Good afternoon, and welcome to the Knowles Corporation Fourth Quarter and Full Year 2022 Financial Results Conference Call. My name is Tamiya, and I'll be your operator for today. With that said, here with opening remarks is Knowles Vice President of Investor Relations, Patton Hofer. Please go ahead. Thank you, Tamiya. Welcome to our Q4 2022 earnings call. I'm Patton Hofer, Vice President of Investor Relations. Presenting with me on the call 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 31st, 2021, periodic reports filed from time to time with the SEC, and the risks and uncertainties identified in today's earnings. 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 to 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 on a non-GAAP continuing operations basis unless otherwise indicated. We've made selected financial information available in 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 some details on our results. Jeff? Thanks, Patton, and thanks to all of you for joining us today. Before we dive into the Q4 results, I wanted to refresh everyone on the new segmentation that we introduced during our investor update call in November, as this is how we will be discussing the company in the prepared remarks. We separate our audio segment into two. The first segment is called MedTech & Specialty Audio, or MSA, which primarily includes acoustic solutions sold into the hearing health market. The second is our Consumer MEMS Microphone segment, or CMM, which is focused on microphones sold into the ear, IoT, compute, and smartphone markets. Knowles now operates and reports under three segments, Precision Devices, MedTech & Specialty Audio, and Consumer MEMS Microphones. With that, let me begin with a summary of our Q4 results. We are pleased to report we delivered results at or above the high end of our guided ranges for gross margins, Adjusted EBIT margins, and free cash flow, despite a challenging backdrop in consumer electronics market and the COVID-related issues in China. In the quarter, Knowles generated $197 million of revenue, which was down 16% versus the prior-year, driven primarily by weak consumer electronics end market demand and customers' inventory adjustments in Consumer MEMS and MedTech & Specialty Audio. Consumer MEMS mics was down 31% versus prior-year levels, and MedTech & Specialty Audio was down 13%. In contrast, Precision Devices delivered revenue growth of 9% versus prior-year levels as we continue to see robust demand in defense, MedTech, EV, and industrial end markets. We delivered gross margins of 40.4% above the high end of our guided range, earnings per share of $0.33, in line with our guidance, We generate just shy of $40 million of free cash flow, which was at the high end of our expectation. I believe these results demonstrate that our focus on the markets and products where we have significant competitive advantages is paying dividends, particularly in our profit margins and cash flow. For full year 2022, I would like to take a minute to highlight each segment's performance individually and their current market dynamics. First, in Precision Devices, we delivered record revenue, gross margins, and Adjusted EBIT margins. Revenue grew 21%. Gross margins finished at 47% Increased 240 basis points versus prior year levels. Adjusted EBIT finished at $68 million and grew 29% versus the prior year. We continue to see strong organic growth in the mid to high single digits going forward, driven by defense, MedTech, and EV markets. Both of our product categories, high-performance capacitors and RF filters, continue to demonstrate our superior technical capabilities, providing a competitive advantage for Knowles in the markets we serve. Second, our MedTech & Specialty Audio segment delivered record gross margins and Adjusted EBIT in the year. Revenue was flat with prior year levels, as strong growth in the hearing aid market in the first half was offset by customer inventory adjustments and a softer end market demand in the second half. Gross margins finished at 50%, 270 basis points increase over prior year levels. Adjusted EBIT finished at $88 million, a 10% increase versus 2021. Although market condition deteriorated slightly for the segment, we were able to deliver double-digit earnings growth on flat revenues. In the near term, we continue to see customer inventory adjustments and softer end market demand. We have confidence in the resilience of this market, and based on bookings trends, we expect to see strong sequential growth for revenue and profitability in Q2 2023 as customers' inventories normalize. Now on to our Consumer MEMS Microphones business. Revenue in this segment was down $144 million versus prior year levels. 