0001587523FALSE00015875232024-10-242024-10-24

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 24, 2024
Knowles Corporation
(Exact name of registrant as specified in its charter)
Delaware001-3610290-1002689
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

1151 Maplewood Drive, Itasca, IL
(Address of Principal Executive Offices)

60143
(Zip Code)
Registrant's telephone number, including area code: (630) 250-5100
(Former Name or Former Address, if Changed since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareKNNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o



Item 2.02 Results of Operations and Financial Condition.
On October 24, 2024, Knowles Corporation (the "Company") issued a press release announcing its results of operations for the quarter ended September 30, 2024 and posted on its website at http://investor.knowles.com presentation slides which summarize certain of its results of operations for the quarter ended September 30, 2024. Knowles Corporation's quarterly financial conference call and webcast will be held on October 24, 2024. A copy of the press release is being furnished as Exhibit 99.1 hereto and a copy of the presentation slides is being furnished as Exhibit 99.2 hereto.
The information furnished with the Current Report on Form 8-K and the related exhibits included in Item 9.01 shall not be deemed to be "filed" for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

Forward Looking Statements
This Current Report on Form 8-K 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 relating to the expected impact of the Company's restructuring program, including estimates of timing and amounts of restructuring charges. 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 Current Report on Form 8-K 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, including risks relating to the timing and execution of the restructuring program; estimates and assumptions related to settlement of supplier obligations, the cost of severance benefits, non-cash fixed asset write-offs, and other associated costs; and other risks, relevant factors, and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, subsequent Reports on Forms 10-Q and 8-K and our other filings we make with the U.S. Securities and Exchange Commission. The Company 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.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished as part of this report:
Exhibit Number
Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document)





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
KNOWLES CORPORATION
Date: October 24, 2024
By: /s/ Robert J. Perna
Robert J. Perna
Senior Vice President, General Counsel & Secretary


knlogonewa27.jpg
Exhibit 99.1
Financial Contact:
Sarah Cook
Knowles Investor Relations
Email: investorrelations@knowles.com


Knowles Reports Q3 2024 Financial Results and Provides Outlook for Q4 2024

Third Quarter Revenues from Continuing Operations increased 32% on a year over year basis to $143M,
at the high end of the guided range

Net Cash from Operations of $53 million; exceeding the high end of the guided range
ITASCA, Ill., October 24, 2024 - Knowles Corporation (NYSE: KN) (“Knowles” or the “Company” ), a leading global supplier of high-performance electronics for demanding applications, including capacitors and radio frequency (“RF”) filters, advanced medtech microphones, and balanced armature speakers, today announced results for the quarter ended September 30, 2024.

“I am pleased that we delivered revenues from continuing operations and cash provided by operating activities at or above the high end of our guided range, with non-GAAP diluted EPS from continuing operations at the mid-point of our guided range,” commented Jeffrey Niew, President, and CEO of Knowles. “Total Company revenues from continuing operations increased by 32% compared with the prior year driven by the Cornell acquisition and organic growth of 4%. We delivered both sequential and year over year revenue growth in our Medtech & Specialty Audio and Precision Devices segments in the third quarter and expect to see sequential revenue growth again in the fourth quarter of 2024.”

In the third quarter, the Company signed a definitive agreement to sell the Consumer MEMS Microphones business, culminating a year long process. This furthers the Company's strategic transition from low margin to higher value markets and products that benefit from our strengths in product design and process technology to create solutions for our customers’ most complex problems. Mr. Niew added, “This divestiture and our third quarter results highlight the higher margin profile of our remaining businesses. We believe that by positioning ourselves in segments that offer both attractive growth prospects and more defensible margins, we can drive sustainable cash flow growth and better returns to shareholders.” The transaction is expected to close late in the fourth quarter of this year.

Financial Highlights
The following table highlights the Company’s financial performance on both a GAAP and supplemental non-GAAP basis for continuing operations* with the exception of Net cash provided by operating activities (in millions, except per share data):
Q3-24Q2-24Q3-23
Revenues$142.5$135.2$108.1
Gross profit$62.9$57.8$50.4
(as a % of revenues)44.1%42.8%46.6%
Non-GAAP gross profit $64.8$59.8$50.9
(as a % of revenues)45.5%44.2%47.1%
Diluted earnings per share**$0.10$0.05$0.17
Non-GAAP diluted earnings per share$0.26$0.20$0.20
Net cash provided by operating activities$52.8$24.9$39.9
* Continuing operations excludes the results of our Consumer MEMS Microphones reporting business for which a definitive agreement for its sale was signed on September 18, 2024.
** Current period results include $0.06 per share in stock-based compensation expense, $0.04 per share in intangibles amortization expense, $0.01 per share in acquisition-related costs, $0.01 per share in production transfer costs, $0.02 in other, and $0.02 per share for differences related to the GAAP effective tax rate excluded from non-GAAP results.

1

Fourth Quarter 2024 Outlook
The forward looking guidance for the quarter ending December 31, 2024 on a continuing operations basis with the exception of Net cash provided by operating activities is as follows:
GAAPAdjustmentsNon-GAAP
Revenues from continuing operations$141 to $151 million—$141 to $151 million
Diluted earnings per share from continuing operations$0.12 to $0.16$0.14$0.26 to $0.30
Net cash provided by operating activities$30 to $40 million—$30 to $40 million

Q4 2024 GAAP results from continuing operations are expected to include approximately $0.06 per share in stock-based compensation expense, $0.04 per share in intangibles amortization expense, and $0.03 per share for differences related to the GAAP effective tax rate and $0.01 per share in acquisition-related costs. These items are excluded from non-GAAP results.

