Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Knowles Corp | exhibit991q32016.htm |
| 8-K - 8-K - Knowles Corp | a20169308-k.htm |
October 24, 2016
Q3 ’16
Supplemental Information
Non-GAAP Disclaimer
2
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 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 in the third
quarter 2016 earnings release.
Q3 ‘16 Financial Results
(continuing operations)
3
Quarter over year ago period Q3FY16 Q3FY15
Revenue $243.1 million $246.7 million
Gross Profit $94.9 million $97.3 million
Non-GAAP Gross Profit $95.7 million $102.1 million
Diluted Earnings Per Share $0.24 $0.05
Non-GAAP Diluted Earnings Per
Share
$0.37 $0.29
Revenue
(Cont. Ops.)
4
$246.7
$223.5
$185.3 $190.3
$243.1
$0
$50
$100
$150
$200
$250
$300
Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16
Q3 ’16 Revenue by Segment
Cont. Ops. (% of revenue)
5
Mobile
Consumer
Electronics
58%
Specialty
Components
42%
Q4 ‘16 Projections
(non-GAAP, cont. ops.)*
6
Q4FY16E
Revenue $225 million - $245 million
Gross Margin 38 percent - 41 percent
EPS (diluted) $0.29 - $0.35
*Projections as of 10/24/16; Q4 2016 GAAP results for continuing operations are expected to include approximately $0.05 per share in stock-
based compensation, $0.03 per share in amortization of intangibles, $0.01 per share in amortization of debt discount, $0.01 per share in
production transfer costs. Expected Q4 2016 GAAP results exclude potential restructuring items.
Historical Segment Data
7
(Cont. Ops.; in $ millions)
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
September 30,
2015
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
September 30,
2015
Revenues 140.4$ 82.2$ 83.3$ 113.5$ 141.3$ 102.7$ 108.1$ 102.0$ 110.0$ 105.4$
Gross Profit 55.6$ 32.7$ 29.1$ 44.4$ 57.6$ 40.3$ 40.8$ 38.4$ 37.3$ 40.2$
Stock-Based Compensation Expense 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.1
Fixed Asset, Inventory and Other Charges - 0.3 - 1.2 - - - - 2.1 -
Restructuring Charges - 0.1 0.2 0.2 0.2 - 0.2 0.8 2.4 0.1
Production Transfers Costs - - 0.1 0.3 0.2 0.4 1.2 1.2 3.6 3.0
Other - - - 1.2 0.8 - - - - -
Non-GAAP Gross Profit 55.7$ 33.2$ 29.5$ 47.4$ 58.9$ 40.9$ 42.4$ 40.6$ 45.6$ 43.4$
Non-GAAP Gross Profit as % of Revenues 39.7% 40.4% 35.4% 41.8% 41.7% 39.8% 39.2% 39.8% 41.5% 41.2%
Research and Development Expenses 16.3$ 18.9$ 19.1$ 22.4$ 21.7$ 7.0$ 6.9$ 7.0$ 7.5$ 6.7$
Stock-Based Compensation Expense (1.2) (1.2) (0.9) (1.0) (0.8) (0.1) (0.1) - - 0.1
Fixed Asset, Inventory and Other Charges - (0.1) (0.1) (0.8) - - - - - -
Non-GAAP Research and Development Expenses 15.1$ 17.6$ 18.1$ 20.6$ 20.9$ 6.9$ 6.8$ 7.0$ 7.5$ 6.8$
Non-GAAP Research and Development Expenses as % of Revenues 10.8% 21.4% 21.7% 18.1% 14.8% 6.7% 6.3% 6.9% 6.8% 6.5%
Selling and Administrative Expenses 16.5$ 16.8$ 15.9$ 19.7$ 20.0$ 13.7$ 15.7$ 15.5$ 15.8$ 15.5$
