Q3 2024 Knowles Corp Earnings Call Transcript
Key Points
- Knowles Corp (KN) reported third-quarter revenue of $143 million, at the high end of their guidance range, representing a 32% year-over-year growth.
- The company achieved a total adjusted EBITDA margin of 24.6%, indicating strong operational performance.
- MedTech and specialty audio revenue grew 4% sequentially and 10% year-over-year, driven by new product adoption and cutting-edge technology.
- The acquisition of Cornell contributed significantly to revenue growth and margin improvement, with a 57% year-over-year increase in the precision devices segment.
- Knowles Corp (KN) generated $53 million in cash from operations in the third quarter, exceeding the high end of their guidance range.
- Gross margins in the MedTech and specialty audio segment decreased by 60 basis points year-over-year due to unfavorable product mix and lower production yields.
- The precision devices segment faced continued headwinds from elevated inventory levels in the industrial markets and distribution channels.
- Despite improvements, Cornell's gross margins remain below Knowles Corp's legacy precision device business.
- Interest expenses increased by $3.3 million compared to the prior year due to higher bank borrowings associated with the Cornell acquisition.
- Bookings in the industrial end market remain inconsistent, with no sustained recovery observed yet.
At this time. I'd like to welcome everyone to the Knowles Corporation third quarter, 2024 earnings conference call. Please note that this call is being recorded at this time. (Operator Instructions). I will now turn the call over to Sarah Cook.
Thank you and welcome to our third quarter, 2024 earnings call. I'm Sarah Cook, Vice President of Investor Relations and presenting with me today are Jeffrey New, our President and CEO and John Anderson, our senior Vice President and CFO our call today will include remarks about future expectations, plans and prospects for Knowles which constitute forward-looking statements for purposes of the safe harbor provisions under applicable federal security laws. Forward-looking statements in this call will include comments about demand for company products, anticipated trends in company sales expenses and profits and involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations.
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