On February 13, 2025, Knowles Corp (KN, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and full year of 2024. Knowles Corp, a manufacturer of micro-acoustic microphones, balanced armature speakers, and other audio solutions, operates through three segments: Precision Devices, Medtech & Specialty Audio, and Consumer MEMS Microphones. The company has recently completed the divestiture of its Consumer MEMS Microphone business, marking a strategic shift towards higher-value markets.
Performance and Challenges
Knowles Corp reported a 2% increase in fourth-quarter revenues from continuing operations, reaching $142.5 million, which aligns with the company's guidance but falls short of the analyst estimate of $146.00 million. The full-year revenue from continuing operations saw a significant 21% increase year-over-year, totaling $553.5 million. Despite this growth, the company's GAAP diluted earnings per share (EPS) for the fourth quarter was $0.12, below the analyst estimate of $0.17. The full-year GAAP diluted EPS declined by 64% to $0.26, reflecting challenges in profitability.
Financial Achievements
Knowles Corp's strategic transformation is underscored by its ability to generate $35 million in net cash from operations in the fourth quarter and $130 million for the full year. The company also received a substantial multi-year order exceeding $75 million for high-performance capacitors in the energy market, highlighting its growing presence in high-value sectors. The Board of Directors has authorized an additional $150 million for the share repurchase program, enhancing shareholder value.
Key Financial Metrics
The following table summarizes key financial metrics for Knowles Corp:
| Metric | Q4 2024 | Q3 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|---|
| Revenues | $142.5M | $142.5M | $139.2M | $553.5M | $456.8M |
| Gross Profit | $60.9M | $62.9M | $58.6M | $234.8M | $203.8M |
| GAAP Diluted EPS | $0.12 | $0.10 | $0.29 | $0.26 | $0.72 |
| Non-GAAP Diluted EPS | $0.27 | $0.26 | $0.22 | $0.91 | $0.69 |
| Net Cash from Operations | $35.1M | $52.8M | $60.4M | $130.1M | $122.7M |
Analysis of Performance
Knowles Corp's performance in 2024 reflects its strategic pivot towards high-value markets, as evidenced by the divestiture of its Consumer MEMS Microphone business. The company's revenue growth is a positive indicator of its successful transition, although the decline in GAAP EPS suggests challenges in managing costs and profitability. The authorization of an additional $150 million for the share repurchase program indicates confidence in future cash flow generation and commitment to enhancing shareholder value.
Looking ahead, Knowles Corp's focus on expanding its Specialty Film product line and leveraging its backlog in the Medical and Defense markets positions it for potential revenue and earnings growth in 2025. The company's ability to maintain a net debt leverage ratio well below one provides financial flexibility to navigate market challenges and capitalize on growth opportunities.
Explore the complete 8-K earnings release (here) from Knowles Corp for further details.
