kn-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020.

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36102

Knowles Corporation

(Exact name of registrant as specified in its charter)


Delaware			90-1002689
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1511 Maplewood Drive, Itasca, IL

(Address of Principal Executive Offices)

60143

(Zip Code)

(630) 250-5100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common stock, $0.01 par value per share

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares outstanding of the registrant’s common stock as of July 27, 2020 was 91,641,109.

Knowles Corporation

Form 10-Q

Table of Contents


		Page
PART I — FINANCIAL INFORMATION			1
Item 1.	Financial Statements	1
	Consolidated Statements of Earnings (unaudited) for the three and six months ended June 30 , 2020 and 2019	1
	Consolidated Statements of Comprehensive Earnings (unaudited) for the three an d six months ended June 30 , 2020 and 2019	2
	Consolidated Balance Sheets (unaudited) at June 30 , 2020 and December 31, 2019	3
	Consolidated Statements of Stockholders' Equity (unaudited) for the three and six months ended June 30 , 2020 and 2019	4
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30 , 2020 and 2019	6
	Notes to Consolidated Financial Statements (unaudited)	7
Forward-Looking Statements			23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II — OTHER INFORMATION			42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43


Item 6.	Exhibits	43
SIGNATURES			44

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

KNOWLES CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenues	$	152.2	$	205.2	$	315.3	$	385.0
Cost of goods sold	103.5		128.4		209.0		239.2

Restructuring charges - cost of goods sold	0.9		0.4		2.3		0.9
Gross profit	47.8		76.4		104.0		144.9
Research and development expenses	22.6		25.0		48.3		49.7
Selling and administrative expenses	31.1		38.9		67.3		76.5

Restructuring charges	6.5		0.1		10.4		1.9
Operating expenses	60.2		64.0		126.0		128.1
Operating (loss) earnings	(12.4)		12.4		(22.0)		16.8
Interest expense, net	4.1		3.6		7.8		7.1
Other expense (income), net	1.9		(0.5)		(0.8)		0.5
(Loss) earnings before income taxes and discontinued operations	(18.4)		9.3		(29.0)		9.2
Provision for income taxes	1.1		3.4		3.3		6.0
(Loss) earnings from continuing operations	(19.5)		5.9		(32.3)		3.2
Earnings from discontinued operations, net	—		—		3.7		—
Net (loss) earnings	$	(19.5)	$	5.9	$	(28.6)	$	3.2

(Loss) earnings per share from continuing operations:
Basic	$	(0.21)	$	0.06	$	(0.35)	$	0.04
Diluted	$	(0.21)	$	0.06	$	(0.35)	$	0.03

Earnings per share from discontinued operations:
Basic	$	—	$	—	$	0.04	$	—
Diluted	$	—	$	—	$	0.04	$	—

Net (loss) earnings per share:
Basic	$	(0.21)	$	0.06	$	(0.31)	$	0.04
Diluted	$	(0.21)	$	0.06	$	(0.31)	$	0.03

Weighted-average common shares outstanding:
Basic	91,589,156		91,018,213		91,721,440		90,780,035
Diluted	91,589,156		92,507,279		91,721,440		92,184,274

See accompanying Notes to Consolidated Financial Statements

Table of Contents

KNOWLES CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(in millions)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net (loss) earnings	$	(19.5)	$	5.9	$	(28.6)	$	3.2

Other comprehensive earnings (loss), net of tax



Foreign currency translation	3.4		(2.5)		(4.1)		1.5

Employee benefit plans:


Amortization or settlement of actuarial losses and prior service costs	0.3		0.2		0.2		0.3
Net change in employee benefit plans	0.3		0.2		0.2		0.3

Changes in fair value of cash flow hedges:
Unrealized net gains (losses) arising during period	0.3		(0.4)		(0.9)		0.2
Net losses reclassified into earnings	0.3		—		0.4		0.1
Total cash flow hedges	0.6		(0.4)		(0.5)		0.3

Other comprehensive earnings (loss), net of tax	4.3		(2.7)		(4.4)		2.1

Comprehensive (loss) earnings	$	(15.2)	$	3.2	$	(33.0)	$	5.3

See accompanying Notes to Consolidated Financial Statements

Table of Contents

KNOWLES CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

(unaudited)


	June 30, 2020		December 31, 2019
Current assets:
Cash and cash equivalents	$	168.3	$	78.4

Receivables, net of allowances of $1.9 and $0.8	101.6		159.6
Inventories, net	162.5		141.8
Prepaid and other current assets	10.6		8.6

Total current assets	443.0		388.4
Property, plant, and equipment, net	192.8		206.5
Goodwill	909.9		909.9
Intangible assets, net	85.2		91.7
Operating lease right-of-use assets	31.3		33.6
Other assets and deferred charges	25.5		24.5

Total assets	$	1,687.7	$	1,654.6

Current liabilities:
Current maturities of long-term debt	$	100.0	$	—
Accounts payable	75.0		87.7
Accrued compensation and employee benefits	21.5		32.1
Operating lease liabilities	9.8		9.3
Other accrued expenses	19.7		16.5
Federal and other taxes on income	5.8		5.9
Total current liabilities	231.8		151.5

Long-term debt	160.9		156.8
Deferred income taxes	2.2		2.2
Long-term operating lease liabilities	22.4		25.1
Other liabilities	26.0		29.9
Liabilities of discontinued operations	0.6		0.6
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred stock - $0.01 par value; 10,000,000 shares authorized; none issued	—		—
Common stock - $0.01 par value; 400,000,000 shares authorized; 92,637,218 and 91,641,109 shares issued and outstanding at June 30, 2020, respectively, and 91,701,745 shares issued and outstanding at December 31, 2019	0.9		0.9
Treasury stock - at cost; 996,109 shares at June 30, 2020	(15.0)		—
Additional paid-in capital	1,578.0		1,574.7
Accumulated deficit	(203.7)		(175.1)
Accumulated other comprehensive loss	(116.4)		(112.0)

Total stockholders' equity	1,243.8		1,288.5

Total liabilities and stockholders' equity	$	1,687.7	$	1,654.6

See accompanying Notes to Consolidated Financial Statements

Table of Contents

KNOWLES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

(unaudited)


	Common Stock		Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at March 31, 2020	$	0.9	$	(15.0)	$	1,572.8	$	(184.2)	$	(120.7)	$	1,253.8
Net loss	—		—		—		(19.5)		—		(19.5)
Other comprehensive earnings, net of tax	—		—		—		—		4.3		4.3





Stock-based compensation expense	—		—		4.1		—		—		4.1

Common stock issued for exercise of stock options	—		—		1.3		—		—		1.3
Tax on restricted and performance stock unit vesting	—		—		(0.2)		—		—		(0.2)



Balance at June 30, 2020	$	0.9	$	(15.0)	$	1,578.0	$	(203.7)	$	(116.4)	$	1,243.8


	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at March 31, 2019	$	0.9	$	1,548.7	$	(226.9)	$	(106.2)	$	1,216.5
Net earnings	—		—		5.9		—		5.9
Other comprehensive loss, net of tax	—		—		—		(2.7)		(2.7)





Stock-based compensation expense	—		7.3		—		—		7.3

Common stock issued for exercise of stock options	—		0.9		—		—		0.9
Tax on restricted stock unit vesting	—		(0.7)		—		—		(0.7)



Balance at June 30, 2019	$	0.9	$	1,556.2	$	(221.0)	$	(108.9)	$	1,227.2

See accompanying Notes to Consolidated Financial Statements

Table of Contents

KNOWLES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

(unaudited)


	Common Stock		Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at December 31, 2019	$	0.9	$	—	$	1,574.7	$	(175.1)	$	(112.0)	$	1,288.5
Net loss	—		—		—		(28.6)		—		(28.6)
Other comprehensive loss, net of tax	—		—		—		—		(4.4)		(4.4)
Repurchase of common stock	—		(15.0)		—		—		—		(15.0)




Stock-based compensation expense	—		—		7.6		—		—		7.6

Common stock issued for exercise of stock options and other	—		—		1.7		—		—		1.7
Tax on restricted and performance stock unit vesting	—		—		(6.0)		—		—		(6.0)



Balance at June 30, 2020	$	0.9	$	(15.0)	$	1,578.0	$	(203.7)	$	(116.4)	$	1,243.8


	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at December 31, 2018	$	0.9	$	1,545.9	$	(224.2)	$	(111.0)	$	1,211.6
Net earnings	—		—		3.2		—		3.2
Other comprehensive earnings, net of tax	—		—		—		2.1		2.1





Stock-based compensation expense	—		14.0		—		—		14.0

Common stock issued for exercise of stock options and other	—		1.8		—		—		1.8
Tax on restricted stock unit vesting	—		(5.5)		—		—		(5.5)



Balance at June 30, 2019	$	0.9	$	1,556.2	$	(221.0)	$	(108.9)	$	1,227.2

See accompanying Notes to Consolidated Financial Statements

Table of Contents

KNOWLES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Six Months Ended June 30,
	2020		2019
Operating Activities
Net (loss) earnings	$	(28.6)	$	3.2
Adjustments to reconcile net (loss) earnings to cash from operating activities:

Depreciation and amortization	30.5		27.0
Stock-based compensation	7.6		14.0

Non-cash interest expense and amortization of debt issuance costs	4.3		4.1

Write-off of fixed assets	1.7		—

Deferred income taxes	(1.0)		(0.7)





Other, net	(2.2)		1.1
Changes in assets and liabilities (excluding effects of foreign exchange):
Receivables, net	58.1		5.7
Inventories, net	(22.1)		(17.7)
Prepaid and other current assets	(2.6)		(3.0)

Accounts payable	(10.9)		(9.1)
Accrued compensation and employee benefits	(10.2)		(11.2)
Other accrued expenses	3.6		1.0
Accrued taxes	(2.8)		0.8
Other non-current assets and non-current liabilities	(0.4)		(4.3)
Net cash provided by operating activities	25.0		10.9

Investing Activities


Additions to property, plant, and equipment	(14.6)		(24.5)
Acquisitions of business (net of cash acquired)	—		(11.4)






Net cash used in investing activities	(14.6)		(35.9)

Financing Activities

Borrowings under revolving credit facility	100.0		10.0




Repurchase of common stock	(15.0)		—
Tax on restricted and performance stock unit vesting	(6.0)		(5.5)
Payments of finance lease obligations	(0.9)		(0.9)
Payment of consideration owed for acquisitions	—		(0.2)
Net proceeds from exercise of stock-based awards	1.5		1.6






Net cash provided by financing activities	79.6		5.0

Effect of exchange rate changes on cash and cash equivalents	(0.1)		0.1

Net increase (decrease) in cash and cash equivalents	89.9		(19.9)
Cash and cash equivalents at beginning of period	78.4		73.5


Cash and cash equivalents at end of period	$	168.3	$	53.6

Supplemental information - cash paid for:
Income taxes	$	8.2	$	6.9
Interest	$	4.1	$	3.8

See accompanying Notes to Consolidated Financial Statements


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

1. Basis of Presentation

Description of Business - Knowles Corporation (NYSE:KN) is a market leader and global provider of advanced micro-acoustic, audio processing, and precision device solutions, serving the mobile consumer electronics, communications, medtech, defense, automotive, and industrial markets. The Company uses its leading position in micro-electro-mechanical systems ("MEMS") microphones and strong capabilities in audio processing technologies to optimize audio systems and improve the user experience in mobile, ear, and Internet of Things ("IoT") applications. Knowles is also a leader in acoustic components, high-end capacitors, and mmWave radio frequency solutions for a diverse set of markets. The Company's focus on the customer, combined with its unique technology, proprietary manufacturing techniques, rigorous testing, and global scale, enable the Company to deliver innovative solutions that optimize the user experience. References to "Knowles," "the Company," "we," "our," and "us" refer to Knowles Corporation and its consolidated subsidiaries.

Financial Statement Presentation - The accompanying unaudited interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) for complete financial statements. These unaudited interim Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K.

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Management uses historical experience and all available information to make these estimates, including considerations for the impact of the COVID-19 pandemic on the macroeconomic environment. The situation related to the COVID-19 pandemic continues to be complex and rapidly evolving. The Company cannot reasonably estimate the duration of the COVID-19 pandemic or fully ascertain its impact on the Company’s future results and market capitalization, which could adversely impact estimates such as the recoverability of goodwill and long-lived assets and the realizability of deferred tax assets. The unaudited interim Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods.

On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the six months ended June 30, 2020, the Company repurchased 996,109 shares of common stock for a total of $15.0 million. In connection with the COVID-19 pandemic, the Company has temporarily suspended share repurchases. However, the Company may resume the share repurchase program at any time when it believes it is prudent to do so and without further notice.

On December 20, 2019, the Company acquired substantially all of the assets of the MEMS Microphone Application-specific integrated circuit Design Business (“ASIC Design Business”). See Note 4. Acquisitions for additional information related to the transaction.

Non-cash Investing Activities - Purchases of property, plant, and equipment included in accounts payable at June 30, 2020 and 2019 were $3.3 million and $3.1 million, respectively. These non-cash amounts are not reflected as outflows to "Additions to property, plant, and equipment" within "Investing Activities" of the Consolidated Statements of Cash Flows for the respective periods.

Leases not yet Commenced - As of June 30, 2020, the Company has an additional operating lease for a research and development and administrative facility that has not yet commenced with fixed lease payments of approximately $5.0 million. The lease is expected to commence in fiscal 2020 with a lease term of approximately 5 years.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

2. Recent Accounting Standards

Recently Issued Accounting Standards

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12 to simplify the accounting for income taxes. This guidance removes certain exceptions to the general principles in Accounting Standards Codification ("ASC") 740 and amends existing guidance to improve consistent application. The standard is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted and prospective application of the guidance is required. The Company has not yet determined the impact of the standard on its Consolidated Financial Statements or its adoption date.

3. Disposed and Discontinued Operations

Management and the Board of Directors periodically conduct strategic reviews of the Company's businesses.

On November 28, 2017, the Company completed the sale of its high-end oscillators business (“Timing Device Business”), part of the Precision Devices (“PD”) segment, for $130.0 million, plus purchase price adjustments for a net amount of $135.1 million. On July 7, 2016, the Company completed the sale of its speaker and receiver product line (“Speaker and Receiver Product Line”) for $45.0 million in cash, less purchase price adjustments for a net amount received of $40.6 million.

In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the results of operations and financial positions of the Timing Device Business and Speaker and Receiver Product Line have been reclassified to discontinued operations for all periods presented as these disposals represent strategic shifts that had a major effect on the Company's results of operations.

Summarized results of the Company's discontinued operations are as follows:


(in millions)	Six Months Ended June 30, 2020
Revenues	$	—
Cost of goods sold	—


Gross profit	—



Operating income	—


Earnings from discontinued operations before taxes ⁽¹⁾	—
Benefit from income taxes ⁽²⁾	(3.7)
Earnings from discontinued operations, net of tax	$	3.7

⁽¹⁾The Company's policy is to not allocate interest expense to discontinued operations unless it is directly attributable to the operations. The discontinued operations did not have any such interest expense in the periods presented.

⁽²⁾The Company recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business.

Assets and liabilities of discontinued operations are summarized below:


(in millions)	June 30, 2020		December 31, 2019
Liabilities of discontinued operations:
Other liabilities ⁽¹⁾	$	0.6	$	0.6
Total liabilities	$	0.6	$	0.6

⁽¹⁾ The Company recorded an unrecognized tax benefit related to the Speaker and Receiver Product Line during the fourth quarter of 2019.

Discontinued operations had no impact on the Company's results of operations for the three months ended June 30, 2020 and the three and six months ended June 30, 2019. There was no depreciation, amortization of intangible assets, or capital expenditures related to discontinued operations during the six months ended June 30, 2020 and 2019.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

4. Acquisitions

ASIC Design Business

On December 20, 2019, the Company acquired substantially all of the assets of the ASIC Design Business from ams AG for $57.9 million. The acquired business, which does not generate revenues, includes intellectual property and an assembled workforce. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Consolidated Financial Statements from the date of acquisition in the Audio segment.

The table below represents the final allocation of the purchase price to net assets acquired as of December 20, 2019:


(in millions)
Property, plant, and equipment	$	0.6
Developed technology	33.3
In-process research and development	3.7
Non-competition agreement	1.6
Goodwill	18.8
Assumed current liabilities	(0.1)
Total purchase price	$	57.9

Intangible Assets

The fair values for developed technology and in-process research and development ("IPR&D") were determined using the multi-period excess earnings method under the income approach. This method reflects the present value of expected future cash flows less charges representing the contribution of other assets to those cash flows. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of developed technology and IPR&D include expected future cost savings, technology obsolescence rates, discount rates, and expected costs to complete IPR&D. Discount rates of 13.0% and 14.0% were applied to the expected future cash flows to reflect the risk related to developed technology and IPR&D, respectively.

Developed technologies will be amortized over an estimated useful life of 6 years based on the technology cycle and cash flows over the forecast period. IPR&D is initially classified as an indefinite-lived intangible asset and assessed for impairment thereafter. Upon completion of the underlying project, IPR&D is reclassified as a definite-lived intangible asset and amortized over its estimated useful life. The IPR&D project is expected to be complete in 2021.

The excess of the total purchase price over the total fair value of the identifiable assets and liabilities was recorded as goodwill. The goodwill recognized is primarily attributable to synergies and the assembled workforce. All of the goodwill resulting from this acquisition is tax deductible. Goodwill has been allocated to the Audio segment, which is the segment expected to benefit from the acquisition.

The Company believes the fair values assigned to intangible assets are based on reasonable assumptions and estimates that approximate the amounts a market participant would pay for these intangible assets as of the acquisition date. Actual results could differ materially from these estimates.

Unaudited Pro-forma Summary

The following unaudited pro-forma summary presents consolidated financial information for the three and six months ended June 30, 2019 as if the ASIC Design Business had been acquired on January 1, 2018. The unaudited pro-forma financial information is based on historical results of operations and financial positions of the Company and the ASIC Design Business. The pro-forma results include estimated amortization of definite-lived intangible assets and exclude transaction costs.

The unaudited pro-forma financial information does not necessarily represent the results that would have occurred had the acquisition occurred on January 1, 2018. In addition, the unaudited pro-forma information should not be deemed to be indicative of future results.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)


	(unaudited)
(in millions, except share and per share amounts)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Earnings (loss) from continuing operations:
As reported	$	5.9	$	3.2
Pro-forma	3.5		(1.5)
Basic earnings (loss) per share from continuing operations:
As reported	$	0.06	$	0.04
Pro-forma	0.04		(0.02)
Diluted earnings (loss) per share from continuing operations:
As reported	$	0.06	$	0.03
Pro-forma	0.04		(0.02)

DITF

On January 3, 2019, the Company acquired substantially all of the assets of DITF Interconnect Technology, Inc. ("DITF") for $11.1 million. The acquired business provides thin film components to the defense, telecommunication, industrial, and medtech markets. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Consolidated Financial Statements from the date of acquisition in the PD segment. Included in the Consolidated Statements of Earnings are DITF's revenues and loss before income taxes of $4.0 million and $0.2 million, respectively, from the date of acquisition through June 30, 2019.

5. Inventories, net

The following table details the major components of inventories, net:


(in millions)	June 30, 2020		December 31, 2019
Raw materials	$	108.9	$	82.8
Work in progress	27.4		30.9
Finished goods	58.0		53.5
Subtotal	194.3		167.2
Less reserves	(31.8)		(25.4)
Total	$	162.5	$	141.8

6. Property, Plant, and Equipment, net

The following table details the major components of property, plant, and equipment, net:


(in millions)	June 30, 2020		December 31, 2019
Land	$	7.8	$	7.7
Buildings and improvements	102.7		104.5
Machinery, equipment, and other	530.9		533.1
Subtotal	641.4		645.3
Less accumulated depreciation	(448.6)		(438.8)
Total	$	192.8	$	206.5

Depreciation expense totaled $12.0 million for the three months ended June 30, 2020 and 2019. For the six months ended June 30, 2020 and 2019, depreciation expense totaled $24.0 million and $23.5 million, respectively.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

7. Goodwill and Other Intangible Assets

There were no changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2020.

