Core Insights - Ariel Investments reported a strong performance for its Mid Cap Value Strategy in Q3 2025, with a return of +9.62% gross of fees, outperforming both the Russell Midcap Value Index (+6.18%) and the Russell Midcap Index (+5.33%) [1] Company Performance - Knowles Corporation (NYSE:KN) experienced a one-month return of -4.95% but saw a 52-week gain of 16.68%, closing at $22.45 per share with a market capitalization of $1.928 billion as of November 27, 2025 [2] - In Q3 2025, Knowles Corporation reported revenue of $153 million, reflecting a 7% year-over-year increase [4] Market Position and Strategy - Knowles Corporation is recognized for its strong quarterly results, with healthy demand across key markets and a return to growth in its Precision Devices segment due to normalized channel inventories and improved operational efficiency [3] - The company has been returning capital to shareholders through share repurchases and is positioned to benefit from its focus on niche markets in hearing health and precision devices [3] Hedge Fund Interest - Knowles Corporation was held by 21 hedge fund portfolios at the end of Q3 2025, an increase from 17 in the previous quarter, indicating growing interest among institutional investors [4]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $791 million, a sequential increase of 4% and 2% above the midpoint of guidance [4][18] - Year-over-year revenue growth was 8%, driven by an 8% increase in volume and a 2% positive foreign currency impact [18] - Gross profit was $154 million, resulting in a gross margin of 19.5%, slightly below the midpoint of guidance [19] - Book-to-bill ratio for the quarter was 0.97, with a backlog of $1.2 billion [18][19] Business Line Data and Key Metrics Changes - Automotive revenue increased by 7% quarter-over-quarter, driven by higher volume in the Americas and Europe [8] - Industrial segment revenue grew by 2%, supported by shipments to smart grid infrastructure projects [9] - Aerospace defense revenue decreased by 2% quarter-over-quarter due to slow funding releases [11] - Medical segment revenue grew by 2%, reflecting increased activity from longstanding customers [11] Market Data and Key Metrics Changes - Orders were up 19% year-over-year, indicating improvements in automotive, smart grid infrastructure, aerospace defense, and AI-related power requirements [6] - Asia saw the greatest growth, particularly from automotive customers and sales to distributors [4][5] - Distribution revenue increased by 4%, with most growth coming from Asia [15] Company Strategy and Development Direction - The company is executing its five-year strategic plan, Vishay 3.0, focusing on capacity investments and expanding product offerings [4][28] - Significant investments in capacity expansion are ongoing, with $179 million spent year-to-date and expectations to spend $300 million-$350 million for the year [28] - The company aims to improve margins by addressing operational efficiencies and passing on increased metal costs to customers [49] Management's Comments on Operating Environment and Future Outlook - Management noted that conditions are improving across several market segments, with expectations for mid-single-digit to high-single-digit growth in 2026 [47][48] - The company is focused on supporting automotive OEMs and tier one suppliers to prevent production line downs [64] - Management expressed optimism about the potential for revenue growth driven by government spending in aerospace defense and smart grid infrastructure [46] Other Important Information - The company generated $28 million in operating cash for Q3, with total CapEx of $52 million [23] - Free cash flow for the quarter was -$24 million, reflecting ongoing capacity expansion investments [23] - The company plans to maintain its dividend policy while managing liquidity needs [26] Q&A Session Summary Question: Did Vishay see any benefit from the export restrictions on Nexperia in the automotive segment? - Management indicated ongoing discussions with OEMs and tier ones, noting opportunities but not including them in Q4 revenue guidance due to current shortages [36] Question: What factors impacted gross margin in Q3? - Management cited elevated metals prices and operational issues as key factors affecting gross margin, with plans to pass costs onto customers [39][40] Question: What is the outlook for revenue growth and margin expansion in 2026? - Management expressed confidence in achieving revenue growth aligned with consensus estimates, driven by multiple positive market segments [48][49] Question: Can you elaborate on the capital return strategy? - Management emphasized the importance of maintaining dividends while prioritizing liquidity needs over share buybacks at this time [50]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $791 million, a sequential increase of 4% and 2% above the midpoint of guidance, with a year-over-year increase of 8% [4][18] - Gross profit was $154 million, resulting in a gross margin of 19.5%, slightly below the midpoint of guidance and flat compared to Q2 [19] - Book-to-bill ratio for the quarter was 0.97, with a backlog of $1.2 billion, flat from the previous quarter [18][19] Business Line Data and Key Metrics Changes - Automotive revenue increased by 7% quarter-over-quarter, driven by higher volume in the Americas and Europe [8] - Industrial segment revenue grew by 2%, supported by shipments to smart grid infrastructure projects [9] - Medical market segment revenue rose by 2%, reflecting increased activity from larger customers [11] - Revenue from computing, consumer, and telecom markets increased by 4%, driven by demand for AI servers [12] Market Data and Key Metrics Changes - Orders were up 19% year-over-year, indicating improving conditions in automotive, smart