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November 2022
November 2022
October 2022
August 2022
August 2022
July 2022
May 2022
April 2022
April 2022
February 2022
Financial Contact: Mike Knapp Knowles Investor Relations Phone: (630) 238-5236 Email: mike.knapp@knowles.com |
Q3FY18 | Q2FY18 | Q3FY17 | Sequential Change | Year Ago Period Change | |
Revenues | $236.2 | $188.4 | $196.0 | 25% | 21% |
Gross profit | $89.8 | $73.2 | $74.1 | 23% | 21% |
(as a % of revenues) | 38.0% | 38.9% | 37.8% | ||
Non-GAAP gross profit | $90.7 | $74.2 | $76.3 | 22% | 19% |
(as a % of revenues) | 38.4% | 39.4% | 38.9% | ||
Diluted (loss) earnings per share ** | $(0.20) | $0.05 | $0.12 | NM*** | NM*** |
Non-GAAP diluted earnings per share | $0.34 | $0.18 | $0.26 | 89% | 31% |
GAAP | Adjustments | Non-GAAP | |
Revenues | $210 to $240 million | — | $210 to $240 million |
Gross Profit Margin | 40 to 42% | 1% | 41 to 43% |
EPS | $0.22 to $0.28 | $0.09 | $0.31 to $0.37 |
Quarter Ended | |||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||||
Revenues | $ | 236.2 | $ | 188.4 | $ | 196.0 | |||||
Cost of goods sold | 146.4 | 115.1 | 121.7 | ||||||||
Restructuring charges - cost of goods sold | — | 0.1 | 0.2 | ||||||||
Gross profit | 89.8 | 73.2 | 74.1 | ||||||||
Research and development expenses | 25.2 | 25.4 | 21.9 | ||||||||
Selling and administrative expenses | 34.5 | 37.1 | 32.0 | ||||||||
Restructuring charges | 0.5 | 0.5 | 0.9 | ||||||||
Operating expenses | 60.2 | 63.0 | 54.8 | ||||||||
Operating earnings | 29.6 | 10.2 | 19.3 | ||||||||
Interest expense, net | 4.0 | 4.1 | 5.1 | ||||||||
Other expense (income), net | 0.3 | 0.3 | (0.7 | ) | |||||||
Earnings before income taxes and discontinued operations | 25.3 | 5.8 | 14.9 | ||||||||
Provision for income taxes | 43.1 | 1.4 | 4.4 | ||||||||
(Loss) earnings from continuing operations | (17.8 | ) | 4.4 | 10.5 | |||||||
Earnings from discontinued operations, net | 1.6 | 0.2 | 5.2 | ||||||||
Net (loss) earnings | $ | (16.2 | ) | $ | 4.6 | $ | 15.7 | ||||
(Loss) earnings per share from continuing operations: | |||||||||||
Basic | $ | (0.20 | ) | $ | 0.05 | $ | 0.12 | ||||
Diluted | $ | (0.20 | ) | $ | 0.05 | $ | 0.12 | ||||
Earnings per share from discontinued operations: | |||||||||||
Basic | $ | 0.02 | $ | — | $ | 0.06 | |||||
Diluted | $ | 0.02 | $ | — | $ | 0.05 | |||||
Net (loss) earnings per share: | |||||||||||
Basic | $ | (0.18 | ) | $ | 0.05 | $ | 0.18 | ||||
Diluted | $ | (0.18 | ) | $ | 0.05 | $ | 0.17 | ||||
Weighted-average common shares outstanding: | |||||||||||
Basic | 90,171,928 | 90,063,089 | 89,469,996 | ||||||||
Diluted | 90,171,928 | 90,731,760 | 90,373,112 |
Nine Months Ended | |||||||
September 30, 2018 | September 30, 2017 | ||||||
Revenues | $ | 603.1 | $ | 528.7 | |||
Cost of goods sold | 374.7 | 326.8 | |||||
Impairment charges | — | 1.4 | |||||
Restructuring charges - cost of goods sold | 0.1 | 3.9 | |||||
Gross profit | 228.3 | 196.6 | |||||
Research and development expenses | 75.4 | 70.6 | |||||
Selling and administrative expenses | 107.4 | 99.3 | |||||
Impairment charges | — | 19.9 | |||||
Restructuring charges | 1.4 | 4.2 | |||||
Operating expenses | 184.2 | 194.0 | |||||
Operating earnings | 44.1 | 2.6 | |||||
Interest expense, net | 12.1 | 15.4 | |||||
Other expense, net | 0.5 | 2.0 | |||||
Earnings (loss) before income taxes and discontinued operations | 31.5 | (14.8 | ) | ||||
