Cover Statement
Cover Statement - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 27, 2020 | |
Cover [Abstract] | ||
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-36102 | |
Entity Registrant Name | Knowles Corporation | |
Entity Incorporation, State or Country Code | DE | |
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 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Trading Symbol | KN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 91,673,777 |
Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Document Information [Line Items] | |
Document Period End Date | Sep. 30, 2020 |
Entity Central Index Key | 0001587523 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | Q3 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2020 |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 205.8 | $ 235.9 | $ 521.1 | $ 620.9 |
Cost of goods sold | 130.6 | 142.3 | 339.6 | 381.5 |
Restructuring charges - cost of goods sold | 0 | 0.1 | 2.3 | 1 |
Gross profit | 75.2 | 93.5 | 179.2 | 238.4 |
Research and development expenses | 21.9 | 23.4 | 70.2 | 73.1 |
Selling and administrative expenses | 32 | 34.6 | 99.3 | 111.1 |
Asset Impairment Charges | 7.6 | 0 | 7.6 | 0 |
Restructuring charges | 0.1 | 1.9 | 10.5 | 3.8 |
Operating expenses | 61.6 | 59.9 | 187.6 | 188 |
Operating earnings (loss) | 13.6 | 33.6 | (8.4) | 50.4 |
Interest expense, net | 4.7 | 3.8 | 12.5 | 10.9 |
Other expense (income), net | 1 | (0.6) | 0.2 | (0.1) |
Earnings (loss) before income taxes and discontinued operations | 7.9 | 30.4 | (21.1) | 39.6 |
Provision for income taxes | 2.3 | 5 | 5.6 | 11 |
Earnings (loss) from continuing operations | 5.6 | 25.4 | (26.7) | 28.6 |
Earnings from discontinued operations, net | 0 | 0 | 3.7 | 0 |
Net earnings (loss) | $ 5.6 | $ 25.4 | $ (23) | $ 28.6 |
Earnings per share: | ||||
Earnings (loss) from continuing operations, per basic share | $ 0.06 | $ 0.28 | $ (0.29) | $ 0.31 |
Earnings (loss) from continuing operations, per diluted share | 0.06 | 0.27 | (0.29) | 0.31 |
Earnings from discontinued operations, per basic share | 0 | 0 | 0.04 | 0 |
Earnings from discontinued operations, per diluted share | 0 | 0 | 0.04 | 0 |
Net earnings (loss) per share, basic | 0.06 | 0.28 | (0.25) | 0.31 |
Net earnings (loss) per share, diluted | $ 0.06 | $ 0.27 | $ (0.25) | $ 0.31 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 91,688,765 | 91,398,539 | 91,707,702 | 90,988,468 |
Diluted (in shares) | 92,473,318 | 93,859,446 | 91,707,702 | 92,655,874 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Document Fiscal Period Focus | Q3 | |||
Net earnings (loss) | $ 5.6 | $ 25.4 | $ (23) | $ 28.6 |
Foreign currency translation | 9.2 | (4.9) | 5.1 | (3.4) |
Employee benefit plans: | ||||
Amortization or settlement of actuarial losses and prior service costs | 0.3 | 0.1 | 0.5 | 0.4 |
Net change in employee benefit plans | 0.3 | 0.1 | 0.5 | 0.4 |
Changes in fair value of cash flow hedges: | ||||
Unrealized net gains (losses) arising during period | 1.4 | (1.3) | 0.5 | (1.1) |
Net (gains) losses reclassified into earnings | (0.5) | 0.4 | (0.1) | 0.5 |
Total cash flow hedges | 0.9 | (0.9) | 0.4 | (0.6) |
Other comprehensive earnings (loss), net of tax | 10.4 | (5.7) | 6 | (3.6) |
Other comprehensive loss, net of tax | 6 | (3.6) | ||
Comprehensive earnings (loss) | 16 | 19.7 | (17) | 25 |
Stockholders' Equity Attributable to Parent | 1,264.6 | 1,257.3 | 1,264.6 | 1,257.3 |
Net earnings (loss) | 5.6 | 25.4 | (23) | 28.6 |
Other comprehensive loss, net of tax | 6 | (3.6) | ||
Stock-based compensation expense | 4.8 | 5.2 | 12.4 | 19.2 |
Common stock issued for exercise of stock options and other | 0.1 | 5.7 | 1.8 | 7.5 |
Tax on restricted stock unit vesting | (0.1) | (0.5) | (6.1) | (6) |
Treasury Stock, Value, Acquired, Cost Method | (15) | |||
Common Stock | ||||
Stockholders' Equity Attributable to Parent | 0.9 | 0.9 | 0.9 | 0.9 |
Additional Paid-In Capital | ||||
Stockholders' Equity Attributable to Parent | 1,582.8 | 1,566.6 | 1,582.8 | 1,566.6 |
Stock-based compensation expense | 4.8 | 5.2 | 12.4 | 19.2 |
Common stock issued for exercise of stock options and other | 0.1 | 5.7 | 1.8 | 7.5 |
Tax on restricted stock unit vesting | (0.1) | (0.5) | (6.1) | (6) |
Accumulated Deficit | ||||
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | 5.6 | 25.4 | ||
Stockholders' Equity Attributable to Parent | (198.1) | (195.6) | (198.1) | (195.6) |
Net earnings (loss) | 5.6 | 25.4 | ||
Accumulated Other Comprehensive Loss | ||||
Changes in fair value of cash flow hedges: | ||||
Other comprehensive earnings (loss), net of tax | 10.4 | |||
Other comprehensive loss, net of tax | 10.4 | (5.7) | 6 | (3.6) |
Stockholders' Equity Attributable to Parent | (106) | (114.6) | (106) | (114.6) |
Other comprehensive loss, net of tax | 10.4 | $ (5.7) | 6 | $ (3.6) |
Treasury Stock | ||||
Stockholders' Equity Attributable to Parent | $ (15) | (15) | ||
Treasury Stock, Value, Acquired, Cost Method | $ (15) |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 139.1 | $ 78.4 |
Accounts Receivable, after Allowance for Credit Loss, Current | 125.2 | 159.6 |
Inventories, net | 160.1 | 141.8 |
Prepaid and other current assets | 10.5 | 8.6 |
Total current assets | 434.9 | 388.4 |
Property, plant, and equipment, net | 188.6 | 206.5 |
Goodwill | 909.9 | 909.9 |
Intangible assets, net | 81.9 | 91.7 |
Operating Lease, Right-of-Use Asset | 24.6 | 33.6 |
Other assets and deferred charges | (27.8) | (24.5) |
Total assets | 1,667.7 | 1,654.6 |
Current liabilities: | ||
Less: current maturities | 0 | 0 |
Accounts payable | 68.9 | 87.7 |
Accrued compensation and employee benefits | 26.8 | 32.1 |
Operating Lease, Liability, Current | 10 | 9.3 |
Other accrued expenses | 23.8 | 16.5 |
Federal and other taxes on income | 8.5 | 5.9 |
Total current liabilities | 138 | 151.5 |
Long-term debt | 213 | 156.8 |
Deferred Income Tax Liabilities, Net | 1.7 | 2.2 |
Operating Lease, Liability, Noncurrent | 20.5 | 25.1 |
Other liabilities | 29.3 | 29.9 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 0.9 | 0.9 |
Treasury Stock, Value | (15) | 0 |
Additional paid-in capital | 1,582.8 | 1,574.7 |
Accumulated deficit | (198.1) | (175.1) |
Accumulated other comprehensive loss | (106) | (112) |
Total stockholders' equity | 1,264.6 | 1,288.5 |
Total liabilities and stockholders' equity | 1,667.7 | 1,654.6 |
Disposal Group, Including Discontinued Operation, Liabilities | $ 0.6 | $ 0.6 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common Stock, Shares, Outstanding | 91,662,657 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 92,658,766 | 91,701,745 |
Treasury Stock, Shares | 996,109 | 996,109 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Allowance for doubtful accounts receivable | $ 1.7 | $ 0.8 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 92,658,766 | 91,701,745 |
Treasury Stock, Shares | 996,109 | 996,109 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Balance at Dec. 31, 2018 | $ 1,211.6 | $ 0.9 | $ 1,545.9 | $ (224.2) | $ (111) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 28.6 | |||||
Earnings (loss) from continuing operations | 28.6 | |||||
Other comprehensive earnings, net of tax | (3.6) | |||||
Other comprehensive loss, net of tax | (3.6) | (3.6) | ||||
Stock-based compensation expense | 19.2 | 19.2 | ||||
Common stock issued for exercise of stock options and other | 7.5 | 7.5 | ||||
Tax on restricted stock unit vesting | (6) | (6) | ||||
Balance at Sep. 30, 2019 | 1,257.3 | 0.9 | 1,566.6 | (195.6) | (114.6) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | (0.1) | |||||
Balance at Jun. 30, 2019 | 1,227.2 | 0.9 | 1,556.2 | (221) | (108.9) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 25.4 | 25.4 | ||||
Earnings (loss) from continuing operations | 25.4 | |||||
Other comprehensive earnings, net of tax | (5.7) | |||||
Other comprehensive loss, net of tax | (5.7) | |||||
Stock-based compensation expense | 5.2 | 5.2 | ||||
Common stock issued for exercise of stock options and other | 5.7 | 5.7 | ||||
Tax on restricted stock unit vesting | (0.5) | (0.5) | ||||
Balance at Sep. 30, 2019 | 1,257.3 | 0.9 | 1,566.6 | (195.6) | (114.6) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | (0.2) | |||||
Treasury Stock, Value | 0 | |||||
Balance at Dec. 31, 2019 | 1,288.5 | 0.9 | 1,574.7 | (175.1) | (112) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | (23) | |||||
Earnings (loss) from continuing operations | (26.7) | (26.7) | ||||
Other comprehensive earnings, net of tax | 6 | |||||
Other comprehensive loss, net of tax | 6 | 6 | ||||
Repurchase of common stock | (15) | (15) | ||||
Stock-based compensation expense | 12.4 | 12.4 | ||||
Common stock issued for exercise of stock options and other | 1.8 | 1.8 | ||||
Tax on restricted stock unit vesting | (6.1) | (6.1) | ||||
Balance at Sep. 30, 2020 | 1,264.6 | 0.9 | 1,582.8 | (198.1) | (106) | (15) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 0.1 | |||||
Balance at Jun. 30, 2020 | 1,243.8 | 0.9 | 1,578 | (203.7) | (116.4) | (15) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 5.6 | 5.6 | ||||
Earnings (loss) from continuing operations | 5.6 | 5.6 | ||||
Other comprehensive earnings, net of tax | 10.4 | 10.4 | ||||
Other comprehensive loss, net of tax | 10.4 | |||||
Stock-based compensation expense | 4.8 | 4.8 | ||||
Common stock issued for exercise of stock options and other | 0.1 | 0.1 | ||||
Tax on restricted stock unit vesting | (0.1) | (0.1) | ||||
Balance at Sep. 30, 2020 | 1,264.6 | $ 0.9 | $ 1,582.8 | $ (198.1) | $ (106) | $ (15) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 0.1 | |||||
Treasury Stock, Value | $ 15 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Payments for Repurchase of Common Stock | $ 15 | $ 0 |
Impaired Assets to be Disposed of by Method Other than Sale, Amount of Impairment Loss | 1.7 | 0 |
Increase (Decrease) in Other Operating Assets and Liabilities, Net | (0.3) | 3.9 |
Asset Impairment Charges | 7.6 | 0 |
Payments of Debt Issuance Costs | (0.9) | 0 |
Loss on disposal of fixed assets | 0.2 | 0.1 |
Repayments of Lines of Credit | (50) | (19) |
Proceeds from Sale of Property, Plant, and Equipment | 0.1 | 0 |
Net Cash Provided by (Used in) Investing Activities, Total | (20.3) | (44) |
Net Cash Provided by (Used in) Financing Activities, Total | 28.2 | (10.3) |
Adjustments to reconcile net (loss) earnings to cash from operating activities: | ||
Depreciation and amortization | 45.7 | 40.4 |
Stock-based compensation | 12.4 | 19.2 |
Non-cash interest expense and amortization of debt issuance costs | 6.6 | 6.1 |
Deferred income taxes | (2.6) | (0.1) |
Other, net | 1.4 | (0.9) |
Changes in assets and liabilities (excluding effects of foreign exchange): | ||
Receivables, net | 34.6 | (20.9) |
Inventories, net | (16.3) | (11.1) |
Prepaid and other current assets | (1.5) | (0.6) |
Accounts payable | (17.2) | (0.3) |
Accrued compensation and employee benefits | (5.3) | (9.4) |
Other accrued expenses | 8 | 1.6 |
Increase Decrease Accrued Taxes, Net | 0 | 1.8 |
Other non-current assets and non-current liabilities | 0.3 | (3.9) |
Net Cash Provided by (Used in) Operating Activities | 52.6 | 50.6 |
