Knowles Corp (KN) 2023 Q2 法說會逐字稿

Good afternoon, and thank you for attending today's Knowles Second Quarter 2023 Earnings Conference Call. My name is Kayla Baker, and I will be your conference operator today. (Operator Instructions).

下午好，感謝您參加今天的樓氏集團 2023 年第二季度收益電話會議。我叫凱拉·貝克，今天我將擔任你們的會議操作員。 （操作員說明）。

I will now pass the conference over to your host, Patton Hofer, Vice President of Investor Relations with Knowles. Thank you, and you may proceed.

現在，我將把會議轉交給東道主、諾爾斯公司投資者關係副總裁帕頓·霍弗 (Patton Hofer)。謝謝你，你可以繼續了。

Thanks, Kayla, and welcome to our Q2 2023 earnings call. I'm Patton Hofer, Vice President of Investor Relations, and presenting with me on the call today are Jeffrey Niew, our President and CEO; and John Anderson, our Senior Vice President and CFO.

謝謝 Kayla，歡迎參加我們的 2023 年第二季度財報電話會議。我是投資者關係副總裁 Patton Hofer，今天與我一起參加電話會議的是我們的總裁兼首席執行官 Jeffrey Niew；以及我們的高級副總裁兼首席財務官約翰·安德森 (John Anderson)。

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 sales, expenses and profits, involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations.

我們今天的電話會議將包括有關樓氏集團未來預期、計劃和前景的評論，這些評論構成適用聯邦證券法下安全港條款的前瞻性陳述。本次電話會議中的前瞻性陳述將包括有關公司產品需求、公司銷售、費用和利潤的預期趨勢的評論，涉及許多風險和不確定性，可能導致實際結果與當前預期存在重大差異。

The company urges investors to review the risks and uncertainties that the company's SEC filings, including, but not limited to, the annual report on Form 10-K for the fiscal year ended December 31, 2022, periodic reports filed from time to time with the SEC and the risks and uncertainties identified in today's earnings release. All forward-looking statements are made as of the date of this call, and Knowles disclaims any duty to update such statements, except as required by law.

該公司敦促投資者審查該公司向SEC 提交的文件的風險和不確定性，包括但不限於截至2022 年12 月31 日的財政年度的10-K 表格年度報告、不時向美國證券交易委員會提交的定期報告。 SEC 以及今天的收益發布中確定的風險和不確定性。所有前瞻性陳述均截至本次電話會議之日作出，諾爾斯不承擔更新此類陳述的義務，除非法律要求。

In addition, pursuant to Reg G, any non-GAAP financial measures referenced during today's conference call can be found in our press release posted on our website at knowles.com. And in our current report on Form 8-K filed today with the SEC, including a reconciliation to the most directly comparable GAAP measures. All financial references on this call will be on a non-GAAP continuing operations basis unless otherwise indicated. Also, we've made selected financial information available on webcast slides, which can be found on the Investor Relations section of our website.

此外，根據 Reg G 規定，今天電話會議期間引用的任何非 GAAP 財務指標均可在我們網站 Knowles.com 上發布的新聞稿中找到。在我們今天向 SEC 提交的 8-K 表格報告中，包括對最直接可比的 GAAP 衡量標準的調節。除非另有說明，本次電話會議的所有財務參考均基於非公認會計準則持續運營基礎。此外，我們還在網絡廣播幻燈片中提供了精選的財務信息，這些信息可以在我們網站的投資者關係部分找到。

With that, let me turn the call over to Jeff, who will provide some details on our results. Jeff?

接下來，讓我將電話轉給傑夫，他將提供有關我們結果的一些詳細信息。傑夫？

Thanks, Patton, and thanks to all of you for joining us today. Knowles delivered solid results for the second quarter with revenues of $173 million, adjusted EBIT margins of 16% and EPS of $0.23, all finishing above the midpoint of our guided range. Gross margins of 42% finished above the high end of the guided range as our teams around the globe continue to improve efficiency, reduce fixed costs and improve mix in light of the macro challenges in certain end markets.

謝謝巴頓，也感謝大家今天加入我們。 Knowles 第二季度業績強勁，收入為 1.73 億美元，調整後息稅前利潤率為 16%，每股收益為 0.23 美元，均高於我們指導範圍的中點。鑑於某些終端市場的宏觀挑戰，我們的全球團隊不斷提高效率、降低固定成本並改善產品組合，最終毛利率達到 42%，高於指導範圍的高端。

In Precision Devices, Q2 revenue was down 20% from the prior year. Inventory challenges in the industrial distribution and telecom markets have continued as we have experienced further revenue weakness in Q2. Defense was down versus the prior year as delays in project awards impacted Q2 bookings and revenue. Finally, the electric vehicle market remains exciting for Knowles growing again in Q2 versus the prior year as we continue to secure additional design wins for onboard and fixed infrastructure charging.