Q4 2024 Net cash provided by operating activities is expected to include $5 to $10 million of cash used by discontinued operations.

Non-GAAP Financial Measures
In addition to the GAAP results included in this press release, Knowles has presented supplemental 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, 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.

A conference call replay will be available after 7:00 p.m. Central time on October 24 through 11:59 p.m. Central time on October 31 at (800) 770-2030 (Toll-Free Dial-In); (609) 800-9909 (Toll Dial-In). The conference ID is 8193117. A webcast replay will also be accessible via the Knowles website at http://investor.knowles.com for a limited time.

About Knowles
Knowles is a market leader and global provider of high-performance capacitors and radio frequency ("RF") filtering products, and advanced micro-acoustic microphones and balanced armature speakers, serving the medtech, defense, electric vehicle, and industrial 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. Founded in 1946 and headquartered in Itasca, Illinois, Knowles is a global organization with employees in 11 countries. The Company continues to invest in high value solutions to diversify its revenue and increase exposure to high growth markets. For more information, visit knowles.com.

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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 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: the occurrence of any event, change, or other circumstance that could give rise to the termination of the Transaction; the possibility that various closing conditions associated with the Transaction may not be satisfied or waived; the possibility of a failure to obtain, delays in obtaining or adverse conditions contained in regulatory or other required approvals; unanticipated difficulties or expenditures relating to the Transaction; legal proceedings that may be instituted against Knowles and others following announcement of the Transaction; disruptions of current plans and operations caused by the announcement and pendency of the Transaction; potential difficulties in employee retention as a result of the announcement and pendency of the Transaction; the response of customers, distributors, suppliers and competitors to the announcement of the Transaction; incurrence of additional impairment charges and a significant charge to earnings due to future events or factors, such as the Company’s inability to realize expected synergies from its acquisitions; 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; 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, 2023, 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.

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INVESTOR SUPPLEMENT - THIRD QUARTER 2024

KNOWLES CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts)
(unaudited)
Quarter Ended
September 30,
2024		June 30,
2024		September 30,
2023
Revenues$142.5 $135.2 $108.1 
Cost of goods sold79.5 77.1 57.5 
Restructuring charges - cost of goods sold0.1 0.3 0.2 
Gross profit62.9 57.8 50.4 
Research and development expenses10.2 9.6 8.1 
Selling and administrative expenses33.9 35.6 29.4 
Restructuring charges0.1 (0.1)1.5 
Operating expenses44.2 45.1 39.0 
Operating earnings18.7 12.7 11.4 
Interest expense, net3.9 4.6 0.6 
Other expense (income), net2.6 0.3 (0.5)
Earnings before income taxes and discontinued operations12.2 7.8 11.3 
Provision for (benefit from) income taxes3.0 3.0 (3.9)
Earnings from continuing operations9.2 4.8 15.2 
(Loss) earnings from discontinued operations, net(8.7)(264.1)1.4 
Net earnings (loss)$0.5 $(259.3)$16.6 
Earnings per share from continuing operations:
Basic$0.10 $0.05 $0.17 
Diluted$0.10 $0.05 $0.17 
(Loss) earnings per share from discontinued operations:
Basic$(0.09)$(2.95)$0.01 
Diluted$(0.09)$(2.93)$0.01 
Net earnings (loss) per share:
Basic$0.01 $(2.90)$0.18 
Diluted$0.01 $(2.88)$0.18 
Weighted-average common shares outstanding:
Basic88.7 89.4 90.8 
Diluted89.7 89.9 91.4 








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KNOWLES CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts)
(unaudited)

Nine Months Ended
September 30,
2024		September 30,
2023
Revenues$411.0 $317.6 
Cost of goods sold235.7 172.2 
Restructuring charges - cost of goods sold1.4 0.2 
Gross profit173.9 145.2 
Research and development expenses29.2 24.0 
Selling and administrative expenses106.8 87.3 
Restructuring charges1.5 1.8 
Operating expenses137.5 113.1 
Operating earnings36.4 32.1 
Interest expense, net12.9 2.2 
Other expense, net2.5 0.5 
Earnings before income taxes and discontinued operations21.0 29.4 
Provision for (benefit from) income taxes8.0 (9.6)
Earnings from continuing operations13.0 39.0 
Loss from discontinued operations, net(269.3)(14.0)
Net (loss) earnings$(256.3)$25.0 
Earnings per share from continuing operations:
Basic$0.15 $0.43 
Diluted$0.14 $0.42 
Loss per share from discontinued operations:
Basic$(3.02)$(0.16)
Diluted$(2.98)$(0.15)
Net (loss) earnings per share:
Basic$(2.87)$0.27 
Diluted$(2.84)$0.27 
Weighted-average common shares outstanding:
Basic89.2 91.2 
Diluted90.2 91.9 

