Kulicke and Soffa Industries (KLIC) Q2 2025 Earnings Call May 07, 2025 08:00 AM ET Company Participants Joseph Elgindy - Senior Director of Investor Relations & Strategic PlanningFusen Chen - President & CEOLester Wong - EVP of Finance & IT and CFOKrish Sankar - Managing DirectorTom Diffely - Director Of Institutional ResearchCraig Ellis - Director of ResearchDavid Duley - Managing Principal Conference Call Participants Charles Shi - Senior Analyst Operator Greetings, and welcome to the CULIC and Sulfa twen ...

Financial Data and Key Metrics Changes - Elanco reported revenue of $1,193 million, a decrease of 1% on a reported basis, but achieved organic constant currency growth of 4% compared to Q1 2024 [39][40] - Adjusted EBITDA was $276 million, a decrease of $18 million year-over-year, but increased by $8 million when excluding the impact of the Aqua divestiture and foreign exchange headwinds [44][45] - Adjusted EPS improved to $0.37, driven by a favorable discrete tax rate benefit and interest expense savings from debt reduction [45] Business Line Data and Key Metrics Changes - Total Pet Health revenue increased by 1% in constant currency, with U.S. Pet Health revenue declining by 3% due to a challenging retail environment and soft vaccine demand, while international Pet Health grew by 5% [40][41] - The U.S. Farm Animal business grew by 17%, driven by demand for Experior and the launch of Pradillac, while international Farm Animal business contributed 2% in organic constant currency [42][43] - Innovation revenue reached $198 million in Q1, leading to an increase in full-year expectations for innovation contributions to $660 million to $740 million [7][20] Market Data and Key Metrics Changes - U.S. Retail business declined by 21% in January and February due to adverse weather conditions, but rebounded to a positive 13% growth in March [14][16] - International Pet Health business saw 5% organic constant currency growth, driven by products like AdTab and Credelio [17][18] - The U.S. Farm Animal business experienced significant growth, particularly in cattle, with Experior leading the way [19][31] Company Strategy and Development Direction - Elanco's strategy focuses on innovation, cash management, and a global operating model to navigate external uncertainties [9][10] - The company is committed to maintaining a balanced profile of risks and implementing mitigating strategies to offset tariff impacts and macroeconomic challenges [11][12] - Continued investment in product launches and facility expansions is planned, with a focus on maintaining cost discipline [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on 2025 goals, citing strong Q1 performance and positive trends in March and April [49][53] - The company is closely monitoring consumer spending and macroeconomic conditions, emphasizing its resilience and execution capabilities [104][106] - Management highlighted the growth potential in the animal protein market, indicating a favorable outlook for the farm animal business [106][107] Other Important Information - Elanco raised its full-year revenue guidance due to favorable foreign exchange impacts, maintaining an organic constant currency growth outlook of 4% to 6% [8][47] - The company expects to achieve a net leverage ratio of 3.9 to 4.3 times adjusted EBITDA by year-end, reflecting strong cash generation and debt reduction efforts [37][50] Q&A Session Summary Question: Can you elaborate on the Q2 guidance and the impact of investments on EBITDA? - Management confirmed that Q2 investments are aimed at supporting product launches during the peak parasiticide season, which may dampen near-term EBITDA but are expected to drive revenue growth in the second half [59][60] Question: What is the expected impact of tariffs and the pharma exemption on EBITDA? - Management indicated a potential $25 million EBITDA tailwind from foreign exchange moves, which has not been reflected in guidance due to uncertainty surrounding the pharma exemption [62][64] Question: Can you provide insights on the innovation revenue contributions? - Management highlighted that the overall innovation portfolio, including products like ZENRELIA and Credelio Quattro, is driving growth, with a focus on expanding market share and clinic adoption [71][93] Question: How is the macro environment affecting consumer spending? - Management noted that while monitoring consumer spending is essential, the company is well-positioned to navigate fluctuations due to its diverse product offerings and strong execution capabilities [104][106]

