Knowles Corp (KN) 2024 Q2 法說會逐字稿

Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2024 Knowles Corporation earnings conference call. (Operator Instruction) I would now like to turn the call over to Sarah Cook. You may begin.

謝謝你的支持。我叫凱拉，今天我將擔任你們的會議操作員。現在，我歡迎大家參加樓氏集團 2024 年第二季財報電話會議。（接線員指示）我現在想將電話轉給莎拉·庫克。你可以開始了。

Thank you, and welcome to our second-quarter 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.

謝謝，歡迎參加我們的 2024 年第二季財報電話會議。我是投資者關係副總裁 Sarah Cook，今天與我一起出席的有我們的總裁兼執行長 Jeffrey Niew 和我們的高級副總裁兼財務長 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.

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。

Forward-looking statements in this call will include comments about demand for company products and just bit of 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.

本次電話會議中的前瞻性陳述將包括有關公司產品需求的評論以及公司銷售費用和利潤的一些趨勢，並涉及許多風險和不確定性，可能導致實際結果與當前預期有重大差異。

The company urges investors to review the risks and uncertainties in the company's SEC filings, including but not limited to the annual report Form 10-K for the fiscal year ended December 31, 2023.

該公司敦促投資者審查該公司向 SEC 提交的文件中的風險和不確定性，包括但不限於截至 2023 年 12 月 31 日的財年的 10-K 表格年度報告。

Periodic reports filed from time to time with the SEC and the risks and uncertainties identified in today's earnings release. Our 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.

不時向美國證券交易委員會提交的定期報告以及今天的收益發布中確定的風險和不確定性。我們的前瞻性陳述是在本次電話會議之日做出的，除法律要求外，Knowles 不承擔任何更新此類陳述的義務。

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 our current report on Form 8-K filed today with the SEC.

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上發布的新聞稿（knowles.com）以及我們今天向 SEC 提交的 8-K 表格當前報告中找到。

This will include a reconciliation to the most directly comparable GAAP measure. All financial references on this call will be on a non-GAAP continuing operations basis, unless otherwise indicated, it made selected financial information available in webcast slides, which can be found in the Investor Relations section of our website.

這將包括與最直接可比較的公認會計準則衡量標準的調節。除非另有說明，本次電話會議的所有財務參考都將基於非公認會計準則持續運營基礎，否則它會在網絡廣播幻燈片中提供選定的財務信息，這些信息可以在我們網站的投資者關係部分找到。

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

因此，讓我將電話轉給傑夫，他將提供有關我們結果的詳細資訊。傑夫？

Thanks, Sarah. Thank you all for joining us today. Let me start by saying I'm pleased with the performance of our business in the second quarter we continued to execute on our plan of focusing on high growth end markets where we have differentiated solutions and in Q2, the business performed as we expected.

謝謝，莎拉。感謝大家今天加入我們。首先我要說的是，我對第二季度的業務表現感到滿意，我們繼續執行專注於高成長終端市場的計劃，在這些市場中我們擁有差異化的解決方案，並且在第二季度，業務表現符合我們的預期。

We delivered $205 million in revenue, which is at the midpoint of our guided range and represents 18% growth on a year-over-year basis, EPS of $0.24 and cash from operations of $25 million were both in line with our expectation and at the midpoint of our guided range.

我們實現了 2.05 億美元的收入，處於我們指導範圍的中點，同比增長 18%，每股收益 0.24 美元，運營現金 2500 萬美元，均符合我們的預期，並且符合我們的預期。中點。

From a segment perspective, MedTech and specialty audio revenue grew 4% sequentially as the end market for hearing health products remained strong. The market dynamic of the aging population expansion of the middle class globally and improved hearing aid penetration all remain favorable.

從細分市場來看，由於聽力健康產品的終端市場依然強勁，醫療科技和專業音訊收入較上季成長了 4%。全球中產階級人口老化和助聽器普及率提高的市場動態仍然有利。

We reported adjusted EBITDA margins of over 45%, driven by continued operational execution and our sustained success of new product adoption. We expect the strength to remain throughout the year or within 2024 and for 2024 to be a year of growth for the MedTech and specialty audio segment, despite continuing headwinds from normalization of inventory levels in our industrial and distribution end markets.

在持續的營運執行和新產品採用的持續成功的推動下，我們的調整後 EBITDA 利潤率超過 45%。我們預計全年或 2024 年仍將保持強勁勢頭，並且儘管我們的工業和分銷終端市場庫存水平正常化仍面臨持續阻力，但 2024 年將成為醫療技術和專業音頻領域增長的一年。

Precision Devices delivered solid results in the second quarter, driven by the acquisition of Cornell revenue was up 55% on a year-over-year basis. Adjusted EBITDA margins increased nearly 260 basis points sequentially and flat revenue, driven by strong operational execution and improvements in gross margin within Cornell.