Provision for income taxes | 45.3 | 10.6 | |||||
Loss from continuing operations | (13.8 | ) | (25.4 | ) | |||
Earnings from discontinued operations, net | 1.9 | 8.2 | |||||
Net loss | $ | (11.9 | ) | $ | (17.2 | ) | |
Loss per share from continuing operations: | |||||||
Basic | $ | (0.15 | ) | $ | (0.28 | ) | |
Diluted | $ | (0.15 | ) | $ | (0.28 | ) | |
Earnings per share from discontinued operations: | |||||||
Basic | $ | 0.02 | $ | 0.09 | |||
Diluted | $ | 0.02 | $ | 0.09 | |||
Net loss per share: | |||||||
Basic | $ | (0.13 | ) | $ | (0.19 | ) | |
Diluted | $ | (0.13 | ) | $ | (0.19 | ) | |
Weighted-average common shares outstanding: | |||||||
Basic | 89,988,254 | 89,270,103 | |||||
Diluted | 89,988,254 | 89,270,103 |
Quarter Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||||
Gross profit | $ | 89.8 | $ | 73.2 | $ | 74.1 | $ | 228.3 | $ | 196.6 | |||||||||
Gross profit as % of revenues | 38.0 | % | 38.9 | % | 37.8 | % | 37.9 | % | 37.2 | % | |||||||||
Stock-based compensation expense | 0.4 | 0.4 | 0.4 | 1.2 | 1.3 | ||||||||||||||
Impairment charges | — | — | — | — | 1.4 | ||||||||||||||
Restructuring charges | — | 0.1 | 0.2 | 0.1 | 3.9 | ||||||||||||||
Production transfer costs (2) | 0.5 | 0.5 | 1.6 | 1.8 | 4.7 | ||||||||||||||
Other (3) | — | — | — | 0.2 | — | ||||||||||||||
Non-GAAP gross profit | $ | 90.7 | $ | 74.2 | $ | 76.3 | $ | 231.6 | $ | 207.9 | |||||||||
Non-GAAP gross profit as % of revenues | 38.4 | % | 39.4 | % | 38.9 | % | 38.4 | % | 39.3 | % | |||||||||
Research and development expenses | $ | 25.2 | $ | 25.4 | $ | 21.9 | $ | 75.4 | $ | 70.6 | |||||||||
Stock-based compensation expense | (1.9 | ) | (2.0 | ) | (1.6 | ) | (5.9 | ) | (4.5 | ) | |||||||||
Production transfer costs (2) | — | (0.2 | ) | — | (0.4 | ) | — | ||||||||||||
Non-GAAP research and development expenses | $ | 23.3 | $ | 23.2 | $ | 20.3 | $ | 69.1 | $ | 66.1 | |||||||||
Selling and administrative expenses | $ | 34.5 | $ | 37.1 | $ | 32.0 | $ | 107.4 | $ | 99.3 | |||||||||
Stock-based compensation expense | (4.2 | ) | (4.9 | ) | (4.1 | ) | (13.7 | ) | (12.4 | ) | |||||||||
Intangibles amortization expense | (1.7 | ) | (1.6 | ) | (1.3 | ) | (4.9 | ) | (5.9 | ) | |||||||||
Other (3) | (0.1 | ) | — | — | (0.2 | ) | (0.2 | ) | |||||||||||
Non-GAAP selling and administrative expenses | $ | 28.5 | $ | 30.6 | $ | 26.6 | $ | 88.6 | $ | 80.8 | |||||||||
Operating expenses | $ | 60.2 | $ | 63.0 | $ | 54.8 | $ | 184.2 | $ | 194.0 | |||||||||
Stock-based compensation expense | (6.1 | ) | (6.9 | ) | (5.7 | ) | (19.6 | ) | (16.9 | ) | |||||||||
Intangibles amortization expense | (1.7 | ) | (1.6 | ) | (1.3 | ) | (4.9 | ) | (5.9 | ) | |||||||||
Impairment charges | — | — | — | — | (19.9 | ) | |||||||||||||
Restructuring charges | (0.5 | ) | (0.5 | ) | (0.9 | ) | (1.4 | ) | (4.2 | ) | |||||||||
Production transfer costs (2) | — | (0.2 | ) | — | (0.4 | ) | — | ||||||||||||
Other (3) | (0.1 | ) | — | — | (0.2 | ) | (0.2 | ) | |||||||||||
Non-GAAP operating expenses | $ | 51.8 | $ | 53.8 | $ | 46.9 | $ | 157.7 | $ | 146.9 | |||||||||
(Loss) earnings from continuing operations | $ | (17.8 | ) | $ | 4.4 | $ | 10.5 | $ | (13.8 | ) | $ | (25.4 | ) | ||||||
Interest expense, net | 4.0 | 4.1 | 5.1 | 12.1 | 15.4 | ||||||||||||||
Provision for income taxes | 43.1 | 1.4 | 4.4 | 45.3 | 10.6 | ||||||||||||||
Earnings from continuing operations before interest and income taxes | 29.3 | 9.9 | 20.0 | 43.6 | 0.6 | ||||||||||||||