Investing Activities | ||
Additions to property, plant, and equipment | (20.4) | (32.6) |
Acquisitions of business (net of cash acquired) | 0 | (11.4) |
Financing Activities | ||
Borrowings under revolving credit facility | 100 | 10 |
Tax on restricted and performance stock unit vesting | (6.1) | (6) |
Payments of finance lease obligations | (1.4) | (1.4) |
Payment of consideration owed for acquisitions | 0 | (1.2) |
Net proceeds from exercise of stock-based awards | 1.6 | 7.3 |
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract] | ||
Effect of exchange rate changes on cash and cash equivalents | 0.2 | (0.1) |
Net earnings (loss) | (23) | 28.6 |
Net increase (decrease) in cash and cash equivalents | 60.7 | (3.8) |
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations, Beginning Balance | 78.4 | 73.5 |
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations | 139.1 | 69.7 |
Supplemental information - cash paid for: | ||
Income taxes | 9.5 | 9.9 |
Interest | 5 | 4.3 |
Payments for Repurchase of Common Stock | $ 15 | $ 0 |
Other Comprehensive Earnings
Other Comprehensive Earnings | 3 Months Ended |
Sep. 30, 2020 | |
Statement of Other Comprehensive Income [Abstract] | |
Other Comprehensive Earnings | The amounts recognized in other comprehensive earnings (loss) were as follows: Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ 9.2 $ — $ 9.2 $ (4.9) $ — $ (4.9) Employee benefit plans 0.2 0.1 0.3 0.1 — 0.1 Changes in fair value of cash flow hedges 1.1 (0.2) 0.9 (1.1) 0.2 (0.9) Total other comprehensive earnings (loss) $ 10.5 $ (0.1) $ 10.4 $ (5.9) $ 0.2 $ (5.7) Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ 5.1 $ — $ 5.1 $ (3.4) $ — $ (3.4) Employee benefit plans 0.5 — 0.5 0.4 — 0.4 Changes in fair value of cash flow hedges 0.5 (0.1) 0.4 (0.7) 0.1 (0.6) Total other comprehensive earnings (loss) $ 6.1 $ (0.1) $ 6.0 $ (3.7) $ 0.1 $ (3.6) The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the nine months ended September 30, 2020 and 2019: (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2019 $ 0.5 $ (18.7) $ (93.8) $ (112.0) Other comprehensive earnings, net of tax 0.4 0.5 5.1 6.0 Balance at September 30, 2020 $ 0.9 $ (18.2) $ (88.7) $ (106.0) (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2018 $ (0.4) $ (15.5) $ (95.1) $ (111.0) Other comprehensive (loss) earnings, net of tax (0.6) 0.4 (3.4) (3.6) Balance at September 30, 2019 $ (1.0) $ (15.1) $ (98.5) $ (114.6) The following tables summarize the amounts reclassified from accumulated other comprehensive loss to earnings: Three Months Ended September 30, (in millions) Statement of Earnings Line 2020 2019 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs $ 0.2 $ 0.1 Tax Provision for income taxes 0.1 — Net of tax $ 0.3 $ 0.1 Cash flow hedges: Net (gains) losses reclassified into earnings Cost of goods sold $ (0.6) $ 0.5 Tax Provision for income taxes 0.1 (0.1) Net of tax $ (0.5) $ 0.4 Nine Months Ended September 30, (in millions) Statement of Earnings Line 2020 2019 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs $ 0.5 $ 0.4 Tax Provision for income taxes — — Net of tax $ 0.5 $ 0.4 Cash flow hedges: Net (gains) losses reclassified into earnings Cost of goods sold $ (0.2) $ 0.7 Tax Provision for income taxes 0.1 (0.2) Net of tax $ (0.1) $ 0.5 |
Other Comprehensive Loss
Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of other comprehensive (loss) earnings | The amounts recognized in other comprehensive earnings (loss) were as follows: Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ 9.2 $ — $ 9.2 $ (4.9) $ — $ (4.9) Employee benefit plans 0.2 0.1 0.3 0.1 — 0.1 Changes in fair value of cash flow hedges 1.1 (0.2) 0.9 (1.1) 0.2 (0.9) Total other comprehensive earnings (loss) $ 10.5 $ (0.1) $ 10.4 $ (5.9) $ 0.2 $ (5.7) Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ 5.1 $ — $ 5.1 $ (3.4) $ — $ (3.4) Employee benefit plans 0.5 — 0.5 0.4 — 0.4 Changes in fair value of cash flow hedges 0.5 (0.1) 0.4 (0.7) 0.1 (0.6) Total other comprehensive earnings (loss) $ 6.1 $ (0.1) $ 6.0 $ (3.7) $ 0.1 $ (3.6) |
Schedule of (Loss) Earnings | The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the nine months ended September 30, 2020 and 2019: (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2019 $ 0.5 $ (18.7) $ (93.8) $ (112.0) Other comprehensive earnings, net of tax 0.4 0.5 5.1 6.0 Balance at September 30, 2020 $ 0.9 $ (18.2) $ (88.7) $ (106.0) (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2018 $ (0.4) $ (15.5) $ (95.1) $ (111.0) Other comprehensive (loss) earnings, net of tax (0.6) 0.4 (3.4) (3.6) Balance at September 30, 2019 $ (1.0) $ (15.1) $ (98.5) $ (114.6) The following tables summarize the amounts reclassified from accumulated other comprehensive loss to earnings: Three Months Ended September 30, (in millions) Statement of Earnings Line 2020 2019 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs $ 0.2 $ 0.1 Tax Provision for income taxes 0.1 — Net of tax $ 0.3 $ 0.1 Cash flow hedges: Net (gains) losses reclassified into earnings Cost of goods sold $ (0.6) $ 0.5 Tax Provision for income taxes 0.1 (0.1) Net of tax $ (0.5) $ 0.4 Nine Months Ended September 30, (in millions) Statement of Earnings Line 2020 2019 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs $ 0.5 $ 0.4 Tax Provision for income taxes — — Net of tax $ 0.5 $ 0.4 Cash flow hedges: Net (gains) losses reclassified into earnings Cost of goods sold $ (0.2) $ 0.7 Tax Provision for income taxes 0.1 (0.2) Net of tax $ (0.1) $ 0.5 |
Other Comprehensive Loss - OCI
Other Comprehensive Loss - OCI - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Foreign currency translation adjustments [Abstract] | ||||
Foreign currency translation | $ 9.2 | $ (4.9) | $ 5.1 | $ (3.4) |
Foreign currency translation, tax | 0 | 0 | 0 | 0 |
Foreign currency translation, net of tax | 9.2 | (4.9) | 5.1 | (3.4) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent [Abstract] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, before Tax, after Reclassification Adjustment, Attributable to Parent | 0.2 | 0.1 | 0.5 | 0.4 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent | 0.1 | 0 | 0 | 0 |
Net change in employee benefit plans | 0.3 | 0.1 | 0.5 | 0.4 |
Changes in fair value of cash flow hedges: | ||||
Changes in fair value of cash flow hedges, before tax | 1.1 | (1.1) | 0.5 | (0.7) |
Changes in fair value of cash flow hedges, tax | (0.2) | 0.2 | (0.1) | 0.1 |
Changes in fair value of cash flow hedges, net of tax | 0.9 | (0.9) | 0.4 | (0.6) |
Total other comprehensive earnings [Abstract] | ||||
Other comprehensive loss, before tax | 10.5 | (5.9) | 6.1 | (3.7) |
Other comprehensive loss, tax | (0.1) | 0.2 | (0.1) | 0.1 |
Other comprehensive earnings (loss), net of tax | $ 10.4 | $ (5.7) | $ 6 | $ (3.6) |
Other Comprehensive Loss - AOCI
Other Comprehensive Loss - AOCI - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Amortization or settlement of actuarial losses and prior service costs | $ 0.2 | $ 0.1 | $ 0.5 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax | (0.1) | 0 | 0 | $ 0 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax | 0.3 | 0.1 | 0.5 | 0.4 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 0.6 | (0.5) | 0.2 | (0.7) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (0.1) | 0.1 | (0.1) | 0.2 |
Net (gains) losses reclassified into earnings | (0.5) | 0.4 | (0.1) | 0.5 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (112) | (111) | ||
Other comprehensive earnings, net of tax | 10.4 | (5.7) | 6 | (3.6) |
Ending balance | (106) | (114.6) | (106) | (114.6) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | 0.5 | (0.4) | ||
Other comprehensive earnings, net of tax | 0.4 | (0.6) | ||
Ending balance | 0.9 | (1) | 0.9 | (1) |
Employee benefit plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (18.7) | (15.5) | ||
Other comprehensive earnings, net of tax | 0.5 | 0.4 | ||
Ending balance | (18.2) | (15.1) | (18.2) | (15.1) |
Cumulative foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (93.8) | (95.1) | ||
Other comprehensive earnings, net of tax | 5.1 | (3.4) | ||
Ending balance | $ (88.7) | $ (98.5) | $ (88.7) | $ (98.5) |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Description of Business - Knowles Corporation (NYSE:KN) is a market leader and global provider of advanced micro-acoustic, audio processing, and precision device solutions, serving the mobile consumer electronics, communications, medtech, defense, automotive, and industrial markets. The Company uses its leading position in micro-electro-mechanical systems ("MEMS") microphones and strong capabilities in audio processing technologies to optimize audio systems and improve the user experience in mobile, ear, and Internet of Things ("IoT") applications. Knowles is also a leader in acoustic components, high-end capacitors, and mmWave radio frequency solutions for a diverse set of markets. The Company's focus on the customer, combined with its unique technology, proprietary manufacturing techniques, rigorous testing, and global scale, enable the Company to deliver innovative solutions that optimize the user experience. References to "Knowles," "the Company," "we," "our," and "us" refer to Knowles Corporation and its consolidated subsidiaries. Financial Statement Presentation - The accompanying unaudited interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) for complete financial statements. These unaudited interim Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Management uses historical experience and all available information to make these estimates, including considerations for the impact of the COVID-19 pandemic on the macroeconomic environment. The situation related to the COVID-19 pandemic continues to be complex and rapidly evolving. The Company cannot reasonably estimate the duration of the COVID-19 pandemic or fully ascertain its impact on the Company’s future results and market capitalization, which could adversely impact estimates such as the recoverability of goodwill and long-lived assets and the realizability of deferred tax assets. The unaudited interim Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods. On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the nine months ended September 30, 2020, the Company repurchased 996,109 shares of common stock for a total of $15.0 million. In connection with the COVID-19 pandemic, the Company temporarily suspended share repurchases, but intends to resume the share repurchase program in the fourth quarter of 2020. On December 20, 2019, the Company acquired substantially all of the assets of the MEMS Microphone Application-specific integrated circuit Design Business (“ASIC Design Business”). See Note 4. Acquisitions for additional information related to the transaction. Non-cash Investing Activities - Purchases of property, plant, and equipment included in accounts payable at September 30, 2020 and 2019 were $1.9 million and $4.2 million, respectively. These non-cash amounts are not reflected as outflows to "Additions to property, plant, and equipment" within "Investing Activities" of the Consolidated Statements of Cash Flows for the respective periods. |