在收購康乃爾大學的推動下，Precision Devices 在第二季業績強勁，營收年增 55%。在康乃爾大學強勁的營運執行力和毛利率改善的推動下，調整後的 EBITDA 利潤率環比增長了近 260 個基點，收入持平。

We have begun to see signs of inventory reduction in our distribution channel, industrial end markets, and we are ready to capitalize on growth as demand improves.

我們已經開始看到分銷管道、工業終端市場庫存減少的跡象，我們已準備好利用需求改善帶來的成長。

I would also add our design activity remains robust, and we are well positioned to grow as the market recovers.

我還要補充一點，我們的設計活動仍然強勁，隨著市場的復甦，我們已經做好了實現成長的準備。

On our consumer mass microphone business, we continue to progress to a conclusion on the strategic alternatives process, taking into consideration all stakeholders from customers to suppliers and shareholders to employees.

在我們的消費者大眾麥克風業務上，我們繼續就策略替代流程得出結論，同時考慮到從客戶到供應商、從股東到員工的所有利害關係人。

From an operational standpoint, CMM financial results in the quarter were solid. Revenue was up 9% from the prior quarter and adjusted EBITDA margins grew by 330 basis points.

從營運角度來看，CMM 本季的財務表現穩健。營收較上一季成長 9%，調整後 EBITDA 利潤率成長 330 個基點。

Before I conclude, I would like to touch on our capital allocation activities in the second quarter. Based on our continued robust cash generation. We repurchased $25 million of shares while also reducing our debt by $34 million.

在結束之前，我想談談我們第二季的資本配置活動。基於我們持續強勁的現金生成能力。我們回購了 2,500 萬美元的股票，同時也減少了 3,400 萬美元的債務。

And we expect sustained cash generation for the remainder of 2024. The first half of 2024 produced solid financial results. I continue to be pleased with the performance of the business, and I'm excited about the opportunities we have ahead of us.

我們預計 2024 年剩餘時間將持續產生現金。2024 年上半年取得了穩健的財務表現。我仍然對公司的業績感到滿意，並對我們面前的機會感到興奮。

My confidence in our ability to deliver shareholder value remains strong as our teams continue to demonstrate operational excellence, execution, innovative products and expanding our market share across our core businesses.

我對我們為股東創造價值的能力仍然充滿信心，因為我們的團隊繼續展示卓越的營運、執行力、創新產品以及擴大我們在核心業務中的市場份額。

Now let me turn the call over to John to go into the details of our quarterly results and provide Q3 guidance.

現在讓我將電話轉給約翰，詳細介紹我們的季度業績並提供第三季的指導。

Thanks, Jeff. We reported second quarter revenues of $205 million at the midpoint of guidance and up 18% from the year ago period, driven by organic growth of 2% and the acquisition of Cornell in the fourth quarter of 2023.

謝謝，傑夫。我們公佈的第二季度營收為 2.05 億美元，處於指導中點，比去年同期增長 18%，這得益於 2% 的有機增長以及 2023 年第四季度對康奈爾大學的收購。

EPS was $0.24 in the quarter at the midpoint of our guidance range and up $0.01 or 4% from the second quarter of 2023. In the MedTech and specialty audio segment, revenue was $60 million, down 2% versus the prior year.

本季每股收益為 0.24 美元，處於我們指引範圍的中點，比 2023 年第二季上漲 0.01 美元，即 4%。在醫療技術和專業音訊領域，收入為 6,000 萬美元，比上年下降 2%。

Our hearing health business was up 5%, offset by lower demand in the specialty audio market. Gross margins were 54.6%, up more than 100 basis points versus the year ago period, driven by favorable product mix and benefits from foreign currency.

我們的聽力健康業務成長了 5%，但被專業音響市場的需求下降所抵消。受有利的產品組合和外匯收益的推動，毛利率為 54.6%，較去年同期成長超過 100 個基點。

Precision devices segment delivered revenues of $74 million, up 55% from the year ago period, driven by the acquisition of Cornell, partially offset by lower shipments of high-performance capacitors into distribution and OEMs in the industrial end market as customer and channel inventories remain elevated.

在收購康乃爾大學的推動下，精密設備部門營收7,400 萬美元，年增55%，但由於客戶和通路庫存仍然存在，工業終端市場分銷和OEM 的高性能電容器出貨量減少部分抵消了這一影響。

Gross margins were 37.2%, down 250 basis points from the second quarter of 2023 due to the acquisition of Cornell. While the gross margins at Cornell remain lower than that of the legacy Precision Devices business, we saw sequential margin improvement at Cornell of 340 basis points, and we expect margins to continue to improve throughout 2024.

