Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 25, 2022 | |
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, $0.01 par value per share | |
Trading Symbol | KN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 90,946,447 | |
Document Type | 10-Q | |
Entity Central Index Key | 0001587523 | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 178.2 | $ 233 | $ 567.6 | $ 633.8 |
Cost of goods sold | 110.1 | 136.1 | 338.5 | 375.2 |
Gross profit | 40 | 96.9 | 201 | 258.6 |
Research and development expenses | 19.3 | 22.3 | 63.7 | 70.2 |
Selling and administrative expenses | 32.6 | 36 | 95.6 | 108.9 |
Asset Impairment Charges | 0 | 4 | 239.8 | 4 |
Restructuring charges | 2.7 | 0 | 9.8 | 0.3 |
Operating expenses | 54.6 | 62.3 | 408.9 | 183.4 |
Operating (loss) earnings | (14.6) | 34.6 | (207.9) | 75.2 |
Interest expense, net | 1.1 | 4.2 | 2.7 | 12.3 |
Other income, net | (2.1) | (1.9) | (0.9) | (3.4) |
(Loss) earnings before income taxes and discontinued operations | (13.6) | 32.3 | (209.7) | 66.3 |
(Benefit from) provision for income taxes | (16.3) | 4.6 | 12.4 | 8.7 |
Earnings (loss) from continuing operations | 2.7 | 27.7 | (222.1) | 57.6 |
Net earnings (loss) | $ 2.7 | $ 27.7 | $ (222.1) | $ 57.8 |
Earnings per share: | ||||
Earnings (loss) from continuing operations, per basic share | $ 0.03 | $ 0.30 | $ (2.42) | $ 0.62 |
Earnings (loss) from continuing operations, per diluted share | 0.03 | 0.29 | (2.42) | 0.61 |
Earnings from discontinued operations, per basic share | 0 | 0 | 0 | 0.01 |
Earnings from discontinued operations, per diluted share | 0 | 0 | 0 | 0 |
Net earnings (loss) per share, basic | 0.03 | 0.30 | (2.42) | 0.63 |
Net earnings (loss) per share, diluted | $ 0.03 | $ 0.29 | $ (2.42) | $ 0.61 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 91,400,000 | 92,200,000 | 91,900,000 | 92,300,000 |
Diluted (in shares) | 92,000,000 | 94,100,000 | 91,900,000 | 94,800,000 |
Restructuring charges - cost of goods sold | $ 28.1 | $ 0 | $ 28.1 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ 2.7 | $ 27.7 | $ (222.1) | $ 57.8 |
Foreign currency translation | (13.1) | (3.7) | (30.9) | (6.4) |
Employee benefit plans: | ||||
Amortization or settlement of actuarial losses and prior service costs | (0.2) | 0.1 | (0.2) | 0.7 |
Net change in employee benefit plans | (0.2) | 0.1 | (0.2) | 0.7 |
Changes in fair value of cash flow hedges: | ||||
Unrealized net losses arising during period | (3) | (0.2) | (6.1) | (0.5) |
Net losses (gains) reclassified into earnings | 1.7 | 0.1 | 2.3 | (1.4) |
Total cash flow hedges | (1.3) | (0.1) | (3.8) | (1.9) |
Other comprehensive loss, net of tax | (14.6) | (3.7) | (34.9) | (7.6) |
Comprehensive (loss) earnings | $ (11.9) | $ 24 | $ (257) | $ 50.2 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 41.5 | $ 68.9 |
Accounts Receivable, after Allowance for Credit Loss, Current | 128.7 | 146.6 |
Inventories, net | 194.6 | 153.1 |
Prepaid and other current assets | 12.4 | 11.7 |
Total current assets | 377.2 | 380.3 |
Property, plant, and equipment, net | 164.4 | 200.8 |
Goodwill | 702.1 | 941.3 |
Intangible assets, net | 88.1 | 97.3 |
Operating Lease, Right-of-Use Asset | 13.6 | 17.4 |
Other assets and deferred charges | (91.3) | (94.5) |
Total assets | 1,436.7 | 1,731.6 |
Current liabilities: | ||
Accounts payable | 58.3 | 90.9 |
Accrued compensation and employee benefits | 24.8 | 42.8 |
Operating Lease, Liability, Current | 9.5 | 11.4 |
Other accrued expenses | 27.5 | 19.4 |
Federal and other taxes on income | 11.2 | 1.7 |
Total current liabilities | 131.3 | 166.2 |
Long-term debt | 78 | 70 |
Deferred Income Tax Liabilities, Net | 0.5 | 0.6 |
Operating Lease, Liability, Noncurrent | 8.4 | 14.7 |
Other liabilities | 38.3 | 20.6 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 1 | 1 |
Treasury Stock, Value | (103.3) | (62.4) |
Additional paid-in capital | 1,658 | 1,639.4 |
Accumulated deficit | (240.2) | (18.1) |
Accumulated other comprehensive loss | (135.3) | (100.4) |
Total stockholders' equity | 1,180.2 | 1,459.5 |
Total liabilities and stockholders' equity | $ 1,436.7 | $ 1,731.6 |
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, par value (in dollars per share) | $ 0.01 | |
Common stock, shares authorized (in shares) | 400,000,000 | |
Common stock, shares issued (in shares) | 96,299,675 | 95,112,778 |
Common Stock, Shares, Outstanding | 90,946,447 | 91,894,980 |
Treasury Stock, Shares | 5,353,228 | 3,217,798 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Allowance for doubtful accounts receivable | $ 0.7 | $ 0.2 |
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 | |
Common stock, shares authorized (in shares) | 400,000,000 | |
Common stock, shares issued (in shares) | 96,299,675 | 95,112,778 |
Treasury Stock, Shares | 5,353,228 | 3,217,798 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock, shares issued (in shares) | 92,689,912 | |||||
Treasury Stock, Shares | (1,078,363) | |||||
Balance at Dec. 31, 2020 | $ 1,303.5 | $ 0.9 | $ (16.2) | $ 1,587.8 | $ (168.5) | $ (100.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 57.8 | |||||
Stock Repurchased During Period, Value | (20) | |||||
Earnings (loss) from continuing operations | 57.6 | |||||
Other comprehensive loss, net of tax | (7.6) | (7.6) | ||||
Stock-based compensation expense | 25.6 | 25.6 | ||||
Stock Issued During Period, Shares, New Issues | 867,386 | |||||
Stock Issued During Period, Value, Stock Options Exercised | 14.4 | $ 0 | 14.4 | |||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 857,888 | |||||
Balance at Sep. 30, 2021 | 1,366.1 | $ 0.9 | $ (36.2) | 1,620.2 | (110.7) | (108.1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Repurchased During Period, Shares | (1,011,124) | |||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | (0.3) | |||||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (7.6) | (7.6) | ||||
Common stock, shares issued (in shares) | 94,075,885 | |||||
Treasury Stock, Shares | (2,089,487) | |||||
Balance at Jun. 30, 2021 | 1,332.1 | $ 0.9 | $ (36.2) | 1,610.2 | (138.4) | (104.4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 27.7 | |||||
Earnings (loss) from continuing operations | 27.7 | |||||
Other comprehensive loss, net of tax | (3.7) | (3.7) | ||||
Stock-based compensation expense | 7.1 | 7.1 | ||||
Stock Issued During Period, Shares, New Issues | 218,342 | |||||
Stock Issued During Period, Value, Stock Options Exercised | 3.9 | $ 0 | 3.9 | |||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 120,959 | |||||
Balance at Sep. 30, 2021 | 1,366.1 | $ 0.9 | $ (36.2) | 1,620.2 | (110.7) | (108.1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | (0.1) | |||||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (1) | (1) | ||||
Common stock, shares issued (in shares) | 94,415,186 | |||||
Treasury Stock, Shares | (2,089,487) | |||||
Balance at Dec. 31, 2021 | 1,459.5 | $ 1 | $ (62.4) | 1,639.4 | (18.1) | (100.4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 400,000 | |||||
Treasury Stock, Value | $ 62.4 | |||||
Common stock, shares issued (in shares) | 95,112,778 | 95,112,778 | ||||
Treasury Stock, Shares | 3,217,798 | (3,217,798) | ||||
Net earnings (loss) | $ (222.1) | |||||
Stock Repurchased During Period, Value | $ (44) | |||||
Earnings (loss) from continuing operations | (222.1) | (222.1) | ||||
Other comprehensive loss, net of tax | (34.9) | (34.9) | ||||
Stock-based compensation expense | 21.6 | 21.6 | ||||
Stock Issued During Period, Shares, New Issues | 529,199 | |||||
Stock Issued During Period, Value, Stock Options Exercised | 6.4 | $ 0 | 6.4 | |||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 657,698 | |||||
Balance at Sep. 30, 2022 | 1,180.2 | $ 1 | $ (103.3) | 1,658 | (240.2) | (135.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Repurchased During Period, Shares | (2,339,045) | |||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 0.4 | |||||
Shares Issued During Period, Value, Exercise of Warrants | 0 | $ 3.1 | 3.1 | |||
Shares Issued During Period, Shares, Exercise of Warrants | 203,615 | |||||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (6.3) | (6.3) | ||||
Common stock, shares issued (in shares) | 96,254,641 | |||||
Treasury Stock, Shares | (4,263,678) | |||||
Balance at Jun. 30, 2022 | 1,203.6 | $ 1 | $ (84.7) | 1,650.9 | (242.9) | (120.7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 2.7 | |||||
Stock Repurchased During Period, Value | (18.6) | |||||
Earnings (loss) from continuing operations | 2.7 | 2.7 | ||||
Other comprehensive loss, net of tax | (14.6) | (14.6) | ||||
Stock-based compensation expense | 6.8 | 6.8 | ||||
Stock Issued During Period, Shares, New Issues | 29,672 | |||||
Stock Issued During Period, Value, Stock Options Exercised | 0.4 | $ 0 | 0.4 | |||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 15,362 | |||||
Balance at Sep. 30, 2022 | 1,180.2 | $ 1 | $ (103.3) | 1,658 | $ (240.2) | $ (135.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock Repurchased During Period, Shares | (1,089,550) | |||||
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent | 0.4 | |||||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (0.1) | $ (0.1) | ||||
Treasury Stock, Value | $ 103.3 | |||||
Common stock, shares issued (in shares) | 96,299,675 | 96,299,675 | ||||
Treasury Stock, Shares | 5,353,228 | (5,353,228) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring charges | $ 8.9 | $ 0 |
Operating Activities | ||
Net earnings (loss) | (222.1) | 57.8 |
Adjustments to reconcile net (loss) earnings to cash from operating activities: | ||
Depreciation and amortization | 41.7 | 46.6 |
Stock-based compensation | 21.6 | 25.6 |
Asset Impairment Charges | 239.8 | 4 |
Non-cash interest expense and amortization of debt issuance costs | 0.5 | 7.1 |
Gain (Loss) on Disposition of Property Plant Equipment | 0.2 | (0.2) |
Deferred income taxes | (2) | (1.5) |
Other, net | (7.4) | (2.5) |
Changes in assets and liabilities (excluding effects of foreign exchange): | ||
Receivables, net | 16.8 | 4.6 |
Inventories, net | (50.3) | (24) |
Prepaid and other current assets | (1.5) | (1.4) |
Accounts payable | (24.6) | 1.4 |
Accrued compensation and employee benefits | (16.7) | 5.9 |
Other accrued expenses | 5.8 | 2.4 |
Increase Decrease Accrued Taxes, Net | 9 | (3) |
Other non-current assets and non-current liabilities | 19.8 | (6.2) |
Net Cash Provided by (Used in) Operating Activities | 39.5 | 116.6 |
Investing Activities | ||
Net Cash Provided by (Used in) Investing Activities, Total | (25.4) | (109.4) |
