Knowles Corporation (NYSE:KN) Q1 2017 Earnings Conference Call - Final Transcript

Apr 26, 2017 • 04:30 pm ET

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Knowles Corporation (NYSE:KN) Q1 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon and welcome to the Knowles Corporation First Quarter 2017 financial results conference call. [Operator Instructions] With that said, here with opening remarks is Knowles' Vice President of Investor Relations, Mike Knapp. Please go ahead.

Executive
Mike Knapp

Thanks, Amanda, and welcome to our Q1 2017 earnings call. I'm Mike Knapp and presenting with me on the call today are Jeff Niew, our President and Chief Executive Officer; and John Anderson, our Senior Vice President and Chief Financial Officer. 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, and involve a number of risks and uncertainties that could cause actual results to differ materially from our 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 on Form 10-K for the fiscal year ended December 31, 2016, 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. In addition, pursuant to Reg G, any non-GAAP financial measures referenced during this call can be found in our press release posted on our Web site at knowles.com, 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 Relation section of our Web site.

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

Executive
Jeff Niew

Thanks Mike and thanks to all of you for joining us today. For Q1, we reported revenue of $194 million, up 5% from the year ago period with gross margins of 38% and earnings per share of $0.12. All metrics came in above the midpoint of our guidance range. In our audio segment, sales came in slightly stronger than expected driven by better than anticipated MEMS microphone demand from two of our largest North American customers as well as from Chinese OEMs.

Overall, revenue from audio comprised 74% of total sales in the first quarter. In the precision device segment Q1 sales were also better than expected due to stronger demand for our timing and capacitor devices. We are seeing improved order trends in our defense, industrial and medical markets with a stable telecom infrastructure market driving demand for our products.

Precision devices represented about 26% of total company revenue in Q1. We continue to see strong demand trend in our MEMS microphone business, voice as a user interface and improved audio quality are driving the need for