10-Q

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 September 30, 2021.

or

☐ 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.)

1151 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	KN	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, a 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 October 26, 2021 was 92,345,471.

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 nine months ended September 30, 2021 and 2020	1
	Consolidated Statements of Comprehensive Earnings (unaudited) for the three and nine months ended September 30, 2021 and 2020	2
	Consolidated Balance Sheets (unaudited) at September 30, 2021 and December 31, 2020	3
	Consolidated Statements of Stockholders' Equity (unaudited) for the three and nine months ended September 30, 2021 and 2020	4
	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2021 and 2020	6
	Notes to Consolidated Financial Statements (unaudited)	7
Forward-Looking Statements		24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
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	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 6.	Exhibits	43
SIGNATURES		44

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues	$	233.0	$	205.8	$	633.8	$	521.1
Cost of goods sold	136.1		130.6		375.2		339.6
Restructuring charges - cost of goods sold	—		—		—		2.3
Gross profit	96.9		75.2		258.6		179.2
Research and development expenses	22.3		21.9		70.2		70.2
Selling and administrative expenses	36.0		32.0		108.9		99.3
Impairment charges	4.0		7.6		4.0		7.6
Restructuring charges	—		0.1		0.3		10.5
Operating expenses	62.3		61.6		183.4		187.6
Operating earnings (loss)	34.6		13.6		75.2		(8.4)
Interest expense, net	4.2		4.7		12.3		12.5
Other (income) expense, net	(1.9)		1.0		(3.4)		0.2
Earnings (loss) before income taxes and discontinued operations	32.3		7.9		66.3		(21.1)
Provision for income taxes	4.6		2.3		8.7		5.6
Earnings (loss) from continuing operations	27.7		5.6		57.6		(26.7)
Earnings from discontinued operations, net	—		—		0.2		3.7
Net earnings (loss)	$	27.7	$	5.6	$	57.8	$	(23.0)
Earnings (loss) per share from continuing operations:
Basic	$	0.30	$	0.06	$	0.62	$	(0.29)
Diluted	$	0.29	$	0.06	$	0.61	$	(0.29)
Earnings per share from discontinued operations:
Basic	$	—	$	—	$	0.01	$	0.04
Diluted	$	—	$	—	$	—	$	0.04
Net earnings (loss) per share:
Basic	$	0.30	$	0.06	$	0.63	$	(0.25)
Diluted	$	0.29	$	0.06	$	0.61	$	(0.25)
Weighted-average common shares outstanding:
Basic	92,189,329		91,688,765		92,315,146		91,707,702
Diluted	94,143,034		92,473,318		94,780,940		91,707,702

See accompanying Notes to Consolidated Financial Statements

1

KNOWLES CORPORATION 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(in millions)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net earnings (loss)	$	27.7	$	5.6	$	57.8	$	(23.0)
Other comprehensive (loss) earnings, net of tax
Foreign currency translation	(3.7)		9.2		(6.4)		5.1
Employee benefit plans:
Amortization or settlement of actuarial losses and prior service costs	0.1		0.3		0.7		0.5
Net change in employee benefit plans	0.1		0.3		0.7		0.5
Changes in fair value of cash flow hedges:
Unrealized net (losses) gains arising during period	(0.2)		1.4		(0.5)		0.5
Net losses (gains) reclassified into earnings	0.1		(0.5)		(1.4)		(0.1)
Total cash flow hedges	(0.1)		0.9		(1.9)		0.4
Other comprehensive (loss) earnings, net of tax	(3.7)		10.4		(7.6)		6.0
Comprehensive earnings (loss)	$	24.0	$	16.0	$	50.2	$	(17.0)

See accompanying Notes to Consolidated Financial Statements

2

KNOWLES CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

(unaudited)

	September 30, 2021		December 31, 2020
Current assets:
Cash and cash equivalents	$	140.0	$	147.8
Receivables, net of allowances of $1.4 and $1.6	129.8		131.4
Inventories, net	155.7		130.1
Prepaid and other current assets	9.9		10.3
Total current assets	435.4		419.6
Property, plant, and equipment, net	190.6		191.5
Goodwill	941.3		910.0
Intangible assets, net	101.7		78.7
Operating lease right-of-use assets	17.0		23.3
Other assets and deferred charges	37.2		31.8
Total assets	$	1,723.2	$	1,654.9
Current liabilities:
Current maturities of long-term debt	$	171.8	$	165.1
Accounts payable	72.9		70.3
Accrued compensation and employee benefits	36.8		30.4
Operating lease liabilities	10.9		10.2
Other accrued expenses	20.7		18.6
Federal and other taxes on income	0.4		2.7
Total current liabilities	313.5		297.3
Deferred income taxes	2.0		2.0
Long-term operating lease liabilities	15.8		18.7
Other liabilities	25.8		32.8
Liabilities of discontinued operations	—		0.6
Commitments and contingencies (Note 15)
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; 94,415,186 and 92,325,699 shares issued and outstanding at September 30, 2021, respectively, and 92,689,912 and 91,611,549 shares issued and outstanding at December 31, 2020, respectively	0.9		0.9
Treasury stock - at cost; 2,089,487 and 1,078,363 shares at September 30, 2021 and December 31, 2020, respectively	(36.2)		(16.2)
Additional paid-in capital	1,620.2		1,587.8
Accumulated deficit	(110.7)		(168.5)
Accumulated other comprehensive loss	(108.1)		(100.5)
Total stockholders' equity	1,366.1		1,303.5
Total liabilities and stockholders' equity	$	1,723.2	$	1,654.9

See accompanying Notes to Consolidated Financial Statements

3

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 June 30, 2021	$	0.9	$	(36.2)	$	1,610.2	$	(138.4)	$	(104.4)	$	1,332.1
Net earnings	—		—		—		27.7		—		27.7
Other comprehensive loss, net of tax	—		—		—		—		(3.7)		(3.7)
Stock-based compensation expense	—		—		7.1		—		—		7.1
Common stock issued for exercise of stock options	—		—		3.9		—		—		3.9
Tax on restricted and performance stock unit vesting	—		—		(1.0)		—		—		(1.0)
Balance at September 30, 2021	$	0.9	$	(36.2)	$	1,620.2	$	(110.7)	$	(108.1)	$	1,366.1

	Common Stock		Treasury Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
Balance at June 30, 2020	$	0.9	$	(15.0)	$	1,578.0	$	(203.7)	$	(116.4)	$	1,243.8
Net earnings	—		—		—		5.6		—		5.6
Other comprehensive earnings, net of tax	—		—		—		—		10.4		10.4
Stock-based compensation expense	—		—		4.8		—		—		4.8
Common stock issued for exercise of stock options	—		—		0.1		—		—		0.1
Tax on restricted and performance stock unit vesting	—		—		(0.1)		—		—		(0.1)
Balance at September 30, 2020	$	0.9	$	(15.0)	$	1,582.8	$	(198.1)	$	(106.0)	$	1,264.6

See accompanying Notes to Consolidated Financial Statements

4

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, 2020	$	0.9	$	(16.2)	$	1,587.8	$	(168.5)	$	(100.5)	$	1,303.5
Net earnings	—		—		—		57.8		—		57.8
Other comprehensive loss, net of tax	—		—		—		—		(7.6)		(7.6)
Repurchase of common stock	—		(20.0)		—		—		—		(20.0)
Stock-based compensation expense	—		—		25.6		—		—		25.6
Common stock issued for exercise of stock options	—		—		14.4		—		—		14.4
Tax on restricted and performance stock unit vesting	—		—		(7.6)		—		—		(7.6)
Balance at September 30, 2021	$	0.9	$	(36.2)	$	1,620.2	$	(110.7)	$	(108.1)	$	1,366.1

	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	—		—		—		(23.0)		—		(23.0)
Other comprehensive earnings, net of tax	—		—		—		—		6.0		6.0
Repurchase of common stock	—		(15.0)		—		—		—		(15.0)
Stock-based compensation expense	—		—		12.4		—		—		12.4
Common stock issued for exercise of stock options and other	—		—		1.8		—		—		1.8
Tax on restricted and performance stock unit vesting	—		—		(6.1)		—		—		(6.1)
Balance at September 30, 2020	$	0.9	$	(15.0)	$	1,582.8	$	(198.1)	$	(106.0)	$	1,264.6

See accompanying Notes to Consolidated Financial Statements

5

KNOWLES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Nine Months Ended September 30,
	2021		2020
Operating Activities
Net earnings (loss)	$	57.8	$	(23.0)
Adjustments to reconcile net earnings (loss) to cash from operating activities:
Depreciation and amortization	46.6		45.7
Stock-based compensation	25.6		12.4
Non-cash interest expense and amortization of debt issuance costs	7.1		6.6
Impairment charges	4.0		7.6
Write-off of fixed assets	—		1.7
(Gain) loss on disposal of fixed assets	(0.2)		0.2
Deferred income taxes	(1.5)		(2.6)
Other, net	(2.5)		1.4
Changes in assets and liabilities (excluding effects of foreign exchange):
Receivables, net	4.6		34.6
Inventories, net	(24.0)		(16.3)
Prepaid and other current assets	(1.4)		(1.5)
Accounts payable	1.4		(17.2)
Accrued compensation and employee benefits	5.9		(5.3)
Other accrued expenses	2.4		8.0
Accrued taxes	(3.0)		—
Other non-current assets and non-current liabilities	(6.2)		0.3
Net cash provided by operating activities	116.6		52.6
Investing Activities
Acquisitions of business (net of cash acquired)	(78.5)		—
Additions to property, plant, and equipment	(28.2)		(20.4)
Purchase of investments	(3.5)		—
Proceeds from the sale of investments	0.4		—
Proceeds from the sale of property, plant, and equipment	0.4		0.1
Net cash used in investing activities	(109.4)		(20.3)
Financing Activities
Payments under revolving credit facility	—		(50.0)
Borrowings under revolving credit facility	—		100.0
Repurchase of common stock	(20.0)		(15.0)
Tax on restricted and performance stock unit vesting	(7.6)		(6.1)
Payments of finance lease obligations	(1.7)		(1.4)
Payments of debt issuance costs	—		(0.9)
Proceeds from exercise of stock-based awards	14.4		1.6
Net cash (used in) provided by financing activities	(14.9)		28.2
Effect of exchange rate changes on cash and cash equivalents	(0.1)		0.2
Net (decrease) increase in cash and cash equivalents	(7.8)		60.7
Cash and cash equivalents at beginning of period	147.8		78.4
Cash and cash equivalents at end of period	$	140.0	$	139.1
Supplemental information - cash paid for:
Income taxes	$	12.3	$	9.5
Interest	$	4.0	$	5.0

See accompanying Notes to Consolidated Financial Statements

6

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 microphones and speakers, audio processing, and precision device solutions, serving the consumer electronics, communications, medtech, defense, electric vehicle, and industrial markets. The Company uses its leading position in SiSonicTM 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 radio frequency ("RF") 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, 2020 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 May 3, 2021, the Company acquired all of the outstanding shares of common stock of Integrated Microwave Corporation ("IMC"), a manufacturer of RF filters. See Note 4. Acquisition for additional information related to the transaction.

On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the nine months ended September 30, 2021, the Company repurchased 1,011,124 shares of common stock for a total of $20.0 million.

Non-cash Investing Activities - Purchases of property, plant, and equipment included in accounts payable at September 30, 2021 and 2020 were $3.6 million and $1.9 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.

7

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

2. Recent Accounting Standards

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The standard eliminates certain accounting models that separated embedded conversion features from host contracts for convertible instruments, requiring bifurcation only if the convertible feature qualifies as a derivative under Accounting Standards Codification ("ASC") 815 or for convertible instruments issued at a substantial premium. In addition, the guidance requires the if-converted method of calculating diluted earnings per share for convertible instruments, which eliminates the use of the treasury stock method for instruments that may be settled in cash or shares. The standard is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The standard can be adopted on a modified retrospective basis to transactions outstanding as of the adoption date or on a fully retrospective basis to all periods presented. The Company plans to adopt the standard using the modified retrospective method on January 1, 2022. The Company does not expect the standard to impact the Consolidated Financial Statements as all currently outstanding convertible instruments will mature prior to the adoption date. See Note 10. Borrowings for detail on the Company's outstanding convertible instruments.

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:

	Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020
Revenues	$	—	$	—
Operating income	—		—
Earnings from discontinued operations before taxes	—		—
Benefit from income taxes (1)	(0.2)		(3.7)
Earnings from discontinued operations, net of tax	$	0.2	$	3.7

(1) 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)	December 31, 2020
Liabilities of discontinued operations:
Other liabilities (1)	$	0.6
Total liabilities	$	0.6

(1) This accrual was attributable to an unrecognized tax benefit related to the Speaker and Receiver Product Line.

Discontinued operations had no impact on the Company's results of operations for the three months ended September 30, 2021 and 2020. There were no assets and liabilities of discontinued operations as of September 30, 2021.

8

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

4. Acquisition

On May 3, 2021, the Company acquired all of the outstanding shares of common stock of IMC for $80.7 million. The acquired business provides RF filters to the defense, industrial, and communications markets. The transaction was accounted for under the acquisition method of accounting and the results of operations are included in the Consolidated Financial Statements from the date of acquisition in the PD segment. Included in the Consolidated Statements of Earnings are IMC’s revenues and loss before income taxes of $7.0 million and $0.2 million, respectively, from the date of acquisition through September 30, 2021.

The table below represents a preliminary allocation of the purchase price to net assets acquired as of May 3, 2021:

(in millions)
Cash	$	2.2
Receivables	3.0
Inventories	2.6
Property, plant, and equipment	8.3
Customer relationships	27.7
Developed technology	5.2
Trademarks and other amortized intangible assets	1.6
Goodwill	31.3
Assumed current liabilities	(1.2)
Total purchase price	$	80.7

The preceding purchase price allocation is subject to change as additional information about the fair values of assets and liabilities becomes available. Any change in the acquisition date fair value of the acquired net assets will change the amount of the purchase price allocated to goodwill. The Company expects to finalize the purchase price allocation as soon as practicable, but not later than one year from the acquisition date.

The fair value for customer relationships was determined using the multi-period excess earnings method under the income approach. This method reflects the present value of expected future cash flows less charges representing the contribution of other assets to those cash flows. The fair value for developed technology was determined using the relief from royalty method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of customer relationships and developed technology include forecasted revenue growth rates, profit margins, customer attrition rates, royalty rates, and discount rates. Discount rates of 13.0% and 14.0% were applied to the expected future cash flows to reflect the risk related to customer relationships and developed technology, respectively. Customer relationships and developed technology will be amortized on a straight-line basis over estimated useful lives of 8 years and 10 years, respectively.

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

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

Pro-forma financial information has not been provided as the acquisition did not have a material impact on the Consolidated Statements of Earnings.

9

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

5. Impairments

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company vacated its leased facility in Mountain View, California during the third quarter of 2020, resulting in its classification as a separate asset group. This facility was previously used by the Intelligent Audio product line, which is included within the Audio segment. Based on an assessment of market conditions, in particular the impact of the COVID-19 pandemic, the Company determined that the carrying amount of the asset group was not recoverable through undiscounted future cash flows, which included estimated sublease proceeds. The fair value of the operating lease right-of-use asset was determined by an estimate of discounted future cash flows that included estimated sublease proceeds and the determination of an appropriate discount rate based on market participant assumptions. The fair value measurements of operating lease right-of-use assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Based on the excess of the carrying amount of the asset group over its fair value, the Company recorded an impairment loss of $5.4 million within Impairment charges in Operating expenses during the three months ended September 30, 2020. During the three months ended September 30, 2021, the Company determined that the remaining carrying amount of the asset group was not recoverable through undiscounted future cash flows, which included estimated sublease proceeds, due to the prolonged impact of the COVID-19 pandemic on market conditions. Based on the excess of the carrying amount of the asset group over its fair value, the Company recorded an impairment loss of $3.2 million within Impairment charges in Operating expenses during the three months ended September 30, 2021.

