Q1 2024 Bel Fuse Inc Earnings Call

Thomson Reuters StreetEvents04-27

Participants Jean Marie Young; IR; Three Part Advisors, LLC Dan Bernstein; President, CEO, & Director; Bel Fuse Inc Lynn Hutkin; VP of Financial Reporting and IR & Company Secretary; Bel Fuse Inc ...

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Good morning and welcome to the Bel Fuse First Quarter 2024 earnings call.  As a reminder, this conference is being recorded. I would now like to turn the call over to Jean Marie Young with Three Part Advisors. Go ahead, Jean.Thank you, Jean. Good morning, and thank you for joining our First Quarter 2020 Earnings Call. Overall, we are pleased with our financial results for this quarter as sales came in at $128 million, which has been the forecast range we provided last quarter last quarter. Earnings Call is encouraging to see our margin continue to track in the","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"BELFB":"Bel Fuse Inc","BELFA":"Bel Fuse Inc"},"translate_title":"Q1 2024年贝尔保险丝公司收益看涨期权","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BELFA":0.9,"BELFB":0.9},"content_text":"Participants\nJean Marie Young; IR; Three Part Advisors, LLC\nDan Bernstein; President, CEO, & Director; Bel Fuse Inc\nLynn Hutkin; VP of Financial Reporting and IR & Company Secretary; Bel Fuse Inc\nFarouq Tuweiq; CFO & Treasurer; Bel Fuse Inc\nTheodore O'Neill; Analyst; Litchfield Hills Research LLC\nJim Ricchiuti; Analyst; Needham & Company, LLC\nHendi Susanto; Analyst; Gabelli Funds, LLC\nBobby Brooks; Analyst; Northland Capital Markets\nPresentation\nOperator\n Good morning and welcome to the Bel Fuse First Quarter 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the call over to Jean Marie Young with Three Part Advisors. Go ahead, Jean.\nJean Marie Young\n Thank you and good morning, everyone. Before we begin, I'd like to remind everyone that during today's conference call, we will make statements relating to our business that will be considered forward-looking statements under the federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2024 These statements are based on the Company's current expectations and reflect the Company's views only as of today and should not be considered representative of the company's views as of any subsequent date. The Company disclaims any obligation to update any forward-looking statements or outlook. Actual results for future periods may differ materially from those projected by these forward-looking statements due to a number of risks, uncertainties and other factors. These material risks are summarized in the press release that we issued after the market closed yesterday. Additional information about the material risks and other factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations is discussed in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K for the fiscal year ended December 31st, 2023, and our quarterly reports and other documents we have filed or may file with the SEC from time to time. We may also discuss non-GAAP results during this call and reconciliations of our GAAP results to non-GAAP results have been included in our press release for our press release and our SEC filings are all available at the IR section of our website. Joining me on the call today is Dan Bernstein, President and CEO; Farouq Tuweiq, CFO; and Lynn Hutkin, Vice President of Financial Reporting and Investor Relations. With that, I'd like to turn the call over to Dan.\nDan Bernstein\n Thank you, Jean. Good morning, and thank you for joining our First Quarter 2020 Earnings Call. Overall, we are pleased with our financial results for this quarter as sales came in at $128 million, which has been the forecast range we provided last quarter last quarter. Earnings Call is encouraging to see our margin continue to track in the right direction. As Lou outlined earlier, we continue to benefit from the diversity of our segments, with strength in some activity on the sales side, impressive profitability of ballparking activity and power savings. These areas helped offset the softness in the magnetic sake, these outcomes were all largely within our expectations. In late February, we announced the Board approved a $25 million share repurchase program shortly thereafter, open market purchases of both classes of stock were initiated pursuing some programs authorization. As of March 31st, we utilized $6.3 million to repurchase a total of 109,000 shares and a 10 B five one plan has been in place, ensuring the company's broker has the ability on an ongoing basis, including post quarter end during our regular blackout periods made open market purchases in accordance with the company's policies. As of April 24th, our program to the program to date repurchases totaled $11.1 million, representing 189,000 shares. We expect to continue executing this program with the internal guidelines and we had established in March, the company announced the upcoming retirement of John Quealy, a long-standing Board member and Audit Committee member, whose term ended May 2024 Annual Shareholders on behalf of the Board, and we enjoy his many contributions to go over these past 28 years. John has insight and counsel will be missed and we wish him the best in his retirement with the upcoming vacancy. The Board nominee table it as a new director at this upcoming meeting. Dave brings 40 years of sales and growth in