| [July 28, 2014] |
 |
Knowles Reports Q2 2014 Financial Results and Provides Outlook for Q3 2014
ITASCA, Ill. --(Business Wire)--
Knowles Corporation (NYSE: KN), a market leader and global supplier of
advanced micro-acoustic solutions and specialty components, today
announced results for the second quarter ended June 30, 2014 and
provided projections for the third quarter of 2014.
"Our second quarter results were above our prior projections," said
Jeffrey Niew, President and CEO of Knowles. "We delivered
better-than-expected revenue driven by both our Mobile Consumer
Electronics and Specialty Components segments. We saw stronger demand
for our micro-acoustic solutions from North American and Chinese OEM
customers, and sales of Precision Devices were better than anticipated
aided by continued 4G/LTE infrastructure spending, particularly in
China."
"Based on our current expectations of customer product launches and
projected builds in the second half of the year, we continue to
anticipate that 2014 will be a year of modest revenue growth for
Knowles. In addition, restructuring initiatives across our business
units are all on track and we remain committed to delivering
year-over-year operating margin expansion in the fourth quarter of 2014."
Business Highlights
Significant achievements in the quarter relative to business
performance, innovation and operational excellence are as follows:
-
Doubled sales to Chinese OEMs from the year ago period.
-
Shipped our two millionth MEMS microphone to the hearing health
industry.
-
Began shipment of N' BassTM-enabled Integrated Audio
Solution for tablets with a leading Chinese OEM.
-
Completed transfer of Capacitor manufacturing operations from the UK
to an existing facility in China.
-
Restructuring of Hearing Health business remains on track and is
expected to be completed in the first half of 2015.
-
Closed Vienna production facility with financial benefits beginning in
the third quarter of 2014.
-
Leveraged MEMS technology leadership to deliver the world's first
digital microphone supporting ultrasonic bandwidth which can enable a
whole new category of applications in the mobile consumer market.
Financial Highlights
The following highlights the Company's financial performance on both a
GAAP and supplemental non-GAAP basis. The Company provides supplemental
information regarding its gross profit, operating expenses, earnings
before interest and income taxes, adjusted earnings before interest and
income taxes, net earnings and diluted earnings per share on a non-GAAP
basis that excludes stock compensation as well as certain intangibles
amortization expense, restructuring and production transfer costs, and
other charges which management considers to be outside our core
operating results. Non-GAAP results are not presented in accordance with
GAAP and may not be comparable to similarly titled non-GAAP information
provided by other companies. Non-GAAP information should be considered a
supplement to, and not a substitute for, financial statements prepared
in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is
attached to this press release.
-
Revenue for the second quarter of 2014 was $281.0 million compared
with $296.7 million reported in the same period one year ago.
-
Gross profit for the second quarter of 2014 was $33.8 million compared
with gross profit of $101.2 million reported in the same period one
year ago. Non-GAAP gross profit for the second quarter of 2014 was
$82.1 million compared with non-GAAP gross profit of $105.6 million,
reported in the same period one year ago.
-
Loss before interest and income taxes for the second quarter of 2014
was $(44.0) million compared with earnings before interest and income
taxes of $28.0 million in the year ago period. Current period results
include $25.8 million of fixed asset and related inventory charges,
$20.7 million in restructuring charges, $10.8 million from
amortization of intangibles, $5.8 million in production transfer costs
and $2.4 million in stock-based compensation.
-
Adjusted earnings before interest and income taxes for the second
quarter of 2014 were $21.5 million compared with $50.6 million
reported in the same period one year ago.
-
Provision for income taxes for the second quarter of 2014 was $33.1
million compared with a benefit from income taxes of $0.8 million
reported in the same period one year ago. Provision for income taxes
for the second quarter of 2014 included discrete tax items of $32.7
million, primarily related to valuation allowances recorded against
certain deferred tax assets.
-
Net loss for the second quarter of 2014 was $(78.9) million compared
with net earnings of $16.7 million reported in the same period one
year ago. Non-GAAP net earnings for the second quarter of 2014 was
$22.2 million compared with $35.4 million reported in the same period
one year ago.