Acquisitions of business (net of cash acquired) | (0.7) | (78.5) |
Capital expenditures | (24.7) | (28.2) |
Payments for (Proceeds from) Investments | 0 | (3.5) |
Proceeds from Sale of Short-term Investments | 0 | 0.4 |
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0.4 |
Financing Activities | ||
Net Cash Provided by (Used in) Financing Activities, Total | (40.1) | (14.9) |
Repayments of Lines of Credit | (15) | 0 |
Borrowings under revolving credit facility | 23 | 0 |
Payments for Repurchase of Common Stock | 44 | 20 |
Tax on restricted and performance stock unit vesting | (6.3) | (7.6) |
Payments of finance lease obligations | (4.2) | (1.7) |
Proceeds from exercise of stock options | 6.4 | 14.4 |
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract] | ||
Effect of exchange rate changes on cash and cash equivalents | (1.4) | (0.1) |
Net decrease in cash and cash equivalents | (27.4) | (7.8) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations | 41.5 | 140 |
Supplemental information - cash paid for: | ||
Income taxes | 3.9 | 12.3 |
Interest | $ 2.4 | $ 4 |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation | 1. Basis of Presentation Description of Business - Knowles Corporation (NYSE:KN) is a market leader and global provider of advanced micro-acoustic microphones and balanced armature speakers, audio solutions, and high performance capacitors and radio frequency ("RF") products, serving the consumer electronics, medtech, defense, electric vehicle, industrial, and communications markets. The Company uses its leading position in SiSonic TM micro-electro-mechanical systems ("MEMS") microphones and strong capabilities in audio processing technologies to optimize audio systems and improve the user experience across consumer applications. Knowles is also a leader in hearing health acoustics, high performance capacitors, and RF solutions for a diverse set of markets. The Company's focus on the customer, combined with its unique technology, proprietary manufacturing techniques, and global operational expertise, enable the Company to deliver innovative solutions across multiple applications. 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, 2021 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. 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. Share Repurchase Program - 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. On April 28, 2022, the Company announced that its Board of Directors had increased the authorization by up to $150 million in additional aggregate value. 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, 2022 and 2021, the Company repurchased 2,339,045 shares and 1,011,124 shares of common stock, respectively, for a total of $44.0 million and $20.0 million, respectively. Non-cash Investing Activities - Purchases of property, plant, and equipment included in accounts payable at September 30, 2022 and 2021 were $1.6 million and $3.6 million, respectively. These non-cash amounts are not reflected as Capital expenditures within Investing Activities on the Consolidated Statements of Cash Flows for the respective periods. |
Recent Accounting Standards (No
Recent Accounting Standards (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Standards | 2. Recent Accounting Standards Recently Adopted 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 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 adopted the standard using the modified retrospective method on January 1, 2022. Adoption of the standard did not impact the Consolidated Financial Statements as all of the Company’s convertible instruments were settled prior to the adoption date. See Note 9. Borrowings for detail on the Company's convertible instruments that matured on November 1, 2021. |
Business Combinations
Business Combinations | 5 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisition On May 3, 2021, the Company acquired all of the outstanding shares of common stock of Integrated Microwave Corporation ("IMC") for $81.4 million. During the first quarter of 2022, the Company recorded a purchase price adjustment of $0.7 million that was paid during the second quarter of 2022. The adjustment, which did not impact the Consolidated Statements of Earnings, resulted in an increase to goodwill of $0.7 million. The acquired business provides RF filters to the defense, industrial, and communications 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 Precision Devices ("PD") segment. Included in the Consolidated Statements of Earnings are IMC’s revenues and loss before income taxes of $7.0 million and $0.2 million, respectively, from the date of acquisition through September 30, 2021. The table below represents the final allocation of the purchase price to net assets acquired as of May 3, 2021: (in millions) Cash $ 2.2 Receivables 3.0 Inventories 2.6 Property, plant, and equipment 8.3 Customer relationships 27.7 Developed technology 5.2 Trademarks and other amortized intangible assets 1.6 Goodwill 32.0 Assumed current liabilities (1.2) Total purchase price $ 81.4 The fair value for customer relationships was 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 for developed technology was determined using the relief from royalty method under the income approach. 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 customer relationships and developed technology include forecasted revenue growth rates, profit margins, customer attrition rates, royalty rates, and discount rates. Discount rates of 13.0% and 14.0% were applied to the expected future cash flows to reflect the risk related to customer relationships and developed technology, respectively. Customer relationships and developed technology will be amortized on a straight-line basis over estimated useful lives of 8 years and 10 years, respectively. 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 PD 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. Pro-forma financial information has not been provided as the acquisition did not have a material impact on the Consolidated Statements of Earnings. |
Inventories, net (Notes)
Inventories, net (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory, Net [Abstract] | |
Inventories, net | 5. Inventories, net The following table details the major components of inventories, net: (in millions) September 30, 2022 December 31, 2021 Raw materials $ 117.0 $ 89.6 Work in progress 32.8 33.6 Finished goods 84.1 66.7 Subtotal 233.9 189.9 Less reserves (39.3) (36.8) Total $ 194.6 $ 153.1 |
Property, Plant, and Equipment,
Property, Plant, and Equipment, net (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | 6. Property, Plant, and Equipment, net The following table details the major components of property, plant, and equipment, net: (in millions) September 30, 2022 December 31, 2021 Land $ 12.3 $ 12.9 Buildings and improvements 112.1 119.3 Machinery, equipment, and other 528.0 575.0 Subtotal 652.4 707.2 Less accumulated depreciation (488.0) (506.4) Total $ 164.4 $ 200.8 Depreciation expense totaled $9.8 million and $11.5 million for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, depreciation expense totaled $32.5 million and $35.1 million, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 7. Goodwill and Other Intangible Assets The changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2022 are as follows: (in millions) Audio Precision Devices Total Balance at December 31, 2021 $ 878.8 $ 62.5 $ 941.3 Impairment charges (1) (239.8) — (239.8) Purchase price adjustment — 0.7 0.7 Foreign currency translation (0.1) — (0.1) Balance at September 30, 2022 $ 638.9 $ 63.2 $ 702.1 (1) During the nine months ended September 30, 2022, the Company recorded a $239.8 million impairment charge on goodwill. See Note 4. Impairment Charges for more information. Other Intangible Assets The gross carrying value and accumulated amortization for each major class of intangible assets are as follows: September 30, 2022 December 31, 2021 (in millions) Gross Carrying Accumulated Gross Carrying Accumulated Amortized intangible assets: Trademarks $ 2.0 $ 0.8 $ 2.0 $ 0.6 Customer relationships 36.4 9.2 36.4 5.9 Developed technology 45.4 18.4 45.4 13.2 Other 2.4 1.7 2.4 1.2 Total 86.2 30.1 86.2 20.9 Unamortized intangible assets: Trademarks 32.0 32.0 Total intangible assets, net $ 88.1 $ 97.3 Amortization expense totaled $3.1 million and $4.3 million for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, amortization expense was $9.2 million and $11.5 million, respectively. Amortization expense for the next five years, based on current definite-lived intangible balances, is estimated to be as follows: (in millions) Q4 2022 $ 3.1 2023 11.6 2024 11.6 2025 11.2 2026 5.3 |
Restructuring and Related Activ
Restructuring and Related Activities (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities | 8. Restructuring and Related Activities Restructuring and related activities are designed to better align the Company's operations with current market conditions through targeted facility consolidations, headcount reductions, and other measures to further optimize operations. During the nine months ended September 30, 2022, the Company restructured its MEMS microphones product line through two restructuring programs, which are included within the Audio segment. These actions resulted in the settlement of supplier obligations, non-cash fixed asset write-offs, and severance pay. During the nine months ended September 30, 2022, the Company recorded restructuring charges of $35.1 million related to this action, including $21.9 million for the settlement of supplier obligations, $8.9 million in fixed asset write-offs, and $4.3 million in severance pay and benefits. The Company may incur additional restructuring charges of up to $9.4 million during the remainder of the fiscal year for certain fixed assets, which cannot be reasonably estimated at this time due to the complex nature of the assets under review for use in other projects. In addition, during the nine months ended September 30, 2022, the Company recorded restructuring charges of $2.2 million for severance pay and benefits to rationalize the Intelligent Audio product line workforce, which is included within the Audio segment, and $0.6 million for other costs. During the three and nine months ended September 30, 2022, the Company recorded total restructuring charges within Gross profit of $28.1 million, primarily for the settlement of supplier obligations, non-cash fixed asset write-offs, and severance pay associated with the MEMS microphones product line. During the three and nine months ended September 30, 2022, the Company recorded total restructuring charges within Operating expenses of $2.7 million and $9.8 million, respectively, primarily for the settlement of supplier obligations and severance pay and benefits associated with the MEMS microphones product line and other actions to rationalize the Intelligent Audio product line workforce. No restructuring charges were recorded within Gross profit for the three and nine months ended September 30, 2021. During the nine months ended September 30, 2021, the Company recorded restructuring charges within Operating expenses of $0.3 million. No restructuring charges were recorded within Operating expenses for the three months ended September 30, 2021. 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) 2022 2021 2022 2021 Audio $ 30.7 $ — $ 37.3 $ 0.3 Precision Devices — — — — Corporate 0.1 — 0.6 — Total $ 30.8 $ — $ 37.9 $ 0.3 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, 2021 $ 0.4 $ — $ 0.4 Restructuring charges 6.5 31.4 37.9 Payments (3.8) (1.0) (4.8) Other, including foreign currency (1) (0.1) (8.9) (9.0) Balance at September 30, 2022 $ 3.0 $ 21.5 $ 24.5 (1) Other activity includes the non-cash disposal of fixed assets of $8.9 million within the MEMS microphones product line. The severance and restructuring accruals are recorded in the following line item on the Consolidated Balance Sheets: (in millions) September 30, 2022 December 31, 2021 Other accrued expenses $ 6.6 $ 0.4 Other liabilities 17.9 — Total $ 24.5 $ 0.4 |