Financial Data and Key Metrics Changes - The company reported revenue of $162 million for Q2 2025, with gross margins at 24.9% which included $38.6 million in EA-related inventory and supply chain charges [21] - Total operating expenses were $125.1 million, including restructuring charges of $8.8 million and impairment charges of $39.8 million [21] - The company anticipates a revenue outlook of $145 million for Q3 2025, with gross margins projected at 46.5% [23] Business Line Data and Key Metrics Changes - The decision to discontinue the electronics assembly (EA) equipment business was announced, which accounted for charges of $86.6 million primarily related to inventory write-downs and restructuring [21] - The automotive and industrial sectors saw a sequential decline of approximately 7% in Q2, but were up nearly 14% year-over-year due to ongoing demand improvements [10] - The APS business continues to provide stable revenue, with expectations for overall installed base and utilization trends to improve [11] Market Data and Key Metrics Changes - Southeast Asia experienced a significant slowdown, accounting for the majority of the company's Q2 to Q3 weakness, while order activity increased in China and Taiwan [22][28] - Utilization rates in China are over 80%, while Taiwan's utilization is just touching 80% [70] - The ongoing trade situation has created uncertainty in global markets, particularly affecting the automotive and industrial sectors [8] Company Strategy and Development Direction - The company intends to focus on vertical wire, power semiconductor, advanced dispense, and thermal compression technologies to enhance growth prospects [9] - The restructuring effort aims to improve long-term financial performance and gross margins [7] - The company is well-positioned to leverage its technology leadership in high-volume semiconductor markets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the semiconductor industry's resilience despite macroeconomic uncertainties [8] - The company anticipates continued capacity digestion supported by improving utilization rates, with expectations for a return to incremental capacity growth in core markets [23] - Management noted that customer hesitation is primarily due to uncertainties surrounding tariffs and trade dynamics [60] Other Important Information - The company has nearly 120 systems installed across 10 different customers, demonstrating a strong market presence [19] - The vertical wire technology is expected to drive significant interest and potential production ramp by 2026 [12] Q&A Session Summary Question: Can you provide insights on June's dynamics and expectations beyond? - Management indicated a Q3 slowdown, particularly in Southeast Asia, with Q2 revenue at $162 million and Q3 guidance at $145 million, attributing the decline to tariff concerns in the automotive and industrial sectors [28][32] Question: What is the revenue run rate of the EA business being exited? - The EA business generated approximately $25 million to $30 million annually, with gross profits around $7 million to $11 million [38] Question: What are the dynamics on the power semiconductor front? - The power semiconductor market is expected to grow rapidly, with new products being introduced to enhance market share [41] Question: Can you elaborate on the utilization rates in Taiwan and China? - Utilization rates in China are over 80%, while Taiwan's are just touching 80%, with expectations for continued high utilization [70] Question: How is the company addressing customer hesitation due to trade policies? - The company manufactures in Singapore, avoiding direct tariff impacts, but acknowledges indirect costs and customer caution due to trade uncertainties [74]

Financial Performance & Guidance - Elanco's Q1 2025 revenue exceeded guidance by $25 million[9] - Adjusted EBITDA for Q1 2025 exceeded guidance by $26 million[9] - Adjusted EPS for Q1 2025 exceeded guidance by $005[9] - The company is raising its 2025 revenue guidance due to foreign exchange tailwinds, while maintaining adjusted EBITDA guidance of $830-$870 million and adjusted EPS guidance of $080-$086[11] - Elanco expects $450-$500 million of gross debt paydown in 2025[10] Revenue Analysis - Elanco achieved 4% organic constant currency revenue growth in Q1 2025[10, 14] - Q1 2025 total Elanco revenue was $1193 million, a decrease of 1% compared to $1205 million in Q1 2024[29, 31] - US Farm Animal revenue increased by 17% to $230 million in Q1 2025 compared to $197 million in Q1 2024[31] - International Farm Animal revenue decreased by 12% to $316 million in Q1 2025 compared to $360 million in Q1 2024, but increased 2% on an organic constant currency basis[31] Innovation & Portfolio - Q1 2025 innovation revenue contribution was $198 million[10, 18] - Elanco is raising its 2025 innovation sales target to $660-$740 million[10, 17, 20]