由於收購康乃爾大學，毛利率為37.2%，較2023年第二季下降250個基點。雖然康乃爾大學的毛利率仍然低於傳統精密設備業務，但我們看到康乃爾大學的利潤率比上季提高了 340 個基點，我們預計 2024 年利潤率將繼續提高。

Excluding Cornell, year-over-year gross margins within the PD segment were flat. Consumer mems microphone revenues of $71 million were up 9% versus the year ago period due to share gains and increased consumer demand, primarily in ear and IoT end markets.

不包括康乃爾大學，PD 部門的年比毛利率持平。由於份額成長和消費者需求增加（主要是在耳機和物聯網終端市場），消費者MEMS麥克風收入為7,100萬美元，較去年同期成長9%。

Gross margins were 28.1%, a 550 basis points decrease from the prior year due to the absence of a $4 million benefit related to the sale of fixed assets, which was recorded in the second quarter of 2023.

毛利率為 28.1%，較上年下降 550 個基點，原因是沒有 2023 年第二季記錄的與固定資產銷售相關的 400 萬美元收益。

On a total company basis R&D expense in the quarter was $17 million, up 6% from Q2 2023 due to the acquisition of Cornell. SG&A expenses were $32 million, $2 million higher than prior year levels, driven by the acquisition of Cornell, partially offset by restructuring actions taken in the second half of 2023. In the Precision Device segment, interest expense was up $4 million versus the prior year due to higher bank borrowings associated with the acquisition of Cornell in the fourth quarter of 2023.

由於收購康乃爾大學，本季公司整體研發費用為 1,700 萬美元，較 2023 年第二季成長 6%。由於收購康乃爾大學，SG&A 費用為 3,200 萬美元，比上年水準高出 200 萬美元，但部分被 2023 年下半年採取的重組行動所抵消。在精密設備領域，由於 2023 年第四季收購康乃爾大學相關的銀行借款增加，利息支出比去年增加了 400 萬美元。

Now I'll turn to our balance sheet and cash flow. In the second quarter, we generated $25 million in cash from operating activities at the midpoint of our guidance for the first six months of 2024, we generated $42 million in operating cash flow, representing a $20 million increase over the first six months of 2023.

現在我將談談我們的資產負債表和現金流。第二季度，我們從經營活動中產生了2,500 萬美元的現金，達到2024 年前六個月指引的中點，產生了4,200 萬美元的經營現金流，比2023 年前六個月增加了2,000 萬美元。

Capital spending was $3 million in Q2, and we ended the quarter with cash and cash equivalents of $84 million. During the second quarter, we repurchased 1.4 million shares at a total cost of $25 million, and we reduced outstanding borrowings under our revolving credit facility by $34 million.

第二季的資本支出為 300 萬美元，本季末我們的現金和現金等價物為 8,400 萬美元。第二季度，我們以總成本 2,500 萬美元回購了 140 萬股股票，並將循環信貸安排下的未償還借款減少了 3,400 萬美元。

We exited the second quarter with $261 million of total debt. That includes $146 million of borrowings under our revolving credit facility and an interest-free seller note issued in connection with the Cornell acquisition. Lastly, our net debt leverage ratio based on trailing 12 months adjusted EBITDA was 1.1 times.

第二季結束時，我們的債務總額為 2.61 億美元。其中包括我們的循環信貸額度下的 1.46 億美元借款以及與康乃爾大學收購相關的無息賣方票據。最後，我們基於過去 12 個月調整後 EBITDA 的淨負債槓桿率為 1.1 倍。

Moving to our guidance for the third quarter of 2024, revenues are expected to be between $210 million and $220 million, up 23% versus the year ago period, driven by organic growth of 3% and the acquisition of Cornell.

根據我們對 2024 年第三季的指導，在 3% 的有機成長和收購康乃爾大學的推動下，營收預計將在 2.1 億美元至 2.2 億美元之間，較去年同期成長 23%。

R&D expenses are expected to be between $16 million and $18 million, and selling and administrative expenses are expected to be within a range of $29 million to $31 million, up $5 million from the prior year due to increases associated with the Cornell acquisition. We're projecting adjusted EBIT margin for the quarter to be within a range of 16% to 18%.

研發費用預計在1,600 萬美元至1,800 萬美元之間，銷售和管理費用預計在2,900 萬美元至3,100 萬美元之間，比上年增加500 萬美元，原因是與康乃爾大學收購相關的費用增加。我們預計本季調整後的息稅前利潤率將在 16% 至 18% 的範圍內。

We're forecasting interest expense in Q3 to be approximately $4 million, which includes $2 million of non-cash imputed interest. We expect an effective tax rate of 9% to 13% for the quarter, which is lower than normal due to the utilization of foreign tax credits.