Recent Accounting Standards (No
Recent Accounting Standards (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Standards | Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The standard eliminates certain accounting models that separated embedded conversion features from host contracts for convertible instruments, requiring bifurcation only if the convertible feature qualifies as a derivative under Accounting Standards Codification ("ASC") 815 or for convertible instruments issued at a substantial premium. In addition, the guidance requires the if-converted method of calculating diluted earnings per share for convertible instruments, which eliminates the use of the treasury stock method for instruments that may be settled in cash or shares. The standard is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The standard can be adopted on a modified retrospective basis to transactions outstanding as of the adoption date or on a fully retrospective basis to all periods presented. The Company plans to adopt the standard using the modified retrospective method on January 1, 2022. The Company does not expect the standard to impact the Consolidated Financial Statements as all currently outstanding convertible instruments will mature prior to the expected adoption date. See Note 10. Borrowings for detail on the Company's outstanding convertible instruments. In December 2019, the FASB issued ASU 2019-12 to simplify the accounting for income taxes. This guidance removes certain exceptions to the general principles in ASC 740 and amends existing guidance to improve consistent application. The standard is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted and prospective application of the guidance is required. The Company has not yet determined its adoption date for the standard, which will not have a significant impact on the Consolidated Financial Statements upon adoption. |
Disposed and Discontinued Opera
Disposed and Discontinued Operations (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations [Abstract] | |
Disposed and Discontinued Operations | Management and the Board of Directors periodically conduct strategic reviews of the Company's businesses. On November 28, 2017, the Company completed the sale of its high-end oscillators business (“Timing Device Business”), part of the Precision Devices (“PD”) segment, for $130.0 million, plus purchase price adjustments for a net amount of $135.1 million. On July 7, 2016, the Company completed the sale of its speaker and receiver product line (“Speaker and Receiver Product Line”) for $45.0 million in cash, less purchase price adjustments for a net amount received of $40.6 million. In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the results of operations and financial positions of the Timing Device Business and Speaker and Receiver Product Line have been reclassified to discontinued operations for all periods presented as these disposals represent strategic shifts that had a major effect on the Company's results of operations. Summarized results of the Company's discontinued operations are as follows: (in millions) Nine Months Ended September 30, 2020 Revenues $ — Cost of goods sold — Gross profit — Operating income — Earnings from discontinued operations before taxes (1) — Benefit from income taxes (2) (3.7) Earnings from discontinued operations, net of tax $ 3.7 (1) The Company's policy is to not allocate interest expense to discontinued operations unless it is directly attributable to the operations. The discontinued operations did not have any such interest expense in the periods presented. (2) The Company recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business. Assets and liabilities of discontinued operations are summarized below: (in millions) September 30, 2020 December 31, 2019 Liabilities of discontinued operations: Other liabilities (1) $ 0.6 $ 0.6 Total liabilities $ 0.6 $ 0.6 (1) The Company recorded an unrecognized tax benefit related to the Speaker and Receiver Product Line during the fourth quarter of 2019. Discontinued operations had no impact on the Company's results of operations for the three months ended September 30, 2020 and the three and nine months ended September 30, 2019. There was no depreciation, amortization of intangible assets, or capital expenditures related to discontinued operations during the nine months ended September 30, 2020 and 2019. |
Acquisitions (Notes)
Acquisitions (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Acquisitions | ASIC Design Business On December 20, 2019, the Company acquired substantially all of the assets of the ASIC Design Business from ams AG for $57.9 million. The acquired business, which does not generate revenues, includes intellectual property and an assembled workforce. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Consolidated Financial Statements from the date of acquisition in the Audio segment. The table below represents the final allocation of the purchase price to net assets acquired as of December 20, 2019: (in millions) Property, plant, and equipment $ 0.6 Developed technology 33.3 In-process research and development 3.7 Non-competition agreement 1.6 Goodwill 18.8 Assumed current liabilities (0.1) Total purchase price $ 57.9 Intangible Assets The fair values for developed technology and in-process research and development ("IPR&D") were determined using the multi-period excess earnings method under the income approach. This method reflects the present value of expected future cash flows less charges representing the contribution of other assets to those cash flows. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of developed technology and IPR&D include expected future cost savings, technology obsolescence rates, discount rates, and expected costs to complete IPR&D. Discount rates of 13.0% and 14.0% were applied to the expected future cash flows to reflect the risk related to developed technology and IPR&D, respectively. Developed technologies will be amortized over an estimated useful life of 6 years based on the technology cycle and cash flows over the forecast period. IPR&D is initially classified as an indefinite-lived intangible asset and assessed for impairment thereafter. Upon completion of the underlying project, IPR&D is reclassified as a definite-lived intangible asset and amortized over its estimated useful life. The IPR&D project is expected to be complete in 2021. The excess of the total purchase price over the total fair value of the identifiable assets and liabilities was recorded as goodwill. The goodwill recognized is primarily attributable to synergies and the assembled workforce. All of the goodwill resulting from this acquisition is tax deductible. Goodwill has been allocated to the Audio segment, which is the segment expected to benefit from the acquisition. The Company believes the fair values assigned to intangible assets are based on reasonable assumptions and estimates that approximate the amounts a market participant would pay for these intangible assets as of the acquisition date. Actual results could differ materially from these estimates. Unaudited Pro-forma Summary The following unaudited pro-forma summary presents consolidated financial information for the three and nine months ended September 30, 2019 as if the ASIC Design Business had been acquired on January 1, 2018. The unaudited pro-forma financial information is based on historical results of operations and financial positions of the Company and the ASIC Design Business. The pro-forma results include estimated amortization of definite-lived intangible assets and exclude cost savings and transaction costs. The unaudited pro-forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2018. In addition, the unaudited pro-forma information should not be deemed to be indicative of future results. (unaudited) (in millions, except share and per share amounts) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Earnings from continuing operations: As reported $ 25.4 $ 28.6 Pro-forma 23.1 21.6 Basic earnings per share from continuing operations: As reported $ 0.28 $ 0.31 Pro-forma 0.25 0.24 Diluted earnings per share from continuing operations: As reported $ 0.27 $ 0.31 Pro-forma 0.25 0.23 DITF On January 3, 2019, the Company acquired substantially all of the assets of DITF Interconnect Technology, Inc. ("DITF") for $11.1 million. The acquired business provides thin film components to the defense, telecommunication, industrial, and medtech markets. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Consolidated Financial Statements from the date of acquisition in the PD segment. Included in the Consolidated Statements of Earnings are DITF's revenues and loss before income taxes of $6.2 million and less than $0.1 million, respectively, from the date of acquisition through September 30, 2019. |
Inventories, net (Notes)
Inventories, net (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory, Net [Abstract] | |
Inventories, net | The following table details the major components of inventories, net: (in millions) September 30, 2020 December 31, 2019 Raw materials $ 106.0 $ 82.8 Work in progress 30.2 30.9 Finished goods 60.9 53.5 Subtotal 197.1 167.2 Less reserves (37.0) (25.4) Total $ 160.1 $ 141.8 |
Property, Plant, and Equipment,
Property, Plant, and Equipment, net (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | 7. Property, Plant, and Equipment, net The following table details the major components of property, plant, and equipment, net: (in millions) September 30, 2020 December 31, 2019 Land $ 7.9 $ 7.7 Buildings and improvements 109.4 104.5 Machinery, equipment, and other 540.6 533.1 Subtotal 657.9 645.3 Less accumulated depreciation (469.3) (438.8) Total $ 188.6 $ 206.5 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | There were no changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2020. The gross carrying value and accumulated amortization for each major class of intangible assets are as follows: September 30, 2020 December 31, 2019 (in millions) Gross Carrying Accumulated Gross Carrying Accumulated Amortized intangible assets: Trademarks $ 1.0 $ 0.3 $ 1.0 $ 0.2 Patents 40.8 35.0 40.8 31.5 Customer relationships 12.0 4.9 12.0 3.6 Developed technology 36.5 5.2 36.5 0.7 Non-competition agreements 1.8 0.5 1.8 0.1 Total 92.1 45.9 92.1 36.1 Unamortized intangible assets: Trademarks 32.0 32.0 IPR&D 3.7 3.7 Total 35.7 35.7 Total intangible assets, net $ 81.9 $ 91.7 Amortization expense totaled $3.3 million and $1.8 million for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, amortization expense was $9.8 million and $5.3 million, respectively. Amortization expense for the next five years, based on current intangible balances, is estimated to be as follows: (in millions) Q4 2020 $ 3.2 2021 13.0 2022 7.7 2023 7.1 2024 7.0 |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company's ETR from continuing operations for the three and nine months ended September 30, 2020 was a 29.1% provision and a 26.5% provision, respectively. During the three and nine months ended September 30, 2020, the ETR from continuing operations was impacted by discrete items totaling $1.2 million of benefit, primarily related to a benefit resulting from an increase to the recognized deferred tax assets in the Company's U.S. and Malaysian subsidiaries. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2020 was a 44.3% provision and a 32.2% provision, respectively. The Company's ETR from continuing operations for the three and nine months ended September 30, 2019 was a 16.4% provision and a 27.8% provision, respectively. During the three and nine months ended September 30, 2019, the ETR from continuing operations was impacted by discrete items totaling $0.2 million of expense and $0.3 million of benefit, respectively. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2019 was a 15.8% provision and a 28.5% provision, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the three and nine months ended September 30, 2020 and 2019. The Company's ETR is favorably impacted by tax holidays granted to the Company in Malaysia effective through December 31, 2021. These tax holidays are subject to the Company's annual satisfaction of certain conditions, including investment and sales thresholds. If the Company fails to satisfy such conditions, the Company's ETR may be significantly adversely impacted. The continuing operations benefit of our tax holidays in Malaysia for the three and nine months ended September 30, 2020 was approximately $2.7 million and $4.2 million, respectively, or $0.03 and $0.05 on a per share basis. The continuing operations benefit of these incentives for the three and nine months ended September 30, 2019 was approximately $6.5 million and $14.4 million, respectively, or $0.07 and $0.16 on a per share basis. |
Equity Incentive Program (Notes
Equity Incentive Program (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Equity Incentive Program | Stock-based compensation expense recognized in the Consolidated Statements of Earnings totaled $4.8 million and $5.2 million for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, stock-based compensation expense was $12.4 million and $19.2 million, respectively. Stock Options and SSARs The expense related to stock options granted in the nine months ended September 30, 2020 and 2019 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below: Nine Months Ended September 30, 2020 2019 Risk-free interest rate 0.11% to 1.42% 1.72% to 2.44% Dividend yield —% —% Expected life (years) 4.3 to 4.5 4.5 Volatility 38.8% to 40.6% 41.0% to 42.9% Fair value at date of grant $4.78 to $5.95 $6.22 to $7.35 The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the nine months ended September 30, 2020 (in millions, except share and per share amounts): SSARs Stock Options Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (Years) Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (Years) Outstanding at December 31, 2019 596,537 $ 22.72 5,377,148 $ 17.51 Granted — — 896,875 16.75 Exercised — — (129,463) 12.55 Forfeited — — (173,680) 16.49 Expired — — (138,742) 19.39 Outstanding at September 30, 2020 596,537 $ 22.72 $ — 1.6 5,832,138 $ 17.49 $ 5.3 3.2 Exercisable at September 30, 2020 596,537 $ 22.72 $ — 1.6 4,300,404 $ 17.92 $ 5.1 2.2 There was no unrecognized compensation expense related to SSARs at September 30, 2020. At September 30, 2020, unrecognized compensation expense related to stock options not yet exercisable of $5.6 million is expected to be recognized over a weighted-average period of 1.7 years. RSUs The following table summarizes the Company's restricted stock unit ("RSU") activity for the nine months ended September 30, 2020: Share units Weighted-average grant date fair value Unvested at December 31, 2019 2,261,114 $ 15.99 Granted 1,431,843 16.50 Vested (1) (1,040,850) 16.29 Forfeited (715,701) 16.22 Unvested at September 30, 2020 1,936,406 $ 16.16 (1) The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements. At September 30, 2020, $19.8 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 1.6 years. PSUs The Company grants performance stock units ("PSUs") to senior management. In each case, the awards will cliff vest three years following the grant date. For the awards granted in February 2018 and 2017, the number of PSUs that may be earned and vest is based on the Company's revenues and stock price performance over a three year performance period. For the awards granted in February 2019, the number of PSUs that may be earned and vest is based on the Company's revenues and total shareholder return relative to the S&P Semiconductor Select Industry Index over a three year performance period. For the awards granted in February 2020, the number of PSUs that may be earned and vest is based on total shareholder return relative to the S&P Semiconductor Select Industry Index over a three year performance period. PSUs will be settled in shares of the Company's common stock. Depending on the Company's overall performance relative to the applicable performance metrics, the size of the PSU awards are subject to adjustment, up or down, resulting in awards at the end of the performance period that can range from 0% to 225% of the initial grant value. In February 2020, the awards granted in February 2017 were converted from 176,154 PSUs to 88,959 shares of stock based on achievement of performance metrics. The Company will ratably recognize the expense over the applicable service period for each grant of PSUs and adjust the expense as appropriate. The fair value of the PSUs is determined by using a Monte Carlo simulation. The following table summarizes the Company's PSU activity for the nine months ended September 30, 2020: Share units Weighted-average grant date fair value Unvested at December 31, 2019 844,789 $ 15.90 Granted 322,178 16.14 Vested (1) (184,405) 15.24 Forfeited (61,589) 17.05 Unvested at September 30, 2020 920,973 $ 16.04 (1) The number of PSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements. At September 30, 2020, $3.3 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.3 years. |
Earnings per Share (Notes)
Earnings per Share (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Basic and diluted earnings per share were computed as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions, except share and per share amounts) 2020 2019 2020 2019 Earnings (loss) from continuing operations $ 5.6 $ 25.4 $ (26.7) $ 28.6 Earnings from discontinued operations, net — — 3.7 — Net earnings (loss) $ 5.6 $ 25.4 $ (23.0) $ 28.6 Basic earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.06 $ 0.28 $ (0.29) $ 0.31 Earnings from discontinued operations, net — — 0.04 — Net earnings (loss) $ 0.06 $ 0.28 $ (0.25) $ 0.31 Weighted-average shares outstanding 91,688,765 91,398,539 91,707,702 90,988,468 Diluted earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.06 $ 0.27 $ (0.29) $ 0.31 Earnings from discontinued operations, net — — 0.04 — Net earnings (loss) $ 0.06 $ 0.27 $ (0.25) $ 0.31 Diluted weighted-average shares outstanding 92,473,318 93,859,446 91,707,702 92,655,874 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | From time to time, the Company is involved in various legal proceedings and claims arising in the ordinary course of its business. The majority of these claims and proceedings relate to commercial, warranty, employment, and intellectual property matters. Although the ultimate outcome of any legal proceeding or claim cannot be predicted with certainty, based on present information, including management’s assessment of the merits of the particular claim, the Company believes that, apart from the action set forth below, the disposition of these legal proceedings or claims, individually or in the aggregate, after taking into account recorded accruals and the availability and limits of insurance coverage, will not have a material adverse effect on its cash flow, results of operations, or financial condition. As previously disclosed, the Company is party to a representative action filed in the Superior Court of California, Los Angeles County under the Private Attorneys General Act, Consuelo Andrade, individually and on behalf of other similarly situated vs. Novacap LLC et al. (Case No. 20STCV21805). The complaint was filed on June 5, 2020 and, as amended, alleges that the Company incorrectly calculated overtime rate of pay, incorrectly paid overtime, and provided inaccurate wage statements, to certain non-exempt employees at the Company’s Valencia, California manufacturing facility in violation of California law. The action seeks penalties, attorneys' fees, and other relief. The Company intends to defend these claims vigorously. While the Company is unable to predict the ultimate outcome of this lawsuit, based on its current assessment of the facts underlying the complaint, the Company does not believe this matter will have a material adverse effect on its future financial condition, results of operations, or cash flows. The Company owns many patents and other intellectual property pertaining to its products, technology, and manufacturing processes. Some of the Company's patents have been and may continue to be infringed upon or challenged by others. In appropriate cases, the Company has taken and will take steps to protect and defend its patents and other intellectual property, including through the use of legal proceedings in various jurisdictions around the world. Such steps have resulted in and may continue to result in retaliatory legal proceedings, including litigation or other legal proceedings in various jurisdictions and forums around the world alleging infringement by the Company of patents owned by others. The costs of investigations and legal proceedings relating to the enforcement and defense of the Company’s intellectual property may be substantial. Additionally, in multi-forum disputes, the Company may incur adverse judgments with regard to certain claims in certain jurisdictions and forums while still contesting other related claims against the same opposing party in other jurisdictions and forums. Intellectual Property Infringement Claims The Company may, on a limited customer specific basis, provide contractual indemnities for certain losses that arise out of claims that its products infringe on the intellectual property of others. It is not possible to determine the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Historically, the Company has not made significant payments under such indemnity arrangements. The Company’s legal accruals associated with these indemnity arrangements were not significant at September 30, 2020 and December 31, 2019. |
Segment Information (Notes)