2022 was a difficult year for consumer electronics around the globe as end market demand, customer inventory adjustments, and the impact of COVID lockdowns in China severely impacted the segment's top line. In August, we announced our restructuring actions to address current market conditions and dynamics to accelerate our strategy to diversify away from commodity microphones. Today, I'm pleased to confirm all the actions have been put in place, delivering greater than $28 million of annualized savings. In Q1, we continue to see weak end market demand and inventory adjustments by our customers. These headwinds are across most end markets and geographies, including PCs and smartphones. Because of the weak demands, we will continue to operate at less than 50% capacity utilization in Q1, negatively impacting gross margins. Despite these near-term headwinds, we expect sequential improvement in Q2 for revenues and profitability on the beginning of China market recovery and our customers' new products. In summary, for the company, Q1 is normally sequentially lower due to seasonality, but is being further impacted by weak consumer demand, inventory in the channel, and COVID-related challenges in China as they reopen their economy. I am proud of the execution by our employees, which has allowed us to continue to generate cash in the face of substantial headwinds. As we look beyond Q1 into Q2, we are anticipating 15%-20% sequential revenue growth with all three segments contributing. Lastly, I would like to highlight we have secured an extension of our $400 million revolving credit facility until 2028. This reflects the strength of our balance sheet and the expectations to generate significant free cash flow. It also provides the substantial liquidity to supplement internal growth with acquisitions. With that, let me turn the call over to John to detail our quarter. John? Thanks, Jeff. We reported fourth quarter revenues of $197 million, down 16% from the year-ago period, driven by lower shipment volumes in Consumer MEMS mics and MedTech & Specialty Audio, partially offset by higher revenues in Precision Devices. The Precision Devices segment delivered revenues of $63 million, up 9% from the prior year, driven by growth in MedTech, EV, defense, and industrial end markets. For the full year, PD revenues increased 21%, including 18% organic growth and 3% from an acquisition, which was completed in 2021. Full year 2022 revenues were at record levels and driven by strong demand across all of our end markets. In MedTech & Specialty Audio, fourth quarter segment revenue was $62 million, down 13% versus the prior year as our customers reduced inventory levels. We faced difficult year-over-year comparables as the second half of 2021 benefited from strong COVID recovery. For the full year, MSA revenue was flat with prior year levels. Consumer MEMS mic revenues of $72 million was down 31% versus the prior year, driven by weak global demand for consumer electronics, channel inventory adjustments, COVID-related issues in China. For the full year, revenue was down 33%, driven by weak consumer demand and inventory adjustments in most end markets and geographies. Fourth quarter gross profit margins were 40.4%, 190 basis points above the high end of our guidance range. Down 290 basis points from the same period a year ago. Precision Devices segment gross margins were 48.6%, down slightly from the prior year due to favorable inventory adjustments in Q4 2021 that did not repeat. For the full year, gross margins finished at a record high of 47.2% and up 250 basis points over prior year levels, driven by favorable product and customer mix, factory productivity improvements, and the acquisition we completed in the first half of 2021. MedTech & Specialty Audio segment gross margins were 51.6%, up 120 basis points versus the prior year, driven by favorable product mix and foreign currency benefits. For the full year, MSA delivered record gross margins of 49.9%, up 270 basis points over prior year levels, driven by favorable product mix, productivity improvements, and benefits related to foreign exchange. Consumer MEMS Microphones gross margins for the fourth quarter were 23.9%, down more than 11 percentage points versus the prior year, driven by significantly lower factory capacity utilization, pricing, and unfavorable mix, partially offset by benefits to the restructuring actions implemented in the second half of the year. For the full year, gross margins were 28.2%, down 960 basis points from the prior year, driven by unfavorable capacity utilization and product mix, partially offset by benefits of the restructuring actions announced in August. For full year 2022, total company gross margins were 40.6%, down 110 basis points from 2021, with record annual gross margins in both the PD and MSA segments more than offset by significant year-over-year margin declines in the Consumer MEMS mic segment. R&D expense in the quarter was $15 million, down more than $4 million from the prior year, with the reduction driven entirely by lower incentive compensation costs and the benefits of the restructuring actions taken in the