The Company entered into an operating lease for a research and development facility in Santa Clara, California during the first quarter of 2020 that did not commence until the second quarter of 2021. During the three months ended September 30, 2020, the Company determined a loss was probable and reasonably estimable under ASC 450, Contingencies, based on its plan to sublet a significant portion of the facility due to the restructuring of the Intelligent Audio product line and the negative impact of the COVID-19 pandemic on market conditions. The estimated loss was determined by comparing the estimated carrying amount of the operating lease right-of-use asset to be recognized for the sublet portion of the facility upon lease commencement to an estimate of discounted future cash flows that included estimated sublease proceeds and the determination of an appropriate discount rate based on market participant assumptions. These measurements are based on significant unobservable inputs, and thus represent Level 3 inputs. The Company recorded an estimated loss of $2.2 million within Impairment charges in Operating expenses during the three months ended September 30, 2020. The corresponding estimated liability, which was recorded in Other liabilities on the Consolidated Balance Sheets as of December 31, 2020, reduced the right-of-use asset upon lease commencement. The lease commenced during the second quarter of 2021, resulting in the recognition of operating lease liabilities of $4.0 million and right-of-use assets of $2.4 million. During the three months ended September 30, 2021, the Company determined that the remaining carrying amount of the operating lease right-of-use asset was not recoverable through undiscounted future cash flows, which included estimated sublease proceeds, due to the prolonged impact of the COVID-19 pandemic on market conditions. Based on the excess of the carrying amount of the operating lease right-of-use asset over its fair value, the Company recorded an impairment loss of $0.8 million within Impairment charges in Operating expenses during the three months ended September 30, 2021.

If actual results differ from estimated amounts, additional impairment charges may be recorded in the future.

6. Inventories, net

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

(in millions)	September 30, 2021		December 31, 2020
Raw materials	$	87.6	$	89.7
Work in progress	33.6		31.0
Finished goods	71.2		48.4
Subtotal	192.4		169.1
Less reserves	(36.7)		(39.0)
Total	$	155.7	$	130.1

10

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

7. Property, Plant, and Equipment, net

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

(in millions)	September 30, 2021		December 31, 2020
Land	$	13.0	$	8.0
Buildings and improvements	117.7		111.9
Machinery, equipment, and other	571.6		562.8
Subtotal	702.3		682.7
Less accumulated depreciation	(511.7)		(491.2)
Total	$	190.6	$	191.5

Depreciation expense totaled $11.5 million and $11.9 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, depreciation expense totaled $35.1 million and $35.9 million, respectively.

8. Goodwill and Other Intangible Assets

The changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2021 are as follows:

(in millions)	Audio		Precision Devices		Total
Balance at December 31, 2020	$	878.8	$	31.2	$	910.0
Acquisition	—		31.3		31.3
Balance at September 30, 2021	$	878.8	$	62.5	$	941.3

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

	September 30, 2021				December 31, 2020
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Trademarks	$	2.0	$	0.5	$	1.0	$	0.4
Patents	40.8		39.6		40.8		36.1
Customer relationships	39.7		7.9		12.0		5.2
Developed technology	45.4		11.5		36.5		6.7
Other	2.4		1.1		1.8		0.7
Total	130.3		60.6		92.1		49.1
Unamortized intangible assets:
Trademarks	32.0				32.0
IPR&D (1)	—				3.7
Total	32.0				35.7
Total intangible assets, net	$	101.7			$	78.7

(1) The in-process research and development ("IPR&D") project was completed during the third quarter of 2021. The IPR&D asset has been reclassified as a definite-lived intangible asset to be amortized on a straight-line basis over an estimated useful life of 9 years.

11

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

Amortization expense totaled $4.3 million and $3.3 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, amortization expense was $11.5 million and $9.8 million, respectively. Amortization expense for the next five years, based on current definite-lived intangible balances, is estimated to be as follows:

(in millions)
Q4 2021	$	4.4
2022	12.2
2023	11.6
2024	11.6
2025	11.2

9. 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.

No restructuring charges were recorded within Gross profit for the three and nine months ended September 30, 2021. During the nine months ended September 30, 2021, the Company recorded restructuring charges within Operating expenses of $0.3 million. No restructuring charges were recorded within Operating expenses for the three months ended September 30, 2021.

During the nine months ended September 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 nine months ended September 30, 2020, the Company recorded restructuring charges of $8.3 million related to these actions, including $5.4 million in severance pay and benefits, $1.7 million in fixed asset write-off costs, and $1.2 million in contract termination costs. No restructuring charges were recorded related to the Intelligent Audio product line during the three months ended September 30, 2020.

In addition, during the three and nine months ended September 30, 2020, the Company recorded restructuring charges of $0.1 million and $4.5 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 experienced due to the COVID-19 pandemic.

During the nine months ended September 30, 2020, the Company recorded total restructuring charges within Gross profit of $2.3 million, 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. No restructuring charges were recorded within Gross profit for the three months ended September 30, 2020. During the three and nine months ended September 30, 2020, the Company also recorded total restructuring charges within Operating expenses of $0.1 million and $10.5 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.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Audio	$	—	$	—	$	0.3	$	11.0
Precision Devices	—		0.1		—		0.1
Corporate	—		—		—		1.7
Total	$	—	$	0.1	$	0.3	$	12.8

12

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

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, 2020	$	1.9	$	0.7	$	2.6
Restructuring charges	0.3		—		0.3
Payments	(1.7)		(0.7)		(2.4)
Balance at September 30, 2021	$	0.5	$	—	$	0.5

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

(in millions)	September 30, 2021		December 31, 2020
Other accrued expenses	$	0.5	$	2.4
Other liabilities	—		0.2
Total	$	0.5	$	2.6

10. Borrowings

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

(in millions)	September 30, 2021		December 31, 2020
3.25% convertible senior notes	$	171.8	$	165.1
Revolving credit facility	—		—
Total	171.8		165.1
Less current maturities	171.8		165.1
Total long-term debt	$	—	$	—

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

(in millions)	Q4 2021		2022		2023		2024		2025
Debt principal payments	$	172.5	$	—	$	—	$	—	$	—

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 has elected to settle the principal amount of the Notes in cash. If the conversion value exceeds the principal amount of the Notes, the Company will deliver shares of its common stock to settle the remainder of its obligation. 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.

13

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

Prior to the close of business on the business day immediately preceding August 1, 2021, the Notes were 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.

No event occurred that would have permitted conversion of the Notes prior to August 1, 2021. 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. No conversion options have been exercised as of September 30, 2021. 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.

The Notes consist of the following:

(in millions)	September 30, 2021		December 31, 2020
Liability component:
Principal	$	172.5	$	172.5
Less debt issuance costs and debt discount, net of amortization	(0.7)		(7.4)
Total	171.8		165.1
Less current maturities (1)	171.8		165.1
Long-term portion	$	—	$	—
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 September 30, 2021 was $186.4 million. The fair value was determined based on the closing trading price of the Notes as of the last trading day for the third quarter of 2021.

14

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
3.25% coupon	$	1.4	$	1.4	$	4.2	$	4.2
Amortization of debt issuance costs	0.2		0.2		0.7		0.7
Amortization of debt discount	2.1		1.9		6.0		5.5
Total	$	3.7	$	3.5	$	10.9	$	10.4

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. The Warrants expire during the first quarter of 2022. 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. 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.

Revolving Credit Facility

There were no revolving credit facility borrowings outstanding as of September 30, 2021 and December 31, 2020.

On September 4, 2020, the Company entered into a new Credit Agreement (the "New Credit Agreement"). The New Credit Agreement provides for a senior secured revolving credit facility (the "New Credit Facility") with borrowings in an aggregate principal amount at any time outstanding not to exceed $400.0 million. The New Credit Agreement serves as refinancing of indebtedness and terminates the Company's Revolving Credit Facility Agreement dated as of October 11, 2017 ("Prior Credit Facility"). The Prior Credit Facility consisted of a $400.0 million senior secured revolving credit facility.

Commitments under the New Credit Facility will terminate, and loans outstanding thereunder will mature, on January 2, 2024; provided, that if all the Notes have not been repaid, refinanced, and/or converted to common stock of the Company by August 2, 2021 (the "Springing Maturity Test Date"), then the commitments under the New Credit Facility will terminate, and the loans outstanding thereunder will mature, on such earlier date unless, from and after the Springing Maturity Test Date and for so long as the Notes have not been repaid, refinanced, and/or converted to common stock of the Company, the Company does not permit liquidity (as defined in the New Credit Agreement) for any period of three consecutive business days to be less than $150.0 million. The Company maintained the required liquidity from August 2, 2021 through September 30, 2021.

15

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

The New Credit Agreement includes requirements, to be tested quarterly, that the Company maintains (i) a minimum ratio of Consolidated EBITDA to consolidated interest expense of 3.25 to 1.0 (the "Interest Coverage Ratio"), (ii) a maximum ratio of Consolidated total indebtedness to Consolidated EBITDA of 3.75 to 1.0 (the "Total Leverage Ratio"), and (iii) a maximum ratio of senior secured indebtedness to Consolidated EBITDA of 3.25 to 1.0 (the "Senior Secured Leverage Ratio"). For these ratios, Consolidated EBITDA and consolidated interest expense are calculated using the most recent four consecutive fiscal quarters in a manner defined in the New Credit Agreement. At September 30, 2021, the Company was in compliance with these covenants and it expects to remain in compliance with all of its debt covenants over the next twelve months.

The interest rates under the New Credit Facility will be, at the Borrowers' option (1) LIBOR (or, in the case of borrowings under the New Credit Facility denominated in Euro, EURIBOR) plus the rates per annum determined from time to time based on the total leverage ratio of the Company as of the end of and for the most recent period of four fiscal quarters for which financial statements have been delivered (the "Applicable Margin"); or (2) in the case of borrowings denominated in U.S. dollars, alternate base rate ("ABR") (as defined in the New Credit Agreement) plus the Applicable Margin. The Applicable Margin for LIBOR could range from 1.50% to 2.50% while the Applicable Margin for ABR could range from 0.50% to 1.50%. Prior to the discontinuation of the relevant LIBOR reference rate on June 30, 2023, the Company and its lenders will agree on an ABR to address the replacement of LIBOR for the remaining life of the New Credit Facility.

The interest rate under the New Credit Facility is variable based on LIBOR at the time of the borrowing and the Applicable Margin. In addition, a commitment fee accrues on the average daily unused portion of the New Credit Facility at a rate of 0.225% to 0.375%.

There were no borrowings outstanding under the New Credit Facility during the nine months ended September 30, 2021. The weighted-average interest rate on the Company's borrowings under the New Credit Facility and Prior Credit Facility was 2.18% for the nine months ended September 30, 2020. The weighted-average commitment fee on the revolving lines of credit was 0.26% and 0.25% for the nine months ended September 30, 2021 and 2020, respectively.

11. Other Comprehensive Earnings

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

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(3.7)	$	—	$	(3.7)	$	9.2	$	—	$	9.2
Employee benefit plans	0.2		(0.1)		0.1		0.2		0.1		0.3
Changes in fair value of cash flow hedges	(0.3)		0.2		(0.1)		1.1		(0.2)		0.9
Total other comprehensive (loss) earnings	$	(3.8)	$	0.1	$	(3.7)	$	10.5	$	(0.1)	$	10.4
	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2020
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(6.4)	$	—	$	(6.4)	$	5.1	$	—	$	5.1
Employee benefit plans	0.6		0.1		0.7		0.5		—		0.5
Changes in fair value of cash flow hedges	(2.1)		0.2		(1.9)		0.5		(0.1)		0.4
Total other comprehensive (loss) earnings	$	(7.9)	$	0.3	$	(7.6)	$	6.1	$	(0.1)	$	6.0

16

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the nine months ended September 30, 2021 and 2020:

(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2020	$	1.6	$	(22.1)	$	(80.0)	$	(100.5)
Other comprehensive (loss) earnings, net of tax	(1.9)		0.7		(6.4)		(7.6)
Balance at September 30, 2021	$	(0.3)	$	(21.4)	$	(86.4)	$	(108.1)

(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2019	$	0.5	$	(18.7)	$	(93.8)	$	(112.0)
Other comprehensive earnings, net of tax	0.4		0.5		5.1		6.0
Balance at September 30, 2020	$	0.9	$	(18.2)	$	(88.7)	$	(106.0)

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

		Three Months Ended September 30,
(in millions)	Statement of Earnings Line	2021		2020
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other (income) expense, net	$	0.2	$	0.2
Tax	Provision for income taxes	(0.1)		0.1
Net of tax		$	0.1	$	0.3
Cash flow hedges:
Net gains reclassified into earnings	Cost of goods sold	$	—	$	(0.6)
Tax	Provision for income taxes	0.1		0.1
Net of tax		$	0.1	$	(0.5)
		Nine Months Ended September 30,
(in millions)	Statement of Earnings Line	2021		2020
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other (income) expense, net	$	0.6	$	0.5
Tax	Provision for income taxes	0.1		—
Net of tax		$	0.7	$	0.5
Cash flow hedges:
Net gains reclassified into earnings	Cost of goods sold	$	(1.9)	$	(0.2)
Tax	Provision for income taxes	0.5		0.1
Net of tax		$	(1.4)	$	(0.1)

17

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

12. Income Taxes

Income taxes for the interim periods presented have been included in the accompanying Consolidated Financial Statements on the basis of an estimated annual effective tax rate ("ETR"). The determination of the consolidated provision for income taxes requires management to make certain judgments and estimates. Changes in the estimated level of annual pre-tax earnings or loss, tax laws, and changes resulting from tax audits can affect the overall ETR, which impacts the level of income tax expense or benefit and net income or loss. Judgments and estimates related to the Company’s projections and assumptions are inherently uncertain and therefore, actual results could differ materially from projections.

The Company's ETR from continuing operations for the three and nine months ended September 30, 2021 was a 14.2% provision and a 13.1% provision, respectively. During the three and nine months ended September 30, 2021, the ETR from continuing operations was impacted by discrete items totaling $0.4 million of expense and $0.9 million of benefit, respectively. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2021 was a 13.0% provision and a 14.5% provision, respectively. The Company's ETR from continuing operations for the three and nine months ended September 30, 2020 was a 29.1% provision and a 26.5% provision, respectively. During the three and nine months ended September 30, 2020, the ETR from continuing operations was impacted by discrete items totaling $1.2 million of benefit, primarily related to a benefit resulting from an increase to the recognized deferred tax assets in the Company's U.S. and Malaysian subsidiaries. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2020 was a 44.3% provision and a 32.2% provision, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the three and nine months ended September 30, 2021 and 2020.

