Good afternoon. And welcome to the Knowles Corporation First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session.

[Operator Instructions] With that said, here with opening remarks is Knowles Vice President of Investor Relations, Mike Knapp. Please go ahead..

Thanks, Anita. And welcome to our Q1 2021 earnings call. I am 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’s 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, 2020, 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 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 reconciliation to the most directly comparable GAAP measures.

All references on this call will be on a non-GAAP continuing operations basis unless otherwise indicated. Also, we have made selected financial information available in webcast slides, which can be found in the IR section of our website. With that, let me turn the call over to Jeff, who will provide some details on our results.

Jeff?.

Thanks, Mike. Thanks to all of you for joining us here today. For Q1, we reported revenue of $201 million, above the midpoint of our guidance and up 23% from the year ago period on strong MEMS microphone demand in multiple end markets and improving trends in Hearing Health. Precision Device revenues were in line with our expectation.

Gross margins improved 330 basis points to 39% and our earnings per share was above the high end of our guidance range at $0.29. Overall, another solid quarter highlighting our operating leverage as demand improves across a broad range of our end markets coupled with our focus on high value products to improve gross margins.

Let me now provide some details on the trends we are seeing by end market. In Audio, sales were up 36% from the year ago quarter, better than our expectations going into the quarter. We saw broad-based improvement year-over-year in the MEMS microphone sales across non-mobile and mobile end markets.

Sales to non-mobile applications were driven by work-from-home and remote schooling, as well as the ongoing trend towards applications requiring high performance Audio solutions. We expect these favorable trends to continue to throughout 2021 and in the years to come.

Since our last call we have made two new product announcements, which support our focus on non-mobile applications. First we announced AI Sonic Bluetooth Standard Solutions, our new complete development solution that enables fast and easy voice integration into Bluetooth devices.

The development kit includes a Knowels CSP coupled with multiple microphones to enable OEMs to build voice-activated calling, control and Farfield’s speech recognition capabilities into Bluetooth devices. We also announced earlier this month the availability of two new MEMS microphones for automotive applications.

The new microphones are engineered to a higher standard of quality to support the increasing demands of the automotive market for hands-free calling, advanced voice assistance and in-cabin noise cancellation. In Mobile, stronger sales to Chinese OEMs and North American OEMs drove the majority of the year-over-year increase.

Trends in Q1 were better than normal given the timing of product launches last year and improved demand from Chinese OEMs. In Q2, we expect demand in Mobile to decrease sequentially due to protect cycle timing from last year’s launches.

While we expect sequential improvement in Mobile for Q3, third-party data on handset expectations for the second half of 2021 indicate that year-over-year rate of growth will moderate and be more aligned with what we have seen over the last few years.

This validates our focus on faster growing non-mobile applications which reduces our reliance on growth from on the Mobile market. For Hearing Health, shipments were slightly higher than expectations for the quarter.

March data showed improved momentum in the VA Hearing Aid channel indicating continued gradual improvement in the hearing aid market as vaccinations rollout and private practice audiologists remain open. While demand for the audio file portion as market remained soft versus pre-pandemic levels.

We have seen some improvement and are optimistic we will see demand accelerate in the second half of the year. In Precision Devices, Q1 sales were down about 12% as expected, as COVID continued to impact our medtech and defense end markets.

At the same time, we saw record bookings in PD during the quarter, driven by improved demand in our defense and medtech end markets and sustained strength in demand from electric vehicles and industrial customers.

This gives me increased confidence that we can grow Precision Devices revenue again this year as the medtech and defense end markets recover throughout the rest of 2021.

We are off to a great start in 2021 and I believe our leadership positions across the markets we serve and our strategy to deliver high value differentiated solutions to a diverse set of growing end markets positions us well for future growth.

With that, I will turn it over to John to expand on our financial results and provide the guidance for the second quarter, John?.

Thanks, Jeff. We reported first quarter revenues of $201 million, up 23% from the year ago period, driven by increased shipments in the Audio segment. Audio revenues of a $163 million were 36% due to increased shipments of MEMS microphones across multiple end markets and a recovery in the Hearing Health market to pre-pandemic levels.