在精密器件領域，第二季度收入較上年下降 20%。由於第二季度收入進一步疲軟，工業分銷和電信市場的庫存挑戰持續存在。由於項目授予的延遲影響了第二季度的預訂和收入，國防業務較上年有所下降。最後，隨著我們繼續獲得車載和固定基礎設施充電的更多設計勝利，樓氏電子第二季度與上年相比再次增長，電動汽車市場仍然令人興奮。

In Medtech & Specialty Audio, revenue was down 2% from the prior year, but up more than 30% sequentially as customer inventory levels declined faster than we originally anticipated. We are definitely past the inventory correction we experienced in the first quarter of 2023. I'd also like to take a moment to commend our MSA team as they delivered outstanding margins in the quarter, a true testament to our differentiated products and operational excellence in our factories.

在醫療技術和專業音頻領域，收入比上年下降了 2%，但由於客戶庫存水平下降速度快於我們最初的預期，環比增長了 30% 以上。我們肯定已經度過了2023 年第一季度經歷的庫存調整。我還想花點時間讚揚我們的MSA 團隊，因為他們在本季度實現了出色的利潤率，這真正證明了我們的差異化產品和卓越運營我們的工廠。

In Consumer MEMS Microphones, revenue was down 3% from last year. Nonmobile was up versus the prior year, driven by new product launches and improved demand in ear and IoT. Computing was also a bright spot in the quarter, finishing better than expected as channel inventory sell-through has improved and upgrade cycles are returning earlier than previously expected. While the smartphone market continues to be very difficult, especially in China, the shift of mix towards ear, IoT and compute is positively impacting gross margins in this segment.

在消費類 MEMS 麥克風領域，收入比去年下降了 3%。受新產品發布以及耳機和物聯網需求增加的推動，非移動業務較上年有所增長。計算也是本季度的一個亮點，由於渠道庫存銷售量有所改善，而且升級週期的回歸早於之前的預期，因此其表現好於預期。儘管智能手機市場仍然非常困難，尤其是在中國，但向耳機、物聯網和計算的組合轉變正在對該領域的毛利率產生積極影響。

Now I'll spend a few minutes discussing the current customer and market conditions for each segment before turning the call over to John to provide the third quarter guidance. Starting with Precision Devices segment. In the industrial and telecom markets, which currently make up approximately 10% of total company revenue, we are seeing continued weakness as inventory levels remain elevated. We previously expected the inventory situation to improve in the second half. But based on the current outlook, we are now expecting these markets to be down the remainder of the year.

現在，我將花幾分鐘討論每個細分市場的當前客戶和市場狀況，然後將電話轉給約翰以提供第三季度指導。從精密設備部門開始。工業和電信市場目前約占公司總收入的 10%，但由於庫存水平仍然較高，我們看到其持續疲軟。我們此前預計下半年庫存狀況將有所改善。但根據目前的前景，我們預計這些市場將在今年剩餘時間內下跌。

For our 3 key end markets, Defense, Medtech and the EV, the long-term outlook is unchanged from our previous expectations. Knowles continues to expand its design wins in these growth markets with a broad range of customers. Demand for components in the Medtech space has been relatively flat in the first half of the year with some excess inventory. And based on current demand, we expect to return to year-over-year growth starting in Q3.

對於我們的三個關鍵終端市場：國防、醫療技術和電動汽車，長期前景與我們之前的預期沒有變化。 Knowles 繼續擴大其在這些增長市場中的設計優勢，贏得了廣泛的客戶。今年上半年，醫療科技領域的零部件需求相對平穩，庫存有些過剩。根據當前需求，我們預計從第三季度開始將恢復同比增長。

For Defense, our previous revenue projections for the year factored a number of bookings in Q2 for communications, radar and electronic warfare programs, which have been delayed. While we believe our position in our core markets for PD, along with the secular trends within these markets are unchanged, continued weakness in industrial and in delayed bookings in defense are reducing our expectations for revenue in the second half of 2023. To mitigate the impact of these delays, we have implemented several measures to reduce costs in Precision Devices to improve profitability. John will provide more detail on these actions during his portion of the call.

對於國防領域，我們之前對今年的收入預測考慮了第二季度通信、雷達和電子戰項目的大量預訂，這些項目已被推遲。雖然我們相信我們在 PD 核心市場的地位以及這些市場的長期趨勢沒有改變，但工業領域的持續疲軟和國防領域的預訂延遲正在降低我們對 2023 年下半年收入的預期。針對這些延誤，我們採取了多項措施來降低精密設備的成本，以提高盈利能力。約翰將在電話會議中提供有關這些行動的更多細節。

Moving to Medtech & Specialty Audio. The hearing health market demand has stabilized as hearing aid inventories around the globe have returned to more normal levels. Our Q3 guide reflects a more than 20% revenue growth versus the prior year, driven by the improved inventory situation and increases in demand in the traditional hearing aid market, particularly in the U.S. It is a very positive sign that we are returning to growth in the second half of '23, which provides confidence for growth in '24.