我們預計第三季的利息支出約為 400 萬美元，其中包括 200 萬美元的非現金估算利息。我們預計本季的有效稅率為 9% 至 13%，由於利用了外國稅收抵免，該稅率低於正常水平。

And we're projecting EPS to be within the range of $0.29 to $0.33 per share. This assumes weighted average shares outstanding during the quarter of $92.2 million on a fully diluted basis. We're projecting cash from operations to be within a range of $35 million to $45 million, and capital spending is expected to be $5 million.

我們預計每股收益將在 0.29 美元至 0.33 美元之間。假設本季完全稀釋後的加權平均流通股為 9,220 萬美元。我們預計營運現金將在 3,500 萬至 4,500 萬美元之間，資本支出預計為 500 萬美元。

I'll now turn the call back over to the operator for the questions and answers portion of our call. Operator.

現在，我將把電話轉回給接線員，以解答電話中的問題和答案。操作員。

(Operator Instructions)

（操作員說明）

Christopher Rolland, Susquehanna.

克里斯多福羅蘭，薩斯奎哈納。

Hey, guys. Thanks for the question. I know you guided for sequential and year-over-year growth in MedTech and specialty audio and precision devices. I assume that's also going to include consumer. And if you could just kind of force rank or give us some idea of what that sequential strength might be for those different segments? That would be great.

嘿，夥計們。謝謝你的提問。我知道您引導了醫療技術以及專業音訊和精密設備的連續和逐年增長。我認為這也將包括消費者。如果您可以提供某種力量排名，或者讓我們了解這些不同細分市場的連續力量可能是什麼？那太好了。

Yeah. So Chris, thanks for the question. So first of all, I think from being very deliberate about this, the sequential growth is coming from the non-CMM portion of the business. So I think and what we're starting to see, particularly in the Precision Device business, we'd rethink and we're starting to see sequential improvement and still on our way at some point and hopefully in the near future, our return to year-over-year growth on a pro forma basis when you include Cornell and we're seeing that being relatively broad-based.

是的。克里斯，謝謝你的提問。首先，我認為經過深思熟慮，連續成長來自業務的非 CMM 部分。所以我認為，我們開始看到的，特別是在精密設備業務中，我們會重新思考，我們開始看到連續的改進，並且在某個時候仍然在我們的路上，希望在不久的將來，我們會回歸到當你包括康奈爾大學時，預計的同比增長，我們看到這一增長的基礎相對廣泛。

So I think we're pretty pleased. We are seeing some sequential growth in the MedTech and specialty audio. I think it's going to be quite honestly, a little bit more pronounced sequential growth in Q4 versus Q3, but we do expect the percentage of licensed again to have sequential growth in Q4 from Q3.

所以我認為我們很高興。我們看到醫療技術和專業音訊領域出現了一些連續成長。老實說，我認為第四季度的環比增長將比第三季度更加明顯，但我們確實預計第四季度的許可百分比將比第三季度再次出現環比增長。

As far as the CMM business, we are not in Q3, seeing a lot of sequential growth. I'd say it's flattish, but it is coming off a pretty strong Q2 on a year-over-year basis, we had a pretty strong Q2. I think that the CMM business was up about 79% year over year in Q2. So it's coming off a pretty strong Q2.

就三坐標測量機業務而言，我們還沒有進入第三季度，看到連續大幅成長。我想說它是平淡的，但與去年同期相比，第二季的表現相當強勁，我們的第二季表現相當強勁。我認為 CMM 在第二季業務年增約 79%。所以第二季的表現相當強勁。

Great. And then I guess maybe following up there because September first helium typically is pretty strong for you guys or is it are you seeing something different in content? Or is it just purely timing? And then lastly, any update on potentially selling that business and yeah--

偉大的。然後我想也許會跟進，因為九月的第一氦氣通常對你們來說非常強烈，或者你們是否看到了不同的內容？或者這只是純粹的時機？最後，關於可能出售該業務的任何最新消息，是的——

Yeah, we'll just let me take the second question first. I would say not a huge update from the last quarter, but I would say we're inching closer towards a conclusion. And so I think that's part of what we can say at this point or is inching closer towards a conclusion.

是的，我們先回答第二個問題。我想說，與上個季度相比，這並不是一個巨大的更新，但我想說，我們正在慢慢接近結論。所以我認為這是我們目前可以說的一部分，或者正在慢慢接近結論。

And I would say overall for the for the full year, our CMM business is actually going to be up pretty significantly year over year. And so I think it appears I would say we're not going to comment by quarter, but I think it's up about 8% or so unless we're seeing for the full year.

我想說，從全年來看，我們的 CMM 業務實際上將比去年同期大幅成長。因此，我認為我們不會按季度發表評論，但我認為除非我們看到全年的情況，否則它會上漲約 8% 左右。

Okay. Great results in the parts of the Knowles. Thanks, guys.