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KNOWLES CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (1)
(in millions, except per share amounts)
(unaudited)
Quarter EndedNine Months Ended
September 30,
2024		June 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Gross profit$62.9 $57.8 $50.4 $173.9 $145.2 
Gross profit as % of revenues44.1 %42.8 %46.6 %42.3 %45.7 %
Stock-based compensation expense0.3 0.4 0.3 1.1 1.3 
Restructuring charges0.1 0.3 0.2 1.4 0.2 
Production transfer costs (2)
1.3 0.7 — 2.8 — 
Acquisition-related costs (3)
0.2 0.6 — 2.2 — 
Other (4)
— — — 1.1 — 
Non-GAAP gross profit $64.8 $59.8 $50.9 $182.5 $146.7 
Non-GAAP gross profit as % of revenues45.5 %44.2 %47.1 %44.4 %46.2 %
Research and development expenses$10.2 $9.6 $8.1 $29.2 $24.0 
Stock-based compensation expense (0.6)(0.5)(0.5)(1.6)(1.5)
Intangibles amortization expense(0.6)(0.6)(0.1)(1.8)(0.3)
Acquisition-related costs (3)
(0.1)(0.1)— (0.5)— 
Non-GAAP research and development expenses$8.9 $8.4 $7.5 $25.3 $22.2 
Selling and administrative expenses$33.9 $35.6 $29.4 $106.8 $87.3 
Stock-based compensation expense (4.9)(5.0)(4.9)(14.1)(14.2)
Intangibles amortization expense(3.6)(3.6)(1.4)(11.0)(4.0)
Production transfer costs (2)
(0.1)(0.1)— (0.2)— 
Acquisition-related costs (3)
(1.0)(1.3)(3.0)(4.8)(3.0)
Other (4)
(0.3)(0.1)(0.8)(0.5)(1.6)
Non-GAAP selling and administrative expenses$24.0 $25.5 $19.3 $76.2 $64.5 
Operating expenses$44.2 $45.1 $39.0 $137.5 $113.1 
Stock-based compensation expense (5.5)(5.5)(5.4)(15.7)(15.7)
Intangibles amortization expense(4.2)(4.2)(1.5)(12.8)(4.3)
Restructuring charges(0.1)0.1 (1.5)(1.5)(1.8)
Production transfer costs (2)
(0.1)(0.1)— (0.2)— 
Acquisition-related costs (3)
(1.1)(1.4)(3.0)(5.3)(3.0)
Other (4)
(0.3)(0.1)(0.8)(0.5)(1.6)
Non-GAAP operating expenses$32.9 $33.9 $26.8 $101.5 $86.7 
Net earnings from continuing operations$9.2 $4.8 $15.2 $13.0 $39.0 
Interest expense, net3.9 4.6 0.6 12.9 2.2 
Provision for (benefit from) income taxes3.0 3.0 (3.9)8.0 (9.6)
Earnings from continuing operations before interest and income taxes16.1 12.4 11.9 33.9 31.6 
Earnings from continuing operations before interest and income taxes as % of revenues
11.3 %9.2 %11.0 %8.2 %9.9 %
Stock-based compensation expense5.8 5.9 5.7 16.8 17.0 
Intangibles amortization expense4.2 4.2 1.5 12.8 4.3 
Restructuring charges0.2 0.2 1.7 2.9 2.0 
Production transfer costs (2)
1.4 0.8 — 3.0 — 
Acquisition-related costs (3)
1.3 2.0 3.0 7.5 3.0 
Other (4)
1.0 (0.3)0.8 1.6 1.6 
Adjusted earnings from continuing operations before interest and income taxes$30.0 $25.2 $24.6 $78.5 $59.5 
Adjusted earnings from continuing operations before interest and income taxes as % of revenues
21.1 %18.6 %22.8 %19.1 %18.7 %
Net earnings from continuing operations$9.2 $4.8 $15.2 $13.0 $39.0 
Interest expense, net3.9 4.6 0.6 12.9 2.2 
Provision for (benefit from) income taxes3.0 3.0 (3.9)8.0 (9.6)
Earnings from continuing operations before interest and income taxes16.1 12.4 11.9 33.9 31.6 
Non-GAAP reconciling adjustments (6)
13.9 12.8 12.7 44.6 27.9 
Depreciation expense5.0 5.1 4.5 15.3 13.7 
Adjusted earnings from continuing operations before interest, income taxes, depreciation, and amortization ("Adjusted EBITDA")$35.0 $30.3 $29.1 $93.8 $73.2 
Adjusted EBITDA as a % of revenues
24.6 %22.4 %26.9 %22.8 %23.0 %
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Quarter EndedNine Months Ended
September 30,
2024		June 30,
2024		September 30,
2023		September 30,
2024		September 30,
2023
Provision for (benefit from) income taxes$3.0 $3.0 $(3.9)$8.0 $(9.6)
Income tax effects of non-GAAP reconciling adjustments (5)
(1.1)(0.8)9.1 (2.0)22.8 
Non-GAAP provision for income taxes$1.9 $2.2 $5.2 $6.0 $13.2 
Net earnings from continuing operations$9.2 $4.8 $15.2 $13.0 $39.0 
Non-GAAP reconciling adjustments (6)
13.9 12.8 12.7 44.6 27.9 
Income tax effects of non-GAAP reconciling adjustments (5)
(1.1)(0.8)9.1 (2.0)22.8 
Non-GAAP net earnings$24.2 $18.4 $18.8 $59.6 $44.1 
Diluted earnings per share from continuing operations$0.10 $0.05 $0.17 $0.14 $0.42 
Earnings per share non-GAAP reconciling adjustment (5)(6)
0.16 0.15 0.03 0.50 0.05 
Non-GAAP diluted earnings per share$0.26 $0.20 $0.20 $0.64 $0.47 
Diluted average shares outstanding89.7 89.9 91.4 90.2 91.9 
Non-GAAP adjustment (7)
2.6 3.3 2.6 2.6 2.5 
Non-GAAP diluted average shares outstanding (7)
92.3 93.2 94.0 92.8 94.4 
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 operating performance.
(2)    Production transfer costs represent duplicate costs incurred to migrate manufacturing to facilities primarily within the United States. These amounts are included in the corresponding Gross profit and Earnings from continuing operations 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 include ongoing costs to facilitate integration, the amortization of fair value adjustments to inventory, and costs incurred by the Company to carry out this transaction.
(4)    Other expenses include non-recurring professional service fees related to the execution of various reorganization projects, foreign currency exchange rate impacts on restructuring balances, and the ongoing net lease cost (income) 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.
(6)    The non-GAAP reconciling adjustments are those adjustments made to reconcile Earnings from continuing operations before interest and income taxes to Adjusted earnings from continuing operations 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.

