Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Knowles Corp | exhibit991q12018.htm |
| 8-K - 8-K - Knowles Corp | a20183318-k.htm |
April 26, 2018
Q1 2018
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 first quarter 2018 earnings release.
Q1 ‘18 Financial Results
(continuing operations*)
3
Quarter over year ago period Q1FY18 Q1FY17
Revenues $178.5 million $168.3 million
Gross profit $65.3 million $59.3 million
Non-GAAP gross profit $66.7 million $65.2 million
Diluted earnings per share $0.00 $(0.06)
Non-GAAP diluted earnings per
share
$0.11 $0.11
* 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. Current period results include $7.0 million in stock-based compensation, $1.6 million from amortization of intangibles, $1.4 million in
production transfer costs and restructuring charges, and $0.3 million in acquisition related expense.
Revenues
(Cont. Ops.)
4
$168.3
$164.4
$196.0
$215.5
$178.5
$0
$50
$100
$150
$200
$250
Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18
Q1 ’18 Revenues by Segment
Cont. Ops. (% of revenue)
5
Audio
82%
Precision
Devices
18%
Q2 ‘18 Projections
(non-GAAP, cont. ops.)*
6
Q2FY18E
Revenues $170 million - $190 million
Gross margin 37 percent – 39 percent
EPS (diluted) $0.12 - $0.16
*Projections as of 4/26/18; Q2 2018 GAAP results for continuing operations are expected to include approximately $0.05 per share in stock-
based compensation, $0.05 per share from a higher effective tax rate, $0.01 per share in amortization of debt discount, and $0.01 per share in
amortization of intangibles. Expected Q2 2018 GAAP results exclude potential restructuring items.
Historical Segment Data
Audio / Precision Devices
7
(Cont. Ops.; in $ millions)
7
March 31,
2018
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
March 31,
2018
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
Revenues 146.4$ 187.3$ 167.8$ 138.1$ 144.2$ 32.1$ 28.2$ 28.2$ 26.3$ 24.1$
Gross Profit 52.7$ 78.7$ 64.1$ 54.2$ 50.6$ 13.1$ 11.1$ 10.5$ 9.4$ 9.1$
Stock-Based Compensation Expense 0.3 0.4 0.3 0.3 0.3 - - -$ - -
Impairment charges - - - 1.4 - - - - - -
Restructuring Charges - 0.1 0.2 (0.6) 4.3 - - - - -
Production Transfers Costs 0.5 2.0 1.4 1.7 1.1 0.3 - 0.2 0.2 0.1
Other - - - - - 0.2 - - - -
Non-GAAP Gross Profit 53.5$ 81.2$ 66.0$ 57.0$ 56.3$ 13.6$ 11.1$ 10.7$ 9.6$ 9.2$
Non-GAAP Gross Profit as % of Revenues 36.5% 43.4% 39.3% 41.3% 39.0% 42.4% 39.4% 37.9% 36.5% 38.2%
Research and Development Expenses 23.3$ 21.5$ 20.7$ 23.5$ 23.3$ 1.4$ 1.2$ 1.2$ 1.1$ 0.7$
Stock-Based Compensation Expense (2.0) (1.6) (1.6) (1.5) (1.4) - - - - -
Production Transfers Costs (0.2) - - - - - - - - -
Non-GAAP Research and Development Expenses 21.1$ 19.9$ 19.1$ 22.0$ 21.9$ 1.4$ 1.2$ 1.2$ 1.1$ 0.7$
Non-GAAP Research and Development Expenses as % of Revenues 14.4% 10.6% 11.4% 15.9% 15.2% 4.4% 4.3% 4.3% 4.2% 2.9%
