Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Knowles Corp | exhibit991q42016.htm |
| 8-K - 8-K - Knowles Corp | a201612318-k.htm |
February 6, 2017
Q4 & Full Year 2016
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 fourth
quarter and full year 2016 earnings release.
Q4 ‘16 Financial Results
(continuing operations)
3
Quarter over year ago period Q4FY16 Q4FY15
Revenue $240.6 million $223.5 million
Gross Profit $94.0 million $81.1 million
Non-GAAP Gross Profit $94.4 million $92.6 million
Diluted Earnings (Loss) Per Share $0.19 $(0.07)
Non-GAAP Diluted Earnings Per
Share
$0.35 $0.29
Revenue
(Cont. Ops.)
4
$223.5
$185.3 $190.3
$243.1 $240.6
$0
$50
$100
$150
$200
$250
$300
Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16
Q4 ’16 Revenue by Segment
Cont. Ops. (% of revenue)
5
Mobile
Consumer
Electronics
56%
Specialty
Components
44%
Q1 ‘17 Projections vs. Q1 ‘16 Actuals
(non-GAAP, cont. ops.)*
6
Q1FY17E Q1FY16
Revenue $180 million - $200 million 185.3 million
Gross Margin 36 percent - 39 percent 37.7 percent
EPS (diluted) $0.08 - $0.14 $0.08
*Projections as of 2/6/17; Q1 2017 GAAP results for continuing operations are expected to include approximately $0.07 per share in stock-based
compensation, $0.02 per share in amortization of intangibles, $0.02 per share in production transfer costs, $0.02 adjustment for tax items, and
$0.01 per share in amortization of debt discount,. Expected Q1 2017 GAAP results exclude potential restructuring items.
Historical Segment Data
Mobile Consumer Electronics / Specialty Components
7
(Cont. Ops.; in $ millions)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2015
Revenues 133.9$ 140.4$ 82.2$ 83.3$ 113.5$ 106.7$ 102.7$ 108.1$ 102.0$ 110.0$
Gross Profit 53.9$ 55.6$ 32.7$ 29.1$ 44.4$ 40.5$ 40.3$ 40.8$ 38.4$ 37.3$
Stock-Based Compensation Expense 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2
Fixed Asset, Inventory and Other Charges - - 0.3 - 1.2 - - - - 2.1
Restructuring Charges - - 0.1 0.2 0.2 0.1 - 0.2 0.8 2.4
Production Transfers Costs - - - 0.1 0.3 0.2 0.4 1.2 1.2 3.6
Other - - - - 1.2 - - - - -
Non-GAAP Gross Profit 54.0$ 55.7$ 33.2$ 29.5$ 47.4$ 41.0$ 40.9$ 42.4$ 40.6$ 45.6$
Non-GAAP Gross Profit as % of Revenues 40.3% 39.7% 40.4% 35.4% 41.8% 38.4% 39.8% 39.2% 39.8% 41.5%
Research and Development Expenses 18.2$ 16.3$ 18.9$ 19.1$ 22.4$ 7.0$ 7.0$ 6.9$ 7.0$ 7.5$
Stock-Based Compensation Expense (1.1) (1.2) (1.2) (0.9) (1.0) (0.1) (0.1) (0.1) - -
Fixed Asset, Inventory and Other Charges - - (0.1) (0.1) (0.8) - - - - -
Non-GAAP Research and Development Expenses 17.1$ 15.1$ 17.6$ 18.1$ 20.6$ 6.9$ 6.9$ 6.8$ 7.0$ 7.5$
Non-GAAP Research and Development Expenses as % of Revenues 12.8% 10.8% 21.4% 21.7% 18.1% 6.5% 6.7% 6.3% 6.9% 6.8%
Selling and Administrative Expenses 13.9$ 16.5$ 16.8$ 15.9$ 19.7$ 11.4$ 13.7$ 15.7$ 15.5$ 15.8$