轉向醫療技術和專業音頻。隨著全球助聽器庫存恢復到更正常的水平，聽力健康市場需求已經穩定。我們的第三季度指南反映出，在庫存狀況改善和傳統助聽器市場（尤其是美國）需求增加的推動下，收入比上一年增長了20% 以上。這是一個非常積極的跡象，表明我們正在恢復增長23年下半年，這為24年的增長提供了信心。

Lastly, on to our Consumer MEMS Microphone segment. Due to the normal seasonality of this business and improving market conditions in nonmobile, we are expecting sequential improvement for revenue throughout the remainder of the year. The second half recovery is now expected to be less pronounced than we previously discussed, driven primarily by the smartphone market. In nonmobile applications, second half demand in computing and ear and IoT are expected to be up significantly versus the prior year, driven by improved channel inventory levels and replacement cycles in computing.

最後，我們來談談消費類 MEMS 麥克風領域。由於該業務的正常季節性以及非移動市場狀況的改善，我們預計今年剩餘時間收入將持續改善。目前預計下半年的複蘇將不如我們之前討論的那麼明顯，這主要是由智能手機市場推動的。在非移動應用中，受計算渠道庫存水平和更換週期改善的推動，下半年計算、耳機和物聯網的需求預計將比去年大幅增長。

In the smartphone market, demand expectations for new products and further weakness in China are driving additional pressure on the recovery in this business ultimately limiting the upside in the back half of '23 for CMM. Overall, for Knowles, although the outlook for improvement in revenue in the second half have softened, we are still expecting margin expansion and earnings growth versus the prior year. In MSA, the inventory situation in the hearing health market is behind us as forecasted, and we are increasingly confident of second half revenue growth.

在智能手機市場，對新產品的需求預期以及中國的進一步疲軟給該業務的複蘇帶來了額外的壓力，最終限制了 CMM 在 23 年下半年的上漲空間。總體而言，對於樓氏電子來說，儘管下半年收入改善的前景有所減弱，但我們仍預計與上年相比，利潤率將擴大，盈利將增長。在MSA方面，聽力健康市場的庫存情況正如我們所預測的那樣，我們對下半年收入增長越來越有信心。

In Precision Devices, continued weakness in the industrial market, coupled with delays in defense orders have impacted revenue expectations for the remainder of 2023. We believe, however, the secular trends in Defense, Medtech and EV markets remain robust. Lastly, for CMM, we are seeing a slow recovery in consumer electronics, primarily due to the smartphone market and softer demand in China.

在精密設備領域，工業市場的持續疲軟，加上國防訂單的延遲，影響了 2023 年剩餘時間的收入預期。不過，我們認為，國防、醫療技術和電動汽車市場的長期趨勢仍然強勁。最後，對於 CMM 來說，我們看到消費電子產品復甦緩慢，這主要是由於智能手機市場和中國需求疲軟。

In summary, we are now expecting total company revenues in the second half of the year to be near prior year levels. And with the cost efficiencies and actions we've implemented, along with favorable mix, we expect our second half adjusted EBIT margins to be greater than 19%.

總而言之，我們目前預計下半年公司總收入將接近去年同期水平。憑藉成本效率和我們實施的行動，以及有利的組合，我們預計下半年調整後的息稅前利潤率將超過 19%。

Now let me turn the call over to John to detail our quarterly results and guidance.

現在讓我將電話轉給約翰，詳細說明我們的季度業績和指導。

Thanks, Jeff. We reported second quarter revenues of $173 million, down 8% from the year-ago period, driven primarily by lower shipment volumes in Precision Devices and Consumer MEMS mics. The Precision Devices segment delivered revenues of $48 million, down 20% from the prior year, driven by continued weak demand associated with excess channel inventory in the industrial and distribution markets and timing of shipments into the defense market.

謝謝，傑夫。我們報告第二季度收入為 1.73 億美元，比去年同期下降 8%，這主要是由於精密設備和消費類 MEMS 麥克風出貨量下降所致。精密設備部門的收入為 4800 萬美元，比上年下降 20%，這是由於工業和分銷市場渠道庫存過剩以及向國防市場發貨的時間安排導致需求持續疲軟。

In the Medtech & Specialty Audio segment, revenue was $61 million, down 2% versus the prior year as we faced tough year-over-year comparables as the first half of '22 demand benefited from strong COVID recovery. Consumer MEMS mic revenue of $65 million was down 3% versus the prior year, driven by weak global demand for smartphones, partially offset by growth in nonmobile applications.

在醫療技術和專業音頻領域，收入為 6100 萬美元，比上年下降 2%，因為我們面臨著嚴峻的同比可比性，因為 22 年上半年的需求受益於新冠疫情的強勁復甦。由於全球智能手機需求疲軟，消費類 MEMS 麥克風收入為 6500 萬美元，較上年下降 3%，但部分被非移動應用的增長所抵消。

Second quarter gross margins were 42%, 100 basis points above the high end of our guidance range and up 50 basis points from the same period a year ago. Precision Devices segment gross margins were 39.7%, down 700 basis points from the prior year due to unfavorable capacity utilization. Medtech & Specialty Audio segment gross margins were 53.5%, up 410 basis points versus the prior year, driven by productivity gains, lower factory costs and foreign currency benefits.

