ITASCA, Ill.--(BUSINESS WIRE)--Feb. 12, 2015--
Knowles Corporation (NYSE: KN), a market leader and global supplier of
advanced micro-acoustic solutions and specialty components, today
announced results for the fourth quarter and year ended December 31,
2014.
“We reported Q4 results that were consistent with our prior
expectations, excluding one-time charges related to the microphone
situation we discussed last quarter,” said Jeffrey Niew, President and
CEO of Knowles. “Revenue in our mobile consumer segment was down 6
percent sequentially, as microphone shipments on a specific platform
remained on hold for the entire fourth quarter. We are pleased to report
that we have been re-qualified and expect to resume microphone shipments
on this platform in the second quarter. Strong quarter-over-quarter
sales of our speaker/receiver products helped offset the declines in
microphones. Sales in specialty components were down slightly
quarter-over-quarter as strong acoustics revenue was offset by lower
demand in telecom infrastructure.”
“Although 2014 was a challenging year for the Company due to the
microphone issue, we made excellent progress during the year in a number
of different areas. These areas include our investment in new product
development as well as manufacturing optimization across both business
segments. Sales of integrated audio solutions more than doubled in 2014
and sales to Chinese OEMS grew over 70 percent from the prior year
driven by multi mic and integrated module adoption. In addition, we made
solid progress in product development for our intelligent audio
solutions.”
“In summary, I’m confident that the improvements we’ve made to our
business in 2014 - both priming the new product pipeline and optimizing
our manufacturing footprint - will translate into revenue growth and
profitability in the years to come.”
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, 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 fourth quarter of 2014 was $286.1 million compared
with $330.4 million reported in the same period one year ago.
-
Gross profit for the fourth quarter of 2014 was $63.6 million compared
with gross profit of $114.2 million reported in the same period one
year ago. Non-GAAP gross profit for the fourth quarter of 2014 was
$70.3 million compared with non-GAAP gross profit of $125.1 million
reported in the same period one year ago. Excluding the impact of the
microphone charges, fourth quarter of 2014 non-GAAP gross profit was
$91.2 million or 32 percent of sales.
-
Loss before interest and income taxes for the fourth quarter of 2014
was $(1.2) million compared with earnings before interest and income
taxes of $41.0 million in the year ago period. Current period results
include $10.5 million from amortization of intangibles, $5.2 million
in production transfer costs, $2.9 million in restructuring charges,
and $2.5 million in stock-based compensation.
-
Adjusted earnings before interest and income taxes for the fourth
quarter of 2014 were $17.6 million compared with $63.4 million
reported in the same period one year ago.
-
Benefit from income taxes for the fourth quarter of 2014 was $2.2
million compared with a provision for income taxes of $2.3 million
reported in the same period one year ago.
-
Net loss for the fourth quarter of 2014 was $(1.1) million compared
with net earnings of $32.9 million reported in the same period one
year ago. Non-GAAP net earnings for the fourth quarter of 2014 was
$11.9 million compared with $52.9 million reported in the same period
one year ago.
-
Loss per diluted share for the fourth quarter of 2014 was $(0.01)
compared with EPS of $0.39 per diluted share in the same period one
year ago.
-
Non-GAAP EPS for the fourth quarter of 2014 was $0.14 per diluted
share compared with $0.62 in the same period one year ago. Excluding
the impact from the microphone charges, fourth quarter of 2014
non-GAAP EPS was $0.38 per diluted share.
-
2014 revenue was $1.14 billion, gross profit was $232.7 million, and
loss per share was $(1.02) per diluted share. Non-GAAP gross profit
for 2014 was $335.8 million and non-GAAP EPS for 2014 was $1.10 per
diluted share. Excluding the impact from the microphone charges, 2014
non-GAAP gross profit was $358.0 million, and 2014 non-GAAP EPS was
$1.36 per diluted share.
First Quarter 2015 Outlook
The forward looking guidance for the quarter ending March 31, 2015,
which has been compiled below, is based on our assumptions, and expected
business trends and conditions:
-
Revenue: $225 million to $245 million
-
Non-GAAP Gross Margin: 25 percent to 27 percent
-
Adjusted EBIT Margin: 1 percent to 4 percent
-
Non-GAAP EPS: $0.01 to $0.07
Q1 2015 GAAP results are expected to include $10.8 million in
amortization of intangibles, $7 million to $8 million in production
transfer related costs, approximately $3.5 million in stock based
compensation, approximately $2 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 February 12, 2015 through 11:59 p.m. Central time
on February 19, 2015 at (855) 859-2056 (United States) or (404) 537-3406
(International). The access code is 67520055.