-
Loss per share for the second quarter of 2014 was $(0.93) per share
compared with EPS of $0.20 per diluted share in the year ago period.
-
Non-GAAP EPS for the second quarter of 2014 was $0.26 per diluted
share, which includes a $0.05 per share benefit from certain discrete
tax effects, compared with $0.42 in the year ago period.
Third Quarter 2014 Outlook
The following forward looking guidance for the third quarter ending
September 30, 2014, based on current business trends and conditions is
as follows:
-
Revenue: $310 million to $330 million
-
Non-GAAP Gross Margin: 32 percent to 34 percent
-
Adjusted EBIT Margin: 14 percent to 15 percent
-
Non-GAAP EPS: $0.45 to $0.52
Q3 2014 GAAP results are expected to include approximately $3 million in
stock based compensation, $11 million in amortization of intangibles, $7
million in production transfer related costs, $5 million to $10 million
in restructuring costs, and related tax effects on these items.
Webcast and Conference Call Information
Investors can listen to a live or replay webcast of the Company's
quarterly financial conference call at http://investor.knowles.com.
The live webcast will begin today at 3:30 p.m. Central time. The webcast
replay will be available after 7:00 p.m. Central time.
Investors can also listen to the live call at 3:30 p.m. Central time
today by calling (877) 359-9508 (United States) or (224) 357-2393
(International). The conference call replay will be available after 7:00
p.m. Central time on July 28, 2014 through 11:59 p.m. Central time on
August 4, 2014 at (855) 859-2056 (United States) or (404) 537-3406
(International). The access code is 69142322.
About Knowles:
Knowles Corporation (NYSE: KN) is a market leader and global supplier of
advanced micro-acoustic solutions and specialty components serving the
mobile communications, consumer electronics, medical technology,
military, aerospace and industrial markets. Knowles has a leading
position in micro-electro-mechanical systems microphones, speakers and
receivers which are used in smartphones, tablets and mobile handsets.
Knowles is also a leading manufacturer of transducers used in hearing
aids and other medical devices and has a strong position in oscillators
(timing devices) and capacitor components which enable various types of
communication. Knowles' focus on the customer, combined with unique
technology, rigorous testing and global scale, helps to deliver
innovative solutions and consistently dependable and precise products.
Founded in 1946 and headquartered in Itasca, Illinois, Knowles has more
than 10,000 employees in 36 locations around the world. For more
information, visit www.knowles.com.
Forward Looking Statements
This news release contains forward-looking statements within the meaning
of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. The words "believe," "project," "expect,"
and similar expressions, among others, generally identify
forward-looking statements. The statements in this news release are
based on current plans, expectations, forecasts and assumptions
involving risks and uncertainties that could cause actual outcomes or
results to differ materially from those outcomes or results that are
projected, anticipated or implied in these statements. These risks and
uncertainties include, but are not limited to: the pace and success of
achieving the cost savings from our announced restructurings;
fluctuations in our stock's market price; fluctuations in operating
results and cash flows; unexpected technological obsolescence and the
emergence of new technologies; changes in macroeconomic conditions, both
in the U.S. and internationally; our financial performance during and
after the current economic conditions; foreign currency exchange rate
fluctuations; our ability to maintain and improve costs, quality and
delivery for our customers; our ability to qualify our products and
facilities with customers; risks and costs inherent in litigation; our
ability to obtain, protect, defend or monetize our intellectual property
rights; whether our announced restructurings will adversely affect our
cost structure; increases in the costs of critical raw materials and
components; availability of raw materials and components; competition;
anticipated growth for us and adoption of our technologies and solutions
that may not occur; managing rapid growth; managing rapid declines in
customer demand for certain of our products or solutions and other
related customer challenges that may occur; our ability to successfully
consummate acquisitions and divestitures; our obligations and risks
under various transaction agreements that were executed as part of our
spin-off from our former parent company, Dover Corporation; managing the
integration of our businesses which were included in our recent spin-off
from Dover Corporation; managing new product ramps and introductions for
our customers; risks associated with international sales and operations;
retaining key personnel; our dependence on a limited number of large
customers; business and competitive factors generally affecting the
advanced micro-acoustic solutions and specialty components industry, our
customers and our business; other factors that we may not have currently
identified or quantified; and other risks, relevant factors and
uncertainties identified in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2013, subsequent Reports on Forms 10-Q
and 8-K and our other filings we make with the SEC. Knowles disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law.
