In This Article:
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Revenue: $143 million, up 32% year-over-year, driven by Cornell acquisition and 4% organic growth.
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Adjusted EBITDA Margins: 24.6% for the total company.
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EPS: $0.26, at the midpoint of guidance range, up 30% from Q3 2023.
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Cash from Operations: $53 million, exceeding the high end of guidance range.
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MedTech and Specialty Audio Revenue: $64 million, up 10% year-over-year.
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Precision Devices Revenue: $79 million, up 57% year-over-year due to Cornell acquisition.
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Gross Margins (MedTech and Specialty Audio): 53.1%, down 60 basis points year-over-year.
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Gross Margins (Precision Devices): 40%, down 40 basis points year-over-year.
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R&D Expense: $8.9 million, up $1 million from Q3 2023.
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SG&A Expenses: $24 million, $5 million higher due to Cornell acquisition.
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Interest Expense: Up $3.3 million year-over-year due to higher bank borrowings.
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Cash Balance: $93 million at quarter end.
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Debt: $225 million, including revolving credit facility and seller note from Cornell acquisition.
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Net Leverage Ratio: 1.0x based on trailing 12 months adjusted EBITDA.
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Q4 Revenue Guidance: $141 to $151 million, up 5% year-over-year.
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Q4 EPS Guidance: $0.26 to $0.30 per share.
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Q4 Cash from Operations Guidance: $30 to $40 million.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Knowles Corp (NYSE:KN) reported third-quarter revenue of $143 million, at the high end of their guidance range, representing a 32% year-over-year growth.
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The company achieved a total adjusted EBITDA margin of 24.6%, indicating strong operational performance.
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MedTech and specialty audio revenue grew 4% sequentially and 10% year-over-year, driven by new product adoption and cutting-edge technology.
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The acquisition of Cornell contributed significantly to revenue growth and margin improvement, with a 57% year-over-year increase in the precision devices segment.
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Knowles Corp (NYSE:KN) generated $53 million in cash from operations in the third quarter, exceeding the high end of their guidance range.
Negative Points
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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.
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The precision devices segment faced continued headwinds from elevated inventory levels in the industrial markets and distribution channels.
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Despite improvements, Cornell's gross margins remain below Knowles Corp's legacy precision device business.
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Interest expenses increased by $3.3 million compared to the prior year due to higher bank borrowings associated with the Cornell acquisition.
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Bookings in the industrial end market remain inconsistent, with no sustained recovery observed yet.