Financial Data and Key Metrics Changes - The company generated $88 million in revenue and $57 million in cash from operations for Q1 2025, aligning with expectations [5] - The full year 2025 revenue outlook remains unchanged, with over 80% supported by contracted revenue [6] - Adjusted EBITDA for Q1 was $47.3 million, reflecting an adjusted EBITDA margin of 54% [20] - The company ended Q1 with $116.5 million in cash, cash equivalents, and marketable securities [21] Business Line Data and Key Metrics Changes - Recurring revenue for Q1 2025 increased modestly year over year, with non-pay TV parts of the business seeing a 25% increase [7][8] - The company signed 10 license agreements in Q1, including four with new customers in key growth areas such as social media, OTT, and semiconductors [8][9] - Renewals accounted for six agreements in Q1, maintaining a strong track record of over 90% renewal rates [12] Market Data and Key Metrics Changes - The company is focusing on growth in OTT, semiconductors, and adjacent media markets, with significant opportunities in the OTT sector due to its growing subscriber base [10] - The semiconductor market is seeing increased adoption of hybrid bonding, which is driving new deal flow [11] Company Strategy and Development Direction - The company emphasizes a balanced capital allocation strategy, focusing on growth through strategic acquisitions while maintaining a strong cash position [5][16] - The strategy includes expanding and diversifying patent portfolios to meet evolving market needs, with a focus on organic growth through R&D [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model despite macroeconomic volatility, with visibility into revenue supported by long-term contracts [6] - The company is monitoring the broader macroeconomic environment and remains prudent in spending, anticipating potential impacts on future performance [25] Other Important Information - The company acquired two IP portfolios for $5 million, enhancing its media and semiconductor capabilities [15][22] - A new board member, Sandeep Vizh, was nominated to replace retiring board member Raghu Rao, bringing extensive expertise in technology and semiconductors [17] Q&A Session Summary Question: Potential for new sports league deals - Management is optimistic about the new deal with a U.S. Professional Sports League, viewing it as a potential breakthrough for future agreements [30][31] Question: Opportunities in sports betting - Management is exploring the sports gambling market as an adjacent opportunity, though it is considered a longer-term prospect [33] Question: Licensing status of acquired portfolios - The acquired micro LED and imaging portfolios do not currently have existing licenses attached, but management sees significant potential for future revenue [35] Question: Semiconductor announcement context - The recent semiconductor deal is not the large opportunity anticipated from the previous year, but it reflects ongoing progress in hybrid bonding adoption [40] Question: OTT market opportunities - The majority of OTT opportunities are domestic, with ongoing litigation affecting some potential deals, but international opportunities are also being pursued [41] Question: Social media market potential - The company has licensed approximately 90% of the social media market, with opportunities primarily in renewals rather than new deals [43]

Financial Data and Key Metrics Changes - Normalized FFO per share for the quarter was $0.39, aligning with expectations and marking a solid start to the year [20] - Same store cash NOI growth was 2.3%, impacted by higher operating expenses and weather volatility, with expectations for acceleration in growth for the remainder of the year [20][21] - The company ended the quarter with a net debt to adjusted EBITDA ratio of 6.4 times, unchanged from the end of 2024, with expectations to decrease this to a range of 6 to 6.25 times throughout the year [22] Business Line Data and Key Metrics Changes - The same store occupancy rate was reported at 89.3%, with expectations for sequential growth throughout 2025 [11][19] - The company commenced nearly 1,500,000 square feet of new and renewal leases during the quarter, with a solid signed non-occupied pipeline of over 630,000 square feet [16] - Tenant retention improved by over 300 basis points to almost 85%, contributing to a slight uptick in occupancy [18] Market Data and Key Metrics Changes - Demand for outpatient medical space remains robust, with health systems experiencing improving revenue and margin trends, driving further growth and space needs [18] - The company’s on-campus portfolio received the highest average score in a recent industry research piece, indicating a resilient outpatient portfolio compared to peers [18] Company Strategy and Development Direction - The company aims to optimize its portfolio by exiting markets with limited scale and focusing on selling assets rather than contributing them to joint ventures [12][30] - Key strategic focuses include improving leasing, optimizing the portfolio, enhancing the balance sheet, increasing efficiency, and instilling financial discipline [14] - The company plans to maintain its dividend at $0.31 per share while discussing its future based on earnings clarity and efficiency gains [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of outpatient medical real estate, with muted new supply and steadily increasing demand [9] - The company anticipates sequential occupancy growth and a strong leasing pipeline, with expectations for NOI growth throughout the year [19] - Management is focused on creating a more stable platform and improved earnings growth profile, aiming for a better stock price [14] Other Important Information - The company sold four buildings for $28 million in the first quarter, which required significant capital for repositioning [21] - The company has $1.4 billion of capacity on its revolving line of credit and has accessed this liquidity to pay off maturing notes [23] Q&A Session Summary Question: Did the areas of focus listed by the new CEO indicate priority? - The new CEO indicated that while not in perfect order of priority, portfolio optimization and deleveraging are immediate focuses, while leasing will take longer to stabilize [27][28] Question: How does the company view the joint venture model? - The CEO expressed a preference for maintaining existing joint ventures but emphasized selling assets rather than contributing more to those ventures [29][30] Question: Is the current guidance for 2025 confirmed? - The CEO reaffirmed the guidance for 2025 after reviewing the forecast with the team, indicating a good start to the year [35] Question: How will dispositions impact earnings? - The CEO acknowledged that while there may be a negative impact from deleveraging, the company is focused on offsetting that through efficiencies and leasing upside [102][104] Question: What is the strategy for retained cash flow? - The CEO emphasized prioritizing redevelopment opportunities for retained cash flow, as they yield higher returns [116]