The Precision Device segment delivered revenues of $38 million in line with our expectations and down 12% from Q1 2020 levels, as shipments into the medtech and defense markets were negatively impacted by COVID 19.

First quarter gross profit margins were 39% at the high end of our guidance range and up 330 basis points versus the same period a year ago. Audio segment gross margins improved 470 basis points, driven by favorable product and customer mix, higher factory capacity utilization and lower factory spending.

In the Precision Devices segment gross margins were 150 basis points below the prior year due to unfavorable mix and lower factory capacity utilization.

R&D expense in the quarter was $20 million, in line with expectations and down $2 million from the year ago period on reduced spending in intelligent audio, partially offset by higher incentive compensation cost and increased spending in MEMS microphones.

SG&A expenses were $25 million, in line with our guidance and down almost $9 million from prior year, driven by a $4 million reduction of legal expenses, reduced spending in intelligent audio and the impacts of restructuring actions taken in the second quarter of 2020.

For the quarter, adjusted EBIT margin was 17% at the high end of our guidance range and up more than 13 percentage points from the same period a year ago, driven by increased shipment volume, higher gross margins and operating expense reductions. EPS was $0.29 in Q1, above our guidance range and up $0.26 from the prior year.

Further information including a detailed reconciliation of GAAP to non-GAAP results is provided in the financial tables of today’s press release and can also be found on our website at knowles.com. Now, I will turn to our balance sheet and cash flow. Cash and cash equivalents totaled $182 million at the end of Q1.

Cash generated by operations in the quarter was $40 million, well above the high end of our guidance due to higher EBITDA and lower than expected net working capital. Capital spending was $5 million in the quarter.

Given our existing cash position and our expectations that we will continue to generate free cash flow in the future, the company intends to settle the principal amount of its convertible notes which mature in Q4 this year in cash. Moving to the second quarter of 2021.

We expect total company revenue to be between $185 million and $205 million, up 28% at the midpoint versus the same period a year ago. Revenue from the Audio segment is expected to be up approximately 41% from Q2 2020 due to increased shipments into non-mobile and Hearing Health applications.

Precision Device revenue is expected to be flat versus prior year levels, but up more than 20% sequentially as defense and medtech demand improves.

We estimate total company gross margins for the second quarter to be 39% to 41%, up 770 basis points from the year ago period, driven by improved capacity utilization, favorable mix within the MEMS microphone business and continued recovery in the Hearing Health market.

Our Q2 gross margin guidance reflects favorable mix and we have increasing confidence that total company gross profit margins will approach 40% for full year 2021.

R&D expense is expected to be between $20 million and $22 million, up $1 million from prior year levels due to higher incentive compensation and increases in MEMS microphone and Precision Device spending, partially offset by a reduction in spending related to intelligent audio.

We are projecting selling and administrative expense to be between $25 million to $27 million, down $1 million from the year ago period. The reduction due to a decrease in legal expense and the impact of restructuring actions taken in the second quarter of 2020, partially offset by higher incentive compensation costs and merit increases.

We are projecting adjusted EBIT margin for the quarter to be in the range of 14% to 18% and expect EPS to be within the range of $0.23 per share to $0.29 per share. This assumes weighted average shares outstanding during the quarter of $96.5 million on a fully diluted basis. We are forecasting an effective tax rate of 13% to 17% for the quarter.

For the quarter, we expect cash generated by operations to between $10 million and $20 million and capital spending to be approximately $10 million. Please refer to our press release and to our Form 8-K filed today with the SEC for a GAAP to non-GAAP reconciliation.

I will now turn the call back over to Jeff for closing remarks and then we will move to the Q&A portion of the call.

Jeff?.

Thanks, John. Before we move to the Q&A, there are three points I would like to highlight from our Q1 results and our Q2 guidance. First the diversity of our revenue across a range of growing end markets is a significant benefit.

In addition to participating in a number of compelling growth opportunities in markets that demand high value solutions, we have reduced our risk of being exposed to any one specific market and are lowering volatility in our business.

Second, our Q1 results demonstrate that we are off to a good start, but there is more improvement to come, as we expect a recovery of demand in PD from the medtech and defense end markets. Third, we have increased our focus on gross margin expansion across the company.

