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Jun 30, 2020
Knowles Q2 2020 Earnings Report
Knowles' financial performance exceeded expectations with better-than-expected sales of MEMS microphones and Precision Devices, while navigating challenges in the Hearing Health sector due to COVID-19.
Key Takeaways
Knowles Corporation reported Q2 2020 financial results, demonstrating better-than-expected sales in MEMS microphones and Precision Devices. The company's Hearing Health revenue faced a downturn due to COVID-19, but sales increased monthly throughout the quarter. Knowles delivered positive operating cash flow and anticipates strong sequential growth in revenue and earnings for Q3.
Q2 sales of MEMS microphones and Precision Devices were better than expected.
Hearing Health revenue decreased by nearly 50% due to COVID-19, but sales improved each month in Q2.
The company achieved positive operating cash flow of $27 million in Q2.
Anticipates strong sequential growth in revenue and earnings for Q3, driven by Hearing Health and MEMS microphones.
Knowles
Knowles
Forward Guidance
For the quarter ending September 30, 2020, Knowles expects revenues between $185 to $200 million, a gross profit margin between 34.5% to 37.5% (GAAP) and EPS between $0.09 to $0.15 (GAAP).
Positive Outlook
- Revenue is expected to be between $185 million and $200 million.
- Gross Profit Margin is expected to be between 34.5% and 37.5%.
- Non-GAAP Gross Profit Margin is expected to be between 35.0% and 38.0%.
- EPS is expected to be between $0.09 and $0.15.
- Non-GAAP EPS is expected to be between $0.17 and $0.23.
Challenges Ahead
- GAAP results are expected to include approximately $0.05 per share in stock-based compensation.
- GAAP results are expected to include approximately $0.03 per share in amortization of intangibles and debt discount.
- Revenue was down close to 50 percent from normal demand due to COVID-19.
- Current period results include $7.6 million in restructuring charges and other expenses.
- Current period results include $4.1 million in stock-based compensation.