Segment Information (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | The Company's two reportable segments are Audio and Precision Devices. Information regarding the Company's reportable segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Revenues: Audio $ 164.8 $ 193.7 $ 389.4 $ 492.7 Precision Devices 41.0 42.2 131.7 128.2 Total revenues $ 205.8 $ 235.9 $ 521.1 $ 620.9 Earnings (loss) from continuing operations before interest and income taxes: Audio $ 17.8 $ 39.1 $ (0.5) $ 72.1 Precision Devices 8.0 7.6 26.2 23.3 Total segments 25.8 46.7 25.7 95.4 Corporate expense / other 13.2 12.5 34.3 44.9 Interest expense, net 4.7 3.8 12.5 10.9 Earnings (loss) before income taxes and discontinued operations 7.9 30.4 (21.1) 39.6 Provision for income taxes 2.3 5.0 5.6 11.0 Earnings (loss) from continuing operations $ 5.6 $ 25.4 $ (26.7) $ 28.6 Information regarding assets of the Company's reportable segments: Total Assets (in millions) September 30, 2020 December 31, 2019 Audio $ 1,466.9 $ 1,487.6 Precision Devices 195.6 162.0 Corporate / eliminations 5.2 5.0 Total $ 1,667.7 $ 1,654.6 The following table details revenues by geographic location. Revenues are attributed to regions based on the location of the Company's direct customer, which in some instances is an intermediary and not necessarily the end user. The Company's businesses are based primarily in Asia, North America, and Europe. Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Asia $ 151.7 $ 178.0 $ 368.3 $ 443.1 United States 28.8 32.2 86.8 97.3 Europe 23.1 22.2 59.8 71.1 Other Americas 1.3 1.9 2.8 4.6 Other 0.9 1.6 3.4 4.8 Total $ 205.8 $ 235.9 $ 521.1 $ 620.9 Receivables, net from contracts with customers were $116.2 million and $152.8 million as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, our total remaining performance obligations are immaterial. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting Policy | The accompanying unaudited interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) for complete financial statements. These unaudited interim Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Management uses historical experience and all available information to make these estimates, including considerations for the impact of the COVID-19 pandemic on the macroeconomic environment. The situation related to the COVID-19 pandemic continues to be complex and rapidly evolving. The Company cannot reasonably estimate the duration of the COVID-19 pandemic or fully ascertain its impact on the Company’s future results and market capitalization, which could adversely impact estimates such as the recoverability of goodwill and long-lived assets and the realizability of deferred tax assets. The unaudited interim Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods. On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the nine months ended September 30, 2020, the Company repurchased 996,109 shares of common stock for a total of $15.0 million. In connection with the COVID-19 pandemic, the Company temporarily suspended share repurchases, but intends to resume the share repurchase program in the fourth quarter of 2020. |
Recent Accounting Standards New
Recent Accounting Standards New Accounting Pronouncements, Policy (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The standard eliminates certain accounting models that separated embedded conversion features from host contracts for convertible instruments, requiring bifurcation only if the convertible feature qualifies as a derivative under Accounting Standards Codification ("ASC") 815 or for convertible instruments issued at a substantial premium. In addition, the guidance requires the if-converted method of calculating diluted earnings per share for convertible instruments, which eliminates the use of the treasury stock method for instruments that may be settled in cash or shares. The standard is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. The standard can be adopted on a modified retrospective basis to transactions outstanding as of the adoption date or on a fully retrospective basis to all periods presented. The Company plans to adopt the standard using the modified retrospective method on January 1, 2022. The Company does not expect the standard to impact the Consolidated Financial Statements as all currently outstanding convertible instruments will mature prior to the expected adoption date. See Note 10. Borrowings for detail on the Company's outstanding convertible instruments. In December 2019, the FASB issued ASU 2019-12 to simplify the accounting for income taxes. This guidance removes certain exceptions to the general principles in ASC 740 and amends existing guidance to improve consistent application. The standard is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted and prospective application of the guidance is required. The Company has not yet determined its adoption date for the standard, which will not have a significant impact on the Consolidated Financial Statements upon adoption. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations [Abstract] | |
Summarized Results and Assets and Liabilities of Discontinued Operations | Summarized results of the Company's discontinued operations are as follows: (in millions) Nine Months Ended September 30, 2020 Revenues $ — Cost of goods sold — Gross profit — Operating income — Earnings from discontinued operations before taxes (1) — Benefit from income taxes (2) (3.7) Earnings from discontinued operations, net of tax $ 3.7 (1) The Company's policy is to not allocate interest expense to discontinued operations unless it is directly attributable to the operations. The discontinued operations did not have any such interest expense in the periods presented. (2) The Company recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business. Assets and liabilities of discontinued operations are summarized below: (in millions) September 30, 2020 December 31, 2019 Liabilities of discontinued operations: Other liabilities (1) $ 0.6 $ 0.6 Total liabilities $ 0.6 $ 0.6 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Schedule of the Final Allocation of the Purchase Price to Net Assets | The table below represents the final allocation of the purchase price to net assets acquired as of December 20, 2019: (in millions) Property, plant, and equipment $ 0.6 Developed technology 33.3 In-process research and development 3.7 Non-competition agreement 1.6 Goodwill 18.8 Assumed current liabilities (0.1) Total purchase price $ 57.9 |
Schedule of Pro-forma summary for an Acquisition | The following unaudited pro-forma summary presents consolidated financial information for the three and nine months ended September 30, 2019 as if the ASIC Design Business had been acquired on January 1, 2018. The unaudited pro-forma financial information is based on historical results of operations and financial positions of the Company and the ASIC Design Business. The pro-forma results include estimated amortization of definite-lived intangible assets and exclude cost savings and transaction costs. The unaudited pro-forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2018. In addition, the unaudited pro-forma information should not be deemed to be indicative of future results. (unaudited) (in millions, except share and per share amounts) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Earnings from continuing operations: As reported $ 25.4 $ 28.6 Pro-forma 23.1 21.6 Basic earnings per share from continuing operations: As reported $ 0.28 $ 0.31 Pro-forma 0.25 0.24 Diluted earnings per share from continuing operations: As reported $ 0.27 $ 0.31 Pro-forma 0.25 0.23 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory, Net [Abstract] | |
Components of Inventory | The following table details the major components of inventories, net: (in millions) September 30, 2020 December 31, 2019 Raw materials $ 106.0 $ 82.8 Work in progress 30.2 30.9 Finished goods 60.9 53.5 Subtotal 197.1 167.2 Less reserves (37.0) (25.4) Total $ 160.1 $ 141.8 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Components of property, plant and equipment, net | The following table details the major components of property, plant, and equipment, net: (in millions) September 30, 2020 December 31, 2019 Land $ 7.9 $ 7.7 Buildings and improvements 109.4 104.5 Machinery, equipment, and other 540.6 533.1 Subtotal 657.9 645.3 Less accumulated depreciation (469.3) (438.8) Total $ 188.6 $ 206.5 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The gross carrying value and accumulated amortization for each major class of intangible assets are as follows: September 30, 2020 December 31, 2019 (in millions) Gross Carrying Accumulated Gross Carrying Accumulated Amortized intangible assets: Trademarks $ 1.0 $ 0.3 $ 1.0 $ 0.2 Patents 40.8 35.0 40.8 31.5 Customer relationships 12.0 4.9 12.0 3.6 Developed technology 36.5 5.2 36.5 0.7 Non-competition agreements 1.8 0.5 1.8 0.1 Total 92.1 45.9 92.1 36.1 Unamortized intangible assets: Trademarks 32.0 32.0 IPR&D 3.7 3.7 Total 35.7 35.7 Total intangible assets, net $ 81.9 $ 91.7 |
Schedule of Future Amortization Expense | Amortization expense for the next five years, based on current intangible balances, is estimated to be as follows: (in millions) Q4 2020 $ 3.2 2021 13.0 2022 7.7 2023 7.1 2024 7.0 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Lease expense [Abstract] | |
Details of Impairment of Long-Lived Assets Held and Used by Asset | 5. Impairments The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company vacated its leased facility in Mountain View, California during the three months ended September 30, 2020, resulting in its classification as a separate asset group. This facility was previously used by the Intelligent Audio product line, which is included within the Audio segment. Based on current market conditions, in particular the impact of the COVID-19 pandemic, the Company determined that the carrying amount of the related operating lease right-of-use asset was not recoverable through undiscounted future cash flows, which included estimated sublease proceeds. The fair value of the operating lease right-of-use asset was determined by an estimate of discounted future cash flows that included estimated sublease proceeds and the determination of an appropriate discount rate based on market participant assumptions. The fair value measurements of operating lease right-of-use assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Based on the excess of the carrying amount of the operating lease right-of-use asset over its fair value, the Company recorded an impairment loss of $5.4 million within Impairment charges in Operating expenses during the three months ended September 30, 2020. Leases not yet Commenced - As of September 30, 2020, the Company has an operating lease for a research and development facility in Santa Clara, California that has not yet commenced with fixed lease payments of approximately $5 million. The lease is expected to commence in the first quarter of fiscal 2021 with a lease term of approximately five years. The Company plans to sublet a significant portion of the facility due to the restructuring of the Intelligent Audio product line. During the three months ended September 30, 2020, the Company determined a loss was probable and reasonably estimable under ASC 450, Contingencies, based on its current plans and the continuing negative impact of the COVID-19 pandemic on market conditions. The estimated loss was determined by comparing the estimated carrying amount of the operating lease right-of-use asset to be recognized for the sublet portion of the facility upon lease commencement to an estimate of discounted future cash flows that included estimated sublease proceeds and the determination of an appropriate discount rate based on market participant assumptions. These measurements are based on significant unobservable inputs, and thus represent Level 3 inputs. The Company recorded an estimated loss of $2.2 million within Impairment charges in Operating expenses during the three months ended September 30, 2020. The corresponding estimated liability, which will reduce the operating lease right-of-use asset upon lease commencement, is recorded in Other liabilities on the Consolidated Balance Sheets as of September 30, 2020. If actual results differ from estimated amounts, additional impairment charges may be recorded in the future. |