The Company's ETR is favorably impacted by tax holidays granted to the Company in Malaysia. 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 current ETR may be significantly adversely impacted. The continuing operations benefit of the tax holidays in Malaysia for the three and nine months ended September 30, 2021 was approximately $3.9 million and $9.3 million, respectively, or $0.04 and $0.10 on a per share basis. The continuing operations benefit of these incentives for the three and nine months ended September 30, 2020 was approximately $2.7 million and $4.2 million, respectively, or $0.03 and $0.05 on a per share basis. The Company's existing significant tax holiday in Malaysia will expire on December 31, 2021. The Company is pursuing an extension for its current tax holiday and evaluating other strategies to mitigate the impact of the expiring tax holiday. If the Company is unable to extend the current tax holiday or negotiate acceptable new terms, the Company’s ETR may be significantly adversely impacted.

13. Equity Incentive Program

Stock-based compensation expense recognized in the Consolidated Statements of Earnings totaled $7.1 million and $4.8 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, stock-based compensation expense was $25.6 million and $12.4 million, respectively.

Stock Options and SSARs

The expense related to stock options granted in the nine months ended September 30, 2021 and 2020 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below:

	Nine Months Ended September 30,
	2021			2020
Risk-free interest rate	0.06%			0.11%	to	1.42%
Dividend yield	—%			—%
Expected life (years)	4.5			4.3	to	4.5
Volatility	36.0%			38.8%	to	40.6%
Fair value at date of grant	$6.14	to	$6.31	$4.78	to	$5.95

18

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the nine months ended September 30, 2021 (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, 2020	596,537	$	22.72				5,765,903	$	17.44
Granted	—	—					216,963	20.61
Exercised	—	—					(867,386)	16.54
Forfeited	—	—					(90,074)	17.01
Expired	(106,477)	22.17					(848,452)	29.52
Outstanding at September 30, 2021	490,060	$	22.84	$	—	0.9	4,176,954	$	15.34	$	14.8	3.0
Exercisable at September 30, 2021	490,060	$	22.84	$	—	0.9	3,309,977	$	14.75	$	13.4	2.4

There was no unrecognized compensation expense related to SSARs at September 30, 2021. At September 30, 2021, unrecognized compensation expense related to stock options not yet exercisable of $3.3 million is expected to be recognized over a weighted-average period of 1.4 years.

RSUs

The following table summarizes the Company's restricted stock unit ("RSU") activity for the nine months ended September 30, 2021:

	Share units	Weighted-average grant date fair value
Unvested at December 31, 2020	1,909,786	$	16.14
Granted	1,117,408	20.58
Vested (1)	(1,049,222)	15.79
Forfeited	(157,176)	18.26
Unvested at September 30, 2021	1,820,796	$	18.82

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

At September 30, 2021, $23.4 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 1.8 years.

PSUs

The Company grants performance share units (“PSUs”) to senior management. In each case, the awards will cliff vest three years following the grant date. PSUs will be settled in shares of the Company's common stock. Depending on the Company's overall performance relative to the applicable measures, the size of the PSU awards are subject to adjustment, up or down, resulting in awards at the end of the performance period that can range from 0% to 225% of target. The Company will ratably recognize the expense over the applicable service period for each grant of PSUs and adjust the expense for the expected achievement of performance conditions as appropriate. The fair value of PSUs is determined by using a Monte Carlo simulation. For the awards granted in February 2021, the number of PSUs that may be earned and vest is based on total shareholder return (“TSR”) relative to the component companies of the Russell 2000 Index over a three-year performance period.

19

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

The COVID-19 pandemic brought on unique and unprecedented challenges to the Company, particularly in the hearing health and medtech markets. Many of the Company's executive compensation programs were affected, including outstanding PSU awards. Due to the impact of the COVID-19 pandemic on the Company’s overall business performance, effective February 8, 2021, the Company’s Compensation Committee approved certain modifications to PSUs granted in February 2018, 2019, and 2020.

For the awards granted in February 2018 (the “2018 PSUs”), the number of PSUs that may be earned and vest was originally based on the Company’s revenues and stock price performance over a three-year performance period. The modified award is based on the Company’s revenues and stock price performance over three separate one-year performance periods to isolate the impact of the COVID-19 pandemic on the Company's fiscal 2020 performance. In addition, the performance periods corresponding to fiscal 2018 and 2019 were weighted at 25% each while the performance period corresponding to fiscal 2020 was weighted at 50%, given the impact of fiscal 2020 performance on shareholders. Service conditions were not modified. The modification of the 2018 PSUs affected nine employees and resulted in total incremental compensation expense of $3.9 million, which was recognized in the first quarter of 2021 as there was no remaining service period. In February 2021, the 2018 PSUs were converted from 329,092 PSUs to 190,544 shares of common stock based on achievement of the modified conditions.

For the awards granted in February 2019 (the “2019 PSUs”), the number of PSUs that may be earned and vest was originally based on the Company's revenues and TSR relative to the component companies of the S&P Semiconductor Select Industry Index over a three-year performance period. The modified award is based on the Company’s revenues and TSR relative to the component companies of the S&P Semiconductor Select Industry Index over three separate one-year performance periods to isolate the impact of the COVID-19 pandemic on the Company's fiscal 2020 performance. Each period is weighted equally, as the Company expects to face challenges related to the COVID-19 pandemic in fiscal 2021. Service conditions were not modified. The modification of the 2019 PSUs affected eight employees and resulted in total incremental compensation expense of $2.4 million, which will be recognized over the remaining service period. Incremental compensation expense is subject to adjustment for the expected achievement of the performance condition based on fiscal 2021 revenues.

For the awards granted in February 2020 (the “2020 PSUs”), the number of PSUs that may be earned and vest was originally based on TSR relative to the component companies of the S&P Semiconductor Select Industry Index over a three-year performance period. The modified award replaces the S&P Semiconductor Select Industry Index with the Russell 2000 Index. The Company is a member of the Russell 2000 Index, which represents a broader, more diversified index that better aligns with the Company's strategy. Service conditions were not modified. The modification of the 2020 PSUs affected eight employees and resulted in total incremental compensation expense of $4.7 million, which will be recognized over the remaining service period.

The following table summarizes the Company's PSU activity for the nine months ended September 30, 2021:

	Share units	Weighted-average grant date fair value
Unvested at December 31, 2020	920,973	$	16.04
Granted	277,183	28.46
Vested (1)	(329,092)	13.75
Forfeited	(101,483)	19.05
Unvested at September 30, 2021	767,581	$	21.11

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

At September 30, 2021, $11.9 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.4 years.

20

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

14. Earnings per Share

Basic and diluted earnings per share were computed as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except share and per share amounts)	2021		2020		2021		2020
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)
Earnings from discontinued operations, net	—		—		0.2		3.7
Net earnings (loss)	$	27.7	$	5.6	$	57.8	$	(23.0)
Basic earnings (loss) per common share:
Earnings (loss) from continuing operations	$	0.30	$	0.06	$	0.62	$	(0.29)
Earnings from discontinued operations, net	—		—		0.01		0.04
Net earnings (loss)	$	0.30	$	0.06	$	0.63	$	(0.25)
Weighted-average shares outstanding	92,189,329		91,688,765		92,315,146		91,707,702
Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations	$	0.29	$	0.06	$	0.61	$	(0.29)
Earnings from discontinued operations, net	—		—		—		0.04
Net earnings (loss)	$	0.29	$	0.06	$	0.61	$	(0.25)
Diluted weighted-average shares outstanding	94,143,034		92,473,318		94,780,940		91,707,702

As the Company either elected or intended to settle the principal amount of the Notes in cash for all periods presented, 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 nine months ended September 30, 2021, the weighted-average number of anti-dilutive potential common shares excluded from the diluted earnings per share calculation above was 1,129,231 and 1,299,454, respectively. For the three and nine months ended September 30, 2020, the weighted-average number of anti-dilutive potential common shares excluded from the diluted earnings per share calculation above was 4,559,131 and 5,102,219, respectively.

15. 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 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.

21

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

Intellectual Property Infringement Claims

The Company may, on a limited customer specific basis, provide contractual indemnities for certain losses that arise out of claims that its products infringe on the intellectual property of others. It is not possible to determine the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Historically, the Company has not made significant payments under such indemnity arrangements. The Company’s legal accruals associated with these indemnity arrangements were not significant at September 30, 2021 and December 31, 2020.

16. Segment Information

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Revenues:
Audio	$	177.7	$	164.8	$	490.6	$	389.4
Precision Devices	55.3		41.0		143.2		131.7
Total revenues	$	233.0	$	205.8	$	633.8	$	521.1
Earnings (loss) from continuing operations before interest and income taxes:
Audio	$	36.6	$	17.8	$	95.0	$	(0.5)
Precision Devices	14.0		8.0		28.3		26.2
Total segments	50.6		25.8		123.3		25.7
Corporate expense / other	14.1		13.2		44.7		34.3
Interest expense, net	4.2		4.7		12.3		12.5
Earnings (loss) before income taxes and discontinued operations	32.3		7.9		66.3		(21.1)
Provision for income taxes	4.6		2.3		8.7		5.6
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)

Information regarding assets of the Company's reportable segments:

	Total Assets
(in millions)	September 30, 2021		December 31, 2020
Audio	$	1,461.7	$	1,470.4
Precision Devices	257.4		179.2
Corporate / eliminations	4.1		5.3
Total	$	1,723.2	$	1,654.9

22

Table of Contents	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Asia	$	163.4	$	151.7	$	452.0	$	368.3
United States	42.2		28.8		109.3		86.8
Europe	24.6		23.1		65.4		59.8
Other Americas	1.6		1.3		3.9		2.8
Other	1.2		0.9		3.2		3.4
Total	$	233.0	$	205.8	$	633.8	$	521.1

Receivables, net from contracts with customers were $120.3 million and $123.8 million as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, our total remaining performance obligations are immaterial.

17. Subsequent Events

On November 1, 2021, the Company will deliver $172.5 million in cash and approximately 0.4 million shares of its common stock to settle its obligations under the Notes. Under the Note Hedges, the Company expects to receive approximately 0.4 million shares of its common stock, which approximates the number of shares to be delivered under the Notes. See Note 10. Borrowings for additional information on these instruments.

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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, power disruptions, 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, 2020, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. 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.

24

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 microphones and speakers, audio processing, and precision device solutions, serving the consumer electronics, communications, medtech, defense, electric vehicle, and industrial markets. We use our leading position in SiSonic™ 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 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, hearing health, True Wireless Stereo ("TWS"), IoT, and computing 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 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, electric vehicle, and industrial markets. Our RF solutions solve a broad range of 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 equipment. 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. We have recently been experiencing demand in excess of available capacity. During the third quarter of 2021, we continued to experience shortages of raw materials used in producing MEMS microphones and capacitor products due to supply chain constraints associated with the COVID-19 pandemic. In addition, we anticipate power curtailments in China will impact production during the fourth quarter of 2021. The duration and full extent of the impact of these disruptions is uncertain and depends upon many factors outside of our control.

IMC Acquisition

On May 3, 2021, we acquired all of the outstanding shares of common stock of Integrated Microwave Corporation ("IMC") for $80.7 million. The acquired business provides RF filters to the defense, industrial, and communications markets. The acquisition's operations are included in the PD segment. For additional information, refer to Note 4. Acquisition to our Consolidated Financial Statements.

COVID-19 Update

During 2020 and continuing into 2021, 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. While some of these measures have been lightened or removed as global distribution of vaccines continues to progress, the COVID-19 pandemic 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.

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. 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.

Additional information regarding the risks that we face as a result of the COVID-19 pandemic can be found under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. Further, to the extent the COVID-19 pandemic adversely affects our business and financial results, it also may have the effect of heightening many of the other risks described in the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2020, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, and in our subsequent filings with the Securities and Exchange Commission.

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.

25

Results of Operations for the Three Months Ended September 30, 2021 compared with the Three Months Ended September 30, 2020

	Three Months Ended September 30,
(in millions, except per share amounts)	2021		2020
Revenues	$	233.0	$	205.8
Gross profit	$	96.9	$	75.2
Non-GAAP gross profit	$	97.5	$	75.6
Earnings from continuing operations before interest and income taxes	$	36.5	$	12.6
Adjusted earnings from continuing operations before interest and income taxes	$	52.6	$	28.8
Provision for income taxes	$	4.6	$	2.3
Non-GAAP provision for income taxes	$	7.5	$	3.7
Earnings from continuing operations	$	27.7	$	5.6
Non-GAAP net earnings from continuing operations	$	43.0	$	22.3
Earnings per share from continuing operations - diluted	$	0.29	$	0.06
Non-GAAP diluted earnings per share from continuing operations	$	0.45	$	0.24

Revenues

Revenues for the third quarter of 2021 were $233.0 million, compared with $205.8 million for the third quarter of 2020, an increase of $27.2 million or 13.2%. Audio revenues increased $12.9 million, primarily due to higher shipping volumes as market conditions have improved from 2020, which was negatively impacted by the COVID-19 pandemic. The higher volumes were driven by hearing health shipments above pre-pandemic levels and increased MEMS microphones shipments into the IoT and mobile markets, partially offset by lower demand from TWS markets. PD revenues increased $14.3 million, primarily due to our acquisition of IMC and higher demand from the medtech, industrial, defense, and electric vehicle markets, partially offset by decreased demand in the communications market. The medtech market, which includes our high-reliability products used in implantable devices and MRI machines, was impacted by the COVID-19 pandemic in the previous period as hospitals had reduced elective procedures. The demand for our medtech products has returned to pre-pandemic levels.

Cost of Goods Sold

Cost of goods sold ("COGS") for the third quarter of 2021 was $136.1 million, compared with $130.6 million for the third quarter of 2020, an increase of $5.5 million or 4.2%. This increase was primarily the result of higher shipping volumes, partially offset by product cost reductions and higher factory capacity utilization.

Restructuring Charges

During the third quarter of 2021, there were no restructuring charges recorded within Gross profit or Operating expenses.

During the third quarter of 2020, we recorded restructuring charges of $0.1 million within Operating expenses, primarily for actions associated with rationalizing the PD segment workforce.

Gross Profit and Non-GAAP Gross Profit

Gross profit for the third quarter of 2021 was $96.9 million, compared with $75.2 million for the third quarter of 2020, an increase of $21.7 million or 28.9%. Gross profit margin (gross profit as a percentage of revenues) for the third quarter of 2021 was 41.6%, compared with 36.5% for the third quarter of 2020. The increases were primarily due to higher shipping volumes, product cost reductions, higher factory capacity utilization, positive mix, and net favorable inventory reserve adjustments, partially offset by higher precious metals cost. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

26

Non-GAAP gross profit for the third quarter of 2021 was $97.5 million, compared with $75.6 million for the third quarter of 2020, an increase of $21.9 million or 29.0%. Non-GAAP gross profit margin (non-GAAP gross profit as a percentage of revenues) for the third quarter of 2021 was 41.8%, compared with 36.7% for the third quarter of 2020. The increases were primarily due to higher shipping volumes, product cost reductions, higher factory capacity utilization, positive mix, and net favorable inventory reserve adjustments, partially offset by higher precious metals cost. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

Research and Development Expenses

Research and development expenses for the third quarter of 2021 were $22.3 million, compared with $21.9 million for the third quarter of 2020, an increase of $0.4 million or 1.8%. Research and development expenses as a percentage of revenues for the third quarter of 2021 and 2020 were 9.6% and 10.6%, respectively. The increase in expenses was primarily driven by our acquisition of IMC. The decrease in expenses as a percentage of revenues was due to the increase in our revenues.