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KNOWLES CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share amounts)
(unaudited)
 September 30, 2024December 31, 2023
Current assets:  
Cash and cash equivalents$92.6 $87.3 
Receivables, net of allowances of $0.1 and $0.2
105.7 90.7 
Inventories124.9 127.0 
Prepaid and other current assets9.8 6.9 
Current assets of discontinued operations103.0 116.9 
Total current assets436.0 428.8 
Property, plant, and equipment, net134.4 141.9 
Goodwill270.4 270.5 
Intangible assets, net162.3 175.6 
Operating lease right-of-use assets7.8 10.2 
Other assets and deferred charges115.6 113.7 
Non-current assets of discontinued operations44.8 322.1 
Total assets$1,171.3 $1,462.8 
Current liabilities:  
Current maturities of long-term debt$49.5 $47.1 
Accounts payable34.2 27.0 
Accrued compensation and employee benefits27.0 23.2 
Operating lease liabilities2.3 3.1 
Other accrued expenses18.5 20.9 
Federal and other taxes on income16.4 2.8 
Current liabilities of discontinued operations38.0 40.5 
Total current liabilities185.9 164.6 
Long-term debt175.5 224.1 
Deferred income taxes0.8 0.7 
Long-term operating lease liabilities5.5 6.1 
Other liabilities24.0 29.3 
Non-current liabilities of discontinued operations2.2 3.9 
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; 98,271,587 and 88,380,502 shares issued and outstanding at September 30, 2024, respectively, and 97,297,703 and 89,092,871 shares issued and outstanding at December 31, 2023, respectively
1.0 1.0 
Treasury stock - at cost; 9,891,085 and 8,204,832 shares at September 30, 2024 and December 31, 2023, respectively
(180.8)(151.2)
Additional paid-in capital1,707.0 1,689.9 
Accumulated deficit(632.1)(375.8)
Accumulated other comprehensive loss(117.7)(129.8)
Total stockholders' equity777.4 1,034.1 
Total liabilities and stockholders' equity$1,171.3 $1,462.8 

8

KNOWLES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 Nine Months Ended September 30,
20242023
Operating Activities  
Net (loss) earnings $(256.3)$25.0 
Adjustments to reconcile net (loss) earnings to cash from operating activities:
Goodwill impairment262.5 — 
Depreciation and amortization40.7 33.8 
Stock-based compensation21.4 21.8 
Non-cash interest expense and amortization of debt issuance costs6.4 0.6 
Impairment of disposal group2.3 — 
Deferred income taxes0.7 1.6 
Non-cash restructuring charges0.3 (1.8)
Gain on sale of fixed assets(1.1)(10.0)
Gain on sale of asset(7.2)— 
Other, net7.4 (2.4)
Changes in assets and liabilities (excluding effects of foreign exchange):
Receivables, net(8.4)15.5 
Inventories11.2 (19.0)
Prepaid and other current assets(0.3)(0.8)
Accounts payable5.8 11.3 
Accrued compensation and employee benefits3.5 0.3 
Other accrued expenses(3.1)(2.7)
Accrued taxes15.3 (2.3)
Other non-current assets and non-current liabilities(6.1)(8.6)
Net cash provided by operating activities95.0 62.3 
Investing Activities  
Proceeds from the sale of asset7.2 — 
Proceeds from the sale of property, plant, and equipment— 12.4 
Capital expenditures(10.3)(11.8)
Acquisition of asset— (0.3)
Purchase of investments(0.5)(0.4)
Proceeds from the sale of investments0.5 0.4 
Net cash (used in) provided by investing activities(3.1)0.3 
Financing Activities  
Payments under revolving credit facility(130.0)— 
Borrowings under revolving credit facility78.0 — 
Repurchase of common stock(29.5)(27.5)
Tax on restricted and performance stock unit vesting and stock option exercises(6.4)(6.2)
Payments of debt issuance costs— (1.9)
Payments of finance lease obligations(1.4)(1.3)
Proceeds from exercise of stock options2.1 1.6 
Net cash used in financing activities(87.2)(35.3)
Effect of exchange rate changes on cash and cash equivalents0.6 (0.4)
Net increase in cash and cash equivalents5.3 26.9 
Cash and cash equivalents at beginning of period87.3 48.2 
Cash and cash equivalents at end of period$92.6 $75.1 
    
9

KNOWLES CORPORATION
RECONCILIATION OF GAAP CASH FLOW MEASURES TO NON-GAAP CASH FLOW MEASURES (1)
(in millions, except per share amounts)
(unaudited)

Quarter EndedNine Months Ended
September 30, 2024June 30, 2024September 30, 2023September 30, 2024September 30, 2023
Net cash provided by operating activities$52.8 $24.9 $39.9 $95.0 $62.3 
Less: amounts attributable to discontinued operations(22.3)1.3 (21.9)(22.1)(21.6)
Non-GAAP net cash attributable to continuing operations30.5 26.2 18.0 72.9 40.7 
Capital expenditures(3.7)(3.2)(3.9)(10.3)(11.8)
Less: amounts attributable to discontinued operations0.2 0.2 0.8 0.9 3.8 
Non-GAAP capital expenditures attributable to continuing operations(3.5)(3.0)(3.1)(9.4)(8.0)
Non-GAAP net cash attributable to continuing operations30.5 26.2 18.0 72.9 40.7 
Non-GAAP capital expenditures attributable to continuing operations(3.5)(3.0)(3.1)(9.4)(8.0)
Adjusted free cash flow$27.0 $23.2 $14.9 $63.5 $32.7 
Adjusted free cash flow as a % of revenues18.9 %17.2 %13.8 %15.5 %10.3 %