Earnings from continuing operations before interest and income taxes as % of revenues | 12.4 | % | 5.3 | % | 10.2 | % | 7.2 | % | 0.1 | % | |||||||||
Stock-based compensation expense | 6.5 | 7.3 | 6.1 | 20.8 | 18.2 | ||||||||||||||
Intangibles amortization expense | 1.7 | 1.6 | 1.3 | 4.9 | 5.9 | ||||||||||||||
Impairment charges | — | — | — | — | 21.3 | ||||||||||||||
Restructuring charges | 0.5 | 0.6 | 1.1 | 1.5 | 8.1 | ||||||||||||||
Production transfer costs (2) | 0.5 | 0.7 | 1.6 | 2.2 | 4.7 | ||||||||||||||
Other (3) | 0.1 | 1.3 | — | 1.7 | 0.2 | ||||||||||||||
Adjusted earnings from continuing operations before interest and income taxes | $ | 38.6 | $ | 21.4 | $ | 30.1 | $ | 74.7 | $ | 59.0 | |||||||||
Adjusted earnings from continuing operations before interest and income taxes as % of revenues | 16.3 | % | 11.4 | % | 15.4 | % | 12.4 | % | 11.2 | % | |||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||||
Interest expense, net | $ | 4.0 | $ | 4.1 | $ | 5.1 | $ | 12.1 | $ | 15.4 | |||||||||
Interest expense, net non-GAAP reconciling adjustments (4) | 1.6 | 1.6 | 1.5 | 4.7 | 4.3 | ||||||||||||||
Non-GAAP interest expense | $ | 2.4 | $ | 2.5 | $ | 3.6 | $ | 7.4 | $ | 11.1 | |||||||||
Provision for income taxes | $ | 43.1 | $ | 1.4 | $ | 4.4 | $ | 45.3 | $ | 10.6 | |||||||||
Income tax effects of non-GAAP reconciling adjustments (5) | (39.0 | ) | 0.7 | (2.0 | ) | (37.6 | ) | (7.3 | ) | ||||||||||
Non-GAAP provision for income taxes | $ | 4.1 | $ | 2.1 | $ | 2.4 | $ | 7.7 | $ | 3.3 | |||||||||
(Loss) earnings from continuing operations | $ | (17.8 | ) | $ | 4.4 | $ | 10.5 | $ | (13.8 | ) | $ | (25.4 | ) | ||||||
Non-GAAP reconciling adjustments (6) | 9.3 | 11.5 | 10.1 | 31.1 | 58.4 | ||||||||||||||
Interest expense, net non-GAAP reconciling adjustments (4) | 1.6 | 1.6 | 1.5 | 4.7 | 4.3 | ||||||||||||||
Income tax effects of non-GAAP reconciling adjustments (5) | (39.0 | ) | 0.7 | (2.0 | ) | (37.6 | ) | (7.3 | ) | ||||||||||
Non-GAAP net earnings | $ | 32.1 | $ | 16.8 | $ | 24.1 | $ | 59.6 | $ | 44.6 | |||||||||
Diluted (loss) earnings per share from continuing operations | $ | (0.20 | ) | $ | 0.05 | $ | 0.12 | $ | (0.15 | ) | $ | (0.28 | ) | ||||||
Earnings per share non-GAAP reconciling adjustment | 0.54 | 0.13 | 0.14 | 0.79 | 0.76 | ||||||||||||||
Non-GAAP diluted earnings per share | $ | 0.34 | $ | 0.18 | $ | 0.26 | $ | 0.64 | $ | 0.48 | |||||||||
Diluted average shares outstanding | 90,171,928 | 90,731,760 | 90,373,112 | 89,988,254 | 89,270,103 | ||||||||||||||
Non-GAAP adjustment (7) | 3,321,388 | 2,481,654 | 2,053,916 | 3,164,269 | 3,173,549 | ||||||||||||||
Non-GAAP diluted average shares outstanding (7) | 93,493,316 | 93,213,414 | 92,427,028 | 93,152,523 | 92,443,652 |
(3) | In 2018, Other expenses in Gross profit and Operating expenses represent expenses related to acquisitions and the remaining Other expenses represent an adjustment to pre-spin-off pension obligations. In 2017, Other primarily represents expenses related to the acquisition of certain assets of a capacitors manufacturer. |