You have seen this gross margin improvement in Q1 results and the guidance for Q2, and this focus will continue to be a priority for us as we move forward.

In closing, our strategy to deliver high value differentiated solutions to a diverse set of end markets is paying off and I am confident we can drive shareholder value by delivering strong earnings growth and cash flow in 2021 and beyond. Operator, we could now take questions..

[Operator Instructions] And your first question comes from Harsh Kumar with Piper Sandler..

Yeah. Hey, guys. Congratulations on very solid performance, very solid results, Jeff, John and the team. Quick question for you guys. Jeff you mentioned that you expect the rate of Audio to moderate -- Audio or call it mobile to moderate to the rest of the year.

I was hoping the rate of growth at least I was hoping you could maybe clarify how you are seeing the rest of the year.

I don’t want exact numbers, I know you are not in a position to give it, but just some color would be helpful based on whatever you have seen so far and I have got one more follow-up?.

Yeah. So, I think, if we look at our non-mobile applications. I will talk a bit that way. I still think we expect the non-mobile applications to be pretty strong throughout the year Harsh. And I think, whether it be, you look at the laptop/PC market we think that’s going to continue to be strong. Our IoT business continues to be very strong.

There are a number of new products that are launching in the ear market that should help us. So I think from our perspective the non-mobile portion of this business is pretty good. I think we are just kind of looking at in terms of Mobile is that, that, is this third-party data.

We had a very strong Q1 in mobile, but Q2 based on the timing of product launches from last year is weaker in mobile in Q2. And I wouldn’t say, we are pessimistic about mobile in the back half. I just think the rate of growth, obviously, will moderate as the back half of the year for mobile was pretty good. So that’s kind of more I would say.

We are little bit more cautious about mobile. But overall, for the MEMS microphone business we still feel very good for the full year as a whole business..

Got it. Hey. Very helpful, Jeff. And then maybe I will link these two questions together. I was sort of surprised, I think, John mentioned the $10 million CapEx.

I believe that might have been for the second quarter?.

Right..

And maybe with that you could also give us the update for the line for VA.

I suppose that’s related, if I am not mistaken maybe?.

Well, I will let John kind of talk about the $10 million in a second, but let me talk just briefly about the VA line. I would say that, generally speaking, we have a nice model of opportunity still. But I do have to say, we are still seeing additional COVID-related delays.

I think we are coming from our perspective here in the U.S., where that -- I don’t know what the exact numbers are, but 20% to 25% of the population has been vaccinated, hopefully heading to 50. In the locations we are installing this equipment. Mobile is still causing some problems for us on an ongoing basis.

And so, I think, we have said, we hope that could be installed in Q2. I think we are pushing that into Q3 now based now COVID-related delays. And I think it’s a tough situation, no doubt on this. But I am never excited we are going to get there. The machine is there. We -- it’s powered up. It’s actually running some stuff.

But there have been other COVID-related issues we have run into in this aftermath had slowed down the installation..

Harsh, with respect to the $10 million CapEx estimate for Q2, I mean, there is a small portion of that relates to the automated VA line, but the majority of it relates to our MEMS microphone business and really new products and 8-inch conversion..

All right. Got you. Thank you, guys. Congratulations. Again, solid results..

Thanks Harsh..

Thanks..

And your next question comes from Bob Labick with CJS Securities..

Good afternoon. Congratulations as well..

Thanks, Bob..

Thanks, Bob..

I wanted to ask a year plus into the pandemic and getting closer to kind of new normal. And you talked a fair bit, so once you are kind of tied into the non-mobile market that you are selling into.

How of the sizes of the various end markets for MEMS mics changed post-pandemic if at all and what’s the next growth area for MEMS mics for you?.

That’s good question. I mean, I think, I got to be honest, right? I still think we see a fair amount of opportunity in the markets that we have seen, which you know is ear, IoT and increasingly notebook and tablet are great opportunities for us. So I think, those start to play out, a little color on those.

I think on ear, I think, we have kind of talk about this over the last, maybe two, three quarters, the fact that increasingly that there will be more a larger group of customers that will be doing business with us on the ear. I think there’s going to be a growth opportunity this year in the back half, front half and into next year.