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
approximately 13,000 employees in 15 countries 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,” “expect,”
“anticipate,” “project,” “estimate,” “budget,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”
“will,” “would,” “expect,” “objective,” “forecast,” “goal,” “guidance,”
“outlook,” “effort,” “target” and similar expressions, among others,
generally identify forward-looking statements, which speak only as of
the date the statements were made. 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; our ability to prevent or identify quality
issues in our products or to promptly remedy any such issues that are
identified; the timing related to the resumption of our production and
shipments of the microphone products that we have recently been
re-qualified to manufacture that are referenced in this release;
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, delays in
customer product introductions, 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, fluctuations in demand by our telecom and
other customers; 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, operating expenses, earnings before
interest and income taxes, adjusted earnings before interest and income
taxes, net earnings, 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 table accompanying this release.
|
INVESTOR SUPPLEMENT - FOURTH QUARTER 2014
|
|
|
|
|
|
|
|
|
|
KNOWLES CORPORATION
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
(in millions except share and per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
December 31, 2014
|
|
September 30, 2014
|
|
December 31, 2013
|
|
Revenues
|
|
$
|
286.1
|
|
|
$
|
300.8
|
|
|
$
|
330.4
|
|
Cost of goods sold
|
|
|
220.3
|
|
|
|
243.9
|
|
|
|
215.2
|
|
Restructuring charges
|
|
|
2.2
|
|
|
|
4.7
|
|
|
|
1.0
|
|
Gross profit
|
|
|
63.6
|
|
|
|
52.2
|
|
|
|
114.2
|
|
Research and development expenses
|
|
|
21.1
|
|
|
|
21.0
|
|
|
|
20.7
|
|
Selling and administrative expenses
|
|
|
45.5
|
|
|
|
46.5
|
|
|
|
51.9
|
|
Restructuring charges
|
|
|
0.7
|
|
|
|
1.1
|
|
|
|
0.4
|
|
Operating expenses
|
|
|
67.3
|
|
|
|
68.6
|
|
|
|
73.0
|
|
Operating (loss) earnings
|
|
|
(3.7
|
)
|
|
|
(16.4
|
)
|
|
|
41.2
|
|
Interest expense, net
|
|
|
2.1
|
|
|
|
2.0
|
|
|
|
5.8
|
|
Other (income) expense, net
|
|
|
(2.5
|
)
|
|
|
(2.3
|
)
|
|
|
0.2
|
|
(Loss) earnings before income taxes
|
|
|
(3.3
|
)
|
|
|
(16.1
|
)
|
|
|
35.2
|
|
(Benefit from) provision for income taxes
|
|
|
(2.2
|
)
|
|
|
(1.5
|
)
|
|
|
2.3
|
|
Net (loss) earnings
|
|
$
|
(1.1
|
)
|
|
$
|
(14.6
|
)
|
|
$
|
32.9
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share (1)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.39
|
|
Diluted (loss) earnings per share (1)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
Basic (1)
|
|
|
85,069,459
|
|
|
|
85,047,991
|
|
|
|
85,019,159
|
|
Diluted (1)
|
|
|
85,069,459
|
|
|
|
85,047,991
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|
Revenues
|
|
$
|
1,141.3
|
|
|
$
|
1,214.8
|
|
|
Cost of goods sold
|
|
|
885.3
|
|
|
|
779.1
|
|
|
Restructuring charges
|
|
|
23.3