第二季度毛利率為 42%，比我們指導範圍的上限高出 100 個基點，比去年同期上升 50 個基點。由於產能利用率不利，精密器件業務毛利率為 39.7%，較上年下降 700 個基點。受生產率提高、工廠成本降低和外匯收益的推動，醫療技術和專業音頻部門的毛利率為 53.5%，比上年增長 410 個基點。

Consumer MEMS Microphones delivered gross margins of 33.6%, up 340 basis points versus the prior year, driven by benefits of the restructuring actions announced in August 2022, improved product mix and a gain on the sale of assets, partially offset by pricing pressure in the mobile market. R&D expense in the quarter was $16 million, down $2 million from the prior year, with the reduction driven by the benefits of the restructuring actions taken in the Consumer MEMS Microphone segment.

消費類 MEMS 麥克風的毛利率為 33.6%，比上年增長 340 個基點，這得益於 2022 年 8 月宣布的重組行動、產品組合的改善以及資產出售收益，但部分被移動市場。本季度的研發費用為 1,600 萬美元，比上年同期減少 200 萬美元，減少的原因是消費 MEMS 麥克風領域採取的重組行動帶來的好處。

SG&A expenses were $30 million, $6 million higher than prior year levels, driven primarily by higher incentive compensation cost and higher professional and legal fees, partially offset by restructuring actions in the Consumer MEMS Microphone segment. For the quarter, adjusted EBIT margin was 16% at the high end of the guidance range. EPS was $0.23 in the quarter, slightly above the midpoint of our guidance range.

SG&A 費用為 3000 萬美元，比上年水平高出 600 萬美元，主要是由於激勵補償成本以及專業和法律費用增加，部分被消費 MEMS 麥克風領域的重組行動所抵消。本季度調整後息稅前利潤率為 16%，處於指導範圍的高端。本季度每股收益為 0.23 美元，略高於我們指導範圍的中點。

Now I'll turn to our balance sheet and cash flow. Cash and cash equivalents totaled $54 million at the end of the quarter. We generated cash from operations of $1 million above the midpoint of our guidance range, driven by timing of customer collections. Capital spending was $4 million in the quarter, and we repurchased approximately 300,000 shares at a total cost of $5 million. We ended the quarter with cash net of outstanding bank borrowings of $9 million.

現在我將談談我們的資產負債表和現金流。截至本季度末，現金和現金等價物總額為 5400 萬美元。在客戶收款時間的推動下，我們從運營中產生的現金超過指導範圍中點 100 萬美元。本季度的資本支出為 400 萬美元，我們回購了約 30 萬股股票，總成本為 500 萬美元。截至本季度末，扣除未償還銀行借款後，我們的現金淨額為 900 萬美元。

Before moving to guidance for the third quarter, I want to comment briefly on some of the specific cost reduction actions we're taking within the Precision Devices segment to mitigate the impacts of our reduced revenue outlook. In Q3, we expect to incur a charge of roughly $2 million, which is expected to result in annualized cost savings of more than $5 million. These actions will be in place by the end of this year, and when implementation is complete, we expect PD operating margins to return near 2022 levels. This will also put total company operating expenses at the low end of our previous range of $43 million to $45 million per quarter.

在談到第三季度的指導之前，我想簡要評論一下我們在精密設備領域採取的一些具體成本削減行動，以減輕收入前景下降的影響。在第三季度，我們預計將產生約 200 萬美元的費用，預計每年將節省超過 500 萬美元的成本。這些行動將於今年年底實施，實施完成後，我們預計 PD 營業利潤率將恢復到 2022 年附近的水平。這也將使公司總運營支出處於我們之前每季度 4300 萬美元至 4500 萬美元範圍的低端。

Moving to guidance for the third quarter. We expect total company revenue to be between $170 million and $180 million down 2% versus the same period a year ago. We estimate gross margins for the third quarter to be approximately 41.5% to 43.5%, up 400 basis points from the year ago period. R&D expense is expected to be between $15 million and $17 million, down slightly from prior year levels, driven by restructuring actions in the Consumer MEMS mics segment.

轉向第三季度的指導。我們預計公司總收入將在 1.7 億美元至 1.8 億美元之間，較去年同期下降 2%。我們預計第三季度毛利率約為41.5%至43.5%，較去年同期上升400個基點。受消費 MEMS 麥克風領域重組行動的推動，研發費用預計在 1500 萬美元至 1700 萬美元之間，略低於去年水平。

We're projecting selling and administrative expense to be between $24 million and $26 million, down $1 million from the year ago period, primarily driven by restructuring actions in the Consumer MEMS and Precision Devices segments. We're projecting adjusted EBIT margin for the quarter to be in the range of 18% to 20% and expect EPS to be within a range of $0.26 to $0.30 per share. This assumes weighted average shares outstanding during the quarter of 94.8 million on a fully diluted basis. We're forecasting an effective tax rate of 18% to 19% for the quarter, and we expect cash from operations to range from $20 million to $30 million. Capital spending is expected to be $7 million.