Borrowings (Notes)
Borrowings (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | 9. Borrowings Revolving Credit Facility Revolving credit facility borrowings consist of the following: (in millions) September 30, 2022 December 31, 2021 Revolving credit facility $ 78.0 $ 70.0 Less current maturities (1) — — Total long-term debt $ 78.0 $ 70.0 (1) There are no required principal payments due until maturity in January 2024. On September 4, 2020, the Company entered into a new Credit Agreement (the "New Credit Agreement"). The New Credit Agreement provides for a senior secured revolving credit facility (the "New Credit Facility") with borrowings in an aggregate principal amount at any time outstanding not to exceed $400.0 million. The New Credit Agreement serves as refinancing of indebtedness and terminates the Company's Revolving Credit Facility Agreement dated as of October 11, 2017 ("Prior Credit Facility"). The Prior Credit Facility consisted of a $400.0 million senior secured revolving credit facility. At any time during the term of the New Credit Facility, the Company will be permitted to increase the commitments under the New Credit Facility or to establish one or more incremental term loan facilities under the New Credit Facility in an aggregate principal amount not to exceed $200.0 million for all such incremental facilities. Commitments under the New Credit Facility will terminate, and loans outstanding thereunder will mature, on January 2, 2024. The New Credit Agreement includes requirements, to be tested quarterly, that the Company maintains (i) a minimum ratio of Consolidated EBITDA to consolidated interest expense of 3.25 to 1.0 (the "Interest Coverage Ratio"), (ii) a maximum ratio of Consolidated total indebtedness to Consolidated EBITDA of 3.75 to 1.0 (the "Total Leverage Ratio"), and (iii) a maximum ratio of senior secured indebtedness to Consolidated EBITDA of 3.25 to 1.0 (the "Senior Secured Leverage Ratio"). For these ratios, Consolidated EBITDA and consolidated interest expense are calculated using the most recent four consecutive fiscal quarters in a manner defined in the New Credit Agreement. At September 30, 2022, the Company was in compliance with these covenants and it expects to remain in compliance with all of its debt covenants over the next twelve months. The interest rates under the New Credit Facility will be, at the Borrowers' option (1) LIBOR (or EURIBOR for borrowings denominated in Euro; or SONIA for borrowings denominated in Pounds Sterling) plus the rates per annum determined from time to time based on the total leverage ratio of the Company as of the end of and for the most recent period of four fiscal quarters for which financial statements have been delivered (the "Applicable Margin"); or (2) in the case of borrowings denominated in U.S. dollars, alternate base rate ("ABR") (as defined in the New Credit Agreement) plus the Applicable Margin. The Applicable Margin for LIBOR could range from 1.50% to 2.50% while the Applicable Margin for ABR could range from 0.50% to 1.50%. Prior to the discontinuation of the relevant LIBOR reference rate on June 30, 2023, the Company and its lenders will agree on an ABR to address the replacement of LIBOR for the remaining life of the New Credit Facility. The interest rate under the New Credit Facility is variable based on LIBOR at the time of the borrowing and the Applicable Margin. In addition, a commitment fee accrues on the average daily unused portion of the New Credit Facility at a rate of 0.225% to 0.375%. The weighted-average interest rate on the Company's borrowings under the New Credit Facility was 2.62% for the nine months ended September 30, 2022. There were no borrowings outstanding under the New Credit Facility during the nine months ended September 30, 2021. The weighted-average commitment fee on the revolving line of credit was 0.23% and 0.26% for the nine months ended September 30, 2022 and 2021, respectively. 3.25% Convertible Senior Notes Due November 1, 2021 In May 2016, the Company issued $172.5 million aggregate principal amount of 3.25% convertible senior notes which matured on November 1, 2021 (the “Notes”). Interest was payable semiannually in arrears on May 1 and November 1 of each year. The Notes were governed by an Indenture between the Company, as issuer, and U.S. Bank National Association as trustee. Upon conversion, the Company could elect to pay or deliver cash, shares of the Company's common stock, or a combination of cash and shares of common stock. On November 1, 2021, the Company settled the principal amount of the Notes in cash and the excess conversion value by delivering 0.4 million shares of its common stock held in treasury. The conversion rate was 54.2741 shares of common stock per $1,000 principal amount of Notes. The conversion price was $18.4250 per share of common stock . The Notes were senior unsecured obligations. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that did not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the face value of the Notes as a whole. The excess of the principal amount of the liability component over its carrying amount was amortized to interest expense over the term of the Notes. The following table sets forth total interest expense recognized related to the Notes: Three Months Ended Nine Months Ended (in millions) September 30, 2021 September 30, 2021 3.25% coupon $ 1.4 $ 4.2 Amortization of debt issuance costs 0.2 0.7 Amortization of debt discount 2.1 6.0 Total $ 3.7 $ 10.9 Warrants In the second quarter of 2016, the Company entered into warrant transactions, whereby the Company sold warrants to acquire shares of the Company's common stock at a strike price of $21.1050 per share (the “Warrants”). The Company received aggregate proceeds of $39.1 million from the sale of the Warrants. The Warrants were separate transactions entered into by the Company, and were not part of the Notes, and were accounted for as part of additional paid-in capital. The Warrants expired during the first quarter of 2022, which resulted in the Company delivering 0.2 million shares of its common stock held in treasury. Settlement of the Warrants resulted in a $3.1 million decrease in treasury stock, which was measured based on the acquisition cost of the delivered shares determined on a first-in, first-out (“FIFO”) basis, offset by an equivalent decrease in additional paid-in capital with no net impact to equity. |
Other Comprehensive Earnings
Other Comprehensive Earnings | 9 Months Ended |
Sep. 30, 2022 | |
Statement of Other Comprehensive Income [Abstract] | |
Other Comprehensive Earnings | 10. Other Comprehensive Earnings The amounts recognized in other comprehensive loss were as follows: Three Months Ended Three Months Ended September 30, 2022 September 30, 2021 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ (13.1) $ — $ (13.1) $ (3.7) $ — $ (3.7) Employee benefit plans 0.2 (0.4) (0.2) 0.2 (0.1) 0.1 Changes in fair value of cash flow hedges (1.3) — (1.3) (0.3) 0.2 (0.1) Total other comprehensive loss $ (14.2) $ (0.4) $ (14.6) $ (3.8) $ 0.1 $ (3.7) Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ (30.9) $ — $ (30.9) $ (6.4) $ — $ (6.4) Employee benefit plans 0.5 (0.7) (0.2) 0.6 0.1 0.7 Changes in fair value of cash flow hedges (4.1) 0.3 (3.8) (2.1) 0.2 (1.9) Total other comprehensive loss $ (34.5) $ (0.4) $ (34.9) $ (7.9) $ 0.3 $ (7.6) 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, 2022 and 2021: (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2021 $ 0.3 $ (17.1) $ (83.6) $ (100.4) Other comprehensive loss, net of tax (3.8) (0.2) (30.9) (34.9) Balance at September 30, 2022 $ (3.5) $ (17.3) $ (114.5) $ (135.3) (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2020 $ 1.6 $ (22.1) $ (80.0) $ (100.5) Other comprehensive (loss) earnings, net of tax (1.9) 0.7 (6.4) (7.6) Balance at September 30, 2021 $ (0.3) $ (21.4) $ (86.4) $ (108.1) 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 2022 2021 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs Other income, net $ 0.2 $ 0.2 Tax (Benefit from) provision for income taxes (0.4) (0.1) Net of tax $ (0.2) $ 0.1 Cash flow hedges: Net losses reclassified into earnings Cost of goods sold $ 2.0 $ — Tax (Benefit from) provision for income taxes (0.3) 0.1 Net of tax $ 1.7 $ 0.1 Nine Months Ended September 30, (in millions) Statement of Earnings Line 2022 2021 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs Other income, net $ 0.5 $ 0.6 Tax (Benefit from) provision for income taxes (0.7) 0.1 Net of tax $ (0.2) $ 0.7 Cash flow hedges: Net losses (gains) reclassified into earnings Cost of goods sold $ 2.7 $ (1.9) Tax (Benefit from) provision for income taxes (0.4) 0.5 Net of tax $ 2.3 $ (1.4) |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 11. Income Taxes Income taxes for the interim periods presented have been included in the accompanying Consolidated Financial Statements on the basis of an estimated annual effective tax rate ("ETR"). The determination of the consolidated provision for income taxes requires management to make certain judgments and estimates. Changes in the estimated level of annual pre-tax earnings or loss, tax laws, and changes resulting from tax audits can affect the overall ETR, which impacts the level of income tax expense or benefit and net income or loss. Judgments and estimates related to the Company’s projections and assumptions are inherently uncertain and therefore, actual results could differ materially from projections. The Company's ETR from continuing operations for the three and nine months ended September 30, 2022, respectively, was 119.9% resulting in $16.3 million of tax benefit, and (5.9)% resulting in $12.4 million of tax expense (inclusive of discrete items totaling $1.6 million of benefit). The provision for the nine months ended September 30, 2022 is the result of estimated tax expense for the year in relation to the estimated pre-tax loss for the year, which when applied to the pre-tax loss results in tax expense. The discrete items impacting the tax provision for the three and nine months ended September 30, 2022 were primarily attributable to the stock-based compensation deduction. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2022 was 119.9% and (6.7)%, respectively. During the three and nine months ended September 30, 2021, the ETR from continuing operations was a 14.2% provision (inclusive of discrete items totaling $0.4 million of provision) and a 13.1% provision (inclusive of discrete items totaling $0.9 million of benefit), respectively. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2021 was a 13.0% provision and a 14.5% provision, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions, which resulted in the provision for the three and nine months ended September 30, 2022 and 2021. |
Equity Incentive Program (Notes
Equity Incentive Program (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Equity Incentive Program | 12. Equity Incentive Program Stock-based compensation expense recognized in the Consolidated Statements of Earnings totaled $6.8 million and $7.1 million for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, stock-based compensation expense was $21.6 million and $25.6 million, respectively. The tax benefit recognized related to stock-based compensation expense was $0.1 million and $4.1 million for the three and nine months ended September 30, 2022, respectively. No tax benefit was recognized related to stock-based compensation expense for the three and nine months ended September 30, 2021. Stock Options and SSARs The expense related to stock options granted in the nine months ended September 30, 2022 and 2021 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, 2022 2021 Risk-free interest rate 0.85% 0.06% Dividend yield —% —% Expected life (years) 4.5 4.5 Volatility 34.3% 36.0% Fair value at date of grant $6.29 $6.14 to $6.31 The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the nine months ended September 30, 2022: 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) (in millions, except share and per share amounts) Outstanding at December 31, 2021 375,964 $ 23.16 3,478,438 $ 15.04 Granted — — 216,813 21.14 Exercised (36,759) 21.77 (529,199) 12.21 Forfeited — — (69,873) 20.63 Expired (95,573) 21.77 (12,222) 17.41 Outstanding at September 30, 2022 243,632 $ 23.92 $ — 0.4 3,083,957 $ 15.82 $ 0.7 2.7 Exercisable at September 30, 2022 243,632 $ 23.92 $ — 0.4 2,582,778 $ 15.17 $ 0.7 2.2 There was no unrecognized compensation expense related to SSARs at September 30, 2022. At September 30, 2022, unrecognized compensation expense related to stock options not yet exercisable of $1.7 million is expected to be recognized over a weighted-average period of 1.3 years. RSUs The following table summarizes the Company's restricted stock unit ("RSU") activity for the nine months ended September 30, 2022: Share units Weighted-average grant date fair value Unvested at December 31, 2021 1,778,639 $ 18.89 Granted 1,203,872 20.55 Vested (1) (817,082) 18.17 Forfeited (243,411) 20.15 Unvested at September 30, 2022 1,922,018 $ 20.04 (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, 2022, $25.3 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 1.8 years. PSUs The Company grants performance share units (“PSUs”) to senior management. In each case, the awards will cliff vest three years following the grant date. PSUs will be settled in shares of the Company's common stock. Depending on the Company's overall performance relative to the applicable measures, 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 target. The Company will ratably recognize the expense over the applicable service period for each grant of PSUs and adjust the expense for the expected achievement of performance conditions as appropriate. The fair value of PSUs is determined by using a Monte Carlo simulation. For the awards granted in February 2022 and 2021, the number of PSUs that may be earned and vest is based on total shareholder return (“TSR”) relative to the component companies of the Russell 2000 Index over a three-year performance period. The COVID-19 pandemic brought on unique and unprecedented challenges to the Company, particularly in the hearing health and medtech markets. Many of the Company's executive compensation programs were affected, including outstanding PSU awards. Due to the impact of the COVID-19 pandemic on the Company’s overall business performance, effective February 8, 2021, the Company’s Compensation Committee approved certain modifications to PSUs granted in February 2018, 2019, and 2020. For the awards granted in February 2018 (the “2018 PSUs”), the number of PSUs that may be earned and vest was originally based on the Company’s revenues and stock price performance over a three-year performance period. The modified award was based on the Company’s revenues and stock price performance over three separate one-year performance periods to isolate the impact of the COVID-19 pandemic on the Company's fiscal 2020 performance. In addition, the performance periods corresponding to fiscal 2018 and 2019 were weighted at 25% each while the performance period corresponding to fiscal 2020 was weighted at 50%, given the impact of fiscal 2020 performance on shareholders. Service conditions were not modified. The modification of the 2018 PSUs affected nine employees and resulted in total incremental compensation expense of $3.9 million, which was recognized in the first quarter of 2021 as there was no remaining service period. In February 2021, the 2018 PSUs were converted from 329,092 PSUs to 190,544 shares of common stock based on achievement of the modified conditions. For the awards granted in February 2019 (the “2019 PSUs”), the number of PSUs that may be earned and vest was originally based on the Company's revenues and TSR relative to the component companies of the S&P Semiconductor Select Industry Index over a three-year performance period. The modified award was based on the Company’s revenues and TSR relative to the component companies of the S&P Semiconductor Select Industry Index over three separate one-year performance periods to isolate the impact of the COVID-19 pandemic on the Company's fiscal 2020 performance. Each period was weighted equally, as the Company expected to face challenges related to the COVID-19 pandemic in fiscal 2021. Service conditions were not modified. The modification of the 2019 PSUs affected eight employees and resulted in total incremental compensation expense of $2.4 million, which was recognized over the remaining service period. Incremental compensation expense was subject to adjustment for the achievement of the performance condition based on fiscal 2021 revenues. In February 2022, the 2019 PSUs were converted from 227,812 PSUs to 150,811 shares of common stock based on achievement of the modified conditions. For the awards granted in February 2020 (the “2020 PSUs”), the number of PSUs that may be earned and vest was originally based on TSR relative to the component companies of the S&P Semiconductor Select Industry Index over a three-year performance period. The modified award replaces the S&P Semiconductor Select Industry Index with the Russell 2000 Index. The Company is a member of the Russell 2000 Index, which represents a broader, more diversified index that better aligns with the Company's strategy. Service conditions were not modified. The modification of the 2020 PSUs affected eight employees and resulted in total incremental compensation expense of $4.7 million, which will be recognized over the remaining service period. The following table summarizes the Company's PSU activity for the nine months ended September 30, 2022: Share units Weighted-average grant date fair value Unvested at December 31, 2021 766,466 $ 21.28 Granted 294,935 29.92 Vested (1) (227,812) 18.44 Forfeited — — Unvested at September 30, 2022 833,589 $ 25.12 (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, 2022, $11.8 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.4 years. |
Earnings per Share (Notes)
Earnings per Share (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 13. 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 per share amounts) 2022 2021 2022 2021 Earnings (loss) from continuing operations $ 2.7 $ 27.7 $ (222.1) $ 57.6 Earnings from discontinued operations, net — — — 0.2 Net earnings (loss) $ 2.7 $ 27.7 $ (222.1) $ 57.8 Basic earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.03 $ 0.30 $ (2.42) $ 0.62 Earnings from discontinued operations, net — — — 0.01 Net earnings (loss) $ 0.03 $ 0.30 $ (2.42) $ 0.63 Weighted-average shares outstanding 91.4 92.2 91.9 92.3 Diluted earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.03 $ 0.29 $ (2.42) $ 0.61 Earnings from discontinued operations, net — — — — Net earnings (loss) $ 0.03 $ 0.29 $ (2.42) $ 0.61 Weighted-average shares outstanding 92.0 94.1 91.9 94.8 The Company intended to settle the principal amount of the Notes in cash during all periods preceding settlement. The treasury stock method was used to calculate the dilutive effect of the conversion option on diluted earnings per share, if applicable. For the three and nine months ended September 30, 2022, the weighted-average number of anti-dilutive potential common shares for stock-based awards excluded from the diluted earnings per share calculation above was 3.2 million and 3.0 million, respectively. For the three and nine months ended September 30, 2021, the weighted-average number of anti-dilutive potential common shares for stock-based awards excluded from the diluted earnings per share calculation above was 1.1 million and 1.3 million, respectively. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | 14. 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 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. 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, 2022 and December 31, 2021. |
