Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Knowles Corp | exhibit991q32018.htm |
| 8-K - 8-K - Knowles Corp | a20189308-k.htm |
Q3 2018 October 24, 2018 Supplemental Information
Non-GAAP Disclaimer The financial results disclosed in this presentation include certain measures calculated and presented in accordance with GAAP. In addition to the GAAP results included in this presentation, Knowles has presented supplemental, non-GAAP gross profit, earnings before interest and income taxes, adjusted earnings before interest and income taxes and non- GAAP diluted earnings per share to facilitate evaluation of Knowles’ operating performance. These non-GAAP financial measures exclude certain amounts that are included in the most directly comparable GAAP measure. In addition, these non-GAAP financial measures do not have standard meanings and may vary from similarly titled non-GAAP financial measures used by other companies. Knowles believes that non-GAAP measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and performance, and its management team primarily focuses on non-GAAP items in evaluating Knowles’ performance for business planning purposes. Knowles believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in Knowles’ opinion, do not reflect its core operating performance. Knowles believes that its presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Knowles uses internally for purposes of assessing its core operating performance. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the reconciliation tables included in the third quarter 2018 earnings release. 2
Q3 ‘18 Financial Results (continuing operations*) Quarter over year ago period Q3FY18 Q3FY17 Change Revenues $236.2 million $196.0 million 21% Gross profit $89.8 million $74.1 million 21% Non-GAAP gross profit $90.7 million $76.3 million 19% Diluted (loss) earnings per $(0.20) $0.12 NM** share Non-GAAP diluted earnings $0.34 $0.26 31% per share *Continuing operations excludes the results of our speaker and receiver product line which was sold on July 7, 2016 and our timing device business which was sold on November 28, 2017. **Not Meaningful 3
Q4 ‘18 Projections (non-GAAP, cont. ops.)* Q4FY18E Revenues $210 million - $240 million Gross margin 41 percent – 43 percent EPS (diluted) $0.31 - $0.37 *Projections as of 10/24/18; Q4 2018 GAAP results for continuing operations are expected to include approximately $0.06 per share in stock-based compensation and $0.03 per share in amortization of intangibles and debt discount. Expected Q4 2018 GAAP results exclude potential restructuring items. 4
Historical Segment Data (Cont. Ops.; in $ millions) Audio / Precision Devices September 30, June 30, March 31, December 31, September 30, September 30, June 30, March 31, December 31, September 30, 2018 2018 2018 2017 2017 2018 2018 2018 2017 2017 Revenues $ Audio 199.0 $ 151.8 $ 146.4 $ 187.3 $ 167.8 Precision$ Devices 37.2 $ 36.6 $ 32.1 $ 28.2 $ 28.2 Gross profit $Quarter Ended 76.6 $ 58.6 $ 52.7 $ 78.7 $ 64.1 $Quarter Ended 14.4 $ 15.1 $ 13.1 $ 11.1 $ 10.5 Stock-based compensation expense 0.3 0.3 0.3 0.4 0.3 - - - - - Restructuring charges - - - 0.1 0.2 - 0.1 - - - Production transfer costs 0.1 - 0.5 2.0 1.4 0.4 0.5 0.3 - 0.2 Other - - - - - - - 0.2 - - Non-GAAP gross profit $ 77.0 $ 58.9 $ 53.5 $ 81.2 $ 66.0 $ 14.8 $ 15.7 $ 13.6 $ 11.1 $ 10.7 Non-GAAP Gross Profit as % of Revenues 38.7% 38.8% 36.5% 43.4% 39.3% 39.8% 42.9% 42.4% 39.4% 37.9% Research and development expenses$ 23.6 $ 23.9 $ 23.3 $ 21.5 $ 20.7 $ 1.5 $ 1.5 $ 1.4 $ 1.2 $ 1.2 Stock-based compensation expense (1.9) (2.0) (2.0) (1.6) (1.6) - - - - - Production transfer costs - (0.2) (0.2) - - - - - - - Non-GAAP research and development expenses$ 21.7 $ 21.7 $ 21.1 $ 19.9 $ 19.1 $ 1.5 $ 1.5 $ 1.4 $ 1.2 $ 1.2 Non-GAAP Research and Development Expenses as % of Revenues 10.9% 14.3% 14.4% 10.6% 11.4% 4.0% 4.1% 4.4% 4.3% 4.3% Selling and administrative expenses$ 15.3 $ 17.1 $ 16.9 $ 10.0 $ 15.3 $ 6.0 $ 6.5 $ 5.6 $ 4.7 $ 4.5 Stock-based compensation expense (1.1) (1.3) (1.1) (1.1) (0.9) (0.2) (0.2) (0.2) (0.2) (0.1) Intangibles amortization expense (1.2) (1.1) (1.2) (1.2) (1.1) (0.5) (0.5) (0.4) (0.2) (0.2) Production transfer costs - - - (0.1) - - - - - - Non-GAAP selling and administrative expenses$ 13.0 $ 14.7 $ 14.6 $ 7.6 $ 13.3 $ 5.3 $ 5.8 $ 5.0 $ 4.3 $ 4.2 Non-GAAP Selling and Administrative Expenses as % of Revenues 6.5% 9.7% 10.0% 4.1% 7.9% 14.2% 15.8% 15.6% 15.2% 14.9% Operating expenses$ 39.20 $ 41.50 $ 40.50 $ 33.50 $ 36.40 $ 7.50 $ 8.00 $ 7.10 $ 5.90 $ 5.70 Stock-based compensation expense (3.0) (3.3) (3.1) (2.7) (2.5) (0.2) (0.2) (0.2) (0.2) (0.1) Intangibles amortization expense (1.2) (1.1) (1.2) (1.2) (1.1) (0.5) (0.5) (0.4) (0.2) (0.2) Restructuring charges (0.3) (0.5) (0.3) (2.0) (0.4) - - (0.1) - - Production transfer costs - (0.2) (0.2) (0.1) - - - - - - Non-GAAP operating expenses $ 34.7 $ 36.4 $ 35.7 $ 27.5 $ 32.4 $ 6.8 $ 7.3 $ 6.4 $ 5.5 $ 5.4 Non-GAAP Operating Expenses as % of Revenues 17.4% 24.0% 24.4% 14.7% 19.3% 18.3% 19.9% 19.9% 19.5% 19.1% Operating earnings$ 37.4 $ 17.1 $ 12.2 $ 45.2 $ 27.7 $ 6.9 $ 7.1 $ 6.0 $ 5.2 $ 4.8 Other (income) expense, net (0.1) (0.2) (0.1) (1.0) (0.4) (0.1) 0.7 (0.2) (0.4) (0.3) Earnings before interest and income taxes 37.5 17.3 12.3 46.2 28.1 7.0 6.4 6.2 5.6 5.1 Stock-based compensation expense 3.3 3.6 3.4 3.1 2.8 0.2 0.2 0.2 0.2 0.1 Intangibles amortization expense 1.2 1.1 1.2 1.2 1.1 0.5 0.5 0.4 0.2 0.2 Restructuring charges 0.3 0.5 0.3 2.1 0.6 - 0.1 0.1 - - Production transfer costs 0.1 0.2 0.7 2.1 1.4 0.4 0.5 0.3 - 0.2 Other - - - - - - 1.3 0.2 - - Adjusted earnings before interest and income taxes$ 42.4 $ 22.7 $ 17.9 $ 54.7 $ 34.0 $ 8.1 $ 9.0 $ 7.4 $ 6.0 $ 5.6 Adjusted Earnings Before Interest and Income Taxes as % of Revenues 21.3% 15.0% 12.2% 29.2% 20.3% 21.8% 24.6% 23.1% 21.3% 19.9% 5 5
Reconciliation of Segment EBIT to Consolidated Net Earnings Audio / Precision Devices (Cont. Ops.; in $ millions) Quarter Ended September 30, June 30, March 31, December 31, September 30, 2018 2018 2018 2017 2017 Earnings before interest and income taxes Audio $ 37.5 $ 17.3 $ 12.3 $ 46.2 $ 28.1 Precision Devices 7.0 6.4 6.2 5.6 5.1 Total segments 44.5 23.7 18.5 51.8 33.2 Corporate expense / other 15.2 13.8 14.1 12.4 13.2 Interest expense, net 4.0 4.1 4.0 5.2 5.1 Earnings before income taxes 25.3 5.8 0.4 34.2 14.9 Provision for income taxes 43.1 1.4 0.8 2.3 4.4 Net (loss) earnings $ (17.8) $ 4.4 $ (0.4) $ 31.9 $ 10.5 6 6