Q4 Cash from Operations above the High End of
Guidance Range
Full Year operating cash flow and free cash
flow margins of 17% and 15% of Revenues, respectively
Completed the acquisition of Cornell Dubilier
in Q4
Full Year 2023 Share Repurchases of $48
million
Knowles Corporation (NYSE: KN), ("Knowles" the "Company"), a
leading global supplier of high performance components and
solutions, including capacitors and radio frequency ("RF") filters,
advanced medtech microphones and balanced armature speakers, and
MEMS microphones for the consumer electronic market, today
announced results for the fourth quarter and year ended December
31, 2023.
“Revenue of $215 million was in line with our expectations and
up 9% versus the fourth quarter of 2022 with all three segments
increasing on a year over year basis. I am pleased to report
Knowles delivered Net Cash from Operating Activities of $60
million, which was well above the high end of the guidance,”
commented Jeffrey Niew, president and CEO of Knowles. “We closed
the year with solid execution across our businesses even though we
experienced challenges in our industrial and distribution end
markets. We are also excited to have successfully completed the
acquisition of Cornell Dubilier and while it has only been two
months since we closed, we are confident in the synergy
opportunities resulting from the acquisition. Reflecting on 2023,
it was another year where we made significant progress in
transitioning our company’s portfolio to higher value markets and
products."
Mr. Niew continued, “As we look to the first quarter of 2024, we
expect to see strong year over year organic growth despite excess
channel inventory in some of our end markets. The Cornell Dubilier
acquisition is anticipated to further add to growth and
profitability. In total, revenue is expected to be up 35% and
Non-GAAP Diluted EPS is expected to grow significantly from first
quarter 2023 levels."
Financial Highlights
The following table highlights the Company’s financial
performance on both a GAAP and supplemental non-GAAP basis (in
millions, except per share data):
Q4-23
Q3-23
Q4-22
Revenues
$215.2
$175.1
$197.1
Gross profit
$78.4
$77.5
$75.3
(as a % of revenues)
36.4%
44.3%
38.2%
Non-GAAP gross profit
$80.2
$78.1
$79.6
(as a % of revenues)
37.3%
44.6%
40.4%
Diluted earnings (loss) per share*
$0.52
$0.18
$(2.28)
Non-GAAP diluted earnings per share
$0.28
$0.31
$0.33
Net cash provided by operating
activities
$60.4
$39.9
$46.8
* Current period results include $0.42 per
share of one-time tax benefits, partially offset by $0.07 per share
in stock-based compensation expense, $0.06 per share in
acquisition-related costs, $0.04 per share in intangibles
amortization expense, and $0.01 per share in restructuring charges
that are excluded from non-GAAP results.
First Quarter 2024 Outlook
The forward looking guidance for the quarter ending March 31,
2024 is as follows:
GAAP
Adjustments
Non-GAAP
Revenues
$190 to $200 million
—
$190 to $200 million
Diluted earnings per share
$0.02 to $0.06
$0.14
$0.16 to $0.20
Net cash provided by operating
activities
$0 to $10 million
—
$0 to $10 million
Q1 2024 GAAP results are expected to include approximately $0.06
per share in stock-based compensation and $0.05 per share in
amortization of intangibles, and $0.03 per share in integration and
production transfer costs related to the acquisition of Cornell
Dubilier that are excluded from non-GAAP results.
Non-GAAP Financial Measures
In addition to the GAAP results included in this press release,
Knowles has presented supplemental non-GAAP financial measures
including non-GAAP gross profit, earnings before interest and
income taxes, adjusted earnings before interest and income taxes,
non-GAAP diluted earnings per share, free cash flow, free cash flow
margin, operating cash flow as a percent of revenue, net debt, as
well as other metrics on a non-GAAP basis that exclude certain
amounts that are included in the most directly comparable GAAP
measure to facilitate evaluation of Knowles’ operating performance.
Non-GAAP results are not presented in accordance with GAAP.
Non-GAAP information should be considered a supplement to, and not
a substitute for, financial statements prepared in accordance with
GAAP. In addition, the non-GAAP financial measures included in this
press release 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 financial performance, and its
management team primarily focuses on non-GAAP items in evaluating
Knowles’ performance for business planning purposes. Knowles also
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 including, for example, stock-based
compensation, certain intangibles amortization expense, impairment
charges, restructuring, production transfer costs, and other
charges which management considers to be outside our core operating
results. 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.