Selling and Administrative Expenses

Selling and administrative expenses for the third quarter of 2021 were $36.0 million, compared with $32.0 million for the third quarter of 2020, an increase of $4.0 million or 12.5%. Selling and administrative expenses as a percentage of revenues for the third quarter of 2021 and 2020 were 15.5%. The increase in expenses was primarily driven by stock-based compensation, incentive compensation, and our acquisition of IMC. For additional information on stock-based compensation, refer to Note 13. Equity Incentive Program to our Consolidated Financial Statements. The increase in selling and administrative expenses was partially offset by lower legal expenses. Legal expenses were lower due to reduced activity related to the protection of our intellectual property. Our expenses as a percentage of revenues remained consistent with prior year as higher revenues offset our increased expenses.

Impairment Charges

Impairment charges for the third quarter of 2021 were $4.0 million, compared to $7.6 million for the third quarter of 2020. These charges relate to facilities in our Intelligent Audio product line. For additional information related to these impairment charges, refer to Note 5. Impairments to our Consolidated Financial Statements.

Interest Expense, net

Interest expense for the third quarter of 2021 was $4.2 million, compared to $4.7 million for the third quarter of 2020, a decrease of $0.5 million. The decrease is primarily due to lower outstanding borrowings, partially offset by higher debt discount amortization. For additional information on borrowings and interest expense, refer to Note 10. Borrowings to our Consolidated Financial Statements.

Other (Income) Expense, net

Other income for the third quarter of 2021 was $1.9 million, compared with expense of $1.0 million for the third quarter of 2020, a change of $2.9 million. The change is primarily due to the impacts from foreign currency exchange rate changes.

27

Provision for Income Taxes and Non-GAAP Provision for Income Taxes

The effective tax rate ("ETR") from continuing operations for the third quarter of 2021 was a 14.2% provision, compared with a 29.1% provision for the third quarter of 2020. The ETR from continuing operations for the third quarter of 2021 was impacted by a net discrete provision totaling $0.4 million. The ETR from continuing operations for the third quarter of 2020 was impacted by a net discrete benefit totaling $1.2 million, primarily related to a benefit resulting from an increase to the recognized deferred tax assets in our U.S. and Malaysian subsidiaries. Absent the discrete items, the ETR from continuing operations for the third quarter of 2021 and 2020 was a 13.0% provision and a 44.3% 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 third quarter of 2021 and 2020. The change in the ETR was due to the mix of earnings and losses by taxing jurisdictions and net discrete items.

The non-GAAP ETR from continuing operations for the third quarter of 2021 was a 14.9% provision, compared with a 14.2% provision for the third quarter of 2020. The non-GAAP ETR from continuing operations for the third quarter of 2021 and 2020 were impacted by net discrete items totaling $0.4 million of expense and $0.9 million of benefit, respectively. Absent the discrete items, the non-GAAP ETR from continuing operations for the third quarter of 2021 and 2020 was a 14.1% provision and a 17.7% provision, respectively. The change in the non-GAAP ETR was due to the mix of earnings and losses by taxing jurisdictions and net discrete items.

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 through the holiday period. Our existing significant tax holiday in Malaysia will expire on December 31, 2021. We are pursuing an extension for our current tax holiday and evaluating other strategies to mitigate the impact of the expiring tax holiday. If we are unable to extend the current tax holiday or negotiate acceptable new terms, our ETR may be significantly adversely impacted. For additional information on these tax holidays, refer to Note 12. Income Taxes to our Consolidated Financial Statements.

Earnings from Continuing Operations

Earnings from continuing operations for the third quarter of 2021 was $27.7 million, compared with earnings of $5.6 million for the third quarter of 2020, an increase of $22.1 million. As described above, the increase is primarily due to increased revenues, higher gross profit margin, lower impairment charges, and reduced legal spending, partially offset by higher income tax expense, stock-based compensation, and incentive compensation.

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

Earnings before interest and income taxes ("EBIT") from continuing operations for the third quarter of 2021 was $36.5 million, compared with $12.6 million for the third quarter of 2020, an increase of $23.9 million. The increase in EBIT was primarily due to increased revenues, higher gross profit margin, lower impairment charges, and reduced legal spending, partially offset by higher stock-based compensation and incentive compensation.

Adjusted earnings before interest and income taxes ("Adjusted EBIT") from continuing operations for the third quarter of 2021 was $52.6 million, compared with $28.8 million for the third quarter of 2020, an increase of $23.8 million. Adjusted EBIT margin (adjusted EBIT from continuing operations as a percentage of revenues) for the third quarter of 2021 was 22.6%, compared with 14.0% for the third quarter of 2020. The increases in Adjusted EBIT and Adjusted EBIT margin were primarily due to increased revenues, higher non-GAAP gross profit margin, and reduced legal spending, partially offset by higher incentive compensation.

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Diluted Earnings per Share from Continuing Operations and Non-GAAP Diluted Earnings per Share from Continuing Operations

Diluted earnings per share from continuing operations was $0.29 for the third quarter of 2021, compared with earnings of $0.06 per share for the third quarter of 2020, an increase of $0.23. As described above, the increase is primarily due to increased revenues, higher gross profit margin, lower impairment charges, and reduced legal spending, partially offset by higher tax expense, stock-based compensation, and incentive compensation.

Non-GAAP diluted earnings per share from continuing operations was $0.45 for the third quarter of 2021, compared with earnings of $0.24 for the third quarter of 2020, an increase of $0.21. As described above, the increase is primarily due to increased revenues, higher non-GAAP gross profit margin, and reduced legal spending, partially offset by higher non-GAAP income tax expense and incentive compensation.

Results of Operations for the Nine Months Ended September 30, 2021 compared with the Nine Months Ended September 30, 2020

	Nine Months Ended September 30,
(in millions, except per share amounts)	2021		2020
Revenues	$	633.8	$	521.1
Gross profit	$	258.6	$	179.2
Non-GAAP gross profit	$	260.7	$	182.9
Earnings (loss) from continuing operations before interest and income taxes	$	78.6	$	(8.6)
Adjusted earnings from continuing operations before interest and income taxes	$	122.7	$	34.9
Provision for income taxes	$	8.7	$	5.6
Non-GAAP provision for income taxes	$	15.5	$	3.6
Earnings (loss) from continuing operations	$	57.6	$	(26.7)
Non-GAAP net earnings from continuing operations	$	100.9	$	24.3
Earnings (loss) per share from continuing operations - diluted	$	0.61	$	(0.29)
Non-GAAP diluted earnings per share from continuing operations	$	1.05	$	0.26

Revenues

Revenues for the nine months ended September 30, 2021 were $633.8 million, compared with $521.1 million for the nine months ended September 30, 2020, an increase of $112.7 million or 21.6%. Audio revenues increased $101.2 million, primarily due to higher shipping volumes as market conditions have improved from 2020, which was negatively impacted by the COVID-19 pandemic. The higher volumes were driven by MEMS microphones in the IoT and computing markets. The IoT and computing markets are above pre-pandemic levels, with the computing market benefiting from the work-from-home and remote-learning trends. Hearing health demand has returned to pre-pandemic levels. The increased demand is partially offset by lower average pricing on mature products. PD revenues increased $11.5 million, primarily due to our acquisition of IMC and higher demand from the industrial, medtech, and electric vehicle markets, partially offset by decreased demand in the communications and defense markets. The medtech market, which includes our high-reliability products used in implantable devices and MRI machines, was impacted by the COVID-19 pandemic in the previous period as hospitals had reduced elective procedures. The demand for our medtech products has returned to pre-pandemic levels.

Cost of Goods Sold

COGS for the nine months ended September 30, 2021 was $375.2 million, compared with $339.6 million for the nine months ended September 30, 2020, an increase of $35.6 million or 10.5%. This increase was primarily the result of higher shipping volumes and unfavorable foreign currency exchange rate changes, partially offset by product cost reductions, higher factory capacity utilization, and favorable mix.

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Restructuring Charges

During the nine months ended September 30, 2021, there were no restructuring charges recorded within Gross profit. We recorded restructuring charges of $0.3 million within Operating expenses.

During the nine months ended September 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.

In addition, during the nine months ended September 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 demand we experienced from the COVID-19 pandemic for our remaining Audio products. We also recorded restructuring charges of $3.7 million within Operating expenses, primarily for actions associated with rationalizing the remaining Audio workforce.

Gross Profit and Non-GAAP Gross Profit

Gross profit for the nine months ended September 30, 2021 was $258.6 million, compared with $179.2 million for the nine months ended September 30, 2020, an increase of $79.4 million or 44.3%. Gross profit margin for the nine months ended September 30, 2021 was 40.8%, compared with 34.4% for the nine months ended September 30, 2020. The increases were primarily due to higher shipping volumes, product cost reductions, higher factory capacity utilization, positive mix, and net favorable inventory reserve adjustments, partially offset by lower average pricing on mature products, unfavorable foreign currency exchange rate changes, and higher precious metals cost. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

Non-GAAP gross profit for the nine months ended September 30, 2021 was $260.7 million, compared with $182.9 million for the nine months ended September 30, 2020, an increase of $77.8 million or 42.5%. Non-GAAP gross profit margin for the nine months ended September 30, 2021 and 2020 was 41.1% and 35.1%, respectively. The increases were primarily due to higher shipping volumes, product cost reductions, higher factory capacity utilization, positive mix, and net favorable inventory reserve adjustments, partially offset by lower average pricing on mature products, unfavorable foreign currency exchange rate changes, and higher precious metals cost. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

Research and Development Expenses

Research and development expenses for the nine months ended September 30, 2021 and 2020 were $70.2 million. Research and development expenses as a percentage of revenues for the nine months ended September 30, 2021 and 2020 were 11.1% and 13.5%, respectively. Our expenses have remained consistent, however we have increased development activities in our precision devices, MEMS microphones, and hearing health product lines, which were offset by a reduction in development activities in our Intelligent Audio product line. The decrease in expenses as a percentage of revenues was primarily due to the increase in our revenues.

Selling and Administrative Expenses

Selling and administrative expenses for the nine months ended September 30, 2021 were $108.9 million, compared with $99.3 million for the nine months ended September 30, 2020, an increase of $9.6 million or 9.7%. Selling and administrative expenses as a percentage of revenues for the nine months ended September 30, 2021 and 2020 were 17.2% and 19.1%, respectively. The increase in expenses was primarily driven by stock-based compensation, incentive compensation, and our acquisition of IMC. Due to the impacts of the COVID-19 pandemic, stock-based compensation in 2021 increased due to certain modifications made to previously granted performance share units, while stock-based compensation in 2020 was lowered due to a change in estimated attainment of certain performance targets. For additional information on stock-based compensation, refer to Note 13. Equity Incentive Program to our Consolidated Financial Statements. The increase in selling and administrative expenses was partially offset by lower legal expenses, which were lower due to reduced activity related to the protection of our intellectual property. The decrease in expenses as a percentage of revenues was due to the increase in our revenues.

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Impairment Charges

Impairment charges for the nine months ended September 30, 2020 were $4.0 million, compared to $7.6 million for the nine months ended September 30, 2020. These charges relate to facilities in our Intelligent Audio product line. For additional information related to these impairment charges, refer to Note 5. Impairments to our Consolidated Financial Statements.

Interest Expense, net

Interest expense for the nine months ended September 30, 2021 was $12.3 million, compared with $12.5 million for the nine months ended September 30, 2020, a decrease of $0.2 million. The decrease is primarily due to lower outstanding borrowings, partially offset by higher debt discount amortization. For additional information on borrowings and interest expense, refer to Note 10. Borrowings to our Consolidated Financial Statements.

Other (Income) Expense, net

Other income for the nine months ended September 30, 2021 was $3.4 million, compared with expense of $0.2 million for the nine months ended September 30, 2020, a change of $3.6 million. The change is primarily due to the impacts from foreign currency exchange rate changes and the appreciation in our investment balances.

Provision for Income Taxes and Non-GAAP Provision for Income Taxes

The ETR from continuing operations for the nine months ended September 30, 2021 was a 13.1% provision, compared with a 26.5% provision for the nine months ended September 30, 2020. The ETR from continuing operations for the nine months ended September 30, 2021 was impacted by a net discrete benefit totaling $0.9 million. The ETR from continuing operations for the nine months ended September 30, 2020 was impacted by a net discrete benefit totaling $1.2 million, primarily related to a benefit resulting from an increase to the recognized deferred tax assets in our U.S. and Malaysian subsidiaries. Absent the discrete items, the ETR from continuing operations for the nine months ended September 30, 2021 and 2020 was a 14.5% provision and a 32.2% 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 nine months ended September 30, 2021 and 2020. The change in the ETR was due to the mix of earnings and losses by taxing jurisdictions and net discrete items.

The non-GAAP ETR from continuing operations for the nine months ended September 30, 2021 was a 13.3% provision, compared with a 12.9% provision for the nine months ended September 30, 2020. The non-GAAP ETR from continuing operations for the nine months ended September 30, 2021 was impacted by a net discrete benefit totaling $0.6 million. The non-GAAP ETR from continuing operations for the nine months ended September 30, 2020 was impacted by a net discrete benefit totaling $1.4 million, primarily related to a change in the indefinite reinvestment assertion related to a portion of undistributed earnings of our Malaysian and Luxembourg subsidiaries and a benefit resulting from an increase to our Malaysian subsidiary's deferred tax assets. Absent the discrete items, the non-GAAP ETR from continuing operations for the nine months ended September 30, 2021 was a 13.8% provision, compared to a 17.9% provision for the nine months ended September 30, 2020. The change in the non-GAAP ETR was due to the mix of earnings and losses by taxing jurisdictions and net discrete items.

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 through the holiday period. Our existing significant tax holiday in Malaysia will expire on December 31, 2021. We are pursuing an extension for our current tax holiday and evaluating other strategies to mitigate the impact of the expiring tax holiday. If we are unable to extend the current tax holiday or negotiate acceptable new terms, our ETR may be significantly adversely impacted. For additional information on these tax holidays, refer to Note 12. Income Taxes to our Consolidated Financial Statements.

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Earnings (Loss) from Continuing Operations

Earnings from continuing operations for the nine months ended September 30, 2021 were $57.6 million, compared with a loss of $26.7 million for the nine months ended September 30, 2020, an increase of $84.3 million. As described above, the increase is primarily due to higher revenues, higher gross profit margin, lower restructuring charges, reduced legal spending, and lower impairment charges, partially offset by higher stock-based compensation, incentive compensation, and income tax expense.

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

Earnings before interest and income taxes from continuing operations for the nine months ended September 30, 2021 were $78.6 million, compared with a loss of $8.6 million for the nine months ended September 30, 2020, an increase of $87.2 million. The increase in EBIT is primarily due to higher revenues, higher gross profit margin, lower restructuring charges, reduced legal spending, and lower impairment charges, partially offset by higher stock-based compensation and incentive compensation.

Adjusted EBIT from continuing operations for the nine months ended September 30, 2021 was $122.7 million, compared with $34.9 million for the nine months ended September 30, 2020, an increase of $87.8 million. Adjusted EBIT margin for the nine months ended September 30, 2021 was 19.4%, compared with 6.7% for the nine months ended September 30, 2020. The increases in Adjusted EBIT and Adjusted EBIT margin were primarily due to higher revenues, higher non-GAAP gross profit margin, and reduced legal spending, partially offset by higher incentive compensation.