screens with electronic component industry with companies including chef interconnect. And yes, we're excited about the potential of adding data. The Board giving us tremendous wealth of knowledge and building audience and management sales grew. So credit might apply currently sales of globalization in our industry. If elected each business will be instrumental to Bell as we continue to implement our growth strategy. In addition to the change at the Board level, as noted in our last earnings calls, there will be transition of executives in July with the retirement of Dennis Ackerman and promotion of Dave Doyle, Steve Dawson to the PALISADE. With these transactions will come fresh perspective on the executive team and the Board will be welcomed as we set our future strategy for growth for years to come. And with that, I will now turn the call over to Lynn for a financial perspective.\nLynn Hutkin\n In summary, we saw continued margin expansion on a lower sales base from us in that Q1 24 versus Q1 23. First Quarter 2024 sales came in at $128.1 million, representing a 25.7% decline from the first quarter of 2023. The majority of the sales fluctuation was driven by our power and magnetic segment as we will discuss further, our gross margin increased to 37.5% in Q1 '24 from 31.1% in Q1 '23. And these profitability improvements were largely driven by our power. Secondly, personnel. Turning to some details at the product group level, Power Solutions and Protection sales for the first quarter of 2024 were $60.2 million, representing a 27.6% decline from Q1 last year. So a decline in sales was mainly due to lower sales of our power products used in networking and consumer applications. However, we saw strength in sales of our rail products, which grew over 50% from Q1 23, reaching $10.3 million in sales in Q1 24. Despite the overall decline in sales, this segment posted a gross margin of 44% in the first quarter, reflecting a 130-basis-point improvement from Q1 23. We are viewing approximately half of this improvement and power margins as being sustainable as it was driven by more permanent factors, including cost reduction efforts, both on the procurement side and port count side, a lower volume of low-margin expedited fees and overall product mix. A balance of the basis point improvement in gross margin versus Q1 23 relates to items that are either nonrecurring or in the case of favorable FX temporary in nature and should not be factored into a normalized view of gross margin for this segment. Turning to our connectivity solutions group, sales for Q1 24 came in at $54.3 million, up 1.7% from Q1 23. Q1 24 sales into commercial air applications amounted to $14.6 million, which is a level consistent with Q1 23 products sold into defense applications totaled $10.7 million for Q1 24, up 3.2% from Q1 23. The year-over-year increase in sales was despite the divestiture of connectivity tech business in June 2023, which previously contributed around $1.5 million per quarter to the segment. Our gross margin for this group was 36.1% for the first quarter of 2024, a significant improvement from the 34.1% in the first quarter of 2023. This margin expansion was made possible due to the operational efficiencies achieved through facility consolidations that were completed in 2023, along with implementation of contract renewals on more balanced terms, the favorable margin factors were partially offset by minimum wage increases in Mexico that went into effect in Q1 24 and the unfavorable impact of FX related to the peso. Lastly, our Magnetic Solutions Group posted sales of $13.6 million in Q1 24, representing a 62% decrease from Q1 23. This reduced level of sales was generally in line with expectations discussed on last quarter's earnings call and largely related to lower shipments into a large networking customer as they worked through inventory on hand, the gross margin for this group was 16% in the first quarter of 2024 as compared to 22.8% in the first quarter of 2023. This change in margin was primarily driven by the lower sales volume in Q1 24, partially offset by lower fixed overhead costs resulting from the facility consolidations in China, which were completed in late 2023 and favorable FX related to the Chinese renminbi versus Q1 23. At the consolidated level across our product segments, our backlog of orders totaled $350 million at March 31st, 2024. Our selling, general and administrative expenses were $24.9 million or 19.5% of sales, down from $25.3 million in Q1 23. Within SG&A, an increase in salaries, fringe benefits and amortization expense were largely offset by lower legal fees. If you recall, we incurred $1.6 million of legal fees related to the MPF litigation in Q1 23, and these expenses did not recur in Q1 24. There were no unusual items of note contained within SG&A during Q1 2014. Turning to balance sheet and cash flow items. We ended the quarter with $121.2 million in cash and securities, a reduction of $5.7 million from year end. We generated $6.2 million in cash flows from operating activities during the first quarter of 2024 and had capital expenditures of $2.9 million. It should be noted that Q1 included our seasonal payments related to our annual bonus and corporate and science. From an inventory perspective, the downward trend that we experienced over the past several quarters has continued into Q1, reflecting a $5.7 million reduction from year end. The lower inventory levels were primarily in the areas of raw materials and finished goods as we continue to work through our own inventory. I'll now turn the call over to Farouq for additional commentary.