Segment Information (Notes)
Segment Information (Notes) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 15. 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) 2022 2021 2022 2021 Revenues: Audio $ 113.8 $ 177.7 $ 388.0 $ 490.6 Precision Devices 64.4 55.3 179.6 143.2 Total revenues $ 178.2 $ 233.0 $ 567.6 $ 633.8 (Loss) earnings from continuing operations before interest and income taxes: Audio $ (16.9) $ 36.6 $ (210.9) $ 95.0 Precision Devices 16.2 14.0 39.5 28.3 Total segments (0.7) 50.6 (171.4) 123.3 Corporate expense / other 11.8 14.1 35.6 44.7 Interest expense, net 1.1 4.2 2.7 12.3 (Loss) earnings before income taxes and discontinued operations (13.6) 32.3 (209.7) 66.3 (Benefit from) provision for income taxes (16.3) 4.6 12.4 8.7 Earnings (loss) from continuing operations $ 2.7 $ 27.7 $ (222.1) $ 57.6 Information regarding assets of the Company's reportable segments: Total Assets (in millions) September 30, 2022 December 31, 2021 Audio $ 1,149.2 $ 1,467.1 Precision Devices 285.2 260.4 Corporate / eliminations 2.3 4.1 Total $ 1,436.7 $ 1,731.6 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) 2022 2021 2022 2021 Asia $ 105.3 $ 163.4 $ 347.2 $ 452.0 United States 43.7 42.2 129.3 109.3 Europe 24.5 24.6 80.2 65.4 Other Americas 2.9 1.6 5.5 3.9 Other 1.8 1.2 5.4 3.2 Total $ 178.2 $ 233.0 $ 567.6 $ 633.8 Receivables, net from contracts with customers were $118.3 million and $137.7 million as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022 and December 31, 2021, our total remaining performance obligations were immaterial. |
Recent Accounting Standards New
Recent Accounting Standards New Accounting Pronouncements, Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted 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 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 adopted the standard using the modified retrospective method on January 1, 2022. Adoption of the standard did not impact the Consolidated Financial Statements as all of the Company’s convertible instruments were settled prior to the adoption date. See Note 9. Borrowings for detail on the Company's convertible instruments that matured on November 1, 2021. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [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 May 3, 2021: (in millions) Cash $ 2.2 Receivables 3.0 Inventories 2.6 Property, plant, and equipment 8.3 Customer relationships 27.7 Developed technology 5.2 Trademarks and other amortized intangible assets 1.6 Goodwill 32.0 Assumed current liabilities (1.2) Total purchase price $ 81.4 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory, Net [Abstract] | |
Components of Inventory | The following table details the major components of inventories, net: (in millions) September 30, 2022 December 31, 2021 Raw materials $ 117.0 $ 89.6 Work in progress 32.8 33.6 Finished goods 84.1 66.7 Subtotal 233.9 189.9 Less reserves (39.3) (36.8) Total $ 194.6 $ 153.1 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Land $ 12.3 $ 12.9 Buildings and improvements 112.1 119.3 Machinery, equipment, and other 528.0 575.0 Subtotal 652.4 707.2 Less accumulated depreciation (488.0) (506.4) Total $ 164.4 $ 200.8 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2022 are as follows: (in millions) Audio Precision Devices Total Balance at December 31, 2021 $ 878.8 $ 62.5 $ 941.3 Impairment charges (1) (239.8) — (239.8) Purchase price adjustment — 0.7 0.7 Foreign currency translation (0.1) — (0.1) Balance at September 30, 2022 $ 638.9 $ 63.2 $ 702.1 (1) During the nine months ended September 30, 2022, the Company recorded a $239.8 million impairment charge on goodwill. See Note 4. Impairment Charges for more information. |
Schedule of Intangible Assets | The gross carrying value and accumulated amortization for each major class of intangible assets are as follows: September 30, 2022 December 31, 2021 (in millions) Gross Carrying Accumulated Gross Carrying Accumulated Amortized intangible assets: Trademarks $ 2.0 $ 0.8 $ 2.0 $ 0.6 Customer relationships 36.4 9.2 36.4 5.9 Developed technology 45.4 18.4 45.4 13.2 Other 2.4 1.7 2.4 1.2 Total 86.2 30.1 86.2 20.9 Unamortized intangible assets: Trademarks 32.0 32.0 Total intangible assets, net $ 88.1 $ 97.3 |
Schedule of Future Amortization Expense | Amortization expense for the next five years, based on current definite-lived intangible balances, is estimated to be as follows: (in millions) Q4 2022 $ 3.1 2023 11.6 2024 11.6 2025 11.2 2026 5.3 |
Restructuring and Related Act_2
Restructuring and Related Activities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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) 2022 2021 2022 2021 Audio $ 30.7 $ — $ 37.3 $ 0.3 Precision Devices — — — — Corporate 0.1 — 0.6 — Total $ 30.8 $ — $ 37.9 $ 0.3 |
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, 2021 $ 0.4 $ — $ 0.4 Restructuring charges 6.5 31.4 37.9 Payments (3.8) (1.0) (4.8) Other, including foreign currency (1) (0.1) (8.9) (9.0) Balance at September 30, 2022 $ 3.0 $ 21.5 $ 24.5 |
Schedule of Restructuring Reserve by Balance Sheet Location | The severance and restructuring accruals are recorded in the following line item on the Consolidated Balance Sheets: (in millions) September 30, 2022 December 31, 2021 Other accrued expenses $ 6.6 $ 0.4 Other liabilities 17.9 — Total $ 24.5 $ 0.4 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Revolving credit facility borrowings consist of the following: (in millions) September 30, 2022 December 31, 2021 Revolving credit facility $ 78.0 $ 70.0 Less current maturities (1) — — Total long-term debt $ 78.0 $ 70.0 |
Schedule of Convertible Debt Interest Expense | The following table sets forth total interest expense recognized related to the Notes: Three Months Ended Nine Months Ended (in millions) September 30, 2021 September 30, 2021 3.25% coupon $ 1.4 $ 4.2 Amortization of debt issuance costs 0.2 0.7 Amortization of debt discount 2.1 6.0 Total $ 3.7 $ 10.9 |
Other Comprehensive Loss (Table
Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of other comprehensive (loss) earnings | The amounts recognized in other comprehensive loss were as follows: Three Months Ended Three Months Ended September 30, 2022 September 30, 2021 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ (13.1) $ — $ (13.1) $ (3.7) $ — $ (3.7) Employee benefit plans 0.2 (0.4) (0.2) 0.2 (0.1) 0.1 Changes in fair value of cash flow hedges (1.3) — (1.3) (0.3) 0.2 (0.1) Total other comprehensive loss $ (14.2) $ (0.4) $ (14.6) $ (3.8) $ 0.1 $ (3.7) Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 (in millions) Pre-tax Tax Net of tax Pre-tax Tax Net of tax Foreign currency translation $ (30.9) $ — $ (30.9) $ (6.4) $ — $ (6.4) Employee benefit plans 0.5 (0.7) (0.2) 0.6 0.1 0.7 Changes in fair value of cash flow hedges (4.1) 0.3 (3.8) (2.1) 0.2 (1.9) Total other comprehensive loss $ (34.5) $ (0.4) $ (34.9) $ (7.9) $ 0.3 $ (7.6) |
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, 2022 and 2021: (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2021 $ 0.3 $ (17.1) $ (83.6) $ (100.4) Other comprehensive loss, net of tax (3.8) (0.2) (30.9) (34.9) Balance at September 30, 2022 $ (3.5) $ (17.3) $ (114.5) $ (135.3) (in millions) Cash flow hedges Employee benefit plans Cumulative foreign currency translation adjustments Total Balance at December 31, 2020 $ 1.6 $ (22.1) $ (80.0) $ (100.5) Other comprehensive (loss) earnings, net of tax (1.9) 0.7 (6.4) (7.6) Balance at September 30, 2021 $ (0.3) $ (21.4) $ (86.4) $ (108.1) 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 2022 2021 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs Other income, net $ 0.2 $ 0.2 Tax (Benefit from) provision for income taxes (0.4) (0.1) Net of tax $ (0.2) $ 0.1 Cash flow hedges: Net losses reclassified into earnings Cost of goods sold $ 2.0 $ — Tax (Benefit from) provision for income taxes (0.3) 0.1 Net of tax $ 1.7 $ 0.1 Nine Months Ended September 30, (in millions) Statement of Earnings Line 2022 2021 Pension and post-retirement benefit plans: Amortization or settlement of actuarial losses and prior service costs Other income, net $ 0.5 $ 0.6 Tax (Benefit from) provision for income taxes (0.7) 0.1 Net of tax $ (0.2) $ 0.7 Cash flow hedges: Net losses (gains) reclassified into earnings Cost of goods sold $ 2.7 $ (1.9) Tax (Benefit from) provision for income taxes (0.4) 0.5 Net of tax $ 2.3 $ (1.4) |
Equity Incentive Program (Table
Equity Incentive Program (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and 2021 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, 2022 2021 Risk-free interest rate 0.85% 0.06% Dividend yield —% —% Expected life (years) 4.5 4.5 Volatility 34.3% 36.0% Fair value at date of grant $6.29 $6.14 to $6.31 |
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, 2022: 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) (in millions, except share and per share amounts) Outstanding at December 31, 2021 375,964 $ 23.16 3,478,438 $ 15.04 Granted — — 216,813 21.14 Exercised (36,759) 21.77 (529,199) 12.21 Forfeited — — (69,873) 20.63 Expired (95,573) 21.77 (12,222) 17.41 Outstanding at September 30, 2022 243,632 $ 23.92 $ — 0.4 3,083,957 $ 15.82 $ 0.7 2.7 Exercisable at September 30, 2022 243,632 $ 23.92 $ — 0.4 2,582,778 $ 15.17 $ 0.7 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, 2022: Share units Weighted-average grant date fair value Unvested at December 31, 2021 1,778,639 $ 18.89 Granted 1,203,872 20.55 Vested (1) (817,082) 18.17 Forfeited (243,411) 20.15 Unvested at September 30, 2022 1,922,018 $ 20.04 (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, 2022: Share units Weighted-average grant date fair value Unvested at December 31, 2021 766,466 $ 21.28 Granted 294,935 29.92 Vested (1) (227,812) 18.44 Forfeited — — Unvested at September 30, 2022 833,589 $ 25.12 (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, 2022 | |