Earnings from Discontinued Operations, net

Earnings from discontinued operations was $0.2 million in the nine months ended September 30, 2021, compared with $3.7 million for the nine months ended September 30, 2020. We recorded a tax benefit during the second quarter of 2021 related to the Speaker and Receiver Product Line. We recorded a tax benefit for a refund received during the first quarter of 2020 related to the Timing Device Business.

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

Diluted earnings per share from continuing operations was $0.61 for the nine months ended September 30, 2021, compared with a loss of $0.29 for the nine months ended September 30, 2020, an increase of $0.90. As described above, the increase is primarily due to increased revenues, higher gross profit margin, lower restructuring charges, reduced legal spending, and lower impairment charges, partially offset by higher stock-based compensation, incentive compensation, and income tax expense.

Non-GAAP diluted earnings per share from continuing operations was $1.05 for the nine months ended September 30, 2021, compared with $0.26 for the nine months ended September 30, 2020, an increase of $0.79. As described above, the increase is primarily due to increased revenues, higher non-GAAP gross profit margin, and reduced legal spending, partially offset by higher incentive compensation.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except share and per share amounts)	2021		2020		2021		2020
Gross profit	$	96.9	$	75.2	$	258.6	$	179.2
Stock-based compensation expense	0.3		0.4		1.1		1.3
Restructuring charges	—		—		—		2.3
Production transfer costs (2)	—		—		—		0.1
Other (3)	0.3		—		1.0		—
Non-GAAP gross profit	$	97.5	$	75.6	$	260.7	$	182.9
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)
Interest expense, net	4.2		4.7		12.3		12.5
Provision for income taxes	4.6		2.3		8.7		5.6
Earnings (loss) from continuing operations before interest and income taxes	36.5		12.6		78.6		(8.6)
Stock-based compensation expense	7.1		4.8		25.6		12.4
Intangibles amortization expense	4.3		3.3		11.5		9.8
Impairment charges	4.0		7.6		4.0		7.6
Restructuring charges	—		0.1		0.3		12.8
Production transfer costs (2)	—		—		—		0.1
Other (3)	0.7		0.4		2.7		0.8
Adjusted earnings from continuing operations before interest and income taxes	$	52.6	$	28.8	$	122.7	$	34.9
Interest expense, net	$	4.2	$	4.7	$	12.3	$	12.5
Interest expense, net non-GAAP reconciling adjustments (4)	2.1		1.9		6.0		5.5
Non-GAAP interest expense	$	2.1	$	2.8	$	6.3	$	7.0
Provision for income taxes	$	4.6	$	2.3	$	8.7	$	5.6
Income tax effects of non-GAAP reconciling adjustments (5)	2.9		1.4		6.8		(2.0)
Non-GAAP provision for income taxes	$	7.5	$	3.7	$	15.5	$	3.6
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)
Non-GAAP reconciling adjustments (6)	16.1		16.2		44.1		43.5
Interest expense, net non-GAAP reconciling adjustments (4)	2.1		1.9		6.0		5.5
Income tax effects of non-GAAP reconciling adjustments (5)	2.9		1.4		6.8		(2.0)
Non-GAAP net earnings from continuing operations	$	43.0	$	22.3	$	100.9	$	24.3
Diluted earnings (loss) per share from continuing operations	$	0.29	$	0.06	$	0.61	$	(0.29)
Earnings per share non-GAAP reconciling adjustment	0.16		0.18		0.44		0.55
Non-GAAP diluted earnings per share from continuing operations	$	0.45	$	0.24	$	1.05	$	0.26
Diluted average shares outstanding	94,143,034		92,473,318		94,780,940		91,707,702
Non-GAAP adjustment (7)	1,226,016		1,574,586		868,783		2,728,712
Non-GAAP diluted average shares outstanding (7)	95,369,050		94,047,904		95,649,723		94,436,414

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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 Earnings (loss) from continuing operations before interest and income taxes for each period presented.

(3)    In 2021, Other expenses represent the ongoing net lease cost (income) related to facilities not used in operations and expenses related to the acquisition of IMC by the PD segment. In 2020, Other expenses represent the ongoing net lease cost (income) related to facilities not used in operations and expenses related to shareholder activism.

(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 Earnings (loss) 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 September 30, 2021 compared with the Three Months Ended September 30, 2020

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

See Note 16. 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 earnings (loss) from continuing operations.

Audio

	Three Months Ended September 30,
(in millions)	2021		Percent of Revenues	2020		Percent of Revenues
Revenues	$	177.7		$	164.8
Earnings from continuing operations before interest and income taxes	$	36.6	20.6%	$	17.8	10.8%
Stock-based compensation expense	2.1			2.2
Intangibles amortization expense	2.7			2.7
Impairment charges	4.0			7.6
Other (1)	0.3			0.4
Adjusted earnings from continuing operations before interest and income taxes	$	45.7	25.7%	$	30.7	18.6%
(1) Other represents the ongoing net lease cost (income) related to facilities not used in operations.

Revenues

Revenues were $177.7 million for the third quarter of 2021, compared with $164.8 million for the third quarter of 2020, an increase of $12.9 million or 7.8%. Revenues increased primarily due to higher shipping volumes as market conditions have improved from 2020, which was negatively impacted by the COVID-19 pandemic. The higher volumes were driven by MEMS microphones in the IoT and computing markets. The IoT and computing markets are above pre-pandemic levels, with the computing market benefiting from the work-from-home and remote-learning trends. Hearing health demand has returned to pre-pandemic levels.

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

EBIT was $36.6 million for the third quarter of 2021, compared with earnings of $17.8 million for the third quarter of 2020, an increase of $18.8 million. The increases were primarily due to higher revenues, higher gross profit margin, a reduction in impairment charges, and lower legal expenses in connection with the protection of our intellectual property. The gross profit margin increase was driven by product cost reductions, positive mix, and higher factory capacity utilization, partially offset by unfavorable foreign currency exchange rate changes and net unfavorable inventory reserve adjustments. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

Adjusted EBIT was $45.7 million for the third quarter of 2021, compared with $30.7 million for the third quarter of 2020, an increase of $15.0 million. Adjusted EBIT margin for the third quarter of 2021 was 25.7%, compared to 18.6% for the third quarter of 2020. The increases were primarily due to higher revenues, higher gross profit margin, and lower legal expenses in connection with the protection of our intellectual property. The gross profit margin increase was driven by product cost reductions, positive mix, and higher factory capacity utilization, partially offset by unfavorable foreign currency exchange rate changes and net unfavorable inventory reserve adjustments. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

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Precision Devices

	Three Months Ended September 30,
(in millions)	2021		Percent of Revenues	2020		Percent of Revenues
Revenues	$	55.3		$	41.0
Earnings from continuing operations before interest and income taxes	$	14.0	25.3%	$	8.0	19.5%
Stock-based compensation expense	0.7			0.2
Intangibles amortization expense	1.6			0.6
Restructuring charges	—			0.1
Other (1)	0.3			—
Adjusted earnings from continuing operations before interest and income taxes	$	16.6	30.0%	$	8.9	21.7%
(1) Expenses related to the acquisition of IMC.

Revenues

Revenues were $55.3 million for the third quarter of 2021, compared with $41.0 million for the third quarter of 2020, an increase of $14.3 million or 34.9%. Revenues increased primarily due to our acquisition of IMC and higher demand from the medtech, industrial, defense, and electric vehicle markets, partially offset by decreased demand in the communications market. The medtech market, which includes our high-reliability products used in implantable devices and MRI machines, was impacted by the COVID-19 pandemic in the previous period as hospitals had reduced elective procedures. The demand for our medtech products has returned to pre-pandemic levels.

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

EBIT was $14.0 million for the third quarter of 2021, compared with $8.0 million for the third quarter of 2020, an increase of $6.0 million. EBIT margin for the third quarter of 2021 was 25.3%, compared to 19.5% for the third quarter of 2020. The increases were primarily due to higher revenues, including the acquisition of IMC and higher gross profit margin, partially offset by IMC operating expenses and an increase in intangible amortization. The gross profit margin increase was driven by the benefits of productivity initiatives, higher factory utilization, and net favorable inventory reserve adjustments, partially offset by higher precious metals cost and unfavorable mix. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

Adjusted EBIT was $16.6 million for the third quarter of 2021, compared with $8.9 million for the third quarter of 2020, an increase of $7.7 million. Adjusted EBIT margin for the third quarter of 2021 was 30.0%, compared with 21.7% for the third quarter of 2020. The increases were primarily due to higher revenues, including the acquisition of IMC and higher gross profit margin, partially offset by IMC operating expenses. The gross profit margin increase was driven by the benefits of productivity initiatives, higher factory utilization, and net favorable inventory reserve adjustments, partially offset by higher precious metals cost and unfavorable mix. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

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Segment Results of Operations for the Nine Months Ended September 30, 2021 compared with the Nine Months Ended September 30, 2020

Audio

	Nine Months Ended September 30,
(in millions)	2021		Percent of Revenues	2020		Percent of Revenues
Revenues	$	490.6		$	389.4
Earnings (loss) from continuing operations before interest and income taxes	$	95.0	19.4%	$	(0.5)	NM (2)
Stock-based compensation expense	7.8			8.4
Intangibles amortization expense	8.1			8.0
Impairment charges	4.0			7.6
Restructuring charges	0.3			11.0
Other (1)	1.2			0.4
Adjusted earnings from continuing operations before interest and income taxes	$	116.4	23.7%	$	34.9	9.0%
(1) Other represents the ongoing net lease cost (income) related to facilities not used in operations.
(2) Not meaningful.

Revenues

Revenues were $490.6 million for the nine months ended September 30, 2021, compared with $389.4 million for the nine months ended September 30, 2020, an increase of $101.2 million or 26.0%. Revenues increased primarily due to higher shipping volumes as market conditions have improved from 2020, which was negatively impacted by the COVID-19 pandemic. The higher volumes were driven by MEMS microphones in the IoT and computing markets. The IoT and computing markets are above pre-pandemic levels, with the computing market benefiting from the work-from-home and remote-learning trends. Hearing health demand has returned to pre-pandemic levels. The increased demand is partially offset by lower average pricing on mature products.

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

Earnings from continuing operations before interest and income taxes were $95.0 million for the nine months ended September 30, 2021, compared with a loss from continuing operations before interest and income taxes of $0.5 million for the nine months ended September 30, 2020, an increase of $95.5 million. The increases were primarily due to higher revenues, higher gross profit margin, a reduction in restructuring charges, lower legal expenses in connection with the protection of our intellectual property, a reduction in operating expenses, and lower impairment charges. The gross profit margin increase was driven by product cost reductions, higher factory capacity utilization, positive mix, and net favorable inventory reserve adjustments, partially offset by lower average pricing on mature products and unfavorable foreign currency exchange rate changes. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels. Our reduction in operating costs was primarily driven by headcount reductions in our Intelligent Audio product line.

Adjusted EBIT was $116.4 million for the nine months ended September 30, 2021, compared with $34.9 million for the nine months ended September 30, 2020, an increase of $81.5 million. Adjusted EBIT margin for the nine months ended September 30, 2021 was 23.7%, compared to 9.0% for the nine months ended September 30, 2020. The increases were primarily due to higher revenues, higher gross profit margin, lower legal expenses in connection with the protection of our intellectual property, and a reduction in operating expenses. The gross profit margin increase was driven by product cost reductions, higher factory capacity utilization, positive mix, and net favorable inventory reserve adjustments, partially offset by lower average pricing on mature products and unfavorable foreign currency exchange rate changes. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels. Our reduction in operating costs was primarily driven by headcount reductions in our Intelligent Audio product line.

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Precision Devices

	Nine Months Ended September 30,
(in millions)	2021		Percent of Revenues	2020		Percent of Revenues
Revenues	$	143.2		$	131.7
Earnings from continuing operations before interest and income taxes	$	28.3	19.8%	$	26.2	19.9%
Stock-based compensation expense	2.1			0.5
Intangibles amortization expense	3.4			1.8
Restructuring charges	—			0.1
Production transfer costs (1)	—			0.1
Other (2)	1.0			—
Adjusted earnings from continuing operations before interest and income taxes	$	34.8	24.3%	$	28.7	21.8%
(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) Expenses related to the acquisition of IMC.

Revenues

Revenues were $143.2 million for the nine months ended September 30, 2021, compared with $131.7 million for the nine months ended September 30, 2020, an increase of $11.5 million or 8.7%. Revenues decreased primarily due to our acquisition of IMC and higher demand from the industrial, medtech, and electric vehicle markets, partially offset by decreased demand in the communications and defense markets. The medtech market, which includes our high-reliability products used in implantable devices and MRI machines, was impacted by the COVID-19 pandemic in the previous period as hospitals had reduced elective procedures. The demand for our medtech products has returned to pre-pandemic levels.

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

EBIT was $28.3 million for the nine months ended September 30, 2021, compared with $26.2 million for the nine months ended September 30, 2020, an increase of $2.1 million. EBIT margin for the nine months ended September 30, 2021 was 19.8%, compared to 19.9% for the nine months ended September 30, 2020. EBIT increased primarily due to higher revenues and gross profit margin, partially offset by IMC operating expenses, increases in intangible amortization, and stock-based compensation. The gross profit margin increase was driven by benefits of productivity initiatives, higher factory utilization, net favorable inventory reserve adjustments, and higher pricing, partially offset by higher precious metals cost and unfavorable foreign currency exchange rate changes. EBIT margin was consistent with the prior period. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

Adjusted EBIT was $34.8 million for the nine months ended September 30, 2021, compared with $28.7 million for the nine months ended September 30, 2020, an increase of $6.1 million. Adjusted EBIT margin for the nine months ended September 30, 2021 was 24.3%, compared with 21.8% for the nine months ended September 30, 2020. The increases were primarily due to higher revenues and gross profit margin, partially offset by IMC operating expenses. The gross profit margin increase was driven by benefits of productivity initiatives, higher factory utilization, net favorable inventory reserve adjustments, and higher pricing, partially offset by higher precious metals cost and unfavorable foreign currency exchange rate changes. Our 2021 plant productivity has improved due to our factories returning to pre-pandemic production levels.

38

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, capital expenditures, strategic investments, and share repurchases. 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. We have elected to settle the principal amount of the Notes in cash. If the conversion value exceeds the principal amount of the Notes, we will deliver shares of our common stock to settle the remainder of our obligation. 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 on November 1, 2021, unless earlier converted. The Notes are unsecured, senior obligations and interest is payable semi-annually in arrears. We have primarily used the net proceeds to reduce borrowings outstanding. For additional information, refer to Note 10. Borrowings 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 nine months ended September 30, 2021, we repurchased 1,011,124 shares of common stock for a total of $20.0 million.

On September 4, 2020, we entered into a new Credit Agreement (the "New Credit Agreement"). The New Credit Agreement provides for a senior secured revolving credit facility (the "New Credit Facility") with borrowings in an aggregate principal amount at any time outstanding not to exceed $400.0 million. For additional information, refer to Note 10. Borrowings to our Consolidated Financial Statements.

On May 3, 2021, we acquired all of the outstanding shares of common stock of IMC for $80.7 million. The acquired business provides RF filters to the defense, industrial, and communications markets. The acquisition's operations are included in the PD segment. For additional information, refer to Note 4. Acquisition to our Consolidated Financial Statements.

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 $140.0 million and $147.8 million at September 30, 2021 and December 31, 2020, respectively. Of these amounts, cash held by our non-U.S. operations totaled $83.2 million and $101.4 million as of September 30, 2021 and December 31, 2020, 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.