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 today.
Investors can also listen to the conference call at 3:30 p.m.
Central time today by calling (888) 596-4144 (United States) or
(646) 968-2525 (International). The conference call replay will be
available after 7:00 p.m. Central time today through 11:59 p.m.
Central time on February 14, 2024 at (800) 770-2030 (United States)
or (609) 800-9909 (International). The conference ID is 3966457
followed by # key.
About Knowles
Knowles is market leader and global provider of high performance
capacitors and radio frequency ("RF") filtering products, and
advanced micro-acoustic microphones and balanced armature speakers,
audio solutions, serving the medtech, defense, consumer
electronics, electric vehicle, industrial, and communications
markets. Knowles' focus on the customer, combined with unique
technology, proprietary manufacturing techniques, and global
operational expertise, enables us to deliver innovative solutions
across multiple applications. Knowles, founded in 1946 and
headquartered in Itasca, Illinois, has approximately 7,700
employees at facilities located in 15 countries around the world.
For more information, visit 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, such as statements about
our future plans, objectives, expectations, financial performance,
and continued business operations. The words “believe,” “expect,”
“anticipate,” “project,” “estimate,” “budget,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”
“will,” “would,” “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, including those statements related to our
expectations regarding the integration of Cornell Dubilier, are
based on currently available information and the current
expectations, forecasts, and assumptions of Knowles’ management
concerning 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. Other
risks and uncertainties include, but are not limited to: if we are
unsuccessful in identifying or completing a strategic alternative
for our Consumer MEMS Microphone segment, unforeseen changes in
MEMS microphone demand from our largest customers, particularly our
top five customers, who represent a significant portion of revenues
for our Consumer MEMS Microphone segment; our ongoing ability to
execute our strategy to diversify our end markets and customers;
our ability to stem or overcome price erosion in our segments;
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 of OEM product launches; risks
associated with increasing our inventories in advance of
anticipated orders by customers; global economic instability,
including due to inflation, rising interest rates, negative impacts
caused by pandemics and public health crises, or the impacts of
geopolitical uncertainties; the impact of changes to laws and
regulations that affect the Company’s ability to offer products or
services to customers in different regions; our ability to achieve
reductions in our operating expenses; the ability to qualify our
products and facilities with customers; our ability to obtain,
enforce, defend or monetize our intellectual property rights;
disruption caused by a cybersecurity incident, including a cyber
attack, cyber breach, theft, or other unauthorized access;
difficulties or delays in and/or the Company’s inability to realize
expected synergies from its acquisitions; increases in the costs of
critical raw materials and components; availability of raw
materials and components; managing new product ramps and
introductions for our customers; our dependence on a limited number
of large customers; our ability to maintain and expand our existing
relationships with leading OEMs in order to maintain and increase
our revenue; increasing competition and new entrants in the market
for our products; our ability to develop new or enhanced products
or technologies in a timely manner that achieve market acceptance;
our reliance on third parties to manufacture, assemble, and test
our products and sub-components; escalating international trade
tensions, new or increased tariffs and trade wars among countries;
financial risks, including risks relating to currency fluctuations,
credit risks and fluctuations in the market value of the Company; a
sustained decline in our stock price and market capitalization may
result in the impairment of certain intangible or long-lived
assets; market risk associated with fluctuations in commodity
prices, particularly for various precious metals used in our
manufacturing operation, changes in tax laws, changes in tax rates
and exposure to additional tax liabilities; and other risks,
relevant factors, and uncertainties identified in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2022,
subsequent Reports on Forms 10-Q and 8-K and our other filings we
make with the U.S. Securities and Exchange Commission. 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.