Supplemental Information
The financial results disclosed in this release include certain measures
calculated and presented in accordance with GAAP. In addition to the
GAAP results included in this press release, Knowles has presented
supplemental, non-GAAP gross profit, earnings before interest and income
taxes, adjusted earnings before interest and income taxes, net earnings
and 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 uses non-GAAP measures as supplements
to its GAAP results of operations in evaluating certain aspects of its
business, and its Board of Directors and executive management team focus
on non-GAAP items as key measures of Knowles' performance for business
planning purposes. These measures assist Knowles in 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 elsewhere in
this release.
|
INVESTOR SUPPLEMENT - SECOND QUARTER 2014
|
|
|
|
|
|
|
|
|
|
KNOWLES CORPORATION
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
(in millions except share and per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
June 30,
2014
|
|
March 31,
2014
|
|
June 30,
2013
|
|
Revenues
|
|
$
|
281.0
|
|
|
$
|
273.4
|
|
$
|
296.7
|
|
|
Cost of goods sold
|
|
|
230.8
|
|
|
|
190.3
|
|
|
191.5
|
|
|
Restructuring charges
|
|
|
16.4
|
|
|
|
-
|
|
|
4.0
|
|
|
Gross profit
|
|
|
33.8
|
|
|
|
83.1
|
|
|
101.2
|
|
|
Research and development expenses
|
|
|
21.7
|
|
|
|
19.2
|
|
|
21.2
|
|
|
Selling and administrative expenses
|
|
|
52.0
|
|
|
|
52.5
|
|
|
45.8
|
|
|
Restructuring charges
|
|
|
4.3
|
|
|
|
0.2
|
|
|
5.5
|
|
|
Operating expenses
|
|
|
78.0
|
|
|
|
71.9
|
|
|
72.5
|
|
|
Operating (loss) earnings
|
|
|
(44.2
|
)
|
|
|
11.2
|
|
|
28.7
|
|
|
Interest expense, net
|
|
|
1.8
|
|
|
|
0.7
|
|
|
12.1
|
|
|
Other (income) expense, net
|
|
|
(0.2
|
)
|
|
|
0.4
|
|
|
0.7
|
|
|
(Loss) earnings before income taxes
|
|
|
(45.8
|
)
|
|
|
10.1
|
|
|
15.9
|
|
|
Provision for (benefit from) income taxes
|
|
|
33.1
|
|
|
|
2.5
|
|
|
(0.8
|
)
|
|
Net (loss) earnings
|
|
$
|
(78.9
|
)
|
|
$
|
7.6
|
|
$
|
16.7
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic (loss) earnings per share (1)
|
|
$
|
(0.93
|
)
|
|
$
|
0.09
|
|
$
|
0.20
|
|
|
Diluted (loss) earnings per share (1)
|
|
$
|
(0.93
|
)
|
|
$
|
0.09
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
Basic (1)
|
|
|
85,042,334
|
|
|
|
85,023,862
|
|
|
85,019,159
|
|
|
Diluted (1)
|
|
|
85,042,334
|
|
|
|
85,126,796
|
|
|
85,019,159
|
|
|
(1) On February 28, 2014, Dover shareholders of record as
of the close of business on February 19, 2014 received one share of
Knowles common stock for every two shares of Dover's common stock
held as of the record date. The computation of basic and diluted