Stock-Based Compensation Expense (0.9) (0.9) (0.8) (0.9) (0.6) (0.4) 0.1 (0.3) (0.6) (0.5)
Intangibles Amortization Expense (2.4) (2.8) (2.8) (2.8) (2.7) (0.4) (2.8) (2.8) (2.8) (2.8)
Fixed Asset, Inventory and Other Charges - - - - (0.1) - - - - -
Production Transfers Costs - - - - - - - - - -
Impairment of Intangible Assets - - - - (1.0) - - - - -
Other - - - - (0.2) - - - (0.1) -
Non-GAAP Selling and Administrative Expenses 10.6$ 12.8$ 13.2$ 12.2$ 15.1$ 10.6$ 11.0$ 12.6$ 12.0$ 12.5$
Non-GAAP Selling and Administrative Expenses as % of Revenues 7.9% 9.1% 16.1% 14.6% 14.2% 9.9% 10.7% 11.7% 11.8% 11.4%
Operating Expenses 32.1$ 33.7$ 38.8$ 37.8$ 44.8$ 19.3$ 20.7$ 23.2$ 23.0$ 23.3$
Stock-Based Compensation Expense (2.0) (2.1) (2.0) (1.8) (1.6) (0.5) - (0.4) (0.6) (0.5)
Intangibles Amortization Expense (2.4) (2.8) (2.8) (2.8) (2.7) (0.4) (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) (0.9) - (0.6) (0.5) -
Impairment of Intangible Assets - - - (1.0) - - - - -
Production Transfers Costs - - - - - - - - - -
Other - - - - (0.2) - - - (0.1) -
Non-GAAP Operating Expenses 27.7$ 27.9$ 30.8$ 30.3$ 35.7$ 17.5$ 17.9$ 19.4$ 19.0$ 20.0$
Non-GAAP Operating Expenses as % of Revenues 20.7% 19.9% 37.5% 36.4% 31.4% 16.4% 17.4% 17.9% 18.6% 18.2%
Operating (Loss) Earnings 21.8$ 21.9$ (6.1)$ (8.7)$ (0.4)$ 21.2$ 19.6$ 17.6$ 15.4$ 14.0$
Other Expense (Income), net 0.3 (0.1) (0.2) (0.1) (0.1) 0.4 (0.2) (0.4) (0.2) (0.3)
(Loss) Earnings Before Interest and Income Taxes 21.5 22.0 (5.9) (8.6) (0.3) 20.8 19.8 18.0 15.6 14.3
Stock-Based Compensation Expense 2.1 2.2 2.1 1.9 1.7 0.7 0.2 0.6 0.8 0.7
Intangibles Amortization Expense 2.4 2.8 2.8 2.8 2.7 0.4 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 1.0 - 0.8 1.3 2.4
Impairment of Intangible Assets - - - - 1.0 - - - - -
Production Transfers Costs - - - 0.1 0.3 0.2 0.4 1.2 1.2 3.6
Other (gain) loss - - - - 1.4 - - - 0.1 -
Adjusted Earnings (Loss) Before Interest and Income Taxes 26.0$ 27.9$ 2.6$ (0.7)$ 11.8$ 23.1$ 23.2$ 23.4$ 21.8$ 25.9$
Adjusted Earnings (Loss) Before Interest and Income Taxes as % of
Revenues 19.4% 19.9% 3.2% -0.8% 10.4% 21.6% 22.6% 21.6% 21.4% 23.5%
Mobile Consumer Electronics Specialty Components
Quarter Ended Quarter Ended
7
Pro Forma 2016 Segment Data
Audio / Precision Devices (assumes new segmentation effective 1/1/16)
8
(Cont. Ops.; in $ millions)
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
December 31,
2016
September 30,
2016
June 30,
2016
March 31,
2016
Revenues 190.3$ 193.4$ 140.3$ 137.9$ 50.3$ 49.7$ 50.0$ 47.4$
Gross Profit 77.8$ 78.9$ 56.6$ 53.1$ 16.6$ 17.0$ 16.9$ 14.4$
Stock-Based Compensation Expense 0.3 0.3 0.3 0.3 - - - -
Fixed Asset, Inventory and Other Charges - - 0.3 - - - - -
Restructuring Charges - - 0.1 0.2 0.1 - 0.2 0.8
Production Transfers Costs - - 0.3 0.7 0.2 0.4 0.9 0.6
Other - - - - - - - -
Non-GAAP Gross Profit 78.1$ 79.2$ 57.6$ 54.3$ 16.9$ 17.4$ 18.0$ 15.8$
