Thank you, and welcome to our Q1 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. 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 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, 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 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 today's conference call can be found in our press release posted on our website at knowles.com, and in our current report on Form 8-K filed today with the SEC, including a reconciliation to the most directly comparable GAAP measure. All financial references on this call will be made on a non-GAAP continuing operations basis unless otherwise indicated. We've made selected financial information available on 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.

Thanks, Sarah, and thanks to all of you for joining us today. I'm very pleased with the start of 2024 as our first quarter results showed the potential of our businesses to expand EBIT margins and drive strong free cash flow. We are continuing our transformation to focus on high-growth end markets where we have differentiated solutions, and our Q1 financial performance is evidence that our strategy is working. In the first quarter, we delivered revenue of $196 million, above the midpoint of our guided range, EPS of $0.20 at the high end of our guided range, and cash from operations of $17 million, which exceeded the high end of our guided range. Turning to segment results, Medtech and Specialty audio revenue was up 26% with over 90% adjusted EBIT growth versus the same period a year ago. The end markets for our hearing health products remain robust as market dynamics such as aging populations, expansion of the middle class globally, and improved hearing aid penetration all remain favorable. Second, our operational excellence continues to produce strong margin performance. This, coupled with our success in new product adoption, is driving revenue growth with expanding EBIT margins and cash flow for 2024. Precision Device revenue was up 38% from a year ago, driven by the acquisition of Cornell. As we expected, the end market challenges we experienced in the back half of 2023 continue into the first half of 2024, and as inventory levels within distribution and the industrial end markets remain high. We remain focused on design activity, which continues to be robust in defense, life sciences, industrial, and electric vehicles, positioning us well for future growth. We continue to be excited about the performance, synergistic opportunities, and total available market expansion Cornell brings to the PD segment. With the beginning of an anticipated recovery in the second half of the year and the addition of Cornell, we expect to see double-digit revenue and adjusted EBIT growth within the segment in 2024. Before moving to the results for the Consumer MEMS microphone business, I will provide some brief commentary on the status of the strategic alternatives process that we announced last year. We are taking into consideration all the stakeholders from customers to suppliers and shareholders to employees, and I believe we are progressing to a conclusion. From an operational standpoint, CMM's financial results in the quarter were solid. Revenue was up 44% from the same period a year ago as the business has returned to more stabilized levels. We've expanded our mobile and ear share and expect to continue to see revenue growth in the second quarter and for the full year of 2024 as compared to 2023 levels. In closing, we expect to continue to generate robust cash from operations in Q2 and the remainder of 2024 despite excess channel inventory negatively impacting demand within our PD segment. Our cash generation and strong balance sheet will allow us to explore acquisition opportunities, buy back shares, and keep our debt at manageable levels. I am pleased with the financial performance to date in 2024, and I'm excited about the opportunities we have ahead of us. We are confident in our ability to deliver shareholder value as we continue to drive operational excellence, execute on design wins in all three segments, and expand our share across our businesses. Now let me turn the call over to John to detail our quarterly results and provide some guidance.

