Loading...
01/11 16:21
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: strong cash flow and debt reduction are positives, but revenue and EPS are flat or slightly down YoY, with declining gross margins. The Q&A reveals management's cautious optimism about demand and gross margin improvement but also highlights production challenges and economic uncertainties. The share repurchase and debt reduction are positive, but the lack of clear guidance on market share gains and the impact of tariffs tempers enthusiasm. Overall, these factors suggest a neutral stock price reaction in the short term.
Revenue $132,000,000, down 1% year-over-year; at the high end of the guided range.
EPS $0.18, flat year-over-year; at the midpoint of the guided range.
MedTech and Specialty Audio Revenue $60,000,000, up slightly year-over-year; seasonally down from Q4.
Precision Device Revenue $73,000,000, down 2% year-over-year; flat compared to Q4.
Gross Margins (Total Company) 48.7%, down 450 basis points year-over-year; impacted by supply agreement with Syntient and unfavorable customer mix.
SG&A Expenses $25,000,000, down $2,000,000 year-over-year; driven by cost reduction actions.
Interest Expense $3,000,000, down $2,000,000 year-over-year; due to reduced debt levels.
Cash from Operations $1,000,000, exceeding the high end of the guided range; driven by higher than expected customer prepayments.
Capital Spending $4,000,000 in the quarter; expected to be 5% of revenues for the full year.
Debt Reduction $15,000,000; reflecting strong cash generation from operations.
Net Leverage Ratio 0.7x based on trailing twelve months adjusted EBITDA.
Cash Balance $102,000,000; reflecting strong cash generation.
Total Debt $189,000,000; includes borrowings under revolving credit facility.
New Product Developments: Strong design and coating activity in medtech, defense, and EV markets with ceramic capacitors.
Product Launches: New prototype production line for specialty film is operational, improving production flow and yields.
Market Expansion: Strong backlog in MedTech and Specialty Audio segment for Q2, indicating growth opportunities.
Customer Demand: Increased order activity in industrial markets as inventory levels normalize.
New Orders: Received substantial prepayment for a $75 million capacitor order for energy market, indicating strong customer commitment.
Operational Efficiency: Cash from operations exceeded high end of guidance, allowing for share buybacks and debt reduction.
Cost Management: Reduced SG&A expenses by $2 million through cost reduction actions.
Strategic Shifts: Focus on exploring acquisition opportunities and maintaining manageable debt levels.
Market Positioning: Positioned to grow in 2025 despite tariff impacts, with minimal exposure to tariffs.
Tariff Exposure: Knowles Corporation has minimal direct tariff exposure, estimating less than 5% of revenue subject to tariffs. Indirectly, less than 3% of cost of goods sold may be impacted. The company anticipates recovering tariff impacts through price increases.
Customer Demand: While tariffs may affect end market demand, Knowles believes its markets in medtech, defense, and industrial sectors will remain relatively insulated. Historical data shows that essential medical devices experience modest short-term impacts during economic downturns.
Production Challenges: Knowles is currently facing production challenges in its specialty film line, which may affect the Precision Device segment's growth. However, improvements in production flow and yields are expected.
Economic Uncertainty: The company is monitoring the macroeconomic environment closely, as changes could impact demand, particularly in the industrial market, which is more sensitive to recessions.
Inventory Levels: Inventory levels at distributors are normalizing, which may lead to increased order activity. This is a positive indicator for future demand.
Acquisition Opportunities: Knowles is exploring acquisition opportunities but is cautious due to current market conditions. The company is prepared to act when the right opportunity arises.
Revenue Growth: Expect year-over-year revenue growth to accelerate in Q2 2025, driven by strong demand in MedTech and Specialty Audio segments.
Tariff Impact: Less than 5% of revenue is subject to current tariffs; expect to pass on tariff costs to customers without significant loss of business.
Production Capacity: New prototype production line is operational, improving production flow and expected to ramp up in the second half of 2025.
Acquisition Opportunities: Exploring acquisition opportunities as cash generation from operations exceeds expectations.
Q2 Revenue Guidance: Projected revenue between $135 million and $145 million for Q2 2025.
EPS Guidance: Expected EPS in the range of $0.21 to $0.25 per share for Q2 2025.
Gross Margin Guidance: Expect gross margins to improve sequentially, targeting low 50% range for full year 2025.
Capital Expenditure Guidance: Capital spending expected to be $7 million for Q2 2025, with full year capital spending at 5% of revenues.
Cash Flow Guidance: Projected cash generated from operations between $10 million and $20 million for Q2 2025.
Share Repurchase: In the first quarter, Knowles Corporation repurchased 300,000 shares at a total cost of $5,000,000.
Debt Reduction: The company reduced its debt level by $15,000,000 during the same period.
The earnings call highlights strong revenue growth, improved gross margins, and strategic expansion in specialty films, with optimistic guidance for MedTech and Precision Devices. While there are some uncertainties in M&A timelines and industrial segment growth, the overall sentiment remains positive due to high demand, operational improvements, and robust bookings. The Q&A session reinforced confidence in future growth and margin improvements, leading to a positive outlook for stock price movement.
The company reported strong financial performance with an 8% revenue increase and a 20% EPS rise. While SG&A expenses increased, the company maintained manageable debt levels and reduced interest expenses. Share repurchases of $30 million reflect confidence in cash flow. Positive guidance and strong bookings further support a positive outlook. Despite some margin pressures, the overall sentiment is positive, especially with expected margin improvements and continued revenue growth.
The earnings call reveals a mixed but generally positive outlook. Financial performance is stable with strong cash flow and debt reduction, despite slight revenue decline and margin pressure. Optimistic guidance for Q2 and beyond, along with strategic customer commitments, suggests future growth. Share repurchase and debt reduction enhance shareholder value. The Q&A indicates potential market share gains and improved margins. Tariff impacts are minimal, and customer demand remains solid. Overall, these factors suggest a potential positive stock price movement over the next two weeks.
The earnings call presents a mixed picture: strong cash flow and debt reduction are positives, but revenue and EPS are flat or slightly down YoY, with declining gross margins. The Q&A reveals management's cautious optimism about demand and gross margin improvement but also highlights production challenges and economic uncertainties. The share repurchase and debt reduction are positive, but the lack of clear guidance on market share gains and the impact of tariffs tempers enthusiasm. Overall, these factors suggest a neutral stock price reaction in the short term.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