IoT, I think, we have had two things going on in IoT. One is upgrade the higher performance mics which has been helpful to our revenue in terms of higher ASP.

But I think the other thing that we are starting to see is this idea of a long tail that, well, it’s not a huge number today, we could see this start to be growing and personally like this because this long tail’s got very nice gross margins as well.

And so this is more of like kind of selling to solution, helping people enable voice in this long tail. And then, lastly, in the notebook market, I think, in the tablet market.

I think, again, we talked about this over the last two quarters, but just to reiterate, work-from-home, home schooling, more of this stuff is not going away for a lot of people. And if I go back three years, four years ago, that microphones on laptops and tablets were not used a lot. Now they are being used kind on a daily basis.

I don’t -- you don’t see this going away. In fact, we see this hopefully accelerating into higher performance mics and more microphones per device as we go into future years. So I think it’s pretty good. I think another market. It’s hard to say where it goes. I think we are getting a little bit more focused on automotive. I don’t know where it goes yet.

But I mean it seems to be these things continue to crop up the new applications that always require microphones..

Got it. Got it. That’s great. And then switching gears a little bit, congratulations on the net cash position that you are in now and I appreciate that you are going to settle the converse with cash.

So kind of two questions there, can you talk about what’s the right capital structure for the long-term for you? And then also are you looking at any M&A and if so, what’s the market like out there right now?.

Yeah. So, I would definitely say that, and I think, this is something we talked about in the past that we are still -- we are looking at some bolt-on M&A opportunities within PD. I think that is an area of focus of ours. We have done, I think, four deals between 2017 and the beginning of 2020.

That were all accretive very quickly after the deal was done. That’s kind we are looking for is acquisitions that are pretty immediately accretive. And I think, we have -- we put this obviously on pause with everything that happened during in the pandemic last year.

But we are definitely moving that process forward and we are looking for things in that space. As far as the capital structure, I will let John comment a little bit about that..

Yeah. Bob, I would say, our intent is differently to maintain investment grade-like credit metrics. So think of maximum leverage of 275, if we -- again if we saw some acquisition out there. But we are going to be fairly disciplined with respect to anything we do there and maintaining data at that level or below..

Got it. Great. Thank you so much..

Thanks..

And your next question comes from Suji Desilva with ROTH Capital..

Hi, Jeff, Hi, John.

So, you spoke about gross margin drivers and mix opportunity, can you be more specific as what some of the elements there are in the gross margin expansion opportunity specifically?.

I will let John start this and then I will put some color on it at the end..

Yeah. Sure. Suji, I mean, we are very pleased with the overall trajectory in our gross margins which were 39% in Q1. We guided to 40% at the midpoint for Q2. And really the drivers there are kind of what, Jeff, talked about is, growth at a higher proportion of revenues and business coming from non-mobile applications and MEMS mics.

And then we are running at -- consistently running at 90% plus in terms of capacity utilization across most of our businesses. We expect that to continue at least through 2021. Those are the big drivers and then also in the back half we have some new products coming on that typically carry above average gross margins.

Those are the three biggest drivers. So it’s a mix, new products and capacity utilization..

Yeah. And I’d just make one other comment about this is that, if you think about where we have been, where we have come to and where we are going. Mobile’s a very important market to us. We are not going to say it’s not important market.

But the reality is this, mobile as an end market is not growing at the rate it was say, five years, six years ago in terms of the number of units that are available. Some of these other markets we talked about ear, IoT, the tablet market, the defense market and PD, EV. There’s still the VA opportunity out there.

They are growing much faster and so the extents that this becomes a larger portion of our business that’s the mix kind of helps us drive gross margin..

Okay.

And maybe related to somewhat a follow-up question on the AI Sonic Bluetooth Solution, I am sure I understand if this is sort of an approach or something that you have had for years with different solutions? And if so, what’s the revenue end market penetration impact with something like that and are there more solutions like AI Sonic coming down the pipeline? Hello? Hello?.

Excuse me, this is the conference operator, I apologize that there will be a slight delay in today’s conference. Please hold in the confidence, we will resume shortly. Thank you for your patience. I apologize that there will be a slight delay in today’s conference. Please hold….