The gross carrying value and accumulated amortization for each major class of intangible assets are as follows:


	June 30, 2020						December 31, 2019
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Trademarks	$	1.0	$	0.3	$	1.0	$	0.2
Patents	40.8		33.8		40.8		31.5
Customer relationships	12.0		4.4		12.0		3.6
Developed technology	36.5		3.7		36.5		0.7
Non-competition agreements	1.8		0.4		1.8		0.1
Total	92.1		42.6		92.1		36.1
Unamortized intangible assets:
Trademarks	32.0				32.0
IPR&D	3.7				3.7
Total	35.7				35.7
Total intangible assets, net	$	85.2			$	91.7

Amortization expense totaled $3.2 million and $1.7 million for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, amortization expense was $6.5 million and $3.5 million, respectively. Amortization expense for the next five years, based on current intangible balances, is estimated to be as follows:


(in millions)
Q3-Q4 2020	$	6.5
2021	13.0
2022	7.7
2023	7.1
2024	7.0

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 three and six months ended June 30, 2020, the Company restructured its Intelligent Audio product line, which is included within the Audio segment. These actions resulted in a reduction in workforce and the refocusing of certain research and development activities. During the three and six months ended June 30, 2020, the Company recorded restructuring charges of $4.9 million and $8.3 million, respectively, related to these actions, including $3.3 million and $5.4 million, respectively, in severance pay and benefits, $0.4 million and $1.7 million, respectively, in fixed asset write-off costs, and $1.2 million in contract termination costs. The Company does not expect to incur additional restructuring costs related to this product line during the remainder of the fiscal year.

In addition, during the three and six months ended June 30, 2020, the Company recorded restructuring charges of $2.5 million and $4.4 million, respectively, for severance pay and benefits primarily to rationalize the remaining Audio segment workforce as a direct result of the lower demand the Company is experiencing due to the COVID-19 pandemic.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

During the three and six months ended June 30, 2020, the Company recorded total restructuring charges within Gross profit of $0.9 million and $2.3 million, respectively, primarily for fixed asset write-off costs and severance pay and benefits associated with the restructuring of the Intelligent Audio product line and other actions to rationalize the remaining Audio segment workforce. During the three and six months ended June 30, 2020, the Company also recorded total restructuring charges within Operating expenses of $6.5 million and $10.4 million, respectively, primarily for severance pay and benefits and contract termination costs associated with the restructuring of the Intelligent Audio product line and other actions to rationalize the remaining Audio segment workforce.

During the three and six months ended June 30, 2019, the Company recorded restructuring charges within Gross profit of $0.4 million and $0.9 million, respectively, primarily for actions associated with transferring certain operations of capacitors manufacturing to other existing facilities in order to further optimize operations in the PD segment. During the three and six months ended June 30, 2019, the Company also recorded restructuring charges within Operating expenses of $0.1 million and $1.9 million, respectively, primarily for actions associated with rationalizing the Audio segment workforce.

The following table details restructuring charges incurred by reportable segment for the periods presented:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Audio	$	6.9	$	0.1	$	11.0	$	1.9
Precision Devices	—		0.4		—		0.7
Corporate	0.5		—		1.7		0.2
Total	$	7.4	$	0.5	$	12.7	$	2.8

The following table details the Company’s severance and other restructuring accrual activity:


(in millions)	Severance Pay and Benefits		Contract Termination and Other Costs		Total
Balance at December 31, 2019	$	1.4	$	—	$	1.4

Restructuring charges	9.7		1.2		10.9
Payments	(5.5)		(0.1)		(5.6)

Balance at June 30, 2020	$	5.6	$	1.1	$	6.7

The severance and restructuring accruals are recorded in the following line items on the Consolidated Balance Sheets:


(in millions)	June 30, 2020		December 31, 2019
Other accrued expenses	$	6.1	$	1.4
Other liabilities	0.6		—
Total	$	6.7	$	1.4

9. Borrowings

Borrowings (net of debt issuance costs, debt discount, and amortization) consist of the following:


(in millions)	June 30, 2020		December 31, 2019
3.25% convertible senior notes	$	160.9	$	156.8
Revolving credit facility	100.0		—
Total	260.9		156.8
Less current maturities	100.0		—
Total long-term debt	$	160.9	$	156.8


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

Total debt principal payments over the next five years are as follows:


(in millions)	Q3-Q4 2020		2021		2022		2023		2024
Debt principal payments	$	—	$	272.5	$	—	$	—	$	—

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 due November 1, 2021 ("the Notes"), unless earlier repurchased by the Company or converted pursuant to their terms. Interest is payable semiannually in arrears on May 1 and November 1 each year and commenced on November 1, 2016.

The Notes are governed by an Indenture (the "Indenture") between the Company, as issuer, and U.S. Bank National Association as trustee. Upon conversion, the Company will pay or deliver cash, shares of the Company's common stock, or a combination of cash and shares of common stock, at the Company's election. The Company’s current intent is to settle the principal amount of the Notes in cash. The initial conversion rate is 54.2741 shares of common stock per $1,000 principal amount of Notes. The initial conversion price is $18.4250 per share of common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the Indenture), the Company may be required, in certain circumstances, to increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change.

Prior to the close of business on the business day immediately preceding August 1, 2021, the Notes will be convertible only under the following circumstances:


=			during any calendar quarter and only during such calendar quarters, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
=			during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or
=			upon the occurrence of specified corporate events.

On or after August 1, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. As of June 30, 2020, no event has occurred that would permit the conversion of the Notes. The Notes are the Company’s 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 does 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 is amortized to interest expense over the term of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

In accounting for the transaction costs related to the Notes issuance, the Company allocated the total amount incurred to the liability and equity components based on their relative values. Issuance costs attributable to the liability component, totaling $5.0 million, are being amortized to interest expense over the term of the Notes, and issuance costs attributable to the equity component, totaling $1.3 million, were netted with the equity component in stockholders' equity.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

The Notes consist of the following:


(in millions)	June 30, 2020		December 31, 2019
Liability component:
Principal	$	172.5	$	172.5
Less debt issuance costs and debt discount, net of amortization	(11.6)		(15.7)
Total	160.9		156.8
Less current maturities ⁽¹⁾	—		—
Long-term portion	$	160.9	$	156.8

Equity component ⁽²⁾	$	29.9	$	29.9

⁽¹⁾ There are no required principal payments due until maturity in November 2021.

⁽²⁾ Recorded in the Consolidated Balance Sheets within additional paid-in capital, inclusive of the $1.3 million of issuance costs in equity.

The total estimated fair value of the Notes at June 30, 2020 was $183.7 million. The fair value was determined based on the closing trading price of the Notes as of the last trading day for the second quarter of 2020.

The following table sets forth total interest expense recognized related to the Notes:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
3.25% coupon	$	1.4	$	1.4	$	2.8	$	2.8
Amortization of debt issuance costs	0.3		0.2		0.5		0.4
Amortization of debt discount	1.8		1.7		3.6		3.4
Total	$	3.5	$	3.3	$	6.9	$	6.6

Note Hedges

To minimize the impact of potential economic dilution upon conversion of the Notes, the Company entered into convertible note hedge transactions (the “Note Hedges”) with respect to its common stock. In the second quarter of 2016, the Company paid an aggregate amount of $44.5 million for the Note Hedges. The Note Hedges will expire upon maturity of the Notes. The Note Hedges are intended to offset the potential dilution upon conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount upon conversion of the Notes in the event that the market value per share of the Company's common stock, as measured under the Note Hedges, is greater than the strike price of the Note Hedges, which initially corresponds to the initial conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes. The Note Hedges are separate transactions entered into by the Company, and are not part of the Notes or the Warrants, and have been accounted for as part of additional paid-in capital. Holders of the Notes do not have any rights with respect to the Note Hedges.

Warrants

In addition to the Note Hedges, 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. If the market price per share of the Company's common stock for the reporting period, as measured under the Warrants, exceeds the strike price of the Warrants, the Warrants could have a dilutive effect on the Company's common stock, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. The Warrants are separate transactions entered into by the Company, and are not part of the Notes or the Note Hedges, and have been accounted for as part of additional paid-in capital. Holders of the Notes and Note Hedges do not have any rights with respect to the Warrants.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

Revolving Credit Facility

Revolving credit facility borrowings consist of the following:


(in millions)	June 30, 2020		December 31, 2019
$400.0 million revolving credit facility	$	100.0	$	—


Less current maturities	100.0		—
Long-term portion	$	—	$	—

On October 11, 2017, the Company entered into a Revolving Credit Facility Agreement (the "Credit Facility"). The Credit Facility contains a five-year senior secured revolving credit facility providing for borrowings in an aggregate principal amount at any time outstanding not to exceed $400.0 million.

Commitments under the Credit Facility will terminate, and loans outstanding thereunder will mature, on October 11, 2022; provided, that if all the Company’s Notes have not been repaid, refinanced, and/or converted to common stock of the Company by April 30, 2021, then the commitments under the Credit Facility will terminate, and the loans outstanding thereunder will mature, on such earlier date. As the Notes have not been repaid, refinanced, and/or converted to common stock of the Company as of June 30, 2020, the revolving credit facility has been classified as a current maturity as of June 30, 2020.

The Credit Facility 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 "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 Credit Facility. At June 30, 2020, 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 rate under the Credit Facility is variable based on LIBOR at the time of the borrowing and the Company’s leverage as measured by a total indebtedness to Consolidated EBITDA ratio. Based upon the Company’s total indebtedness to Consolidated EBITDA ratio, the Company’s borrowing rate could range from LIBOR + 1.25% to LIBOR + 2.25%. In addition, a commitment fee accrues on the average daily unused portion of the Credit Facility at a rate of 0.20% to 0.35%.

The weighted-average interest rate on the Company's borrowings under the Credit Facility was 2.37% and 3.99% for the six months ended June 30, 2020 and 2019, respectively. The weighted-average commitment fee on the revolving line of credit was 0.23% for the six months ended June 30, 2020 and 2019.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

10. Other Comprehensive Earnings

The amounts recognized in other comprehensive earnings (loss) were as follows:


	Three Months Ended										Three Months Ended
	June 30, 2020										June 30, 2019
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	3.4	$	—	$	3.4	$	(2.5)	$	—	$	(2.5)
Employee benefit plans	0.1		0.2		0.3		0.2		—		0.2
Changes in fair value of cash flow hedges	0.6		—		0.6		(0.5)		0.1		(0.4)

Total other comprehensive earnings (loss)	$	4.1	$	0.2	$	4.3	$	(2.8)	$	0.1	$	(2.7)

	Six Months Ended										Six Months Ended
	June 30, 2020										June 30, 2019
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(4.1)	$	—	$	(4.1)	$	1.5	$	—	$	1.5
Employee benefit plans	0.3		(0.1)		0.2		0.3		—		0.3
Changes in fair value of cash flow hedges	(0.6)		0.1		(0.5)		0.4		(0.1)		0.3

Total other comprehensive (loss) earnings	$	(4.4)	$	—	$	(4.4)	$	2.2	$	(0.1)	$	2.1

The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the six months ended June 30, 2020 and 2019:


(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2019	$	0.5	$	(18.7)	$	(93.8)	$	(112.0)


Other comprehensive (loss) earnings, net of tax	(0.5)		0.2		(4.1)		(4.4)

Balance at June 30, 2020	$	—	$	(18.5)	$	(97.9)	$	(116.4)


(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2018	$	(0.4)	$	(15.5)	$	(95.1)	$	(111.0)
Other comprehensive earnings, net of tax	0.3		0.3		1.5		2.1
Balance at June 30, 2019	$	(0.1)	$	(15.2)	$	(93.6)	$	(108.9)


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

The following tables summarize the amounts reclassified from accumulated other comprehensive loss to earnings:


		Three Months Ended June 30,
(in millions)	Statement of Earnings Line	2020		2019
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other expense (income), net	$	0.1	$	0.2
Tax	Provision for income taxes	0.2		—
Net of tax		$	0.3	$	0.2

Cash flow hedges:
Net losses reclassified into earnings	Cost of goods sold	$	0.3	$	—
Tax	Provision for income taxes	—		—
Net of tax		$	0.3	$	—

		Six Months Ended June 30,
(in millions)	Statement of Earnings Line	2020		2019
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other expense (income), net	$	0.3	$	0.3
Tax	Provision for income taxes	(0.1)		—
Net of tax		$	0.2	$	0.3

Cash flow hedges:
Net losses reclassified into earnings	Cost of goods sold	$	0.4	$	0.2
Tax	Provision for income taxes	—		(0.1)
Net of tax		$	0.4	$	0.1

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 six months ended June 30, 2020 was a 6.0% provision and an 11.4% provision, respectively. The Company's ETR from continuing operations for the three and six months ended June 30, 2019 was a 36.6% provision and a 65.2% provision, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the three and six months ended June 30, 2020 and 2019.

The Company's ETR is favorably impacted by tax holidays granted to the Company in Malaysia effective through December 31, 2021. These tax holidays are subject to the Company's annual satisfaction of certain conditions, including investment and sales thresholds. If the Company fails to satisfy such conditions, the Company's ETR may be significantly adversely impacted. The continuing operations benefit of our tax holidays in Malaysia for the three and six months ended June 30, 2020 was approximately $0.2 million and $1.5 million, respectively, or $0.01 and $0.02 on a per share basis. The continuing operations benefit of these incentives for the three and six months ended June 30, 2019 was approximately $4.5 million and $7.9 million, respectively, or $0.05 and $0.09 on a per share basis.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

12. Equity Incentive Program

Stock-based compensation expense recognized in the Consolidated Statements of Earnings totaled $4.1 million and $7.3 million for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, stock-based compensation expense was $7.6 million and $14.0 million, respectively.

Stock Options and SSARs

The expense related to stock options granted in the six months ended June 30, 2020 and 2019 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below:


	Six Months Ended June 30,
	2020					2019
Risk-free interest rate	0.16%	to	1.42%	2.29%	to	2.44%
Dividend yield	—%					—%
Expected life (years)	4.3	to	4.5	4.5
Volatility	38.8%	to	40.6%	41.8%	to	42.9%

Fair value at date of grant	$4.78	to	$5.95	$6.22	to	$6.55

The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the six months ended June 30, 2020 (in millions, except share and per share amounts):


	SSARs											Stock Options
	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)
Outstanding at December 31, 2019	596,537	$	22.72				5,377,148	$	17.51
Granted	—	—					888,891	16.76

Exercised	—	—					(123,574)	12.43
Forfeited	—	—					(139,969)	16.59
Expired	—	—					(100,791)	19.73
Outstanding at June 30, 2020	596,537	$	22.72	$	—	1.9	5,901,705	$	17.48	$	6.0	3.4

Exercisable at June 30, 2020	596,537	$	22.72	$	—	1.9	4,335,643	$	17.92	$	5.8	2.5

There was no unrecognized compensation expense related to SSARs at June 30, 2020. At June 30, 2020, unrecognized compensation expense related to stock options not yet exercisable of $6.6 million is expected to be recognized over a weighted-average period of 2.0 years.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

RSUs

The following table summarizes the Company's restricted stock unit ("RSU") activity for the six months ended June 30, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	2,261,114	$	15.99
Granted	1,406,939	16.52

Vested ⁽¹⁾	(1,016,274)	16.26
Forfeited	(635,437)	16.24
Unvested at June 30, 2020	2,016,342	$	16.19

⁽¹⁾ The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

At June 30, 2020, $23.9 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 1.9 years.

PSUs

The Company grants performance stock units ("PSUs") to senior management. In each case, the awards will cliff vest three years following the grant date. For the awards granted in February 2018 and 2017, the number of PSUs that may be earned and vest is based on the Company's revenues and stock price performance over a three year performance period. For the awards granted in February 2019, the number of PSUs that may be earned and vest is based on the Company's revenues and total shareholder return relative to the S&P Semiconductor Select Industry Index over a three year performance period. For the awards granted in February 2020, the number of PSUs that may be earned and vest is based on total shareholder return relative to the S&P Semiconductor Select Industry Index over a three year performance period.

PSUs will be settled in shares of the Company's common stock. Depending on the Company's overall performance relative to the applicable performance metrics, the size of the PSU awards are subject to adjustment, up or down, resulting in awards at the end of the performance period that can range from 0% to 225% of the initial grant value. In February 2020, the awards granted in February 2017 were converted from 176,154 PSUs to 88,959 shares of stock based on achievement of performance metrics. The Company will ratably recognize the expense over the applicable service period for each grant of PSUs and adjust the expense as appropriate. The fair value of the PSUs is determined by using a Monte Carlo simulation.

The following table summarizes the Company's PSU activity for the six months ended June 30, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	844,789	$	15.90
Granted	322,178	16.14

Vested ⁽¹⁾	(176,154)	15.38
Forfeited	(61,589)	17.05
Unvested at June 30, 2020	929,224	$	16.01

⁽¹⁾ The number of PSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

At June 30, 2020, $3.7 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.6 years.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

13. Earnings per Share

Basic and diluted earnings per share were computed as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except share and per share amounts)	2020		2019		2020		2019
(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2
Earnings from discontinued operations, net	—		—		3.7		—
Net (loss) earnings	$	(19.5)	$	5.9	$	(28.6)	$	3.2

Basic (loss) earnings per common share:
(Loss) earnings from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.04
Earnings from discontinued operations, net	—		—		0.04		—
Net (loss) earnings	$	(0.21)	$	0.06	$	(0.31)	$	0.04

Weighted-average shares outstanding	91,589,156		91,018,213		91,721,440		90,780,035

Diluted (loss) earnings per common share:
(Loss) earnings from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.03
Earnings from discontinued operations, net	—		—		0.04		—
Net (loss) earnings	$	(0.21)	$	0.06	$	(0.31)	$	0.03

Diluted weighted-average shares outstanding	91,589,156		92,507,279		91,721,440		92,184,274

As the Company intends to settle the principal amount of the Notes in cash, the treasury stock method was used to calculate any potential dilutive effect of the conversion option on diluted earnings per share, if applicable. For the three and six months ended June 30, 2020, the weighted-average number of anti-dilutive potential common shares excluded from the diluted earnings per share calculation above was 6,157,127 and 5,176,141, respectively. For the three and six months ended June 30, 2019, the weighted-average number of anti-dilutive potential common shares excluded from the diluted earnings per share calculation above was 4,306,633 and 4,457,926, respectively.

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, apart from the action set forth below, the disposition of these legal proceedings or claims, individually or in the aggregate, after taking into account recorded accruals and the availability and limits of insurance coverage, will not have a material adverse effect on its cash flow, results of operations, or financial condition.

The Company is party to a representative action filed in the Superior Court of California, Los Angeles County under the Private Attorneys General Act. The complaint was filed on June 5, 2020 and alleges that the Company incorrectly calculated overtime rate of pay, incorrectly paid overtime, and provided inaccurate wage statements, to certain non-exempt employees at the Company’s Valencia, California manufacturing facility in violation of California law. The action seeks penalties, attorneys' fees, and other relief. The Company intends to defend these claims vigorously. Due to the early stage of this litigation among other factors, the Company is currently unable to predict the ultimate outcome of this lawsuit or provide meaningful quantification of how the final resolution of this matter may impact our future financial condition, results of operations, or cash flows.

The Company owns many patents and other intellectual property pertaining to its products, technology, and manufacturing processes. Some of the Company's patents have been and may continue to be infringed upon or challenged by others. In appropriate cases, the Company has taken and will take steps to protect and defend its patents and other intellectual property,


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)

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 June 30, 2020 and December 31, 2019.

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 June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Revenues:
Audio	$	104.5	$	159.9	$	224.6	$	299.0
Precision Devices	47.7		45.3		90.7		86.0
Total revenues	$	152.2	$	205.2	$	315.3	$	385.0

(Loss) earnings from continuing operations before interest and income taxes:
Audio	$	(12.2)	$	21.2	$	(18.3)	$	33.0
Precision Devices	11.1		8.2		18.2		15.7
Total segments	(1.1)		29.4		(0.1)		48.7
Corporate expense / other	13.2		16.5		21.1		32.4
Interest expense, net	4.1		3.6		7.8		7.1
(Loss) earnings before income taxes and discontinued operations	(18.4)		9.3		(29.0)		9.2
Provision for income taxes	1.1		3.4		3.3		6.0
(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2

Information regarding assets of the Company's reportable segments:


	Total Assets
(in millions)	June 30, 2020		December 31, 2019
Audio	$	1,475.8	$	1,487.6
Precision Devices	207.9		162.0
Corporate / eliminations	4.0		5.0

Total	$	1,687.7	$	1,654.6

The following table details revenues by geographic location. Revenues are attributed to regions based on the location of the Company's direct customer, which in some instances is an intermediary and not necessarily the end user. The Company's businesses are based primarily in Asia, North America, and Europe.


Table of Contents			NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
			(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Asia	$	106.9	$	144.0	$	216.6	$	265.1
United States	28.7		32.9		58.0		65.1
Europe	14.3		25.1		36.7		48.9
Other Americas	0.9		1.6		1.5		2.7
Other	1.4		1.6		2.5		3.2
Total	$	152.2	$	205.2	$	315.3	$	385.0

Receivables, net from contracts with customers were $93.7 million and $152.8 million as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, our total remaining performance obligations are immaterial.