INVESTOR
SUPPLEMENT - FOURTH QUARTER 2023
KNOWLES CORPORATION
CONSOLIDATED STATEMENTS OF
EARNINGS
(in millions, except per share
amounts)
(unaudited)
Quarter Ended
December 31, 2023
September 30, 2023
December 31, 2022
Revenues
$
215.2
$
175.1
$
197.1
Cost of goods sold
136.6
102.7
117.2
(Gain) loss on sale of fixed assets
—
(5.2
)
0.5
Restructuring charges - cost of goods
sold
0.2
0.1
4.1
Gross profit
78.4
77.5
75.3
Research and development expenses
19.0
19.8
18.0
Selling and administrative expenses
45.4
34.6
33.3
Impairment charges
—
—
231.1
Restructuring charges
0.4
1.5
(0.2
)
Operating expenses
64.8
55.9
282.2
Operating earnings (loss)
13.6
21.6
(206.9
)
Interest expense, net
3.2
0.6
1.2
Other expense (income), net
0.2
(0.5
)
0.4
Earnings (loss) before income
taxes
10.2
21.5
(208.5
)
(Benefit from) provision for income
taxes
(37.2
)
4.9
(0.5
)
Net earnings (loss)
$
47.4
$
16.6
$
(208.0
)
Net earnings (loss) per share:
Basic
$
0.53
$
0.18
$
(2.28
)
Diluted
$
0.52
$
0.18
$
(2.28
)
Weighted-average common shares
outstanding:
Basic
90.0
90.8
91.0
Diluted
90.7
91.4
91.0
KNOWLES CORPORATION
CONSOLIDATED STATEMENTS OF
EARNINGS
(in millions, except per share
amounts)
(unaudited)
Year Ended
December 31, 2023
December 31, 2022
Revenues
$
707.6
$
764.7
Cost of goods sold
435.5
455.7
(Gain) loss on sale of fixed assets
(10.0
)
0.5
Restructuring charges - cost of goods
sold
(1.3
)
32.2
Gross profit
283.4
276.3
Research and development expenses
78.5
81.7
Selling and administrative expenses
150.3
128.9
Impairment charges
—
470.9
Restructuring charges
3.5
9.6
Operating expenses
232.3
691.1
Operating earnings (loss)
51.1
(414.8
)
Interest expense, net
5.4
3.9
Other expense (income), net
0.7
(0.5
)
Earnings (loss) before income
taxes
45.0
(418.2
)
(Benefit from) provision for income
taxes
(27.4
)
11.9
Net earnings (loss)
$
72.4
$
(430.1
)
Net earnings (loss) per share:
Basic
$
0.80
$
(4.69
)
Diluted
$
0.79
$
(4.69
)
Weighted-average common shares
outstanding:
Basic
90.9
91.7
Diluted
91.6
91.7
KNOWLES CORPORATION
RECONCILIATION OF GAAP
FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (1)
(in millions, except per share
amounts)
(unaudited)
Quarter Ended
Year Ended
December 31, 2023
September 30, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Gross profit
$
78.4
$
77.5
$
75.3
$
283.4
$
276.3
Gross profit as % of revenues
36.4
%
44.3
%
38.2
%
40.1
%
36.1
%
Stock-based compensation expense
0.4
0.5
0.2
2.1
1.6
Restructuring charges
0.2
0.1
4.1
(1.3
)
32.2
Production transfer costs (2)
0.4
—
—
0.4
—
Acquisition-related costs (3)
0.8
—
—
0.8
—
Non-GAAP gross profit
$
80.2
$
78.1
$
79.6
$
285.4
$
310.1
Non-GAAP gross profit as % of revenues
37.3
%
44.6
%
40.4
%
40.3
%
40.6
%
Research and development
expenses
$
19.0
$
19.8
$
18.0
$
78.5
$
81.7
Stock-based compensation expense
(1.3
)
(1.1
)
(1.4
)
(5.9
)
(5.6
)
Intangibles amortization expense
(2.1
)
(1.6
)
(1.6
)
(6.9
)
(6.4
)
Other (4)
(0.1
)
(0.1
)
(0.2
)
(0.3
)
(0.4
)
Non-GAAP research and development
expenses
$
15.5
$
17.0
$
14.8
$
65.4
$
69.3
Selling and administrative
expenses
$
45.4
$
34.6
$
33.3
$
150.3
$
128.9
Stock-based compensation expense
(5.5
)
(5.3
)
(5.4
)
(21.0
)
(21.4
)
Intangibles amortization expense
(2.6
)
(1.4
)
(1.4
)
(6.6
)
(5.8
)
Acquisition-related costs (3)
(5.6
)
(3.0
)
—
(8.6
)
—
Other (4)
(0.4
)
(0.1
)
0.7
(0.6
)
0.6
Non-GAAP selling and administrative
expenses
$
31.3
$
24.8
$
27.2
$
113.5
$
102.3
Operating expenses
$
64.8
$
55.9
$
282.2
$
232.3
$
691.1