我們預計銷售和管理費用將在 2400 萬美元至 2600 萬美元之間，比去年同期減少 100 萬美元，這主要是由消費 MEMS 和精密設備領域的重組行動推動的。我們預計本季度調整後的息稅前利潤率將在 18% 至 20% 之間，每股收益將在 0.26 美元至 0.30 美元之間。假設本季度完全稀釋後的加權平均流通股數量為 9,480 萬股。我們預計本季度的有效稅率為 18% 至 19%，運營現金預計為 2000 萬美元至 3000 萬美元。資本支出預計為 700 萬美元。

I'll now turn the call back over to the operator for the question-and-answer portion of the call. Operator?

我現在將把電話轉回接線員以進行電話問答部分。操作員？

(Operator Instructions) And our first question comes from the line of Christopher Rolland with Susquehanna.

（操作員說明）我們的第一個問題來自克里斯托弗·羅蘭與薩斯奎哈納的線路。

Thanks so much for the question here. Just talking about maybe your largest customer, what we can kind of expect for the back half? I know you've been deemphasizing them over time. It seems like strength came from other areas of the market as well. But how does this affect seasonality? And in particular, for your whole company, you were expecting to have really a strong seasonal December like 20-plus percent sequentially, I think, was where the Street was. Does this come into play here at all? Or is this still just PD related that might dampen that?

非常感謝您在這裡提出問題。只是談論也許是您最大的客戶，我們對後半部分有何期望？我知道隨著時間的推移，你一直在淡化它們。似乎力量也來自市場的其他領域。但這如何影響季節性呢？特別是，對於您的整個公司來說，您預計 12 月份的季節性表現會非常強勁，我認為，我認為華爾街就是如此。這在這裡起作用嗎？或者這仍然只是與 PD 相關，可能會抑制這種情況？

Yes. So I would sit there and say, generally speaking, without going to the customer specifics. I think we're pretty close to where we thought the CMM business would be in the back half. It's not altogether. It's slightly down but driven primarily by smartphone in China. So I think here, IoT and compute continue to look relatively strong for us, but the smartphone is definitely coming in weaker, and I would say even more specific, China is coming in weaker. So our overall expectations for CMM is probably slightly less than we would have said 3 months ago. I think the primary driver of what we kind of talked about here would probably be more on the PD side versus the prior expectations.

是的。所以我會坐在那裡說，一般來說，而不涉及客戶的具體情況。我認為我們已經非常接近我們認為 CMM 業務在後半段的情況了。這並不完全是。略有下降，但主要是由中國智能手機推動的。所以我認為，物聯網和計算對我們來說仍然相對強勁，但智能手機肯定會變得更弱，我想說更具體的是，中國的表現正在變得更弱。因此，我們對 CMM 的總體預期可能略低於 3 個月前的預期。我認為我們在這裡討論的主要驅動因素可能更多是在 PD 方面，而不是之前的預期。

Yes. And then on the PD side of things as well, I get the pushouts, defense-related and other. It sounds like maybe there's some inventory as well maybe go through where you think there is some inventory build, where you think it is in terms of weeks or however you want to define it? And when you think that inventory is finally going to work through here? And what kind of caught you guys by surprise on the inventory side as well?

是的。然後在PD方面，我也得到了與防守相關的驅逐和其他方面的信息。聽起來好像可能還有一些庫存，也可能會經過您認為有一些庫存建設的地方，您認為以周為單位的庫存，或者您想要定義的庫存？當您認為庫存最終會在這裡發揮作用時？在庫存方面，什麼也讓你們感到驚訝？

Well, I think in the original projections for PD, we're kind of starting to see recovery in the industrial such distribution portion of the business in the back half. And right now, we're not seeing that recovery at all, quite frankly. So I think that's going to be delayed into '24 of the recovery in industrial and distribution. To make a few more comments, Medtech was stable in the first half, I'd call it. We do expect a return to growth in the back half for Medtech with the PD.

嗯，我認為在對 PD 的最初預測中，我們開始看到下半年工業分銷部分的複蘇。坦率地說，目前我們根本沒有看到這種複蘇。因此，我認為工業和分銷業的複蘇將推遲到 24 世紀。多說幾句，我認為醫療科技上半年表現穩定。我們確實預計醫療技術行業將在下半年恢復增長。

And then I'll just make a comment on defense. There's been a number of larger programs that have been delayed, which we haven't changed our position, but it's been delayed. And the one I can kind of call out, Chris, is more specific. Lockheed just announced about a week ago or a little over a week ago that they were going to deliver 150 Joint Strike Fighters this year. That was the original projection. And now they're projecting to deliver only 110 due to a number of issues on their side. So that's the kind of delays we're talking about here in defense.