Consumer MEMS Microphones segment. SG&A expenses were $27 million, $3 million lower than prior year levels, driven by lower incentive compensation costs. For the quarter, Adjusted EBIT margin was 18.9% and 190 basis points above our expectations. For the full year, EBIT margins were 18.6%. EPS was $0.33 in the quarter at the midpoint of our guidance range. Now I'll turn to our balance sheet and cash flow. Cash and cash equivalents totaled $48 million at the end of the quarter. We generated cash from operations of $47 million, slightly above the midpoint of our guidance range. Capital spending was $7 million in the quarter. For full year 2022, free cash flow was $54 million, representing just over 7% of revenue. We repurchased 2.3 million shares at a total cost of $44 million and exited the year with cash net of debt of $3 million. This marks the first time since the spin-off we've ended the year in a net cash position. Moving to guidance for the first quarter of 2023. We expect total company revenue to be between $140 million and $155 million, down 27% versus the same period a year ago, with the decline in revenues driven by weak demand in Consumer MEMS mic, inventory corrections in MedTech & Specialty Audio, partially offset by year-over-year growth in Precision Devices. We estimate gross margins for the first quarter to be approximately 32%-35%, down 8 percentage points from the year-ago period, driven by low factory capacity utilization and unfavorable mix in our Consumer MEMS mic and MedTech & Specialty Audio segments. R&D expense is expected to be between $16 million and $18 million, down $3 million from prior-year levels, driven primarily by prior-year restructuring actions in the Consumer MEMS mic segment. We're projecting selling and administrative expense to be between $25 million and $27 million, up $2 million from the year-ago period, driven primarily by higher incentive compensation cost, partially offset by restructuring actions we've taken in the Consumer MEMS Microphones segment. We're projecting Adjusted EBIT margin for the quarter to be in the range of 2%-6% and expect EPS to be within a range of $0.01-$0.07 per share. This assumes weighted average shares outstanding during the quarter of $94.8 million on a fully diluted basis. We're forecasting an effective tax rate of 16%-18% for the quarter and full year 2023, which reflects an expected change in jurisdictional income and the impact of the unmet conditions for a tax holiday in Malaysia. For the quarter, we expect cash generated from operations to range between $15 million and $25 million. Capital spending is expected to be approximately $5 million. Given the current macro headwinds and uncertainty in the market, we'd like to provide some select commentary as it relates to our expectations for the second quarter of 2023. As Jeff mentioned, we're expecting sequential revenue growth of 15%-20%, with all three segments expected to drive the increase. We also expect gross margins in the second quarter will return to 40% or more, driven by improved capacity utilization and favorable mix. I'll now turn the call back over to Jeff for closing remarks. Jeff? Thanks, John. While there's no doubt we are dealing with some significant challenges in the global markets, our Q4 and 2022 results continue to demonstrate our strategy to focus on high-value markets and products is allowing us to achieve strong EBIT margins and continuing to generate cash. Looking at 2023, we are expecting significant sequential improvement from Q1 to Q2 in both revenue and profitability and remain confident in our ability to achieve our midterm targets of 22%-24% EBIT margins and 15%-17% free cash flow margins. With that, we can open up for questions. Absolutely. We will now begin the question- and- answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a quick reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question comes from Bob Labick with CJS Securities. Please proceed. Good afternoon. Thanks for taking our questions. Hey. Hey, Bob. Hey. I just wanted to kind of dig in a little more on what you just gave us, you know, in terms of guidance and a look into the first half in general. If I do the quick math on the sequential growth in Q2, it looks like you're still looking for about 10% revenue declines there. ±25% in Q1, 10% in Q2. The question is, can you talk more about the first half, end market demand, you know, versus inventory corrections? Really talk about the end market demand for that first half by segment, if you could, in the new segment, orientation that you've laid out for us. Yeah, Bob Labick, I'd be happy to do that, provide some additional color around Q2. You know, also just like maybe first start with Q2, then maybe delve in a little bit about what we see right now for full year. Let me start with Q2. Let me break this up by the business units. As I said in the prepared remarks, we expect about 15%-20% sequential revenue