Thanks, Jeff. We reported first quarter revenues of $196 million, above the midpoint of guidance and up 36% from the year-ago period, driven by double-digit growth in all three segments. EPS was $0.20 in the quarter, at the high end of our guidance range and $0.15 above the year-ago period, driven by increased gross profit associated with higher shipment volume, partially offset by higher interest expense. In the Medtech and Specialty Audio segment, revenue was $57 million, up 26% versus the first quarter of 2023, on increased demand in the hearing health market as customer inventories have returned to normal levels. Gross margins were 54.8%, and up 1,130 basis points versus the prior year, driven by improved factory performance and favorable product mix. Precision Devices segment delivered revenues of $74 million, up 38% from the year-ago period, driven by the acquisition of Cornell, partially offset by lower shipments into the distribution and industrial end markets as channel and customer inventory levels remain elevated. Gross margins were 36.1% and down 1,100 basis points from prior year levels due to lower factory capacity utilization and the acquisition of Cornell. Consumer MEMS microphone revenues of $65 million were up 44% versus the year-ago period due to increased consumer demand and share gains in mobile, ear, and computing markets. Gross margins were 26.2%, and 450 basis points above Q1 2023 on improved factory capacity utilization, partially offset by lower pricing. On a total company basis, R&D expense in the quarter was $16.7 million, flat compared to the prior year. SG&A expenses were $32 million, $5 million higher than prior year levels, driven by the acquisition of Cornell, partially offset by the benefits of prior year restructuring actions taken in both the Precision Devices and CMM segments. Interest expense was up $4 million versus the prior year due to the acquisition of Cornell in the fourth quarter of 2023. Now I'll turn to our balance sheet and cash flow. In the first quarter, we generated $17 million in cash from operating activities above the high end of our guidance, driven by higher customer collections and lower-than-expected inventory levels. Capital spending was $3 million. We ended the quarter with cash and cash equivalents of $122 million. We exited the first quarter of 2024 with $293 million of debt, which includes $180 million of borrowings under our revolving credit facility and an interest-free seller note, which was issued in connection with the Cornell acquisition. Lastly, our net leverage ratio based on trailing 12 months EBITDA was 1.1x. Moving to our guidance. For the second quarter of 2024, revenues are expected to be between $199 million and $209 million, up 18% versus the year-ago period, driven primarily by the acquisition of Cornell. R&D expenses are expected to be between $16 million and $18 million, and selling and administrative expenses are expected to be within the range of $29 million to $31 million, up from prior year due to the Cornell acquisition. We're projecting adjusted EBIT margin for the quarter to be within a range of 14% to 16%. We're forecasting interest expense in Q2 to be approximately $5 million, which includes $2 million of noncash imputed interest, and we expect an effective tax rate of 14% to 16% for both the quarter and full year 2024. We're projecting EPS to be within a range of $0.22 to $0.26 per share. This assumes a weighted average of shares outstanding during the quarter of 93 million on a fully diluted basis. We're projecting cash from operations to be within a range of $20 million to $30 million, and capital spending is expected to be $5 million. I will now turn the call back over to the operator for the questions-and-answer portion of the call.

For my first question, could you provide insight into the recovery profile for the latter half of the year? What type of sequential growth should we anticipate, will it be double-digit or single-digit? Additionally, any further details by segment for Q2 and the remainder of the year would be appreciated.

Yes. Chris, thanks for the question. Good question. So let me just kind of break it out by segment, and then I'll kind of summarize at the end. But first, in the PD segment, I think what we're expecting now is we had Q1 to Q2, we are seeing sequential growth in the PD segment, we expect to see sequential growth again in Q3 and in Q4 right now. We expect that. And just a little color around that. I think we're probably a little bit more, I would say, cautious now on industrial and distribution in the rate of rising. It's still going up sequentially, but not quite as much. And I would say more of our OEM customers, bigger OEM customers, med, and defense we see more growth there. And so overall, for PD, again, we're going to see, I would say, pretty decent sequential growth in the back half of the year, but probably more heavily weighted toward the fourth quarter. Second, in MSA, I think they're hitting on all cylinders. They're doing very well. The market is very strong, our execution, our new products. We're doing very well in this market. And I just would remind you is Q4 is typically our largest quarter. There's a big hearing aid launch of products in Q3, which kind of drives revenue in Q4 so we would expect that while we'll see some sequential growth going forward, it's really going to come in Q4. And then lastly, I'd say CMM, normally it is seasonally higher in the back half than the front half. I would say we're cautiously more optimistic about the back half than we say we're three months ago. And so I think overall, I think when I look at this, I'd say, again, probably a little bit more heavily weighted to in the fourth quarter but we do expect to have nice sequential growth from Q2 to Q3 and then even a little bit more from Q3 to Q4.

So much, Jeff. That's so helpful. The second one is around the appetite for the CMM business or progress there? And then any update more broadly you might have on M&A?

