million, gets replayed in Q4? Does it get any worse in this environment? It sounds like you could have a situation where you have this kind of impact supply chain just kind of rolling from one quarter to the next. I'm not sure how to think about this.

I would tend to think that way, Jim. But, you know, maybe using 10 million as a barometer, you know, just because we never had this type of history before, you know, and we don't have a track record of this type of, you know, push outs. I would initially go with, I could probably roll another 10 million next, next quarter, but, you know, things change so rapidly. It's just, it's, it's a marketplace that we have not seen for a long, long time. And again, most, and mostly with some of the decommits and then you throw in the logistics and, In the labor situation, like, who would think you can't find labor in China? But, you know, these are the, you know, the battles we face. But, you know, again, I think that's why most customers have been pretty aggressive of laying out their orders. These give us strong visibility so we can make substantial commitments that we couldn't make in the past.

And last question, and I'll just jump, I'll jump back in the queue. But I'm just wondering, you called out now a couple of quarters. where you're seeing some recovery in commercial aerospace. And I guess it's off a low base, given how that market has fallen. But what I'm wondering is how we might think about that business in 2022. Are you anticipating that there could be a decent recovery that is more meaningful for revenues next year in commercial air?

Bruce?

Yes, so I think the way we would think about it is there is a strong ramp up, quite frankly, a pretty steep ramp up that we're going through right now. And as we scale our business up, obviously it introduces all sorts of challenges, but I think we're pretty bullish on the build rates that are going on in the broader market. I think to... Our commercial aerospace, I would say, from a bookings perspective, is up north of roughly around 700%. So it's a steep ride, but I think we're very bullish on that.

I think it's our understanding that we should get back to normal levels by the end of 2023. Is that correct?

That is our best guidance we've gotten so far, correct.

is there a way to think about what normal is in terms of, because business has changed a little bit. I'm just not sure. It could be, it sounds like it could be a fairly meaningful revenue amount. I think pre-COVID,

So I can answer that one.

So pre-COVID, our commercial aerospace business, and this is just direct, this is not what may go through distribution, was in the ballpark of call it $5 million per quarter. And we've seen that dip down to around the $2 million mark per quarter over this past year. So there is, you know, quite a bit on the revenue side. for a rebound there.

Got it. Thanks, Lynn.

Thank you, Lynn.

Thank you.

And congratulations on the quarter.

We'll now take the next question from Hendy Santos at Gabelli Funds.

Please go ahead.

Good morning, Dan, Farrokh, and Lynn. Dan, I'm wondering whether we can characterize BellFuse that it is benefiting from customers scrambling to get their parts, including BellFuse products.

I think, again, I think everybody's scrambling for products from toilet paper to everything. I think anybody that's supplying anything today, people are having larger visibility. and creating, you know, substantial demand. What makes us exciting with the new, you know, post-COVID world with people working from home more and the type of communication they do need it to do properly, plus, you know, the EV market, we really are playing some strong markets that are generating a lot of growth. Got it. So it is very exciting.

And then on the press release, There is like refresh, like Bell Fuse will refresh its growth and operating strategic plans. Any more color on that statement?

No, I think, again, yes. You know, we've been a 70-year-old family-run company, and I think the board has been taking a very aggressive stand of how we want to move the company forward. And I think with Farouk, the young CFO, coming aboard with a lot of good ideas and a lot of energy, I think the board's looking for him to re-energize the company and take a hard look at every part of Bell and see how we should improve it. So I think, again, I think it's a very exciting time at Bell of how we move forward and Farouk's going to be a major catalyst to make that happen.

And then, Dan, How do you envision the path toward supply chain normalizing in the later part of 2022? I assume that inventory in the channel is also lower than normal, so it will take a while, but I'm wondering whether you can share some insight into what kind of guideposts that we should be watching.

I think that the guideposts we now is, you know, generally we always say we never have any visibility, but from everybody we've talked to in the industry, They're all saying that, you know, will the supply get back from 45 weeks down to 22 weeks? They're all predicting this, you know, by the end of the second quarter, they're seeing somewhat more normalized. Now, I don't know if it will go down 45 weeks down to 12 weeks to 22 weeks, but I think everybody's confident that the lead time should be dropping by the end of the second quarter of next year.