Stock-based compensation expense
(6.8
)
(6.4
)
(6.8
)
(26.9
)
(27.0
)
Intangibles amortization expense
(4.7
)
(3.0
)
(3.0
)
(13.5
)
(12.2
)
Impairment charges
—
—
(231.1
)
—
(470.9
)
Restructuring charges
(0.4
)
(1.5
)
0.2
(3.5
)
(9.6
)
Acquisition-related costs (3)
(5.6
)
(3.0
)
—
(8.6
)
—
Other (4)
(0.5
)
(0.2
)
0.5
(0.9
)
0.2
Non-GAAP operating expenses
$
46.8
$
41.8
$
42.0
$
178.9
$
171.6
Net earnings (loss)
$
47.4
$
16.6
$
(208.0
)
$
72.4
$
(430.1
)
Interest expense, net
3.2
0.6
1.2
5.4
3.9
(Benefit from) provision for income
taxes
(37.2
)
4.9
(0.5
)
(27.4
)
11.9
Earnings (loss) before interest and
income taxes
13.4
22.1
(207.3
)
50.4
(414.3
)
Earnings (loss) before interest and income
taxes as % of revenues
6.2
%
12.6
%
(105.2
) %
7.1
%
(54.2
) %
Stock-based compensation expense
7.2
6.9
7.0
29.0
28.6
Intangibles amortization expense
4.7
3.0
3.0
13.5
12.2
Impairment charges
—
—
231.1
—
470.9
Restructuring charges
0.6
1.6
3.9
2.2
41.8
Production transfer costs (2)
0.4
—
—
0.4
—
Acquisition-related costs (3)
6.4
3.0
—
9.4
—
Other (4)
0.5
0.2
(0.5
)
0.9
3.2
Adjusted earnings before interest and
income taxes
$
33.2
$
36.8
$
37.2
$
105.8
$
142.4
Adjusted earnings before interest and
income taxes as % of revenues
15.4
%
21.0
%
18.9
%
15.0
%
18.6
%
Net earnings (loss)
47.4
16.6
(208.0
)
72.4
(430.1
)
Interest expense, net
3.2
0.6
1.2
5.4
3.9
(Benefit from) provision for income
taxes
(37.2
)
4.9
(0.5
)
(27.4
)
11.9
Earnings (loss) before interest and
income taxes
13.4
22.1
(207.3
)
50.4
(414.3
)
Non-GAAP reconciling adjustments (6)
19.8
14.7
244.5
55.4
556.7
Depreciation expense
8.0
7.6
9.2
33.0
41.7
Adjusted earnings before interest,
income taxes, depreciation, and amortization ("EBITDA")
41.2
44.4
46.4
138.8
184.1
Adjusted EBITDA as a % of revenues
19.1
%
25.4
%
23.5
%
19.6
%
24.1
%
Quarter Ended
Year Ended
December 31, 2023
September 30, 2023
December 31, 2022
December 31, 2023
December 31, 2022
(Benefit from) provision for income
taxes
$
(37.2
)
$
4.9
$
(0.5
)
$
(27.4
)
$
11.9
Income tax effects of non-GAAP reconciling
adjustments (5)
41.3
2.0
5.8
45.6
7.3
Non-GAAP provision for income
taxes
$
4.1
$
6.9
$
5.3
$
18.2
$
19.2
Net earnings (loss)
$
47.4
$
16.6
$
(208.0
)
$
72.4
$
(430.1
)
Non-GAAP reconciling adjustments (6)
19.8
14.7
244.5
55.4
556.7
Income tax effects of non-GAAP reconciling
adjustments (5)
41.3
2.0
5.8
45.6
7.3
Non-GAAP net earnings
$
25.9
$
29.3
$
30.7
$
82.2
$
119.3
Diluted earnings (loss) per
share
$
0.52
$
0.18
$
(2.28
)
$
0.79
$
(4.69
)
(Loss) earnings per share non-GAAP
reconciling adjustment
(0.24
)
0.13
2.61
0.09
5.95
Non-GAAP diluted earnings per
share
$
0.28
$
0.31
$
0.33
$
0.88
$
1.26
Diluted average shares
outstanding
90.7
91.4
91.0
91.6
91.7
Non-GAAP adjustment (7)
2.2
2.6
2.5
2.3
2.9
Non-GAAP diluted average shares
outstanding (7)
92.9
94.0
93.5
93.9
94.6
Notes:
(1)
In addition to the GAAP financial measures
included herein, Knowles has presented certain non-GAAP financial
measures that exclude certain amounts that are included in the most
directly comparable GAAP measures. Knowles believes that non-GAAP
measures are useful as supplements to its GAAP results of
operations to evaluate certain aspects of its operations and
financial performance, and its management team primarily focuses on
non-GAAP items in evaluating Knowles' performance for business
planning purposes. Knowles also 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 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 op erating performance.