growth in Q2 over Q1. First in the MedTech & Specialty Audio, what I'd say here is, you know, we're fully booked for Q1 already. I think we're probably a little ahead of normally where we'd be at this time. We're feeling pretty good that, you know, the what's included in our guidance for Q1, you know, is very achievable. The trend generally is that as we move through the quarter, the bookings are getting better. Even in Q2, we're already seeing strong bookings in Q2. You know, I think when we think about the sequential growth, improvement in Q2, I think, you know, we're pretty happy about where we are with that. In the PD space, I would say it's kind of a similar story. You know, the current bookings, you know, which are even longer than out than where we would be in the MedTech & Specialty Audio, you know, are pretty good. The expectations to see growth in defense, EV, MedTech, you know, are quite good. I think we feel pretty good about that as well. Lastly, in the Consumer MEMS market, I would say I'm cautiously optimistic for modest improvements in Q2. I think the majority of that will be in China improvements. I mean, right now, if I were to sit there and look at my forecast for how I look at China's at a really low point in Q1 still. You know, we do see some pretty nice growth sequentially, not year-over-year yet, but sequentially. There's still inventory clearly in some of these places. I would point out specifically compute. We're not seeing a real recovery or move out of the inventory till probably the back half of the year. You know, overall, again, 15%-20% sequential growth. Now, I'd like to just make a few comments about 2023. I'll preface this. This is a very fluid situation. This is not guidance. This is more just kind of what I'm thinking about, and I'll go through it by segment again. You know, first for Precision Devices, very strong defense markets we're expecting in 2023. I'd say steady growth in the MedTech portion of Precision Devices. The last piece, you know, in terms of growth is EV. I would say since the last earning call, our visibility into growth, to nice growth in this space for 2023, looks pretty good. The bookings have been strong, and we expect them to continue to be strong. That's being driven by, you know, the kind of the abatement of the global shortage of chips, first for automotive. Also more of our designs are now entering production, and we have more confidence that they're entering production and that that's gonna drive growth. We are experiencing some softening in the industrial markets with inventory starting to become a little bit more elevated than normal in the distribution channel. Overall, I would sit there and say, you know, we still expect, you know, mid-single digit growth for PD in 2023. In the MedTech space for the full year, I would say, you know, based on what's going to happen in the first quarter, which is there is this inventory correction, I would say we're expecting the full year to be flattish for this segment. You know, all of our data points, and discussions with our customers lead us to believe that, you know, we'll return to growth in this business in the second half of the year. You know, with the, with the tough, you know, first quarter already being, you know, down, you know, versus prior year, it's probably gonna be tough to get more than a flattish business for the full year. Lastly, probably the, you know, the one that I probably have the most, I would say, wide variety of outcomes would be the Consumer MEMS microphone business. I mean, there's a lot of, you know, people who are, you know, predicting, you know, I would sit there and say a big upswing in the back half. I mean, that could happen, but I'm not calling the bottom here. Right now, yet again, you know, the first half continue to be impacted by demand in China, inventory clearing. I would say we'll definitely see sequential improvement from the first half based on normal seasonality in the back half of 2023. There's cautious optimism on return to growth in the second half for this segment, driven by normal seasonality, inventory being out of China and a recovery in China. I know that's a long answer, but all in all, I guess what I would say, given the PD mid-single digits, MSA relatively flat, and given the first half challenges with CMM, and I would say an upside downside right here, kind of middle of the road, we see revenue being flat full year in 2023. I mean, I hope that kind of gives you some color on all the markets. It's a lot of markets, but I wanna make sure we cover that. Yeah, that's super helpful. It doesn't sound like this is the case at all, but I just wanna clarify. You know, in terms of, you know, some of the changes, is there any market share shifts of any note? Doesn't sound like there's any major, certainly like any major losses despite, you know, everything that's going on. Any market share shifts, potential wins or how are