And I think maybe just to build off of that, Indy, as well, That's a little bit of a nuanced question. And the reason being is we obviously play in various end markets, and some of them are going through a fundamental transformation, right? So EV being one of them. And all things electrification, for example. So to Dan's commentary, there'll be some that will ramp up more, kind of like the commercial air we just talked about as well. And maybe some we see a little bit of loosening up. So I think that mix and diversity that we have embedded should position us well for when that day comes.

Got it. And Farouk, are we at the point where Bell can share the magnitude of cell to e-mobility?

Let us maybe think about that. And the reason is just it's, you know, from a tracking perspective, it's something that we're trying to have a little more clarity on. And just the way it's selling, but we hear you, Hindi. We want to put that out there at some point. But I think right now we're just working our way through it and want to make sure we put a clean number out there. So let us get back to you on that. Unless, you know, Dan, if you know it off the top of your head, I think we need to look at it a little more.

I think that's definitely a Farouk project.

Okay. So, Farouk, I do have recurring sales on e-mobility, if that would be ... Yeah.

Okay. Sure. And, Hendy, I'll caution that we may build on that later. There's a couple of more things that we've got to trace to it, but this is kind of just the clear ones, if you will. Okay.

Great. So, in the third quarter of 21, e-mobility sales were 3.9 million, and that compared to 1.8 million in last year's third quarter.

And then, Lynn or Farouk, do you have year-over-year organic sales growth, including that 12.4 million sales contribution from RMS and EOS?

Year-over-year organic sales growth.

So that would be... You just drop out RMS and EOS, and that would be the number. Okay.

That's right.

I see, okay. Yes, 12.4 million.

That's it. Thank you, and then great performance in Q3. All the best for Q4.

Thank you so much.

Thank you. We'll now take the next question from Mike Hughes at SGF Capital.

Please go ahead.

Good morning. Thanks for taking my questions. First, I wanted to follow up on the pricing discussion your gross margins were pressured by 230 basis points year over year in the just reported quarter. So assuming that the cost side stays the same from where it is right today, do you recover that margin degradation by 1Q22 or is it further out than that?

Yeah, so that's a good question.

As Dan alluded to, some customers are kind of 30-day out notifications, some are 60, some are annual contract. But putting all that aside for a minute, as we look at Q4, barring any kind of significant fluctuation effects, we should be on a similar path to Q3 that we just showed for this year. Obviously, Q3 last year had some noise in it from some of the COVID subsidies and things that we talked about. And understanding that just the nature of the business with the backlog, kind of the backlog that we're working and burning off here in Q4 is kind of effectively priced in. So, when we think about pricing, it'll be a little more forward. So, I think we'll see, given some of the reactions and actions that we're taking, we'll see some of that start to trickle into the first quarter.

Just to back it up, the number one goal I tell, and the major focus of everybody in the organization since Farouk come aboard, is really to look at our margins and see what every area we can do to improve our margins going forward. And it's a commitment throughout the whole organization to reevaluate how we do everything in our processes and so forth, you know, to improve to where we have to get to.

Okay. And are you on FIFO or LIFO accounting?

So we utilize standard costs.

Okay. And then what is your long-term operating margin goal? Have you put one out there?

We don't have guidance on that. Just given overall, we don't provide forward guidance here. But we know we want to be north of where we're at today.

Okay. Okay. And then you made a comment, and I know this isn't unique to your company, but you made a comment about tracking rolling electrical blackouts in China. So can you just speak to if that impacted your production or your suppliers' productions in the third quarter and when the impact started to occur and if you're still seeing it?

It hasn't, you know, it hasn't impacted our suppliers and ourselves. You know, we all know some of us do have generators. The government says you can't use the generators, but what we have been able to do is manage it by overtime. So we shut down Monday, Tuesday, the workers will work Saturday, Sunday. So, so far in our supplies have been flexible. It's just the concern that's been spreading, you know, to a lot of our investors and people ask the question, you know, what's going on with blackouts. And generally we've seen it in the summer. Or pre-Olympics, when they want to address the smog issue in China, they do change their policy of how they want to run the situation. So at this point in time, it's something we've seen, but it hasn't really affected our top line or bottom line growth.

