KN - Earnings call transcript Q2 2020

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Operator

Good afternoon and welcome to the Knowles Corporation Second Quarter 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] With that said, here with opening remarks is Knowles’ Vice President of Investor Relations, Mike Knapp. ahead. go Please

Mike Knapp

Executive welcome am and the QX earnings Chief and XXXX today Senior Anderson, Thanks, President Vice Knapp to and I and Chief President our Mike Jeff Officer. on and presenting call. John are our David Financial Niew, our Officer; with call me

laws. constitute remarks provisions purposes for of Safe Harbor will Our expectations, and statements call include today prospects forward-looking plans applicable federal securities under future about for Knowles, which the

comments for report about earnings profits Forward-looking call for made this and not company’s the year reports the this from and number risks statements time-to-time XX-K differ will include law. current The to company including, could such with XXXX, date and any filings in anticipated SEC materially to statements by products, expenses as uncertainties of that expectations. the in and to Knowles the company in update December and demand Form uncertainties trends and actual periodic uncertainties call as SEC, the limited except but statements duty company annual a results urges in cause from review risks investors sales, and involve of are XX, All risks forward-looking required identified filed fiscal the of on disclaims ended release. the today’s to

Jeff, selected the let will webcast which unless provide details of website. IR otherwise our can the be on non-GAAP press the measures. posted to indicated. this measures today’s to will be on some on conference who during that, comparable release GAAP referenced website call made financial including to financial found available references information In on All on non-GAAP pursuant Jeff? be basis in any a slides on directly addition, turn over With continuing results. section our our G, Reg call at found me Also, call we most can financial reconciliation our operations have knowles.com,

Jeff Niew

thanks and all joining today. for Mike, Thanks, us to you of

Precision reported during better-than-expected $XXX quarter. QX, and million, solutions Device revenue microphones MEMS For the with we of sales of

into throughout margins also for loss QX improved market XX.X%, sales this market. per Gross marked and quarter, saw gives write-off $X.XX. audio, We as confidence share the our which utilization Health investment that the with improvement reduced end bottom In was margins. sales, were demand an me Hearing This well margins. inventory in Device Intelligent by in was associated offset weighed lower Audio partially in on and factory Precision as sequential the

for QX, to we driven sequential Precision X% continued total We lower increased were Based work-from-home strong devices. offset It a half it in The sales growth OEMs has demand said, QX growth second shipments end stronger that in market also prior hospitals are of them saw as markets. current Asia to levels, anticipate increased has computing, Hearing market suspend this and improvements strength sequentially, has mobile states with by also XXXX demand. sales the rising large in ICU This significant cases being mixed across market MRIs differentiated much QX. improving costs. the demand MedTech with through versus quarter, of new QX conditions the That QX up continued sales, our recovery more Let in COVID-XX, month, sales demand see close driven implantable In were half early into to better and trends me the on into improved applications to in the during they elective as flat. market was price into reporting than demand use still of end and were growth COVID sequentially company Europe saw take revenue decreased. in sales mobile on products microphone sequential being up in going our picking to markets. QX slow capacitors running seen as month down operational margins the back update one In the than due high-performance in of MedTech sequentially, with for offset begin expectations and also of sales mobile represented availability the this rates. Chinese pleased QX, non-mobile and announced market. from in the OEM. XX% the to run driven sales Earlier have but months as installations the get procedures in We I customers was less Health, Korean increasing U.S., in to year demand by sales Overall, in from momentum slowdown lower by palladium revenue up QX. significantly In below microphone of we In an believe with Microphone product. move and or our until non-mobile of recovery expect partially by remain QX. three end back North by were sales and our led quarter, QX, quarter. in normal stronger XXXX to Gross spite conditions for Devices, and that markets XX% backlog, of for American we across the customer a delayed to of I each sales sequentially, our sales XX% X% telecom in our due partially expected could we defense markets, place. increased