earnings per common share for all periods through December 31, 2013
is calculated using the shares distributed on February 28, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KNOWLES CORPORATION
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
(in millions except share and per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
2014
|
|
June 30,
2013
|
|
Revenues
|
|
$
|
554.4
|
|
|
$
|
572.8
|
|
|
Cost of goods sold
|
|
|
421.1
|
|
|
|
371.0
|
|
|
Restructuring charges
|
|
|
16.4
|
|
|
|
5.9
|
|
|
Gross profit
|
|
|
116.9
|
|
|
|
195.9
|
|
|
Research and development expenses
|
|
|
40.9
|
|
|
|
42.2
|
|
|
Selling and administrative expenses
|
|
|
104.5
|
|
|
|
95.8
|
|
|
Restructuring charges
|
|
|
4.5
|
|
|
|
7.0
|
|
|
Operating expenses
|
|
|
149.9
|
|
|
|
145.0
|
|
|
Operating (loss) earnings
|
|
|
(33.0
|
)
|
|
|
50.9
|
|
|
Interest expense, net
|
|
|
2.5
|
|
|
|
24.0
|
|
|
Other expense (income), net
|
|
|
0.2
|
|
|
|
(1.1
|
)
|
|
(Loss) earnings before income taxes
|
|
|
(35.7
|
)
|
|
|
28.0
|
|
|
Provision for (benefit from) income taxes
|
|
|
35.6
|
|
|
|
(0.6
|
)
|
|
Net (loss) earnings
|
|
$
|
(71.3
|
)
|
|
$
|
28.6
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
Basic (loss) earnings per share (1)
|
|
$
|
(0.84
|
)
|
|
$
|
0.34
|
|
|
Diluted (loss) earnings per share (1)
|
|
$
|
(0.84
|
)
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
Basic (1)
|
|
|
85,033,149
|
|
|
|
85,019,159
|
|
|
Diluted (1)
|
|
|
85,033,149
|
|
|
|
85,019,159
|
|
|
(1) On February 28, 2014, Dover shareholders of record as
of the close of business on February 19, 2014 received one share of
Knowles common stock for every two shares of Dover's common stock
held as of the record date. The computation of basic and diluted
earnings per common share for all periods through December 31, 2013
is calculated using the shares distributed on February 28, 2014.
|
|
KNOWLES CORPORATION
|
|
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES (1)
|
|
(in millions, except for share and per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
June 30,
2014
|
|
March 31,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2013
|
|
Gross Profit
|
|
$
|
33.8
|
|
|
$
|
83.1
|
|
|
$
|
101.2
|
|
|
$
|
116.9
|
|
|
$
|
195.9
|
|
|
Stock-based Compensation Expense
|
|
|
0.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.3
|
|
|
|
-
|
|
|
Fixed Asset and Related Inventory Charges
|
|
|
25.8
|
|
|
|
0.8
|
|
|
|
-
|
|
|
|
26.6
|
|
|
|
0.5
|
|
|
Restructuring Charges
|
|
|
16.4
|
|
|
|
-
|
|
|
|
4.0
|
|
|
|
16.4
|
|
|
|
5.9
|
|
|
Production Transfers Costs (2)
|
|
|
5.8
|
|
|
|
5.1
|
|
|
|
1.8
|
|
|
|
10.9
|
|
|
|
2.4
|
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.4