然後我就防守發表評論。有許多較大的項目被推遲，我們沒有改變我們的立場，但它已經被推遲了。我可以說的克里斯更加具體。洛克希德公司大約一周前或一周多一點前剛剛宣布，他們今年將交付 150 架聯合攻擊戰鬥機。這是最初的投影。現在，由於存在一些問題，他們預計只能交付 110 架。這就是我們在防守中談論的延誤。

There's a couple of other larger programs like that. Our position in defense really hasn't changed, and the long-term prognosis for defense is still looks very good, but some of these orders are delayed. We expected to get some of these orders in Q2, they didn't materialize, and they're probably going to materialize in the back half, but it really draws on the question whether we could deliver them within the calendar year '23.

還有其他一些類似的大型程序。我們在國防方面的立場確實沒有改變，而且國防的長期預測看起來仍然非常好，但其中一些命令被推遲了。我們預計會在第二季度獲得其中一些訂單，但它們沒有實現，並且可能會在下半年實現，但這確實涉及到我們是否可以在 23 日曆年內交付它們的問題。

And the next question comes from the line of Bob Labick with CJS Securities.

下一個問題來自 CJS 證券的 Bob Labick。

It's Lee Jagoda for Bob tonight. So just to start with -- just to clarify your guidance, I think I heard you say in the back half in total, you expect flat revenues and EBITDA margins north of 19%. Is that correct?

今晚鮑勃的電話是李·賈戈達。首先，為了澄清您的指導，我想我聽到您說，在下半年，您預計收入持平，EBITDA 利潤率將超過 19%。那是對的嗎？

That is correct.

那是對的。

Okay. So I guess that would also imply around flat revenue for Q4. And I guess the question -- for the first question is how much of that is conservatism without visibility versus you have visibility to what looks to be flat revenue consolidated?

好的。所以我想這也意味著第四季度的收入持平。我想問題是——第一個問題是，其中有多少是沒有可見性的保守主義，而你可以看到看似穩定的合併收入？

Well, I would sit there and say is, let me go through by business unit. I think we're very comfortable with the projections within the MSA, the Medtech & Specialty Audio. When we do -- it is -- they do have growth year-over-year in the back half. As we kind of talked about in the consumer does microphone business, I would say that is flattish year-over-year and so maybe slightly up.

好吧，我會坐在那裡說，讓我按業務部門進行介紹。我認為我們對 MSA（醫療技術和專業音頻）內的預測非常滿意。當我們這樣做時——確實如此——他們在後半段確實實現了同比增長。正如我們在消費者麥克風業務中談到的那樣，我想說，這一數字同比持平，因此可能略有上升。

And then the Precision Devices business obviously is down. Now within the Precision Devices area, I would just sit there and say on the defense side, I think we are going to get these orders. I can't predict the exact month we're going to get it. And so there could be a little bit of conservatism in the fact that the orders come sooner rather than later, we'll be able to deliver it within calendar year '23.

然後精密設備業務顯然在下滑。現在在精密設備領域，我只是坐在那裡，在防禦方面說，我認為我們將得到這些訂單。我無法預測我們能收到它的確切月份。因此，訂單來得宜早不宜遲，這一事實可能有點保守，我們將能夠在 23 日曆年內交付。

But right now, I wouldn't -- I can't count on that yet because I don't have the orders in hand yet, and we're already in August. The second piece is this industrial and distribution portion. And quite frankly, we're not seeing a lot of recovery in this market. No. Could it change? Yes. But right now, we're kind of saying don't expect the kind of trajectory in that market to ship until sometime in '24.

但現在，我不會——我還不能指望這一點，因為我手上還沒有訂單，而我們已經在八月份了。第二部分是工業和分銷部分。坦率地說，我們沒有看到這個市場有很大的複蘇。不，能改變嗎？是的。但現在，我們想說的是，不要指望該市場的這種軌跡要到 24 年的某個時候才會出現。

Got it. And then I guess along the lines of your balance sheet keeps getting stronger. You've talked about allocating 50% of your free cash flow towards share repurchase. Can you give us any update there? And then with regard to acquisitions, has anything changed related to either size or areas of focus versus the last couple of years?

知道了。然後我猜你的資產負債表會變得越來越強大。您曾談到將 50% 的自由現金流用於股票回購。您能給我們提供任何更新嗎？那麼在收購方面，與過去幾年相比，規模或重點領域有什麼變化嗎？

Well, I think first, we covered the acquisition portion first. I think when we look at the acquisitions we've done in the past since 2017. The largest one was about $80 million. And I think with our balance sheet, there is the opportunity to probably look at some things that are larger than that on a purchase price basis with the discipline around that we don't want to overpay for something. And I think we kind of talked a lot about this, that in previous years, the multiples were kind of like high. And so we're going to be very disciplined about what we do in terms of acquisitions, but they could be larger.

嗯，我認為首先，我們首先討論了收購部分。我認為，當我們回顧 2017 年以來我們過去進行的收購時，最大的一筆收購金額約為 8000 萬美元。我認為，通過我們的資產負債表，我們有機會考慮一些比購買價格更大的事情，並遵守我們不想為某件事支付過高費用的紀律。我認為我們對此進行了很多討論，在前幾年，倍數有點高。因此，我們在收購方面將會非常嚴格，但規模可能會更大。

And again, I'm optimistic that we're looking at a lot of different things, and we'll see how this all plays out over the next 6 months to a year. As far as the stock buyback, I think we've committed not 50%, but more than 50% of our free cash flow to go towards share repurchase. I think year-to-date, for the full year, we've actually spent more than 50% of the cash flow year-to-date through Q2 on share repurchases. And we'll continue to buy back shares in line with what we've talked about in the past.