in MedTech growth in confident in slowdown nature, XXXX. remained temporary to expect in for be year-over-year we Devices Precision and We this

operations me where we discuss stand an from standpoint. let Now

employees our capacity our our safe. in keep around facilities manufactured we remained to now is the place processes operate to restrictions. to our of globe. to still For exception government ability continue travel we the One globe, We impacting diligent largely around with we in demand, back are normal although, terms below due put the to full operations

we issues will on quarter, $XX production reduce interim, COVID as this also is the a Philippines' is see Specifically, I team dependent fill $XX Intelligent restructuring be to the reduce the focused we balanced for inventory would of cash collections. In plan, expenses which makes of In an delivered time reallocation armature free in and expected take significant to of manual cash capital Audio operating The quarter, resources set our will it we automated capital, this rate line In last current are on pleased installation increasing just line. million flow the delaying mentioned demand we to for to capacity. broader an working quarterly a part this difficult returns. resolved, operations, expand very with and balanced and operating being plan installation year, in announced million investments. $XX was while moment. the time that line. in million see by of exact our receivers run in the these expenses to end of on actions to highest control new areas QX, I John where spend to a armature the manage we issues

I While the the pleased am of with there with still are business. COVID-XX, challenges trajectory

anticipate Health microphones. we QX, and strong by sequential MEMS to look we growth, As driven Hearing

end the take positioned uniquely well of John? John pandemic come advantage markets results to I'll solutions positioned the we to guidance provide of growth. future it a expand quarter. for turn financial out of the over that, to With our to and company will third differentiated growing enable I across and Our value, strategy our diverse believe us serve, to set high to markets remains deliver

John Anderson

health the the Precision Jeff. markets each throughout Device Thanks, segment XX% demand of hearing quarter in XX% $XXX Device million, market. defense We attributable lower million, sales of levels, revenues driven were reported move were of health revenues sequentially, by Shipments the microphones solutions. remain with into and up the increasing down prior work-from-home sequentially, higher-than-expected shipments year second as to as $XX Shipments driven the down market we in into The sequentially, trends XX% quarter. with were MEMS microphones million MEMS decline month continue levels up revenues delivered growth the robust telecom place. sales by into consumer and nearly Precision $XXX to with markets. of with of Audio from X% computing hearing

margins charge Audio. to million points were the basis In sequentially. segment, as XXX gross Second a Audio inventory incurred XX.X%, quarter down margins of basis $X were in we write-off down our Intelligent XXX points gross investment part sequentially, as reduced

Intelligent Device addition, discretionary polonium In by in almost and COVID-XX reductions factory market QX expenses of by in reduce experienced slightly during more than Audio. capacity offset was costs. utilization over improved reduced an XX% reduced pricing higher and the weaker in the quarter sequentially, $XX expense labor driven nearly the margins by driven demand $XX we spending gross million, in XX% driven with to spending primarily Audio, impact pandemic. down lower end taken QX cost Intelligent increase were COVID-XX million, productivity as associated Precision levels, from pandemic. lower improved company-wide levels, utilization, R&D factory the spending headcount down SG&A capacity

of a $X.XX. be in at results, financial found Further can of is on GAAP release today's non-GAAP we quarter, For including provided to website per tables information, loss the reported share the a knowles.com. also reconciliation of detailed press our and

were up generated capital the to $X cash $XX and end $XXX from cash with cash were million equivalents I'll levels. spending from of $XX flow. of million. second strong quarter, We at and Cash flow cash pleased operations to our free during deliver of Now balance sheet million, the QX million turn quarter the and

