Knowles (KN) Q4 2023 earnings summary

Executive summary

• Q4 revenue was $215.2M, up 9.2% YoY, with growth across all three segments; Cornell Dubilier contributed to growth.

• Q4 cash from operations rose to $60.4M from $46.8M, above the high end of guidance, supported by lower net working capital.

• FY2023 portfolio execution advanced toward higher-value markets and products despite challenges in industrial and distribution end markets.

Financial highlights

• Q4 GAAP diluted EPS was $0.52, including a $0.42/share one-time tax benefit; non-GAAP diluted EPS was $0.28 vs. $0.33 in Q4 2022.

• Q4 net earnings were $47.4M; Q4 2022 included a $208.0M net loss and $231.1M impairment charge.

• FY revenue was $707.6M vs. $764.7M in 2022; GAAP net earnings were $72.4M vs. a $430.1M loss.

• FY GAAP diluted EPS was $0.79 vs. a $4.69 loss in 2022; non-GAAP diluted EPS was $0.88 vs. $1.26.

Outlook and guidance

• Q1 2024 revenue guidance is $190M–$200M; GAAP diluted EPS is $0.02–$0.06 and non-GAAP diluted EPS is $0.16–$0.20.

• Q1 net cash from operating activities is expected at $0M–$10M; revenue is forecast to rise 35% YoY, with significant non-GAAP EPS growth from Q1 2023.

• GAAP EPS guidance includes $0.06/share stock compensation, $0.05/share intangible amortization and $0.03/share Cornell Dubilier integration and production-transfer costs, excluded from non-GAAP results.