\nFarouq Tuweiq\n Thank you, and good morning, everyone. As noted on our last earnings call, we anticipated the first half of 2024 to be on the slower side. Our first quarter results were in line with our expectations for second quarter of 2024 is expected to be largely similar to the first quarter in terms of sales volume, with margins expected to normalize a bit given the impact of one-time items in Q1, as mentioned by Lynn. In summary, based on information available to us today, our outlook for Q2 sales in the range of $125 million to $135 million for the gross margins in the range of 34 to 36. There are several items to keep in mind with bridging our Q2 23 of $169 million to the expected range for Q2 2024. And we'll discuss these here by segments on the power side, our Q2 2023 sales included $5.7 million of expedite fee revenue that is not expected to reoccur in Q2 2014. Second, as previously noted on our last earnings call, Q2 23 included an estimated $10 million of catch-up sales that resulted from past due orders connected to the raw material shortage from 2020 to fees will not recur in Q2 2014. Third, our e-mobility business is softer this year, given the current interest rate environment, which has delayed capital investment projects at our customers and their customers. E-mobility sales in Q2 23 were $8.5 million, and we anticipate this will be down by roughly $3 billion to $4 billion in Q2 24. The balance of the expected decline in power relates to a continuation of lower sales into our distribution partners and consumer end markets, which while similar to Q1 24 levels will represent a lower level from Q2 23. On the magnetic segment side, given the current status of shipments into our large networking and distribution customers, we're projecting only a slight rebound in Q2 24 from Q1 24 levels, accounting for approximately $10 million of the expected decline from Q2 23. Within our Connectivity segment, we are estimating sales are largely in line with Q2 23 potentially up a bit given the recent contract renewals. Looking to the second half of 2024, we remain optimistic that some level of recovery will occur, though the degree and speed of rebound will likely vary by product line and end markets. Overall, we do not anticipate a quick flip of a switch and instead expect to it will be more of a slow and steady recovery as certain customers and end markets reserve their normal level of shipments upon inventory depletion. Shifting our view, the medium term growth drivers to areas that we are excited about. I wanted to highlight our space and AI., let's first discuss the end market of space. This is an end market that is very harsh environment. It takes years of design work to get into up until recently, the volume of product going into space applications for anyone was limited. Bell has successfully added products in space since 1970s. As a result, we have already proven ourselves as a reliable supplier of connectors and components that can withstand the harsh environment. And we're benefiting from this legacy today. To that end, our Connectivity segment has been successful in securing significant design wins in multiple commercial and military satellite platforms as well as ground based support applications for both copper and optical connectivity products. We believe these design wins will accelerate connectivity's growth in the space market with 50% year over year. Growth in that market expected 2024 to provide some context in the full year of 2023, we have sales of $4.5 million in just space applications during the first quarter of 2024 alone. We shipped $2 million of product into this end market and are forecasting $77 million for the year for the full year of 2024. Similar to our e-mobility business. This has a longer development cycle and will take time to ramp up. But we believe we are hitting a break out point for space applications in 2024 we also continue to invest in this key market to grow our portfolio of space rated products and expand our internal capabilities, allowing us to support our customers' most extreme connectivity requirements The second area of note is in the area of AI. While we do not have meaningful sales directly tied to AI today, potential future benefit is becoming more clear of our three segments. We view our power segment as the biggest possible beneficiary of the industry's transition to AI. While we have products in each segment that support general networking applications for systems that will support a I consume significantly more power than a traditional system, even if the number of data centers that we currently participate and remain the same for power supply dollar content per server is expected to be two to eight times higher. Another item of note here is that our existing products and capabilities will support its future needs. There's no need for major new product designs for us to support a I was just additional volume of our existing power products or perhaps some minor modifications while still in the very early stages we are seeing an increased level of activity and discussions happened very existing networking customers and also specialty