Stock-Based Compensation Expense (0.9) (0.8) (0.9) (0.6) (0.9) 0.1 (0.3) (0.6) (0.5) (0.4)
Intangibles Amortization Expense (2.8) (2.8) (2.8) (2.7) (2.7) (2.8) (2.8) (2.8) (2.8) (2.8)
Fixed Asset, Inventory and Other Charges - - - (0.1) - - - - - -
Other - - - (0.2) (0.7) - - (0.1) - -
Non-GAAP Selling and Administrative Expenses 12.8$ 13.2$ 12.2$ 16.1$ 15.7$ 11.0$ 12.6$ 12.0$ 12.5$ 12.3$
Non-GAAP Selling and Administrative Expenses as % of Revenues 9.1% 16.1% 14.6% 14.2% 11.1% 10.7% 11.7% 11.8% 11.4% 11.7%
Operating Expenses 33.7$ 38.8$ 37.8$ 44.8$ 49.9$ 20.7$ 23.2$ 23.0$ 23.3$ 22.4$
Stock-Based Compensation Expense (2.1) (2.0) (1.8) (1.6) (1.7) - (0.4) (0.6) (0.5) (0.3)
Intangibles Amortization Expense (2.8) (2.8) (2.8) (2.7) (2.7) (2.8) (2.8) (2.8) (2.8) (2.8)
Fixed Asset, Inventory and Other Charges - (0.1) (0.1) (0.9) - - - - - -
Restructuring Charges (0.9) (3.1) (2.8) (2.7) (8.2) - (0.6) (0.5) - (0.2)
Impairment of Intangible Assets - - (1.0) (0.4) - - - - -
Other - - - (0.2) (0.7) - - (0.1) - -
Non-GAAP Operating Expenses 27.9$ 30.8$ 30.3$ 35.7$ 36.2$ 17.9$ 19.4$ 19.0$ 20.0$ 19.1$
Non-GAAP Operating Expenses as % of Revenues 19.9% 37.5% 36.4% 31.4% 25.6% 17.4% 17.9% 18.6% 18.2% 18.1%
Operating Earnings (Loss) 21.9$ (6.1)$ (8.7)$ (0.4)$ 7.7$ 19.6$ 17.6$ 15.4$ 14.0$ 17.8$
Other (Income) Expense, net (0.1) (0.2) (0.1) (0.1) 0.7 (0.2) (0.4) (0.2) (0.3) 0.1
Earnings (Loss) Before Interest and Income Taxes 22.0 (5.9) (8.6) (0.3) 7.0 19.8 18.0 15.6 14.3 17.7
Stock-Based Compensation Expense 2.2 2.1 1.9 1.7 1.8 0.2 0.6 0.8 0.7 0.4
Intangibles Amortization Expense 2.8 2.8 2.8 2.7 2.7 2.8 2.8 2.8 2.8 2.8
Fixed Asset, Inventory and Other Charges - 0.4 0.1 2.1 - - - - 2.1 -
Restructuring Charges 0.9 3.2 3.0 2.9 8.4 - 0.8 1.3 2.4 0.3
Impairme t of Intangible Assets - - - 1.0 0.4 - - - - -
Production Transfers Costs - - 0.1 0.3 0.2 0.4 1.2 1.2 3.6 3.0
Other (gain) loss - - - 1.4 1.5 - - 0.1 - -
Adjusted Earnings Before Interest and Income Taxes 27.9$ 2.6$ (0.7)$ 11.8$ 22.0$ 23.2$ 23.4$ 21.8$ 25.9$ 24.2$
Adjusted Earnings Before Interest and Income Taxes as % of
Revenues 19.9% 3.2% -0.8% 10.4% 15.6% 22.6% 21.6% 21.4% 23.5% 23.0%
Mobile Consumer Electronics Specialty Components
Quarter Ended Quarter Ended
Reconciliation of Segment EBIT to
Consolidated Net Earnings
8
(in $ millions)
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
September 30,
2015
Earn ngs (loss) before interest and income taxes
M bil Consumer Electronics 22.0$ (5.9)$ (8.6)$ (0.3)$ 7.0$
Specialty Components 19.8 18.0 15.6 14.3 17.7
Total segments 41.8 12.1 7.0 14.0 24.7
Corporate expense / other 15.3 11.7 13.4 15.6 16.4
Interest expense, net 5.6 5.8 3.7 3.6 3.6
Earnings (loss) before income taxes 20.9 (5.4) (10.1) (5.2) 4.7
Provision for (benefit from) income taxes - 1.4 2.4 1.4 (0.1)
Net income (loss) 20.9$ (6.8)$ (12.5)$ (6.6)$ 4.8$
Quarter Ended