(1)    In addition to measuring cash flow generation based on the operating, investing, and financing classifications included in the Consolidated Statement of Cash Flows, Knowles also measures adjusted free cash flow and adjusted free cash flow as a percentage of revenues. Adjusted free cash flow is defined as non-GAAP net cash attributable to continuing operations less non-GAAP capital expenditures attributable to continuing operations. Non-GAAP net cash attributable to continuing operations is defined as net cash provided by operating activities less amounts attributable to discontinued operations. Non-GAAP capital expenditures attributable to continuing operations is defined as capital expenditures less amounts attributable to discontinued operations. Knowles believes these measures are helpful in measuring its cash generated from its continuing operations that is available to repay debt, fund acquisitions, and repurchase Knowles common stock. Adjusted free cash flow and adjusted 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, adjusted free cash flow and adjusted 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.
10
3rd Quarter 2024 Earnings Release Supplemental Information 1 0 . 2 4 . 2 4

 
2 Safe Harbor Forward Looking Statements This presentation 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 presentation 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: the occurrence of any event, change, or other circumstance that could give rise to the termination of the Transaction; the possibility that various closing conditions associated with the Transaction may not be satisfied or waived; the possibility of a failure to obtain, delays in obtaining or adverse conditions contained in regulatory or other required approvals; unanticipated difficulties or expenditures relating to the Transaction; legal proceedings that may be instituted against Knowles and others following announcement of the Transaction; disruptions of current plans and operations caused by the announcement and pendency of the Transaction; potential difficulties in employee retention as a result of the announcement and pendency of the Transaction; the response of customers, distributors, suppliers and competitors to the announcement of the Transaction; incurrence of additional impairment charges and a significant charge to earnings due to future events or factors, such as the Company’s inability to realize expected synergies from its acquisitions; 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; 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, 2023, 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. Non-GAAP Disclaimer 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, adjusted earnings before interest and income taxes, adjusted earnings before interest and income taxes margin, adjusted earnings before interest, taxes, depreciation, and amortization; adjusted earnings before interest, taxes, depreciation, and amortization margin; non-GAAP gross profit margin, non-GAAP diluted earnings per share, non-GAAP operating expense; free cash flow; and free cash flow margin 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 executive management team focuses 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 in the Appendix.

 
3 Financial measures depicted on this slide (other than net cash provided by operating activities) are for continuing operations, thereby excluding the results of our Consumer MEMS Microphones reporting business as a definitive agreement for its sale was signed on September 18, 2024. * For this Non-GAAP financial measure see the Appendix for GAAP to Non-GAAP reconciliation Q 3 2 0 2 4 Y E A R -O V E R -Y E A R Third Quarter Results at or above expectations • Revenue is at the high end of our guided range, growing 32% driven by Cornell and 4% by organic growth. • Non-GAAP Diluted EPS was at the mid-point of our guided range; growing 30% from the previous year. • Cash from operating activities exceeded the high end of the guided range. Net Cash Provided by Operating Activities ($M) Revenue ($M) Non-GAAP Diluted EPS* ($) 108.1 142.5 3Q23 3Q24 0.20 0.26 3Q23 3Q24 +30.0% 39.9 52.8 3Q23 3Q24 +32.3%+ 31.8%

 
4 Financial measures depicted on this slide are for continuing operations, thereby excluding the results of our Consumer MEMS Microphones reporting business as a definitive agreement for its sale was signed on September 18, 2024. * For this Non-GAAP financial measure see the Appendix for GAAP to Non-GAAP reconciliation Q 3 2 0 2 4 S E G M E N T P E R F O R M A N C E MedTech & Specialty Audio • Revenue grew 10% year over year on higher demand in both hearing health and specialty audio. • Adjusted EBITDA margins improved 60 bps driven by operating leverage. • Our strong margins and growth are attributed to our continued operational excellence, new product adoption, cutting edge technology, and strong end markets. Revenue ($M) Adjusted EBITDA Margin* (%) 57.9 63.7 3Q23 3Q24 43.5 44.1 3Q23 3Q24 +10.0% +60 bps

 
5 • Revenue grew 57% year over year driven by the acquisition of Cornell. • Adjusted EBITDA margins improved 60 bps driven by operating leverage. • A strong pipeline of new opportunities positions us well for growth as markets recover in 2025. • Continued focus on margin expansion in both Cornell and the legacy business through productivity, capacity utilization, and pricing. Financial measures depicted on this slide are for continuing operations, thereby excluding the results of our Consumer MEMS Microphones reporting business as a definitive agreement for its sale was signed on September 18, 2024. * For this Non-GAAP financial measure see the Appendix for GAAP to Non-GAAP reconciliation Precision Devices Q 3 2 0 2 4 S E G M E N T P E R F O R M A N C E Revenue ($M) 50.2 78.8 3Q23 3Q24 Adjusted EBITDA Margin* (%) +57.0% 23.1 23.7 3Q23 3Q24 +60 bps

 
6 Financial measures depicted on this slide are for continuing operations, thereby excluding the results of our Consumer MEMS Microphones reporting business as a definitive agreement for its sale was signed on September 18, 2024. * For this Non-GAAP financial measure see the Appendix for GAAP to Non-GAAP reconciliation Q 3 2 0 2 4 P E R F O R M A N C E High reliability. High performance. High margins. ◦ The sale of the Consumer MEMS Microphone business is an important step in our evolution to a leading industrial technology company. ◦ Our continuing operations quarterly results highlight our expanded margin profile as we continue to focus on more attractive growth markets in the MedTech, Defense, Electrification and Industrial spaces. ◦ Well positioned to drive shareholder value with higher organic growth in earnings and revenue. ◦ Investor Forum anticipated in the first quarter of 2025. Adjusted EBITDA Margin* (%) 45.5% Non-GAAP Gross Profit Margin* 24.6% Adjusted EBITDA Margin* 21.1% Adjusted EBIT Margin*