of our and demand up the expected up Audio Hearing utilization with Health market quarter We're expect projecting XX% quarter expected from effective of Audio. revenues certain products, QX. number million Intelligent shipments from administrative in QX related markets within be between carry total to XX%, be basis. on to levels. to million, million, We levels We're the $X.XX recovery reduction jurisdictional up factory product to QX million I remain weighted segment business market to to into XX% margins the to consumer levels, is year, $XX.X Hearing $X.XX changes due million are well due to favorable on sequentially, targets, the margins. down mix of than flat is from full quarter previously decline outstanding Asia third exit revenue share. to first is $XX Precision year, of improving the We're we our market a than between by selling following and stronger in levels projecting from in in to and tax $XX XX% $XX due company XX% Device more from $XX improve range between be $XX as to be $X from states more to XXXX an be approximately forecasting European million third to be of restructuring quarter and XX% a and expected shares the and within to and which with above-average a and million. expect conditions for EPS EBIT million, in Audio of the and we Revenue activities range million, average half telecom in basis prior to coming with for to the confident XX% expense quarter, project in up as we gross for be diluted which our of impact sequentially of reduced announced assumes that XX% U.S. the expenses XX% mix. quarter $XXX expect cost the segment QX revenue to in stronger-than-expected Moving track $XXX at margin adjusted the as greater shipments This a be down R&D points to due capacity $XX to the rate to quarter XXX the is during million Health per fully in operating the driven QX the achieve expense as quarterly portion the midpoint.

challenging we $XX customers' cash positioned by back generated the COVID-XX, to portion $XX needs, And remain operating Jeff? deliver be generate over Jeff, strong to million capital million. closing between we conditions free the of to million, remarks. the well the approximately and call For serve long-term. with associated we'll market our leverage $XX for move Despite the expect cash and turn then the with to operations spending call. I'll over Q&A flow now quarter,

Jeff Niew

Thanks, John.

in across a microphones, to as positioned, introduced. we a months. the drive years. levels, in future. solutions place the MEMS In growth to expect company remains phones markets uniquely stabilize, grow to leader Our XXXX in end remained market non-mobile to six set And in applications mobile nine We XG several are the of recovery next Hearing diverse the and to Health expect

track We we been take a with shareholder revenue Devices to by also beyond. leverage so but has growth cash Operator, Session far, XXXX I believe revenue on now XXXX challenging remained and this Precision in grow year. driving and strong Question-and-Answer deliver operating questions. year value, can we could flow,

Operator

[Operator Instructions] Colliers first question of comes line Securities. Your Charlie the with Anderson from

is line Your open.

Charlie Anderson

Yes. a nice questions Congrats wanted And on counts care start the health Thank year. you for with my some I taking SO of back to exposure.

things like Precision as like, Hearing there if it you quarter as maybe us remind the of to you be So exposure forward? recover sounded the expect that articulated, QX. sounds you care it there wonder you looking starting the that are us to much vertical I the to was minus just is if could Devices describe as went case. how how I case, obviously, within is through kind running give somewhat. relative Health so It And you you wondered then you if reported. impact And Devices some Precision maybe to health in XX,

Jeff Niew

Sure, sure.

Precision the with first. start Devices, me let So

in as we sciences market I million would life exposure say, look XXXX. the I is and million between think, that to $XX it, at $XX

again, We down, XX% started the new things it are weakness. QX. And probably is It what mean, XX% year. for really, But to we like was, full it's implantable I expect Hearing We QX I today, and But obviously, machines. weakness would market. well later that to in say QX. see of seeing highly the be in happened as pacemakers, MRI a installation these than definitely as other Health within as that about

this to matter expect It's is just we back. a going when. so, come And of

we Hearing come it's think, of will I about Health the market, same vein it kind in talk the back. as

-- lot maybe quarter. of now better down QX from As as see year-over-year fair mentioned, were a in a as over I right Health got XX%, in my levels. it quarter the that Hearing market improvement later far the be to close John Health, probably or the year as amount best mentioned, did right will got probably XX%, prior down, through sales we is estimate a so. maybe we mean, little Hearing I now But

recovery. increasingly see I so that getting we’re And think, confident we're to starting that

could last quarter that same to year, maybe all Right second if that to Obviously, that to the I normal getting practice COVID bullish probably about could little changes that now, to are we're good as more be even I'd out. it opposed said, with all a the significantly right staying year customers inward Our or pushing that's next bit recovery. -- have return change. this with there's feeling the to But the say something again, when of levels. -- now, pushing I