好的。諾爾斯地區取得了很好的成績。謝謝，夥計們。

Anthony Stoss, Craig-Hallum.

安東尼·斯托斯，克雷格·哈勒姆。

I have a couple of questions on the on the CD acquisition. I think the past quarter you were kind of ballparking it to equate to $135 million to $140 million for the full year 2024 that change or is that still kind of the right number to think about?

我有幾個關於 CD 購買的問題。我認為上個季度您將 2024 年全年的預算定為 1.35 億至 1.4 億美元，這一數字發生了變化，還是說這仍然是值得考慮的正確數字？

I'd say it's no lower than that. Although there's I would say I think when we announced the deal, we talked about $26 million in EBITDA for this year, still stick and we're going to hit the $26 million of EBITDA even on both the lower number. And the way we're doing that, quite frankly, is the synergies are larger than we had expected. I think we've talked about that probably in the past.

我想說，不會比這個低。儘管我想說，我認為當我們宣布這項交易時，我們談到了今年 2600 萬美元的 EBITDA，但仍然堅持下去，即使在兩個較低的數字上，我們也將達到 2600 萬美元的 EBITDA。坦白說，我們這樣做的方式是協同效應比我們預期的要大。我想我們過去可能已經討論過這個問題。

I think couple of quarters ago, we were talking to maybe a couple of million dollars of kind of price opportunity. Last quarter, we talked maybe $3 million to $4 million I would say it's probably closer to $5 million now in terms of price in that business.

我想幾個季度前，我們正在談論可能價值幾百萬美元的價格機會。上個季度，我們談到的價格可能是 300 萬至 400 萬美元，我想說，就該業務的價格而言，現在可能接近 500 萬美元。

So we're feeling pretty good about where we are in that. And I think I'd say, about CD. acquisition is the margins are coming up by probably a little faster than we would have expected even on lower revenue, which is, I think, a really good sign because as the market starts to recover, we can see that the margins are going to expand and we're going to get to the target margins. And we've kind of talked about early on faster than we probably would have at San Antonio

所以我們對自己在這方面的處境感覺非常好。我想我會說，關於 CD。收購的原因是，即使收入較低，利潤率的成長可能比我們預期的要快一些，我認為這是一個非常好的跡象，因為隨著市場開始復甦，我們可以看到利潤率將會擴大我們將達到目標利潤。我們早期討論的速度比我們在聖安東尼奧的速度還要快

Just to give a little color there, and we are moving acquired CD Q4 of last year. Margins were right around 30%, same thing in Q1 of this year, and we're seeing sequential pretty significant sequential improvement. We expect to be kind of in the high 30s as we exit 2024 year.

只是為了給那裡一點色彩，我們正在移動去年第四季購買的 CD。利潤率約為 30%，與今年第一季的情況相同，而且我們看到連續相當顯著的連續改善。當我們退出 2024 年時，我們預計會達到 30 多歲的水平。

And so the net the combination, obviously of some just capacity utilization, but it's also getting the synergies.

因此，網路組合顯然只是產能利用率的一部分，但它也獲得了協同效應。

Got it. Perfect. But on second question, just wanted to confirm something. So the September guide, are you assuming anything from your prior biggest handset customer in terms of content in a handset

知道了。完美的。但關於第二個問題，我只是想確認一下。那麼九月份的指南，您是否從您之前最大的手機客戶那裡假設了手機內容方面的任何內容？

So again, but I would kind of say it's actually we're not going to make comments on specific customers, I think so overall, I would just make the comment again that the growth sequentially is coming from the non-CMM portion of the business. I think we keep continue to focus on.

再說一次，但我想說的是，實際上我們不會對特定客戶發表評論，我認為總的來說，我只是再次評論說，連續增長來自業務的非 CMM 部分。我認為我們繼續關注。

Overall, we're reducing our exposure to mobile, which is our one of our lowest gross margin markets and it. But overall, if you look at for the full year, the CMM business will be up 8% based on the what we're seeing for this year for the full year.

總體而言，我們正在減少對行動裝置的投資，這是我們毛利率最低的市場之一。但總的來說，如果你看一下全年情況，CMM 業務將比我們今年看到的全年增長 8%。

Got it. Okay. And then lastly, Jeff, and I think in past quarters, you're sitting with about five months' worth of inventory and CD and you wanted to bring it down to two months? Are we still in that kind of, say, five months or does it start to come in?

知道了。好的。最後，傑夫，我認為在過去的幾個季度中，您擁有大約五個月的庫存和 CD，而您想將其減少到兩個月？我們是否仍然處於那種狀態，比如說五個月，還是已經開始了？

So you're referring to inventory in the channel? Correct. That's what you're referring to?

那您指的是通路中的庫存嗎？正確的。你指的是那個？

Yeah.