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Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to our operations, results of operations, our continued business operations during the COVID-19 pandemic, and other matters that are based on our current expectations, estimates, assumptions, and projections. Words such as “believe,” “expect,” “anticipate,” “project,” “estimate,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “objective,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made. The statements in this Quarterly Report on Form 10-Q are based on currently available information and the current expectations, forecasts, and assumptions of our management concerning risks and uncertainties that could cause actual outcomes or results to differ materially from those outcomes or results that are projected, anticipated, or implied in these statements, including risks related to the COVID-19 pandemic and governmental responses to it, including but not limited to, the impact on our supply chain, customer demand, and costs associated with our operations. Other risks and uncertainties include, but are not limited to:


o			unforeseen changes in MEMS microphone demand from our largest customers, in particular, two North American, a Korean, and Chinese original equipment manufacturer ("OEM") customers;
o			our ongoing ability to execute our strategy to diversify our end markets and customers;
o			our ability to stem or overcome price erosion in our segments;
o			fluctuations in our stock's market price;
o			fluctuations in operating results and cash flows;
o			our ability to prevent or identify quality issues in our products or to promptly remedy any such issues that are identified;
o			the timing of OEM product launches;
o			risks associated with increasing our inventories in advance of anticipated orders by customers;
o			global economic instability;
o			the impact of changes to laws and regulations that affect the Company’s ability to offer products or services to customers in different regions;
o			risks associated with shareholder activism, including proxy contests;
o			our ability to achieve continued reductions in our operating expenses;
o			the ability to qualify our products and facilities with customers;
o			our ability to obtain, enforce, defend, or monetize our intellectual property rights;
o			difficulties or delays in and/or the Company's inability to realize expected cost synergies from its acquisitions;
o			increases in the costs of critical raw materials and components;
o			availability of raw materials and components;
o			managing new product ramps and introductions for our customers;
o			our dependence on a limited number of large customers;
o			our ability to maintain and expand our existing relationships with leading OEMs in order to maintain and increase our revenue;
o			increasing competition and new entrants in the market for our products;
o			our ability to develop new or enhanced products or technologies in a timely manner that achieve market acceptance;
o			our reliance on third parties to manufacture, assemble, and test our products and sub-components;
o			escalating international trade tensions, new or increased tariffs, and trade wars among countries;
o			financial risks, including risks relating to currency fluctuations, credit risks, and fluctuations in the market value of the Company;
o			market risk associated with fluctuations in commodity prices, particularly for various precious metals used in our manufacturing operation; and
o			changes in tax laws, changes in tax rates, and exposure to additional tax liabilities.

A more complete description of these risks, uncertainties, and other factors can be found under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. We do not undertake to update or revise our forward-looking statements as a result of new information, future events, or otherwise, except as required by law.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q.

Overview

We are a market leader and global provider of advanced micro-acoustic, audio processing, and precision device solutions, serving the mobile consumer electronics, communications, medtech, defense, automotive, and industrial markets. We use our leading position in micro-electro-mechanical systems ("MEMS") microphones and strong capabilities in audio processing technologies to optimize audio systems and improve the user experience in mobile, ear, and Internet of Things ("IoT") applications. We are also a leader in acoustic components, high-end capacitors, and mmWave radio frequency ("RF") solutions for a diverse set of markets. Our focus on the customer, combined with unique technology, proprietary manufacturing techniques, rigorous testing, and global scale, enables us to deliver innovative solutions that optimize the user experience. References to "Knowles," the "Company," "we," "our," or "us" refer to Knowles Corporation and its consolidated subsidiaries, unless the context otherwise requires.

We are organized into two reportable segments based on how management analyzes performance, allocates capital, and makes strategic and operational decisions. These segments were determined in accordance with Financial Accounting Standards Board Accounting Standards Codification 280 - Segment Reporting and are comprised of (i) Audio and (ii) Precision Devices ("PD"). The segments are aligned around similar product applications serving our key end markets, to enhance focus on end market growth strategies.

•Audio Segment

Our Audio group designs and manufactures innovative audio products, including microphones, balanced armature speakers, and audio processors used in applications that serve the mobile, ear, and IoT markets. Locations include the sales, support, and engineering facilities in North America, Europe, and Asia, as well as manufacturing facilities in Asia.

•PD Segment

Our PD group specializes in the design and delivery of high performance capacitor products and mmWave RF solutions for technically demanding applications. Our high performance capacitor products are used in applications such as power supplies and medical implants, which sell to a diverse set of customers for mission critical applications across the communications, medtech, defense, automotive, and industrial markets. Our mmWave RF solutions primarily solve high frequency filtering challenges for our military customers, who use them in their satellite communication and radar systems, as well as our telecommunications infrastructure customers deploying mmWave 5G base stations. Locations include the sales, support, engineering, and manufacturing facilities in North America, Europe, and Asia.

We sell our products directly to original equipment manufacturers ("OEMs") and to their contract manufacturers and suppliers and to a lesser extent through distributors worldwide.

COVID-19 Impact

During 2020, COVID-19, the most recently discovered coronavirus, spread throughout areas of the world where we operate. In March 2020, the World Health Organization declared COVID-19 a pandemic and recommended containment and mitigation measures worldwide. This has resulted in global business disruption, which has impacted our business operations, results of operations, customer demand, and the productivity of our facilities, particularly in China, Malaysia, and the Philippines.

We have taken various steps to minimize the negative impact of the COVID-19 pandemic on our business and to protect the health and safety of our employees. Such steps include, but are not limited to, significantly reducing employee travel; having office workers work remotely; suspending our share repurchase program; suspending annual wage increases and temporarily reducing salaries of employees, including the CEO and executive team; and reducing the cash compensation of our board of directors. Our facility locations are operating within varying stages of restrictions; with some jurisdictions re-opening only to return to restrictions as new COVID-19 cases continue to rise in those areas. In locations where public health protocols have accommodated returning to work at our facilities, we have implemented additional safety measures, including increased frequency in cleaning and disinfecting as well as hygiene and social distancing practices.

The situation related to COVID-19 continues to be complex and rapidly evolving. We cannot reasonably estimate the duration of the pandemic or fully ascertain its impact to our future results, but we currently expect that full year revenues, net income, and cash flow will be lower than 2019. During the first and second quarters of 2020, we considered and determined that there was no impact on our long-lived assets (including goodwill and intangible assets, property, plant, and equipment, and lease right-of-use assets). We concluded that it is not more likely than not that any of our long-lived assets have carrying values exceeding their respective fair values. Our analysis considered, among other factors; the nature of our products and services as well as our position within our industry and our expectation that we will continue generating positive operating cash flows over the long-term. In addition, we have not experienced and do not anticipate a material impact to the realizability of current assets, such as accounts receivable or inventories.

As the COVID-19 pandemic evolves, we will continue to actively monitor developments and business conditions and may take further actions that alter business operations as may be required by applicable authorities or that we determine are in the best interests of our employees, customers, suppliers, stockholders, and communities. It is not clear what potential effects any such alterations or modifications may have on our business, including the effects on our financial results.

ASIC Design Business Acquisition

On December 20, 2019, we acquired substantially all of the assets of the MEMS Microphone Application-specific integrated circuit Design Business (“ASIC Design Business”) from ams AG for $57.9 million. The acquired business, which does not generate revenues, includes intellectual property and an assembled workforce. The acquisition’s operations are included in the Audio segment. For additional information, refer to Note 4. Acquisitions to our Consolidated Financial Statements.

Non-GAAP Financial Measures

In addition to the GAAP financial measures included in this item, we have presented certain non-GAAP financial measures. We use non-GAAP measures as supplements to our GAAP results of operations in evaluating certain aspects of our business, and our executive management team and Board of Directors focus on non-GAAP items as key measures of our performance for business planning purposes. These measures assist us in comparing our performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in our opinion, do not reflect our core operating performance. We believe that our presentation of non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that we use internally for purposes of assessing our core operating performance. The Company does not consider these non-GAAP financial measures to be a substitute for the information provided by GAAP financial results. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the reconciliation included herein.

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Results of Operations for the Three Months Ended June 30, 2020 compared with the Three Months Ended June 30, 2019


	Three Months Ended June 30,
(in millions, except per share amounts)	2020		2019
Revenues	$	152.2	$	205.2

Gross profit	$	47.8	$	76.4
Non-GAAP gross profit	$	49.1	$	78.1

(Loss) earnings from continuing operations before interest and income taxes	$	(14.3)	$	12.9

Adjusted earnings from continuing operations before interest and income taxes	$	0.6	$	26.1

Provision for income taxes	$	1.1	$	3.4
Non-GAAP (benefit from) provision for income taxes	$	(0.5)	$	3.5

(Loss) earnings from continuing operations	$	(19.5)	$	5.9
Non-GAAP net (loss) earnings from continuing operations	$	(1.2)	$	20.7

(Loss) earnings per share from continuing operations - diluted	$	(0.21)	$	0.06
Non-GAAP diluted (loss) earnings per share from continuing operations	$	(0.01)	$	0.22

Revenues

Revenues for the second quarter of 2020 were $152.2 million, compared with $205.2 million for the second quarter of 2019, a decrease of $53.0 million or 25.8%. Audio revenues decreased $55.4 million, primarily due to the impacts of the COVID-19 pandemic, which caused lower demand for hearing health products and MEMS microphones in the mobile, ear, and IoT markets. Audio revenues were also impacted by lower average pricing on mature products. PD revenues increased $2.4 million, primarily due to higher shipments to the defense, automotive, and communication markets, partially offset by lower shipments to the medtech market as hospitals are slowing elective procedures as a result of the COVID-19 pandemic.

Cost of Goods Sold

Cost of goods sold ("COGS") for the second quarter of 2020 was $103.5 million, compared with $128.4 million for the second quarter of 2019, a decrease of $24.9 million or 19.4%. This decrease was primarily the result of lower shipping volumes in Audio and product cost reductions, partially offset by our reduced plant productivity and capacity utilization as a result of the disruptions related to the COVID-19 pandemic that we experienced within our manufacturing operations across Asia and the establishment of an inventory reserve within the Intelligent Audio product line.

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Restructuring Charges

During the second quarter of 2020, we restructured our Intelligent Audio product line, which is included within our Audio segment. This resulted in a reduction in workforce and the refocusing of certain research and development activities. As a result, we recorded restructuring charges of $0.1 million within Gross profit, primarily for fixed asset write-off costs directly associated with the product line. In addition, we recorded restructuring charges of $4.8 million within Operating expenses, primarily for rationalizing the research and development workforce and contract termination costs associated with the product line. We do not expect to incur additional restructuring costs related to this product line during the remainder of the fiscal year.

Also, during the second quarter of 2020, we recorded restructuring charges of $0.8 million within Gross profit, primarily for actions to rationalize the remainder of the Audio segment workforce, as a direct result of the lower current demand we are experiencing from the COVID-19 pandemic for our remaining Audio products. We also recorded restructuring charges of $1.7 million within Operating expenses, primarily for actions associated with rationalizing the remaining Audio research and development workforce. We do not expect to incur additional restructuring costs related to the remaining Audio segment workforce through the remainder of the fiscal year.

During the second quarter of 2019, we recorded restructuring charges of $0.4 million within Gross profit, primarily for actions associated with transferring certain operations of capacitors manufacturing to other existing facilities in order to further optimize operations in the PD segment. We also recorded restructuring charges of $0.1 million within Operating expenses, primarily for actions associated with rationalizing the Audio segment workforce.

Gross Profit and Non-GAAP Gross Profit

Gross profit for the second quarter of 2020 was $47.8 million, compared with $76.4 million for the second quarter of 2019, a decrease of $28.6 million or 37.4%. Gross profit margin (gross profit as a percentage of revenues) for the second quarter of 2020 was 31.4%, compared with 37.2% for the second quarter of 2019. The decreases were primarily due to lower Audio revenue volumes. In addition, we experienced disruptions due to the COVID-19 pandemic within our manufacturing operations across Asia, which negatively impacted plant productivity and capacity utilization in our Audio segment. The Audio segment was also negatively impacted by lower average pricing on mature products and the establishment of an inventory reserve within the Intelligent Audio product line, partially offset by product cost reductions.

Non-GAAP gross profit for the second quarter of 2020 was $49.1 million, compared with $78.1 million for the second quarter of 2019, a decrease of $29.0 million or 37.1%. Non-GAAP gross profit margin (non-GAAP gross profit as a percentage of revenues) for the second quarter of 2020 was 32.3%, compared with 38.1% for the second quarter of 2019. The decreases were primarily due to lower Audio revenue volumes. In addition, we experienced disruptions due to the COVID-19 pandemic within our manufacturing operations across Asia, which negatively impacted plant productivity and capacity utilization in our Audio segment. The Audio segment was also impacted by lower average pricing on mature products and the establishment of an inventory reserve within the Intelligent Audio product line, partially offset by product cost reductions.

Research and Development Expenses

Research and development expenses for the second quarter of 2020 were $22.6 million, compared with $25.0 million for the second quarter of 2019, a decrease of $2.4 million or 9.6%. Research and development expenses as a percentage of revenues for the second quarter of 2020 and 2019 were 14.8% and 12.2%, respectively. The decrease in expenses was primarily driven by the benefits of operating cost reductions in our Audio segment as a result of headcount reductions to optimize the workforce, partially offset by increased expense related to our acquisition of the ASIC Design Business. In addition, there will be incremental cost reduction benefits in the third quarter of 2020 related to the restructuring actions that were substantially completed in June 2020. The increase in expenses as a percentage of revenues was due to the decrease in our revenues.

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Selling and Administrative Expenses

Selling and administrative expenses for the second quarter of 2020 were $31.1 million, compared with $38.9 million for the second quarter of 2019, a decrease of $7.8 million or 20.1%. Selling and administrative expenses as a percentage of revenues for the second quarter of 2020 and 2019 were 20.4% and 19.0%, respectively. The decrease in expenses was primarily driven by the benefits of our operating cost reduction efforts, which were implemented to minimize the negative impact of the COVID-19 pandemic. The cost reduction efforts included, but were not limited to, temporarily reducing salaries of employees, suspending annual wage increases, and significantly reducing employee travel. In addition, we incurred lower stock-based and incentive compensation as certain performance targets will not be met due to the impacts of COVID-19 pandemic, partially offset by higher legal expenses related to protecting our intellectual property. The increase in expenses as a percentage of revenues was due to the decrease in our revenues.

Interest Expense, net

Interest expense for the second quarter of 2020 was $4.1 million, compared with $3.6 million for the second quarter of 2019, an increase of $0.5 million. The increase is primarily due to higher outstanding borrowings. For additional information on borrowings and interest expense, refer to Note 9. Borrowings to our Consolidated Financial Statements.

Other expense (income), net

Other expense for the second quarter of 2020 was $1.9 million, compared with income of $0.5 million for the second quarter of 2019, a decrease of $2.4 million. The decrease is primarily due to unfavorable impacts from foreign currency exchange rate changes in the second quarter of 2020.

Provision for Income Taxes and Non-GAAP (Benefit from) Provision for Income Taxes

The effective tax rate ("ETR") from continuing operations for the second quarter of 2020 was a 6.0% provision, compared with a 36.6% provision for the second quarter of 2019. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the second quarter of 2020 and 2019.

The non-GAAP ETR from continuing operations for the second quarter of 2020 was a 29.4% benefit, compared with a 14.5% provision for the second quarter of 2019. The change in the non-GAAP ETR was due to the mix of earnings and losses by taxing jurisdictions.

The ETR and non-GAAP ETR deviate from the statutory U.S. federal income tax rate, mainly due to the taxing jurisdictions where we generate taxable income or loss, the favorable impact of our significant tax holidays in Malaysia, and judgments as to the realizability of our deferred tax assets. A significant portion of our pre-tax income is subject to a lower tax rate as a result of our Malaysian tax holidays, subject to our annual satisfaction of certain conditions we expect to continue to satisfy. Unless extended or renegotiated, our existing significant tax holiday in Malaysia will expire on December 31, 2021. For additional information on these tax holidays, refer to Note 11. Income Taxes to our Consolidated Financial Statements.

(Loss) Earnings from Continuing Operations

Loss from continuing operations for the second quarter of 2020 was $19.5 million, compared with earnings of $5.9 million for the second quarter of 2019, a decrease of $25.4 million. As described above, the decrease is primarily due to lower gross profit and an increase in operating restructuring charges, partially offset by the reductions in operating expenses.

(Loss) Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

Loss before interest and income taxes from continuing operations for the second quarter of 2020 was $14.3 million, compared with earnings of $12.9 million for the second quarter of 2019, a decrease of $27.2 million. As described above, the decrease was primarily due to lower gross profit and an increase in operating restructuring charges, partially offset by the reductions in operating expenses.

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Adjusted earnings before interest and income taxes ("Adjusted EBIT") from continuing operations for the second quarter of 2020 was $0.6 million, compared with $26.1 million for the second quarter of 2019, a decrease of $25.5 million. Adjusted EBIT margin (adjusted EBIT from continuing operations as a percentage of revenues) for the second quarter of 2020 was 0.4%, compared with 12.7% for the second quarter of 2019. As described above, the decreases were primarily due to lower non-GAAP gross profit, partially offset by a decrease in non-GAAP operating expenses.

Diluted (Loss) Earnings per Share from Continuing Operations and Non-GAAP Diluted (Loss) Earnings per Share from Continuing Operations

Diluted loss per share from continuing operations was $0.21 for the second quarter of 2020, compared with earnings of $0.06 per share for the second quarter of 2019, a decrease of $0.27. As described above, the decrease is primarily due to lower gross profit and an increase in restructuring charges, partially offset by the reductions in operating expenses.

Non-GAAP diluted loss per share from continuing operations was $0.01 for the second quarter of 2020, compared with earnings of $0.22 for the second quarter of 2019, a decrease of $0.23. As described above, the decrease is primarily due to lower gross profit, partially offset by the reductions in non-GAAP operating expenses.

Results of Operations for the Six Months Ended June 30, 2020 compared with the Six Months Ended June 30, 2019


	Six Months Ended June 30,
(in millions, except per share amounts)	2020		2019
Revenues	$	315.3	$	385.0

Gross profit	$	104.0	$	144.9
Non-GAAP gross profit	$	107.3	$	148.0

(Loss) earnings from continuing operations before interest and income taxes	$	(21.2)	$	16.3

Adjusted earnings from continuing operations before interest and income taxes	$	6.1	$	42.8

Provision for income taxes	$	3.3	$	6.0
Non-GAAP (benefit from) provision for income taxes	$	(0.1)	$	6.6

(Loss) earnings from continuing operations	$	(32.3)	$	3.2
Non-GAAP net earnings from continuing operations	$	2.0	$	32.5

(Loss) earnings per share from continuing operations - diluted	$	(0.35)	$	0.03
Non-GAAP diluted earnings per share from continuing operations	$	0.02	$	0.34

Revenues

Revenues for the six months ended June 30, 2020 were $315.3 million, compared with $385.0 million for the six months ended June 30, 2019, a decrease of $69.7 million or 18.1%. Audio revenues decreased $74.4 million due to the impacts of the COVID-19 pandemic, which caused lower demand for hearing health products and MEMS microphones in the mobile, ear, and IoT markets. Audio revenues were also impacted by lower average pricing on mature products. PD revenues increased $4.7 million primarily due to higher shipments to the defense and automotive markets, partially offset by decreases in the communication and medtech markets as hospitals are slowing elective procedures as a result of the COVID-19 pandemic.

Cost of Goods Sold

COGS for the six months ended June 30, 2020 was $209.0 million, compared with $239.2 million for the six months ended June 30, 2019, a decrease of $30.2 million or 12.6%. This decrease was primarily the result of lower shipping volumes in Audio and product cost reductions, partially offset by our reduced plant productivity and capacity utilization as a result of the disruptions related to the COVID-19 pandemic that we experienced within our manufacturing operations across Asia and the establishment of an inventory reserve within the Intelligent Audio product line.

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Restructuring Charges

During the six months ended June 30, 2020, we restructured our Intelligent Audio product line, which is included within our Audio segment. This resulted in a reduction in workforce and the refocusing of certain research and development activities. As a result, we recorded restructuring charges of $1.5 million within Gross profit, primarily for fixed asset write-off costs directly associated with the product line. In addition, we recorded restructuring charges of $6.8 million within Operating expenses, primarily for rationalizing the research and development workforce and contract termination costs associated with the product line. We do not expect to incur additional restructuring costs related to this product line during the remainder of the fiscal year.