Charlie Anderson

wanted Great. And I to BA. for then my follow-up, about ask

you of impact wondering, Are in looking? have of resources terms issues plans maybe just automated to You how of I'm is previously? the if line. as your thoughts the looking? build How still ambitious on as the the mentioned for capital spending is relates need update of some maybe could some on pipeline you you you some terms getting as of And Thanks. that demand were program? the you it the us in

Jeff Niew

lines make second I install going Well, is line, until to at first think don't first, Yes. a least decision to we're installed.

is that correct. to So correct, we make have yields and sure are return

what in demand be reverse capacity. is On probably, year. little bit that going the have probably great gross going unfortunately, as back don't manual going to the have customers it want installed. half to a that the is will have with to than a not more in manual. we're line we fill means the of considering side, be we margins, And we do the is it's what that to be do to it's momentum But stop not QX, QX, because with And

have be The the unfortunately, U.S. anticipation how shipped. what right go as travel -- far and will line. line As us is we automation will team the restrictions. be our to and But Philippines the people there to of will the that it this it what of to is relative -- install the line, the installation a quarter, to to ship from on need we from it

a support making bit a planning it the operationally earlier. demand end now, I'm will in to so we're right putting of we're to year, on just be the manual installed. the -- would assumption year. I'm nervous. little able but the now when installed be And it And the could through end that of I the production it date be be until right not

Charlie Anderson

Great. Thank you so much. Okay.

Operator

line the from with comes Bill JPMorgan. question of next Your Peterson

line Your is open.

Bill Peterson

half particular, for third-parties I'd to home, an talked of are try in to versus to talk are we direction to the for the you in a those like question. have Hi. mobile, about research, going be this have the home. going smart of you is profile you within Yes. the Obviously, versus non-mobile. each assuming down to actually compute, have parse back your about mobile fairly double year? each taking get feel be those seeing during wear, according audio, year for to this of of demand Thanks TV really the year How ear speakers microphone third-party business? In as you digits the past. I’m think my trying so that segments I'm between case should has up Smart segments smart the about

Jeff Niew

Yes.

back in some I right be we've the QX would speakers but being We stronger that, got well, IoT, beyond been that, first as with with I'm check year, the of gains back. numbers you. agree all, -- Mobile, speakers. confident share I and the the looking have than half we're Smart to being stronger category going pretty we QX the I'm with pretty things coming products see have some it say potentially that think speakers that QX, are in now, of sequentially. of some on weak, sit there So unique kind going of and we said, get trying with smart is than significantly to smart here, that at QX, introduced. real do strong

strong ear I very and some ear. we year, the still of to sequential back strong. improvement being tablet to down. kind of And the improvement that's And slow some in strong start going think sequential pretty then notebook. I go see QX pretty We think half to as we see in

So what I this the have guide now, say, the for QX of say we quarter would will I would terms overall, is probably year. QX. the that that We year. is for peak quarter this peak full Right be the not think shipments in for

Bill Peterson

trajectory that With Okay. Hearing think I business the gross and improve and into Device margin Health medical How presumably, in better. utilization to continues and should the maybe assuming your also fourth is we Precision improve? mind getting guess, also quarter? about

John Anderson

Yes, is Bill, this John.

here. were we win. had We expected areas First the Just feel and that than really within gross of lower to product segment, quarter. $X kind of we things: recap charge back Audio Intelligent going roughly two what all, they investment, the to lines our QX scaling related can to margins we we Audio had reduced into million

through in QX. So gross charge that was a margins going

In in utilization, lower-than-expected QX. addition, had Hearing especially we actually our Health in capacity business

again, expect dependent slightly And utilization, by should I -- that improved capacity up of it it's in the QX give -- on XX.X%, QX to QX. That's significantly QX to on…. potentially that absence So charge a it's midpoint But guidance really guide QX, close really at driven the heavily we a forward, for provided the as levels. was pretty but I be it's think -- would move that I you above have little sequentially. lot give early

Jeff Niew

mean, little a I color...