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 per share amounts) 2022 2021 2022 2021 Earnings (loss) from continuing operations $ 2.7 $ 27.7 $ (222.1) $ 57.6 Earnings from discontinued operations, net — — — 0.2 Net earnings (loss) $ 2.7 $ 27.7 $ (222.1) $ 57.8 Basic earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.03 $ 0.30 $ (2.42) $ 0.62 Earnings from discontinued operations, net — — — 0.01 Net earnings (loss) $ 0.03 $ 0.30 $ (2.42) $ 0.63 Weighted-average shares outstanding 91.4 92.2 91.9 92.3 Diluted earnings (loss) per common share: Earnings (loss) from continuing operations $ 0.03 $ 0.29 $ (2.42) $ 0.61 Earnings from discontinued operations, net — — — — Net earnings (loss) $ 0.03 $ 0.29 $ (2.42) $ 0.61 Weighted-average shares outstanding 92.0 94.1 91.9 94.8 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Revenue and Earnings from continuing operations by market segment | Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Revenues: Audio $ 113.8 $ 177.7 $ 388.0 $ 490.6 Precision Devices 64.4 55.3 179.6 143.2 Total revenues $ 178.2 $ 233.0 $ 567.6 $ 633.8 (Loss) earnings from continuing operations before interest and income taxes: Audio $ (16.9) $ 36.6 $ (210.9) $ 95.0 Precision Devices 16.2 14.0 39.5 28.3 Total segments (0.7) 50.6 (171.4) 123.3 Corporate expense / other 11.8 14.1 35.6 44.7 Interest expense, net 1.1 4.2 2.7 12.3 (Loss) earnings before income taxes and discontinued operations (13.6) 32.3 (209.7) 66.3 (Benefit from) provision for income taxes (16.3) 4.6 12.4 8.7 Earnings (loss) from continuing operations $ 2.7 $ 27.7 $ (222.1) $ 57.6 |
Reconciliation of Assets from Segment to Consolidated | Information regarding assets of the Company's reportable segments: Total Assets (in millions) September 30, 2022 December 31, 2021 Audio $ 1,149.2 $ 1,467.1 Precision Devices 285.2 260.4 Corporate / eliminations 2.3 4.1 Total $ 1,436.7 $ 1,731.6 |
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) 2022 2021 2022 2021 Asia $ 105.3 $ 163.4 $ 347.2 $ 452.0 United States 43.7 42.2 129.3 109.3 Europe 24.5 24.6 80.2 65.4 Other Americas 2.9 1.6 5.5 3.9 Other 1.8 1.2 5.4 3.2 Total $ 178.2 $ 233.0 $ 567.6 $ 633.8 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Apr. 28, 2022 | Feb. 24, 2020 | |
Noncash Investing and Financing Items | ||||
Purchases of property and equipment included in accounts payable | $ 1.6 | $ 3.6 | ||
Stock Repurchase Program, Authorized Amount | $ 100 | |||
Share Repurchase Program, Authorized Amount, Increase (Decrease) | $ 150 | |||
Payments for Repurchase of Common Stock | $ 44 | $ 20 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | 5 Months Ended | 9 Months Ended | ||
May 03, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets | ||||
Goodwill | $ 702.1 | $ 941.3 | ||
Goodwill, Purchase Accounting Adjustments | $ 0.7 | |||
Acquisitions | 3. Acquisition On May 3, 2021, the Company acquired all of the outstanding shares of common stock of Integrated Microwave Corporation ("IMC") for $81.4 million. During the first quarter of 2022, the Company recorded a purchase price adjustment of $0.7 million that was paid during the second quarter of 2022. The adjustment, which did not impact the Consolidated Statements of Earnings, resulted in an increase to goodwill of $0.7 million. The acquired business provides RF filters to the defense, industrial, and communications 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 Precision Devices ("PD") segment. Included in the Consolidated Statements of Earnings are IMC’s revenues and loss before income taxes of $7.0 million and $0.2 million, respectively, from the date of acquisition through September 30, 2021. The table below represents the final allocation of the purchase price to net assets acquired as of May 3, 2021: (in millions) Cash $ 2.2 Receivables 3.0 Inventories 2.6 Property, plant, and equipment 8.3 Customer relationships 27.7 Developed technology 5.2 Trademarks and other amortized intangible assets 1.6 Goodwill 32.0 Assumed current liabilities (1.2) Total purchase price $ 81.4 The fair value for customer relationships was 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 for developed technology was determined using the relief from royalty method under the income approach. 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 customer relationships and developed technology include forecasted revenue growth rates, profit margins, customer attrition rates, royalty rates, and discount rates. Discount rates of 13.0% and 14.0% were applied to the expected future cash flows to reflect the risk related to customer relationships and developed technology, respectively. Customer relationships and developed technology will be amortized on a straight-line basis over estimated useful lives of 8 years and 10 years, respectively. 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 PD 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. Pro-forma financial information has not been provided as the acquisition did not have a material impact on the Consolidated Statements of Earnings. | |||
Integrated Microwave Corporation | ||||
Business Combination Segment Allocation [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 81.4 | |||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 0.2 | |||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 7 | |||
Finite-Lived Intangible Assets | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 2.2 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 3 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 2.6 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 8.3 | |||
Goodwill | 32 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (1.2) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 81.4 | |||
Integrated Microwave Corporation | Unpatented Technology [Member] | ||||
Finite-Lived Intangible Assets | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 5.2 | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Integrated Microwave Corporation | Trademarks | ||||
Finite-Lived Intangible Assets | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 1.6 | |||
Integrated Microwave Corporation | Customer relationships | ||||
Finite-Lived Intangible Assets | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 27.7 | |||
Finite-Lived Intangible Asset, Useful Life | 8 years | |||
Finite-Lived Intangible Asset, Useful Life | 8 years |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory, Net [Abstract] | ||
Raw materials | $ 117 | $ 89.6 |
Work in progress | 32.8 | 33.6 |
Finished goods | 84.1 | 66.7 |
Subtotal | 233.9 | 189.9 |
Less reserves | (39.3) | (36.8) |
Total | $ 194.6 | $ 153.1 |
Property, Plant and Equipment,
Property, Plant and Equipment, net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment | |||||
Cost | $ 652.4 | $ 652.4 | $ 707.2 | ||
Less accumulated depreciation | (488) | (488) | (506.4) | ||
Total | 164.4 | 164.4 | 200.8 | ||
Depreciation | 9.8 | $ 11.5 | 32.5 | $ 35.1 | |
Restructuring charges | 2.7 | 0 | 9.8 | 0.3 | |
Severance Pay and Contract Termination and Other Costs | |||||
Property, Plant and Equipment | |||||
Restructuring charges | 30.8 | 0 | 37.9 | $ 0.3 | |
Severance Pay and Contract Termination and Other Costs | Operating Segments | Corporate, Non-Segment [Member] | |||||
Property, Plant and Equipment | |||||
Restructuring charges | 0.1 | $ 0 | |||
Land | |||||
Property, Plant and Equipment | |||||
Cost | 12.3 | 12.3 | 12.9 | ||
Buildings and improvements | |||||
Property, Plant and Equipment | |||||
Cost | 112.1 | 112.1 | 119.3 | ||
Machinery, equipment, and other | |||||
Property, Plant and Equipment | |||||
Cost | $ 528 | $ 528 | $ 575 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | $ 941.3 | $ 941.3 | |||
Goodwill, Ending Balance | $ 702.1 | 702.1 | |||
Goodwill, Impairment Loss | (239.8) | ||||
Goodwill, Purchase Accounting Adjustments | 0.7 | ||||
Goodwill, Foreign Currency Translation Gain (Loss) | (0.1) | ||||
Amortization expense | 3.1 | $ 4.3 | 9.2 | $ 11.5 | |
Audio | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 878.8 | 878.8 | |||
Goodwill, Ending Balance | 638.9 | 638.9 | |||
Goodwill, Impairment Loss | (239.8) | ||||
Goodwill, Purchase Accounting Adjustments | 0 | ||||
Goodwill, Foreign Currency Translation Gain (Loss) | (0.1) | ||||
Precision Devices | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 62.5 | 62.5 | |||
Goodwill, Ending Balance | $ 63.2 | 63.2 | |||
Goodwill, Impairment Loss | 0 | ||||
Goodwill, Foreign Currency Translation Gain (Loss) | $ 0 | ||||
Precision Devices | Integrated Microwave Corporation | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Purchase Accounting Adjustments | $ 0.7 |
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 | ||||
May 03, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets | ||||||
Gross carrying amount | $ 86.2 | $ 86.2 | $ 86.2 | |||
Accumulated amortization | 30.1 | 30.1 | 20.9 | |||
Intangible assets, net | 88.1 | 88.1 | 97.3 | |||
Amortization expense | 3.1 | $ 4.3 | 9.2 | $ 11.5 | ||
2021 | 3.1 | 3.1 | ||||
2022 | 11.6 | 11.6 | ||||
2023 | 11.6 | 11.6 | ||||
2024 | 11.2 | 11.2 | ||||
2025 | 5.3 | 5.3 | ||||
Trademarks | ||||||
Finite-Lived Intangible Assets | ||||||
Unamortized intangible assets, gross carrying amount | 32 | 32 | 32 | |||
Trademarks | ||||||
Finite-Lived Intangible Assets | ||||||
Gross carrying amount | 2 | 2 | 2 | |||
Accumulated amortization | 0.8 | 0.8 | 0.6 | |||
Customer relationships | ||||||
Finite-Lived Intangible Assets | ||||||
Gross carrying amount | 36.4 | 36.4 | 36.4 | |||
Accumulated amortization | 9.2 | 9.2 | 5.9 | |||
Customer relationships | Integrated Microwave Corporation | ||||||
Finite-Lived Intangible Assets | ||||||
Finite-Lived Intangible Asset, Useful Life | 8 years | |||||
Unpatented Technology [Member] | ||||||
Finite-Lived Intangible Assets | ||||||
Gross carrying amount | 45.4 | 45.4 | 45.4 | |||
Accumulated amortization | 18.4 | 18.4 | 13.2 | |||
Unpatented Technology [Member] | Integrated Microwave Corporation | ||||||
Finite-Lived Intangible Assets | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||
Other | ||||||
Finite-Lived Intangible Assets | ||||||
Gross carrying amount | 2.4 | 2.4 | 2.4 | |||
Accumulated amortization | $ 1.7 | $ 1.7 | $ 1.2 |
Restructuring and Related Act_3
Restructuring and Related Activities - Restructuring Charges by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 2.7 | $ 0 | $ 9.8 | $ 0.3 |
Restructuring and Related Cost, Incurred Cost | 37.9 | |||
MEMS Microphones product line | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 35.1 | |||
Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 30.8 | 0 | 37.9 | 0.3 |
Severance Pay and Benefits | ||||
Restructuring Cost and Reserve | ||||
Restructuring and Related Cost, Incurred Cost | 6.5 | |||
Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring and Related Cost, Incurred Cost | 31.4 | |||
Operating Segments | Audio | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 30.7 | 0 | 37.3 | 0.3 |
Operating Segments | Precision Devices | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0 | 0 | 0 | 0 |
Operating Segments | Corporate, Non-Segment [Member] | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.1 | 0 | ||
Corporate, Non-Segment [Member] | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.6 | 0 | ||
Cost of Goods Sold, Restructuring Charges | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 28.1 | $ 0 | ||
Operating Expense | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 2.7 | 9.8 | $ 0.3 | |
Restructuring Charges | Severance Pay and Benefits | Intelligent Audio [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 2.2 | |||
Restructuring Charges | Severance Pay and Benefits | MEMS Microphones product line | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 4.3 | |||
Restructuring Charges | Contract Termination [Member] | MEMS Microphones product line | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 21.9 | |||
Restructuring Charges | Other Restructuring | MEMS Microphones product line | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 8.9 | |||
Restructuring Charges | Audio | Other Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 0.6 | |||
Contract Termination [Member] | MEMS Microphones product line | Maximum [Member] | ||||
Restructuring Cost and Reserve | ||||
Restructuring and Related Cost, Expected Cost Remaining | $ 9.4 | $ 9.4 |
Restructuring and Related Act_4
Restructuring and Related Activities - Restructuring Accrual Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 2.7 | $ 0 | $ 9.8 | $ 0.3 |
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 0.4 | |||
Restructuring charges | 37.9 | |||
Payments | (4.8) | |||
Restructuring Reserve, Accrual Adjustment | (9) | |||
Severance and other restructuring reserve, ending balance | 24.5 | 24.5 | ||
Other liabilities | ||||
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 0 | |||
Severance and other restructuring reserve, ending balance | 17.9 | 17.9 | ||
Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 30.8 | 0 | 37.9 | 0.3 |
Severance Pay and Benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 0.4 | |||
Restructuring charges | 6.5 | |||
Payments | (3.8) | |||
Restructuring Reserve, Accrual Adjustment | (0.1) | |||
Severance and other restructuring reserve, ending balance | 3 | 3 | ||
Contract Termination and Other Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Severance and other restructuring reserve, beginning balance | 0 | |||
Restructuring charges | 31.4 | |||
Payments | (1) | |||
Restructuring Reserve, Accrual Adjustment | (8.9) | |||
Severance and other restructuring reserve, ending balance | 21.5 | 21.5 | ||
Cost of Goods Sold, Restructuring Charges | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 28.1 | $ 0 | ||
Operating Expense | Severance Pay and Contract Termination and Other Costs | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 2.7 | $ 9.8 | $ 0.3 |
Restructuring and Related Act_5
Restructuring and Related Activities - Balance Sheet Location (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Restructuring Cost and Reserve | ||
Severance and restructuring accrual | $ 24.5 | $ 0.4 |
Other accrued expenses | ||
Restructuring Cost and Reserve | ||
Severance and restructuring accrual | $ 6.6 | $ 0.4 |
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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative | ||||
Cost of goods sold | $ 110.1 | $ 136.1 | $ 338.5 | $ 375.2 |
Interest expense, net | (1.1) | (4.2) | (2.7) | (12.3) |
Other expense (income), net | $ 2.1 | $ 1.9 | $ 0.9 | $ 3.4 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Long-term borrowings | ||
Long-term Line of Credit | $ 78 | |
Less: current maturities | 78 | $ 70 |
Long-term portion | 78 | $ 70 |
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 78 | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 0 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 0 | |
Debt Instrument, Convertible, Conversion Price | $ 18.4250 | |
Line of Credit | Credit Facility due January 2, 2024 [Member] | ||
Long-term borrowings | ||
Long-term Line of Credit | 78 | $ 70 |
Line of Credit, Current | $ 0 | $ 0 |
Borrowings Convertible Debt (De
Borrowings Convertible Debt (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2022 USD ($) shares | Dec. 31, 2021 $ / shares shares | Sep. 30, 2021 USD ($) | Jun. 30, 2017 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | May 04, 2016 USD ($) $ / shares | |
Schedule of Convertible Debt | |||||||
Debt Instrument, Convertible, Conversion Ratio | 54.2741 | ||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 18.4250 | ||||||
Shares Issued During Period, Value, Exercise of Warrants | $ 0 | ||||||
Treasury Stock | |||||||
Schedule of Convertible Debt | |||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | shares | 400,000 | ||||||
Shares Issued During Period, Shares, Exercise of Warrants | shares | 200,000 | 203,615 | |||||
Shares Issued During Period, Value, Exercise of Warrants | $ (3.1) | $ (3.1) | |||||
Convertible Debt | Convertible Notes Due Twenty Twenty One | |||||||
Schedule of Convertible Debt | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||
Debt Instrument, Face Amount | $ 172.5 | ||||||
Interest Expense, Debt, Excluding Amortization | $ 1.4 | $ 4.2 | |||||
Amortization of Debt Issuance Costs | 0.2 | 0.7 | |||||
Amortization of Debt Discount (Premium) | 2.1 | 6 | |||||
Interest Expense, Debt | $ 3.7 | $ 10.9 | |||||
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) | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 | Dec. 31, 2021 USD ($) | Sep. 04, 2020 USD ($) | |
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Long-term Line of Credit | $ 78,000,000 | |||
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 | |||
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 0 | |||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 0 | |||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 0 | |||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 0 | |||
Shares Issued During Period, Value, Exercise of Warrants | $ 0 | |||
Line of Credit | Weighted Average | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.23% | 0.26% | ||
Credit Facilities | London Interbank Offered Rate (LIBOR) | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 2.62% | 0% | ||
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 | |||
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 | $ 78,000,000 | $ 70,000,000 | ||
Credit Facility due October 11, 2022 | ||||
Schedule of Term Loan and Revolving Credit Facilities [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 |
Other Comprehensive Loss - OCI
Other Comprehensive Loss - OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Foreign currency translation adjustments [Abstract] | ||||
Foreign currency translation | $ (13.1) | $ (3.7) | $ (30.9) | $ (6.4) |
Foreign currency translation, tax | 0 | 0 | 0 | 0 |
Foreign currency translation, net of tax | (13.1) | (3.7) | (30.9) | (6.4) |
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 | 0.2 | 0.5 | 0.6 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent | (0.4) | (0.1) | (0.7) | 0.1 |
Net change in employee benefit plans | (0.2) | 0.1 | (0.2) | 0.7 |
Total cash flow hedges | (1.3) | (0.1) | (3.8) | (1.9) |
Changes in fair value of cash flow hedges: | ||||
Changes in fair value of cash flow hedges, before tax | (1.3) | (0.3) | (4.1) | (2.1) |
Changes in fair value of cash flow hedges, tax | 0 | 0.2 | 0.3 | 0.2 |
Total other comprehensive earnings [Abstract] | ||||
Other comprehensive loss, before tax | (14.2) | (3.8) | (34.5) | (7.9) |
Other comprehensive loss, tax | (0.4) | 0.1 | (0.4) | 0.3 |
Other comprehensive loss, net of tax | (14.6) | (3.7) | (34.9) | (7.6) |
Net losses (gains) reclassified into earnings | $ 1.7 | $ 0.1 | $ 2.3 | $ (1.4) |
Other Comprehensive Loss - AOCI
Other Comprehensive Loss - AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
Amortization or settlement of actuarial losses and prior service costs | $ 0.2 | $ 0.2 | $ 0.5 | $ 0.6 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax | 0.4 | 0.1 | 0.7 | (0.1) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax | (0.2) | 0.1 | (0.2) | 0.7 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 2 | 0 | 2.7 | (1.9) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | (0.3) | 0.1 | (0.4) | 0.5 |
Net losses (gains) reclassified into earnings | 1.7 | 0.1 | 2.3 | (1.4) |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (100.4) | (100.5) | ||
Other comprehensive loss, net of tax | (14.6) | (3.7) | (34.9) | (7.6) |
Ending balance | (135.3) | (108.1) | (135.3) | (108.1) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | 0.3 | 1.6 | ||
Other comprehensive loss, net of tax | (3.8) | (1.9) | ||
Ending balance | (3.5) | (0.3) | (3.5) | (0.3) |
Employee benefit plans | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (17.1) | (22.1) | ||
Other comprehensive loss, net of tax | (0.2) | 0.7 | ||
Ending balance | (17.3) | (21.4) | (17.3) | (21.4) |
Cumulative foreign currency translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Beginning balance | (83.6) | (80) | ||
Other comprehensive loss, net of tax | (30.9) | (6.4) | ||
Ending balance | $ (114.5) | $ (86.4) | $ (114.5) | $ (86.4) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Holiday [Line Items] | ||||
Share-based Payment Arrangement, Expense | $ 6.8 | $ 7.1 | $ 21.6 | $ 25.6 |
Effective tax rate (benefit) provision | 119.90% | 14.20% | (5.90%) | 13.10% |
Income Tax Expense (Benefit) | $ (16.3) | $ 4.6 | $ 12.4 | $ 8.7 |
Other expense (income), net | 2.1 | 1.9 | 0.9 | 3.4 |
Effective Income Tax Rate Reconciliation, Discrete Items | $ 0.4 | $ (1.6) | $ (0.9) | |
Effective Tax Rate Excluding Discrete Items | 13% | 6.70% | 14.50% | |
Share-based Payment Arrangement, Expense, Tax Benefit | 0.1 | $ 4.1 | $ 0 | |
Foreign Tax Authority | ||||
Income Tax Holiday [Line Items] | ||||
Effective income tax rate reconciliation, tax holiday | $ (4) | $ 3.9 | $ 0.9 | $ 9.3 |
Holiday benefit (usd per share) | $ 0.04 | $ 0.01 | $ 0.10 | |
Income Tax Holiday, Income Tax Expense Per Share | $ (0.04) |
Equity Incentive Program - Stoc
Equity Incentive Program - Stock Options and SSARs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Expense | $ 6,800,000 | $ 7,100,000 | $ 21,600,000 | $ 25,600,000 |