Sure. To address the first and second questions, our leverage ratio is currently just over one. By the end of the year, with the cash we expect to generate, it will likely be below 0.8. Given that leverage ratio, we are very disciplined in our market approach. I want to highlight our acquisition of Cornell, which we are very pleased with. Despite some challenges in the industrial and distribution sectors, it continues to perform as we anticipated at the time of the deal. We are excited to explore additional acquisition opportunities that align with our strategic goals.

Chris, if I could just add too. I mean, Jeff mentioned, yes, we do expect our leverage to come down a bit over 2024. In addition, we expect to continue to repurchase shares. We think our stock price is undervalued. So it will be a combination of share buybacks and pay down of debt.

Regarding CMM, I don’t have too much more to add. I’ll express my thoughts in my own words. There are many stakeholders involved, and we have been clear that regardless of what happens with CMM, our MSA business will continue, which includes the sale of MEMS microphones. As I’ve mentioned to our employees, shareholders, and suppliers, we are taking a bit more time than some may have expected, but we are carefully considering our next steps. I believe we are getting closer to reaching a conclusion and are making progress towards it. You can interpret that as we're honing in on the direction we are headed.

It's Pete Lukas for Bob. You covered a lot and answered a lot of my questions. Just one here for you. Just an update on the integration and synergies of CD? And how is pricing power? And do you still think margins can be increased?

Yes. That's a good question, very good question. I think when we announced the deal we really focused in on cost synergies that we were going to do, and we're on track to deliver those cost synergies we kind of laid out at the.

A $4 million annual cost synergies by the end of Q3. And we're on track for those.

We're on track to deliver those. I would say that beyond that, there are going to be what we call revenue synergies, but not revenue is just going out and getting more sales. But we did think there was a pricing opportunity. I would say we are running ahead of what we expected with really starting to take hold more in the back half of the year than in the front half. With contracts and inventory, sometimes you give price increases, and it takes a quarter or two to actually start delivering product at those new price levels. But we are expecting that we have quite nice pricing increases. Our expectation is that when we bought this business, we were pretty clear it was in the low 30s in terms of gross margin that we think that we'll be approaching over 35%, probably approaching 40% exiting the year. And so it's a combination of cost synergies as well as pricing. And I think as we look to '25, obviously, we didn't get all the pricing in this year because, obviously, it rolled through the year, but some of this will roll over into future price increases in the first two to three quarters of next year. So I think we're pretty excited about the opportunities in terms of synergy. Lastly, just one more piece on Cornell. I think we're really starting to understand a little bit better about some of the things that they do that are very unique in terms of products. So there's going to be some opportunities. I think we'll probably talk about at Investor Day later this year in some of the new markets that we probably will go after. But what I would also say is the strength that they have in distribution with our distribution partners like Arrow and TTI is a great opportunity for our legacy PD business to start getting more business and distribution. So obviously, that's not a short-term thing like this year. But I think overall, I think we couldn't be quite frankly more pleased with this save for the kind of industrial distribution inventory issues that most people have been dealing with.

Nice execution, Jeff. I'm curious, if you wouldn't mind sharing your view on either changes in your competitors in terms of their go-to-market or pricing within each of the segments? And also, it's nice to see PD up expected to be up each quarter sequentially. Can the same be said for the medtech group?

Well, again, I would say for the full year, MSA will be up for the full year and growing in kind of that rate that we've kind of talked about in that 3% to 5% range. And so it does tend to be, as I kind of said on an earlier question, a little bit more heavily weighted in terms of seasonally to Q4, but I don't have any big issues on this because we see this every year. You can see Q4 always being the heaviest year within the MSA segment, driven by the product launches of our customers. So that's what I'd say about that. As for the competitive environment, let me cover it by segment. In the PD segment, no big changes really. I think we have a lot of sole-source positions. I would just say the one thing, obviously, people are hearing is EV is slower than probably what we'd hope for. But as we kind of see a recovery, I think the one thing I'm very encouraged about in the PD is that we're seeing increasing gross margins throughout the year, which is showing that we don't have to get back to 2022 levels in order to really get back to gross margins we saw then. And so I think there's some pricing in there, there's some productivity, there's obviously revenue growth, and where we get the revenue growth helps us with capacity utilization. MSA, I'd say the pricing environment is stable. That's what I would just say; there really hasn't been any change in the competitive environment over the last year or so. And I think in the CMM business, I think the thing that we just keep saying, which is kind of like in the last couple of quarters, is that mobile is a tough business. And we are trying to kind of reduce our exposure over time to mobile. I think over the years, at one point, our company was 35% mobile. Last year, it was around 15%. I would say we would expect it to be sub-15% this year as we continue to try and diversify the total company revenue away from the mobile environment.