(2)
Production transfer costs represent
duplicate costs incurred to migrate manufacturing to facilities
primarily in the United States. These amounts are included in the
corresponding Gross profit and Earnings (loss) before interest and
income taxes for each period presented.
(3)
These expenses are related to the
acquisition of Cornell Dubilier by the Precision Devices segment.
These expenses principally include costs incurred by the Company to
carry out this transaction as well as ongoing costs to facilitate
integration.
(4)
In 2023, Other expenses include
non-recurring professional service fees related to an execution of
a reorganization. In addition, Other expenses include the ongoing
net lease cost (income) related to facilities not used in
operations. In 2022, Other expenses represent an adjustment to
pre-spin-off pension obligations of $3.4 million, which was
recorded during the second quarter of 2022 in the Other expense
(income), net line on the Consolidated Statements of Earnings, and
the ongoing net lease cost related to facilities not used in
operations.
(5)
Income tax effects of non-GAAP reconciling
adjustments are calculated using the applicable tax rates in the
jurisdictions of the underlying adjustments. In 2023, these
adjustments include one-time tax benefits.
(6)
The non-GAAP reconciling adjustments are
those adjustments made to reconcile Earnings (loss) before interest
and income taxes to Adjusted earnings before interest and income
taxes.
(7)
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 share and
per share amounts)
(unaudited)
December 31, 2023
December 31, 2022
Current assets:
Cash and cash equivalents
$
87.3
$
48.2
Receivables, net of allowances of $0.2 and
$1.1
135.3
134.7
Inventories, net
196.4
169.5
Prepaid and other current assets
9.8
10.0
Total current assets
428.8
362.4
Property, plant, and equipment,
net
175.4
161.8
Goodwill
540.7
471.0
Intangible assets, net
189.4
85.1
Operating lease right-of-use
assets
13.1
12.6
Other assets and deferred
charges
115.4
91.0
Total assets
$
1,462.8
$
1,183.9
Current liabilities:
Current maturities of long-term debt
$
47.1
$
—
Accounts payable
51.3
41.4
Accrued compensation and employee
benefits
33.0
26.9
Operating lease liabilities
5.1
8.4
Other accrued expenses
25.0
19.9
Federal and other taxes on income
3.1
2.5
Total current liabilities
164.6
99.1
Long-term debt
224.1
45.0
Deferred income taxes
0.7
0.9
Long-term operating lease
liabilities
8.2
7.2
Other liabilities
31.1
38.8
Commitments and contingencies
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; 97,297,703 and 89,092,871 shares
issued and outstanding at December 31, 2023, respectively, and
96,431,604 and 91,078,376 shares issued and outstanding at December
31, 2022, respectively
1.0
1.0
Treasury stock - at cost; 8,204,832 and
5,353,228 shares at December 31, 2023 and 2022, respectively
(151.2
)
(103.3
)
Additional paid-in capital
1,689.9
1,665.5
Accumulated deficit
(375.8
)
(448.2
)
Accumulated other comprehensive loss
(129.8
)
(122.1
)
Total stockholders' equity
1,034.1
992.9
Total liabilities and stockholders'
equity
$
1,462.8
$
1,183.9
KNOWLES CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in millions)
(unaudited)
Years Ended December
31,
2023
2022
Operating Activities
Net earnings (loss)
$
72.4
$
(430.1
)
Adjustments to reconcile net earnings
(loss) to cash from operating activities:
Depreciation and amortization
46.5
53.9
Stock-based compensation
29.0
28.6
Impairment charges
—
470.9
Non-cash restructuring charges
(1.8
)
13.5
Non-cash interest expense and amortization
of debt issuance costs
2.0
0.7
Deferred income taxes
(40.3
)
1.6
(Gain) loss on sale or disposal of fixed
assets
(10.0
)
0.5
Other, net
(0.9
)
(5.9
)
Changes in assets and liabilities
(excluding effects of foreign exchange):
Receivables, net
12.7
11.1