Restructuring and Related Activ
Restructuring and Related Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table details restructuring charges incurred by reportable segment for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Audio $ — $ 1.9 $ 11.0 $ 3.8 Precision Devices 0.1 0.1 0.1 0.8 Corporate — — 1.7 0.2 Total $ 0.1 $ 2.0 $ 12.8 $ 4.8 |
Schedule of Restructuring Reserve by Type of Cost | The following table details the Company’s severance and other restructuring accrual activity: (in millions) Severance Pay and Benefits Contract Termination and Other Costs Total Balance at December 31, 2019 $ 1.4 $ — $ 1.4 Restructuring charges 9.9 1.2 11.1 Payments (7.8) (0.3) (8.1) Balance at September 30, 2020 $ 3.5 $ 0.9 $ 4.4 |
Schedule of Restructuring Reserve by Balance Sheet Location | The severance and restructuring accruals are recorded in the following line items on the Consolidated Balance Sheets: (in millions) September 30, 2020 December 31, 2019 Other accrued expenses $ 4.0 $ 1.4 Other liabilities 0.4 — Total $ 4.4 $ 1.4 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Borrowings (net of debt issuance costs, debt discount, and amortization) consist of the following: (in millions) September 30, 2020 December 31, 2019 3.25% convertible senior notes $ 163.0 $ 156.8 Revolving credit facility 50.0 — Total 213.0 156.8 Less current maturities — — Total long-term debt $ 213.0 $ 156.8 |
Contractual Obligation, Fiscal Year Maturity Schedule | Total debt principal payments over the next five years are as follows: (in millions) Q4 2020 2021 2022 2023 2024 Debt principal payments $ — $ 172.5 $ — $ — $ 50.0 |
Schedule of Convertible Debt | The Notes consist of the following: (in millions) September 30, 2020 December 31, 2019 Liability component: Principal $ 172.5 $ 172.5 Less debt issuance costs and debt discount, net of amortization (9.5) (15.7) Total 163.0 156.8 Less current maturities (1) — — Long-term portion $ 163.0 $ 156.8 Equity component (2) $ 29.9 $ 29.9 (1) There are no required principal payments due until maturity in November 2021. (2) Recorded in the Consolidated Balance Sheets within additional paid-in capital, inclusive of the $1.3 million of issuance costs in equity. |
Schedule of Convertible Debt Interest Expense | The following table sets forth total interest expense recognized related to the Notes: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 3.25% coupon $ 1.4 $ 1.4 $ 4.2 $ 4.2 Amortization of debt issuance costs 0.2 0.2 0.7 0.6 Amortization of debt discount 1.9 1.7 5.5 5.1 Total $ 3.5 $ 3.3 $ 10.4 $ 9.9 |
Schedule of Revolving Credit Facilities | Revolving credit facility borrowings consist of the following: (in millions) September 30, 2020 December 31, 2019 $400.0 million revolving credit facility $ 50.0 $ — Less current maturities — — Long-term portion $ 50.0 $ — |
Equity Incentive Program (Table
Equity Incentive Program (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of Black-Scholes Option-Pricing Assumptions | The expense related to stock options granted in the nine months ended September 30, 2020 and 2019 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below: Nine Months Ended September 30, 2020 2019 Risk-free interest rate 0.11% to 1.42% 1.72% to 2.44% Dividend yield —% —% Expected life (years) 4.3 to 4.5 4.5 Volatility 38.8% to 40.6% 41.0% to 42.9% Fair value at date of grant $4.78 to $5.95 $6.22 to $7.35 |
Schedule of SSAR and Stock Options Activity | The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the nine months ended September 30, 2020 (in millions, except share and per share amounts): SSARs Stock Options Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (Years) Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Term (Years) Outstanding at December 31, 2019 596,537 $ 22.72 5,377,148 $ 17.51 Granted — — 896,875 16.75 Exercised — — (129,463) 12.55 Forfeited — — (173,680) 16.49 Expired — — (138,742) 19.39 Outstanding at September 30, 2020 596,537 $ 22.72 $ — 1.6 5,832,138 $ 17.49 $ 5.3 3.2 Exercisable at September 30, 2020 596,537 $ 22.72 $ — 1.6 4,300,404 $ 17.92 $ 5.1 2.2 |
Schedule of Restricted Stock Units Award Activity | The following table summarizes the Company's restricted stock unit ("RSU") activity for the nine months ended September 30, 2020: Share units Weighted-average grant date fair value Unvested at December 31, 2019 2,261,114 $ 15.99 Granted 1,431,843 16.50 Vested (1) (1,040,850) 16.29 Forfeited (715,701) 16.22 Unvested at September 30, 2020 1,936,406 $ 16.16 (1) The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements. |
Share-based Payment Arrangement, Performance Shares, Outstanding Activity | The following table summarizes the Company's PSU activity for the nine months ended September 30, 2020: Share units Weighted-average grant date fair value Unvested at December 31, 2019 844,789 $ 15.90 Granted 322,178 16.14 Vested (1) (184,405) 15.24 Forfeited (61,589) 17.05 Unvested at September 30, 2020 920,973 $ 16.04 (1) The number of PSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of information used in computing basic and diluted earnings per share | Basic and diluted earnings per share were computed as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions, except share and per share amounts) 2020 2019 2020 2019 Earnings (loss) from continuing operations $ 5.6 $ 25.4 $ (26.7) $ 28.6 Earnings from discontinued operations, net — — 3.7 — Net earnings (loss) $ 5.6 $ 25.4 $ (23.0) $ 28.6 Basic earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.06 $ 0.28 $ (0.29) $ 0.31 Earnings from discontinued operations, net — — 0.04 — Net earnings (loss) $ 0.06 $ 0.28 $ (0.25) $ 0.31 Weighted-average shares outstanding 91,688,765 91,398,539 91,707,702 90,988,468 Diluted earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.06 $ 0.27 $ (0.29) $ 0.31 Earnings from discontinued operations, net — — 0.04 — Net earnings (loss) $ 0.06 $ 0.27 $ (0.25) $ 0.31 Diluted weighted-average shares outstanding 92,473,318 93,859,446 91,707,702 92,655,874 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Revenue and Earnings from continuing operations by market segment | Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Revenues: Audio $ 164.8 $ 193.7 $ 389.4 $ 492.7 Precision Devices 41.0 42.2 131.7 128.2 Total revenues $ 205.8 $ 235.9 $ 521.1 $ 620.9 Earnings (loss) from continuing operations before interest and income taxes: Audio $ 17.8 $ 39.1 $ (0.5) $ 72.1 Precision Devices 8.0 7.6 26.2 23.3 Total segments 25.8 46.7 25.7 95.4 Corporate expense / other 13.2 12.5 34.3 44.9 Interest expense, net 4.7 3.8 12.5 10.9 Earnings (loss) before income taxes and discontinued operations 7.9 30.4 (21.1) 39.6 Provision for income taxes 2.3 5.0 5.6 11.0 Earnings (loss) from continuing operations $ 5.6 $ 25.4 $ (26.7) $ 28.6 |
Reconciliation of Assets from Segment to Consolidated | Information regarding assets of the Company's reportable segments: Total Assets (in millions) September 30, 2020 December 31, 2019 Audio $ 1,466.9 $ 1,487.6 Precision Devices 195.6 162.0 Corporate / eliminations 5.2 5.0 Total $ 1,667.7 $ 1,654.6 |
Revenue from External Customers by Geographic Areas | The following table details revenues by geographic location. Revenues are attributed to regions based on the location of the Company's direct customer, which in some instances is an intermediary and not necessarily the end user. The Company's businesses are based primarily in Asia, North America, and Europe. Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2020 2019 2020 2019 Asia $ 151.7 $ 178.0 $ 368.3 $ 443.1 United States 28.8 32.2 86.8 97.3 Europe 23.1 22.2 59.8 71.1 Other Americas 1.3 1.9 2.8 4.6 Other 0.9 1.6 3.4 4.8 Total $ 205.8 $ 235.9 $ 521.1 $ 620.9 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |||||
Earnings (loss) before income taxes and discontinued operations | $ 7.9 | $ 30.4 | $ (21.1) | $ 39.6 | |
Treasury Stock, Shares | 996,109 | 996,109 | 996,109 | ||
Noncash Investing and Financing Items | |||||
Purchases of property and equipment included in accounts payable | $ 1.9 | $ 4.2 | |||
Credit Facility due January 2, 2024 [Member] | Line of Credit | |||||
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |||||
Line of Credit, Current | $ 0 | $ 0 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Jul. 07, 2016 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Nov. 28, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Consideration received for disposal group | $ 45,000,000 | $ 130,000,000 | ||||||
Proceeds from the sale of business | $ 40,600,000 | $ 135,100,000 | ||||||
Disposal Group, Including Discontinued Operation, Liabilities | $ 600,000 | $ 600,000 | $ 600,000 | |||||
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent | 600,000 | 600,000 | 600,000 | |||||
Benefit from income taxes (2) | (3,700,000) | |||||||
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 0 | |||||||
Discontinued Operations, Disposed of by Sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Amortization of intangible Assets, Discontinued Operations | 0 | $ 0 | 0 | $ 0 | ||||
Depreciation, Discontinued Operations | 0 | 0 | 0 | 0 | ||||
Disposal Group, Including Discontinued Operation, Operating Expense | 0 | |||||||
Assets of discontinued operations | 0 | |||||||
Disposal Group, Including Discontinued Operation, Liabilities | 0 | 0 | $ 0 | |||||
Capital expenditures | 0 | 0 | 0 | 0 | ||||
Discontinued Operation, Income (Loss) from Discontinued Operation During Phase-out Period, Net of Tax | 3,700,000 | |||||||
Disposal Group, Including Discontinued Operation, Gross Profit (Loss) | 0 | |||||||
Cost of goods sold | 0 | |||||||
Disposal Group, Including Discontinued Operation, Revenue | 0 | |||||||
Accounts Payable [Member] | Discontinued Operations, Disposed of by Sale | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Capital expenditures | $ 0 | $ 0 | $ 0 | $ 0 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) | Dec. 20, 2019 | Jan. 03, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Business Acquisition | |||||||
Goodwill | $ 909,900,000 | $ 909,900,000 | $ 909,900,000 | ||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 23,100,000 | $ 21,600,000 | |||||