grid infrastructure, aerospace defense, and AI-related power requirements [6] - Asia saw the greatest growth in sales, particularly from automotive customers and distributors [4][5] - Distribution revenue increased by 4%, with most growth coming from Asia [15] Company Strategy and Development Direction - The company is executing its five-year strategic plan, Vishay 3.0, focusing on capacity expansion and innovation [4][28] - Significant investments in capacity expansion are ongoing, with $179 million spent year-to-date and an expected total of $300 million to $350 million for the year [28] - The company aims to improve margins and returns on capital through operational efficiencies and passing on increased metal costs to customers [49] Management Comments on Operating Environment and Future Outlook - Management noted that conditions are improving across several market segments, with expectations for mid-single-digit to high-single-digit growth in 2026 [48] - The company is focused on addressing customer needs and preventing production line downs, particularly in the automotive sector [64] - Management expressed confidence in the company's ability to meet quick-turn delivery requests while maintaining competitive lead times [7][32] Other Important Information - The company reported a negative free cash flow of $24 million for the quarter, with a focus on maintaining dividends despite ongoing capacity expansion [23][26] - The effective tax rate remains low due to minimal pre-tax income, with expectations for normalization as profitability returns [21][25] Q&A Session Summary Question: Did Vishay see any benefit from the export restrictions on Nexperia in the automotive segment? - Management indicated ongoing discussions with OEMs and tier ones, noting opportunities but not including them in Q4 revenue guidance due to current shortages [36] Question: What factors impacted gross margin in Q3? - Management cited elevated metals prices and operational issues as key factors affecting gross margin, with plans to pass costs onto customers [39][40] Question: How does the company view growth and margin expectations for fiscal 2026? - Management expressed optimism about growth driven by five key market segments, aligning with consensus estimates for revenue growth of around 7% [48][49] Question: Can you elaborate on the capital return strategy? - Management emphasized the importance of dividends and indicated no plans for share buybacks at this time due to current liquidity needs [50]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $791 million, a sequential increase of 4% and 2% above the midpoint of guidance, with many market segments showing growth [5][19] - Year-over-year revenue increased by 8%, reflecting an 8% increase in volume and a 2% positive foreign currency impact [19] - Gross profit was $154 million, resulting in a gross margin of 19.5%, slightly below the midpoint of guidance and flat compared to Q2 [20] - Adjusted earnings per share for Q3 2025 was $0.04, compared to a net loss per share of $0.07 in Q2 2025 [22][23] Business Line Data and Key Metrics Changes - Automotive revenue increased by 7% versus Q2, driven by higher volume in the Americas and Europe [9] - Industrial segment revenue grew by 2%, primarily due to shipments of capacitors for smart grid infrastructure projects [10] - Aerospace defense revenue decreased by 2% quarter-over-quarter due to slow funding releases from the U.S. Department of Defense [12] - Medical market revenue grew by 2%, supported by increased activity from longstanding customers [12] Market Data and Key Metrics Changes - Asia achieved the greatest growth in Q3, particularly from automotive customers and sales to distributors [5][6] - Distribution revenue increased by 4%, with nearly all growth coming from Asia [16] - Book-to-bill ratio for the quarter was 0.97, with a run rate of 1.15 for October, indicating improving order conditions [19][6] Company Strategy and Development Direction - The company is executing its five-year strategic plan, Vishay 3.0, focusing on capacity investments and expanding product offerings [5][28] - Investments in capacity expansion are expected to be between $300 million and $350 million for the year, with a significant portion allocated to high-growth products [28] - The company aims to enhance customer engagement and cross-sell products across its portfolio [33] Management's Comments on Operating Environment and Future Outlook - Management noted that market signals remain directionally positive, with increasing demand from automotive, AI servers, smart grid infrastructure, and medical sectors [31] - The company expects revenue growth in 2026, driven by five key market segments showing positive signs [42] - Management is focused on improving gross margins and operational efficiencies, with plans to achieve margin neutrality at the Newport facility by the end of Q1 2026 [43] Other Important Information - The company generated $28 million in operating cash for Q3, with total CapEx for the quarter at $52 million [24] - Free cash flow for the quarter was negative $24 million, but improved from negative $73 million in Q2 [24] - The company plans to maintain its dividend policy while managing liquidity and capital needs [27] Q&A Session Summary Question: Did Vishay see any benefit from the export restrictions on Nexperia in the automotive segment? - Management indicated ongoing discussions with OEMs and tier ones, noting opportunities arising from the situation, but did not include it in Q4 revenue guidance due to the dynamic nature of the market [34] Question: What factors impacted gross margin in Q3? - Management cited elevated metals prices and operational issues as key factors affecting gross margin, with plans to pass costs onto customers [35][36] Question: What is the outlook for revenue growth and margin expansion in 2026? - Management expressed confidence in achieving revenue growth aligned with consensus estimates, supported by positive market drivers and customer engagements [42] Question: How is the capital return strategy prioritized? - Management emphasized the importance of maintaining dividends while managing liquidity, indicating no current plans for share buybacks [45]

