Knowles Corporation

will be a question and answer session if you'd like to ask a question during this time simply press star followed by the number one on your telephone keypad if you would like to withdraw your question again press the star and one i would now like to turn the call over to sarah cook you may begin 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 new 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 NOLS, which constitute forward-looking statements for purposes of a 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, and involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations. 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, 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 NOLS disclaims any duty to update such statements except as required by law. 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 nols.com and in our current report on Form 8K filed today with the SEC. 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. We've made selected financial information available in webcast slides, which can be found in the investor relations section of our website. With that, let me turn the call over to Jeff, who will provide details on our results. Jeff?

Thanks, Sarah, and 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 continue to execute on our plan of focusing on high growth and markets where we have differentiated solutions, and in Q2, the business performed as we expected. 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. From a segment perspective, MedTech and specialty audio revenue grew 4% sequentially as the end market for our 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. 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 within 2024 and for 2024 to be a year of growth for the MedTech and specialty audio segment. Despite continued headwinds from normalization of inventory levels in our industrial distribution and markets, 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 on flat revenue driven by strong operational execution and improvements in gross margin within Cornell. We have begun to see signs of inventory reduction in our distribution channel in industrial and markets, and we are ready to capitalize on growth as demand improves. I would also add our design activity remains robust, and we are well-positioned to grow as the market recovers. On our consumer MEMS 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. From an operational standpoint, CMM financial results in the quarter were solid. Revenue was up 300%. was up 9% from the prior quarter and adjusted EBITDA margins grew by 330 basis points. 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. 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 am excited about the opportunities we have ahead of us. My confidence in our ability to deliver shareholder value remains strong as our teams continue to demonstrate operational excellence, execution in innovative products, and expanding our market share across our core businesses. Now, let me turn the call to John to go into the details of our quarterly results and provide the Q3 guidance.