39

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:

	Nine Months Ended September 30,
(in millions)	2021		2020
Net cash flows provided by (used in):
Operating activities	$	116.6	$	52.6
Investing activities	(109.4)		(20.3)
Financing activities	(14.9)		28.2
Effect of exchange rate changes on cash and cash equivalents	(0.1)		0.2
Net (decrease) increase in cash and cash equivalents	$	(7.8)	$	60.7

Operating Activities

Cash provided by operating activities in 2021 increased $64.0 million compared to 2020, primarily due to an improvement in net earnings, which was largely driven by higher revenues and improved gross profit margins. The improvement in net earnings was partially offset by the net sum of unfavorable changes in accounts receivable, inventories, and accounts payable, which is attributable to higher customer demand and increased production activity.

Investing Activities

The cash used in investing activities during 2021 was primarily driven by the acquisition of IMC and capital expenditures to support product innovation and cost savings. The cash used in investing activities during 2020 was driven by capital expenditures to support our manufacturing capacity expansion.

In 2021, we expect capital expenditures to be in the range of 5.0% to 6.0% of revenues.

Financing Activities

Cash used in financing activities during 2021 is primarily related to the $20.0 million of repurchases of common stock and the $7.6 million payment of taxes related to net share settlement of equity awards, partially offset by proceeds of $14.4 million from the exercise of options. Cash provided by financing activities during 2020 is primarily related to the net borrowings under our revolving credit facility of $50.0 million, partially offset by the $15.0 million of repurchases of common stock and the $6.1 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 15. 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)	September 30, 2021		December 31, 2020
3.25% convertible senior notes	$	171.8	$	165.1
Revolving credit facility	—		—
Total	171.8		165.1
Less current maturities	171.8		165.1
Total long-term debt	$	—	$	—

40

Commitments under the New Credit Facility will terminate, and loans outstanding thereunder will mature, on January 2, 2024; provided, that if all the Notes have not been repaid, refinanced, and/or converted to our common stock by August 2, 2021 (the "Springing Maturity Test Date"), then the commitments under the New Credit Facility will terminate, and the loans outstanding thereunder will mature, on such earlier date unless, from and after the Springing Maturity Test Date and for so long as the Notes have not been repaid, refinanced, and/or converted to our common stock, we do not permit liquidity (as defined in the New Credit Agreement) for any period of three consecutive business days to be less than $150.0 million. We maintained the required liquidity from August 2, 2021 through September 30, 2021.

The interest rate under the New Credit Facility is variable based on LIBOR at the time of the borrowing and our total leverage ratio. Based upon our total leverage ratio, our borrowing rate could range from LIBOR + 1.50% to LIBOR + 2.50%. In addition, a commitment fee accrues on the average daily unused portion of the New Credit Facility at a rate of 0.225% to 0.375%. At September 30, 2021, 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, 2020 filed with the Securities and Exchange Commission on February 10, 2021. 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.

41

Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the nine months ended September 30, 2021, 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, 2020. For a discussion of our exposure to market risk as of December 31, 2020, 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, 2020.

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 third quarter of 2021 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 15. 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.

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, 2020, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.

42

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.

The Company did not repurchase any shares of its common stock during the three months ended September 30, 2021. As of September 30, 2021, the remaining amount authorized for share repurchases was $63.8 million.

Item 6. Exhibits

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 September 30, 2021 formatted in Inline XBRL: (i) Consolidated Statements of Earnings (Unaudited) for the three and nine months ended September 30, 2021 and 2020, (ii) Consolidated Statements of Comprehensive Earnings (Unaudited) for the three and nine months ended September 30, 2021 and 2020, (iii) Consolidated Balance Sheets (Unaudited) as of September 30, 2021 and December 31, 2020, (iv) Consolidated Statements of Stockholders’ Equity (Unaudited) for the three and nine months ended September 30, 2021 and 2020, (v) Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2021 and 2020, 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 September 30, 2021, formatted in Inline XBRL and contained in Exhibit 101.

43

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:	October 28, 2021	/s/ John S. Anderson
		John S. Anderson
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

44

EX-31.1

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: October 28, 2021

/s/ JEFFREY S. NIEW

Name: Jeffrey S. Niew

Title: President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

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;

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: October 28, 2021

/s/ JOHN S. ANDERSON

Name: John S. Anderson

Title: Senior Vice President & Chief Financial Officer

(Principal Financial Officer)

EX-32.1

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 September 30, 2021 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:	October 28, 2021
/s/ JOHN S. ANDERSON
Name: John S. Anderson
Title: Senior Vice President & Chief Financial Officer
(Principal Financial Officer)
Date:	October 28, 2021

XML

Cover - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Oct. 26, 2021
Cover [Abstract]
Document Quarterly Report		true
Document Transition Report		false
Entity File Number		001-36102
Entity Registrant Name		Knowles Corporation
Entity Incorporation, State or Country Code		DE
Entity Tax Identification Number		90-1002689
Entity Address, Address Line One		1151 Maplewood Drive,
Entity Address, City or Town		Itasca,
Entity Address, State or Province		IL
Entity Address, Postal Zip Code		60143
City Area Code		(630)
Local Phone Number		250-5100
Title of 12(b) Security		Common stock, $0.01 par value per share
Trading Symbol		KN
Security Exchange Name		NYSE
Entity Current Reporting Status		Yes
Entity Interactive Data Current		Yes
Entity Filer Category		Large Accelerated Filer
Entity Small Business		false
Entity Emerging Growth Company		false
Entity Shell Company		false
Entity Common Stock, Shares Outstanding			92,345,471
Document Type		10-Q
Entity Central Index Key		0001587523
Current Fiscal Year End Date		--12-31
Document Period End Date	Sep. 30, 2021
Document Fiscal Period Focus		Q3
Amendment Flag		false
Document Fiscal Year Focus		2021

XML

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Revenues	$ 233.0	$ 205.8	$ 633.8	$ 521.1
Cost of goods sold	136.1	130.6	375.2	339.6
Restructuring charges - cost of goods sold	0.0	0.0	0.0	2.3
Gross profit	96.9	75.2	258.6	179.2
Research and development expenses	22.3	21.9	70.2	70.2
Selling and administrative expenses	36.0	32.0	108.9	99.3
Asset Impairment Charges	4.0	7.6	4.0	7.6
Restructuring charges	0.0	0.1	0.3	10.5
Operating expenses	62.3	61.6	183.4	187.6
Operating earnings (loss)	34.6	13.6	75.2	(8.4)
Interest expense, net	4.2	4.7	12.3	12.5
Other (income) expense, net	(1.9)	1.0	(3.4)	0.2
Earnings (loss) before income taxes and discontinued operations	32.3	7.9	66.3	(21.1)
Provision for income taxes	4.6	2.3	8.7	5.6
Earnings (loss) from continuing operations	27.7	5.6	57.6	(26.7)
Earnings from discontinued operations, net	0.0	0.0	0.2	3.7
Net earnings (loss)	$ 27.7	$ 5.6	$ 57.8	$ (23.0)
Earnings per share:
Earnings (loss) from continuing operations, per basic share	$ 0.30	$ 0.06	$ 0.62	$ (0.29)
Earnings (loss) from continuing operations, per diluted share	0.29	0.06	0.61	(0.29)
Earnings from discontinued operations, per basic share	0	0	0.01	0.04
Earnings from discontinued operations, per diluted share	0	0	0	0.04
Net earnings (loss) per share, basic	0.30	0.06	0.63	(0.25)
Net earnings (loss) per share, diluted	$ 0.29	$ 0.06	$ 0.61	$ (0.25)
Weighted-average common shares outstanding:
Basic (in shares)	92,189,329	91,688,765	92,315,146	91,707,702
Diluted (in shares)	94,143,034	92,473,318	94,780,940	91,707,702

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net earnings (loss)	$ 27.7	$ 5.6	$ 57.8	$ (23.0)
Foreign currency translation	(3.7)	9.2	(6.4)	5.1
Employee benefit plans:
Amortization or settlement of actuarial losses and prior service costs	0.1	0.3	0.7	0.5
Net change in employee benefit plans	0.1	0.3	0.7	0.5
Changes in fair value of cash flow hedges:
Unrealized net (losses) gains arising during period	(0.2)	1.4	(0.5)	0.5
Net losses (gains) reclassified into earnings	0.1	(0.5)	(1.4)	(0.1)
Total cash flow hedges	(0.1)	0.9	(1.9)	0.4
Other comprehensive (loss) earnings, net of tax	(3.7)	10.4	(7.6)	6.0
Comprehensive earnings (loss)	$ 24.0	$ 16.0	$ 50.2	$ (17.0)

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 140.0	$ 147.8
Accounts Receivable, after Allowance for Credit Loss, Current	129.8	131.4
Inventories, net	155.7	130.1
Prepaid and other current assets	9.9	10.3
Total current assets	435.4	419.6
Property, plant, and equipment, net	190.6	191.5
Goodwill	941.3	910.0
Intangible assets, net	101.7	78.7
Operating Lease, Right-of-Use Asset	17.0	23.3
Other assets and deferred charges	(37.2)	(31.8)
Total assets	1,723.2	1,654.9
Current liabilities:
Less: current maturities	171.8	165.1
Accounts payable	72.9	70.3
Accrued compensation and employee benefits	36.8	30.4
Operating Lease, Liability, Current	10.9	10.2
Other accrued expenses	20.7	18.6
Federal and other taxes on income	0.4	2.7
Total current liabilities	313.5	297.3
Long-term debt	0.0	0.0
Deferred Income Tax Liabilities, Net	2.0	2.0
Operating Lease, Liability, Noncurrent	15.8	18.7
Other liabilities	25.8	32.8
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred Stock, Value, Issued	0.0	0.0
Common Stock, Value, Issued	0.9	0.9
Treasury Stock, Value	(36.2)	(16.2)
Additional paid-in capital	1,620.2	1,587.8
Accumulated deficit	(110.7)	(168.5)
Accumulated other comprehensive loss	(108.1)	(100.5)
Total stockholders' equity	1,366.1	1,303.5
Total liabilities and stockholders' equity	1,723.2	1,654.9
Disposal Group, Including Discontinued Operation, Liabilities	$ 0.0	$ 0.6
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common Stock, Shares, Outstanding	92,325,699	91,611,549
Common stock, par value (in dollars per share)	$ 0.01
Common stock, shares authorized (in shares)	400,000,000
Common stock, shares issued (in shares)	94,415,186	92,689,912
Treasury Stock, Shares	2,089,487	1,078,363
Document Period End Date	Sep. 30, 2021

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CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Allowance for doubtful accounts receivable	$ 1.4	$ 1.6
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01
Common stock, shares authorized (in shares)	400,000,000
Common stock, shares issued (in shares)	94,415,186	92,689,912
Treasury Stock, Shares	2,089,487	1,078,363

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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, 2019	$ 1,288.5	$ 0.9	$ 1,574.7	$ (175.1)	$ (112.0)	$ 0.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	(23.0)			(23.0)
Earnings (loss) from continuing operations	(26.7)
Other comprehensive (loss) earnings, net of tax	6.0
Other comprehensive loss, net of tax					6.0
Treasury Stock, Value, Acquired, Cost Method	(15.0)					(15.0)
Stock-based compensation expense	12.4		12.4
Common stock issued for exercise of stock options and other	1.8		1.8
Tax on restricted stock unit vesting	(6.1)		(6.1)
Balance at Sep. 30, 2020	1,264.6	0.9	1,582.8	(198.1)	(106.0)	(15.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0.1
Balance at Jun. 30, 2020	1,243.8	0.9	1,578.0	(203.7)	(116.4)	(15.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	5.6			5.6
Earnings (loss) from continuing operations	5.6
Other comprehensive (loss) earnings, net of tax	10.4
Other comprehensive loss, net of tax					10.4
Stock-based compensation expense	4.8		4.8
Common stock issued for exercise of stock options and other	0.1		0.1
Tax on restricted stock unit vesting	(0.1)		(0.1)
Balance at Sep. 30, 2020	1,264.6	0.9	1,582.8	(198.1)	(106.0)	(15.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	0.1
Treasury Stock, Value	16.2
Balance at Dec. 31, 2020	1,303.5	0.9	1,587.8	(168.5)	(100.5)	(16.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	57.8
Earnings (loss) from continuing operations	57.6			57.6
Other comprehensive (loss) earnings, net of tax	(7.6)
Other comprehensive loss, net of tax					(7.6)
Treasury Stock, Value, Acquired, Cost Method	(20.0)					(20.0)
Stock-based compensation expense	25.6		25.6
Common stock issued for exercise of stock options and other	14.4		14.4
Tax on restricted stock unit vesting	(7.6)		(7.6)
Balance at Sep. 30, 2021	1,366.1	0.9	1,620.2	(110.7)	(108.1)	(36.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(0.3)
Balance at Jun. 30, 2021	1,332.1		1,610.2	(138.4)	(104.4)	(36.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	27.7			27.7
Earnings (loss) from continuing operations	27.7			27.7
Other comprehensive (loss) earnings, net of tax	(3.7)
Other comprehensive loss, net of tax					(3.7)
Stock-based compensation expense	7.1		7.1
Common stock issued for exercise of stock options and other	3.9		3.9
Tax on restricted stock unit vesting	(1.0)		(1.0)
Balance at Sep. 30, 2021	1,366.1	$ 0.9	$ 1,620.2	$ (110.7)	$ (108.1)	$ (36.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(0.1)
Treasury Stock, Value	$ 36.2

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CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Proceeds from the sale of business	$ 3.5	$ 0.0
Proceeds from Sale of Short-term Investments	0.4	0.0
Payments to Acquire Businesses, Net of Cash Acquired	78.5	0.0
Asset Impairment Charges	4.0	7.6
Repayments of Lines of Credit	0.0	(50.0)
Payments of Debt Issuance Costs	0.0	(0.9)
Adjustments to reconcile net earnings (loss) to cash from operating activities:
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	6.2	(0.3)
Other accrued expenses	2.4	8.0
Impaired Assets to be Disposed of by Method Other than Sale, Amount of Impairment Loss	0.0	1.7
Gain (Loss) on Disposition of Property Plant Equipment	(0.2)	0.2
Depreciation and amortization	46.6	45.7
Stock-based compensation	25.6	12.4
Non-cash interest expense and amortization of debt issuance costs	7.1	6.6
Deferred income taxes	(1.5)	(2.6)
Other, net	(2.5)	1.4
Changes in assets and liabilities (excluding effects of foreign exchange):
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	6.2	(0.3)
Increase (Decrease) in Prepaid Expense and Other Assets	1.4	1.5
Other accrued expenses	2.4	8.0
Receivables, net	4.6	34.6
Inventories, net	(24.0)	(16.3)
Prepaid and other current assets	(1.4)	(1.5)
Accounts payable	1.4	(17.2)
Accrued compensation and employee benefits	5.9	(5.3)
Increase Decrease Accrued Taxes, Net	(3.0)	0.0
Net Cash Provided by (Used in) Operating Activities	116.6	52.6
Investing Activities
Net Cash Provided by (Used in) Investing Activities, Total	(109.4)	(20.3)
Additions to property, plant, and equipment	(28.2)	(20.4)
Payments for (Proceeds from) Investments	(3.5)	0.0
Proceeds from Sale of Property, Plant, and Equipment	0.4	0.1
Financing Activities
Net Cash Provided by (Used in) Financing Activities, Total	(14.9)	28.2
Borrowings under revolving credit facility	0.0	100.0
Payments for Repurchase of Common Stock	20.0	15.0
Tax on restricted and performance stock unit vesting	(7.6)	(6.1)
Payments of finance lease obligations	(1.7)	(1.4)
Proceeds from exercise of stock-based awards	14.4	1.6
Effect of Exchange Rate on Cash and Cash Equivalents [Abstract]
Effect of exchange rate changes on cash and cash equivalents	(0.1)	0.2
Net earnings (loss)	57.8	(23.0)
Net (decrease) increase in cash and cash equivalents	(7.8)	60.7
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations, Beginning Balance	147.8	78.4
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations	140.0	139.1
Supplemental information - cash paid for:
Income taxes	12.3	9.5
Interest	$ 4.0	$ 5.0

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Basis of Presentation (Notes)

9 Months Ended

Sep. 30, 2021

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 microphones and speakers, audio processing, and precision device solutions, serving the consumer electronics, communications, medtech, defense, electric vehicle, and industrial markets. The Company uses its leading position in SiSonicTM 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 radio frequency ("RF") 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, 2020 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 May 3, 2021, the Company acquired all of the outstanding shares of common stock of Integrated Microwave Corporation ("IMC"), a manufacturer of RF filters. See Note 4. Acquisition for additional information related to the transaction.