是的。

Yeah, so we're definitely seeing so like again, I kind of process, of course, we expect PD all in the classic TD as well as Cornell, so to be sequentially improving in Q3, and we expect it to improving in Q4. We are seeing the inventory in the channel starting to come down again, but it's probably coming down a little bit slower than we expected.

是的，所以我們肯定會再次看到這樣的情況，當然，我們希望經典TD 和康奈爾大學的PD 都能得到改善，因此在第三季度會連續改善，我們預計在第四季度也會有所改善。我們看到通路中的庫存開始再次下降，但下降速度可能比我們預期的要慢一些。

So no, the steepness of the sequential improvement is probably a little less than we would have expected, but we're definitely seeing it.

所以不，連續改善的陡度可能比我們預期的要小一些，但我們肯定看到了。

As I look at the numbers, we had some nice even sequential growth. We're going to have upfront from Cornell again in classic PD from Q2 to Q3. So the inventory definitely coming down in the channel is are still pockets where there's still probably too much inventory. But overall, we're starting to kind of see the light at the end of the tunnel in the PD markets.

當我查看這些數字時，我們實現了一些不錯的連續成長。從第二季到第三季度，我們將再次從康乃爾大學獲得經典 PD 的預付款。因此，通路中的庫存肯定會下降，但仍可能存在過多的庫存。但總體而言，我們開始看到 PD 市場隧道盡頭的曙光。

So, I just would kind of make a comment on Tony's your passives versus semiconductors because I think we sometimes get these things mixed what we're seeing is the semiconductor channel, which we're not obviously involved with as much there is a lot of inventory still in semiconductors, but the passive inventory in the channel, the past inventory has been reducing at a faster rate than we've been semiconductor the channel.

所以，我只是想對托尼的被動器件與半導體進行評論，因為我認為我們有時會將這些東西混合在一起，我們所看到的是半導體渠道，我們顯然沒有參與太多，因為有很多庫存仍然在半導體，但是渠道中的被動庫存，過去庫存的減少速度比我們半導體渠道更快。

Very good. Thanks for all the color.

非常好。感謝所有的顏色。

Yeah.

是的。

Tristan Gerra, Baird.

特里斯坦·杰拉，貝爾德。

Hi this is Tristan Gerra, thanks for taking the question. I know you talked about some of the pricing opportunity you have on the corner fiber, can you speak to pricing across the rest of your businesses?

大家好，我是 Tristan Gerra，謝謝你們問問題。我知道您談到了角光纖上的一些定價機會，您能談談您其他業務的定價嗎？

Yeah, sure. I can talk about it. I would sit there and say first in the MedTech, especially on pricing stable. Some I wouldn't say we've gotten big price increases or reductions. It's very, very stable. Again, a lot of things we have with these customers are longer term contracts very stable. I think we're a very valuable valued supplier in the in the present and Device segment.

是的，當然。我可以談談。我會坐在那裡先說醫療科技，特別是定價穩定。有些我不會說我們的價格大幅上漲或下降。它非常非常穩定。同樣，我們與這些客戶簽訂的許多長期合約都非常穩定。我認為我們是當前和設備領域非常有價值的供應商。

Outside of Cornell, we're seeing some modest price increases. I think you've talked about this before, Tyler were when we first started doing pricing in the classic PD section, we had some larger increases. Now it's kind of smaller, but continual. And then I think lastly, as CMM business, you I'd say you're outside of mobile. Pricing has been pretty stable and our CMM business mobile is still challenged.

在康乃爾大學之外，我們看到價格略有上漲。我想你之前已經討論過這一點，泰勒，當我們第一次開始在經典的 PD 部分進行定價時，我們有一些較大的增長。現在規模變小了，但仍在持續。最後，我認為，作為 CMM 業務，我想說你已經脫離了行動領域。定價一直相當穩定，我們的 CMM 業務移動仍然面臨挑戰。

I would sit there and say mobile is still challenged. And so that's probably our biggest challenge is on the mobile area. And again, as we tried to over time, reduce our exposure to mobile, we would probably see less and less price decreases in that business.

我會坐在那裡說移動仍然面臨挑戰。因此，我們最大的挑戰可能是在行動領域。而且，隨著時間的推移，當我們試圖減少對行動裝置的接觸時，我們可能會看到該業務的價格下降越來越少。

Great. And then just looking at the hearing health business, have you seen anything notable to call out on the OTC market? Any sense that there's upside relative to your expectations for that business?

偉大的。然後看看聽力健康業務，您在非處方藥市場上有看到什麼值得注意的事情嗎？您認為該業務相對於您的期望有什麼好處嗎？

Yeah, you know, we've been on the call with brief time talking about OTC and you know, I've always kind of like trying to hold back expectations in terms of how big this could be. It still is not really like becoming a significant piece of business for us in what I can sit there and say pretty competently, there's no sockets I can point to that. We've really lost any significant volume.