John Anderson

QX. In

Jeff Niew

in Let moment. me at give don't Bill. Health expectation to back for color, levels QX. little going not are would I this a you think be XXXX be in That my we Hearing

an to above gross average our margin that that is Health. for end, so Hearing And

still next to And into be problems from utilization QX probably probably Hearing of year. market going so -- the and in Health we're suffering factory

Bill Peterson

Okay.

So positive really impact much not point? utilization at expecting this

Jeff Niew

not probably be be right, -- And to -- incrementally us that where don't that's is getting seeing levels. of, John kind incremental back is probably we think, incremental. saying we're It's it will is better, I XXXX but

John Anderson

in The I utilization Within for and capacity business. opportunity the the plans, PD build Health QX. margin Hearing better similar MEMS the microphone, see -- is improvement QX, factory utilization

Jeff Niew

margin Health, sales then And gross of also more would up. which Hearing drive

John Anderson

Yes.

Bill Peterson

fair. That's in for Okay. Thanks there. Good Thanks. luck. the color

John Anderson

Thanks, Bill.

Operator

Rolland question with Your comes Susquehanna. next from the of Christopher line

Your line open. is

Unidentified Analyst

of This Hi, [Indiscernible] good behalf on is afternoon. speaking, Chris.

in trends shipments quarter. the in as I said tension prepared mobile should second in during was up? half? grew that China the think U.S. remarks, are seeing as between Should heating America if you in the are So the share as North into kind well to continue? expect also, wondering, the And the still losses we of market we about and how trade China you any mobile China

John Anderson

Yes.

Okay.

think I in did improvement in then, we pretty QX. significant So mobile we some see in more in expect sequential sequential in QX, improvement mobile again, QX. improvement and And

see to through continue we better So the to year. continue get --

overall, is for is the with -- but mean, I be a the which mobile. full tough to backdrop mobile it's down, year right? -- mobile going that for year, So all

have still last quarter. at our from to words, I we said think back other what changed Huawei. China. your we have question In about low share share Now don't losses very

shifts seen don't any Huawei, Beyond share. I think significant we've in

Unidentified Analyst

the phone. And typical a with to you the reports the and has the their that to shipping your out headsets Great. smartphone Okay. box? content headset if is purchase customers customers follow of talk up, has about it been Could trying the some headsets of business to of inbox with some start there would as that a the take impact microphone exclude

John Anderson

question. to understand struggling I'm the

Just...

Unidentified Analyst

Yes, sorry.

been there have some... So

John Anderson

ahead. Go

Unidentified Analyst

inside have there customers out smartphone those when buy exclude you that of reports your sorry. would that phones. some Yes, of the some to been first box There headsets start

started to typical talk to the could out box? headset I if the you would customers of wondering in impact So the a if was you take headset? microphone And business be about ship your content out that what

Jeff Niew

speaking, wireless generally market well. Well, doing the quite I is think, true

of on microphone to ear, wireless. content per variance I think wide true wireless a there's on microphone from one microphone per ear true two per different ear to three

So wireless, well. there's more There's headset-to-headset. which positive content variance we for trend said, do wide is a digital pretty in usage a being towards see as digital. of That from us true

if would I move old right think positive are us call think inbox I toward what that headset did are that now, old be which the has content, the this So was things that for box because of wired, in - we today most one microphone.

So if that I box, box. could that two a was positive if started to be at in I in microphone I put then a four think can would it hard would the being products would put highest see be end being that, box. only it and But included into maybe more in doubt. you believe one that the least put or find

Unidentified Analyst

Got Thank it. you.