|
|
|
|
7.8
|
|
|
Gross profit
|
|
|
232.7
|
|
|
|
427.9
|
|
|
Research and development expenses
|
|
|
83.0
|
|
|
|
82.6
|
|
|
Selling and administrative expenses
|
|
|
196.5
|
|
|
|
193.0
|
|
|
Restructuring charges
|
|
|
6.3
|
|
|
|
8.5
|
|
|
Operating expenses
|
|
|
285.8
|
|
|
|
284.1
|
|
|
Operating (loss) earnings
|
|
|
(53.1
|
)
|
|
|
143.8
|
|
|
Interest expense, net
|
|
|
6.6
|
|
|
|
42.0
|
|
|
Other (income) expense, net
|
|
|
(4.6
|
)
|
|
|
0.3
|
|
|
(Loss) earnings before income taxes
|
|
|
(55.1
|
)
|
|
|
101.5
|
|
|
Provision for (benefit from) income taxes
|
|
|
31.9
|
|
|
|
(4.3
|
)
|
|
Net (loss) earnings
|
|
$
|
(87.0
|
)
|
|
$
|
105.8
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share (1)
|
|
$
|
(1.02
|
)
|
|
$
|
1.24
|
|
|
Diluted (loss) earnings per share (1)
|
|
$
|
(1.02
|
)
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
Basic (1)
|
|
|
85,046,042
|
|
|
|
85,019,159
|
|
|
Diluted (1)
|
|
|
85,046,042
|
|
|
|
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
|
|
Year Ended
|
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Gross Profit
|
|
$
|
63.6
|
|
|
$
|
52.2
|
|
|
$
|
114.2
|
|
|
$
|
232.7
|
|
|
$
|
427.9
|
|
|
Stock-Based Compensation Expense
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
-
|
|
|
Fixed Asset and Related Inventory Charges
|
|
|
(1.0
|
)
|
|
|
13.9
|
|
|
|
6.1
|
|
|
|
39.5
|
|
|
|
6.9
|
|
|
Restructuring Charges
|
|
|
2.2
|
|
|
|
4.7
|
|
|
|
1.0
|
|
|
|
23.3
|
|
|
|
7.8
|
|
|
Production Transfer Costs (2)
|
|
|
5.2
|
|
|
|
8.4
|
|
|
|
3.8
|
|
|
|
24.5
|
|
|
|
8.9
|
|
|
Other (3)
|
|
|
-
|
|
|
|
15.0
|
|
|
|
-
|
|
|
|
15.0
|
|
|
|
(1.4
|
)
|
|
Non-GAAP Gross Profit
|
|
$
|
70.3
|
|
|
$
|
94.4
|
|
|
$
|
125.1
|
|
|
$
|
335.8
|
|
|
$
|
450.1
|
|
|
Non-GAAP Gross Profit as % of Revenues
|
|
|
24.6
|
%
|
|
|
31.4
|
%
|
|
|
37.9
|
%
|
|
|
29.4
|
%
|
|
|
37.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and Development Expenses
|
|
$
|
21.1
|
|
|
$
|
21.0
|
|
|
$
|
20.7
|
|
|
$
|
83.0
|
|
|
$
|
82.6
|
|
|
Stock-Based Compensation Expense
|
|
|
0.1
|
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
(0.3
|
)
|
|
|
-
|
|
|
Non-GAAP Research and Development Expenses
|
|
$
|
21.2
|
|
|
$
|
20.8
|
|
|
$
|
20.7
|
|
|
$
|
82.7
|
|
|
$
|
82.6
|
|
|
Non-GAAP Research and Development Expenses as % of Revenues
|
|
|
7.4
|
%
|
|
|
6.9
|
%
|
|
|
6.3
|
%
|
|
|
7.2
|
%
|
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and Administrative Expenses
|
|
$
|
45.5
|
|
|
$
|
46.5
|
|
|
$
|
51.9
|
|
|
$
|
196.5
|
|
|
$
|
193.0
|
|
|
Stock-Based Compensation Expense
|
|
|
(2.3
|
)
|
|
|
(2.2
|
)
|
|
|
(0.4
|
)
|
|
|
(7.9
|
)
|
|
|
(2.0
|
)
|
|
Intangibles Amortization Expense
|
|
|
(10.5
|
)
|
|
|
(10.6
|
)
|
|
|
(10.5
|
)
|
|
|
(42.6
|
)
|
|
|
(45.9
|
)
|
|
Production Transfer Costs (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
(0.7
|
)
|
|
|
(0.2
|
)
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
Non-GAAP Selling and Administrative Expenses
|
|
$
|
32.7
|
|
|
$
|
33.7
|
|
|
$
|
40.8
|
|
|
$
|
143.0
|
|
|
$
|
144.9
|
|
|
Non-GAAP Selling and Administrative Expenses as % of Revenues
|
|
|
11.4