Also, during the six months ended June 30, 2020, we recorded restructuring charges of $0.8 million within Gross profit, primarily for actions to rationalize the remainder of the Audio segment workforce, as a direct result of the lower current demand we are experiencing from the COVID-19 pandemic for our remaining Audio products. We also recorded restructuring charges of $3.6 million within Operating expenses, primarily for actions associated with rationalizing the remaining Audio workforce. We do not expect to incur additional restructuring costs related to the remaining Audio segment workforce through the remainder of the fiscal year.

During the six months ended June 30, 2019, we recorded restructuring charges of $0.9 million within Gross profit, primarily for actions associated with transferring certain operations of capacitors manufacturing to other existing facilities in order to further optimize operations in the PD segment. We also recorded restructuring charges of $1.9 million within Operating expenses, primarily for actions associated with rationalizing the Audio segment workforce.

Gross Profit and Non-GAAP Gross Profit

Gross profit for the six months ended June 30, 2020 was $104.0 million, compared with $144.9 million for the six months ended June 30, 2019, a decrease of $40.9 million or 28.2%. Gross profit margin for the six months ended June 30, 2020 was 33.0%, compared with 37.6% for the six months ended June 30, 2019. The decreases were primarily due to lower Audio revenue volumes. In addition, we experienced disruptions due to the COVID-19 pandemic within our manufacturing operations across Asia, which negatively impacted plant productivity and capacity utilization in our Audio segment. The Audio segment was also negatively impacted by lower average pricing on mature products and the establishment of an inventory reserve within the Intelligent Audio product line, partially offset by product cost reductions.

Non-GAAP gross profit for the six months ended June 30, 2020 was $107.3 million, compared with $148.0 million for the six months ended June 30, 2019, a decrease of $40.7 million or 27.5%. Non-GAAP gross profit margin for the six months ended June 30, 2020 and 2019 was 34.0% and 38.4%, respectively. The decreases were primarily due to lower Audio revenue volumes. In addition, we experienced disruptions due to the COVID-19 pandemic within our manufacturing operations across Asia, which negatively impacted plant productivity and capacity utilization in our Audio segment. The Audio segment was also negatively impacted by lower average pricing on mature products and the establishment of an inventory reserve within the Intelligent Audio product line, partially offset by product cost reductions.

Research and Development Expenses

Research and development expenses for the six months ended June 30, 2020 were $48.3 million, compared with $49.7 million for the six months ended June 30, 2019, a decrease of $1.4 million or 2.8%. Research and development expenses as a percentage of revenues for the six months ended June 30, 2020 and 2019 were 15.3% and 12.9%, respectively. The decrease in expenses was primarily driven by the benefits of operating cost reductions in our Audio segment as a result of headcount reductions to optimize the workforce, partially offset by increased expense related to our acquisition of the ASIC Design Business. In addition, there will be incremental cost reduction benefits in the third quarter of 2020 related to the restructuring actions that were substantially completed in June 2020. The increase in expenses as a percentage of revenues was due to the decrease in our revenues.

Selling and Administrative Expenses

Selling and administrative expenses for the six months ended June 30, 2020 were $67.3 million, compared with $76.5 million for the six months ended June 30, 2019, a decrease of $9.2 million or 12.0%. Selling and administrative expenses as a percentage of revenues for the six months ended June 30, 2020 and 2019 were 21.3% and 19.9%, respectively. The decrease in expenses was primarily driven by the benefits of our operating cost reduction efforts, which were implemented to minimize the

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negative impact of the COVID-19 pandemic. The cost reduction efforts included, but were not limited to, temporarily reducing salaries of employees, suspending annual wage increases, and significantly reducing employee travel. In addition, we incurred lower stock-based and incentive compensation as certain performance targets will not be met due to the impacts of COVID-19, partially offset by higher legal expenses related to protecting our intellectual property. The increase in expenses as a percentage of revenues was due to the decrease in our revenues.

Interest Expense, net

Interest expense for the six months ended June 30, 2020 was $7.8 million, compared with $7.1 million for the six months ended June 30, 2019, an increase of $0.7 million. The increase in interest expense is primarily due to higher outstanding borrowings. For additional information on borrowings and interest expense, refer to Note 9. Borrowings to our Consolidated Financial Statements.

Other expense (income), net

Other income for the six months ended June 30, 2020 was $0.8 million, compared with expense of $0.5 million for the six months ended June 30, 2019, an increase of $1.3 million. The increase is primarily due to favorable impacts from foreign currency exchange rate changes in 2020.

Provision for Income Taxes and Non-GAAP (Benefit from) Provision for Income Taxes

The ETR from continuing operations for the six months ended June 30, 2020 was an 11.4% provision, compared with a 65.2% provision for the six months ended June 30, 2019. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the six months ended June 30, 2020 and 2019.

The non-GAAP ETR from continuing operations for the six months ended June 30, 2020 was a 5.3% benefit, compared with a 16.9% provision for the six months ended June 30, 2019. The non-GAAP ETR from continuing operations for the six months ended June 30, 2020 was impacted by a net discrete benefit totaling $0.5 million due to a change in the indefinite reinvestment assertion related to a portion of undistributed earnings of our Malaysian subsidiary. The non-GAAP ETR from continuing operations for the six months ended June 30, 2019 was impacted by net discrete expense totaling $0.8 million, primarily related to a change in the Company's uncertain tax positions. Absent the discrete items, the non-GAAP ETR from continuing operations for the six months ended June 30, 2020 was a 21.1% provision, compared to a 14.8% provision for the six months ended June 30, 2019. The change in the non-GAAP ETR was due to the mix of earnings and losses by taxing jurisdictions.

(Loss) Earnings from Continuing Operations

Loss from continuing operations for the six months ended June 30, 2020 was $32.3 million, compared with earnings of $3.2 million for the six months ended June 30, 2019, a decrease of $35.5 million. As described above, the decrease is primarily due to lower gross profit and an increase in operating restructuring charges, partially offset by the reductions in operating expenses.

(Loss) Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

Loss before interest and income taxes from continuing operations for the six months ended June 30, 2020 was $21.2 million, compared with earnings of $16.3 million for the six months ended June 30, 2019, a decrease of $37.5 million. As described above, the decrease was primarily due to lower gross profit and an increase in operating restructuring charges, partially offset by the reductions in operating expenses.

Adjusted EBIT from continuing operations for the six months ended June 30, 2020 was $6.1 million, compared with $42.8 million for the six months ended June 30, 2019, a decrease of $36.7 million. Adjusted EBIT margin for the six months ended

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June 30, 2020 was 1.9%, compared with 11.1% for the six months ended June 30, 2019. As described above, the decreases were primarily due to lower non-GAAP gross profit, partially offset by a decrease in non-GAAP operating expenses.

Earnings from Discontinued Operations, net

Earnings from discontinued operations was $3.7 million in the six months ended June 30, 2020, compared with no impact for the six months ended June 30, 2019. We recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business.

Diluted (Loss) Earnings per Share from Continuing Operations and Non-GAAP Diluted Earnings per Share from Continuing Operations

Diluted loss per share from continuing operations was $0.35 for the six months ended June 30, 2020, compared with earnings of $0.03 for the six months ended June 30, 2019, a decrease of $0.38. As described above, the decrease is primarily due to lower gross profit and an increase in restructuring charges, partially offset by the reductions in operating expenses.

Non-GAAP diluted earnings per share from continuing operations was $0.02 for the six months ended June 30, 2020, compared with $0.34 for the six months ended June 30, 2019, a decrease of $0.32. As described above, the decrease is primarily due to lower gross profit, partially offset by the reductions in non-GAAP operating expenses.

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Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures ⁽¹⁾


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except share and per share amounts)	2020		2019		2020		2019
Gross profit	$	47.8	$	76.4	$	104.0	$	144.9
Stock-based compensation expense	0.4		0.4		0.9		0.8

Restructuring charges	0.9		0.4		2.3		0.9
Production transfer costs ⁽²⁾	—		0.9		0.1		1.4

Non-GAAP gross profit	$	49.1	$	78.1	$	107.3	$	148.0





















(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2
Interest expense, net	4.1		3.6		7.8		7.1
Provision for income taxes	1.1		3.4		3.3		6.0
(Loss) earnings from continuing operations before interest and income taxes	(14.3)		12.9		(21.2)		16.3
Stock-based compensation expense	4.1		7.3		7.6		14.0
Intangibles amortization expense	3.2		1.7		6.5		3.5

Restructuring charges	7.4		0.5		12.7		2.8
Production transfer costs⁽²⁾	—		0.9		0.1		1.4
Other ⁽³⁾	0.2		2.8		0.4		4.8
Adjusted earnings from continuing operations before interest and income taxes	$	0.6	$	26.1	$	6.1	$	42.8

Interest expense, net	$	4.1	$	3.6	$	7.8	$	7.1
Interest expense, net non-GAAP reconciling adjustments ⁽⁴⁾	1.8		1.7		3.6		3.4
Non-GAAP interest expense	$	2.3	$	1.9	$	4.2	$	3.7

Provision for income taxes	$	1.1	$	3.4	$	3.3	$	6.0
Income tax effects of non-GAAP reconciling adjustments⁽⁵⁾	(1.6)		0.1		(3.4)		0.6
Non-GAAP (benefit from) provision for income taxes	$	(0.5)	$	3.5	$	(0.1)	$	6.6

(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2
Non-GAAP reconciling adjustments ⁽⁶⁾	14.9		13.2		27.3		26.5
Interest expense, net non-GAAP reconciling adjustments ⁽⁴⁾	1.8		1.7		3.6		3.4
Income tax effects of non-GAAP reconciling adjustments⁽⁵⁾	(1.6)		0.1		(3.4)		0.6
Non-GAAP net (loss) earnings from continuing operations	$	(1.2)	$	20.7	$	2.0	$	32.5

Diluted (loss) earnings per share from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.03
Earnings per share non-GAAP reconciling adjustment	0.20		0.16		0.37		0.31
Non-GAAP diluted (loss) earnings per share from continuing operations	$	(0.01)	$	0.22	$	0.02	$	0.34



Diluted average shares outstanding	91,589,156		92,507,279		91,721,440		92,184,274
Non-GAAP adjustment ⁽⁷⁾	—		2,215,158		2,922,435		2,079,695
Non-GAAP diluted average shares outstanding ⁽⁷⁾	91,589,156		94,722,437		94,643,875		94,263,969

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⁽¹⁾ In addition to the GAAP financial measures included herein, Knowles has presented certain non-GAAP financial measures that exclude certain amounts that are included in the most directly comparable GAAP measures. Knowles believes that non-GAAP measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating Knowles' performance for business planning purposes. Knowles also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in Knowles' opinion, do not reflect its core operating performance. Knowles believes that its presentation of non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Knowles uses internally for purposes of assessing its core operating performance.

⁽²⁾ Production transfer costs represent duplicate costs incurred to migrate manufacturing to facilities primarily in Asia. These amounts are included in the corresponding Gross profit and (Loss) earnings from continuing operations before interest and income taxes for each period presented.

⁽³⁾ In 2020, Other expenses represent expenses related to shareholder activism. In 2019, Other expenses represent expenses related to shareholder activism and the acquisition of DITF Interconnect Technology, Inc. ("DITF") by the PD segment.

⁽⁴⁾Under GAAP, certain convertible debt instruments that may be settled in cash (or other assets) upon conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. Accordingly, for GAAP purposes we are required to recognize imputed interest expense on the Company’s $172.5 million of convertible senior notes due 2021 that were issued in a private placement in May 2016. The imputed interest rate is 8.12% for the convertible notes due 2021, while the actual coupon interest rate of the notes was 3.25%. The difference between the imputed interest expense and the coupon interest expense is excluded from management’s assessment of the Company’s operating performance because management believes that this non-cash expense is not indicative of its core, ongoing operating performance.

⁽⁵⁾ Income tax effects of non-GAAP reconciling adjustments are calculated using the applicable tax rates in the jurisdictions of the underlying adjustments.

⁽⁶⁾ The non-GAAP reconciling adjustments are those adjustments made to reconcile (Loss) earnings from continuing operations before interest and income taxes to Adjusted earnings from continuing operations before interest and income taxes.

⁽⁷⁾ The number of shares used in the diluted per share calculations on a non-GAAP basis excludes the impact of stock-based compensation expense expected to be incurred in future periods and not yet recognized in the financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method. In addition, the Company entered into convertible note hedge transactions to offset any potential dilution from the convertible notes. Although the anti-dilutive impact of the convertible note hedges is not reflected under GAAP, the Company includes the anti-dilutive impact of the convertible note hedges in non-GAAP diluted average shares outstanding, if applicable.

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Segment Results of Operations for the Three Months Ended June 30, 2020 compared with the Three Months Ended June 30, 2019

The following is a summary of the results of operations of our two reportable segments: Audio and PD.

See Note 15. Segment Information to the Consolidated Financial Statements for (i) a reconciliation of segment revenues to our consolidated revenues and (ii) a reconciliation of segment earnings (loss) from continuing operations before interest and income taxes to our consolidated loss from continuing operations.

Audio


	Three Months Ended June 30,
(in millions)	2020		Percent of Revenues	2019		Percent of Revenues
Revenues	$	104.5		$	159.9



(Loss) earnings from continuing operations before interest and income taxes	$	(12.2)	NM ⁽¹⁾	$	21.2	13.3%
Stock-based compensation expense	2.8			4.0
Intangibles amortization expense	2.7			1.1

Restructuring charges	6.9			0.1



Adjusted earnings from continuing operations before interest and income taxes	$	0.2	0.2%	$	26.4	16.5%

⁽¹⁾Not meaningful.

Revenues

Revenues were $104.5 million for the second quarter of 2020, compared with $159.9 million for the second quarter of 2019, a decrease of $55.4 million or 34.6%. Revenues decreased primarily due to the impacts of the COVID-19 pandemic, which caused lower demand for hearing health products and MEMS microphones in the mobile, ear, and IoT markets. Audio revenues were also impacted by lower average pricing on mature products.

(Loss) Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

Loss from continuing operations before interest and income taxes was $12.2 million for the second quarter of 2020, compared with earnings of $21.2 million for the second quarter of 2019, a decrease of $33.4 million. The decrease was primarily driven by the impacts of the COVID-19 pandemic, which lowered demand for our Audio products and disrupted our manufacturing operations across Asia, reducing plant productivity and capacity utilization. In addition, we were also impacted by increased restructuring charges, lower average pricing on mature products, higher legal expenses related to protecting our intellectual property, and the establishment of an inventory reserve within the Intelligent Audio product line, which were partially offset by the benefits of our operating cost reductions, product cost reductions, and lower warranty claims.

Adjusted EBIT was $0.2 million for the second quarter of 2020, compared with $26.4 million for the second quarter of 2019, a decrease of $26.2 million. Adjusted EBIT margin for the second quarter of 2020 was 0.2%, compared to 16.5% for the second quarter of 2019. The decreases were primarily driven by the impacts of the COVID-19 pandemic, which lowered demand for our Audio products and disrupted our manufacturing operations across Asia, reducing plant productivity and capacity utilization. In addition, we were also impacted by lower average pricing on mature products, higher legal expenses related to protecting our intellectual property, and the establishment of an inventory reserve within the Intelligent Audio product line, which were partially offset by the benefits of our operating cost reductions, product cost reductions, and lower warranty claims.

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Precision Devices


	Three Months Ended June 30,
(in millions)	2020		Percent of Revenues	2019		Percent of Revenues
Revenues	$	47.7		$	45.3



Earnings from continuing operations before interest and income taxes	$	11.1	23.3%	$	8.2	18.1%
Stock-based compensation expense	0.2			0.4
Intangibles amortization expense	0.5			0.6

Restructuring charges	—			0.4
Production transfer costs ⁽¹⁾	—			0.9

Adjusted earnings from continuing operations before interest and income taxes	$	11.8	24.7%	$	10.5	23.2%

⁽¹⁾ Production transfer costs represent duplicate costs incurred to migrate manufacturing to existing facilities. These amounts are included in earnings from continuing operations before interest and income taxes for each period presented.

Revenues

Revenues were $47.7 million for the second quarter of 2020, compared with $45.3 million for the second quarter of 2019, an increase of $2.4 million or 5.3%. Revenues increased primarily due to higher shipments to the defense, automotive, and communication markets, partially offset by lower shipments to the medtech market as hospitals are slowing elective procedures as a result of the COVID-19 pandemic.

Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

Earnings from continuing operations before interest and income taxes ("EBIT") was $11.1 million for the second quarter of 2020, compared with $8.2 million for the second quarter of 2019, an increase of $2.9 million. EBIT margin for the second quarter of 2020 was 23.3%, compared to 18.1% for the second quarter of 2019. The increases were primarily driven by benefits of productivity initiatives, increased shipments, and lower production transfer costs, partially offset by factory overhead increases to support higher production volumes and manufacturing capacity and higher product costs.

Adjusted EBIT was $11.8 million for the second quarter of 2020, compared with $10.5 million for the second quarter of 2019, an increase of $1.3 million. Adjusted EBIT margin for the second quarter of 2020 was 24.7%, compared with 23.2% for the second quarter of 2019. The increases were primarily driven by benefits of productivity initiatives and increased shipments, partially offset by factory overhead increases to support higher production volumes and manufacturing capacity and higher product costs.

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Segment Results of Operations for the Six Months Ended June 30, 2020 compared with the Six Months Ended June 30, 2019

Audio


	Six Months Ended June 30,
(in millions)	2020		Percent of Revenues	2019		Percent of Revenues
Revenues	$	224.6		$	299.0



(Loss) earnings from continuing operations before interest and income taxes	$	(18.3)	NM ⁽¹⁾	$	33.0	11.0%
Stock-based compensation expense	6.2			7.6
Intangibles amortization expense	5.3			2.3

Restructuring charges	11.0			1.9



Adjusted earnings from continuing operations before interest and income taxes	$	4.2	1.9%	$	44.8	15.0%

⁽¹⁾Not meaningful.

Revenues

Revenues were $224.6 million for the six months ended June 30, 2020, compared with $299.0 million for the six months ended June 30, 2019, a decrease of $74.4 million or 24.9%. Revenues decreased primarily due to the impacts of the COVID-19 pandemic, which caused lower demand for hearing health products and MEMS microphones in the mobile, ear, and IoT markets. Audio revenues were also impacted by lower average pricing on mature products.

(Loss) Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

Loss from continuing operations before interest and income taxes was $18.3 million for the six months ended June 30, 2020, compared with earnings from continuing operations before interest and income taxes of $33.0 million for the six months ended June 30, 2019, a decrease of $51.3 million. The decrease was primarily driven by the impacts of the COVID-19 pandemic, which lowered demand for our Audio products and disrupted our manufacturing operations across Asia, reducing plant productivity and capacity utilization. In addition, we were also impacted by lower average pricing on mature products, increased restructuring charges, higher legal expenses related to protecting our intellectual property, and the establishment of an inventory reserve within the Intelligent Audio product line, which were partially offset by benefits of our product cost reductions and operating cost reductions.

Adjusted EBIT was $4.2 million for the six months ended June 30, 2020, compared with $44.8 million for the six months ended June 30, 2019, a decrease of $40.6 million. Adjusted EBIT margin for the six months ended June 30, 2020 was 1.9%, compared to 15.0% for the six months ended June 30, 2019. The decreases were primarily driven by the impacts of the COVID-19 pandemic, which lowered demand for our Audio products and disrupted our manufacturing operations across Asia, reducing plant productivity and capacity utilization. In addition, we were also impacted by lower average pricing on mature products, higher legal expenses related to protecting our intellectual property, and the establishment of an inventory reserve within the Intelligent Audio product line, which were partially offset by benefits of our product cost reductions and operating cost reductions.

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Precision Devices


	Six Months Ended June 30,
(in millions)	2020		Percent of Revenues	2019		Percent of Revenues
Revenues	$	90.7		$	86.0



Earnings from continuing operations before interest and income taxes	$	18.2	20.1%	$	15.7	18.3%
Stock-based compensation expense	0.3			0.7
Intangibles amortization expense	1.2			1.2

Restructuring charges	—			0.7

Production transfer costs ⁽¹⁾	0.1			1.4
Other ⁽²⁾	—			0.5
Adjusted earnings from continuing operations before interest and income taxes	$	19.8	21.8%	$	20.2	23.5%

⁽¹⁾ Production transfer costs represent duplicate costs incurred to migrate manufacturing to existing facilities. These amounts are included in earnings from continuing operations before interest and income taxes for each period presented.
⁽²⁾ In 2019, Other represents expenses related to the acquisition of DITF.