customers of high-performance computing. We're just starting to see early production volume orders from many of these customers, which is exciting for us. The last item I'll touch on is the M&A market, the volume of the many opportunities available to us in 2022 is fairly limited, and we are definitely seeing a shift here in 2024. This is consistent with what we've been talking about. There appears to be a more robust pipeline of opportunities becoming available, and we'll continue to assess those. That may be a good fit for us. There's nothing to report here today, but we're actively reviewing a variety of potential overall beyond the near-term uncertainties surrounding timing of scale of recovery, there are many areas that accused energized about for the long term. Still has a long history of evolving over the years to support new end markets. And we believe we are at that next pivotal point of Evolution base AIE. mobility are viewed as the next new end markets for Bell product. We're excited about our current position in each of these areas and the growth potential base rates develop future. With that, if we could open up for questions.\nQuestion and Answer Session\nOperator\n (Operator Instructions) Theodore O'Neill with Litchfield Hills Research.\nTheodore O'Neill\n Thank you very much for frugal. I think you covered this a bit in your prepared remarks, but it last quarter miss was primarily related to a single customer. It seems like it's a slightly broader inventory issue now. And does it concern you that GDP growth rate for Q1 is sequentially lower than it was for Q4? Is I think a thank you for the question. And I think you're referencing the Q4 numbers heading into Q2, correct?\nDan Bernstein\n We did miss on largely with one, but remember that heading into the Q1, which is seasonally a little bit weaker distribution, which touches obviously a number of folks is a little bit finer inventory. So we looked at it as more continuation of inventory base stations. So I would say from a Q4 to Q1 perspective, we let's say we still see the challenges from the same set of people that we largely saw in Q4. So there hasn't been any call it, new struggles, if you will. And it was just with regards to the GD. side of things. I mean, obviously GDP is what we all are hoping for to kind of move more so in the right direction. I think the you know, the impact obviously will impact a little bit of our customers, but ultimately, we know, given we participate in more of a technology solution industry and our customers do it, while it's not going to be disconnect from GDP, we do think that there's a different value proposition there. And following up on that comment, would you mind repeating what you said about the dollar value for the power supply transformers in the AI space? It was a two to eight times growth.\nTheodore O'Neill\n Okay. Thank you.\nOperator\n Jim Ricchiuti with Needham & Co.\nJim Ricchiuti\n Hi, good morning. Apologies if there's any background noise, but a couple of questions, just with respect to that, normally, when you come out of Q1 is a bit of a seasonal pickup and just related to the Chinese New Year. Is that less of a driver to you this year, just given the current environment?\nLynn Hutkin\n Yes, Jim, that's historically been the case for this year. Because our magnetics business was so low in Q1. That's normally the area where we do see that pickup in from Q1 to Q2. And but it's just magnetics, is that at a depressed level right now as we're waiting for that some of these large customers to turn around. So we're just not seeing that same seasonal pickup and from Q1 to Q2 within within athletic a little bit, but not not the same degree.\nJim Ricchiuti\n Got it. Really helpful, Lynn, thanks. Remind us again, as we think about the back half of the year, when did you see there really sharp falloff in sales in the networking sector because?\nLynn Hutkin\n Yes, just in terms of when they compare, I'm sorry, I guess what we're trying to get to is when do the comparisons really can you share why did you start lapping that? Are you talking specific to magnetics?\nJim Ricchiuti\n Well, is it the net within the it sounds like the weakness in that market sector also touches a little bit on power, but however you want to characterize it, we're seeing a pretty big we've seen a big falloff in that part of the business. It had happened in Q three of last year. You start to see the real June sharp decline.\nLynn Hutkin\n Yes. So if we're just talking about Magnolia first, the we started seeing a decline in Q2 of 23 is defined further in Q4. I think the most recent drop-off that occurred in November of 23. So there were basically in a, call it two months of that drop off in Q4. We felt it in full in Q1 and and this is what we're projecting here for for Q2. It will be in a similar environment underground, I would ask question Gerard, please. So on the power side, and that was very strong on the networking side in Q1 and Q2 last year, and we didn't see as large of a drop-off, but it did start going down a bit in Q3.