|
%
|
|
|
11.2
|
%
|
|
|
12.3
|
%
|
|
|
12.5
|
%
|
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
$
|
67.3
|
|
|
$
|
68.6
|
|
|
$
|
73.0
|
|
|
$
|
285.8
|
|
|
$
|
284.1
|
|
|
Stock-Based Compensation Expense
|
|
|
(2.2
|
)
|
|
|
(2.4
|
)
|
|
|
(0.4
|
)
|
|
|
(8.2
|
)
|
|
|
(2.0
|
)
|
|
Intangibles Amortization Expense
|
|
|
(10.5
|
)
|
|
|
(10.6
|
)
|
|
|
(10.5
|
)
|
|
|
(42.6
|
)
|
|
|
(45.9
|
)
|
|
Restructuring Charges
|
|
|
(0.7
|
)
|
|
|
(1.1
|
)
|
|
|
(0.4
|
)
|
|
|
(6.3
|
)
|
|
|
(8.5
|
)
|
|
Production Transfer Costs (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
(0.7
|
)
|
|
|
(0.2
|
)
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.3
|
)
|
|
|
-
|
|
|
Non-GAAP Operating Expenses
|
|
$
|
53.9
|
|
|
$
|
54.5
|
|
|
$
|
61.5
|
|
|
$
|
225.7
|
|
|
$
|
227.5
|
|
|
Non-GAAP Operating Expenses as % of Revenues
|
|
|
18.8
|
%
|
|
|
18.1
|
%
|
|
|
18.6
|
%
|
|
|
19.8
|
%
|
|
|
18.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Earnings
|
|
$
|
(1.1
|
)
|
|
$
|
(14.6
|
)
|
|
$
|
32.9
|
|
|
$
|
(87.0
|
)
|
|
$
|
105.8
|
|
|
Interest Expense, net
|
|
|
2.1
|
|
|
|
2.0
|
|
|
|
5.8
|
|
|
|
6.6
|
|
|
|
42.0
|
|
|
(Benefit from) Provision for Income Taxes
|
|
|
(2.2
|
)
|
|
|
(1.5
|
)
|
|
|
2.3
|
|
|
|
31.9
|
|
|
|
(4.3
|
)
|
|
(loss) Earnings Before Interest and Income Taxes
|
|
|
(1.2
|
)
|
|
|
(14.1
|
)
|
|
|
41.0
|
|
|
|
(48.5
|
)
|
|
|
143.5
|
|
|
Stock-Based Compensation Expense
|
|
|
2.5
|
|
|
|
2.6
|
|
|
|
0.4
|
|
|
|
9.0
|
|
|
|
2.0
|
|
|
Intangibles Amortization Expense
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.5
|
|
|
|
42.6
|
|
|
|
45.9
|
|
|
Fixed Asset and Related Inventory Charges
|
|
|
(1.0
|
)
|
|
|
13.9
|
|
|
|
6.1
|
|
|
|
39.5
|
|
|
|
6.9
|
|
|
Restructuring Charges
|
|
|
2.9
|
|
|
|
5.8
|
|
|
|
1.4
|
|
|
|
29.6
|
|
|
|
16.3
|
|
|
Production Transfer Costs (2)
|
|
|
5.2
|
|
|
|
8.4
|
|
|
|
4.0
|
|
|
|
25.2
|
|
|
|
9.1
|
|
|
Other (3)
|
|
|
(1.3
|
)
|
|
|
15.0
|
|
|
|
-
|
|
|
|
16.0
|
|
|
|
(1.4
|
)
|
|
Adjusted Earnings Before Interest and Income Taxes
|
|
$
|
17.6
|
|
|
$
|
42.2
|
|
|
$
|
63.4
|
|
|
$
|
113.4
|
|
|
$
|
222.3
|
|
|
Adjusted Earnings Before Interest and Income Taxes as % of
Revenues
|
|
|
6.2
|
%
|
|
|
14.0
|
%
|
|
|
19.2
|
%
|
|
|
9.9
|
%
|
|
|
18.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit from) Provision for Income Taxes
|
|
$
|
(2.2
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
2.3
|
|
|
$
|
31.9
|
|
|
$
|
(4.3
|
)
|
|
Income Tax Effects of Non-GAAP Reconciling Adjustments
|
|
|
(5.8
|
)
|
|
|
(9.0
|
)
|
|
|
(2.4
|
)
|
|
|
19.4
|
|
|
|
(18.8
|
)
|
|
Non-GAAP Provision for Income Taxes
|
|
$
|
3.6
|
|
|
$
|
7.5
|
|
|
$
|
4.7
|
|
|
$
|
12.5
|
|
|
$
|
14.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) Earnings
|
|
$
|
(1.1
|
)
|
|
$
|
(14.6
|
)
|
|
$
|
32.9
|
|
|
$
|
(87.0
|
)
|
|
$
|
105.8
|
|
|
Non-GAAP Net Earnings Reconciling Adjustments
|
|
|
18.8
|
|
|
|
56.3
|
|
|
|
22.4
|
|
|
|
161.9
|
|
|
|
78.8
|
|
|
Income Tax Effects of Non-GAAP Reconciling Adjustments
|
|
|
(5.8
|
)
|
|
|
(9.0
|
)
|
|
|
(2.4
|
)
|
|
|
19.4
|
|
|
|
(18.8
|
)
|
|
Non-GAAP Net Earnings
|
|
$
|
11.9