you viewing the competitive landscape in this difficult macro environment? Yeah, I mean, I would say, you know, for Precision Devices, again, we always kind of say it's kind of hard to identify the real competition here. I, you know, I don't think there's any shifts. I would sit there and say we're taking share in the defense portion of that market. You know, EV is a new market, so I don't know how you sit there and say we're taking share. We're just, you know, capitalizing on a new market in terms of EV. In MedTech & Specialty Audio, I would sit there and say, you know, we kind of took some share last year. I think those share gains are sustained. I don't think we see a lot of change in that either up or down in terms of share. We have relatively high share in that business. The consumer MEMS business, you know, I really can't point to and sit there and say we've lost this or we've won this, that's changing share significantly. You know, I would say in the consumer space, we're probably taking more lower margin business in the short term than we would want because we're, you know, trying to optimize our capacity utilization. You know, and really to get the improvements we are hoping for in the back half from this business, we're gonna have to get the full capacity utilization or near it in the back half of 2023. Got it. Okay, great color. Last question from me, I promise. I'll jump back in queue. It just relates to what you just said in terms of, you gave us the update on the restructuring, said it's complete. You know, I think you kind of planned the capacity drawdown, so to speak, in, you know, back in August or sort of before that, probably the first half or middle of last year. Are you done with restructuring? Is there more given the outlook now that you need to do to take out? You know, how do you feel about the level of capacity that you have after this restructuring? I mean, I feel pretty good about the level of capacity we have right now. There's a lot of background noise. Hey, Bob, there's a lot of background noise on your side. Okay. Sorry. This is my last question, so if you can just answer, I'll hit mute. Yeah, I'll answer it. As far as the capacity utilization, you know, I, our capacity we have, I think we feel pretty good about where we're at. You know, we took out, again, a fair amount of capacity last year, and I think when the market recovers, we feel comfortable that we can fill that capacity with reasonably good gross margin business. As far as restructuring, you know, I think if there's one thing about us you could say, we're not shy about taking action when it's necessary. You know, and we'll move forward with a restructuring if it becomes necessary, you know, in any of our business if it makes sense. That's how I would answer that question. Great. Thank you so much. Thank you. Our next question goes to Christopher Rolland with Susquehanna. You may proceed. Hey, guys. Thanks for the question, and thanks for all that info. I don't know if I followed all of it. There was a lot there. I guess maybe asking a different way for March. I think I have you guys down roughly 25% sequential. Can you talk about the three segments and, you know, either force rank them or how they kind of apply to that 25? My next question will be about inventories, but I'm not quite sure how sell-in is affected here, for each of these segments into March. Yeah. For the March quarter, you know, I would sit there and say, we're talking Q4 to Q1? Yeah. Yeah. I would sit there and say in Precision Devices, you know, Typically, seasonally, Q1 is down. You know, we're expecting growth from this business again in Q1 year-over-year, but it is down sequentially. Just to describe kind of goes on here, we typically give our price increases at the end of the year. That does sometimes drive people to wanna order more in the previous quarter, especially in our distribution channel where they can get a lower price before the end of the year. It's very difficult to control that, but that's driving some sequential decline in Q1. In the hearing health business, MSA, I would sit there and say, you know, we had a very strong first half of 2022. It definitely slowed down. If you look at some of our hearing aid customers that are starting to report, they're basically pointing to, you know, 1%-3%, 1%-4% full year growth in the hearing and health market, weighted heavily towards the back half. They're expecting the first half to be down. We're dealing with the first half being down in that business, the end market, but also inventory in the channel. You know, as I said, what I kind of see in this business is we are already fully booked for Q1. You know, the numbers that we're thinking in our guidance, we're already fully booked, which is probably a little earlier we expect. As we go into Q2, we're already starting to see bookings that are stronger probably, you know, than or stronger than. As we're kind of