Revenues

Revenues were $90.7 million for the six months ended June 30, 2020, compared with $86.0 million for the six months ended June 30, 2019, an increase of $4.7 million or 5.5%. Revenues increased primarily due to higher shipments to the defense and automotive markets, partially offset by decreases in the communication and medtech markets as hospitals are slowing elective procedures as a result of the COVID-19 pandemic.

Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

EBIT was $18.2 million for the six months ended June 30, 2020, compared with $15.7 million for the six months ended June 30, 2019, an increase of $2.5 million. EBIT margin for the six months ended June 30, 2020 was 20.1%, compared to 18.3% for the six months ended June 30, 2019. The increases were primarily driven by benefits of productivity initiatives, increased shipments, and lower production transfer costs, partially offset by factory overhead increases to support higher production volumes and manufacturing capacity and higher product costs.

Adjusted EBIT was $19.8 million for the six months ended June 30, 2020, compared with $20.2 million for the six months ended June 30, 2019, a decrease of $0.4 million. Adjusted EBIT margin for the six months ended June 30, 2020 was 21.8%, compared with 23.5% for the six months ended June 30, 2019. The decreases were primarily driven by factory overhead increases to support higher production volumes and manufacturing capacity and higher product costs, partially offset by the benefits of productivity initiatives and increased shipments.

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Liquidity and Capital Resources

Historically, we have generated and expect to continue to generate positive cash flow from operations. Our ability to fund our operations and capital needs will depend on our ongoing ability to generate cash from operations and access to capital markets. We believe that our future cash flow from operations and access to capital markets will provide adequate resources to fund our working capital needs, dividends (if any), capital expenditures, and strategic investments. We have secured a revolving line of credit in the United States from a syndicate of commercial banks to provide additional liquidity. Furthermore, if we were to require additional cash above and beyond our cash on the balance sheet, the free cash flow generated by the business, and availability under our revolving credit facility, we would most likely seek to raise long-term financing through the U.S. debt or bank markets.

In May 2016, we sold $172.5 million aggregate principal amount of 3.25% convertible senior notes due November 1, 2021 ("the Notes") and concurrently entered into convertible note hedge transactions with respect to our common stock to minimize the potential dilution upon conversion of the Notes. In addition, we entered into warrant transactions whereby we sold warrants to acquire shares of our common stock at a strike price of $21.1050 per share. The Notes will mature in 2021, unless earlier converted. The Notes are unsecured, senior obligations and interest is payable semi-annually in arrears. The Notes will be convertible into cash, shares of our common stock, or a combination thereof, at our election. We have primarily used the net proceeds to reduce borrowings outstanding. For additional information, refer to Note 9. Borrowings to our Consolidated Financial Statements.

On January 3, 2019, we acquired substantially all of the assets of DITF for $11.1 million. The acquired business provides thin film components to the defense, telecommunication, industrial, and medtech markets. This acquisition's operations are included in the PD segment. For additional information, refer to Note 4. Acquisitions to our Consolidated Financial Statements.

On December 20, 2019, we acquired substantially all of the assets of the ASIC Design Business for $57.9 million. The acquired business, which does not generate revenues, includes intellectual property and an assembled workforce. The acquisition’s operations are included in the Audio segment. For additional information, refer to Note 4. Acquisitions to our Consolidated Financial Statements.

On February 24, 2020, we announced that our Board of Directors had authorized a share repurchase program of up to $100 million of our common stock. The timing and amount of any shares repurchased will be determined by us based on our 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. We are 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 our common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the six months ended June 30, 2020, we repurchased 996,109 shares of common stock for a total of $15.0 million. In connection with the COVID-19 pandemic, we have temporarily suspended share repurchases. However, we may resume the share repurchase program at any time when we believe it is prudent to do so and without further notice.

Our ability to make payments on and to refinance our indebtedness, as well as any debt that we may incur in the future, will depend on our ability in the future to generate cash from operations and financings. Due to the global nature of our operations, a significant portion of our cash is generated and typically held outside the United States. Our cash and cash equivalents totaled $168.3 million and $78.4 million at June 30, 2020 and December 31, 2019, respectively. Of these amounts, cash held by our non-U.S. operations totaled $77.5 million and $74.6 million as of June 30, 2020 and December 31, 2019, respectively.

To the extent we repatriate these funds to the U.S., we may be required to pay U.S. state income taxes and applicable foreign withholding taxes on those amounts during the period when such repatriation occurs. Management will continue to reassess our need to repatriate the earnings of our foreign subsidiaries.

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Cash Flow Summary

Cash flows from operating, investing, and financing activities as reflected in our Consolidated Statements of Cash Flows are summarized in the following table:


	Six Months Ended June 30,
(in millions)	2020		2019
Net cash flows provided by (used in):
Operating activities	$	25.0	$	10.9
Investing activities	(14.6)		(35.9)
Financing activities	79.6		5.0
Effect of exchange rate changes on cash and cash equivalents	(0.1)		0.1
Net increase (decrease) in cash and cash equivalents	$	89.9	$	(19.9)

Operating Activities

Cash provided by operating activities in 2020 increased $14.1 million compared to 2019, primarily due to the favorable change in receivables, partially offset by the net loss during the six months ended June 30, 2020. The change in receivables was driven by lower revenues in the current year and the timing of collections.

Investing Activities

The cash used in investing activities during 2020 was driven by capital expenditures to support our manufacturing capacity expansion. The cash used in investing activities during 2019 was driven by capital expenditures to support our manufacturing capacity expansion and the acquisition of DITF.

In 2020, we expect capital expenditures to be in the range of 5.0% to 6.0% of revenues.

Financing Activities

Cash provided by financing activities during 2020 is primarily related to the borrowings under our revolving credit facility of $100.0 million, partially offset by the $15.0 million of repurchases of common stock and the $6.0 million payment of taxes related to net share settlement of equity awards. Cash provided by financing activities during 2019 is primarily related to the borrowings under our revolving credit facility of $10.0 million, partially offset by the $5.5 million payment of taxes related to net share settlement of equity awards.

Contingent Obligations

We are involved in various legal proceedings, claims, and investigations arising in the ordinary course of business. Legal contingencies are discussed in Note 14. Commitments and Contingent Liabilities to our Consolidated Financial Statements.

Borrowings

Borrowings (net of debt issuance costs, debt discount, and amortization) consist of the following:


(in millions)	June 30, 2020		December 31, 2019
3.25% convertible senior notes	$	160.9	$	156.8
Revolving credit facility	100.0		—
Total	260.9		156.8
Less current maturities	100.0		—
Total long-term debt	$	160.9	$	156.8

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Commitments under the revolving credit facility will terminate, and loans outstanding thereunder will mature, on October 11, 2022; provided, that if all of our Notes have not been repaid, refinanced, and/or converted to our common stock by April 30, 2021, then the commitments under the revolving credit facility will terminate, and the loans outstanding thereunder will mature, on such earlier date. As the Notes have not been repaid, refinanced, and/or converted to our common stock as of June 30, 2020, the revolving credit facility has been classified as a current maturity as of June 30, 2020.

The interest rate under the revolving credit facility is variable based on LIBOR at the time of the borrowing and our leverage as measured by a total indebtedness to Consolidated EBITDA ratio. Based upon our total indebtedness to Consolidated EBITDA ratio, our borrowing rate could range from LIBOR + 1.25% to LIBOR + 2.25%. In addition, a commitment fee accrues on the average daily unused portion of the revolving credit facility at a rate of 0.20% to 0.35%. At June 30, 2020, we were in compliance with all covenants under these facilities.

Critical Accounting Policies and Estimates

This discussion and analysis of results of operations and financial condition is based on our Consolidated Financial Statements, which have been prepared in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates and assumptions related to the reporting of assets, liabilities, revenues, expenses, and related disclosures. In preparing these financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements. Estimates are revised periodically. Actual results could differ from these estimates.

The information concerning our critical accounting policies can be found under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 12, 2020. There are no material changes in our previously reported critical accounting policies.

Recent Accounting Standards

The adoption of recent accounting standards, as included in Note 2. Recent Accounting Standards to our Consolidated Financial Statements, has not had and is not expected to have a significant impact on our revenue, earnings, or liquidity.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the six months ended June 30, 2020, there were no material changes to the information on market risk exposure disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. For a discussion of our exposure to market risk as of December 31, 2019, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, contained in our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our chief executive officer ("CEO") and chief financial officer ("CFO"), the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the second quarter of 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the CEO and CFO, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, will be detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by intentionally falsified documentation, by collusion of two or more individuals within Knowles or third parties, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of contingencies related to legal proceedings, see Note 14. Commitments and Contingent Liabilities to our Consolidated Financial Statements, which is incorporated herein by reference.

Except as otherwise noted above, there have been no material developments in legal proceedings.

Table of Contents

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. In connection with the COVID-19 pandemic, the Company has temporarily suspended share repurchases. However, the Company may resume the share repurchase program at any time when it believes it is prudent to do so and without further notice.

The Company did not repurchase any shares of its common stock during the three months ended June 30, 2020. As of June 30, 2020, the remaining amount authorized for share repurchases was $85.0 million.

Item 6. Exhibits


3.1			Third Amended and Restated By-Laws of Knowles Corporation, adopted May 15, 2020 (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on May 1 9 , 2020 (SEC fi le No. 001-36 102))

31.1			Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Joint Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101			The following financial information from Knowles Corporation's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 formatted in Inline XBRL: (i) Consolidated Statements of Earnings (Unaudited) for the three and six months ended June 30, 2020 and 2019, (ii) Consolidated Statements of Comprehensive Earnings (Unaudited) for the three and six months ended June 30, 2020 and 2019, (iii) Consolidated Balance Sheets (Unaudited) as of June 30, 2020 and December 31, 2019, (iv) Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and six months ended June 30, 2020 and 2019, (v) Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2020 and 2019, and (vi) the Notes to the Consolidated Financial Statements (Unaudited) tagged as blocks of text and including detailed tags.

104			The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL and contained in Exhibit 101.

Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		KNOWLES CORPORATION

Date:	July 29, 2020	/s/ John S. Anderson
		John S. Anderson
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

Document

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Jeffrey S. Niew, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Knowles Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 29, 2020


						/s/ JEFFREY S. NIEW
						Name: Jeffrey S. Niew
						Title: President and Chief Executive Officer
						(Principal Executive Officer)

Document

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, John S. Anderson, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Knowles Corporation;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 29, 2020


						/s/ JOHN S. ANDERSON
						Name: John S. Anderson
						Title: Senior Vice President & Chief Financial Officer
						(Principal Financial Officer)

Document

Exhibit 32.1

JOINT CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Knowles Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Jeffrey S. Niew and John S. Anderson, the Principal Executive and Financial Officers of the Company, certify, pursuant to and for purposes of 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JEFFREY S. NIEW

Name: Jeffrey S. Niew

Title: President and Chief Executive Officer

(Principal Executive Officer)

Date:

July 29, 2020

/s/ JOHN S. ANDERSON

Name: John S. Anderson

Title: Senior Vice President & Chief Financial Officer

(Principal Financial Officer)

Date:

July 29, 2020

Cover Statement - shares	6 Months Ended
Cover Statement - shares	Jun. 30, 2020	Jul. 27, 2020
Cover [Abstract]
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-36102
Entity Registrant Name	Knowles Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	90-1002689
Entity Address, Address Line One	1511 Maplewood Drive,
Entity Address, City or Town	Itasca,
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60143
City Area Code	(630)
Local Phone Number	250-5100
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	KN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		91,641,109

Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2020
Document Information [Line Items]
Document Period End Date	Jun. 30, 2020
Entity Central Index Key	0001587523
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Revenues	$ 152.2	$ 205.2	$ 315.3	$ 385.0
Cost of goods sold	103.5	128.4	209.0	239.2
Restructuring charges - cost of goods sold	0.9	0.4	2.3	0.9
Gross profit	47.8	76.4	104.0	144.9
Research and development expenses	22.6	25.0	48.3	49.7
Selling and administrative expenses	31.1	38.9	67.3	76.5
Restructuring charges	6.5	0.1	10.4	1.9
Operating expenses	60.2	64.0	126.0	128.1
Operating (loss) earnings	(12.4)	12.4	(22.0)	16.8
Interest expense, net	4.1	3.6	7.8	7.1
Other expense (income), net	1.9	(0.5)	(0.8)	0.5
(Loss) earnings before income taxes and discontinued operations	(18.4)	9.3	(29.0)	9.2
Provision for income taxes	1.1	3.4	3.3	6.0
(Loss) earnings from continuing operations	(19.5)	5.9	(32.3)	3.2
Earnings from discontinued operations, net	0.0	0.0	3.7	0.0
Net (loss) earnings	$ (19.5)	$ 5.9	$ (28.6)	$ 3.2
Earnings per share:
Earnings (loss) from continuing operations, per basic share	$ (0.21)	$ 0.06	$ (0.35)	$ 0.04
Earnings (loss) from continuing operations, per diluted share	(0.21)	0.06	(0.35)	0.03
Earnings from discontinued operations, per basic share	0	0	0.04	0
Earnings from discontinued operations, per diluted share	0	0	0.04	0
Net earnings (loss) per share, basic	(0.21)	0.06	(0.31)	0.04
Net earnings (loss) per share, diluted	$ (0.21)	$ 0.06	$ (0.31)	$ 0.03
Weighted-average common shares outstanding:
Basic (in shares)	91,589,156	91,018,213	91,721,440	90,780,035
Diluted (in shares)	91,589,156	92,507,279	91,721,440	92,184,274

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Document Fiscal Period Focus			Q2
Net (loss) earnings	$ (19.5)	$ 5.9	$ (28.6)	$ 3.2
Foreign currency translation	3.4	(2.5)	(4.1)	1.5
Employee benefit plans:
Amortization or settlement of actuarial losses and prior service costs	0.3	0.2		0.3
Net change in employee benefit plans	0.3	0.2	0.2	0.3
Changes in fair value of cash flow hedges:
Unrealized net gains (losses) arising during period	0.3	(0.4)	(0.9)	0.2
Net losses reclassified into earnings	0.3	0.0	0.4	0.1
Total cash flow hedges	0.6	(0.4)	(0.5)	0.3
Other comprehensive earnings (loss), net of tax	4.3	(2.7)	(4.4)	2.1
Other comprehensive loss, net of tax			(4.4)	2.1
Comprehensive (loss) earnings	(15.2)	3.2	(33.0)	5.3
Stockholders' Equity Attributable to Parent	1,243.8	1,227.2	1,243.8	1,227.2
Net (loss) earnings	(19.5)	5.9	(28.6)	3.2
Other comprehensive loss, net of tax			(4.4)	2.1
Stock-based compensation expense	4.1	7.3	7.6	14.0
Common stock issued for exercise of stock options and other	1.3	0.9	1.7	1.8
Tax on restricted stock unit vesting	(0.2)	(0.7)	(6.0)	(5.5)
Treasury Stock, Value, Acquired, Cost Method			(15.0)
Common Stock
Stockholders' Equity Attributable to Parent	0.9	0.9	0.9	0.9
Additional Paid-In Capital
Stockholders' Equity Attributable to Parent	1,578.0	1,556.2	1,578.0	1,556.2
Stock-based compensation expense	4.1	7.3	7.6	14.0
Common stock issued for exercise of stock options and other	1.3	0.9	1.7	1.8
Tax on restricted stock unit vesting	(0.2)	(0.7)	(6.0)	(5.5)
Accumulated Deficit
Statement of Comprehensive Income [Abstract]
Net (loss) earnings	(19.5)	5.9
Stockholders' Equity Attributable to Parent	(203.7)	(221.0)	(203.7)	(221.0)
Net (loss) earnings	(19.5)	5.9
Accumulated Other Comprehensive Loss
Changes in fair value of cash flow hedges:
Other comprehensive earnings (loss), net of tax	4.3
Other comprehensive loss, net of tax	4.3	(2.7)	(4.4)	2.1
Stockholders' Equity Attributable to Parent	(116.4)	(108.9)	(116.4)	(108.9)
Other comprehensive loss, net of tax	4.3	$ (2.7)	(4.4)	$ 2.1
Treasury Stock
Stockholders' Equity Attributable to Parent	$ (15.0)		(15.0)
Treasury Stock, Value, Acquired, Cost Method			$ (15.0)

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 168.3	$ 78.4
Receivables, net of allowances of $1.9 and $0.8	101.6	159.6
Inventories, net	162.5	141.8
Prepaid and other current assets	10.6	8.6
Total current assets	443.0	388.4
Property, plant, and equipment, net	192.8	206.5
Goodwill	909.9	909.9
Intangible assets, net	85.2	91.7
Operating Lease, Right-of-Use Asset	31.3	33.6
Other assets and deferred charges	(25.5)	(24.5)
Total assets	1,687.7	1,654.6
Current liabilities:
Less: current maturities	100.0	0.0
Accounts payable	75.0	87.7
Accrued compensation and employee benefits	21.5	32.1
Operating Lease, Liability, Current	9.8	9.3
Other accrued expenses	19.7	16.5
Federal and other taxes on income	5.8	5.9
Total current liabilities	231.8	151.5
Long-term debt	160.9	156.8
Deferred Income Tax Liabilities, Net	2.2	2.2
Operating Lease, Liability, Noncurrent	22.4	25.1
Other liabilities	26.0	29.9
Commitments and contingencies (Note 14)
Stockholders' equity:
Preferred Stock, Value, Issued	0.0	0.0
Common stock - $0.01 par value; 400,000,000 shares authorized; 92,637,218 and 91,641,109 shares issued and outstanding at June 30, 2020, respectively, and 91,701,745 shares issued and outstanding at December 31, 2019	0.9	0.9
Treasury Stock, Value	(15.0)	0.0
Additional paid-in capital	1,578.0	1,574.7
Accumulated deficit	(203.7)	(175.1)
Accumulated other comprehensive loss	(116.4)	(112.0)
Total stockholders' equity	1,243.8	1,288.5
Total liabilities and stockholders' equity	1,687.7	1,654.6
Disposal Group, Including Discontinued Operation, Liabilities	$ 0.6	$ 0.6

CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Allowance for doubtful accounts receivable	$ 1.8	$ 0.8
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	400,000,000	400,000,000
Common stock, shares issued (in shares)	92,390,944	91,701,745
Treasury Stock, Shares	996,109	0

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Treasury Stock
Balance at Dec. 31, 2018	$ 1,211.6	$ 0.9	$ 1,545.9	$ (224.2)	$ (111.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	3.2
(Loss) earnings from continuing operations	3.2
Other comprehensive (loss) earnings, net of tax	2.1
Other comprehensive loss, net of tax	2.1				2.1
Stock-based compensation expense	14.0		14.0
Common stock issued for exercise of stock options and other	1.8		1.8
Tax on restricted stock unit vesting	(5.5)		(5.5)
Balance at Jun. 30, 2019	1,227.2	0.9	1,556.2	(221.0)	(108.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0.1
Balance at Mar. 31, 2019	1,216.5	0.9	1,548.7	(226.9)	(106.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	5.9			5.9
(Loss) earnings from continuing operations	5.9
Other comprehensive (loss) earnings, net of tax	(2.7)
Other comprehensive loss, net of tax					(2.7)
Stock-based compensation expense	7.3		7.3
Common stock issued for exercise of stock options and other	0.9		0.9
Tax on restricted stock unit vesting	(0.7)		(0.7)
Balance at Jun. 30, 2019	1,227.2	0.9	1,556.2	(221.0)	(108.9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(0.1)
Treasury Stock, Value	0.0
Balance at Dec. 31, 2019	1,288.5	0.9	1,574.7	(175.1)	(112.0)	$ 0.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	(28.6)
(Loss) earnings from continuing operations	(32.3)			(32.3)
Other comprehensive (loss) earnings, net of tax	(4.4)
Other comprehensive loss, net of tax	(4.4)				(4.4)
Repurchase of common stock	(15.0)					(15.0)
Stock-based compensation expense	7.6		7.6
Common stock issued for exercise of stock options and other	1.7		1.7
Tax on restricted stock unit vesting	(6.0)		(6.0)
Balance at Jun. 30, 2020	1,243.8	0.9	1,578.0	(203.7)	(116.4)	(15.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0.0
Balance at Mar. 31, 2020	1,253.8	0.9	1,572.8	(184.2)	(120.7)	(15.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) earnings	(19.5)			(19.5)
(Loss) earnings from continuing operations	(19.5)			(19.5)
Other comprehensive (loss) earnings, net of tax	4.3				4.3
Other comprehensive loss, net of tax					4.3
Stock-based compensation expense	4.1		4.1
Common stock issued for exercise of stock options and other	1.3		1.3
Tax on restricted stock unit vesting	(0.2)		(0.2)
Balance at Jun. 30, 2020	1,243.8	$ 0.9	$ 1,578.0	$ (203.7)	$ (116.4)	$ (15.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(0.2)
Treasury Stock, Value	$ 15.0