Inventories, net
11.5
(22.8
)
Prepaid and other current assets
(0.4
)
2.0
Accounts payable
6.2
(41.2
)
Accrued compensation and employee
benefits
4.0
(15.0
)
Other accrued expenses
(2.0
)
(0.3
)
Accrued taxes
(0.4
)
1.3
Other non-current assets and non-current
liabilities
(5.8
)
17.5
Net cash provided by operating
activities
122.7
86.3
Investing Activities
Acquisitions of businesses
(136.9
)
(0.7
)
Acquisition of asset
(0.3
)
—
Capital expenditures
(16.9
)
(32.1
)
Proceeds from the sale of property, plant,
and equipment
12.5
0.1
Purchase of investments
(0.4
)
(0.4
)
Proceeds from the sale of investments
0.4
0.4
Net cash used in investing
activities
(141.6
)
(32.7
)
Financing Activities
Borrowings under revolving credit
facility
150.0
23.0
Payments under revolving credit
facility
(35.0
)
(48.0
)
Repurchase of common stock
(47.5
)
(44.0
)
Tax on stock option exercises and
restricted and performance stock unit vesting
(6.2
)
(6.9
)
Payments of finance lease obligations
(2.5
)
(4.8
)
Payments of debt issuance costs
(2.2
)
—
Proceeds from exercise of stock-based
awards
1.6
7.5
Net cash provided by (used in)
financing activities
58.2
(73.2
)
Effect of exchange rate changes on cash
and cash equivalents
(0.2
)
(1.1
)
Net increase (decrease) in cash and
cash equivalents
39.1
(20.7
)
Cash and cash equivalents at beginning of
period
48.2
68.9
Cash and cash equivalents at end of
period
$
87.3
$
48.2
KNOWLES CORPORATION
RECONCILIATION OF GAAP
LIQUIDITY MEASURES TO NON-GAAP LIQUIDITY MEASURES
(in millions)
(unaudited)
Net cash provided
by operating activities to Free cash flow (1)
Year Ended December 31,
2023
Net cash provided by operating
activities
$
122.7
Net cash provided by operating activities
as % of revenues
17.3
%
Less: Capital expenditures
(16.9
)
Free cash flow
$
105.8
Free cash flow as % of revenues
15.0
%
Debt to Net debt (2)
December 31, 2023
Current maturities of long-term debt
$
47.1
Long-term debt
224.1
Total debt
271.2
Less: Cash and cash equivalents
(87.3
)
Net debt
$
183.9
(1)
In addition to measuring cash flow
generation and usage based upon the operating, investing, and
financing classifications included in the Consolidated Statements
of Cash Flows, Knowles also measures free cash flow and free cash
flow as a percentage of revenues. Free cash flow is defined as cash
provided by operating activities less capital expenditures. Knowles
believes these measures are useful in measuring its cash generated
from operations that is available to repay debt, fund acquisitions,
and repurchase Knowles’ common stock. Free cash flow and free cash
flow as a percentage of revenues are not presented in accordance
with GAAP and may not be comparable to similarly titled measures
used by other companies in our industry. As such, free cash flow
and free cash flow as a percentage of revenues should not be
considered in isolation from, or as an alternative to, any other
liquidity measures determined in accordance with GAAP.
(2)
In addition to evaluating its financial
position based upon the financial measures included in the
Consolidated Balance Sheets, Knowles also uses net debt. Net debt
is defined as total debt, which includes current maturities of
long-term debt and long-term debt, less cash and cash equivalents.
Knowles believes this measure is useful in evaluating its financial
position. Net debt is not presented in accordance with GAAP and may
not be comparable to similarly titled measures used by other
companies in our industry. As such, net debt should not be
considered in isolation from, or as an alternative to, any other
liquidity measures determined in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207462399/en/
Financial Contact: Sarah Cook Knowles Investor Relations
Email: investorrelations@knowles.com
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