Selling and Administrative Expenses 16.9$ 10.0$ 15.3$ 16.4$ 17.1$ 5.6$ 4.7$ 4.5$ 4.3$ 3.9$
Stock-Based Compensation Expense (1.1) (1.1) (0.9) (1.1) (1.0) (0.2) (0.2) (0.1) (0.1) -
Intangibles Amortization Expense (1.2) (1.2) (1.1) (1.7) (2.5) (0.4) (0.2) (0.2) (0.2) (0.2)
Production Transfers Costs - (0.1) - - - - - - - -
Other - - - - - - - - (0.1) -
Non-GAAP Selling and Administrative Expenses 14.6$ 7.6$ 13.3$ 13.6$ 13.6$ 5.0$ 4.3$ 4.2$ 3.9$ 3.7$
Non-GAAP Selling and Administrative Expenses as % of Revenues 10.0% 4.1% 7.9% 9.8% 9.4% 15.6% 15.2% 14.9% 14.8% 15.4%
Operating Expenses 40.5$ 33.5$ 36.4$ 61.1$ 40.8$ 7.1$ 5.9$ 5.7$ 5.4$ 4.7$
Stock-Based Compensation Expense (3.1) (2.7) (2.5) (2.6) (2.4) (0.2) (0.2) (0.1) (0.1) -
Intangibles Amortization Expense (1.2) (1.2) (1.1) (1.7) (2.5) (0.4) (0.2) (0.2) (0.2) (0.2)
Impairment charges - - - (19.9) - - - - - -
Restructuring Charges (0.3) (2.0) (0.4) (1.3) (0.4) (0.1) - - - (0.1)
Production Transfers Costs (0.2) (0.1) - - - - - - - -
Other - - - - - - - - (0.1) -
Non-GAAP Operating Expenses 35.7$ 27.5$ 32.4$ 35.6$ 35.5$ 6.4$ 5.5$ 5.4$ 5.0$ 4.4$
Non-GAAP Operating Expenses as % of Revenues 24.4% 14.7% 19.3% 25.8% 24.6% 19.9% 19.5% 19.1% 19.0% 18.3%
Operating Earnings (Loss) 12.2$ 45.2$ 27.7$ (6.9)$ 9.8$ 6.0$ 5.2$ 4.8$ 4.0$ 4.4$
Other (Income) Expense, net (0.1) (1.0) (0.4) 0.2 0.9 (0.2) (0.4) (0.3) (0.2) 0.1
Earnings (Loss) Before Interest and Income Taxes 12.3 46.2 28.1 (7.1) 8.9 6.2 5.6 5.1 4.2 4.3
Stock-Based Compensation Expense 3.4 3.1 2.8 2.9 2.7 0.2 0.2 0.1 0.1 -
Intangibles Amortization Expense 1.2 1.2 1.1 1.7 2.5 0.4 0.2 0.2 0.2 0.2
Impairment charges - - - 21.3 - - - - - -
Restructuring Charges 0.3 2.1 0.6 0.7 4.7 0.1 - - - 0.1
Production Transfers Costs 0.7 2.1 1.4 1.7 1.1 0.3 - 0.2 0.2 0.1
Other (gain) loss - - - - - 0.2 - - 0.1 -
Adjusted Earnings Before Interest and Income Taxes 17.9$ 54.7$ 34.0$ 21.2$ 19.9$ 7.4$ 6.0$ 5.6$ 4.8$ 4.7$
Adjusted Earnings Before Interest and Income Taxes as % of
Revenues 12.2% 29.2% 20.3% 15.4% 13.8% 23.1% 21.3% 19.9% 18.3% 19.5%
Audio Precision Devices
Quarter Ended Quarter Ended
Reconciliation of Segment EBIT to
Consolidated Net Earnings
Audio / Precision Devices
8
(Cont. Ops.; in $ millions)
8
March 31, December 31, September 30, June 30, March 31,
2018 2017 2017 2017 2017
Earnings (loss) before interest and income taxes
Audio 12.3$ 46.2$ 28.1$ (7.1)$ 8.9$
Precision Devices 6.2 5.6 5.1 4.2 4.3
Total segments 18.5 51.8 33.2 (2.9) 13.2
Corporate expense / other 14.1 12.4 13.2 16.2 13.5
Interest expense, net 4.0 5.2 5.1 5.1 5.2
Earnings (loss) before income taxes 0.4 34.2 14.9 (24.2) (5.5)
Provision for (benefit from) income taxes 0.8 2.3 4.4 6.7 (0.5)
Net (loss) earnings (0.4)$ 31.9$ 10.5$ (30.9)$ (5.0)$
Quarter Ended