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2018
Payments for Repurchase of Common Stock			$ 15.0	$ 0.0
Impaired Assets to be Disposed of by Method Other than Sale, Amount of Impairment Loss			1.7	0.0
Increase (Decrease) in Other Operating Assets and Liabilities, Net			0.4	4.3
Net Cash Provided by (Used in) Investing Activities, Total			(14.6)	(35.9)
Net Cash Provided by (Used in) Financing Activities, Total			79.6	5.0
Adjustments to reconcile net (loss) earnings to cash from operating activities:
Depreciation and amortization			30.5	27.0
Stock-based compensation			7.6	14.0
Non-cash interest expense and amortization of debt issuance costs			4.3	4.1
Deferred income taxes			(1.0)	(0.7)
Other, net			(2.2)	1.1
Proceeds from the sale of business					$ 135.1
Changes in assets and liabilities (excluding effects of foreign exchange):
Receivables, net			58.1	5.7
Inventories, net			(22.1)	(17.7)
Prepaid and other current assets			(2.6)	(3.0)
Accounts payable			(10.9)	(9.1)
Accrued compensation and employee benefits			(10.2)	(11.2)
Other accrued expenses			3.6	1.0
Increase Decrease Accrued Taxes, Net			(2.8)	0.8
Other non-current assets and non-current liabilities			(0.4)	(4.3)
Net Cash Provided by (Used in) Operating Activities			25.0	10.9
Investing Activities
Additions to property, plant, and equipment			(14.6)	(24.5)
Acquisitions of business (net of cash acquired)			0.0	(11.4)
Proceeds from the sale of business					135.1
Financing Activities
Borrowings under revolving credit facility			100.0	10.0
Tax on restricted and performance stock unit vesting			(6.0)	(5.5)
Payments of finance lease obligations			(0.9)	(0.9)
Payment of consideration owed for acquisitions			0.0	(0.2)
Net proceeds from exercise of stock-based awards			1.5	1.6
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of exchange rate changes on cash and cash equivalents			(0.1)	0.1
Net (loss) earnings	$ (19.5)	$ 5.9	(28.6)	3.2
Net increase (decrease) in cash and cash equivalents			89.9	(19.9)
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations, Beginning Balance			78.4	73.5
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations	$ 168.3	$ 53.6	168.3	53.6	$ 73.5
Supplemental information - cash paid for:
Income taxes			8.2	6.9
Interest			4.1	3.8
Payments for Repurchase of Common Stock			$ 15.0	$ 0.0

Other Comprehensive Earnings

3 Months Ended

Jun. 30, 2020

Statement of Other Comprehensive Income [Abstract]

Other Comprehensive Earnings

The amounts recognized in other comprehensive earnings (loss) were as follows:


	Three Months Ended										Three Months Ended
	June 30, 2020										June 30, 2019
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	3.4	$	—	$	3.4	$	(2.5)	$	—	$	(2.5)
Employee benefit plans	0.1		0.2		0.3		0.2		—		0.2
Changes in fair value of cash flow hedges	0.6		—		0.6		(0.5)		0.1		(0.4)

Total other comprehensive earnings (loss)	$	4.1	$	0.2	$	4.3	$	(2.8)	$	0.1	$	(2.7)

	Six Months Ended										Six Months Ended
	June 30, 2020										June 30, 2019
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(4.1)	$	—	$	(4.1)	$	1.5	$	—	$	1.5
Employee benefit plans	0.3		(0.1)		0.2		0.3		—		0.3
Changes in fair value of cash flow hedges	(0.6)		0.1		(0.5)		0.4		(0.1)		0.3

Total other comprehensive (loss) earnings	$	(4.4)	$	—	$	(4.4)	$	2.2	$	(0.1)	$	2.1

The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the six months ended June 30, 2020 and 2019:


(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2019	$	0.5	$	(18.7)	$	(93.8)	$	(112.0)


Other comprehensive (loss) earnings, net of tax	(0.5)		0.2		(4.1)		(4.4)

Balance at June 30, 2020	$	—	$	(18.5)	$	(97.9)	$	(116.4)


(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2018	$	(0.4)	$	(15.5)	$	(95.1)	$	(111.0)
Other comprehensive earnings, net of tax	0.3		0.3		1.5		2.1
Balance at June 30, 2019	$	(0.1)	$	(15.2)	$	(93.6)	$	(108.9)

The following tables summarize the amounts reclassified from accumulated other comprehensive loss to earnings:


		Three Months Ended June 30,
(in millions)	Statement of Earnings Line	2020		2019
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other expense (income), net	$	0.1	$	0.2
Tax	Provision for income taxes	0.2		—
Net of tax		$	0.3	$	0.2

Cash flow hedges:
Net losses reclassified into earnings	Cost of goods sold	$	0.3	$	—
Tax	Provision for income taxes	—		—
Net of tax		$	0.3	$	—

		Six Months Ended June 30,
(in millions)	Statement of Earnings Line	2020		2019
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other expense (income), net	$	0.3	$	0.3
Tax	Provision for income taxes	(0.1)		—
Net of tax		$	0.2	$	0.3

Cash flow hedges:
Net losses reclassified into earnings	Cost of goods sold	$	0.4	$	0.2
Tax	Provision for income taxes	—		(0.1)
Net of tax		$	0.4	$	0.1

Other Comprehensive Loss

6 Months Ended

Jun. 30, 2020

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Components of other comprehensive (loss) earnings

The amounts recognized in other comprehensive earnings (loss) were as follows:


	Three Months Ended										Three Months Ended
	June 30, 2020										June 30, 2019
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	3.4	$	—	$	3.4	$	(2.5)	$	—	$	(2.5)
Employee benefit plans	0.1		0.2		0.3		0.2		—		0.2
Changes in fair value of cash flow hedges	0.6		—		0.6		(0.5)		0.1		(0.4)

Total other comprehensive earnings (loss)	$	4.1	$	0.2	$	4.3	$	(2.8)	$	0.1	$	(2.7)

	Six Months Ended										Six Months Ended
	June 30, 2020										June 30, 2019
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(4.1)	$	—	$	(4.1)	$	1.5	$	—	$	1.5
Employee benefit plans	0.3		(0.1)		0.2		0.3		—		0.3
Changes in fair value of cash flow hedges	(0.6)		0.1		(0.5)		0.4		(0.1)		0.3

Total other comprehensive (loss) earnings	$	(4.4)	$	—	$	(4.4)	$	2.2	$	(0.1)	$	2.1

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 six months ended June 30, 2020 and 2019:


(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2019	$	0.5	$	(18.7)	$	(93.8)	$	(112.0)


Other comprehensive (loss) earnings, net of tax	(0.5)		0.2		(4.1)		(4.4)

Balance at June 30, 2020	$	—	$	(18.5)	$	(97.9)	$	(116.4)


(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2018	$	(0.4)	$	(15.5)	$	(95.1)	$	(111.0)
Other comprehensive earnings, net of tax	0.3		0.3		1.5		2.1
Balance at June 30, 2019	$	(0.1)	$	(15.2)	$	(93.6)	$	(108.9)

The following tables summarize the amounts reclassified from accumulated other comprehensive loss to earnings:


		Three Months Ended June 30,
(in millions)	Statement of Earnings Line	2020		2019
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other expense (income), net	$	0.1	$	0.2
Tax	Provision for income taxes	0.2		—
Net of tax		$	0.3	$	0.2

Cash flow hedges:
Net losses reclassified into earnings	Cost of goods sold	$	0.3	$	—
Tax	Provision for income taxes	—		—
Net of tax		$	0.3	$	—

		Six Months Ended June 30,
(in millions)	Statement of Earnings Line	2020		2019
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other expense (income), net	$	0.3	$	0.3
Tax	Provision for income taxes	(0.1)		—
Net of tax		$	0.2	$	0.3

Cash flow hedges:
Net losses reclassified into earnings	Cost of goods sold	$	0.4	$	0.2
Tax	Provision for income taxes	—		(0.1)
Net of tax		$	0.4	$	0.1

Other Comprehensive Loss - OCI - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Other Comprehensive Loss - OCI - USD ($) $ in Millions	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Foreign currency translation adjustments [Abstract]
Foreign currency translation	$ 3.4	$ (2.5)	$ (4.1)	$ 1.5
Foreign currency translation, tax	0.0	0.0	0.0	0.0
Foreign currency translation, net of tax	3.4	(2.5)	(4.1)	1.5
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	0.1	0.2	0.3	0.3
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent	0.2	0.0	(0.1)	0.0
Net change in employee benefit plans	0.3	0.2	0.2	0.3
Changes in fair value of cash flow hedges:
Changes in fair value of cash flow hedges, before tax	0.6	(0.5)	(0.6)	0.4
Changes in fair value of cash flow hedges, tax	0.0	0.1	0.1	(0.1)
Changes in fair value of cash flow hedges, net of tax	0.6	(0.4)	(0.5)	0.3
Total other comprehensive earnings [Abstract]
Other comprehensive loss, before tax	4.1	(2.8)	(4.4)	2.2
Other comprehensive loss, tax	0.2	0.1	0.0	(0.1)
Other comprehensive earnings (loss), net of tax	$ 4.3	$ (2.7)	$ (4.4)	$ 2.1

Other Comprehensive Loss - AOCI - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Other Comprehensive Loss - AOCI - USD ($) $ in Millions	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Amortization or settlement of actuarial losses and prior service costs	$ 0.1	$ 0.2	$ 0.3
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax	(0.2)	0.0	0.1	$ 0.0
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax	0.3	0.2	0.2	0.3
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	(0.3)	0.0	(0.4)	(0.2)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax	0.0	0.0	0.0	0.1
Net losses reclassified into earnings	0.3	0.0	0.4	0.1
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			(112.0)	(111.0)
Other comprehensive (loss) earnings, net of tax	4.3	(2.7)	(4.4)	2.1
Ending balance	(116.4)	(108.9)	(116.4)	(108.9)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			0.5	(0.4)
Other comprehensive (loss) earnings, net of tax			(0.5)	0.3
Ending balance	0.0	(0.1)	0.0	(0.1)
Employee benefit plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			(18.7)	(15.5)
Other comprehensive (loss) earnings, net of tax			0.2	0.3
Ending balance	(18.5)	(15.2)	(18.5)	(15.2)
Cumulative foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			(93.8)	(95.1)
Other comprehensive (loss) earnings, net of tax			(4.1)	1.5
Ending balance	$ (97.9)	$ (93.6)	$ (97.9)	$ (93.6)

Basis of Presentation (Notes)	6 Months Ended
Basis of Presentation (Notes)	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Description of Business - Knowles Corporation (NYSE:KN) is a market leader and global provider of advanced micro-acoustic, audio processing, and precision device solutions, serving the mobile consumer electronics, communications, medtech, defense, automotive, and industrial markets. The Company uses its leading position in micro-electro-mechanical systems ("MEMS") microphones and strong capabilities in audio processing technologies to optimize audio systems and improve the user experience in mobile, ear, and Internet of Things ("IoT") applications. Knowles is also a leader in acoustic components, high-end capacitors, and mmWave radio frequency solutions for a diverse set of markets. The Company's focus on the customer, combined with its unique technology, proprietary manufacturing techniques, rigorous testing, and global scale, enable the Company to deliver innovative solutions that optimize the user experience. References to "Knowles," "the Company," "we," "our," and "us" refer to Knowles Corporation and its consolidated subsidiaries. Financial Statement Presentation - The accompanying unaudited interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) for complete financial statements. These unaudited interim Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Management uses historical experience and all available information to make these estimates, including considerations for the impact of the COVID-19 pandemic on the macroeconomic environment. The situation related to the COVID-19 pandemic continues to be complex and rapidly evolving. The Company cannot reasonably estimate the duration of the COVID-19 pandemic or fully ascertain its impact on the Company’s future results and market capitalization, which could adversely impact estimates such as the recoverability of goodwill and long-lived assets and the realizability of deferred tax assets. The unaudited interim Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods. On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the six months ended June 30, 2020, the Company repurchased 996,109 shares of common stock for a total of $15.0 million. In connection with the COVID-19 pandemic, the Company has temporarily suspended share repurchases. However, the Company may resume the share repurchase program at any time when it believes it is prudent to do so and without further notice. On December 20, 2019, the Company acquired substantially all of the assets of the MEMS Microphone Application-specific integrated circuit Design Business (“ASIC Design Business”). See Note 4. Acquisitions for additional information related to the transaction. Non-cash Investing Activities - Purchases of property, plant, and equipment included in accounts payable at June 30, 2020 and 2019 were $3.3 million and $3.1 million, respectively. These non-cash amounts are not reflected as outflows to "Additions to property, plant, and equipment" within "Investing Activities" of the Consolidated Statements of Cash Flows for the respective periods. Leases not yet Commenced - As of June 30, 2020, the Company has an additional operating lease for a research and development and administrative facility that has not yet commenced with fixed lease payments of approximately $5.0 million. The lease is expected to commence in fiscal 2020 with a lease term of approximately 5 years.

Recent Accounting Standards (Notes)	6 Months Ended
Recent Accounting Standards (Notes)	Jun. 30, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]
Recent Accounting Standards	Recently Issued Accounting Standards In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12 to simplify the accounting for income taxes. This guidance removes certain exceptions to the general principles in Accounting Standards Codification ("ASC") 740 and amends existing guidance to improve consistent application. The standard is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted and prospective application of the guidance is required. The Company has not yet determined the impact of the standard on its Consolidated Financial Statements or its adoption date.

Disposed and Discontinued Operations (Notes)

6 Months Ended

Jun. 30, 2020

Discontinued Operations [Abstract]

Disposed and Discontinued Operations

Management and the Board of Directors periodically conduct strategic reviews of the Company's businesses.

Summarized results of the Company's discontinued operations are as follows:


(in millions)	Six Months Ended June 30, 2020
Revenues	$	—
Cost of goods sold	—


Gross profit	—



Operating income	—


Earnings from discontinued operations before taxes ⁽¹⁾	—
Benefit from income taxes ⁽²⁾	(3.7)
Earnings from discontinued operations, net of tax	$	3.7

⁽²⁾The Company recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business.

Assets and liabilities of discontinued operations are summarized below:


(in millions)	June 30, 2020		December 31, 2019
Liabilities of discontinued operations:
Other liabilities ⁽¹⁾	$	0.6	$	0.6
Total liabilities	$	0.6	$	0.6

⁽¹⁾ The Company recorded an unrecognized tax benefit related to the Speaker and Receiver Product Line during the fourth quarter of 2019.

Acquisitions (Notes)

6 Months Ended

Jun. 30, 2020

Acquisitions [Abstract]

Acquisitions

ASIC Design Business

The table below represents the final allocation of the purchase price to net assets acquired as of December 20, 2019:


(in millions)
Property, plant, and equipment	$	0.6
Developed technology	33.3
In-process research and development	3.7
Non-competition agreement	1.6
Goodwill	18.8
Assumed current liabilities	(0.1)
Total purchase price	$	57.9

Intangible Assets

Unaudited Pro-forma Summary


	(unaudited)
(in millions, except share and per share amounts)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Earnings (loss) from continuing operations:
As reported	$	5.9	$	3.2
Pro-forma	3.5		(1.5)
Basic earnings (loss) per share from continuing operations:
As reported	$	0.06	$	0.04
Pro-forma	0.04		(0.02)
Diluted earnings (loss) per share from continuing operations:
As reported	$	0.06	$	0.03
Pro-forma	0.04		(0.02)

DITF

Inventories, net (Notes)

6 Months Ended

Jun. 30, 2020

Inventory, Net [Abstract]

Inventories, net

The following table details the major components of inventories, net:


(in millions)	June 30, 2020		December 31, 2019
Raw materials	$	108.9	$	82.8
Work in progress	27.4		30.9
Finished goods	58.0		53.5
Subtotal	194.3		167.2
Less reserves	(31.8)		(25.4)
Total	$	162.5	$	141.8

Property, Plant, and Equipment, net (Notes)

6 Months Ended

Jun. 30, 2020

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)	June 30, 2020		December 31, 2019
Land	$	7.8	$	7.7
Buildings and improvements	102.7		104.5
Machinery, equipment, and other	530.9		533.1
Subtotal	641.4		645.3
Less accumulated depreciation	(448.6)		(438.8)
Total	$	192.8	$	206.5

Goodwill and Other Intangible Assets (Notes)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

There were no changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2020.

The gross carrying value and accumulated amortization for each major class of intangible assets are as follows:


	June 30, 2020						December 31, 2019
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Trademarks	$	1.0	$	0.3	$	1.0	$	0.2
Patents	40.8		33.8		40.8		31.5
Customer relationships	12.0		4.4		12.0		3.6
Developed technology	36.5		3.7		36.5		0.7
Non-competition agreements	1.8		0.4		1.8		0.1
Total	92.1		42.6		92.1		36.1
Unamortized intangible assets:
Trademarks	32.0				32.0
IPR&D	3.7				3.7
Total	35.7				35.7
Total intangible assets, net	$	85.2			$	91.7


(in millions)
Q3-Q4 2020	$	6.5
2021	13.0
2022	7.7
2023	7.1
2024	7.0

Restructuring and Related Activities (Notes)

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities

The following table details restructuring charges incurred by reportable segment for the periods presented:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Audio	$	6.9	$	0.1	$	11.0	$	1.9
Precision Devices	—		0.4		—		0.7
Corporate	0.5		—		1.7		0.2
Total	$	7.4	$	0.5	$	12.7	$	2.8

The following table details the Company’s severance and other restructuring accrual activity:


(in millions)	Severance Pay and Benefits		Contract Termination and Other Costs		Total
Balance at December 31, 2019	$	1.4	$	—	$	1.4

Restructuring charges	9.7		1.2		10.9
Payments	(5.5)		(0.1)		(5.6)

Balance at June 30, 2020	$	5.6	$	1.1	$	6.7

The severance and restructuring accruals are recorded in the following line items on the Consolidated Balance Sheets:


(in millions)	June 30, 2020		December 31, 2019
Other accrued expenses	$	6.1	$	1.4
Other liabilities	0.6		—
Total	$	6.7	$	1.4

Borrowings (Notes)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Borrowings

Borrowings (net of debt issuance costs, debt discount, and amortization) consist of the following:


(in millions)	June 30, 2020		December 31, 2019
3.25% convertible senior notes	$	160.9	$	156.8
Revolving credit facility	100.0		—
Total	260.9		156.8
Less current maturities	100.0		—
Total long-term debt	$	160.9	$	156.8

Total debt principal payments over the next five years are as follows:


(in millions)	Q3-Q4 2020		2021		2022		2023		2024
Debt principal payments	$	—	$	272.5	$	—	$	—	$	—

3.25% Convertible Senior Notes Due November 1, 2021

Prior to the close of business on the business day immediately preceding August 1, 2021, the Notes will be convertible only under the following circumstances:


=			during any calendar quarter and only during such calendar quarters, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
=			during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or
=			upon the occurrence of specified corporate events.

The Notes consist of the following:


(in millions)	June 30, 2020		December 31, 2019
Liability component:
Principal	$	172.5	$	172.5
Less debt issuance costs and debt discount, net of amortization	(11.6)		(15.7)
Total	160.9		156.8
Less current maturities ⁽¹⁾	—		—
Long-term portion	$	160.9	$	156.8

Equity component ⁽²⁾	$	29.9	$	29.9

⁽¹⁾ There are no required principal payments due until maturity in November 2021.

⁽²⁾ Recorded in the Consolidated Balance Sheets within additional paid-in capital, inclusive of the $1.3 million of issuance costs in equity.