 
7 Q4 2024 GAAP results are expected to include approximately $0.06 per share in stock-based compensation, $0.04 per share in amortization of intangibles, and $0.03 per share for differences related to the GAAP effective tax rate and $0.01 per share in acquisition-related costs. These items are excluded from non-GAAP results. O U T L O O K Q4 2024 Guidance GAAP Adjustments Non-GAAP Revenues from continuing operations $141 to $151 million $— $141 to $151 million Diluted earnings per share from continuing operations $0.12 to $0.16 $0.14 $0.26 to $0.30 Net cash provided by operating activities $30 to $40 million $— $30 to $40 million

 
8 Appendix

 
9 Notes 1. Production transfer costs represent duplicate costs incurred to migrate manufacturing to facilities primarily within the United States. These amounts are included in the corresponding Gross profit and Earnings from continuing operations before interest and income taxes for each period presented. 2. These expenses are related to the acquisition of Cornell Dubilier by the Precision Devices segment. These expenses include ongoing costs to facilitate integration, the amortization of fair value adjustments to inventory, and costs incurred by the Company to carry out this transaction. 3. Other expenses include non-recurring professional service fees related to the execution of various reorganization projects, foreign currency exchange rate impacts on restructuring balances, and the ongoing net lease cost (income) related to facilities not used in operations. R EC O N C ILIA TIO N O F G A A P FIN A N C IA L M EA S U R ES TO N O N -G A A P FIN A N C IA L M EA S U R ES Quarter Ended September 30, (continuing operations, in millions, except per share amounts) 2024 2023 Revenues $ 142.5 $ 108.1 Gross profit $ 62.9 $ 50.4 Gross profit margin 44.1 % 46.6 % Stock-based compensation expense 0.3 0.3 Restructuring charges 0.1 0.2 Production transfer costs (1) 1.3 — Acquisition-related costs (2) 0.2 — Non-GAAP gross profit $ 64.8 $ 50.9 Non-GAAP gross profit margin 45.5 % 47.1 % Operating expenses $ 44.2 $ 39.0 Stock-based compensation expense (5.5) (5.4) Intangibles amortization expense (4.2) (1.5) Restructuring charges (0.1) (1.5) Production transfer costs (1) (0.1) — Acquisition-related costs (2) (1.1) (3.0) Other (3) (0.3) (0.8) Non-GAAP operating expenses $ 32.9 $ 26.8 Non-GAAP operating expenses margin 23.1 % 24.8 % Net earnings $ 9.2 $ 15.2 Interest expense, net 3.9 0.6 Provision for (benefit from) income taxes 3.0 (3.9) Earnings before interest and income taxes 16.1 11.9 Earnings before interest and income taxes margin 11.3 % 11.0 % Stock-based compensation expense 5.8 5.7 Intangibles amortization expense 4.2 1.5 Restructuring charges 0.2 1.7 Production transfer costs (1) 1.4 — Acquisition-related costs (2) 1.3 3.0 Other (3) 1.0 0.8 Adjusted earnings before interest and income taxes $ 30.0 $ 24.6 Adjusted earnings before interest and income taxes margin 21.1 % 22.8 %

 
1 0 R EC O N C ILIA TIO N O F G A A P FIN A N C IA L M EA S U R ES TO N O N -G A A P FIN A N C IA L M EA S U R ES Notes 4. The non-GAAP reconciling adjustments are those adjustments made to reconcile Earnings from continuing operations before interest and income taxes to Adjusted earnings before interest and income taxes. 5. Income tax effects of non-GAAP reconciling adjustments are calculated using the applicable tax rates in the jurisdictions of the underlying adjustments. 6. 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. Quarter Ended September 30, (continuing operations, in millions, except per share amounts) 2024 2023 Net earnings $ 9.2 $ 15.2 Interest expense, net 3.9 0.6 Provision for (benefit from) income taxes 3.0 (3.9) Earnings before interest and income taxes $ 16.1 $ 11.9 Non-GAAP reconciling adjustments (4) 13.9 12.7 Depreciation expense 5.0 4.5 Adjusted earnings before interest, income taxes, depreciation, and amortization ("Adjusted EBITDA") $ 35.0 $ 29.1 Adjusted EBITDA margin 24.6 % 26.9 % Net earnings $ 9.2 $ 15.2 Non-GAAP reconciling adjustments (4) 13.9 12.7 Income tax effects of non-GAAP reconciling adjustments (5) (1.1) 9.1 Non-GAAP net earnings $ 24.2 $ 18.8 Diluted earnings per share $ 0.10 $ 0.17 Earnings per share non-GAAP reconciling adjustment (4)(5) 0.16 0.03 Non-GAAP diluted earnings per share $ 0.26 $ 0.20 Diluted average shares outstanding 89.7 91.4 Non-GAAP adjustment (6) 2.6 2.6 Non-GAAP diluted average shares outstanding (6) 92.3 94.0