Core Viewpoint - CSW Industrials, Inc. has successfully completed the acquisition of Motors & Armatures Parts (MARS Parts) for approximately $650 million in cash, enhancing its HVAC/R product portfolio and aligning with its strategic growth objectives [1][2][4]. Group 1: Acquisition Details - The acquisition price represents 10.4x pro-forma trailing twelve-month (TTM) EBITDA adjusted for identified synergies and approximately 12.4x MARS Parts' estimated adjusted TTM EBITDA of $52.3 million [1]. - CSW funded the transaction through a five-year Syndicated Term Loan A for $600 million and borrowings under a $700 million revolving credit facility, while maintaining a strong balance sheet [4]. Group 2: Strategic Rationale - This acquisition expands CSW's product offerings in the profitable HVAC/R market, adding motors, capacitors, and other electrical components, which are essential for HVAC/R repairs and replacements [2][3]. - MARS Parts is recognized as one of the largest providers of HVAC/R parts in North America, with a focus on repair rather than replacement, complementing CSW's existing Contractor Solutions business [3]. Group 3: Market Position and Future Outlook - The addition of MARS Parts is expected to drive above-market growth for CSW by diversifying its product portfolio and enhancing its competitive position in the HVAC/R sector [4]. - The acquisition aligns with CSW's established criteria to leverage existing distribution channels and grow its share of wallet with current customers [2].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $153 million, up 7% year over year, with EPS of $0.33, an increase of 22% year over year, and cash from operations at $29 million, all exceeding the midpoint of guidance [5][13][19] - Gross margins for Q3 were 53%, flat compared to the previous year, with expectations to remain above 50% for the full year 2025 [14][19] Business Line Data and Key Metrics Changes - MedTech and Specialty Audio segment revenue was $65 million, up 2% year over year, driven by increased demand in the specialty audio market [5][13] - Precision Devices segment revenue was $88 million, up 12% year over year, with strong growth across all end markets including medtech, defense, industrial, and EV [6][14] Market Data and Key Metrics Changes - The defense market showed particularly strong performance, with design wins and bookings outpacing other end markets [8][9] - Bookings in the Precision Devices segment remained strong, particularly in defense and with distribution partners, indicating normalized channel inventories [9][44] Company Strategy and Development Direction - The company is focused on leveraging unique technologies to design custom engineered solutions and deliver them at scale, positioning itself well for future growth [4][10] - The strategy includes expanding specialty film production and pursuing synergistic acquisitions while maintaining manageable debt levels [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering a period of accelerated organic growth, supported by strong design wins and a healthy backlog of orders [10][12] - The company expects organic growth rates at the high end of the stated range of 4% to 6% for the total company in 2025, driven by robust secular growth trends [10][19] Other Important Information - Cash generation from operations was robust, allowing for share repurchases of $20 million and a reduction in bank borrowings by $15 million [11][16] - The company has a strong balance sheet with liquidity exceeding $350 million, and exposure to tariffs is less than 5% of revenue [17][18] Q&A Session Summary Question: Specialty film capacity and demand outlook - Management indicated that specialty film revenue is expected to be in the range of $55 million to $60 million next year, with a backlog of $25 million to $30 million [21][23] Question: Design activity and growth expectations - Management expects MedTech and Specialty Audio growth in the range of 2% to 4%, while Precision Devices may exceed the high end of the 6% to 8% growth range [25][26] Question: Specialty film applications and follow-up orders - Specialty film is focused on pulse power applications, with emerging applications in defibrillators and radiotherapy, indicating strong future demand [32][33] Question: M&A environment and strategy - The company remains focused on acquisitions but is being disciplined, ensuring any acquisition makes strategic sense [37][38] Question: Book to bill ratio and palladium prices - The book to bill ratio for the Precision Devices segment was one for the quarter, with strong bookings and a high backlog [44] - Palladium prices have increased, but the company has pre-buys in place to mitigate impact on gross margins [41][42]

Core Insights - Surge Components, Inc. reported its financial results for the third quarter ending August 31, 2025, highlighting its position as a leading supplier in the industry [1] Operational Highlights - The company continues to provide best-in-class service to customers, which helps maintain its competitive advantage over peers [1] - Surge Components is focused on maintaining superior lead times and stable production, which are critical for customer satisfaction and operational efficiency [1] - The company is actively collaborating with partners to enhance its service offerings and operational capabilities [1]