Okay.

Anita?.

… the conference will resume shortly. Yes..

Anita, we are back..

Okay..

Hi, Mike. It’s Suji.

Can you hear me?.

Yeah..

Yeah..

Sorry, we lost you..

Sorry. Apologies for that..

Okay. So let me repeat my follow-up question then.

So on the following through the gross margin question, the AI Sonic Bluetooth Solution that you announced, I am curious if that’s sort of a new type of product or something you guys have always been doing? And I what’s the revenue model impact or end market penetration impact or content impact, something like that is, I know there are additional sort of reference design AI or solutions like this coming similar to AI Sonic in the future?.

Yeah. So what I’d say is, this is really targeted, Suji, at the long tail of customers and we got a number of this reference designs now in the works. There’s our four or five of them. We are trying to do is design like one solution that can go to many end customers as opposed to a custom solution for each customer we deal with.

It’s little early to say what this means yet, because it is a long tail and I think we will be talking about this more in the quarters to come. But I think what really the take away I would sit there and say for, I love this, is that, it’s -- first for sure, we have this line of DSPs, which we would like to sell at long tail and give them a solution.

But we are also work -- openly working with third-party DSP to provide solutions as well to drive more microphones sales. And I think, again, we are starting to see this in a number of different locations and it’s a little early to say how big this to be, but there’s the IoT market, for sure, in the long tail.

And increasingly and if we kind of talked about the ear market for true wireless, there’s a long tail there as well.

And I will kind of give you just one other kind of piece of something that we are working there right now, which we would probably talk more about more in the quarters to come, is what we have actually now started to build an entire headset reference design.

And it’s very interesting that we could go to customers and say, here is the full design, microphones, Vas, all the software usually algorithms with third-party in order to provide a total solution on true wireless to smaller company. We really don’t have the ability to put something like this together..

Okay. Very helpful. Thanks guys..

Thanks Suji..

Thanks Suji..

And your next question comes from Anthony Stoss with Craig-Hallum..

Thanks. Close enough. Jeff, I wanted to follow up on your commons related to a moderating global fund business.

Can you comment on where you think content in right now, is content -- number of mics per phone peak, is it flat, is it going to be down you think year-over-year per device? And then also on the ear side of the business, kind of XBA as you are waiting to get the automated lines up, what does this content look like within the ear just related to mics? Thanks..

Yeah. So let me take the ear question first. I just would sit there and say is, the general trend right now is the new move toward more microphones.

I would sit there and say that there’s a number of different applications that are driving that, but we are starting to see larger and larger portion of what people are doing, thinking about three microphones per ear versus a couple of years of it was a one to two per ear.

So I think the content story on ears is pretty strong over the next year or two. Coupled with again, obviously, the ear has been dominated by a small group of customers. We are starting to see that diversify more into more customers.

And I kind of tune it to the some of the other markets that have been developed or are pioneered by certain customers and then it usually kind of stands out into new customers. So the ear opportunity, I still think the next couple of years, still looks pretty good for us.

I think it looks very positive, both from content and still from growth in the market. As far as the mobile side, I would sit there and say the number of mics per has, probably, I would say, modulated in terms of increases. We are seeing some increase obviously with mix as more 5G phones are being sold.

I think the next big lag up, still that’s out there is the move from analog to digital in terms of the mobile market. I would say, it’s a relatively small percentage of the market has moved towards digital microphone.

But I think over time, if you look at the other markets, whether it would be the tablet market, the IoT market, the ear market, all these markets are eventually moving towards digital microphones and I think mobile will come along with that as well..

Then as a follow up to your comments about record bookings from PD in the quarter, I presume that, the remainder of this year and is there any way of gauging whether or not you think some of this is tied up to component shortages, double ordering or you think you have got a visibility on designs?.

I think we have got pretty good visibility in designs. And so here what I would say is, that -- it’s pretty broad-based, and I would say that, the areas that is really improved the most significantly since last year in terms of bookings into this year are med, which is lot of implantable devices.

