Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Knowles Corp | exhibit991q22017.htm |
| 8-K - 8-K - Knowles Corp | a20176308-k.htm |
July 26, 2017
Q2 2017
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 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 second quarter 2017 earnings release.
Q2 ‘17 Financial Results
(continuing operations)
3
Quarter over year ago period Q2FY17 Q2FY16
Revenue $190.2 million $190.3 million
Gross Profit $71.7 million $72.9 million
Non-GAAP Gross Profit $75.0 million $75.1 million
Diluted Loss Per Share $(0.34) $(0.08)
Non-GAAP Diluted Earnings Per
Share
$0.13 $0.13
Revenue
(Cont. Ops.)
4
$190.3
$243.1 $240.6
$193.7
$190.2
$0
$50
$100
$150
$200
$250
$300
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17
Q2 ’17 Revenue by Segment
Cont. Ops. (% of revenue)
5
Audio
73%
Precision
Devices
27%
Q3 ‘17 Projections
(non-GAAP, cont. ops.)*
6
Q3FY17E
Revenue $205 million - $235 million
Gross Margin 38 percent – 41 percent
EPS (diluted) $0.23 - $0.29
*Projections as of 7/26/17; Q3 2017 GAAP results for continuing operations are expected to include approximately $0.06 per share from a higher
effective tax rate, $0.05 per share in stock-based compensation, $0.02 per share in amortization of intangibles, $0.02 per share in production
transfer costs and $0.01 per share in amortization of debt discount. Expected Q3 2017 GAAP results exclude potential restructuring items.
Historical Segment Data
Audio / Precision Devices
7
(Cont. Ops.; in $ millions)
7
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Revenues 138.1$ 144.2$ 190.3$ 193.4$ 140.3$ 52.1$ 49.5$ 50.3$ 49.7$ 50.0$
Gross Profit 54.2$ 50.6$ 77.8$ 78.9$ 56.6$ 17.9$ 17.4$ 16.6$ 17.0$ 16.9$
Stock-Based Compensation Expense 0.3 0.3 0.3 0.3 0.3 - - - - -
Fixed Asset, Inventory and Other Charges 1.4 - - - 0.3 - - - - -
Restructuring Charges (0.6) 4.3 - - 0.1 - - 0.1 - 0.2
Production Transfers Costs 1.7 1.1 - - 0.3 0.3 0.3 0.2 0.4 0.9
Non-GAAP Gross Profit 57.0$ 56.3$ 78.1$ 79.2$ 57.6$ 18.2$ 17.7$ 16.9$ 17.4$ 18.0$
Non-GAAP Gross Profit as % of Revenues 41.3% 39.0% 41.0% 41.0% 41.1% 34.9% 35.8% 33.6% 35.0% 36.0%
Research and Development Expenses 23.5$ 23.3$ 22.6$ 20.7$ 23.0$ 3.1$ 2.9$ 2.6$ 2.6$ 2.8$
Stock-Based Compensation Expense (1.5) (1.4) (1.2) (1.3) (1.3) - - - - -
Fixed Asset, Inventory and Other Charges - - - - (0.1) - - - - -
Non-GAAP Research and Development Expenses 22.0$ 21.9$ 21.4$ 19.4$ 21.6$ 3.1$ 2.9$ 2.6$ 2.6$ 2.8$
Non-GAAP Research and Development Expenses as % of Revenues 15.9% 15.2% 11.2% 10.0% 15.4% 6.0% 5.9% 5.2% 5.2% 5.6%
Selling and Administrative Expenses 16.4$ 17.0$ 16.3$ 21.1$ 22.7$ 9.1$ 8.7$ 9.0$ 9.1$ 9.8$