On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the nine months ended September 30, 2021, the Company repurchased 1,011,124 shares of common stock for a total of $20.0 million.

Non-cash Investing Activities - Purchases of property, plant, and equipment included in accounts payable at September 30, 2021 and 2020 were $3.6 million and $1.9 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.

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Recent Accounting Standards (Notes)

9 Months Ended

Sep. 30, 2021

Accounting Standards Update and Change in Accounting Principle [Abstract]

Recent Accounting Standards

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The standard eliminates certain accounting models that separated embedded conversion features from host contracts for convertible instruments, requiring bifurcation only if the convertible feature qualifies as a derivative under Accounting Standards Codification ("ASC") 815 or for convertible instruments issued at a substantial premium. In addition, the guidance requires the if-converted method of calculating diluted earnings per share for convertible instruments, which eliminates the use of the treasury stock method for instruments that may be settled in cash or shares. The standard is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The standard can be adopted on a modified retrospective basis to transactions outstanding as of the adoption date or on a fully retrospective basis to all periods presented. The Company plans to adopt the standard using the modified retrospective method on January 1, 2022. The Company does not expect the standard to impact the Consolidated Financial Statements as all currently outstanding convertible instruments will mature prior to the adoption date. See Note 10. Borrowings for detail on the Company's outstanding convertible instruments.

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Disposed and Discontinued Operations (Notes)

9 Months Ended

Sep. 30, 2021

Discontinued Operations [Abstract]

Disposed and Discontinued Operations

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

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

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

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

	Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020
Revenues	$	—	$	—
Operating income	—		—
Earnings from discontinued operations before taxes	—		—
Benefit from income taxes (1)	(0.2)		(3.7)
Earnings from discontinued operations, net of tax	$	0.2	$	3.7

(1) 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)	December 31, 2020
Liabilities of discontinued operations:
Other liabilities (1)	$	0.6
Total liabilities	$	0.6

(1) This accrual was attributable to an unrecognized tax benefit related to the Speaker and Receiver Product Line.

Discontinued operations had no impact on the Company's results of operations for the three months ended September 30, 2021 and 2020. There were no assets and liabilities of discontinued operations as of September 30, 2021.

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Inventories, net (Notes)

9 Months Ended

Sep. 30, 2021

Inventory, Net [Abstract]

Inventories, net

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

(in millions)	September 30, 2021		December 31, 2020
Raw materials	$	87.6	$	89.7
Work in progress	33.6		31.0
Finished goods	71.2		48.4
Subtotal	192.4		169.1
Less reserves	(36.7)		(39.0)
Total	$	155.7	$	130.1

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Property, Plant, and Equipment, net (Notes)

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

7. Property, Plant, and Equipment, net

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

(in millions)	September 30, 2021		December 31, 2020
Land	$	13.0	$	8.0
Buildings and improvements	117.7		111.9
Machinery, equipment, and other	571.6		562.8
Subtotal	702.3		682.7
Less accumulated depreciation	(511.7)		(491.2)
Total	$	190.6	$	191.5

Depreciation expense totaled $11.5 million and $11.9 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, depreciation expense totaled $35.1 million and $35.9 million, respectively

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Goodwill and Other Intangible Assets (Notes)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

The changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2021 are as follows:

(in millions)	Audio		Precision Devices		Total
Balance at December 31, 2020	$	878.8	$	31.2	$	910.0
Acquisition	—		31.3		31.3
Balance at September 30, 2021	$	878.8	$	62.5	$	941.3

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

	September 30, 2021				December 31, 2020
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Trademarks	$	2.0	$	0.5	$	1.0	$	0.4
Patents	40.8		39.6		40.8		36.1
Customer relationships	39.7		7.9		12.0		5.2
Developed technology	45.4		11.5		36.5		6.7
Other	2.4		1.1		1.8		0.7
Total	130.3		60.6		92.1		49.1
Unamortized intangible assets:
Trademarks	32.0				32.0
IPR&D (1)	—				3.7
Total	32.0				35.7
Total intangible assets, net	$	101.7			$	78.7

(1) The in-process research and development ("IPR&D") project was completed during the third quarter of 2021. The IPR&D asset has been reclassified as a definite-lived intangible asset to be amortized on a straight-line basis over an estimated useful life of 9 years.

Amortization expense totaled $4.3 million and $3.3 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, amortization expense was $11.5 million and $9.8 million, respectively. Amortization expense for the next five years, based on current definite-lived intangible balances, is estimated to be as follows:

(in millions)
Q4 2021	$	4.4
2022	12.2
2023	11.6
2024	11.6
2025	11.2

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Other Comprehensive Earnings

3 Months Ended

Sep. 30, 2021

Statement of Other Comprehensive Income [Abstract]

Other Comprehensive Earnings

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

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(3.7)	$	—	$	(3.7)	$	9.2	$	—	$	9.2
Employee benefit plans	0.2		(0.1)		0.1		0.2		0.1		0.3
Changes in fair value of cash flow hedges	(0.3)		0.2		(0.1)		1.1		(0.2)		0.9
Total other comprehensive (loss) earnings	$	(3.8)	$	0.1	$	(3.7)	$	10.5	$	(0.1)	$	10.4
	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2020
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(6.4)	$	—	$	(6.4)	$	5.1	$	—	$	5.1
Employee benefit plans	0.6		0.1		0.7		0.5		—		0.5
Changes in fair value of cash flow hedges	(2.1)		0.2		(1.9)		0.5		(0.1)		0.4
Total other comprehensive (loss) earnings	$	(7.9)	$	0.3	$	(7.6)	$	6.1	$	(0.1)	$	6.0

The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the nine months ended September 30, 2021 and 2020:

(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2020	$	1.6	$	(22.1)	$	(80.0)	$	(100.5)
Other comprehensive (loss) earnings, net of tax	(1.9)		0.7		(6.4)		(7.6)
Balance at September 30, 2021	$	(0.3)	$	(21.4)	$	(86.4)	$	(108.1)

(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2019	$	0.5	$	(18.7)	$	(93.8)	$	(112.0)
Other comprehensive earnings, net of tax	0.4		0.5		5.1		6.0
Balance at September 30, 2020	$	0.9	$	(18.2)	$	(88.7)	$	(106.0)

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

		Three Months Ended September 30,
(in millions)	Statement of Earnings Line	2021		2020
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other (income) expense, net	$	0.2	$	0.2
Tax	Provision for income taxes	(0.1)		0.1
Net of tax		$	0.1	$	0.3
Cash flow hedges:
Net gains reclassified into earnings	Cost of goods sold	$	—	$	(0.6)
Tax	Provision for income taxes	0.1		0.1
Net of tax		$	0.1	$	(0.5)
		Nine Months Ended September 30,
(in millions)	Statement of Earnings Line	2021		2020
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other (income) expense, net	$	0.6	$	0.5
Tax	Provision for income taxes	0.1		—
Net of tax		$	0.7	$	0.5
Cash flow hedges:
Net gains reclassified into earnings	Cost of goods sold	$	(1.9)	$	(0.2)
Tax	Provision for income taxes	0.5		0.1
Net of tax		$	(1.4)	$	(0.1)

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Income Taxes (Notes)

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

The Company's ETR from continuing operations for the three and nine months ended September 30, 2021 was a 14.2% provision and a 13.1% provision, respectively. During the three and nine months ended September 30, 2021, the ETR from continuing operations was impacted by discrete items totaling $0.4 million of expense and $0.9 million of benefit, respectively. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2021 was a 13.0% provision and a 14.5% provision, respectively. The Company's ETR from continuing operations for the three and nine months ended September 30, 2020 was a 29.1% provision and a 26.5% provision, respectively. During the three and nine months ended September 30, 2020, the ETR from continuing operations was impacted by discrete items totaling $1.2 million of benefit, primarily related to a benefit resulting from an increase to the recognized deferred tax assets in the Company's U.S. and Malaysian subsidiaries. Absent the discrete items, the ETR from continuing operations for the three and nine months ended September 30, 2020 was a 44.3% provision and a 32.2% provision, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions (primarily the U.S.), which resulted in the provision for both the three and nine months ended September 30, 2021 and 2020.

The Company's ETR is favorably impacted by tax holidays granted to the Company in Malaysia. 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 current ETR may be significantly adversely impacted. The continuing operations benefit of the tax holidays in Malaysia for the three and nine months ended September 30, 2021 was approximately $3.9 million and $9.3 million, respectively, or $0.04 and $0.10 on a per share basis. The continuing operations benefit of these incentives for the three and nine months ended September 30, 2020 was approximately $2.7 million and $4.2 million, respectively, or $0.03 and $0.05 on a per share basis. The Company's existing significant tax holiday in Malaysia will expire on December 31, 2021. The Company is pursuing an extension for its current tax holiday and evaluating other strategies to mitigate the impact of the expiring tax holiday. If the Company is unable to extend the current tax holiday or negotiate acceptable new terms, the Company’s ETR may be significantly adversely impacted.

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Equity Incentive Program (Notes)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Equity Incentive Program

Stock-based compensation expense recognized in the Consolidated Statements of Earnings totaled $7.1 million and $4.8 million for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, stock-based compensation expense was $25.6 million and $12.4 million, respectively.

Stock Options and SSARs

The expense related to stock options granted in the nine months ended September 30, 2021 and 2020 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below:

	Nine Months Ended September 30,
	2021			2020
Risk-free interest rate	0.06%			0.11%	to	1.42%
Dividend yield	—%			—%
Expected life (years)	4.5			4.3	to	4.5
Volatility	36.0%			38.8%	to	40.6%
Fair value at date of grant	$6.14	to	$6.31	$4.78	to	$5.95

The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the nine months ended September 30, 2021 (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, 2020	596,537	$	22.72				5,765,903	$	17.44
Granted	—	—					216,963	20.61
Exercised	—	—					(867,386)	16.54
Forfeited	—	—					(90,074)	17.01
Expired	(106,477)	22.17					(848,452)	29.52
Outstanding at September 30, 2021	490,060	$	22.84	$	—	0.9	4,176,954	$	15.34	$	14.8	3.0
Exercisable at September 30, 2021	490,060	$	22.84	$	—	0.9	3,309,977	$	14.75	$	13.4	2.4

There was no unrecognized compensation expense related to SSARs at September 30, 2021. At September 30, 2021, unrecognized compensation expense related to stock options not yet exercisable of $3.3 million is expected to be recognized over a weighted-average period of 1.4 years.

RSUs

The following table summarizes the Company's restricted stock unit ("RSU") activity for the nine months ended September 30, 2021:

	Share units	Weighted-average grant date fair value
Unvested at December 31, 2020	1,909,786	$	16.14
Granted	1,117,408	20.58
Vested (1)	(1,049,222)	15.79
Forfeited	(157,176)	18.26
Unvested at September 30, 2021	1,820,796	$	18.82

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

At September 30, 2021, $23.4 million of unrecognized compensation expense related to RSUs is expected to be recognized over a weighted-average period of 1.8 years.

PSUs

The Company grants performance share units (“PSUs”) to senior management. In each case, the awards will cliff vest three years following the grant date. PSUs will be settled in shares of the Company's common stock. Depending on the Company's overall performance relative to the applicable measures, the size of the PSU awards are subject to adjustment, up or down, resulting in awards at the end of the performance period that can range from 0% to 225% of target. The Company will ratably recognize the expense over the applicable service period for each grant of PSUs and adjust the expense for the expected achievement of performance conditions as appropriate. The fair value of PSUs is determined by using a Monte Carlo simulation. For the awards granted in February 2021, the number of PSUs that may be earned and vest is based on total shareholder return (“TSR”) relative to the component companies of the Russell 2000 Index over a three-year performance period.

The COVID-19 pandemic brought on unique and unprecedented challenges to the Company, particularly in the hearing health and medtech markets. Many of the Company's executive compensation programs were affected, including outstanding PSU awards. Due to the impact of the COVID-19 pandemic on the Company’s overall business performance, effective February 8, 2021, the Company’s Compensation Committee approved certain modifications to PSUs granted in February 2018, 2019, and 2020.

For the awards granted in February 2018 (the “2018 PSUs”), the number of PSUs that may be earned and vest was originally based on the Company’s revenues and stock price performance over a three-year performance period. The modified award is based on the Company’s revenues and stock price performance over three separate one-year performance periods to isolate the impact of the COVID-19 pandemic on the Company's fiscal 2020 performance. In addition, the performance periods corresponding to fiscal 2018 and 2019 were weighted at 25% each while the performance period corresponding to fiscal 2020 was weighted at 50%, given the impact of fiscal 2020 performance on shareholders. Service conditions were not modified. The modification of the 2018 PSUs affected nine employees and resulted in total incremental compensation expense of $3.9 million, which was recognized in the first quarter of 2021 as there was no remaining service period. In February 2021, the 2018 PSUs were converted from 329,092 PSUs to 190,544 shares of common stock based on achievement of the modified conditions.

For the awards granted in February 2019 (the “2019 PSUs”), the number of PSUs that may be earned and vest was originally based on the Company's revenues and TSR relative to the component companies of the S&P Semiconductor Select Industry Index over a three-year performance period. The modified award is based on the Company’s revenues and TSR relative to the component companies of the S&P Semiconductor Select Industry Index over three separate one-year performance periods to isolate the impact of the COVID-19 pandemic on the Company's fiscal 2020 performance. Each period is weighted equally, as the Company expects to face challenges related to the COVID-19 pandemic in fiscal 2021. Service conditions were not modified. The modification of the 2019 PSUs affected eight employees and resulted in total incremental compensation expense of $2.4 million, which will be recognized over the remaining service period. Incremental compensation expense is subject to adjustment for the expected achievement of the performance condition based on fiscal 2021 revenues.

For the awards granted in February 2020 (the “2020 PSUs”), the number of PSUs that may be earned and vest was originally based on TSR relative to the component companies of the S&P Semiconductor Select Industry Index over a three-year performance period. The modified award replaces the S&P Semiconductor Select Industry Index with the Russell 2000 Index. The Company is a member of the Russell 2000 Index, which represents a broader, more diversified index that better aligns with the Company's strategy. Service conditions were not modified. The modification of the 2020 PSUs affected eight employees and resulted in total incremental compensation expense of $4.7 million, which will be recognized over the remaining service period.