 
11 H IS T O R IC A L S E G M E N T D A T A PRECISION DEVICES MEDTECH & SPECIALTY AUDIO Quarter Ended Quarter Ended September 30, June 30, March 31, December 31, September 30, September 30, June 30, March 31, December 31, September 30, (continuing operations, in millions) 2024 2024 2024 2023 2023 2024 2024 2024 2023 2023 Revenues $ 78.8 $ 74.1 $ 74.3 $ 69.7 $ 50.2 $ 63.7 $ 61.1 $ 59.0 $ 69.5 $ 57.9 Gross profit $ 29.8 $ 25.8 $ 22.9 $ 22.5 $ 20.0 $ 33.7 $ 32.5 $ 31.3 $ 36.5 $ 31.0 Gross profit margin 37.8 % 34.8 % 30.8 % 32.3 % 39.8 % 52.9 % 53.2 % 53.1 % 52.5 % 53.5 % Stock-based compensation expense 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Restructuring charges 0.1 0.3 1.0 0.9 0.2 — — — — — Production transfer costs 1.3 0.7 0.8 0.4 — — — — — — Acquisition-related costs 0.2 0.6 1.4 0.8 — — — — — — Other — — 0.5 — — — — — — — Non-GAAP gross profit $ 31.5 $ 27.6 $ 26.8 $ 24.7 $ 20.3 $ 33.8 $ 32.6 $ 31.4 $ 36.6 $ 31.1 Non-GAAP gross profit margin 40.0 % 37.2 % 36.1 % 35.4 % 40.4 % 53.1 % 53.4 % 53.2 % 52.7 % 53.7 % Research and development expenses $ 5.2 $ 4.7 $ 4.7 $ 4.0 $ 3.1 $ 5.0 $ 4.8 $ 4.7 $ 4.3 $ 4.8 Research and development expenses margin 6.6 % 6.3 % 6.3 % 5.7 % 6.2 % 7.8 % 7.9 % 8.0 % 6.2 % 8.3 % Stock-based compensation expense (0.2) (0.1) (0.1) (0.1) (0.2) (0.4) (0.4) (0.4) (0.3) (0.3) Intangibles amortization expense (0.6) (0.6) (0.6) (0.6) (0.1) — — — — — Acquisition-related costs (0.1) (0.1) (0.3) — — — — — — — Non-GAAP research and development expenses $ 4.3 $ 3.9 $ 3.7 $ 3.3 $ 2.8 $ 4.6 $ 4.4 $ 4.3 $ 4.0 $ 4.5 Non-GAAP research and development expenses margin 5.5 % 5.3 % 5.0 % 4.7 % 5.6 % 7.2 % 7.2 % 7.3 % 5.8 % 7.8 % Selling and administrative expenses $ 16.1 $ 17.0 $ 18.7 $ 14.8 $ 9.6 $ 3.7 $ 3.6 $ 3.8 $ 3.3 $ 3.9 Selling and administrative expenses margin 20.4 % 22.9 % 25.2 % 21.2 % 19.1 % 5.8 % 5.9 % 6.4 % 4.7 % 6.7 % Stock-based compensation expense (0.4) (0.4) 0.2 (0.5) (0.5) (0.6) (0.5) (0.5) (0.5) (0.5) Intangibles amortization expense (3.6) (3.6) (3.8) (2.6) (1.4) — — — — — Production transfer costs (0.1) (0.1) — — — — — — — — Acquisition-related costs (0.9) (1.0) (1.9) (0.8) — — — — — — Non-GAAP selling and administrative expenses $ 11.1 $ 11.9 $ 13.2 $ 10.9 $ 7.7 $ 3.1 $ 3.1 $ 3.3 $ 2.8 $ 3.4 Non-GAAP selling and administrative expenses margin 14.1 % 16.1 % 17.8 % 15.6 % 15.3 % 4.9 % 5.1 % 5.6 % 4.0 % 5.9 % Operating expenses $ 21.4 $ 21.6 $ 24.9 $ 19.1 $ 13.8 $ 8.7 $ 8.4 $ 8.5 $ 7.6 $ 8.7 Operating expenses margin 27.2 % 29.1 % 33.5 % 27.4 % 27.5 % 13.7 % 13.7 % 14.4 % 10.9 % 15.0 % Stock-based compensation expense (0.6) (0.5) 0.1 (0.6) (0.7) (1.0) (0.9) (0.9) (0.8) (0.8) Intangibles amortization expense (4.2) (4.2) (4.4) (3.2) (1.5) — — — — — Restructuring charges (0.1) 0.1 (1.5) (0.3) (1.1) — — — — — Production transfer costs (0.1) (0.1) — — — — — — — — Acquisition-related costs (1.0) (1.1) (2.2) (0.8) — — — — — — Non-GAAP operating expenses $ 15.4 $ 15.8 $ 16.9 $ 14.2 $ 10.5 $ 7.7 $ 7.5 $ 7.6 $ 6.8 $ 7.9 Non-GAAP operating expenses margin 19.5 % 21.3 % 22.7 % 20.4 % 20.9 % 12.1 % 12.3 % 12.9 % 9.8 % 13.6 %