rocking 15%-20% sequential growth in the Q2. You know, I think I feel pretty good about that business going into Q2 and then in the back half of the year. I think the big wildcard is the microphone business. You know, we're not seeing obviously any recovery in Q1. Q1's a very challenging quarter. We're running, you know, sub 50% capacity utilization. You know, we are expecting some sequential improvement in Q2, I would say it's not a reduction or inventory coming down. It's just some recovery in China from what I would say, you know, Q4 and Q1 being extremely low. As I said, I'm cautiously optimistic that this business can return to growth year-over-year in the back half of 2023. Okay. I guess first following up on that, I guess maybe I don't totally understand. If you're fully booked, I believe you're still implying a sequential drop into Q1 for MedTech. Why would that be the case if you were fully booked out? Well- I guess I'm missing something there. Well, fully booked out that. It's fully booked out to that lower expectation. I would say it's skewed toward the end of the quarter that the shipments are gonna happen. Okay. Okay. My second question is around inventories. I mean, if we have this very large increase in June, I guess there's two things to that. First of all, I'd love to understand the full industry dynamic. Perhaps you can quantify how this inventory dynamic looks, you know, at maybe revenue out there in terms of inventory that needs to be burned through in March in order to get that strong seasonal June. I assume that that's why June is so strong here because of this inventory dynamic overall. Just to add one more thing to that, I apologize, but for your largest customer, I think they're still your largest customer, a lot of people are guiding for a weaker June than we would've expected. Do you anticipate that in your guidance, or is it now at the point where it's not meaningful? I mean, they're still a meaningful customer, but we're not gonna make any comments about our shipments specifically to them. Here's what I, here's what I'd say is, if you look at the sequential growth that we expect from Q1 to Q2, it is the vast majority is with between PD and MSA. Or so PD and the MedTech & Specialty Audio. I would say on an absolute basis, it's incremental that we're expecting sequential growth in Q2. It's not a huge amount of sequential growth. Secondly, as far as inventory goes, I mean, we're following a lot of same things you are following in terms of mobile phone shipments, in terms of PCs. Let's give you one example. We just got the data for January sales on handsets in China. It was not good. I mean, it was not good. We're still not seeing the inventory come out of the channel that's there in terms of finished product. I would sit there and say for PCs, we've talked to the customers, but we're also, you know, looking at what the industry is saying is, you know, most people are saying that the inventory won't be cleared out till the end of the second quarter. Okay. Great. Thank you very much. That's helpful, Jeff. Thank you. Our next question comes from Anthony Stoss with Craig-Hallum. Your line is open. Hi, guys. Jeff, let me start with you. I wanted to really focus in more on the PD side, which is still doing quite well. Do you have a view on the inventory in the channel, particularly just for the PD side, where you think it is? I would sit there and say that the majority of stuff we do is with the custom stuff, which is MedTech, defense and EV. I would say that there isn't a lot of inventory in the channel at all. You know, I think they order for specific, you know, builds. We deliver their custom products. We're not seeing people say, "Oh, I got too much inventory," in that portion of the market. If you look at the PD business, I would say the industrial/distribution business, you know, was somewhere in the neighborhood of $50 million-$60 million for on an annualized basis. We're definitely, because we watch that inventory, it definitely, especially in the distribution where we can see it has been starting to creep up some. You know, we are expecting, you know, a little bit of weakness here, you know, in the short term. You know, overall, we still expect mid-single digit growth for this business in 2023. I mean, driven by very strong defense growth, very strong EV growth and steady MedTech growth. Got it. Just the nature of your competitors, and I know you guys have shied away from really the mobile market, but I'm curious generally what you're seeing on ASPs and maybe, I guess I'm more interested on the PD side is, are your competitors acting fairly rational at this point? I would say, you know, in the PD space, you know, again, most of our stuff is custom long-term contracts, you know, and I would sit there and say, I haven't seen much pricing pressure at all in that portion. You know, there's been a little bit more discussion in that distribution/industrial