Hecla Mining Company (HL) Q1 2025 Earnings Call May 02, 2025 10:00 AM ET Company Participants Mike Parkin - VP - Strategy & IRRob Krcmarov - President and Chief Executive OfficerRussell Lawlar - SVP, CFOCarlos Aguiar - Senior VP & COOHeiko Ihle - MD & Equity ResearchDalton Baretto - Managing Director, Equity ResearchMichael Siperco - DirectorKurt Allen - Vice President of ExplorationAndrew Dusome - Equity Research Associate, Metals & MiningHenry Hearle - Equity Research AssociateJoseph Reagor - Managing Dir ...

Financial Data and Key Metrics Changes - Normalized FFO per share for Q1 2025 was $0.39, aligning with expectations and marking a strong start to the year [22] - Same store cash NOI growth was 2.3%, impacted by higher operating expenses and weather volatility, with expectations for acceleration in growth for the remainder of the year [22][23] - Net debt to adjusted EBITDA remained unchanged at 6.4 times, with expectations to decrease to a range of 6 to 6.25 times as the year progresses [24] Business Line Data and Key Metrics Changes - Same store occupancy at the end of Q1 was 89.3%, with expectations for sequential growth throughout 2025 [11] - The company commenced nearly 1,500,000 square feet of new and renewal leases during the quarter, with a solid signed non-occupied pipeline of over 630,000 square feet [17][20] - Tenant retention improved by over 300 basis points to almost 85%, contributing to the slight uptick in occupancy [20] Market Data and Key Metrics Changes - The demand for outpatient medical space remains robust, with health systems experiencing improving revenue and margin trends, driving further growth and space needs [20] - The company’s on-campus portfolio received an A+ score in a recent industry research piece, indicating a resilient outpatient portfolio compared to peers [20] Company Strategy and Development Direction - The new CEO emphasized a focus on leasing, portfolio optimization, balance sheet improvement, organizational efficiency, and financial discipline as initial strategic priorities [11][14] - The company plans to exit markets with limited scale and focus on selling assets rather than contributing them to joint ventures [13][31] - The dividend will be an output of the strategic plan, with discussions ongoing at the Board level regarding its future [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of outpatient medical real estate, with muted new supply and steadily increasing demand [7] - The company anticipates occupancy growth throughout 2025, with a target of 75 to 125 basis points of absorption by year-end [21] - Management is cautious about potential federal healthcare budget cuts but noted that outpatient medical assets may benefit indirectly from such changes [45] Other Important Information - The company maintained its dividend at $0.31 per share for the quarter, with discussions ongoing regarding its future based on earnings clarity [16] - The company sold four buildings for $28 million in Q1, with plans for further dispositions as part of its strategy [23] Q&A Session Summary Question: Did the areas of focus listed by the new CEO represent a priority order? - The CEO indicated that while not in perfect order of priority, portfolio optimization and deleveraging are immediate focuses, while leasing improvements may take two to three years [30] Question: How does the company view the joint venture model? - The CEO expressed a preference for maintaining existing joint ventures but emphasized the need to sell assets rather than contribute more to these ventures [31] Question: Is the current guidance for 2025 confirmed? - The CEO reaffirmed the guidance after reviewing the 2025 forecast, indicating comfort with the numbers presented [35] Question: How will dispositions impact earnings and dividend coverage? - The CEO acknowledged that while there may be a negative impact from asset sales, efforts are being made to offset dilution through efficiencies and leasing upside [104][105] Question: What is the outlook for rent collection from tenants? - The CFO reported full rent collection from a key tenant for February, March, and April, indicating stability despite ongoing bankruptcy processes [62] Question: How does the company plan to utilize retained cash flow? - The CEO highlighted redevelopment opportunities as a priority for retained cash flow, aiming for higher returns on reinvested capital [115]