|
)
|
|
|
-
|
|
|
|
(1.4
|
)
|
|
Non-GAAP Gross Profit
|
|
$
|
82.1
|
|
|
$
|
89.0
|
|
|
$
|
105.6
|
|
|
$
|
171.1
|
|
|
$
|
203.3
|
|
|
Non-GAAP Gross Profit as % of Revenues
|
|
|
29.2
|
%
|
|
|
32.6
|
%
|
|
|
35.6
|
%
|
|
|
30.9
|
%
|
|
|
35.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and Development Expenses
|
|
$
|
21.7
|
|
|
$
|
19.2
|
|
|
$
|
21.2
|
|
|
$
|
40.9
|
|
|
$
|
42.2
|
|
|
Stock-Based Compensation Expense
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
Non-GAAP Research and Development Expenses
|
|
$
|
21.5
|
|
|
$
|
19.2
|
|
|
$
|
21.2
|
|
|
$
|
40.7
|
|
|
$
|
42.2
|
|
|
Non-GAAP Research and Development Expenses as % of Revenues
|
|
|
7.7
|
%
|
|
|
7.0
|
%
|
|
|
7.1
|
%
|
|
|
7.3
|
%
|
|
|
7.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and Administrative Expenses
|
|
$
|
52.0
|
|
|
$
|
52.5
|
|
|
$
|
45.8
|
|
|
$
|
104.5
|
|
|
$
|
95.8
|
|
|
Stock-Based Compensation Expense
|
|
|
(1.9
|
)
|
|
|
(1.5
|
)
|
|
|
(0.6
|
)
|
|
|
(3.4
|
)
|
|
|
(1.1
|
)
|
|
Intangibles Amortization Expense
|
|
|
(10.8
|
)
|
|
|
(10.7
|
)
|
|
|
(12.3
|
)
|
|
|
(21.5
|
)
|
|
|
(24.0
|
)
|
|
Production Transfers Costs (2)
|
|
|
-
|
|
|
|
(0.7
|
)
|
|
|
0.2
|
|
|
|
(0.7
|
)
|
|
|
-
|
|
|
Other
|
|
|
-
|
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
Non-GAAP Selling and Administrative Expenses
|
|
$
|
39.3
|
|
|
$
|
37.3
|
|
|
$
|
33.1
|
|
|
$
|
76.6
|
|
|
$
|
70.7
|
|
|
Non-GAAP Selling and Administrative Expenses as % of Revenues
|
|
|
14.0
|
%
|
|
|
13.6
|
%
|
|
|
11.2
|
%
|
|
|
13.8
|
%
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
$
|
78.0
|
|
|
$
|
71.9
|
|
|
$
|
72.5
|
|
|
$
|
149.9
|
|
|
$
|
145.0
|
|
|
Stock-Based Compensation Expense
|
|
|
(2.1
|
)
|
|
|
(1.5
|
)
|
|
|
(0.6
|
)
|
|
|
(3.6
|
)
|
|
|
(1.1
|
)
|
|
Intangibles Amortization Expense
|
|
|
(10.8
|
)
|
|
|
(10.7
|
)
|
|
|
(12.3
|
)
|
|
|
(21.5
|
)
|
|
|
(24.0
|
)
|
|
Restructuring Charges
|
|
|
(4.3
|
)
|
|
|
(0.2
|
)
|
|
|
(5.5
|
)
|
|
|
(4.5
|
)
|
|
|
(7.0
|
)
|
|
Production Transfers Costs (2)
|
|
|
-
|
|
|
|
(0.7
|
)
|
|
|
0.2
|
|
|
|
(0.7
|
)
|
|
|
-
|
|
|
Other
|
|
|
-
|
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
Non-GAAP Operating Expenses
|
|
$
|
60.8
|
|
|
$
|
56.5
|
|
|
$
|
54.3
|
|
|
$
|
117.3
|
|
|
$
|
112.9
|
|
|
Non-GAAP Operating Expenses as % of Revenues
|
|
|
21.6
|
%
|
|
|
20.7
|
%
|
|
|
18.3
|
%
|
|
|
21.2
|
%
|
|
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Earnings
|
|
$
|
(78.9
|
)
|
|
$
|
7.6
|
|
|
$
|
16.7
|
|
|
$
|
(71.3
|
)
|
|
$
|
28.6
|
|
|
Interest Expense, net
|
|
|
1.8
|
|
|
|
0.7
|
|
|
|
12.1
|
|
|
|
2.5
|
|
|
|
24.0
|
|
|
Provision for (Benefit from) Income Taxes
|
|
|
33.1
|
|
|
|
2.5
|
|
|
|