side, you know, on pricing, but it's not, you know, big. I'll make the comment on the CMM business. You know, I'll be honest, I mean, you know, the pricing has been challenged as we in Q4 and Q1. If you look at 2022 and 2021, 2020, we've really limited price erosion in that microphone business, you know, for the last three, four years. We've done a pretty good job of keeping that sub 4%, even sub 3%. As you look at the end of this year, as we started saying, "Okay, we gotta fill some of this capacity," the price erosion has become more, and we're expecting, you know, that to kind of persist in the first half of 2023 because there's, you know, a lot of excess capacity, you know, chasing less business. You know, we're hopeful with new products and things that'll happen towards the back half of next year and into 2024 that, you know, that will reverse that trend again. In the short term, it's kind of tough on pricing in that business. I didn't ask, but on the hearing health, you know, I think business or MSA business, I think, you know, we're the dynamics really haven't changed dramatically. You know, I think, you know, we're foreseeing essentially flattish pricing. Yeah. Tony, Got it. John, just to add on PD, one of the big drivers or one of the drivers of gross margin expansion in 2022 was pricing. We increased gross margins, you know, over 250 basis points. There's some mix, there's some productivity improvements, but we've also been really good at passing on our inflationary input cost to the customers through price increase. Got it. Makes sense. John, since I have you, I'm wanting to hear kind of your view on the full year CapEx. I know you gave us for Q1, on top of that, you guys have done a good job on free cash flow over the last 12 months. What are your thoughts now, given on the reduced expectations for 2023, where your cash flow goes? I know in the past you were hoping that it'd nearly double, but I'm curious what your updated view is for free cash flow. I thought you led with CapEx? Did you lead CapEx or free cash flow? I led with both. From a CapEx standpoint, I think. Yeah. We're gonna be kind of in the 4%-5% of revenue from a CapEx standpoint with more of it skewed to the PD and MSA segments. You know, we clearly aren't gonna put in more CapEx for capacity in CMM. I would say two-thirds of our CapEx in 2023 will go to PD and MSA. I think it's worth just mentioning on the CapEx side, you know, Tony, you know, at one point, like 65%-70% of our CapEx used to go when we were at 7%-8% towards the microphone business. Now it's like 33% of 4%-5%. You can see how we're shifting where we spend our dollars. Yeah. In terms of cash flow, I mean, despite some pretty tough macro conditions, we still delivered. 7% free cash flow as a percent of revenues in 2022. We had a big headwind, Anthony, with networking capital. Inventory increased our payables because we really started turning off the spigot. Our payables were at a historic low as we exited 2022. It's a $40 million-$50 million working capital headwind in 2022. We don't expect that to recur in 2023. You know, that's one of the metrics that I feel pretty good about, is we have a very reasonable shot at getting back to that 15%. Kinda doubling the 2022 rate as a percent of revenue in 2023. Not having the headwind, being a little more disciplined on our CapEx and then some operating expenses. That kind of points to, you know, getting back to the free cash flow, percent of sales back to where we were in 2021. Yep. Yep. One last question, if I could sneak it in, and maybe I misheard. When you talked about kind of second half growth, for Q3, the September quarter, are you calling for September of 2023 to be larger than September of 2022? Same thing with December? Um. In terms of rev. Yeah, I would say the answer to that is yes. I think, you know, let me just break it down by segment. We're expecting growth, you know, in Precision Devices in the back half over the back half of 2022. That's all the dynamics we've talked about. In MedTech, you know, I think we started seeing this inventory correction in the back half of 2022. I think we have a lot easier comps. Again, the market's expecting the end market, our customers, and there's a lot of data out there, are expected to return back to growth in the back half of the year. We're expecting some nice growth year-over-year. The wild card is really around the microphone business. You know, I think, you know, right now, if I were to sit here and say, "Yeah, I would expect year-over-year growth in the back half," I'm being very cautious in calling that out. I would sit there and say, if we really start seeing really nice growth in that business and there's a recovery, you know, I kind of said to Bob's question, we will end up flattish. Well, if we really start seeing some strong growth in the microphone business in the back half, we'll do better than flattish for the full year. Got