The following table sets forth total interest expense recognized related to the Notes:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
3.25% coupon	$	1.4	$	1.4	$	2.8	$	2.8
Amortization of debt issuance costs	0.3		0.2		0.5		0.4
Amortization of debt discount	1.8		1.7		3.6		3.4
Total	$	3.5	$	3.3	$	6.9	$	6.6

Note Hedges

Warrants

Revolving Credit Facility

Revolving credit facility borrowings consist of the following:


(in millions)	June 30, 2020		December 31, 2019
$400.0 million revolving credit facility	$	100.0	$	—


Less current maturities	100.0		—
Long-term portion	$	—	$	—

Income Taxes (Notes)	6 Months Ended
Income Taxes (Notes)	Jun. 30, 2020
Income Tax Disclosure [Abstract]
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 six months ended June 30, 2020 was a 6.0% provision and an 11.4% provision, respectively. The Company's ETR from continuing operations for the three and six months ended June 30, 2019 was a 36.6% provision and a 65.2% provision, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the three and six months ended June 30, 2020 and 2019. The Company's ETR is favorably impacted by tax holidays granted to the Company in Malaysia effective through December 31, 2021. These tax holidays are subject to the Company's annual satisfaction of certain conditions, including investment and sales thresholds. If the Company fails to satisfy such conditions, the Company's ETR may be significantly adversely impacted. The continuing operations benefit of our tax holidays in Malaysia for the three and six months ended June 30, 2020 was approximately $0.2 million and $1.5 million, respectively, or $0.01 and $0.02 on a per share basis. The continuing operations benefit of these incentives for the three and six months ended June 30, 2019 was approximately $4.5 million and $7.9 million, respectively, or $0.05 and $0.09 on a per share basis.

Equity Incentive Program (Notes)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Equity Incentive Program

Stock Options and SSARs


	Six Months Ended June 30,
	2020					2019
Risk-free interest rate	0.16%	to	1.42%	2.29%	to	2.44%
Dividend yield	—%					—%
Expected life (years)	4.3	to	4.5	4.5
Volatility	38.8%	to	40.6%	41.8%	to	42.9%

Fair value at date of grant	$4.78	to	$5.95	$6.22	to	$6.55


	SSARs											Stock Options
	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)
Outstanding at December 31, 2019	596,537	$	22.72				5,377,148	$	17.51
Granted	—	—					888,891	16.76

Exercised	—	—					(123,574)	12.43
Forfeited	—	—					(139,969)	16.59
Expired	—	—					(100,791)	19.73
Outstanding at June 30, 2020	596,537	$	22.72	$	—	1.9	5,901,705	$	17.48	$	6.0	3.4

Exercisable at June 30, 2020	596,537	$	22.72	$	—	1.9	4,335,643	$	17.92	$	5.8	2.5

RSUs

The following table summarizes the Company's restricted stock unit ("RSU") activity for the six months ended June 30, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	2,261,114	$	15.99
Granted	1,406,939	16.52

Vested ⁽¹⁾	(1,016,274)	16.26
Forfeited	(635,437)	16.24
Unvested at June 30, 2020	2,016,342	$	16.19

⁽¹⁾ The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

At June 30, 2020, $23.9 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 1.9 years.

PSUs

The following table summarizes the Company's PSU activity for the six months ended June 30, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	844,789	$	15.90
Granted	322,178	16.14

Vested ⁽¹⁾	(176,154)	15.38
Forfeited	(61,589)	17.05
Unvested at June 30, 2020	929,224	$	16.01

⁽¹⁾ The number of PSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.

At June 30, 2020, $3.7 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.6 years.

Earnings per Share (Notes)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings per Share

Basic and diluted earnings per share were computed as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except share and per share amounts)	2020		2019		2020		2019
(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2
Earnings from discontinued operations, net	—		—		3.7		—
Net (loss) earnings	$	(19.5)	$	5.9	$	(28.6)	$	3.2

Basic (loss) earnings per common share:
(Loss) earnings from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.04
Earnings from discontinued operations, net	—		—		0.04		—
Net (loss) earnings	$	(0.21)	$	0.06	$	(0.31)	$	0.04

Weighted-average shares outstanding	91,589,156		91,018,213		91,721,440		90,780,035

Diluted (loss) earnings per common share:
(Loss) earnings from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.03
Earnings from discontinued operations, net	—		—		0.04		—
Net (loss) earnings	$	(0.21)	$	0.06	$	(0.31)	$	0.03

Diluted weighted-average shares outstanding	91,589,156		92,507,279		91,721,440		92,184,274

Commitments and Contingent Liabilities (Notes)	6 Months Ended
Commitments and Contingent Liabilities (Notes)	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingent Liabilities	From time to time, the Company is involved in various legal proceedings and claims arising in the ordinary course of its business. The majority of these claims and proceedings relate to commercial, warranty, employment, and intellectual property matters. Although the ultimate outcome of any legal proceeding or claim cannot be predicted with certainty, based on present information, including management’s assessment of the merits of the particular claim, the Company believes that, apart from the action set forth below, the disposition of these legal proceedings or claims, individually or in the aggregate, after taking into account recorded accruals and the availability and limits of insurance coverage, will not have a material adverse effect on its cash flow, results of operations, or financial condition. The Company is party to a representative action filed in the Superior Court of California, Los Angeles County under the Private Attorneys General Act. The complaint was filed on June 5, 2020 and alleges that the Company incorrectly calculated overtime rate of pay, incorrectly paid overtime, and provided inaccurate wage statements, to certain non-exempt employees at the Company’s Valencia, California manufacturing facility in violation of California law. The action seeks penalties, attorneys' fees, and other relief. The Company intends to defend these claims vigorously. Due to the early stage of this litigation among other factors, the Company is currently unable to predict the ultimate outcome of this lawsuit or provide meaningful quantification of how the final resolution of this matter may impact our future financial condition, results of operations, or cash flows. The Company owns many patents and other intellectual property pertaining to its products, technology, and manufacturing processes. Some of the Company's patents have been and may continue to be infringed upon or challenged by others. In appropriate cases, the Company has taken and will take steps to protect and defend its patents and other intellectual property, including through the use of legal proceedings in various jurisdictions around the world. Such steps have resulted in and may continue to result in retaliatory legal proceedings, including litigation or other legal proceedings in various jurisdictions and forums around the world alleging infringement by the Company of patents owned by others. The costs of investigations and legal proceedings relating to the enforcement and defense of the Company’s intellectual property may be substantial. Additionally, in multi-forum disputes, the Company may incur adverse judgments with regard to certain claims in certain jurisdictions and forums while still contesting other related claims against the same opposing party in other jurisdictions and forums. Intellectual Property Infringement Claims The Company may, on a limited customer specific basis, provide contractual indemnities for certain losses that arise out of claims that its products infringe on the intellectual property of others. It is not possible to determine the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Historically, the Company has not made significant payments under such indemnity arrangements. The Company’s legal accruals associated with these indemnity arrangements were not significant at June 30, 2020 and December 31, 2019.

Segment Information (Notes)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Information

The Company's two reportable segments are Audio and Precision Devices. Information regarding the Company's reportable segments is as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Revenues:
Audio	$	104.5	$	159.9	$	224.6	$	299.0
Precision Devices	47.7		45.3		90.7		86.0
Total revenues	$	152.2	$	205.2	$	315.3	$	385.0

(Loss) earnings from continuing operations before interest and income taxes:
Audio	$	(12.2)	$	21.2	$	(18.3)	$	33.0
Precision Devices	11.1		8.2		18.2		15.7
Total segments	(1.1)		29.4		(0.1)		48.7
Corporate expense / other	13.2		16.5		21.1		32.4
Interest expense, net	4.1		3.6		7.8		7.1
(Loss) earnings before income taxes and discontinued operations	(18.4)		9.3		(29.0)		9.2
Provision for income taxes	1.1		3.4		3.3		6.0
(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2

Information regarding assets of the Company's reportable segments:


	Total Assets
(in millions)	June 30, 2020		December 31, 2019
Audio	$	1,475.8	$	1,487.6
Precision Devices	207.9		162.0
Corporate / eliminations	4.0		5.0

Total	$	1,687.7	$	1,654.6


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Asia	$	106.9	$	144.0	$	216.6	$	265.1
United States	28.7		32.9		58.0		65.1
Europe	14.3		25.1		36.7		48.9
Other Americas	0.9		1.6		1.5		2.7
Other	1.4		1.6		2.5		3.2
Total	$	152.2	$	205.2	$	315.3	$	385.0

Basis of Presentation (Policies)	6 Months Ended
Basis of Presentation (Policies)	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting Policy	The accompanying unaudited interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles (“GAAP” or “U.S. GAAP”) for complete financial statements. These unaudited interim Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. Management uses historical experience and all available information to make these estimates, including considerations for the impact of the COVID-19 pandemic on the macroeconomic environment. The situation related to the COVID-19 pandemic continues to be complex and rapidly evolving. The Company cannot reasonably estimate the duration of the COVID-19 pandemic or fully ascertain its impact on the Company’s future results and market capitalization, which could adversely impact estimates such as the recoverability of goodwill and long-lived assets and the realizability of deferred tax assets. The unaudited interim Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods. On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the six months ended June 30, 2020, the Company repurchased 996,109 shares of common stock for a total of $15.0 million. In connection with the COVID-19 pandemic, the Company has temporarily suspended share repurchases. However, the Company may resume the share repurchase program at any time when it believes it is prudent to do so and without further notice.

Recent Accounting Standards New Accounting Pronouncements, Policy (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Standards In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12 to simplify the accounting for income taxes. This guidance removes certain exceptions to the general principles in Accounting Standards Codification ("ASC") 740 and amends existing guidance to improve consistent application. The standard is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted and prospective application of the guidance is required. The Company has not yet determined the impact of the standard on its Consolidated Financial Statements or its adoption date.

Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2020

Discontinued Operations [Abstract]

Summarized Results and Assets and Liabilities of Discontinued Operations

Summarized results of the Company's discontinued operations are as follows:


(in millions)	Six Months Ended June 30, 2020
Revenues	$	—
Cost of goods sold	—


Gross profit	—



Operating income	—


Earnings from discontinued operations before taxes ⁽¹⁾	—
Benefit from income taxes ⁽²⁾	(3.7)
Earnings from discontinued operations, net of tax	$	3.7

⁽²⁾The Company recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business.

Assets and liabilities of discontinued operations are summarized below:


(in millions)	June 30, 2020		December 31, 2019
Liabilities of discontinued operations:
Other liabilities ⁽¹⁾	$	0.6	$	0.6
Total liabilities	$	0.6	$	0.6

(1) The Company recorded an unrecognized tax benefit related to the Speaker and Receiver Product Line during the fourth quarter of 2019.

Acquisitions (Tables)

6 Months Ended

Jun. 30, 2020

Acquisitions [Abstract]

Schedule of the Final Allocation of the Purchase Price to Net Assets

The table below represents the final allocation of the purchase price to net assets acquired as of December 20, 2019:


(in millions)
Property, plant, and equipment	$	0.6
Developed technology	33.3
In-process research and development	3.7
Non-competition agreement	1.6
Goodwill	18.8
Assumed current liabilities	(0.1)
Total purchase price	$	57.9

Schedule of Pro-forma summary for an Acquisition


	(unaudited)
(in millions, except share and per share amounts)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Earnings (loss) from continuing operations:
As reported	$	5.9	$	3.2
Pro-forma	3.5		(1.5)
Basic earnings (loss) per share from continuing operations:
As reported	$	0.06	$	0.04
Pro-forma	0.04		(0.02)
Diluted earnings (loss) per share from continuing operations:
As reported	$	0.06	$	0.03
Pro-forma	0.04		(0.02)

Inventories (Tables)

6 Months Ended

Jun. 30, 2020

Inventory, Net [Abstract]

Components of Inventory

The following table details the major components of inventories, net:


(in millions)	June 30, 2020		December 31, 2019
Raw materials	$	108.9	$	82.8
Work in progress	27.4		30.9
Finished goods	58.0		53.5
Subtotal	194.3		167.2
Less reserves	(31.8)		(25.4)
Total	$	162.5	$	141.8

Property, Plant, and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Components of property, plant and equipment, net

The following table details the major components of property, plant, and equipment, net:


(in millions)	June 30, 2020		December 31, 2019
Land	$	7.8	$	7.7
Buildings and improvements	102.7		104.5
Machinery, equipment, and other	530.9		533.1
Subtotal	641.4		645.3
Less accumulated depreciation	(448.6)		(438.8)
Total	$	192.8	$	206.5

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

The gross carrying value and accumulated amortization for each major class of intangible assets are as follows:


	June 30, 2020						December 31, 2019
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Trademarks	$	1.0	$	0.3	$	1.0	$	0.2
Patents	40.8		33.8		40.8		31.5
Customer relationships	12.0		4.4		12.0		3.6
Developed technology	36.5		3.7		36.5		0.7
Non-competition agreements	1.8		0.4		1.8		0.1
Total	92.1		42.6		92.1		36.1
Unamortized intangible assets:
Trademarks	32.0				32.0
IPR&D	3.7				3.7
Total	35.7				35.7
Total intangible assets, net	$	85.2			$	91.7

Schedule of Future Amortization Expense

Amortization expense for the next five years, based on current intangible balances, is estimated to be as follows:


(in millions)
Q3-Q4 2020	$	6.5
2021	13.0
2022	7.7
2023	7.1
2024	7.0

Restructuring and Related Activities (Tables)

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The following table details restructuring charges incurred by reportable segment for the periods presented:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Audio	$	6.9	$	0.1	$	11.0	$	1.9
Precision Devices	—		0.4		—		0.7
Corporate	0.5		—		1.7		0.2
Total	$	7.4	$	0.5	$	12.7	$	2.8

Schedule of Restructuring Reserve by Type of Cost

The following table details the Company’s severance and other restructuring accrual activity:


(in millions)	Severance Pay and Benefits		Contract Termination and Other Costs		Total
Balance at December 31, 2019	$	1.4	$	—	$	1.4

Restructuring charges	9.7		1.2		10.9
Payments	(5.5)		(0.1)		(5.6)

Balance at June 30, 2020	$	5.6	$	1.1	$	6.7

Schedule of Restructuring Reserve by Balance Sheet Location

The severance and restructuring accruals are recorded in the following line items on the Consolidated Balance Sheets:


(in millions)	June 30, 2020		December 31, 2019
Other accrued expenses	$	6.1	$	1.4
Other liabilities	0.6		—
Total	$	6.7	$	1.4

Borrowings (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Borrowings (net of debt issuance costs, debt discount, and amortization) consist of the following:


(in millions)	June 30, 2020		December 31, 2019
3.25% convertible senior notes	$	160.9	$	156.8
Revolving credit facility	100.0		—
Total	260.9		156.8
Less current maturities	100.0		—
Total long-term debt	$	160.9	$	156.8

Contractual Obligation, Fiscal Year Maturity Schedule

Total debt principal payments over the next five years are as follows:


(in millions)	Q3-Q4 2020		2021		2022		2023		2024
Debt principal payments	$	—	$	272.5	$	—	$	—	$	—

Schedule of Convertible Debt

The Notes consist of the following:


(in millions)	June 30, 2020		December 31, 2019
Liability component:
Principal	$	172.5	$	172.5
Less debt issuance costs and debt discount, net of amortization	(11.6)		(15.7)
Total	160.9		156.8
Less current maturities ⁽¹⁾	—		—
Long-term portion	$	160.9	$	156.8

Equity component ⁽²⁾	$	29.9	$	29.9

⁽¹⁾ There are no required principal payments due until maturity in November 2021.

⁽²⁾ Recorded in the Consolidated Balance Sheets within additional paid-in capital, inclusive of the $1.3 million of issuance costs in equity.

Schedule of Convertible Debt Interest Expense

The following table sets forth total interest expense recognized related to the Notes:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
3.25% coupon	$	1.4	$	1.4	$	2.8	$	2.8
Amortization of debt issuance costs	0.3		0.2		0.5		0.4
Amortization of debt discount	1.8		1.7		3.6		3.4
Total	$	3.5	$	3.3	$	6.9	$	6.6

Schedule of Revolving Credit Facilities

Revolving credit facility borrowings consist of the following:


(in millions)	June 30, 2020		December 31, 2019
$400.0 million revolving credit facility	$	100.0	$	—


Less current maturities	100.0		—
Long-term portion	$	—	$	—

Equity Incentive Program (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Black-Scholes Option-Pricing Assumptions


	Six Months Ended June 30,
	2020					2019
Risk-free interest rate	0.16%	to	1.42%	2.29%	to	2.44%
Dividend yield	—%					—%
Expected life (years)	4.3	to	4.5	4.5
Volatility	38.8%	to	40.6%	41.8%	to	42.9%

Fair value at date of grant	$4.78	to	$5.95	$6.22	to	$6.55

Schedule of SSAR and Stock Options Activity


	SSARs											Stock Options
	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)	Number of Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Term (Years)
Outstanding at December 31, 2019	596,537	$	22.72				5,377,148	$	17.51
Granted	—	—					888,891	16.76

Exercised	—	—					(123,574)	12.43
Forfeited	—	—					(139,969)	16.59
Expired	—	—					(100,791)	19.73
Outstanding at June 30, 2020	596,537	$	22.72	$	—	1.9	5,901,705	$	17.48	$	6.0	3.4

Exercisable at June 30, 2020	596,537	$	22.72	$	—	1.9	4,335,643	$	17.92	$	5.8	2.5

Schedule of Restricted Stock Units Award Activity

The following table summarizes the Company's restricted stock unit ("RSU") activity for the six months ended June 30, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	2,261,114	$	15.99
Granted	1,406,939	16.52

Vested ⁽¹⁾	(1,016,274)	16.26
Forfeited	(635,437)	16.24
Unvested at June 30, 2020	2,016,342	$	16.19

⁽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 six months ended June 30, 2020:


	Share units	Weighted-average grant date fair value
Unvested at December 31, 2019	844,789	$	15.90
Granted	322,178	16.14

Vested ⁽¹⁾	(176,154)	15.38
Forfeited	(61,589)	17.05
Unvested at June 30, 2020	929,224	$	16.01

⁽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)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Reconciliation of information used in computing basic and diluted earnings per share

Basic and diluted earnings per share were computed as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except share and per share amounts)	2020		2019		2020		2019
(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2
Earnings from discontinued operations, net	—		—		3.7		—
Net (loss) earnings	$	(19.5)	$	5.9	$	(28.6)	$	3.2

Basic (loss) earnings per common share:
(Loss) earnings from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.04
Earnings from discontinued operations, net	—		—		0.04		—
Net (loss) earnings	$	(0.21)	$	0.06	$	(0.31)	$	0.04

Weighted-average shares outstanding	91,589,156		91,018,213		91,721,440		90,780,035

Diluted (loss) earnings per common share:
(Loss) earnings from continuing operations	$	(0.21)	$	0.06	$	(0.35)	$	0.03
Earnings from discontinued operations, net	—		—		0.04		—
Net (loss) earnings	$	(0.21)	$	0.06	$	(0.31)	$	0.03

Diluted weighted-average shares outstanding	91,589,156		92,507,279		91,721,440		92,184,274

Segment Information (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Revenue and Earnings from continuing operations by market segment


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Revenues:
Audio	$	104.5	$	159.9	$	224.6	$	299.0
Precision Devices	47.7		45.3		90.7		86.0
Total revenues	$	152.2	$	205.2	$	315.3	$	385.0

(Loss) earnings from continuing operations before interest and income taxes:
Audio	$	(12.2)	$	21.2	$	(18.3)	$	33.0
Precision Devices	11.1		8.2		18.2		15.7
Total segments	(1.1)		29.4		(0.1)		48.7
Corporate expense / other	13.2		16.5		21.1		32.4
Interest expense, net	4.1		3.6		7.8		7.1
(Loss) earnings before income taxes and discontinued operations	(18.4)		9.3		(29.0)		9.2
Provision for income taxes	1.1		3.4		3.3		6.0
(Loss) earnings from continuing operations	$	(19.5)	$	5.9	$	(32.3)	$	3.2

Reconciliation of Assets from Segment to Consolidated

Information regarding assets of the Company's reportable segments:


	Total Assets
(in millions)	June 30, 2020		December 31, 2019
Audio	$	1,475.8	$	1,487.6
Precision Devices	207.9		162.0
Corporate / eliminations	4.0		5.0

Total	$	1,687.7	$	1,654.6

Revenue from External Customers by Geographic Areas


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Asia	$	106.9	$	144.0	$	216.6	$	265.1
United States	28.7		32.9		58.0		65.1
Europe	14.3		25.1		36.7		48.9
Other Americas	0.9		1.6		1.5		2.7
Other	1.4		1.6		2.5		3.2
Total	$	152.2	$	205.2	$	315.3	$	385.0

Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Basis of Presentation (Details) - USD ($) $ in Millions	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Quantifying Misstatement in Current Year Financial Statements [Line Items]
(Loss) earnings before income taxes and discontinued operations	$ (18.4)	$ 9.3	$ (29.0)	$ 9.2
Noncash Investing and Financing Items
Purchases of property and equipment included in accounts payable			$ 3.3	$ 3.1