\nJim Ricchiuti\n Okay. That that's helpful. And maybe if we just this last question, just relates to the whole environment in terms of destocking and maybe if we tried out break out the magnetics piece, put that aside for a second, how would you characterize what you're seeing in terms of and distributor inventories and you're hoping stocking at the rest of the business. Has that improved much? Are you or do we still have a couple of quarters we might have to see that. I think this is Dan Berce. I know it's always always pushed back six months, but I was in Europe and was visiting some of our key distributors. And no, the feeling is that we hit rock bottom in February and then things should start to improve, but they are there. They're all saying today might change that by the end of the fourth quarter. All inventory should be flushed out and they go back to normal ordering processes.\nDan Bernstein\n And I think, Jim, we also just hit on that as well, right? So it's not like a flip of a switch. So it will be kind of a rolling type pickup mix. So to Dan's point, somebody can earlier somebody come later on, but you know, it just wanted to be mindful. It's not clear that that all clears out on day one.\nJim Ricchiuti\n Yes, I think I understand that. Thanks. Thanks Dan. Appreciate it, guys.\nJean Marie Young\n Thank you.\nOperator\n Hendi Susanto, Gabelli.\nHendi Susanto\n Good morning, Dan, Farouq, Lynn. The morning up. So and yes, I would like to get more insight on how to think about your gross margin. I think given the lower scales, RBOC's has demonstrated resilient gross margin. So how should we think be thinking of gross margin when I say market recovery has taken place and the sales has as a gain meaningful recovery like will it's like how much of gross margin expansion, can we expect or should we expect or are or should we expect that the sense is that the sensitivity on the on the scale of revenue is somewhat not meaningful enough.\nDan Bernstein\n So Andy, I would say a couple of things to that. Like mix really plays a part, right? So we start seeing get when we start seeing recovery in, let's say, magnetics, why that's a lower gross margin business. So by definition, it will compress your gross margin, right? But obviously, what our magnetics business is running healthy and has really nice operating profit and EBITDA, right? So while the gross margin may not be the best out there, real nice contributor on the profit line. So one is mix will play a factor right two is within each of our product groups like power and connectivity, that there's also some things that we need to be mindful. So the way we kind of think about it is we guided to 34% to 36% right at it at our current levels. And if there is increase revenue, that's going to be operational leverage. And we expect that that would be additive, right? So the fact the way we tend to think about it guiding to 34, 36 at the current levels and able to deliver on our EPS. We look at that as a great new shows of durability of what we are doing here and anything more above and beyond that should be positive to the upside. And we felt very helpful, though, we called out a little bit of economic fluctuations here as well covered for commentary. Yes.\nHendi Susanto\n Okay. That's very helpful. If I look and then up? And then would you be able to give more color and insights about the exciting growth opportunities in space MI specifically, could you talk about with application with end products? Let's say for a for space, like should we pay attention to likely or satellites or like Artix? Or should should it be like satellite you like? I think in general and for a I like do you have more presence in networking versus computing? Or like I think any any insights will be helpful, please, for space, I think office space and we're working very closely with Amazon.\nDan Bernstein\n We do have filed on the Amazon satellites now and we're looking to build relationship with Space X. So I would characterize our relationships is given our legacy. There is a broad based and outcome of the household names that you hear both on the commercial and on the military side, it is where we participate the orbit. So we have things obviously going up and space as evidenced by our revenue growth. These are long design cycles. This business really chasing for years, but generally on a satellite like I said, both commercial and military saw some things we can talk about some things we're not able to talk about. But as we think about spaces end market and you know more going up there. We know that there's going to be more overall fundamental drivers that will be beneficial to us on the AI side. When we look at a I do know, that there is a fundamental requirement side of things, right? So there's a need for higher capital or higher power for more power density. It also just Mark, that up customer management so where are we succeed with developing these exact products? We've been doing it for years. We have very high that high power density on some of the shelves. And we also have really good relationships with the wafer scale chip manufacturers and also, you know, that's where we play. But when we look at where we find it specifically, there's kind of the big cloud giants kind of the big four that we everybody hears about that we will be not necessarily our focus given the heavy commoditization there. So where we will be more suited better is on the networking players. So where where we have existing relationships and we have been developing for time, there's also on the compute side, there's some new and emerging players there that have better, quite frankly, a bigger and more powerful chips than maybe some of the