Earnings (loss) from continuing operations | $ 5,600,000 | $ 25,400,000 | $ (26,700,000) | $ 28,600,000 | |||
Earnings (loss) from continuing operations, per basic share | $ 0.06 | $ 0.28 | $ (0.29) | $ 0.31 | |||
Business Acquisition, Pro Forma Earnings Per Share, Basic | 0.25 | 0.24 | |||||
Earnings (loss) from continuing operations, per diluted share | $ 0.06 | 0.27 | $ (0.29) | 0.31 | |||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.25 | $ 0.23 | |||||
Credit Facility due January 2, 2024 [Member] | |||||||
Business Acquisition | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 | $ 400,000,000 | |||||
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | |||||||
Business Acquisition | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.375% | ||||||
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | Applicable margin alternate base rate [Member] | |||||||
Business Acquisition | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | ||||||
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | |||||||
Business Acquisition | |||||||
Line of Credit Facility, Commitment Fee Percentage | 0.225% | ||||||
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | Applicable margin alternate base rate [Member] | |||||||
Business Acquisition | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||
ASIC Design Business | |||||||
Business Acquisition | |||||||
Payments to Acquire Businesses, Gross | $ 57,900,000 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 600,000 | ||||||
Goodwill | 18,800,000 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (100,000) | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | $ 57,900,000 | ||||||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1,600,000 | ||||||
Compex Corporation | |||||||
Business Acquisition | |||||||
Payments to Acquire Businesses, Gross | $ 11,100,000 | ||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 6,200,000 | ||||||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 100,000 | ||||||
0 | ASIC Design Business | |||||||
Business Acquisition | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 33,300,000 | ||||||
In Process Research and Development [Member] | ASIC Design Business | |||||||
Business Acquisition | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 3,700,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 106 | $ 82.8 |
Work in progress | 30.2 | 30.9 |
Finished goods | 60.9 | 53.5 |
Subtotal | 197.1 | 167.2 |
Less reserves | (37) | (25.4) |
Total | $ 160.1 | $ 141.8 |
Property, Plant and Equipment,
Property, Plant and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment | |||||
Cost | $ 657.9 | $ 657.9 | $ 645.3 | ||
Less accumulated depreciation | (469.3) | (469.3) | (438.8) | ||
Total | 188.6 | 188.6 | 206.5 | ||
Depreciation | 11.9 | $ 11.6 | 35.9 | $ 35.1 | |
Land | |||||
Property, Plant and Equipment | |||||
Cost | 7.9 | 7.9 | 7.7 | ||
Buildings and improvements | |||||
Property, Plant and Equipment | |||||
Cost | 109.4 | 109.4 | 104.5 | ||
Machinery, equipment, and other | |||||
Property, Plant and Equipment | |||||
Cost | $ 540.6 | $ 540.6 | $ 533.1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions | Sep. 30, 2020USD ($) |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | $ 909.9 |
44104 | $ 909.9 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets and Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets | |||||
Gross carrying amount | $ 92.1 | $ 92.1 | $ 92.1 | ||
Accumulated amortization | 45.9 | 45.9 | 36.1 | ||
Unamortized intangible assets, gross carrying amount | 35.7 | 35.7 | 35.7 | ||
Intangible assets, net | 81.9 | 81.9 | 91.7 | ||
Amortization expense | 3.3 | $ 1.8 | 9.8 | $ 5.3 | |
Q4 2018 | 3.2 | 3.2 | |||
2019 | 13 | 13 | |||
2020 | 7.7 | 7.7 | |||
2021 | 7.1 | 7.1 | |||
2022 | 7 | 7 | |||
Trademarks | |||||
Finite-Lived Intangible Assets | |||||
Unamortized intangible assets, gross carrying amount | 32 | 32 | 32 | ||
In Process Research and Development [Member] | |||||
Finite-Lived Intangible Assets | |||||
Unamortized intangible assets, gross carrying amount | 3.7 | 3.7 | 3.7 | ||
Trademarks | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 1 | 1 | 1 | ||
Accumulated amortization | 0.3 | 0.3 | 0.2 | ||
Patents | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 40.8 | 40.8 | 40.8 | ||
Accumulated amortization | 35 | 35 | 31.5 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 12 | 12 | 12 | ||
Accumulated amortization | 4.9 | 4.9 | 3.6 | ||
0 | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 36.5 | 36.5 | 36.5 | ||
Accumulated amortization | 5.2 | 5.2 | 0.7 | ||
Non-competition agreements | |||||
Finite-Lived Intangible Assets | |||||
Gross carrying amount | 1.8 | 1.8 | 1.8 | ||
Accumulated amortization | $ 0.5 | $ 0.5 | $ 0.1 |
Leases Lease Assets and Liabili
Leases Lease Assets and Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Asset Impairment Charges | $ 7.6 | $ 0 | $ 7.6 | $ 0 |
Mountain View, California [Member] | ||||
Asset Impairment Charges | 5.4 | |||
Santa Clara, California [Member] | ||||
Asset Impairment Charges | $ 2.2 |
Restructuring and Related Act_2
Restructuring and Related Activities - Restructuring Charges by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 0.1 | $ 1.9 | $ 10.5 | $ 3.8 |
Restructuring and Related Cost, Incurred Cost | 11.1 | |||
Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 8.3 | ||
Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.1 | 2 | 12.8 | 4.8 |
Severance Pay and Benefits | ||||
Restructuring Cost and Reserve | ||||
Restructuring and Related Cost, Incurred Cost | 9.9 | |||
Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring and Related Cost, Incurred Cost | 1.2 | |||
Operating Segments | Audio | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 1.9 | 11 | 3.8 |
Operating Segments | Precision Devices | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.1 | 0.1 | 0.1 | 0.8 |
Corporate | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 0 | 1.7 | 0.2 |
Cost of Goods Sold, Restructuring Charges | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 0.1 | 2.3 | 1 |
Cost of Goods Sold, Restructuring Charges | Severance Pay and Benefits | Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 5.4 | |||
Cost of Goods Sold, Restructuring Charges | Severance Pay and Benefits | Audio | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.1 | 4.5 | ||
Cost of Goods Sold, Restructuring Charges | Contract Termination and Other Costs | Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 1.7 | |||
Cost of Goods Sold, Restructuring Charges | Contract Termination [Member] | Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 1.2 | |||
Operating Expense | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 0.1 | $ 10.5 | ||
Restructuring Charges | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 1.9 | $ 3.8 |
Restructuring and Related Act_3
Restructuring and Related Activities - Restructuring Accrual Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 0.1 | $ 1.9 | $ 10.5 | $ 3.8 |
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 1.4 | |||
Restructuring charges | 11.1 | |||
Payments | (8.1) | |||
Severance and other restructuring reserve, ending balance | 4.4 | 4.4 | ||
Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 8.3 | ||
Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.1 | 2 | 12.8 | 4.8 |
Severance Pay and Benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 1.4 | |||
Restructuring charges | 9.9 | |||
Payments | (7.8) | |||
Severance and other restructuring reserve, ending balance | 3.5 | 3.5 | ||
Contract Termination and Other Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 0 | |||
Restructuring charges | 1.2 | |||
Payments | (0.3) | |||
Severance and other restructuring reserve, ending balance | 0.9 | 0.9 | ||
Cost of Goods Sold, Restructuring Charges | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 0.1 | 2.3 | 1 |
Cost of Goods Sold, Restructuring Charges | Severance Pay and Benefits | Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 5.4 | |||
Cost of Goods Sold, Restructuring Charges | Contract Termination and Other Costs | Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 1.7 | |||
Operating Expense | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 0.1 | $ 10.5 | ||
Restructuring Charges | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 1.9 | $ 3.8 |
Restructuring and Related Act_4
Restructuring and Related Activities - Balance Sheet Location (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Restructuring Cost and Reserve | ||
Severance and restructuring accrual | $ 4.4 | $ 1.4 |
Other accrued expenses | ||
Restructuring Cost and Reserve | ||
Severance and restructuring accrual | 4 | 1.4 |
Other liabilities | ||
Restructuring Cost and Reserve | ||
Severance and restructuring accrual | $ 0.4 | $ 0 |
Hedging Transaction and Derivat
Hedging Transaction and Derivative Instruments - Gain (Loss) of Derivative Instruments Recognized on Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative | ||||
Cost of goods sold | $ 130.6 | $ 142.3 | $ 339.6 | $ 381.5 |
Interest expense, net | (4.7) | (3.8) | (12.5) | (10.9) |
Other expense (income), net | $ (1) | $ 0.6 | $ (0.2) | $ 0.1 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term borrowings | ||
Long-term debt | $ 213 | $ 156.8 |
Less: current maturities | 0 | 0 |
Long-term portion | 213 | 156.8 |
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 172.5 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 0 | |
Convertible Debt | Convertible Notes Due Twenty Twenty One | ||
Long-term borrowings | ||
Convertible Notes Payable | 163 | 156.8 |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 0 | |
Debt Instrument, Unamortized Discount | 9.5 | 15.7 |
Line of Credit | Credit Facility due October 11, 2022 | ||
Long-term borrowings | ||
Long-term Line of Credit | 50 | $ 0 |
Long-term Debt, Maturities, Repayments of Principal in Year Five | $ 50 |
Borrowings Convertible Debt (De
Borrowings Convertible Debt (Details) - Convertible Debt - Convertible Notes Due Twenty Twenty One $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | May 04, 2016USD ($)$ / shares | |
Schedule of Convertible Debt | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||
Debt Instrument, Convertible, Conversion Ratio | 54.2741 | ||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 18.4250 | $ 18.4250 | |||||
Debt Issuance Costs, Net | $ 5 | $ 5 | |||||
Debt Issuance Costs Attributable to the Equity Component | 1.3 | ||||||
Debt Instrument, Face Amount | 172.5 | 172.5 | $ 172.5 | $ 172.5 | |||
Debt Instrument, Unamortized Discount | (9.5) | (9.5) | (15.7) | ||||
Convertible Notes Payable | 163 | 163 | 156.8 | ||||
Convertible Notes Payable, Current | 0 | 0 | 0 | ||||
Convertible Notes Payable, Noncurrent | 163 | 163 | 156.8 | ||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | 29.9 | 29.9 | $ 29.9 | ||||
Debt Instrument, Fair Value Disclosure | 183 | 183 | |||||
Interest Expense, Debt, Excluding Amortization | 1.4 | $ 1.4 | 4.2 | $ 4.2 | |||
Amortization of Debt Issuance Costs | 0.2 | 0.2 | 0.7 | 0.6 | |||
Amortization of Debt Discount (Premium) | 1.9 | 1.7 | 5.5 | 5.1 | |||