再說一遍，我很樂觀，我們正在研究很多不同的事情，我們將看看這一切在未來 6 個月到一年內如何發揮作用。就股票回購而言，我認為我們承諾將 50% 以上的自由現金流用於股票回購，而不是 50%。我認為今年迄今，全年，我們實際上已將今年迄今至第二季度超過 50% 的現金流用於股票回購。我們將繼續按照我們過去討論過的方式回購股票。

Great. And then just one more for me, and I'll hop back in queue. Any update on the OTC hearing aid market? Are you seeing any new entrants, more demand? Anything along those lines?

偉大的。然後再給我一張，我就會重新排隊。 OTC助聽器市場有什麼最新消息嗎？您是否看到任何新進入者或更多需求？有什麼類似的事情嗎？

Yes. The short answer is we continue to see that it's actually doing better than we originally expected so far. But we're not seeing a lot of sell-through data. I would sit there and say, our traditional hearing aid market is doing better than expected than we would have said 6 months ago.

是的。簡而言之，我們繼續看到到目前為止它的表現實際上比我們最初預期的要好。但我們沒有看到很多銷售數據。我會坐在那裡說，我們傳統的助聽器市場的表現比我們 6 個月前所說的要好。

So I would say 2 things. One, I think it's a little too early to we see sell-through data on the over-the-counter market to say that this is sustainable. And again, it's not a super meaningful number in the first half of the year, but it is better than expected. In the meantime, maybe what we could be seeing here is that the over-the-counter market is actually getting people interested in looking at hearing aids and that they're opting for the traditional hearing aid market when they see that there's only a marginal difference in price and you get full service with a traditional hearing aid because the traditional hearing is that market is doing quite well right now.

所以我想說兩件事。第一，我認為現在就我們看到場外交易市場的銷售數據來判斷這是可持續的還為時過早。再說一遍，這在上半年並不是一個超級有意義的數字，但好於預期。與此同時，也許我們在這裡可以看到的是，非處方藥市場實際上讓人們對助聽器產生了興趣，當他們看到助聽器市場的邊際收益很小時，他們就會選擇傳統的助聽器市場。價格差異，您可以通過傳統助聽器獲得全面服務，因為傳統助聽器市場目前表現相當不錯。

(Operator Instructions) And our next question comes from the line of Anthony Stoss with Craig-Hallum.

（操作員說明）我們的下一個問題來自 Anthony Stoss 和 Craig-Hallum 的線路。

Nice gross margins in a tough environment. Jeff, I wanted to follow up on Q4. So if Q4 is roughly flat with a year ago, Q4, up 12%. Are you expecting China smartphones, et cetera, to bounce back in the December quarter? Or what do you really need to come through to hit kind of an up 12% sequentially for December?

在嚴峻的環境下仍能獲得不錯的毛利率。傑夫，我想跟進第四季度。因此，如果第四季度與去年同期大致持平，那麼第四季度將增長 12%。您是否預計中國智能手機等產品將在第四季度反彈？或者你真正需要經歷什麼才能在 12 月份實現環比增長 12% 的目標？

Yes. I mean we do have some sequential improvement from Q2 to Q3 and Q3 to Q4. But I mean, if I go back to the numbers prior to '22, I mean, we're nowhere near the numbers we were shipping per quarter at the end of '21. And so I mean, I would sit there and say, again, our expectations have come down, reasonable amount since last quarter for China. And it seems like this is doable. I mean, looking at China essentially for the full year being flat, flattish with 22%. I mean that's what we're talking about, which 22 is not a great year for China.

是的。我的意思是，從第二季度到第三季度，從第三季度到第四季度，我們確實取得了一些連續的改進。但我的意思是，如果我回到 22 年之前的數字，我的意思是，我們距離 21 年底每季度發貨的數字還差得很遠。所以我的意思是，我會坐在那裡再次說，自上個季度以來，我們對中國的預期已經下降，降幅合理。這似乎是可行的。我的意思是，中國全年的增長率基本持平，增長率為 22%。我的意思是，這就是我們正在談論的，22 對於中國來說不是一個偉大的年份。

And the sequential improvement, Tony, from Q3 to Q4, it's very modest though we have built in here, right.

托尼，從第三季度到第四季度的連續改進，雖然我們已經在這裡建立了，但這是非常溫和的，對吧。

Got it. And then if you backed up the delays in defense on the PD side, I mean how much of it can you tell is just business in general slowing down or is it closer to what you guys expected if you didn't see those delays on the defense side?