headline type folks out there. So it will come for us. We look at it as a two-pronged approach there, the new players on the compute side and in our existing customers, maybe a little bit. And there was well the networking side and the contents of these systems, obviously are really kind of shifted and kind of expanded. So we expect exciting things from there. And similar to space, we'll be able to talk maybe more about that a little bit as time goes on here, but it was nice to see. The one thing I'll also say about AI. is we cannot talk about identifiable AI and an identifiable A., I what I mean by that is because of the general purpose nature of our power products, we know right or we send it to our customer. We may or may not know, is going to die because of the general-purpose nature of it. But then there are other applications that we know we can identify that this is specifically KI. So we do know that there's a good amount of identifiable AI., but we will generally limit our competition as things that can speak to with clarity. The other thing I would say on the AI. is there is a whole ecosystem that supports a lot of the direct players through various testing equipment. So we'll have a secondary impact of it because we do supply a lot of stuff into the test equipment that's required by AI. So we touch it from a few different angles.\nHendi Susanto\n And a follow-up, given the rapid speed on AI and development and investment. I think they are they I think speed is their number one priority. Now, how should we be thinking about the AI opportunity? Will be toward Alex, second half of 2024, although before beyond like 2024.\nDan Bernstein\n Is it I just want to be careful with this indeed, right. So nobody's saying you know, Compuware and make $100 million of revenue in the next three, four quarters. I'm just wondering a little bit careful here. We started seeing from these, call it what we talked about the compute guys. We start seeing some nice orders in Q1 and more coming into Q2 and also some of the networking guys. So we expect it to be, let's call it a steady climb. I think as the year goes on, we would probably expect to have more meaningful percentage jumps from 25 over 24, 26 over 25 and so on. So I think we will just want to it's going to reveal a little bit more, but you know, we'll talk more about AI once once we start feel feeling more comfortable with that.\nHendi Susanto\n And then I have one more question. And even the weaknesses in EV., any update on your milestone and expectation on the Illinois electric investment?\nDan Bernstein\n Yes. So I would say, you know, the electric is largely kind of seeing the same things as our EV business and with our electric investments. Obviously, I would say from a milestone perspective, it's largely on track. When we did this investment early last year, we knew it was about a 23, 24 thing there. And the reason there is is some of the development that's going on to. There are some interesting products that are being worked on and developed. So as we think about growth in terms of coming out of an ideal world. We kind of get through this bumpiness that 2024 out in the market, and we expect their price to be ready for market in 2025. So for now, we look at it as on track and not, but we do see some of the same challenges within their customer base pace.\nHendi Susanto\n Thank you.\nOperator\n Bobby Brooks, Northland Capital Markets.\nBobby Brooks\n Yes, hey, good morning, guys. Thank you for taking my question. So very strong buyback number, right. I think that surprised they came in far above my expectations was. So I guess what I'm wondering is should we assume that it kind of stays around that level? And just maybe more broadly, how should we think of the pace of the buyback going forward? Obviously, Dan, you mentioned now as of the 24th of April rate in Brazil, you guys improved repurchased an additional $4 million. So that's kind of beating the pace that you did in the first quarter. So I'm just trying to get a gauge on how to think about that buyback going forward? Do you stay at that pace that the stock stays in the 55 to $60 range?\nDan Bernstein\n Yes. So the way we think about it, Bobby, is obviously, you know, these are always moving, right? So we've got to kind of assess this a little bit real time. Our expectation is in terms of getting through the program is a 2024 event. Obviously, if things move that debate, that makes it a little bit, but our expectation is to be largely through that in 2024. We're roughly $11 million through the $25 million program. And then also noted that we are in our blackout period. So the purchase programs were the autopilot. We come out of our blackout here into three days. And we'll take another look at our buyback program has depending on the price. But you know, fluctuates a little bit of how much we've bought back. So maybe a long way of answering your question is we expect to be down this program through end of the year, but it may change a little bit in terms of the pace we're doing it up depending on how the market and price.\nBobby Brooks\n Got it. And then maybe just sort of follow up on that is, are you guys in terms of, you know, you just mentioned in terms of how the market is doing, is it something where you're comparing Bel Fuse to your peer group in terms of stock year to date stock performance, are you more so basing it off of the broader indices? Or is it more so just looking at a certain range of a certain price range and I know you don't need to give that price range obviously, but or is it more based on kind of Bel Fuse stock price relative to where you think it is in kind of in isolation?