Operator

question the next line from Kumar Your comes of with Harsh Piper Sandler.

is line open. Your

Harsh Kumar

given hearing all Hi, with execution, just I good say particularly wanted All uncertainties, considered, the to things very health. just guys.

dollars was, wanted Jeff, just mentioned want I so I that quarter. absolute greedy XQ My out? pass clarify. meant sequential cleared in I always the you will growth? to So to that question assumed that that for want you I growth, top to make We're along. just versus to point first be

Jeff Niew

expectation. Yes. again It from will be sequential our QX growth

Harsh Kumar

one what XQ XQ, And the drove China? Maybe dollars? where in it you Was be going it you guidance? tell predominantly? growth? up Understood. which Like to then, to of us could these Jeff, are point, absolute But U.S. see the driver? that in two be will will Was sequential it

Jeff Niew

North mean, amount I definitely focused Yes. America would fair driving in non-mobile And a is I of QX. that. application say

is will be But towards application I expectations now would we up non-mobile America sequentially, is fair be more sequentially. of will up then, So up a there's flattish there be -- where expecting mobile although China North our probably as America. are say in sequentially, throughout driving will again, I look sequentially. North amount that China, definitely And right QX,

Harsh Kumar

-- Thank on And you. then Okay. Intelligent one I last Audio. was had

out. costs bunch cut of a You

think rate. to be year of want that full costs with Or how just future? You’ve the this Is sort in you the kind of you some exit point so guided out could from see you -- could business lingering the you you're starts at for that take here? restructuring? believe, and wait Or done there

Jeff Niew

think Audio. it, I even did just describe I we John into mean, Intelligent restructuring that was of the kind a fair know I quarter it, Well, to in beyond large went

I would of to numbers that Intelligent say was out we is about what to took so the relative Audio half about John And talking getting overall.

I now, for think so done. And think I we're right --

think in would well that I kind I ourselves return Harsh, previous think, about talked we've this, to we about of I think calls and positioned we feel I hope which are on profitable is, in we've had That than well would would be when XXXX, positioned the XXXX. lower more a be very to number we a revenue that we be at company goal. growth,

the necessary done right we And I was restructuring to be that we're think done. we've felt so I now, think -- for,

Harsh Kumar

guys. you Thank

Operator

from Desilva next Suji Your line Capital. with the of ROTH comes question

is line Your open.

Suji Desilva

Hi, Jeff. Hi John.

the kind headset predicated market? quarters, of good much in there of your kind the next business on microphone and there does market the headset is of line in? the So give into of you expectation and alone, how better for few automated terms Or doing armature balanced coming tailwinds that

Jeff Niew

Yes.

obviously, thing right? so I I'd the think that, incrementally, thought probably really less demand the much can is armature even the kind balanced last bit we're there little not had it's I because of manually that, a important expecting Suji, going us it's huge and of a of running we're say for really little say, would now build, year. sales we rope think XXXX. a of bit versus tight now call, how within amount a walking manual here of this about we And that I lines. to But of was be

we an is are make and buying not or And filled, be of line. going another should this so to be line our intent assessment to have will we whether

in this term It's very of really at to really factor. probably focused year lower, that demand, our the for demand. it's year, least microphones is short the incrementally continue this not armature balanced be So but a terms in -- but focus,

Suji Desilva

as where the wave Jeff. think Okay. mentioned demand terms the you XG millimeter the That's about have here. talk color, helpful and of structure, then in expectations? Can market, I filter much is you market And your to that track on in it's

Jeff Niew

I in past. talked the I we've Yes. think mean, about

wouldn't millimeter First, probably expected. growing. slower quarter overly $XX driving What has previous I been in for the is a is just defense still lot ago, might been talked really expectation wave, terms in about a revenue is, I When than bit but defense still the in slightly slower that million our would of measurable. we again, has good. I what short is XG, defense that. -- that of we say And have fall it fact demand would quite the millimeter is But quarters, said, a growth. say It's little than in wave, probably