(0.8
|
)
|
|
|
35.6
|
|
|
|
(0.6
|
)
|
|
(Loss) Earnings Before Interest and Income Taxes (3)
|
|
|
(44.0
|
)
|
|
|
10.8
|
|
|
|
28.0
|
|
|
|
(33.2
|
)
|
|
|
51.9
|
|
|
Stock-Based Compensation Expense
|
|
|
2.4
|
|
|
|
1.5
|
|
|
|
0.6
|
|
|
|
3.9
|
|
|
|
1.1
|
|
|
Intangibles Amortization Expense
|
|
|
10.8
|
|
|
|
10.7
|
|
|
|
12.3
|
|
|
|
21.5
|
|
|
|
24.0
|
|
|
Fixed Asset and Related Inventory Charges
|
|
|
25.8
|
|
|
|
0.8
|
|
|
|
-
|
|
|
|
26.6
|
|
|
|
0.5
|
|
|
Restructuring Charges
|
|
|
20.7
|
|
|
|
0.2
|
|
|
|
9.5
|
|
|
|
20.9
|
|
|
|
12.9
|
|
|
Production Transfers Costs (2)
|
|
|
5.8
|
|
|
|
5.8
|
|
|
|
1.6
|
|
|
|
11.6
|
|
|
|
2.4
|
|
|
Other
|
|
|
-
|
|
|
|
2.3
|
|
|
|
(1.4
|
)
|
|
|
2.3
|
|
|
|
(1.4
|
)
|
|
Adjusted Earnings Before Interest and Income Taxes
|
|
$
|
21.5
|
|
|
$
|
32.1
|
|
|
$
|
50.6
|
|
|
$
|
53.6
|
|
|
$
|
91.4
|
|
|
Adjusted Earnings Before Interest and Income Taxes as % of
Revenues
|
|
|
7.7
|
%
|
|
|
11.7
|
%
|
|
|
17.1
|
%
|
|
|
9.7
|
%
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Earnings
|
|
$
|
(78.9
|
)
|
|
$
|
7.6
|
|
|
$
|
16.7
|
|
|
$
|
(71.3
|
)
|
|
$
|
28.6
|
|
|
Non-GAAP Net Earnings Reconciling Adjustments
|
|
|
65.5
|
|
|
|
21.3
|
|
|
|
22.6
|
|
|
|
86.8
|
|
|
|
39.5
|
|
|
Income Tax Effects of Non-GAAP Reconciling Adjustments
|
|
|
35.6
|
|
|
|
(1.4
|
)
|
|
|
(3.9
|
)
|
|
|
34.2
|
|
|
|
(6.0
|
)
|
|
Non-GAAP Net Earnings
|
|
$
|
22.2
|
|
|
$
|
27.5
|
|
|
$
|
35.4
|
|
|
$
|
49.7
|
|
|
$
|
62.1
|
|
|
Non-GAAP Net Earnings as % of Revenues
|
|
|
7.9
|
%
|
|
|
10.1
|
%
|
|
|
11.9
|
%
|
|
|
9.0
|
%
|
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (Benefit from) Income Taxes
|
|
$
|
33.1
|
|
|
$
|
2.5
|
|
|
$
|
(0.8
|
)
|
|
$
|
35.6
|
|
|
$
|
(0.6
|
)
|
|
Income Tax Effects of Non-GAAP Reconciling Adjustments
|
|
|
35.6
|
|
|
|
(1.4
|
)
|
|
|
(3.9
|
)
|
|
|
34.2
|
|
|
|
(6.0
|
)
|
|
Non-GAAP Provision for (Benefit from) Income Taxes
|
|
$
|
(2.5
|
)
|
|
$
|
3.9
|
|
|
$
|
3.1
|
|
|
$
|
1.4
|
|
|
$
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted Earnings per Share (4)
|
|
$
|
0.26
|
|
|
$
|
0.32
|
|
|
$
|
0.42
|
|
|
$
|
0.58
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Average Shares Outstanding (4)
|
|
|
85,042,334
|
|
|
|
85,126,796
|
|
|
|
85,019,159
|
|
|
|
85,033,149
|
|
|
|
85,019,159
|
|
|
Non-GAAP Adjustment (5)
|
|
|
755,153
|
|
|
|
121,919
|
|
|
|
-
|
|
|
|
492,478
|
|
|
|
-
|
|
|
Non-GAAP Diluted Average Shares Outstanding (4) (5)
|
|
|
85,797,487
|
|
|
|
85,248,715
|
|
|
|
85,019,159
|
|
|
|
85,525,627
|
|
|
|
85,019,159
|
|
|
Notes:
|
|
|
|
|
|
(1) In addition to the GAAP financial measures included
herein, Knowles has presented certain non-GAAP financial measures.