Interest Expense, Debt | $ 3.5 | $ 3.3 | $ 10.4 | $ 9.9 | |||
Payments for Hedge, Financing Activities | $ 44.5 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 21.1050 | ||||||
Proceeds from issuance of warrants | $ 39.1 |
Borrowings Schedule of Revolvin
Borrowings Schedule of Revolving Credit Facility (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019 | Dec. 31, 2019USD ($) | |
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Debt Instrument, Covenant, EBITDA to Interest Ratio, Minimum | 3.25 | |||
Debt Instrument, Covenant, Debt to EBITDA, Maximum | 3.75 | |||
Debt Instrument, Covenant, Senior Secured Leverage Ratio, Maximum | 3.25 | |||
Line of Credit | Weighted Average | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.25% | 0.23% | ||
Line of Credit | Weighted Average | London Interbank Offered Rate (LIBOR) | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 2.18% | 2.18% | 3.99% | |
Credit Facility due January 2, 2024 [Member] | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 | $ 400,000,000 | ||
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.225% | |||
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | Applicable margin alternate base rate [Member] | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.375% | |||
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | Applicable margin alternate base rate [Member] | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | |||
Credit Facility due January 2, 2024 [Member] | Line of Credit | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Long-term Line of Credit | $ 50,000,000 | $ 50,000,000 | ||
Line of Credit, Current | 0 | 0 | ||
Long-term Line of Credit, Noncurrent | 50,000,000 | 50,000,000 | ||
Credit Facility due October 11, 2022 | Line of Credit | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Long-term Line of Credit | $ 50,000,000 | $ 50,000,000 | $ 0 | |
Line of Credit, Current | 0 | |||
Long-term Line of Credit, Noncurrent | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Holiday [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 4.8 | $ 5.2 | $ 12.4 | $ 19.2 |
Effective tax rate (benefit) provision | 29.10% | 16.40% | (26.50%) | 27.80% |
Income Tax Expense (Benefit) | $ 2.3 | $ 5 | $ 5.6 | $ 11 |
Earnings (loss) before income taxes and discontinued operations | 7.9 | 30.4 | (21.1) | 39.6 |
Other expense (income), net | $ (1) | 0.6 | (0.2) | 0.1 |
Effective Income Tax Rate Reconciliation, Discrete Items | $ 0.2 | $ (1.2) | $ 0.3 | |
Effective Tax Rate Excluding Discrete Items | 44.30% | 15.80% | 32.20% | 28.50% |
Foreign Tax Authority | ||||
Income Tax Holiday [Line Items] | ||||
Effective income tax rate reconciliation, tax holiday | $ 2.7 | $ 6.5 | $ 4.2 | $ 14.4 |
Holiday benefit (usd per share) | $ 0.03 | $ 0.07 | $ 0.05 | $ 0.16 |
Equity Incentive Program - Stoc
Equity Incentive Program - Stock Options and SSARs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Expense | $ 4,800,000 | $ 5,200,000 | $ 12,400,000 | $ 19,200,000 |
SSARs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 0 | $ 0 | ||
Number of Shares [Roll Forward] | ||||
Beginning balance | 596,537 | |||
Granted | 0 | |||
Exercised | 0 | |||
Forfeited | 0 | |||
Expired | 0 | |||
Ending balance | 596,537 | 596,537 | ||
Exercised | 596,537 | 596,537 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Expired in Period, Weighted Average Exercise Price | $ 0 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning balance | 22.72 | |||
Granted | 0 | |||
Exercised | 0 | |||
Forfeited | 0 | |||
Ending balance | $ 22.72 | 22.72 | ||
Exercisable | $ 22.72 | $ 22.72 | ||
SARS and Options, Additional Disclosures | ||||
SSARs, aggregate intrinsic value, outstanding | $ 0 | $ 0 | ||
SSARs, aggregate intrinsic value, exercisable | 0 | $ 0 | ||
SSARs, weighted average remaining contractual terms, outstanding | 1 year 7 months 6 days | |||
SSARs, weighted average remaining contractual term, exercisable | 1 year 7 months 6 days | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 5,600,000 | $ 5,600,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Dividend yield | 0.00% | 0.00% | ||
Expected life (years) | 4 years 6 months | |||
Volatility | 41.00% | |||
Stock Options, Number of Shares | ||||
Beginning balance | 5,377,148 | |||
Granted | 896,875 | |||
Exercised | (129,463) | |||
Forfeited | (173,680) | |||
Expired | (138,742) | |||
Ending balance | 5,832,138 | 5,832,138 | ||
Exercisable | 4,300,404 | 4,300,404 | ||
Stock Options, Weighted Average Exercise Price | ||||
Beginning balance | $ 17.51 | |||
Granted | 16.75 | |||
Exercised | 12.55 | |||
Forfeited | 16.49 | |||
Expired | 19.39 | |||
Ending balance | $ 17.49 | 17.49 | ||
Exercisable | $ 17.92 | $ 17.92 | ||
SARS and Options, Additional Disclosures | ||||
Options, aggregate intrinsic value, outstanding | $ 5,300,000 | $ 5,300,000 | ||
Options, aggregate intrinsic value, exercisable | $ 5,100,000 | $ 5,100,000 | ||
Options, weighted average remaining contractual term, outstanding | 3 years 2 months 12 days | |||
Options, weighted average remaining contractual term, exercisable | 2 years 2 months 12 days | |||
Minimum [Member] | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Risk-free interest rate | 0.11% | 1.72% | ||
Expected life (years) | 4 years 3 months 18 days | |||
Volatility | 38.80% | |||
Fair value at date of grant | $ 4.78 | $ 6.22 | ||
Maximum [Member] | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Risk-free interest rate | 1.42% | 2.44% | ||
Expected life (years) | 4 years 6 months | |||
Volatility | 40.60% | 42.90% | ||
Fair value at date of grant | $ 5.95 | $ 7.35 |
Equity Incentive Program - RSUs
Equity Incentive Program - RSUs (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days |
Number of Shares [Roll Forward] | |
Beginning balance | shares | 2,261,114 |
Granted | shares | 1,431,843 |
Vested (1) | shares | (1,040,850) |
Forfeited | shares | (715,701) |
Ending balance | shares | 1,936,406 |
Weighted Average Grant Date Fair Value | |
Beginning balance | $ / shares | $ 15.99 |
Granted | $ / shares | 16.50 |
Vested (1) | $ / shares | 16.29 |
Forfeited | $ / shares | 16.22 |
Ending balance | $ / shares | $ 16.16 |
Equity Incentive Program Equity
Equity Incentive Program Equity Incentive Program - PSUs (Details) - Performance Shares $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ | $ 3.3 |
Number of Shares [Roll Forward] | |
Beginning balance | shares | 844,789 |
Granted | shares | 322,178 |
Vested (1) | shares | (184,405) |
Forfeited | shares | (61,589) |
Ending balance | shares | 920,973 |
Weighted Average Grant Date Fair Value | |
Beginning balance | $ / shares | $ 15.90 |
Granted | $ / shares | 16.14 |
Vested (1) | $ / shares | 15.24 |
Forfeited | $ / shares | 17.05 |
Ending balance | $ / shares | $ 16.04 |
Equity Incentive Program - Addi
Equity Incentive Program - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Expense | $ 4,800,000 | $ 5,200,000 | $ 12,400,000 | $ 19,200,000 |
SSARs | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | 0 | 0 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | 5,600,000 | $ 5,600,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | 19,800,000 | $ 19,800,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 7 months 6 days | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 3,300,000 | $ 3,300,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 3 months 18 days | |||
Minimum [Member] | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage increase of initial grant value | 0.00% | |||
Maximum [Member] | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage increase of initial grant value | 225.00% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation of information used in computing basic and diluted earnings per share [Abstract] | ||||
Earnings (loss) from continuing operations | $ 5.6 | $ 25.4 | $ (26.7) | $ 28.6 |
Earnings from discontinued operations, net | 0 | 0 | 3.7 | 0 |
Net earnings (loss) | $ 5.6 | $ 25.4 | $ (23) | $ 28.6 |
Basic earnings (loss) per common share: | ||||
Earnings (loss) from continuing operations, per basic share | $ 0.06 | $ 0.28 | $ (0.29) | $ 0.31 |
Earnings from discontinued operations, per basic share | 0 | 0 | 0.04 | 0 |
Net earnings (loss) per share, basic | $ 0.06 | $ 0.28 | $ (0.25) | $ 0.31 |
Weighted average shares outstanding | 91,688,765 | 91,398,539 | 91,707,702 | 90,988,468 |
Diluted earnings (loss) per common share: | ||||
Earnings (loss) from continuing operations, per diluted share | $ 0.06 | $ 0.27 | $ (0.29) | $ 0.31 |
Loss from discontinued operations, net | 0 | 0 | 0.04 | 0 |
Net earnings (loss) per share, diluted | $ 0.06 | $ 0.27 | $ (0.25) | $ 0.31 |
Diluted (in shares) | 92,473,318 | 93,859,446 | 91,707,702 | 92,655,874 |
Weighted average number of anti-dilutive shares excluded from the calculation (in shares) | 4,559,131 | 2,064,121 | 5,102,219 | 4,118,639 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segments | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information | |||||
Billed Contracts Receivable | $ 116.2 | $ 116.2 | $ 152.8 | ||
Number of reportable segments | segments | 2 | ||||
Assets | 1,667.7 | $ 1,667.7 | 1,654.6 | ||
Revenues | 205.8 | $ 235.9 | 521.1 | $ 620.9 | |
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Interest expense, net | 4.7 | 3.8 | 12.5 | 10.9 | |
Earnings (loss) before income taxes and discontinued operations | 7.9 | 30.4 | (21.1) | 39.6 | |
Provision for income taxes | 2.3 | 5 | 5.6 | 11 | |
Earnings (loss) from continuing operations | 5.6 | 25.4 | $ (26.7) | 28.6 | |
Document Period End Date | Sep. 30, 2020 | ||||
Asia | |||||
Segment Reporting Information | |||||
Revenues | 151.7 | 178 | $ 368.3 | 443.1 | |
United States | |||||
Segment Reporting Information | |||||
Revenues | 28.8 | 32.2 | 86.8 | 97.3 | |
Europe | |||||
Segment Reporting Information | |||||
Revenues | 23.1 | 22.2 | 59.8 | 71.1 | |
Other Americas | |||||
Segment Reporting Information | |||||
Revenues | 1.3 | 1.9 | 2.8 | 4.6 | |
Other Geographical Locations | |||||
Segment Reporting Information | |||||
Revenues | 0.9 | 1.6 | 3.4 | 4.8 | |
Operating Segments | |||||
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Earnings (loss) before interest and income taxes | 25.8 | 46.7 | 25.7 | 95.4 | |
Operating Segments | Audio | |||||
Segment Reporting Information | |||||
Assets | 1,466.9 | 1,466.9 | 1,487.6 | ||
Revenues | 164.8 | 193.7 | 389.4 | 492.7 | |
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Earnings (loss) before interest and income taxes | 17.8 | 39.1 | (0.5) | 72.1 | |
Operating Segments | Precision Devices | |||||
Segment Reporting Information | |||||
Assets | 195.6 | 195.6 | 162 | ||
Revenues | 41 | 42.2 | 131.7 | 128.2 | |
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Earnings (loss) before interest and income taxes | 8 | 7.6 | 26.2 | 23.3 | |
Corporate | |||||
Segment Reporting Information | |||||
Assets | 5.2 | 5.2 | $ 5 | ||
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Corporate expense / other | 13.2 | 12.5 | 34.3 | 44.9 | |
Interest expense, net | $ 4.7 | $ 3.8 | $ 12.5 | $ 10.9 |