\nDan Bernstein\n Yes. So really, as you know, it's an amalgamation of factors that would lead us to triangulate to where we need to be at. But I would say they are obviously we're aware of the market we're aware of where the industry is, but I think one of our views always has been is our stock price is not really reflective of the value. So I would say that is probably our DOORS guiding star in terms of where we think it should be. So we look at it as to where it is and that's how we scale it up and down. That will be that from a different factor. And obviously it goes without saying probably right, and we have a very strong cash position. But you know, if anything were to change with that, that may change. But for the most part, we feel pretty good about it.\nBobby Brooks\n Our share gains, I'd appreciate by color. Ben transitioning. You know, I wanted to kind of follow up on you guys. Is this more so I wanted to follow up on your guidance early reads on the gross admission growth initiatives that you've got details on the Q4 call, but that was really and that was really interesting and positive. And also kind of speaking to those initiatives on kind of most interested in that the revamped European sales force and I know, Dan, you mentioned that you're just in Europe the past quarter. So curious to hear, you know, any early reads. I know it might take a few colors for certain inflect on financials, but just curious about, you know how those and any early reads on those growth initiatives that you mentioned.\nDan Bernstein\n And I think again, as we mentioned last time, we put in a new SaaS director with a very strong distribution background. Gvr was the distribution manager from all that she has a great eye on tray and from a people standpoint and from a relationship standpoint with people like Arrow and Avnet. So for example, we have seen three opportunities that we never saw before with Guardant uses each opportunities over 1 billion. I think we're pretty confident that we can capture to them. So again, there's a lot of planting of seeds but again, Joe, it's a direct sales force that we have pretty well cover of Europe. And so far things look very, very promising, but it's definitely going to take some time but we're hoping like, again, if some of these use opportunities and we're talking millions of users at a pretty big already low debt to morph in my car, and we have three of those opportunities coming to us. So yet, again, very exciting. And again, how long does a Europe might change our position as we look at Asia and how we look at Ultimate and I think to expand on that comment as well, right?\nFarouq Tuweiq\n I would agree, but six months to two year design cycles, right? So we're a little bit long design cycle. So the key for us in this environment with inventory is we're seeing a lot more NPI development. So for us, it's kind of getting out there better alignment with the customers pursuing the opportunities because once the inventory works through, we'll see some of the legacy product without, but we'll also see a more kind of rich environment of new products and a side comment on Europe, I'd say, you know, our European business has definitely performed, I would say, above market for us in Q1, which I think is a testament to the team at our approach and at how we're kind of getting out there. So we are excited about Europe. On the US side, we've also have added a couple of strategic positions as well. And we're continuing to kind of do the team, but we're seeing some nice stuff coming out of that team here as well.\nBobby Brooks\n Thus, all some color I appreciate it. And then maybe just on the last point touched on kind of circling back on the space know, guys, I gave it given I gave Excellent color, and that's for sure, an exciting end market where you guys clearly already have an edge given the long history of reliability in a harsh environment. So what I was curious on is could you discuss how you are planning to continue to grow that? And maybe is there a path where you could see doubling revenues doubling revenues into that end market in fiscal 25 or maybe asked differently, what do you think the revenue opportunity is there over what is in the space market over maybe the three year outlook?\nFarouq Tuweiq\n Yes, you know, it's I think it's it's moving pretty quickly as we looked at the funding some of that, but that's kind of going in there. So we know it's rapidly evolving. We kind of internally joke about it. It's the new EVH., right? Where where four years you're kind of testing and sampling and low volume, and then you start clicking pretty rapidly into the growth side of things. The obviously space has a very different customer base and tailwinds versus the business. So I would just say there's a lot of funding going into it. There's a lot of increasing just sheer number of things going up of space. And the nice thing about the space, as we think about specific satellites, there will be a natural depletion rate where there's a useful life for these things that ultimately will have to come back down to earth and the ones go