Q4 2024 Knowles Corp Earnings Call Transcript
Key Points
- Knowles Corp (KN) reported a 21% revenue growth and a 32% increase in non-GAAP diluted EPS for the full year 2024, driven by strength in med tech and specialty audio.
- The company completed the sale of its Consumer MEMS microphone business, which is expected to streamline operations and focus on core business areas.
- Knowles Corp (KN) has a strong backlog of orders, particularly in the specialty film capacitor product line, which is expected to drive significant growth in 2025 and beyond.
- The Board authorized an additional $150 million for share repurchases, indicating confidence in the company's financial health and future prospects.
- The company has reduced its exposure to tariffs by minimizing its manufacturing footprint in China, with only about 5% of revenue potentially subject to tariffs.
- Challenges in plant consolidation and production ramp-up for new products in the specialty film capacitor line led to a revenue shortfall in Q4 2024.
- Pricing pressure was noted in the Medtech and Specialty Audio segment, particularly on mature products, which could impact future margins.
- The ramp-up of the specialty film product line is taking longer than expected, with full resolution anticipated by the end of the first half of 2025.
- Gross margins in Q4 2024 were down 130 basis points year-over-year due to lower average pricing on mature products and higher factory costs.
- The company expects to utilize cash in operating activities in Q1 2025, partly due to settling supplier obligations related to the Consumer MEMS microphone business.
Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Knowles Corporation fourth-quarter and full-year 2024 earnings conference call. Today's conference is being recorded. (Operator Instructions)
At this time, I would like to turn the conference over to Sarah Cook.
Please go ahead.
Thank you, and welcome to our fourth-quarter and full-year 2024 earnings call. I'm Sarah Cook, Vice President of Investor Relations, and presenting with me today are Jeffrey Niew, 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 securities laws. Forward-looking statements in this call will include comments about demand for company products, anticipated trends in company's sales,
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