Non-GAAP Gross Profit as % of Revenues 41.0% 41.0% 41.1% 39.4% 33.6% 35.0% 36.0% 33.3%
Research and Development Expenses 22.6$ 20.7$ 23.0$ 23.1$ 2.6$ 2.6$ 2.8$ 3.0$
Stock-Based Compensation Expense (1.2) (1.3) (1.3) (0.9) - - - -
Fixed Asset, Inventory and Other Charges - - (0.1) (0.1) - - - -
Non-GAAP Research and Development Expenses 21.4$ 19.4$ 21.6$ 22.1$ 2.6$ 2.6$ 2.8$ 3.0$
Non-GAAP Research and Development Expenses as % of Revenues 11.2% 10.0% 15.4% 16.0% 5.2% 5.2% 5.6% 6.3%
Selling and Administrative Expenses 16.3$ 21.1$ 22.7$ 21.6$ 9.0$ 9.1$ 9.8$ 9.8$
Stock-Based Compensation Expense (1.1) (0.5) (1.0) (1.2) (0.2) (0.3) (0.1) (0.3)
Intangibles Amortization Expense (2.4) (5.2) (5.2) (5.2) (0.4) (0.4) (0.4) (0.4)
Fixed Asset, Inventory and Other Charges - - - - - - - -
Production Transfers Costs - - - - - - - -
Impairment of Intangible Assets - - - - - - - -
Other - - - (0.1) - - - -
Non-GAAP Selling and Administrative Expenses 12.8$ 15.4$ 16.5$ 15.1$ 8.4$ 8.4$ 9.3$ 9.1$
Non-GAAP Selling and Administrative Expenses as % of Revenues 6.7% 8.0% 11.8% 10.9% 16.7% 16.9% 18.6% 19.2%
Operating Expenses 38.9$ 42.7$ 48.8$ 47.5$ 12.5$ 11.7$ 13.2$ 13.3$
Stock-Based Compensation Expense (2.3) (1.8) (2.3) (2.1) (0.2) (0.3) (0.1) (0.3)
Intangibles Amortization Expense (2.4) (5.2) (5.2) (5.2) (0.4) (0.4) (0.4) (0.4)
Fixed Asset, Inventory and Other Charges - - (0.1) (0.1) - - - -
Restructuring Charges - (0.9) (3.1) (2.8) (0.9) - (0.6) (0.5)
Impairment of Intangible Assets - - - - - - -
Production Transfers Costs - - - - - - - -
Other - - - (0.1) - - - -
Non-GAAP Operating Expenses 34.2$ 34.8$ 38.1$ 37.2$ 11.0$ 11.0$ 12.1$ 12.1$
Non-GAAP Operating Expenses as % of Revenues 18.0% 18.0% 27.2% 27.0% 21.9% 22.1% 24.2% 25.5%
Operating (Loss) Earnings 38.9$ 36.2$ 7.8$ 5.6$ 4.1$ 5.3$ 3.7$ 1.1$
Other Expense (Income), net 0.7 (0.3) (0.6) (0.1) - - - (0.2)
(Loss) Earnings Before Interest and Income Taxes 38.2 36.5 8.4 5.7 4.1 5.3 3.7 1.3
Stock-Based Compensation Expense 2.6 2.1 2.6 2.4 0.2 0.3 0.1 0.3
Intangibles Amortization Expense 2.4 5.2 5.2 5.2 0.4 0.4 0.4 0.4
Fixed Asset, Inventory and Other Charges - - 0.4 0.1 - - - -
Restructuring Charges - 0.9 3.2 3.0 1.0 - 0.8 1.3
Impairment of Intangible Assets - - - - - - - -
Production Transfers Costs - - 0.3 0.7 0.2 0.4 0.9 0.6
Other (gain) loss - - - 0.1 - - - -
Adjusted Earnings (Loss) Before Interest and Income Taxes 43.2$ 44.7$ 20.1$ 17.2$ 5.9$ 6.4$ 5.9$ 3.9$
Adjusted Earnings (Loss) Before Interest and Income Taxes as % of
Revenues 22.7% 23.1% 14.3% 12.5% 11.7% 12.9% 11.8% 8.2%
Audio Precision Devices
Quarter Ended Quarter Ended
8
Reconciliation of Segment EBIT to
Consolidated Net Earnings
Mobile Consumer Electronics / Specialty Components
9
(Cont. Ops.; in $ millions)
9
Reconciliation of Segment EBIT to
Consolidated Net Earnings
Audio / Precision Devices
10
(Cont. Ops.; in $ millions)
10