Knowles uses non-GAAP measures as supplements to its GAAP results
of operations in evaluating certain aspects of its business, and
its Board of Directors and executive management team focus on
non-GAAP items as key measures of Knowles' performance for
business planning purposes. These measures assist Knowles in
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 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.
|
|
|
|
|
(2) Production Transfer Costs represent one-time and
duplicate costs incurred to migrate manufacturing to new or existing
facilities in Asia, primarily for speakers, hearing health products,
and capacitors. These amounts are included in the corresponding
Gross Profit, Research and Development Expenses, Selling and
Administrative Expenses, Operating Expenses and Earnings Before
Interest and Income Taxes for each period presented.
|
|
|
|
|
(3) Amounts in table may not total due to rounding.
|
|
|
|
|
(4) On February 28, 2014, Dover shareholders of record as
of the close of business on February 19, 2014 received one share of
Knowles common stock for every two shares of Dover's common stock
held as of the record date. The computation diluted earnings per
common share for all periods through December 31, 2013 is calculated
using the shares distributed on February 28, 2014.
|
|
|
|
|
(5) 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.
|
|
KNOWLES CORPORATION
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in millions, except for share and per share amounts)
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
|
|
(unaudited)
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
44.6
|
|
|
$
|
105.6
|
|
Receivables, net of allowances of $0.8 and $1.7
|
|
|
207.3
|
|
|
|
224.6
|
|
Inventories, net
|
|
|
155.9
|
|
|
|
149.2
|
|
Prepaid and other current assets
|
|
|
15.9
|
|
|
|
11.8
|
|
Deferred tax assets
|
|
|
8.0
|
|
|
|
10.7
|
|
Total current assets
|
|
|
431.7
|
|
|
|
501.9
|
|
Property, plant and equipment, net
|
|
|
335.7
|
|
|
|
361.0
|
|
Goodwill
|
|
|
958.2
|
|
|
|
961.9
|
|
Intangible assets, net
|
|
|
305.5
|
|
|
|
318.3
|
|
Other assets and deferred charges
|
|
|
41.9
|
|
|
|
27.1
|
|
Total assets
|
|
$
|
2,073.0
|
|
|
$
|
2,170.2
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Current maturities of long-term debt
|
|
$
|
7.5
|
|
|
$
|
-
|
|
Accounts payable
|
|
|
155.1
|
|
|
|
143.8
|
|
Accrued compensation and employee benefits
|
|
|
39.1
|
|
|
|
40.9
|
|
Other accrued expenses
|
|
|
47.9
|
|
|
|
25.2
|
|
Federal and other taxes on income
|
|
|
18.4
|
|
|
|
-
|
|
Total current liabilities
|
|
|
268.0
|
|
|
|
209.9
|
|
Long-term debt
|
|
|
392.5
|
|
|
|
-
|
|
Deferred income taxes
|
|
|
63.7
|
|
|
|
45.9
|
|
Other liabilities
|
|
|
30.1
|
|
|
|
27.1
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Net parent company investment in Knowles Corporation, prior to
separation
|
|
|
-
|
|
|
|
1,850.8
|
|
|
|
|
|
|
|
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;
85,038,904 shares issued at June 30, 2014
|
|
|
0.9
|
|
|
|
-
|
|
Additional paid-in capital
|
|
|
1,368.0
|
|
|
|
-
|
|
Accumulated deficit
|
|
|
(68.3
|
)
|
|
|
-
|
|
Accumulated other comprehensive earnings
|
|
|
18.1
|
|
|
|
36.5
|
|
Total stockholders' equity
|
|
|
1,318.7
|
|
|
|
36.5
|
|
Total equity
|
|
|
1,318.7
|
|
|
|
1,887.3
|
|
Total liabilities and equity
|
|
$
|
2,073.0
|
|
|
$
|
2,170.2
|
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