是的，你知道，我們在電話會議上花了很短的時間討論 OTC，你知道，我總是有點想抑制對這可能有多大的期望。它仍然不像成為我們的重要業務，我可以坐在那裡非常有能力地說，我沒有可以指出的地方。我們確實損失了大量的銷售量。

And so it just stopped developing do with the way people had hoped, but more it's kind of in line what we felt what I would say. I still think the OTC market is helping with the traditional hearing aid market where people are hearing more about hearing aids and maybe they will look at the over-the-counter hearing aid and then they opt into the traditional hearing aid channel.

因此，它只是停止按照人們希望的方式發展，但更多的是，它符合我們的感受，我想說的話。我仍然認為OTC市場正在幫助傳統助聽器市場，人們越來越多地聽到有關助聽器的信息，也許他們會考慮非處方助聽器，然後選擇進入傳統助聽器管道。

And these are complicated devices and I think there's probably a little bit of it, I would say an under appreciation for the value of the audiologist in the in the way this works in terms of a person getting a hearing aid.

這些都是複雜的設備，我認為可能有一點，我想說的是，人們對聽力學家的價值低估了，因為它在人們獲得助聽器方面發揮了作用。

I think people are starting to realize that. And again, having been in the market for many years, right, we didn't we didn't factor in too much in for OTC, and it's probably meeting expectation, but at a very low level, but the traditional hearing care channel continue to do very well.

我認為人們開始意識到這一點。再說一次，我們已經進入市場很多年了，對吧，我們沒有對OTC考慮太多，它可能符合預期，但水平非常低，但傳統的聽力保健渠道仍在繼續做得很好。

Great. Thanks again for taking the questions.

偉大的。再次感謝您提出問題。

(Operator Instructions)

（操作員說明）

Bob Labick, CJS Securities.

拉比克 (Bob Labick)，CJS 證券公司。

Thanks. Good afternoon, you talked obviously about in precision device in particular, you have the destock going on in inventory in the channel and stuff. But can you maybe talk a little bit about the overall end market demand where the biggest drivers are, where you see that and how long it takes to kind of get back up to that growth rate?

謝謝。下午好，您特別提到了精密設備方面，您在渠道庫存方面正在進行庫存等工作。但您能否談談終端市場的整體需求，其中最大的推動因素在哪裡，您在哪裡看到了這一點，以及需要多長時間才能恢復到這一增長率？

Yeah. So let me kind of trying to divide it up into a few different markets. We got defense, medtech, industrial other will make some comments a little bit about I'll go electric as well. And again, Steve Cornell as well as the traditional PD participate in all these areas.

是的。因此，讓我嘗試將其分為幾個不同的市場。我們得到了國防、醫療技術、工業等方面的支持，其他方面也會對我也將採用電動技術發表一些評論。史蒂夫康奈爾和傳統的 PD 再次參與所有這些領域。

And so what I would I would sit there and say, let me start with defense, we're definitely seeing growth in defense. We are seeing some growth in defense it's not probably as high as we would have expected.

所以我會坐在那裡說，讓我從防守開始，我們肯定會看到防守的成長。我們看到國防方面有所成長，但可能沒有我們預期的那麼高。

But you know, for the full year we will see growth in defense, Medtech, there has been a number of areas where we have seen inventory issues that the hearing aid, but given some of our other precision device markets, but we are expecting that some pretty strong year-over-year growth in medtech in the back half of the year as the inventory has kind of winding down, right?

但你知道，全年我們將看到國防、醫療技術、助聽器等許多領域的庫存問題，但考慮到我們的其他一些精密設備市場，但我們預計由於庫存逐漸減少，今年下半年醫療技術領域的同比成長相當​​強勁，對嗎？

So we are starting to see that in the marketplace. I mean, I guess what I would sit there and say is that the one market that's probably a little bit probably the more murky of all is the industrial flash other. And that market has been, I'd say now it's still in decline and there's some modest improvement that we're seeing going forward.

所以我們開始在市場上看到這一點。我的意思是，我想我會坐在那裡說的是，可能有點暗淡的一個市場是工業快閃記憶體市場。我想說，這個市場現在仍在下降，我們看到未來會有一些適度的改善。

But it's not like, and that's probably, when I kind of said upfront that we're the steepness of the recovery is probably not as large as we thought, probably really more in the industrial area. We're seeing some sequential improvement.

但情況並非如此，而且可能是這樣，當我預先說過，我們的復甦幅度可能沒有我們想像的那麼大，在工業領域可能更大。我們看到了一些連續的改進。

Now let me call it a different way. And also kind of a different way, which is OEM versus distribution. We're expecting some pretty strong back half of the year, sequential improvement at our OEM customers. A lot of that driven by Matt and our distribution. We're expecting modest sequential growth in the back half of the year.