Discontinued Operations (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
Discontinued Operations (Details) - USD ($)	Jul. 07, 2016	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2019	Nov. 28, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received for disposal group	$ 45,000,000.0							$ 130,000,000.0
Proceeds from the sale of business	$ 40,600,000					$ 135,100,000
Disposal Group, Including Discontinued Operation, Liabilities		$ 600,000		$ 600,000			$ 600,000
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent		600,000		600,000			600,000
Benefit from income taxes (2)				(3,700,000)
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax				0
Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amortization of intangible Assets, Discontinued Operations		0	$ 0	0	$ 0
Depreciation, Discontinued Operations		0	0	0	0
Disposal Group, Including Discontinued Operation, Operating Expense				0
Assets of discontinued operations							0
Disposal Group, Including Discontinued Operation, Liabilities		0		0			$ 0
Capital expenditures		0	0	0	0
Discontinued Operation, Income (Loss) from Discontinued Operation During Phase-out Period, Net of Tax				3,700,000
Disposal Group, Including Discontinued Operation, Gross Profit (Loss)				0
Cost of goods sold				0
Disposal Group, Including Discontinued Operation, Revenue				0
Accounts Payable [Member] \| Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Capital expenditures		$ 0	$ 0	$ 0	$ 0

Acquisitions (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended		6 Months Ended
	Dec. 20, 2019	Jan. 03, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Business Acquisition
Goodwill			$ 909.9		$ 909.9		$ 909.9
Business Acquisition, Pro Forma Net Income (Loss)				$ 3.5		$ (1.5)
(Loss) earnings from continuing operations			$ (19.5)	$ 5.9	$ (32.3)	$ 3.2
Earnings (loss) from continuing operations, per basic share			$ (0.21)	$ 0.06	$ (0.35)	$ 0.04
Business Acquisition, Pro Forma Earnings Per Share, Basic				0.04		(0.02)
Earnings (loss) from continuing operations, per diluted share			$ (0.21)	0.06	$ (0.35)	0.03
Business Acquisition, Pro Forma Earnings Per Share, Diluted				$ 0.04		$ (0.02)
ASIC Design Business
Business Acquisition
Payments to Acquire Businesses, Gross	$ 57.9
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	0.6
Goodwill	18.8
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	(0.1)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net	$ 57.9
Finite-Lived Intangible Asset, Useful Life	6 years
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 1.6
Compex Corporation
Business Acquisition
Payments to Acquire Businesses, Gross		$ 11.1
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual						$ 4.0
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual						$ 0.2
-100000 \| ASIC Design Business
Business Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	33.3
In Process Research and Development [Member] \| ASIC Design Business
Business Acquisition
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 3.7

Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Inventory, Net [Abstract]
Raw materials	$ 108.9	$ 82.8
Work in progress	27.4	30.9
Finished goods	58.0	53.5
Subtotal	194.3	167.2
Less reserves	(31.8)	(25.4)
Total	$ 162.5	$ 141.8

Property, Plant and Equipment, net (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment
Cost	$ 641.4	$ 641.4		$ 645.3
Less accumulated depreciation	(448.6)	(448.6)		(438.8)
Total	192.8	192.8		206.5
Depreciation	12.0	24.0	$ 23.5
Land
Property, Plant and Equipment
Cost	7.8	7.8		7.7
Buildings and improvements
Property, Plant and Equipment
Cost	102.7	102.7		104.5
Machinery, equipment, and other
Property, Plant and Equipment
Cost	$ 530.9	$ 530.9		$ 533.1

Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions	Jun. 30, 2020 USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2019	$ 909.9
44012	$ 909.9

Goodwill and Other Intangible Assets - Intangible Assets and Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Finite-Lived Intangible Assets
Gross carrying amount	$ 92.1		$ 92.1		$ 92.1
Accumulated amortization	42.6		42.6		36.1
Unamortized intangible assets, gross carrying amount	35.7		35.7		35.7
Intangible assets, net	85.2		85.2		91.7
Amortization expense	3.2	$ 1.7	6.5	$ 3.5
Q4 2018	6.5		6.5
2019	13.0		13.0
2020	7.7		7.7
2021	7.1		7.1
2022	7.0		7.0
Trademarks
Finite-Lived Intangible Assets
Unamortized intangible assets, gross carrying amount	32.0		32.0		32.0
In Process Research and Development [Member]
Finite-Lived Intangible Assets
Unamortized intangible assets, gross carrying amount	3.7		3.7		3.7
Trademarks
Finite-Lived Intangible Assets
Gross carrying amount	1.0		1.0		1.0
Accumulated amortization	0.3		0.3		0.2
Patents
Finite-Lived Intangible Assets
Gross carrying amount	40.8		40.8		40.8
Accumulated amortization	33.8		33.8		31.5
Customer relationships
Finite-Lived Intangible Assets
Gross carrying amount	12.0		12.0		12.0
Accumulated amortization	4.4		4.4		3.6
-100000
Finite-Lived Intangible Assets
Gross carrying amount	36.5		36.5		36.5
Accumulated amortization	3.7		3.7		0.7
Non-competition agreements
Finite-Lived Intangible Assets
Gross carrying amount	1.8		1.8		1.8
Accumulated amortization	$ 0.4		$ 0.4		$ 0.1

Restructuring and Related Activities - Restructuring Charges by Segment (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve
Restructuring charges	$ 6.5	$ 0.1	$ 10.4	$ 1.9
Restructuring and Related Cost, Incurred Cost			10.9
Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges	4.9		8.3
Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	7.4	0.5	12.7	2.8
Severance Pay and Benefits
Restructuring Cost and Reserve
Restructuring and Related Cost, Incurred Cost			9.7
Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring and Related Cost, Incurred Cost			1.2
Operating Segments \| Audio \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	6.9	0.1	11.0	1.9
Operating Segments \| Precision Devices \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.4	0.0	0.7
Corporate \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.5	0.0	1.7	0.2
Cost of Goods Sold, Restructuring Charges \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.9	0.4	2.3	0.9
Cost of Goods Sold, Restructuring Charges \| Severance Pay and Benefits \| Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges	3.3		5.4
Cost of Goods Sold, Restructuring Charges \| Severance Pay and Benefits \| Audio
Restructuring Cost and Reserve
Restructuring charges	2.5		4.4
Cost of Goods Sold, Restructuring Charges \| Contract Termination and Other Costs \| Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges	0.4		1.7
Cost of Goods Sold, Restructuring Charges \| Contract Termination [Member] \| Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges			1.2
Operating Expense \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	$ 6.5		$ 10.4
Restructuring Charges \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges		$ 0.1		$ 1.9

Restructuring and Related Activities - Restructuring Accrual Activities (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve
Restructuring charges	$ 6.5	$ 0.1	$ 10.4	$ 1.9
Restructuring Reserve [Roll Forward]
Severance and other restructuring reserve, beginning balance			1.4
Restructuring charges			10.9
Payments			(5.6)
Severance and other restructuring reserve, ending balance	6.7		6.7
Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	7.4	0.5	12.7	2.8
Severance Pay and Benefits
Restructuring Reserve [Roll Forward]
Severance and other restructuring reserve, beginning balance			1.4
Restructuring charges			9.7
Payments			(5.5)
Severance and other restructuring reserve, ending balance	5.6		5.6
Contract Termination and Other Costs
Restructuring Reserve [Roll Forward]
Severance and other restructuring reserve, beginning balance			0.0
Restructuring charges			1.2
Payments			(0.1)
Severance and other restructuring reserve, ending balance	1.1		1.1
Cost of Goods Sold, Restructuring Charges \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.9	0.4	2.3	0.9
Operating Expense \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	$ 6.5		$ 10.4
Restructuring Charges \| Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges		$ 0.1		$ 1.9

Restructuring and Related Activities - Balance Sheet Location (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Restructuring Cost and Reserve
Severance and restructuring accrual	$ 6.7	$ 1.4
Other accrued expenses
Restructuring Cost and Reserve
Severance and restructuring accrual	6.1	1.4
Other liabilities
Restructuring Cost and Reserve
Severance and restructuring accrual	$ 0.6	$ 0.0

Hedging Transaction and Derivative Instruments - Gain (Loss) of Derivative Instruments Recognized on Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative
Cost of goods sold	$ 103.5	$ 128.4	$ 209.0	$ 239.2
Interest expense, net	(4.1)	(3.6)	(7.8)	(7.1)
Other expense (income), net	$ (1.9)	$ 0.5	$ 0.8	$ (0.5)

Borrowings (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Long-term borrowings
Long-term debt	$ 260.9	$ 156.8
Less: current maturities	100.0	0.0
Long-term portion	160.9	156.8
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year	0.0
Long-term Debt, Maturities, Repayments of Principal in Year Two	272.5
Long-term Debt, Maturities, Repayments of Principal in Year Three	0.0
Convertible Debt \| Convertible Notes Due Twenty Twenty One
Long-term borrowings
Convertible Notes Payable	160.9	156.8
Long-term Debt, Maturities, Repayments of Principal in Year Four	0.0
Debt Instrument, Unamortized Discount	11.6	15.7
Line of Credit \| Credit Facility due October 11, 2022
Long-term borrowings
Long-term Line of Credit	100.0	$ 0.0
Long-term Debt, Maturities, Repayments of Principal in Year Five	$ 0.0

Borrowings Convertible Debt (Details) - Convertible Debt - Convertible Notes Due Twenty Twenty One $ / shares in Units, $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares	Jun. 30, 2019 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2020 USD ($) $ / shares	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	May 04, 2016 USD ($) $ / shares
Schedule of Convertible Debt
Debt Instrument, Interest Rate, Stated Percentage							3.25%
Debt Instrument, Convertible, Conversion Ratio				54.2741
Debt Instrument, Convertible, Conversion Price \| $ / shares	$ 18.4250			$ 18.4250
Debt Issuance Costs, Net	$ 5.0			$ 5.0
Debt Issuance Costs Attributable to the Equity Component				1.3
Debt Instrument, Face Amount	172.5			172.5		$ 172.5	$ 172.5
Debt Instrument, Unamortized Discount	(11.6)			(11.6)		(15.7)
Convertible Notes Payable	160.9			160.9		156.8
Convertible Notes Payable, Current	0.0			0.0		0.0
Convertible Notes Payable, Noncurrent	160.9			160.9		156.8
Debt Instrument, Convertible, Carrying Amount of Equity Component	29.9			29.9		$ 29.9
Debt Instrument, Fair Value Disclosure	183.7			183.7
Interest Expense, Debt, Excluding Amortization	1.4	$ 1.4		2.8	$ 2.8
Amortization of Debt Issuance Costs	0.3	0.2		0.5	0.4
Amortization of Debt Discount (Premium)	1.8	1.7		3.6	3.4
Interest Expense, Debt	$ 3.5	$ 3.3		$ 6.9	$ 6.6
Payments for Hedge, Financing Activities			$ 44.5
Class of Warrant or Right, Exercise Price of Warrants or Rights \| $ / shares							$ 21.1050
Proceeds from issuance of warrants			$ 39.1

Borrowings Schedule of Revolving Credit Facility (Details)	6 Months Ended
	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Covenant, EBITDA to Interest Ratio, Minimum	3.25
Debt Instrument, Covenant, Debt to EBITDA, Maximum	3.75
Debt Instrument, Covenant, Senior Secured Leverage Ratio, Maximum	3.25
Credit Facility due October 11, 2022
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 400,000,000.0
Line of Credit \| Credit Facility due October 11, 2022
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Long-term Line of Credit	100,000,000.0	$ 0
Line of Credit, Current	100,000,000.0	0
Long-term Line of Credit, Noncurrent	$ 0	$ 0
Weighted Average \| Line of Credit
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Commitment Fee Percentage	0.23%
Maximum [Member] \| Credit Facility due October 11, 2022
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Commitment Fee Percentage	0.35%
Minimum [Member] \| Credit Facility due October 11, 2022
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Commitment Fee Percentage	0.20%
London Interbank Offered Rate (LIBOR) \| Weighted Average \| Line of Credit
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	2.37%		3.99%
London Interbank Offered Rate (LIBOR) \| Maximum [Member] \| Credit Facility due October 11, 2022
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.25%
London Interbank Offered Rate (LIBOR) \| Minimum [Member] \| Credit Facility due October 11, 2022
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.25%

Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Holiday [Line Items]
Share-based Payment Arrangement, Expense	$ 4.1	$ 7.3	$ 7.6	$ 14.0
Effective tax rate (benefit) provision	(6.00%)	36.60%	(11.40%)	65.20%
Income Tax Expense (Benefit)	$ 1.1	$ 3.4	$ 3.3	$ 6.0
(Loss) earnings before income taxes and discontinued operations	(18.4)	9.3	(29.0)	9.2
Other expense (income), net	(1.9)	0.5	0.8	(0.5)
Foreign Tax Authority
Income Tax Holiday [Line Items]
Effective income tax rate reconciliation, tax holiday	$ 0.2	$ 4.5	$ 1.5	$ 7.9
Holiday benefit (usd per share)	$ 0.01	$ 0.05	$ 0.02	$ 0.09

Equity Incentive Program - Stock Options and SSARs (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Expense	$ 4,100,000	$ 7,300,000	$ 7,600,000	$ 14,000,000.0
SSARs
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 0		$ 0
Number of Shares [Roll Forward]
Beginning balance			596,537
Granted			0
Exercised			0
Forfeited			0
Expired			0
Ending balance	596,537		596,537
Exercised	596,537		596,537
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Expired in Period, Weighted Average Exercise Price			$ 0
Weighted Average Grant Date Fair Value
Beginning balance			22.72
Granted			0
Exercised			0
Forfeited			0
Ending balance	$ 22.72		22.72
Exercisable	$ 22.72		$ 22.72
SARS and Options, Additional Disclosures
SSARs, aggregate intrinsic value, outstanding	$ 0		$ 0
SSARs, aggregate intrinsic value, exercisable	0		$ 0
SSARs, weighted average remaining contractual terms, outstanding			1 year 10 months 24 days
SSARs, weighted average remaining contractual term, exercisable			1 year 10 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	$ 6,600,000		$ 6,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Dividend yield			0.00%	0.00%
Expected life (years)				4 years 6 months
Volatility				41.80%
Stock Options, Number of Shares
Beginning balance			5,377,148
Granted			888,891
Exercised			(123,574)
Forfeited			(139,969)
Expired			(100,791)
Ending balance	5,901,705		5,901,705
Exercisable	4,335,643		4,335,643
Stock Options, Weighted Average Exercise Price
Beginning balance			$ 17.51
Granted			16.76
Exercised			12.43
Forfeited			16.59
Expired			19.73
Ending balance	$ 17.48		17.48
Exercisable	$ 17.92		$ 17.92
SARS and Options, Additional Disclosures
Options, aggregate intrinsic value, outstanding	$ 6,000,000.0		$ 6,000,000.0
Options, aggregate intrinsic value, exercisable	$ 5,800,000		$ 5,800,000
Options, weighted average remaining contractual term, outstanding			3 years 4 months 24 days
Options, weighted average remaining contractual term, exercisable			2 years 6 months
Minimum [Member] \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate			0.16%	2.29%
Expected life (years)			4 years 3 months 18 days
Volatility			38.80%
Fair value at date of grant			$ 4.78	$ 6.22
Maximum [Member] \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate			1.42%	2.44%
Expected life (years)			4 years 6 months
Volatility			40.60%	42.90%
Fair value at date of grant			$ 5.95	$ 6.55

Equity Incentive Program - RSUs (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2020 $ / 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 10 months 24 days
Number of Shares [Roll Forward]
Beginning balance \| shares	2,261,114
Granted \| shares	1,406,939
Vested (1) \| shares	(1,016,274)
Forfeited \| shares	(635,437)
Ending balance \| shares	2,016,342
Weighted Average Grant Date Fair Value
Beginning balance \| $ / shares	$ 15.99
Granted \| $ / shares	16.52
Vested (1) \| $ / shares	16.26
Forfeited \| $ / shares	16.24
Ending balance \| $ / shares	$ 16.19

Equity Incentive Program Equity Incentive Program - PSUs (Details) - Performance Shares $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount \| $	$ 3.7
Number of Shares [Roll Forward]
Beginning balance \| shares	844,789
Granted \| shares	322,178
Vested (1) \| shares	(176,154)
Forfeited \| shares	(61,589)
Ending balance \| shares	929,224
Weighted Average Grant Date Fair Value
Beginning balance \| $ / shares	$ 15.90
Granted \| $ / shares	16.14
Vested (1) \| $ / shares	15.38
Forfeited \| $ / shares	17.05
Ending balance \| $ / shares	$ 16.01

Equity Incentive Program - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Expense	$ 4,100,000	$ 7,300,000	$ 7,600,000	$ 14,000,000.0
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	6,600,000		$ 6,600,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			2 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	23,900,000		$ 23,900,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 10 months 24 days
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 3,700,000		$ 3,700,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 7 months 6 days
Minimum [Member] \| Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Percentage increase of initial grant value			0.00%
Maximum [Member] \| Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Percentage increase of initial grant value			225.00%

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Reconciliation of information used in computing basic and diluted earnings per share [Abstract]
(Loss) earnings from continuing operations	$ (19.5)	$ 5.9	$ (32.3)	$ 3.2
Earnings from discontinued operations, net	0.0	0.0	3.7	0.0
Net (loss) earnings	$ (19.5)	$ 5.9	$ (28.6)	$ 3.2
Basic (loss) earnings per common share:
Earnings (loss) from continuing operations, per basic share	$ (0.21)	$ 0.06	$ (0.35)	$ 0.04
Earnings from discontinued operations, per basic share	0	0	0.04	0
Net earnings (loss) per share, basic	$ (0.21)	$ 0.06	$ (0.31)	$ 0.04
Weighted average shares outstanding	91,589,156	91,018,213	91,721,440	90,780,035
Diluted (loss) earnings per common share:
Earnings (loss) from continuing operations, per diluted share	$ (0.21)	$ 0.06	$ (0.35)	$ 0.03
Loss from discontinued operations, net	0	0	0.04	0
Net earnings (loss) per share, diluted	$ (0.21)	$ 0.06	$ (0.31)	$ 0.03
Diluted (in shares)	91,589,156	92,507,279	91,721,440	92,184,274
Weighted average number of anti-dilutive shares excluded from the calculation (in shares)	6,157,127	4,306,633	5,176,141	4,457,926

Segment Information (Details) $ in Millions	3 Months Ended		6 Months Ended
Segment Information (Details) $ in Millions	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) segments	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Segment Reporting Information
Billed Contracts Receivable	$ 93.7		$ 93.7		$ 152.8
Number of reportable segments \| segments			2
Assets	1,687.7		$ 1,687.7		1,654.6
Revenues	152.2	$ 205.2	315.3	$ 385.0
Reconciliation of Net Earnings from Segments [Abstract]
Interest expense, net	4.1	3.6	7.8	7.1
(Loss) earnings before income taxes and discontinued operations	(18.4)	9.3	(29.0)	9.2
Provision for income taxes	1.1	3.4	3.3	6.0
(Loss) earnings from continuing operations	(19.5)	5.9	(32.3)	3.2
Asia
Segment Reporting Information
Revenues	106.9	144.0	216.6	265.1
United States
Segment Reporting Information
Revenues	28.7	32.9	58.0	65.1
Europe
Segment Reporting Information
Revenues	14.3	25.1	36.7	48.9
Other Americas
Segment Reporting Information
Revenues	0.9	1.6	1.5	2.7
Other Geographical Locations
Segment Reporting Information
Revenues	1.4	1.6	2.5	3.2
Operating Segments
Reconciliation of Net Earnings from Segments [Abstract]
Earnings (loss) before interest and income taxes	(1.1)	29.4	(0.1)	48.7
Operating Segments \| Audio
Segment Reporting Information
Assets	1,475.8		1,475.8		1,487.6
Revenues	104.5	159.9	224.6	299.0
Reconciliation of Net Earnings from Segments [Abstract]
Earnings (loss) before interest and income taxes	(12.2)	21.2	(18.3)	33.0
Operating Segments \| Precision Devices
Segment Reporting Information
Assets	207.9		207.9		162.0
Revenues	47.7	45.3	90.7	86.0
Reconciliation of Net Earnings from Segments [Abstract]
Earnings (loss) before interest and income taxes	11.1	8.2	18.2	15.7
Corporate
Segment Reporting Information
Assets	4.0		4.0		$ 5.0
Reconciliation of Net Earnings from Segments [Abstract]
Corporate expense / other	13.2	16.5	21.1	32.4
Interest expense, net	$ 4.1	$ 3.6	$ 7.8	$ 7.1