it. Thanks, guys. Appreciate it. Best of luck. Thanks, Tony. Thank you. As a quick reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Suji Desilva with Roth Capital Partners. You may proceed. Hi, Jeff. Hi, John. maybe, hitting on a sub-segment you haven't talked about much yet, the EV auto market. Can you talk about what the potential for that to ramp up is in terms of program visibility? I know it's longer visibility. Whether that can grow to be a material part of the revenues, two to three years out. Yeah, I think it's kind of mentioned that. You know, I think last year we had some reasonable growth last year and, you know, I think we had set the expectation it was gonna be around $15 million in sales at the EV business. It actually was slightly over that, so we exceeded that. I think we could have probably shipped more into that segment if it wasn't for the chip shortages that a lot of our customers were experiencing. You know, right now, I would sit there and say for this year, for 2023, you know, we would expect another 30%-40% growth in terms of revenue, you know, that it'll be over, probably over $20 million in revenue. I think the other part about this, Suji, that I just kind of would make the comment is, the bookings are becoming very strong. You know what I mean, I don't wanna get into how the bookings exactly translate into when the revenue will come, but, you know, I'm hearing from the team that we could have like in excess, obviously with more bookings in the back half, more than $30 million in bookings in this business. That kinda starts to give you an indication of where that business could probably go in 2024. You know, all that said, you know, design wins are strong. It depends on who are the winners, you know, three, four years from now. You know, I think we had said, you know, we hope this business could be like $50 million-$60 million in three-four years. I think that's achievable, you know, and if we win with the winners, we'll see who those are, you know, in terms of how much content we have, it could be even more than that. you know, it's starting to become material, you know, later this year and into 2024. Okay. My other question is for John, perhaps. you know, you talked about a lot of the elements looking ahead too in revenue and gross margin and free cash flow, intermediate term. In terms of the cost, and, you already did the restructuring here and had that question before in terms of more restructuring. Is the cost OpEx in 1 Q, the way to think about a run rate going forward from here, John? Is there more flow through of the restructuring benefit? Is that the right baseline to start with, as we move forward? If you look at Q4 and actually the numbers I gave in Q1, the benefits are full of the restructuring we announced last August are entirely baked into that. You know, I've talked before about a $45 million run rate, which is about $180 million annualized. That's kinda what I would expect sitting here today. That is up over 2022 levels, it's really driven primarily by incentive comp. You know, bonuses were very low in the Consumer MEMS segment as well as the corporate at corporate in 2022. We're gonna have a pretty, you know, a decent uptick because we're planning to get back to normalized levels in terms of incentive comp. We also are adding some headcount in the PD to support the growth there. We also, you know, have conversely the benefits from the restructuring we took. Again, I think kind of a $45 million run rate is appropriate. Thanks, John. Sure. Thank you. Our next question comes from Christopher Rolland with Susquehanna. You may proceed. Chris? Oh, sorry about that. Mute button. This one's for John. I might have heard this incorrectly, so I apologize, but did you guide Q2 to an EBIT margin of 22%-24%? No. Gross margins were... Well, hello? I said, Yeah, Chris, I said gross margin. Jeff mentioned sequential growth of 15%-20%. I said with that gross margins will be back at 40% or above in Q2. Yeah. Okay. I thought I heard improved cap utilization and favorable mix, 22%-24% EBIT, or I made that up? Yeah, I didn't say that. The gross margin getting back to 40% is dependent on increased capacity utilization, but we do expect that. I mean, there's gonna be a significant improvement in EBIT margins in Q2, you know? You know, but you can see that. Not to that level. Yeah. Use the gross margins in Q1. Use it to look at the revenue. Most of that's gonna go right to the bottom line. We kinda gave you a pretty good trail. If you think of sequential growth, gross margins at 40% above, I just gave the run rate on OpEx, so you can... Yeah. I must have had some bad notes. Apologize, guys. Thank you. Oh, no worries. Thanks, Chris. Thank you. There are no other questions waiting at this time. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. There appear to be no further questions at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect your line.