Okay, okay. And then just last question, SG&A and R&D costs, can we take the third quarter and just extrapolate that into the future and, you know, barring a big ramp in revenues, is that fair or not?

Yeah, I think that's fair.

You know, I think with multiple questionnaires where, you know, seemingly everything is just more on a, inflationary environment and everything's costing more, but I think just on average, it should be a little more status quo.

Okay, thank you very much.

Once again, as a reminder, to ask a question, please press star 1 on your telephone keypad.

We'll now take the next question from Edward Schuessler, a private investor. Please go ahead.

Yes, thank you. A couple questions. Dan, could you address your utilization and capacity for your company and your plants? What is their total capacity and what percentage of utilization are you at now?

I would think the majority of our factories are running full tilt and most of them are scheduling overtime to get as much as we can out of the factory within the limits of the labor laws of that country. So I don't think we have many factories that are, you know, running at 70 or 60%. So I think we're running pretty hard now. We are looking, you know, we do a lot of manufacturing for one product group, our magnetic product group. We are looking to, you know, to build a new facility in China to consolidate our operations there and give us some added space. But at this point, we generally use overtime. that is committing to capital investment.

Like the RMS transaction in January where you moved your equipment into your Minnesota facility, if that business increases, would you have to increase the space in Minnesota?

No, to be honest, we had additional space and we had added, I think, 5,000 to 10,000 square feet to our building. Our lease just came due like six months ago. So we have space, but that is tend to be a highly automated production processes where you do a lot of stamping and molding equipment, which are very expensive. So for that, it's, you know, to get high output, you have to run those operations, you know, seven days a week, 24 hour shifts. And that's how the company required with doing it. So again, we were able to, you know, do hone a lot of it in, and just added minimum space.

Another question is... Go ahead.

Let me just backtrack an idea. So when we bought the company, they were at a current run rate of about 20% of what they did in the peak. So again, we have a lot of utilization of equipment. Yeah. As that ramp up comes back up over the next two or three years.

In your magnetics business, do you have any concern about the supply for rare earth minerals, or what is your need for rare earth minerals?

Well, not that much. You know, we do have copper and wire, but generally it's, you know, a lot of it's wire and plastics and metals. So we don't really have concerns about rare earth minerals. and on the magnetic side. We do use ferrites and so forth, but it has not been a problem yet. I mean, I think that if we looked overall, I think our number one problem from a material standpoint is dealing with the large IC companies and getting ICs in on a timely manner.

Last question and a follow-up on Mike's question on the R&D. The R&D has gone from $5 million to $5.5 million, then $5.9 million. Is that a good thing? Is that it could indicate new products are coming for next year and the year beyond?

I think the – maybe I'm misunderstanding the question, but if the question is are we confident in where we're spending our dollars to get good MPI out there that's a good return, then the answer is yes. I think as we're looking to focus the business with folks on margins, it's just really more of a refocus and realignment of our R&D efforts. So I think where we're sitting today, we're feeling good with what we have. We add strategic where it needs to be. But I think we're just shifting our focus a little bit to be a little more focused.

I think the question is, it looks like you had a substantial increase in R&D. is after new product, but I think a lot of the increase came from the FX.

That's right, Dan. Yeah, so a lot of our R&D staff, the engineers, are in China and in Europe, and with the strengthening of renminbi and euro over the past year, especially since Q3 last year, just those same local costs translate into much higher USD.

So it wasn't adding more people, I think is a major question you were asking.

Similar to that, yes. That's fine. Thank you very much.

I'll go back to the queue.

That concludes today's questions and answers session.

I'd now like to turn the call back to the manager.

Catherine, you just want to confirm if anybody has any more questions one more time?

Of course. If you'd like to ask a question, please press star 1 on your telephone keypad.

There are no further questions, then.

I'd like to turn the call back to you.

Thank you, Catherine, and thank you, everybody, for taking time out of your busy schedule to speak to us today. We appreciate your time, and we appreciate you investing in Bell. I hope you all have a nice weekend.

Thank you for your participation. You may now disconnect.