So MRI and implantables is also some new applications in implantables that were -- has been designed into. So I don’t really see that as some type of double ordering. Then there is the defense market, which they had a lot of supply chain issues through the back half this year into the first quarter.

I do not see that as doubling ordering either these are mostly are custom products. They are very specific for them. They are not like off the shelf products and so I don’t see that there. The area that we intend to see if we were to see double ordering would be typically in the distribution business.

We probably be something that would be more double ordering in PD and that, I see that business, that portion of the business, it is up, but over the first half, but now a lot, it’s not where the growth is coming from the distributor business. So we are not really seeing that. There is -- we don’t think there is a lot of double ordering.

And one thing about PD is that, they are pretty -- have pretty long lead times based on some of the products and so we are pretty reasonable degree, a high degree of confidence on the revenue numbers at least within the quarter, where we usually very fully booked, it’s what we are going to ship within the quarter going into it..

And Tony, you heard in my script and we are projecting at the midpoint, 20% sequential growth in the PD business from Q1 to Q2..

Got it. Thanks for the detail. Nice quarter guys..

Thanks, Tony..

[Operator Instructions] And your next question comes from Chris Rolland with CIG (sic) [SIG Susquehanna]..

Chris?.

Sorry about that. I tried the mute button.

And if you guys could actually talk about the supply situation for you guys right now, are there any constraints there, have you guys seen your lead times go up? And then just maybe talk about that ratio of bookings, what sort of coming in right now to billings and what you can fulfill?.

Yeah. So, let’s -- first, I don’t think we have any constraints I am aware of today that it would impact PD or Hearing Health business. I think we are pretty okay there.

I would say in the MEMS microphone business, I just said last quarter, the lead times for wafers have gone out and that was -- if you think about what’s been in the MEMS microphones, there is the MEMS die and then there is ASIC that goes along with it. The MEMS die, we don’t have any constraints on it at all.

I think, I mean, we talked about this, but that we have a very solid relationship with our supplier there. We have dedicated capacity to some of the stuff that’s going on there. We have had -- I would say longer lead times on the ASIC that goes in. This has not so far been any type of issue that has held us back from shipping.

Now, what I will say is, we have had some price increases on wafers passed on us in order to meet the demand. But so far we have been able to pass those price increases on into the marketplace. And so, I think, right now, I think, one of our expectations are for the quarter in the back half of the year for us, I think, we are pretty well aligned.

If there was another big rise in demand in MEMS mics, I think, we have to obviously look at this again. But right now, I think, we are in reasonably good shape relative to supply matching up with demand..

Thanks, Jeff. And just as a follow up, you had mentioned pricing and pushing along some price increases there, previously you have talked about kind of high single-digit on the microphone side going to mid.

Is there any chance that we can get to the low single-digit ASP declines or even flat for the Audio side of your business just considering how tight things are kind of across the industry, does that give you some extra pricing power? Thanks..

Yeah. And so interesting question and I think it’s worth mentioning that, I think, if you go back, let’s just forget about 2020. 2020 was kind of this pandemic year, a lot of crazy stuff going on. But in 2019, we had talked about slightly less than 4% price erosion on mature products.

I think, we are seeing now for 2020, it’s going to be less 2021, 2021, sorry, it’s going to be less than 4% for sure. And so, I think, you are absolutely right. I would also say that one other piece, obviously, it will be dependent on the back half of the year. But that ASPs overall is not including mature products.

I believe you are going to be roughly flat with last year. So, I think, this is all leading to the point that you are right, we are kind of in the market here where demand is high and I think I talked about this in the last call, the intent is not to add capacity at this point in the MEMS microphone business.

So, we are highly focused on, I would say, the high value portions of the market and the new products that are coming in out associated with it and so we feel pretty good about where ASPs are relative to where they were, say, 2016, 2017, 2019 was a pretty good year for us and we think there is the opportunity even that in 2021..

Thanks, Jeff..

Thanks..

Okay. And there are no further questions. I will now turn the conference back over to you for closing remarks..

Great. Well, thanks very much for joining us today. As always, we appreciate your interest in Knowles and we look forward to speaking with you on our next earnings call. Thanks and good-bye..

This concludes today’s conference call. You may now disconnect..