Got it. And you guys are definitely outperforming your other mobile peers in chip land so congrats on that. That's all my questions.

You've mentioned that most of the year-over-year growth embedded in your Q2 revenue guidance would be coming from Cornell. So I'm guessing high 20s, maybe $30 million in revenue in the quarter. Can you remind us of the seasonality of that business? How does this tie to a full year revenue number? I'm guessing that we're probably going to be below the $140 million plus that you've talked about before, given the macro headwind for Cornell, but just wanted to kind of get an update on that.

I wouldn't say there's a significant amount of seasonality in this business. Based on bookings, we are expecting sequential growth in Q3 and again in Q4. We previously indicated $140 million in revenue and $26 million in EBITDA. Right now, we think we might come in a bit short of $140 million, estimating somewhere between $135 million and $140 million for the year. However, I believe that even at that revenue level, we can still achieve the EBITDA target due to the synergies we've recognized. Overall, we feel pretty good about the situation.

The other thing I'd add, Tristan, in terms of the Cornell, we really are excited about the cash flow generation ability of that business. Even as Jeff said, slightly lower revenue plan for 2024, the business is going to generate more cash flow than we envisioned in our model.

That's great. And then you talked about the positive pricing that you see in Precision Devices. Help us reconcile this with the overall environment that we're seeing pricing stabilizing, meaning kind of returning to low single-digit declines. We see that in analog; we're seeing more pressure in MCUs. So what's driving the pricing that you're able to implement in PD? And then if you could talk about lead times and supply/demand dynamics that you see in that space industry-wide. So get a sense of what the landscape is with pricing going forward?

Yes. So here's how I would describe it. If you think about the markets that we really focus on in Precision Devices – medtech, defense, industrial, and distribution, let me break those out. In medtech and defense, we have a lot of sole-sourced positions where we have unique offerings. And this has kind of been the strategy all along where we're trying to move in a direction where we can provide differentiated products in these places and then have some amount of pricing power going forward. And so we feel pretty good about those end markets. Now distribution is a little bit different of an animal, as I've described. But here, what I'd say, I think we brought the sell about Cornell. Cornell shipped in the prior 12 months to us owning it, they shipped to 30,000 unique customers, and a lot of those are through distribution. A lot of them are customers that are some 50,000. We see that as an opportunity when we bought the business to say, if you raise prices by 5% on a $50,000-a-year customer, you're raising prices by $2,500. And so we see the value of that distribution market because what happens typically in distribution is, if we raise prices to these smaller customers through distribution, the distributor just passes those on. And so the underlying demand is going to be what it's going to be, right? Obviously, there's some challenges in underlying demand. And when it comes back, we will be better for it. Overall, when I see this is the pricing environment for us because of our position in Medtech and Defense, coupled with distribution, we're not facing quite the issues that some of the more commoditized products are encountering.

Okay. That's great. So it sounds like the pricing optimization opportunity is really on the Cornell side. Outside of that, would you say that pricing is stable in the rest of your Precision Device business?

No, I would say that prices are probably still going to be up in the rest of Precision Devices, but here's the difference: what we've done in Cornell in terms of pricing this year under the ownership, we went through the same, I think, three to four years ago in overall Precision Devices so the amount we're getting in any given year with the legacy PD is not going to be as large as the first what we saw in the Cornell opportunity. So from our perspective, we're still getting some price this year in the legacy PD. But the Cornell, it was an untapped opportunity that we've figured out and we're taking advantage of.

Your next question comes from the line of Anthony Stoss from Craig-Hallum Capital Group. There are no further questions at this time. This concludes today's call. Thank you all for joining. You may now disconnect.