Stock-Based Compensation Expense (1.1) (1.0) (1.1) (0.5) (1.0) (0.2) (0.2) (0.2) (0.3) (0.1)
Intangibles Amortization Expense (1.7) (2.5) (2.4) (5.2) (5.2) (0.6) (0.5) (0.4) (0.4) (0.4)
Other - - - - - (0.1) - - - -
Non-GAAP Selling and Administrative Expenses 13.6$ 13.5$ 12.8$ 15.4$ 16.5$ 8.2$ 8.0$ 8.4$ 8.4$ 9.3$
Non-GAAP Selling and Administrative Expenses as % of Revenues 9.8% 9.4% 6.7% 8.0% 11.8% 15.7% 16.2% 16.7% 16.9% 18.6%
Operating Expenses 61.1$ 40.7$ 38.9$ 42.7$ 48.8$ 12.3$ 11.8$ 12.5$ 11.7$ 13.2$
Stock-Based Compensation Expense (2.6) (2.4) (2.3) (1.8) (2.3) (0.2) (0.2) (0.2) (0.3) (0.1)
Intangibles Amortization Expense (1.7) (2.5) (2.4) (5.2) (5.2) (0.6) (0.5) (0.4) (0.4) (0.4)
Fixed Asset, Inventory and Other Charges (3.7) - - - (0.1) - - - - -
Restructuring Charges (1.3) (0.4) - (0.9) (3.1) (0.1) (0.2) (0.9) - (0.6)
Impairment of Intangible Assets (16.2) - - - - - - - -
Other - - - - - (0.1) - - - -
Non-GAAP Operating Expenses 35.6$ 35.4$ 34.2$ 34.8$ 38.1$ 11.3$ 10.9$ 11.0$ 11.0$ 12.1$
Non-GAAP Operating Expenses as % of Revenues 25.8% 24.5% 18.0% 18.0% 27.2% 21.7% 22.0% 21.9% 22.1% 24.2%
Operating (Loss) Earnings (6.9)$ 9.9$ 38.9$ 36.2$ 7.8$ 5.6$ 5.6$ 4.1$ 5.3$ 3.7$
Other Expense (Income), net 0.2 1.0 0.7 (0.3) (0.6) (0.3) 0.1 - - -
(Loss) Earnings Before Interest and Income Taxes (7.1) 8.9 38.2 36.5 8.4 5.9 5.5 4.1 5.3 3.7
Stock-Based Compensation Expense 2.9 2.7 2.6 2.1 2.6 0.2 0.2 0.2 0.3 0.1
Intangibles Amortization Expense 1.7 2.5 2.4 5.2 5.2 0.6 0.5 0.4 0.4 0.4
Fixed Asset, Inventory and Other Charges 5.1 - - - 0.4 - - - - -
Restructuring Charges 0.7 4.7 - 0.9 3.2 0.1 0.2 1.0 - 0.8
Impairment of Intangible Assets 16.2 - - - - - - - - -
Production Transfers Costs 1.7 1.1 - - 0.3 0.3 0.3 0.2 0.4 0.9
Other (gain) loss - - - - - 0.1 - - - -
Adjusted Earnings Before Interest and Income Taxes 21.2$ 19.9$ 43.2$ 44.7$ 20.1$ 7.2$ 6.7$ 5.9$ 6.4$ 5.9$
Adjusted Earnings (Loss) Before Interest and Income Taxes as % of
Revenues 15.4% 13.8% 22.7% 23.1% 14.3% 13.8% 13.5% 11.7% 12.9% 11.8%
Audio Precision Devices
Quarter Ended Quarter Ended
Reconciliation of Segment EBIT to
Consolidated Net Earnings
Audio / Precision Devices
8
(Cont. Ops.; in $ millions)
8
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Earn ngs before interest and income taxes
Au io (7.1)$ 8.9$ 38.2$ 36.5$ 8.4$
Precision Devices 5.9 5.5 4.1 5.3 3.7
Total segments (1.2) 14.4 42.3 41.8 12.1
Corporate expense / other 16.7 14.1 11.6 15.3 11.7
Interest expense, net 5.1 5.2 5.3 5.6 5.8
(Loss) earnings before income taxes (23.0) (4.9) 25.4 20.9 (5.4)
Provision for (benefit from) income taxes 7.3 (0.2) 7.9 - 1.4
Net (loss) income (30.3)$ (4.7)$ 17.5$ 20.9$ (6.8)$
Quarter Ended