Financial Data and Key Metrics Changes - In 2024, the company generated $11.7 billion in operating cash flow and $4.9 billion in free cash flow before working capital [6] - The company achieved a record year-end proved oil and gas reserves of 4.6 billion BOE, a 15% increase from 2023 [5] - The company paid approximately $800 million in combined dividends and approved a 22% dividend increase in early 2024, followed by an additional 9% increase early this year [6] Business Line Data and Key Metrics Changes - The company reported record US oil production of 571,000 barrels per day from its Permian, Rockies, and Gulf of America assets [5] - Combined production from ongoing operations reached 1.3 million BOE per day, with significant contributions from both US and international assets [5] Market Data and Key Metrics Changes - The company noted that ongoing negotiations and macroeconomic factors, including tariffs and geopolitical events, have impacted commodity prices and created volatility in financial markets [29][32] - The company is focused on managing its operations efficiently in any price environment, with a strategy to strengthen its balance sheet through deleveraging [30] Company Strategy and Development Direction - The company closed a strategic acquisition of Crown Rock, enhancing its access to high-quality unconventional domestic oil assets [4] - The company is advancing major projects, including the commissioning of its first commercial-scale direct air capture facility, Stratos, expected to start in 2025 [4][7] - The company aims to integrate sustainability throughout its operations and has set emission reduction targets [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic focus and operational performance, positioning it well to deliver long-term value despite near-term pressures from commodity prices [32] - The company is optimistic about the growth prospects for global oil demand beyond 2030, which is seen as positive for its operations [40] Other Important Information - The company achieved its best-ever safety performance record in 2024, reflecting a commitment to safety across all segments [6] - The board is committed to ongoing refreshment of its membership to align with the evolving needs of the company [19] Q&A Session Summary Question: Are there any plans for board refreshment? - The board has committed to ongoing refreshment, with almost half of the independent directors beginning their service within the past five years [19] Question: How does the executive compensation program align with pay for performance? - A substantial portion of named executive officer compensation is performance-based, with significant at-risk pay for executives [24] Question: What is the potential impact of tariffs and the macro environment on Oxy? - The company is focused on what it can control, with ongoing assessments of the impact of tariffs and geopolitical events on operations and financial performance [29] Question: How does Oxy approach diversity and inclusion? - Oxy maintains a culture of inclusion and belonging, which is essential for recruiting and retaining talented employees [33] Question: What are Oxy's sustainability efforts? - Oxy has implemented key emission reduction targets and has sustained zero routine flaring in its US operations [36] Question: What are the growth prospects for the different commodities produced? - Oxy is well-positioned with a diversified portfolio and expects growth in oil and gas operations, particularly in the Permian Basin [40]

Hecla Mining Company (HL) Q1 2025 Earnings Call May 02, 2025 10:00 AM ET Company Participants Mike Parkin - VP - Strategy & IRRob Krcmarov - President and Chief Executive OfficerRussell Lawlar - SVP, CFOCarlos Aguiar - Senior VP & COOHeiko Ihle - MD & Equity ResearchDalton Baretto - Managing Director, Equity ResearchMichael Siperco - DirectorKurt Allen - Vice President of ExplorationAndrew Dusome - Equity Research Associate, Metals & MiningHenry Hearle - Equity Research AssociateJoseph Reagor - Managing Dir ...