 
1 2 H IS T O R IC A L S E G M E N T D A T A PRECISION DEVICES MEDTECH & SPECIALTY AUDIO Quarter Ended Quarter Ended September 30, June 30, March 31, December 31, September 30, September 30, June 30, March 31, December 31, September 30, (continuing operations, in millions) 2024 2024 2024 2023 2023 2024 2024 2024 2023 2023 Revenues $ 78.8 $ 74.1 $ 74.3 $ 69.7 $ 50.2 $ 63.7 $ 61.1 $ 59.0 $ 69.5 $ 57.9 Operating earnings (loss) $ 8.4 $ 4.2 $ (2.0) $ 3.4 $ 6.2 $ 25.0 $ 24.1 $ 22.8 $ 28.9 $ 22.3 Other expense, net — — 0.1 — 0.1 — — — — — Earnings (loss) before interest and income taxes $ 8.4 $ 4.2 $ (2.1) $ 3.4 $ 6.1 $ 25.0 $ 24.1 $ 22.8 $ 28.9 $ 22.3 Earnings (loss) before interest and income taxes margin 10.7 % 5.7 % -2.8 % 4.9 % 12.2 % 39.2 % 39.4 % 38.6 % 41.6 % 38.5 % Stock-based compensation expense 0.7 0.7 0.1 0.7 0.8 1.1 1.0 1.0 0.9 0.9 Intangibles amortization expense 4.2 4.2 4.4 3.2 1.5 — — — — — Restructuring charges 0.2 0.2 2.5 1.2 1.3 — — — — — Production transfer costs 1.4 0.8 0.8 0.4 — — — — — — Acquisition-related costs 1.2 1.7 3.6 1.6 — — — — — — Other — — 0.5 — — — — — — — Adjusted earnings before interest and income taxes $ 16.1 $ 11.8 $ 9.8 $ 10.5 $ 9.7 $ 26.1 $ 25.1 $ 23.8 $ 29.8 $ 23.2 Adjusted earnings before interest and income taxes margin 20.4 % 15.9 % 13.2 % 15.1 % 19.3 % 41.0 % 41.1 % 40.3 % 42.9 % 40.1 % Operating earnings (loss) $ 8.4 $ 4.2 $ (2.0) $ 3.4 $ 6.2 $ 25.0 $ 24.1 $ 22.8 $ 28.9 $ 22.3 Other expense, net — — 0.1 — 0.1 — — — — — Earnings (loss) before interest and income taxes $ 8.4 $ 4.2 $ (2.1) $ 3.4 $ 6.1 $ 25.0 $ 24.1 $ 22.8 $ 28.9 $ 22.3 Non-GAAP reconciling adjustments 7.7 7.6 11.9 7.1 3.6 1.1 1.0 1.0 0.9 0.9 Depreciation expense 2.6 2.6 2.7 2.5 1.9 2.0 2.0 2.0 2.0 2.0 Adjusted earnings before interest, income taxes, depreciation, and amortization ("Adjusted EBITDA") $ 18.7 $ 14.4 $ 12.5 $ 13.0 $ 11.6 $ 28.1 $ 27.1 $ 25.8 $ 31.8 $ 25.2 Adjusted EBITDA margin 23.7 % 19.4 % 16.8 % 18.7 % 23.1 % 44.1 % 44.4 % 43.7 % 45.8 % 43.5 %

 
1 3 R EC O N C ILIA TIO N O F S EG M EN T EB IT TO C O N S O LID A TED N ET EA R N IN G S Quarter Ended September 30, June 30, March 31, December 31, September 30, (Continuing operations, in millions) 2024 2024 2024 2023 2023 Earnings (loss) before interest and income taxes Precision Devices $ 8.4 $ 4.2 $ (2.1) $ 3.4 $ 6.1 MedTech & Specialty Audio 25.0 24.1 22.8 28.9 22.3 Total segments 33.4 28.3 20.7 32.3 28.4 Corporate expense / other 17.3 15.9 15.3 21.2 16.5 Interest expense, net 3.9 4.6 4.4 3.2 0.6 Earnings before income taxes 12.2 7.8 1.0 7.9 11.3 Provision for (benefit from) income taxes 3.0 3.0 2.0 (18.7) (3.9) Net earnings (loss) $ 9.2 $ 4.8 $ (1.0) $ 26.6 $ 15.2

 
1 4 Quarter Ended September 30, June 30, March 31, December 31, Trailing 12-months(Continuing operations, in millions) 2024 2024 2024 2023 Net earnings (loss) $ 9.2 $ 4.8 $ (1.0) $ 26.6 $ 39.6 Interest expense, net 3.9 4.6 4.4 3.2 16.1 Provision for (benefit from) income taxes 3.0 3.0 2.0 (18.7) (10.7) Earnings before interest and income taxes 16.1 12.4 5.4 11.1 45.0 Stock-based compensation expense 5.8 5.9 5.1 5.8 22.6 Intangibles amortization expense 4.2 4.2 4.4 3.2 16.0 Restructuring charges 0.2 0.2 2.5 1.3 4.2 Production transfer costs 1.4 0.8 0.8 0.4 3.4 Acquisition-related costs 1.3 2.0 4.2 6.4 13.9 Other 1.0 (0.3) 0.9 0.5 2.1 Non-GAAP reconciling adjustments 13.9 12.8 17.9 17.6 62.2 Depreciation expense 5.0 5.1 5.2 5.0 20.3 Adjusted earnings before interest, income taxes, depreciation, and amortization ("Adjusted EBITDA") $ 35.0 $ 30.3 $ 28.5 $ 33.7 $ 127.5

 
1 5 R E C O N C IL IA T IO N O F N E T D E B T (in millions) September 30, 2024 Current maturities of long-term debt $ 49.5 Long-term debt 175.5 Total debt 225.0 Less: Cash and cash equivalents (92.6) Net debt $ 132.4 Net debt $ 132.4 Trailing 12 Month Adjusted EBITDA $ 127.5 Net debt leverage ratio 1.0 x

 
Thank you.

 
v3.24.3
Cover Statement
Oct. 24, 2024
Document Information [Line Items]  
Document Period End Date Oct. 24, 2024
Entity Registrant Name Knowles Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 001-36102
Entity Tax Identification Number 90-1002689
Entity Address, Address Line One 1151 Maplewood Drive
Entity Address, City or Town Itasca
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60143
City Area Code 630
Local Phone Number 250-5100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol KN
Security Exchange Name NYSE
Entity Emerging Growth Company false
Document Type 8-K
Entity Central Index Key 0001587523
Amendment Flag false
Knowles (NYSE:KN)
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