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 | 375,964 | |||
Granted | 0 | |||
Exercised | (36,759) | |||
Forfeited | 0 | |||
Expired | (95,573) | |||
Ending balance | 243,632 | 243,632 | ||
Exercised | 243,632 | 243,632 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Expired in Period, Weighted Average Exercise Price | $ 21.77 | |||
Weighted Average Grant Date Fair Value | ||||
Beginning balance | 23.16 | |||
Granted | 0 | |||
Exercised | 21.77 | |||
Forfeited | 0 | |||
Ending balance | $ 23.92 | 23.92 | ||
Exercisable | $ 23.92 | $ 23.92 | ||
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 | 4 months 24 days | |||
SSARs, weighted average remaining contractual term, exercisable | 4 months 24 days | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 1,700,000 | $ 1,700,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Risk-free interest rate | 0.85% | |||
Dividend yield | 0% | 0% | ||
Expected life (years) | 4 years 6 months | |||
Volatility | 34.30% | |||
Stock Options, Number of Shares | ||||
Beginning balance | 3,478,438 | |||
Granted | 216,813 | |||
Exercised | (529,199) | |||
Forfeited | (69,873) | |||
Expired | (12,222) | |||
Ending balance | 3,083,957 | 3,083,957 | ||
Exercisable | 2,582,778 | 2,582,778 | ||
Stock Options, Weighted Average Exercise Price | ||||
Beginning balance | $ 15.04 | |||
Granted | 21.14 | |||
Exercised | 12.21 | |||
Forfeited | 20.63 | |||
Expired | 17.41 | |||
Ending balance | $ 15.82 | 15.82 | ||
Exercisable | $ 15.17 | $ 15.17 | ||
SARS and Options, Additional Disclosures | ||||
Options, aggregate intrinsic value, outstanding | $ 700,000 | $ 700,000 | ||
Options, aggregate intrinsic value, exercisable | $ 700,000 | $ 700,000 | ||
Options, weighted average remaining contractual term, outstanding | 2 years 8 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 | 0.06% | |||
Expected life (years) | 4 years 6 months | |||
Volatility | 36% | |||
Fair value at date of grant | $ 6.29 | $ 6.14 | ||
Maximum [Member] | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Fair value at date of grant | $ 6.31 |
Equity Incentive Program - RSUs
Equity Incentive Program - RSUs (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 9 months 18 days |
Number of Shares [Roll Forward] | |
Beginning balance | shares | 1,778,639 |
Granted | shares | 1,203,872 |
Vested (1) | shares | (817,082) |
Forfeited | shares | (243,411) |
Ending balance | shares | 1,922,018 |
Weighted Average Grant Date Fair Value | |
Beginning balance | $ / shares | $ 18.89 |
Granted | $ / shares | 20.55 |
Vested (1) | $ / shares | 18.17 |
Forfeited | $ / shares | 20.15 |
Ending balance | $ / shares | $ 20.04 |
Equity Incentive Program Equity
Equity Incentive Program Equity Incentive Program - PSUs (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2022 $ / shares shares | Mar. 31, 2021 shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 numberOfGrantees | Sep. 30, 2020 numberOfGrantees | Sep. 30, 2019 numberOfGrantees | |
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ | $ 11.8 | |||||
Number of Shares [Roll Forward] | ||||||
Beginning balance | 766,466 | 766,466 | ||||
Granted | 294,935 | |||||
Vested (1) | (227,812) | |||||
Forfeited | 0 | |||||
Ending balance | 833,589 | |||||
Weighted Average Grant Date Fair Value | ||||||
Beginning balance | $ / shares | $ 21.28 | $ 21.28 | ||||
Granted | $ / shares | 29.92 | |||||
Vested (1) | $ / shares | 18.44 | |||||
Forfeited | $ / shares | 0 | |||||
Ending balance | $ / shares | $ 25.12 | |||||
Performance Shares | 2019 | ||||||
Number of Shares [Roll Forward] | ||||||
Granted | 227,812 | |||||
Vested (1) | (150,811) | |||||
Weighted Average Grant Date Fair Value | ||||||
Share-based Payment Arrangement, Plan Modification, Number of Grantees Affected | numberOfGrantees | 8 | |||||
Share-based Payment Arrangement, Plan Modification, Incremental Cost | $ | $ 2.4 | |||||
Performance Shares | 2018 | ||||||
Number of Shares [Roll Forward] | ||||||
Granted | 329,092 | |||||
Vested (1) | (190,544) | |||||
Weighted Average Grant Date Fair Value | ||||||
Share-based Payment Arrangement, Plan Modification, Number of Grantees Affected | numberOfGrantees | 9 | |||||
Share-based Payment Arrangement, Plan Modification, Incremental Cost | $ | 3.9 | |||||
Performance Shares | 2020 | ||||||
Weighted Average Grant Date Fair Value | ||||||
Share-based Payment Arrangement, Plan Modification, Number of Grantees Affected | numberOfGrantees | 8 | |||||
Share-based Payment Arrangement, Plan Modification, Incremental Cost | $ | 4.7 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ | $ 25.3 | |||||
Number of Shares [Roll Forward] | ||||||
Beginning balance | 1,778,639 | 1,778,639 | ||||
Granted | 1,203,872 | |||||
Vested (1) | (817,082) | |||||
Forfeited | (243,411) | |||||
Ending balance | 1,922,018 | |||||
Weighted Average Grant Date Fair Value | ||||||
Beginning balance | $ / shares | $ 18.89 | $ 18.89 | ||||
Granted | $ / shares | 20.55 | |||||
Vested (1) | $ / shares | 18.17 | |||||
Forfeited | $ / shares | 20.15 | |||||
Ending balance | $ / shares | $ 20.04 |
Equity Incentive Program - Addi
Equity Incentive Program - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Expense | $ 6,800,000 | $ 7,100,000 | $ 21,600,000 | $ 25,600,000 |
Share-based Payment Arrangement, Expense, Tax Benefit | 100,000 | 4,100,000 | $ 0 | |
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 | 1,700,000 | $ 1,700,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 3 months 18 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 | 25,300,000 | $ 25,300,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 9 months 18 days | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 11,800,000 | $ 11,800,000 | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 4 months 24 days | |||
Minimum [Member] | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage increase of initial grant value | 0% | |||
Maximum [Member] | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage increase of initial grant value | 225% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of information used in computing basic and diluted earnings per share [Abstract] | ||||
Earnings (loss) from continuing operations | $ 2.7 | $ 27.7 | $ (222.1) | $ 57.6 |
Earnings from discontinued operations, net | 0 | 0 | 0 | 0.2 |
Net earnings (loss) | $ 2.7 | $ 27.7 | $ (222.1) | $ 57.8 |
Basic earnings (loss) per common share: | ||||
Earnings (loss) from continuing operations, per basic share | $ 0.03 | $ 0.30 | $ (2.42) | $ 0.62 |
Earnings from discontinued operations, per basic share | 0 | 0 | 0 | 0.01 |
Net earnings (loss) per share, basic | $ 0.03 | $ 0.30 | $ (2.42) | $ 0.63 |
Weighted average shares outstanding | 91,400,000 | 92,200,000 | 91,900,000 | 92,300,000 |
Diluted earnings (loss) per common share: | ||||
Net earnings (loss) per share, diluted | $ 0.03 | $ 0.29 | $ (2.42) | $ 0.61 |
Diluted (in shares) | 92,000,000 | 94,100,000 | 91,900,000 | 94,800,000 |
Earnings (loss) from continuing operations, per diluted share | $ 0.03 | $ 0.29 | $ (2.42) | $ 0.61 |
Loss from discontinued operations, net | 0 | 0 | 0 | 0 |
Earnings Per Share, Diluted | $ 0.03 | $ 0.29 | $ (2.42) | $ 0.61 |
Diluted (in shares) | 92,000,000 | 94,100,000 | 91,900,000 | 94,800,000 |
Share-based Payment Arrangement | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average number of anti-dilutive shares excluded from the calculation (in shares) | 3,200,000 | 1,100,000 | 3,000,000 | 1,300,000 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segments | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information | |||||
Billed Contracts Receivable | $ 118.3 | $ 118.3 | $ 137.7 | ||
Number of reportable segments | segments | 2 | ||||
Assets | 1,436.7 | $ 1,436.7 | 1,731.6 | ||
Revenues | 178.2 | $ 233 | 567.6 | $ 633.8 | |
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Interest expense, net | 1.1 | 4.2 | 2.7 | 12.3 | |
(Loss) earnings before income taxes and discontinued operations | (13.6) | 32.3 | (209.7) | 66.3 | |
(Benefit from) provision for income taxes | (16.3) | 4.6 | 12.4 | 8.7 | |
Earnings (loss) from continuing operations | 2.7 | 27.7 | (222.1) | 57.6 | |
Asia | |||||
Segment Reporting Information | |||||
Revenues | 105.3 | 163.4 | 347.2 | 452 | |
United States | |||||
Segment Reporting Information | |||||
Revenues | 43.7 | 42.2 | 129.3 | 109.3 | |
Europe | |||||
Segment Reporting Information | |||||
Revenues | 24.5 | 24.6 | 80.2 | 65.4 | |
Other Americas | |||||
Segment Reporting Information | |||||
Revenues | 2.9 | 1.6 | 5.5 | 3.9 | |
Other Geographical Locations | |||||
Segment Reporting Information | |||||
Revenues | 1.8 | 1.2 | 5.4 | 3.2 | |
Operating Segments | |||||
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Earnings (loss) before interest and income taxes | (0.7) | 50.6 | (171.4) | 123.3 | |
Operating Segments | Audio | |||||
Segment Reporting Information | |||||
Assets | 1,149.2 | 1,149.2 | 1,467.1 | ||
Revenues | 113.8 | 177.7 | 388 | 490.6 | |
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Earnings (loss) before interest and income taxes | (16.9) | 36.6 | (210.9) | 95 | |
Operating Segments | Precision Devices | |||||
Segment Reporting Information | |||||
Assets | 285.2 | 285.2 | 260.4 | ||
Revenues | 64.4 | 55.3 | 179.6 | 143.2 | |
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Earnings (loss) before interest and income taxes | 16.2 | 14 | 39.5 | 28.3 | |
Corporate, Non-Segment [Member] | |||||
Segment Reporting Information | |||||
Assets | 2.3 | 2.3 | $ 4.1 | ||
Reconciliation of Net Earnings from Segments [Abstract] | |||||
Corporate expense / other | 11.8 | 14.1 | 35.6 | 44.7 | |
Interest expense, net | $ 1.1 | $ 4.2 | $ 2.7 | $ 12.3 |
Impairment Charges (Details)
Impairment Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |||||||
Asset Impairment Charges | $ 0 | $ 239.8 | $ 4 | $ 239.8 | $ 4 | ||
Operating Lease, Right-of-Use Asset | $ 13.6 | $ 13.6 | $ 17.4 | ||||
Mountain View, California | |||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||
Asset Impairment Charges | 3.2 | ||||||
Santa Clara, California | |||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||
Asset Impairment Charges | $ 0.8 | ||||||
Operating Lease, Liability | $ 4 | ||||||
Operating Lease, Right-of-Use Asset | $ 2.4 |
Uncategorized Items - kn-202209
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations | $ 68,900,000 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations | $ 147,800,000 |