Suji Desilva

guys. Thanks

Operator

Your Gerra Tristan Instructions] comes [Operator next with line of question from Baird. the

line open. is Your

Tristan Gerra

Hi, good follow on Quick afternoon. balanced the armature speakers. up

manual line XX automated about million I about million million is per about year. had the XX units think per And your talked XX to being you year. line units output

margin production if your in Hearing are armature in And percentage going that Health quarter balanced you to QX? move the from manual also, in what line you quantify perhaps, QX? to potential gross So, the impact could from away speakers from

Jeff Niew

But margin. have been about if lines has gross access thing it, I'll obviously, It one the gross able fill relative John Health margins. to Hearing capacity Hearing say going our you lines. want Yes, handle And we Health our to demand. excess the not hearing if market; on we let because think I on, to hurting, been have you manual that's of think

in we're have fill to the lines. some still excess how demand. do we So manual That's the now right able capacity

Tristan Gerra

follow-up. Quick

sequentially decline with heard from mentioned the earnings. necessarily also It by that in some QX. base station? You line what driven doesn’t in we’ve Is of for companies seem silicon

little maybe color to So think happening as there? more bit you is what

Jeff Niew

In at telecom so Yes, we the just you or about going X% we over I would is was up but remember I -- lot impacting resulting up other XX% quarter, for it that product more long be QX, in QX. PD we're less lumpiness. just really I say, which thought than They to like base expected. more don't think delivered is for what beginning that is being telecom. words, almost saying of sequentially. a what It ship station, bit That litter and the we a ended seeing say term was more we the year, in all of we’re QX XX%. the it's to if And would in quarter we had a

say, more, it's anything. So lumpiness than of the delivery I'd just more

Tristan Gerra

Great. you. Thank

Operator

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

open. is line Your

Bob Labick

in good job million And to cuts you've just for containment to or Is you've talk the right? that Thanks. afternoon. to SG&A sure, $XX.X a rate, the cost wanted the OpEx Good $XX million the about be done. there. to very and adjusted I $XX year-end to clarify, that compares Obviously, done cost million run quarter?

Jeff Niew

$XX.X Bob. Actually, million, it's

standpoint. infringement from of our guidance, midpoint case take be forward million If We're in we patent still biggest you spending. the active a $XX the $XX.X the the in million, for going delta legal is to have QX, very going

pretty We are going off is as very of this spending matter that to confident this kind exit in we quarter. fall significantly the

will $XX.X to $XX at -- in able again, $XX even we're this XXXX. to though range million as that million get And able I'm will we so that confident be of million we exit quarter, be we that to

Bob Labick

is Is to more of bring it in Okay. incremental return or have support you growth? back expenses do Great. And kind -- you to to as operating then your growth 'XX, there leverage?

Jeff Niew

good of a XXXX. a mean, point increase, we have some around to travels, some of the -- if question, it, medical as throughout we now, revisit we'll -- modest I quarter we XXXX that increases restriction call insurance, this -- or have kind of right in going $XX million accelerates, maintain this. But rate. we the million but mid $XX half Obviously, of, can the maintain the we're No, to modest revenue will of quarter this we confident XXXX, think have XX. we’ll to some exiting wages, run over into feel level some call some look of so first for We’’

Bob Labick

mentioned, was I ago? Okay. were that us sales Can you a a less mobile just of appreciate believe into question. what in Terrific. that. sense total XX% Earlier, give year the I And than another then of that you quarter. the

Jeff Niew

here.. It almost the was numbers look We'll at year. XX last right

Bob Labick

Got it.

Okay. Terrific. right. Thank All you.

Operator

time. back at I Mike call Knapp. questions this no will are the There further turn over to

Mike Knapp

much today. for joining Great. Thanks us very

you Thanks Knowles to appreciate interest at call. look with our forward and we your earnings As goodbye. next always, on speaking and

Operator

call. for concludes gentlemen, you today's this and Thank conference Ladies participating.

You may now disconnect.

Knowles (KN) 29 Jul 202020 Q2 Earnings call transcript