知道了。然後，如果你支持PD方面的防禦延遲，我的意思是你能看出其中有多少只是業務總體放緩，或者如果你沒有看到這些延遲，它是否更接近你們的預期防守方？

I would say, of the shortfall compared to what we would have thought a quarter ago, I would say probably about 30% to 35% of it is defense and the rest is the industrial distribution, where we were expecting, if I look back at a quarter ago, we were expecting for industrial distribution to kind of start coming back in a stronger way. I mean not quite back to '22 levels, but starting to come back. And we're just not seeing that. We're just not seeing a rebound at this point. So say 60% industrial distribution not improving and about 35%, 40% of it is delays in defense.

我想說的是，與我們一個季度前的預期相比，缺口中，我想說可能大約有 30% 到 35% 是國防，其餘的是工業分佈，這是我們所期望的，如果我回顧一下一個季度前，我們預計工業分佈將開始以更強勁的方式回歸。我的意思是還沒有完全回到22年的水平，但已經開始恢復了。我們只是沒有看到這一點。目前我們還沒有看到反彈。所以說60%的工業佈局沒有改善，大約35%、40%是國防方面的延誤。

Got it. And the last question for me. You called out computer PC being stronger. It's definitely nice to see. I'm just curious if you looked at that business as a whole, do you think PCs are going to still be down year-over-year 2023 versus 2022 for you guys?

知道了。還有我的最後一個問題。你喊電腦PC更強。很高興看到。我只是很好奇，如果您從整體上看該業務，您認為 2023 年 PC 銷量與 2022 年相比還會出現同比下降嗎？

I would sit there and say right now, our PC market is going to be flattish year-over-year, but definitely growth in the back half compared to what it was last year. So the first half was really low, especially Q1 in the notebook tablet market. We had a really weak Q1. And we're expecting based on orders and demand in Q3, some nice growth year-over-year. So -- but overall, for the full year, it's going to be roughly flattish our compute market. I guess what I'd say, Tory, in a lot of these markets ear, IoT compute, we're seeing a lot of it being, I would say, flattish year-over-year, right, in terms of ear IoT compute but definitely weaker in the first half and stronger in the back half. The one exception is smartphone. And we're just not seeing a recovery in that market.

我會坐在那裡說，現在我們的個人電腦市場將同比持平，但與去年相比，下半年肯定會增長。所以上半年確實很低，尤其是筆記本平板電腦市場的第一季度。我們的第一季度非常疲軟。我們預計，根據第三季度的訂單和需求，同比會出現一些不錯的增長。因此，但總體而言，全年我們的計算市場將大致持平。我想我會說，Tory，在很多這樣的市場中，物聯網計算，我想說的是，在物聯網計算方面，我們看到很多市場同比持平，對吧但肯定是上半場弱，後半場強。唯一的例外是智能手機。我們只是沒有看到該市場的複蘇。

That's definitely better than your peers, my compliments on how you guys are performing on the compute side for sure. And then I guess, let me throw one to John, on the OpEx, 43% to 45%, is that a good number to use kind of on a go-forward basis? Or are there still more levers that you think you might pull and drop that even further?

這絕對比你們的同行更好，我對你們在計算方面的表現表示讚賞。然後我想，讓我向約翰提出一個關於運營支出的數字，43% 到 45%，這是一個可以在未來使用的好數字嗎？或者您認為還有更多的槓桿可以進一步拉動或放下？

Yes, Tony, I think I would go towards the low end of that number from a run rate. We did have in this quarter higher than normal OpEx. We had some professional fee spending that we pulled forward from the back half of the year into Q2. But you can see in my guide, OpEx go back down to I think it's $41 million is the midpoint of the guide for Q3. So I would keep it in that kind of $4 million, $3 million for the remainder of 2023.

是的，托尼，我想我會從運行率轉向該數字的低端。本季度我們的運營支出確實高於正常水平。我們將一些專業費用支出從下半年推遲到第二季度。但你可以在我的指南中看到，運營支出回落至 4100 萬美元，這是第三季度指南的中點。因此，我會將其在 2023 年剩餘時間內保持在 400 萬至 300 萬美元。

Yes. I mean just to say, Tony, we've taken a number of actions based on -- we were -- at the beginning of the year, we were expecting some very nice growth from PD, which is not materializing. And so we've taken action on the cost side to make sure that we can maintain profitability. You can kind of see even with a shortfall in revenue, we're pretty close on the profitability and the operating margins are holding up.

是的。我的意思只是說，托尼，我們已經採取了一些行動，因為我們在今年年初，我們預計 PD 會出現一些非常好的增長，但這並沒有實現。因此，我們在成本方面採取了行動，以確保我們能夠保持盈利能力。你可以看到，即使收入出現短缺，我們的盈利能力也非常接近，而且營業利潤率也保持不變。

Yes, I would say both gross margins and operating margins are holding up fairly well given the challenges on the top line.

是的，我想說，考慮到營收方面的挑戰，毛利率和營業利潤率都保持得相當不錯。

And there are no further questions at this time. This concludes today's conference call, and you may now disconnect.

目前沒有其他問題。今天的電話會議到此結束，您現在可以掛斷電話了。