現在讓我用不同的方式稱呼它。還有一種不同的方式，即 OEM 與分銷。我們預計我們的 OEM 客戶將在今年下半年出現相當強勁的持續改善。這很大程度上是由 Matt 和我們的發行版推動的。我們預計今年下半年將出現溫和的環比成長。

Okay, guys. Thanks. And then, I haven't really had a chance to fully go through this, but so at the risk of sounding a little silly, could you talk about the goodwill impairment in CMM, what I guess the process was and what it kind of says to us about that segment?

好吧，夥計們。謝謝。然後，我還沒有真正有機會完全了解這一點，但是冒著聽起來有點傻的風險，你能談談 CMM 中的商譽減值嗎？該部分？

Bob, I can take that. So as you recall, in the third quarter of last year, we announced that we were reviewing strategic alternatives for the CMM business that review included a range of possibilities, including a potential sale or restructuring of the business.

鮑勃，我可以接受。正如您所記得的，去年第三季度，我們宣布我們正在審查 CMM 業務的策略替代方案，其中審查了一系列可能性，包括潛在的業務出售或重組。

During the second-quarter of 2024, we evaluated the potential outcomes of our review. And we concluded as a management team that it's more likely than not the fair value of the CMM reporting unit was below its carrying value and as a result, we recorded a goodwill impairment charge of $249 million.

在 2024 年第二季度，我們評估了審查的潛在結果。作為管理團隊，我們得出的結論是，CMM 報告單位的公允價值很可能低於其帳面價值，因此，我們記錄了 2.49 億美元的商譽減損費用。

Okay. Got it. And you said you're inching towards a resolution there. Some can you talk about M&A? I mean, you've talked about it most likely in the PD segment. Can you still is M&A still doable with the kind of ongoing CMM strategic alternatives? Are they going to be set separate, eventual finished CMM and then get back to potential M&A or how is that process playing.

好的。知道了。你說你正在慢慢地解決這個問題。能談談併購嗎？我的意思是，您很可能在 PD 部分討論過它。對於正在進行的 CMM 戰略替代方案，併購是否仍然可行？他們是否會被分開設置，最終完成 CMM，然後回到潛在的併購，或者這個過程是如何進行的。

But will let me start with the first statement, which is our cash flow continues to be very robust on. We're very pleased with the cash flow in the first half. Normally, your seasonally cash flow is usually weaker in the first half, we had a very strong first half cash flow.

但讓我從第一個聲明開始，這是我們的現金流仍然非常強勁。我們對上半年的現金流感到非常滿意。通常，上半年的季節性現金流通常較弱，但我們上半年的現金流非常強勁。

We're expecting that to continue in the back half. And I would sit there and say we are definitely looking at acquisitions. But I guess what I would just say we want to make sure we don't do anything that, our shareholders would look at and say, why are they doing that there's a lot of opportunities out there. And given I point to the Parnell acquisition, which we think is from a synergy standpoint from a how it fits with what we do.

我們預計這種情況將在後半段繼續下去。我會坐在那裡說我們肯定正在考慮收購。但我想我想說的是，我們要確保我們不會做任何事情，我們的股東會看著並說，他們為什麼要這樣做，那裡有很多機會。鑑於我提到了對帕內爾的收購，我們認為這是從協同的角度來看它與我們所做的事情的契合度。

I mean, this has been a really great acquisition for us. We're looking for that next Cornell. And so I don't think it's going to take for a conclusion of the CMM process to move forward the M&A, if we find the right thing, our balance sheet's in good shape. We are going to move forward with M&A.

我的意思是，這對我們來說是一次非常偉大的收購。我們正在尋找下一個康乃爾大學。因此，我認為，如果我們找到正確的事情，我們的資產負債表狀況良好，就不需要完成 CMM 流程來推進併購。我們將繼續推動併購。

About we've always said we're going to maintain modest debt levels, you're not going above, call it [275%] on a net leverage ratio.

關於我們一直說我們將保持適度的債務水平，你不會超過淨槓桿率[275%]。

Yeah. And it and it kind of leads to just a little bit on the capital allocation. We are continuing to buy back shares as well because of the cash flow.

是的。它和它只會導致一點點資本配置。由於現金流，我們也將繼續回購股票。

Okay, super. Thank you very much.

好吧，超級。非常感謝。

And there are no further questions at this time, I will turn the call back over to Sarah Cook.

目前沒有其他問題，我會將電話轉回給莎拉庫克。

Thank you for joining us today. As always, we appreciate your interest in all of them and forward to speaking with you in the next earning call. This concludes our call today.

感謝您今天加入我們。一如既往，我們感謝您對所有這些內容的興趣，並期待在下一次財報電話會議中與您交談。我們今天的電話會議到此結束。

And this concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。