up. So as a result of that, we think that will be both expansion in terms of number of satellites up there, but also replenishment rate. And you know, to kind of maybe just point for this, maybe historically, I would say it was a low volume business, maybe were call it, 2 million, maybe $3 million a year at a high end. And in 2023, we saw kind of growth to that $4.5 million, and we're kind of projecting call it seven ish this year. Again, you know, as we're also just pay a little bit more wins coming our way. So we do expect to have nice growth rates and in terms of whereas in terms of also kind of our commitment to it, we're doing some things on the marketing side as we, let's call it, create a more targeted campaign for customer awareness and progress further into the space side of things, both via our websites, but also just kind of trade shows and kind out more your typical way of extending our reach. So we're planning on hitting a few different ways, but you know, we'll see where it goes I mean, doubling is not not off the table for us in 25, but we're going to see how the year progresses here.\nBobby Brooks\n Yes, for sure. And then maybe just a last question on spaces. So you talked about how historically it was a low margin million, $2 million a year end market for you. So maybe could you as a new are these new orders may come at a much higher margin because there's more technology in it? Or was it just kind of you've gotten you guys taking a more a place where you're only working with customers who value the value, what you guys bring to the table and therefore you guys get better pricing? And then secondly, I guess just the just step first.\nFarouq Tuweiq\n Yes, no, it was never low margin is I mean, I'm sorry, misheard that. Yes, that is why they go from from a margin perspective. And obviously, these are we definitely want more of this. I'll leave it at that. So that's kind of the way we think about it. So the growth there, we'll have a very positive mix. Let's call it from a gross margin perspective.\nBobby Brooks\n Okay. Thanks. I'm sorry, I misheard that. And then just the second point or the second point I'm trying to make was so right you guys shipped $2 million. I think the number was you said you shipped $2 million of products and further ahead. Could you maybe give us a sense of like how what how much of that $2 million was towards like new product development or kind of small run testing stuff versus actual production orders?\nFarouq Tuweiq\n I would say it's probably a little bit of a mix. But I would say as well that these things are the ramping up, right. So so so I would I would I would definitely ramping up slightly. The majority of it is probably small runs. We do expect some maybe larger runs, call it into maybe Q3 and up to two somebody that is with Q4. So again, similar to the EV. business, we are expecting bigger number of things to go into space. So it's a matter I would say, but largely probably going up a little bit lower in a more diversity of customers of NHS has not diminished or changed.\nBobby Brooks\n Thank you for your answers. I'll go back to the queue.\nOperator\n Hendi Susanto, Gabelli Funds.\nHendi Susanto\n Yes, I have one follow up. Dan, you mentioned that based on your conversations with distributors in France that we flush out may vary like some may take place earlier. So I'm a little bit for of this year. Do you have any insight into what kind of pecking order in terms of when somebody flush out may take place like the one that we'll see it sooner versus the one that we'll see later.\nFarouq Tuweiq\n This is just related to the advanced use of common distributions.\nHendi Susanto\n Yes, yes. Like essentially that gives us any indication like with with the inventory correction, may may see completion like sooner versus the one that may see inventory correction hiked, our likely 2024.\nLynn Hutkin\n So I think the are you asking specifically like by distributor distributor type of who we all know biting, but by product group, our buy areas.\nDan Bernstein\n I mean, ultimately, I think it was, you know, it really depends on the customer and the end market there. And I think if you look at the military aerospace distribution, but strong, that's very strong fully being hit is more in the consumer of from ICU, our product group, our key product group by magnetic Fire Group, things that go into networking consumer is really where they have the over-inventory situation and basically you have the phase to and not as a problem with semiconductors. And so people are in products thinking that we're going to get the semiconductors it. They never got the semiconductors it, but they receive the passive components. So most of all in our channel, most of the problem is coming from the magnetic group circuit protection and power supplies.\nHendi Susanto\n I see. Okay, thank you. And then all the best for 2024.\nDan Bernstein\n Thank you so much.\nFarouq Tuweiq\n Thanks, Ed.\nOperator\n Thank you. We have reached the end of our question and answer session. And with that, I would like to turn the floor back over to Dan Bernstein for any closing comments.\nDan Bernstein\n Thank you for joining us today, and we're looking forward to speaking to you in July.\nOperator\n Concludes today's teleconference. You may disconnect your lines at this time. 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