(4) | Under GAAP, certain convertible debt instruments that may be settled in cash (or other assets) upon conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. Accordingly, for GAAP purposes we are required to recognize imputed interest expense on the Company’s $172.5 million of convertible senior notes due 2021 that were issued in a private placement in May 2016. The imputed interest rate is 8.12% for the convertible notes due 2021, while the actual coupon interest rate of the notes was 3.25%. The difference between the imputed interest expense and the coupon interest expense is excluded from management’s assessment of the Company’s operating performance because management believes that this non-cash expense is not indicative of its core, ongoing operating performance. |
(5) | Income tax effects of non-GAAP reconciling adjustments are calculated using the applicable tax rates in the jurisdictions of the underlying adjustments. Adjustments are also made to exclude charges related to the provisional impacts of the Tax Reform Act and the resulting consequences that were accounted for as uncertain tax positions. |
(6) | The non-GAAP reconciling adjustments are those adjustments made to reconcile Earnings from continuing operations before interest and income taxes to Adjusted earnings from continuing operations before interest and income taxes. |
(7) | The number of shares used in the diluted per share calculations on a non-GAAP basis excludes the impact of stock-based compensation expense expected to be incurred in future periods and not yet recognized in the financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method. |
September 30, 2018 | December 31, 2017 | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 68.6 | $ | 111.7 | |||
Receivables, net of allowances of $0.5 and $0.7 | 148.4 | 137.7 | |||||
Inventories, net | 154.1 | 125.6 | |||||
Prepaid and other current assets | 12.2 | 19.9 | |||||
Total current assets | 383.3 | 394.9 | |||||
Property, plant, and equipment, net | 201.3 | 183.0 | |||||
Goodwill | 887.9 | 884.9 | |||||
Intangible assets, net | 58.3 | 53.5 | |||||
Other assets and deferred charges | 34.1 | 31.8 | |||||
Assets of discontinued operations | 0.2 | 1.7 | |||||
Total assets | $ | 1,565.1 | $ | 1,549.8 | |||
Current liabilities: | |||||||
Accounts payable | $ | 82.7 | $ | 85.6 | |||
Accrued compensation and employee benefits | 34.9 | 31.2 | |||||
Other accrued expenses | 25.3 | 28.2 | |||||
Federal and other taxes on income | 4.6 | 6.6 | |||||
Total current liabilities | 147.5 | 151.6 | |||||
Long-term debt | 187.9 | 192.6 | |||||
Other liabilities | 104.6 | 67.9 | |||||
Liabilities of discontinued operations | 0.2 | 5.6 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock - $0.01 par value; 10,000,000 shares authorized; none issued | — | — | |||||
Common stock - $0.01 par value; 400,000,000 shares authorized; 90,180,960 and 89,491,471 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0.9 | 0.9 | |||||
Additional paid-in capital | 1,539.9 | 1,523.1 | |||||
Accumulated deficit | (303.8 | ) | (291.9 | ) | |||
Accumulated other comprehensive loss | (112.1 | ) | (100.0 | ) | |||
Total stockholders' equity | 1,124.9 | 1,132.1 | |||||
Total liabilities and stockholders' equity | $ | 1,565.1 | $ | 1,549.8 |
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Knowles Corp provided additional information to their SEC Filing as exhibits
Ticker: KNEvents:
CIK: 1587523
Form Type: 8-K Corporate News
Accession Number: 0001587523-18-000023
Submitted to the SEC: Wed Oct 24 2018 4:04:37 PM EST
Accepted by the SEC: Wed Oct 24 2018
Period: Wednesday, October 24, 2018
Industry: Household Audio And Video Equipment