|
|
|
$
|
32.7
|
|
|
$
|
52.9
|
|
|
$
|
94.3
|
|
|
$
|
165.8
|
|
|
Non-GAAP Net Earnings as % of Revenues
|
|
|
4.2
|
%
|
|
|
10.9
|
%
|
|
|
16.0
|
%
|
|
|
8.3
|
%
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted Earnings per Share (4)
|
|
$
|
0.14
|
|
|
$
|
0.38
|
|
|
$
|
0.62
|
|
|
$
|
1.10
|
|
|
$
|
1.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Average Shares Outstanding (4)
|
|
|
85,069,459
|
|
|
|
85,047,991
|
|
|
|
85,019,159
|
|
|
|
85,046,042
|
|
|
|
85,019,159
|
|
|
Non-GAAP Adjustment (5)
|
|
|
481,298
|
|
|
|
777,283
|
|
|
|
-
|
|
|
|
539,734
|
|
|
|
-
|
|
|
Non-GAAP Diluted Average Shares Outstanding (4) (5)
|
|
|
85,550,757
|
|
|
|
85,825,274
|
|
|
|
85,019,159
|
|
|
|
85,585,776
|
|
|
|
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. 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) In the third quarter of 2014, Other represents a charge
related to the resolution of customer claims for products no longer
produced.
(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)
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|
|
|
(unaudited)
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
55.2
|
|
|
$
|
105.6
|
|
Receivables, net of allowances of $0.8 and $1.7
|
|
|
236.3
|
|
|
|
224.6
|
|
Inventories, net
|
|
|
162.0
|
|
|
|
149.2
|
|
Prepaid and other current assets
|
|
|
10.7
|
|
|
|
11.7
|
|
Deferred tax assets
|
|
|
9.8
|
|
|
|
10.7
|
|
Total current assets
|
|
|
474.0
|
|
|
|
501.8
|
|
Property, plant and equipment, net
|
|
|
315.9
|
|
|
|
361.0
|
|
Goodwill
|
|
|
914.7
|
|
|
|
961.9
|
|
Intangible assets, net
|
|
|
270.3
|
|
|
|
318.3
|
|
Other assets and deferred charges
|
|
|
23.6
|
|
|
|
27.1
|
|
Total assets
|
|
$
|
1,998.5
|
|
|
$
|
2,170.1
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Current maturities of long-term debt
|
|
$
|
15.0
|
|
|
$
|
-
|
|
Accounts payable
|
|
|
172.1
|
|
|
|
143.9
|
|
Accrued compensation and employee benefits
|
|
|
38.7
|
|
|
|
40.9
|
|
Other accrued expenses
|
|
|
48.8
|
|
|
|
25.2
|
|
Federal and other taxes on income
|
|
|
14.0
|
|
|
|
-
|
|
Total current liabilities
|
|
|
288.6
|
|
|
|
210.0
|
|
Long-term debt
|
|
|
385.0
|
|
|
|
-
|
|
Deferred income taxes
|
|
|
49.2
|
|
|
|
45.9
|
|
Other liabilities
|
|
|
39.5
|
|
|
|
27.1
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Net Former Parent Company Investment in Knowles Corporation, prior
to Separation
|
|
|
|
1,850.6
|
|
|
|
|
|
|
|
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;
85,061,449 shares issued at December 31, 2014
|
|
|
0.9
|
|
|
|
-
|
|
Additional paid-in capital
|
|
|
1,372.6
|
|
|
|
-
|
|
Accumulated deficit
|
|
|
(84.0
|
)
|
|
|
-
|
|
Accumulated other comprehensive (loss) earnings
|
|
|
(53.3
|
)
|
|
|
36.5
|
|
Total stockholders' equity
|
|
|
1,236.2
|
|
|
|
36.5
|
|
Total equity
|
|
|
1,236.2
|
|
|
|
1,887.1
|
|
Total liabilities and equity
|
|
$
|
1,998.5
|
|
|
$
|
2,170.1
|
Source: Knowles Corporation
Financial Contact:
Knowles Investor Relations
Mike
Knapp, (630) 238-5236
mike.knapp@knowles.com
or
Media
Contact:
Knowles Communications
Melissa York, (630)
238-5242
melissa.york@knowles.com