The following table summarizes the Company's PSU activity for the nine months ended September 30, 2021:

	Share units	Weighted-average grant date fair value
Unvested at December 31, 2020	920,973	$	16.04
Granted	277,183	28.46
Vested (1)	(329,092)	13.75
Forfeited	(101,483)	19.05
Unvested at September 30, 2021	767,581	$	21.11

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

At September 30, 2021, $11.9 million of unrecognized compensation expense related to PSUs is expected to be recognized over a weighted-average period of 1.4 years.

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Earnings per Share (Notes)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings per Share

Basic and diluted earnings per share were computed as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except share and per share amounts)	2021		2020		2021		2020
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)
Earnings from discontinued operations, net	—		—		0.2		3.7
Net earnings (loss)	$	27.7	$	5.6	$	57.8	$	(23.0)
Basic earnings (loss) per common share:
Earnings (loss) from continuing operations	$	0.30	$	0.06	$	0.62	$	(0.29)
Earnings from discontinued operations, net	—		—		0.01		0.04
Net earnings (loss)	$	0.30	$	0.06	$	0.63	$	(0.25)
Weighted-average shares outstanding	92,189,329		91,688,765		92,315,146		91,707,702
Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations	$	0.29	$	0.06	$	0.61	$	(0.29)
Earnings from discontinued operations, net	—		—		—		0.04
Net earnings (loss)	$	0.29	$	0.06	$	0.61	$	(0.25)
Diluted weighted-average shares outstanding	94,143,034		92,473,318		94,780,940		91,707,702

As the Company either elected or intended to settle the principal amount of the Notes in cash for all periods presented, 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 nine months ended September 30, 2021, the weighted-average number of anti-dilutive potential common shares excluded from the diluted earnings per share calculation above was 1,129,231 and 1,299,454, respectively. For the three and nine months ended September 30, 2020, the weighted-average number of anti-dilutive potential common shares excluded from the diluted earnings per share calculation above was 4,559,131 and 5,102,219, respectively.

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Commitments and Contingent Liabilities (Notes)	9 Months Ended
	Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingent Liabilities	September 30, 2021 and December 31, 2020.

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Segment Information (Notes)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Revenues:
Audio	$	177.7	$	164.8	$	490.6	$	389.4
Precision Devices	55.3		41.0		143.2		131.7
Total revenues	$	233.0	$	205.8	$	633.8	$	521.1
Earnings (loss) from continuing operations before interest and income taxes:
Audio	$	36.6	$	17.8	$	95.0	$	(0.5)
Precision Devices	14.0		8.0		28.3		26.2
Total segments	50.6		25.8		123.3		25.7
Corporate expense / other	14.1		13.2		44.7		34.3
Interest expense, net	4.2		4.7		12.3		12.5
Earnings (loss) before income taxes and discontinued operations	32.3		7.9		66.3		(21.1)
Provision for income taxes	4.6		2.3		8.7		5.6
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)

Information regarding assets of the Company's reportable segments:

	Total Assets
(in millions)	September 30, 2021		December 31, 2020
Audio	$	1,461.7	$	1,470.4
Precision Devices	257.4		179.2
Corporate / eliminations	4.1		5.3
Total	$	1,723.2	$	1,654.9

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Asia	$	163.4	$	151.7	$	452.0	$	368.3
United States	42.2		28.8		109.3		86.8
Europe	24.6		23.1		65.4		59.8
Other Americas	1.6		1.3		3.9		2.8
Other	1.2		0.9		3.2		3.4
Total	$	233.0	$	205.8	$	633.8	$	521.1

Receivables, net from contracts with customers were $120.3 million and $123.8 million as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, our total remaining performance obligations are immaterial.

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2021

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, 2020 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 May 3, 2021, the Company acquired all of the outstanding shares of common stock of Integrated Microwave Corporation ("IMC"), a manufacturer of RF filters. See Note 4. Acquisition for additional information related to the transaction.

On February 24, 2020, the Company announced that its Board of Directors had authorized a share repurchase program of up to $100 million of the Company's common stock. The timing and amount of any shares repurchased will be determined by the Company based on its evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. The actual timing, number, and share price of shares repurchased will depend on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal requirements. Any shares repurchased will be held as treasury stock. During the nine months ended September 30, 2021, the Company repurchased 1,011,124 shares of common stock for a total of $20.0 million.

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Recent Accounting Standards New Accounting Pronouncements, Policy (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06 to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The standard eliminates certain accounting models that separated embedded conversion features from host contracts for convertible instruments, requiring bifurcation only if the convertible feature qualifies as a derivative under Accounting Standards Codification ("ASC") 815 or for convertible instruments issued at a substantial premium. In addition, the guidance requires the if-converted method of calculating diluted earnings per share for convertible instruments, which eliminates the use of the treasury stock method for instruments that may be settled in cash or shares. The standard is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The standard can be adopted on a modified retrospective basis to transactions outstanding as of the adoption date or on a fully retrospective basis to all periods presented. The Company plans to adopt the standard using the modified retrospective method on January 1, 2022. The Company does not expect the standard to impact the Consolidated Financial Statements as all currently outstanding convertible instruments will mature prior to the adoption date. See Note 10. Borrowings for detail on the Company's outstanding convertible instruments.

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2021

Discontinued Operations [Abstract]

Summarized Results and Assets and Liabilities of Discontinued Operations

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

	Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020
Revenues	$	—	$	—
Operating income	—		—
Earnings from discontinued operations before taxes	—		—
Benefit from income taxes (1)	(0.2)		(3.7)
Earnings from discontinued operations, net of tax	$	0.2	$	3.7

(1) 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)	December 31, 2020
Liabilities of discontinued operations:
Other liabilities (1)	$	0.6
Total liabilities	$	0.6

(1) This accrual was attributable to an unrecognized tax benefit related to the Speaker and Receiver Product Line.

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

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

The table below represents a preliminary allocation of the purchase price to net assets acquired as of May 3, 2021:

(in millions)
Cash	$	2.2
Receivables	3.0
Inventories	2.6
Property, plant, and equipment	8.3
Customer relationships	27.7
Developed technology	5.2
Trademarks and other amortized intangible assets	1.6
Goodwill	31.3
Assumed current liabilities	(1.2)
Total purchase price	$	80.7

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Inventories (Tables)

9 Months Ended

Sep. 30, 2021

Inventory, Net [Abstract]

Components of Inventory

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

(in millions)	September 30, 2021		December 31, 2020
Raw materials	$	87.6	$	89.7
Work in progress	33.6		31.0
Finished goods	71.2		48.4
Subtotal	192.4		169.1
Less reserves	(36.7)		(39.0)
Total	$	155.7	$	130.1

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Property, Plant, and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Components of property, plant and equipment, net

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

(in millions)	September 30, 2021		December 31, 2020
Land	$	13.0	$	8.0
Buildings and improvements	117.7		111.9
Machinery, equipment, and other	571.6		562.8
Subtotal	702.3		682.7
Less accumulated depreciation	(511.7)		(491.2)
Total	$	190.6	$	191.5

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

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

	September 30, 2021				December 31, 2020
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Trademarks	$	2.0	$	0.5	$	1.0	$	0.4
Patents	40.8		39.6		40.8		36.1
Customer relationships	39.7		7.9		12.0		5.2
Developed technology	45.4		11.5		36.5		6.7
Other	2.4		1.1		1.8		0.7
Total	130.3		60.6		92.1		49.1
Unamortized intangible assets:
Trademarks	32.0				32.0
IPR&D (1)	—				3.7
Total	32.0				35.7
Total intangible assets, net	$	101.7			$	78.7

Schedule of Future Amortization Expense

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

(in millions)
Q4 2021	$	4.4
2022	12.2
2023	11.6
2024	11.6
2025	11.2

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Restructuring and Related Activities (Tables)

9 Months Ended

Sep. 30, 2021

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Audio	$	—	$	—	$	0.3	$	11.0
Precision Devices	—		0.1		—		0.1
Corporate	—		—		—		1.7
Total	$	—	$	0.1	$	0.3	$	12.8

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, 2020	$	1.9	$	0.7	$	2.6
Restructuring charges	0.3		—		0.3
Payments	(1.7)		(0.7)		(2.4)
Balance at September 30, 2021	$	0.5	$	—	$	0.5

Schedule of Restructuring Reserve by Balance Sheet Location

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

(in millions)	September 30, 2021		December 31, 2020
Other accrued expenses	$	0.5	$	2.4
Other liabilities	—		0.2
Total	$	0.5	$	2.6

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

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

(in millions)	September 30, 2021		December 31, 2020
3.25% convertible senior notes	$	171.8	$	165.1
Revolving credit facility	—		—
Total	171.8		165.1
Less current maturities	171.8		165.1
Total long-term debt	$	—	$	—

Contractual Obligation, Fiscal Year Maturity Schedule

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

(in millions)	Q4 2021		2022		2023		2024		2025
Debt principal payments	$	172.5	$	—	$	—	$	—	$	—

Schedule of Convertible Debt

The Notes consist of the following:

(in millions)	September 30, 2021		December 31, 2020
Liability component:
Principal	$	172.5	$	172.5
Less debt issuance costs and debt discount, net of amortization	(0.7)		(7.4)
Total	171.8		165.1
Less current maturities (1)	171.8		165.1
Long-term portion	$	—	$	—
Equity component (2)	$	29.9	$	29.9

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

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

Schedule of Convertible Debt Interest Expense

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
3.25% coupon	$	1.4	$	1.4	$	4.2	$	4.2
Amortization of debt issuance costs	0.2		0.2		0.7		0.7
Amortization of debt discount	2.1		1.9		6.0		5.5
Total	$	3.7	$	3.5	$	10.9	$	10.4

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Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2021

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

Components of other comprehensive (loss) earnings

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

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(3.7)	$	—	$	(3.7)	$	9.2	$	—	$	9.2
Employee benefit plans	0.2		(0.1)		0.1		0.2		0.1		0.3
Changes in fair value of cash flow hedges	(0.3)		0.2		(0.1)		1.1		(0.2)		0.9
Total other comprehensive (loss) earnings	$	(3.8)	$	0.1	$	(3.7)	$	10.5	$	(0.1)	$	10.4
	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 30, 2020
(in millions)	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation	$	(6.4)	$	—	$	(6.4)	$	5.1	$	—	$	5.1
Employee benefit plans	0.6		0.1		0.7		0.5		—		0.5
Changes in fair value of cash flow hedges	(2.1)		0.2		(1.9)		0.5		(0.1)		0.4
Total other comprehensive (loss) earnings	$	(7.9)	$	0.3	$	(7.6)	$	6.1	$	(0.1)	$	6.0

Schedule of (Loss) Earnings

The following tables summarize the changes in balances of each component of accumulated other comprehensive loss, net of tax during the nine months ended September 30, 2021 and 2020:

(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2020	$	1.6	$	(22.1)	$	(80.0)	$	(100.5)
Other comprehensive (loss) earnings, net of tax	(1.9)		0.7		(6.4)		(7.6)
Balance at September 30, 2021	$	(0.3)	$	(21.4)	$	(86.4)	$	(108.1)

(in millions)	Cash flow hedges		Employee benefit plans		Cumulative foreign currency translation adjustments		Total
Balance at December 31, 2019	$	0.5	$	(18.7)	$	(93.8)	$	(112.0)
Other comprehensive earnings, net of tax	0.4		0.5		5.1		6.0
Balance at September 30, 2020	$	0.9	$	(18.2)	$	(88.7)	$	(106.0)

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

		Three Months Ended September 30,
(in millions)	Statement of Earnings Line	2021		2020
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other (income) expense, net	$	0.2	$	0.2
Tax	Provision for income taxes	(0.1)		0.1
Net of tax		$	0.1	$	0.3
Cash flow hedges:
Net gains reclassified into earnings	Cost of goods sold	$	—	$	(0.6)
Tax	Provision for income taxes	0.1		0.1
Net of tax		$	0.1	$	(0.5)
		Nine Months Ended September 30,
(in millions)	Statement of Earnings Line	2021		2020
Pension and post-retirement benefit plans:
Amortization or settlement of actuarial losses and prior service costs	Other (income) expense, net	$	0.6	$	0.5
Tax	Provision for income taxes	0.1		—
Net of tax		$	0.7	$	0.5
Cash flow hedges:
Net gains reclassified into earnings	Cost of goods sold	$	(1.9)	$	(0.2)
Tax	Provision for income taxes	0.5		0.1
Net of tax		$	(1.4)	$	(0.1)

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Equity Incentive Program (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Black-Scholes Option-Pricing Assumptions

The expense related to stock options granted in the nine months ended September 30, 2021 and 2020 was estimated on the date of grant using a Black-Scholes option-pricing model based on the assumptions shown in the table below:

	Nine Months Ended September 30,
	2021			2020
Risk-free interest rate	0.06%			0.11%	to	1.42%
Dividend yield	—%			—%
Expected life (years)	4.5			4.3	to	4.5
Volatility	36.0%			38.8%	to	40.6%
Fair value at date of grant	$6.14	to	$6.31	$4.78	to	$5.95

Schedule of SSAR and Stock Options Activity

The following table summarizes the Company's stock-settled stock appreciation right ("SSAR") and stock option activity for the nine months ended September 30, 2021 (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, 2020	596,537	$	22.72				5,765,903	$	17.44
Granted	—	—					216,963	20.61
Exercised	—	—					(867,386)	16.54
Forfeited	—	—					(90,074)	17.01
Expired	(106,477)	22.17					(848,452)	29.52
Outstanding at September 30, 2021	490,060	$	22.84	$	—	0.9	4,176,954	$	15.34	$	14.8	3.0
Exercisable at September 30, 2021	490,060	$	22.84	$	—	0.9	3,309,977	$	14.75	$	13.4	2.4

Schedule of Restricted Stock Units Award Activity

The following table summarizes the Company's restricted stock unit ("RSU") activity for the nine months ended September 30, 2021:

	Share units	Weighted-average grant date fair value
Unvested at December 31, 2020	1,909,786	$	16.14
Granted	1,117,408	20.58
Vested (1)	(1,049,222)	15.79
Forfeited	(157,176)	18.26
Unvested at September 30, 2021	1,820,796	$	18.82

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

Share-based Payment Arrangement, Performance Shares, Outstanding Activity

The following table summarizes the Company's PSU activity for the nine months ended September 30, 2021:

	Share units	Weighted-average grant date fair value
Unvested at December 31, 2020	920,973	$	16.04
Granted	277,183	28.46
Vested (1)	(329,092)	13.75
Forfeited	(101,483)	19.05
Unvested at September 30, 2021	767,581	$	21.11

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

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

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

Basic and diluted earnings per share were computed as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except share and per share amounts)	2021		2020		2021		2020
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)
Earnings from discontinued operations, net	—		—		0.2		3.7
Net earnings (loss)	$	27.7	$	5.6	$	57.8	$	(23.0)
Basic earnings (loss) per common share:
Earnings (loss) from continuing operations	$	0.30	$	0.06	$	0.62	$	(0.29)
Earnings from discontinued operations, net	—		—		0.01		0.04
Net earnings (loss)	$	0.30	$	0.06	$	0.63	$	(0.25)
Weighted-average shares outstanding	92,189,329		91,688,765		92,315,146		91,707,702
Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations	$	0.29	$	0.06	$	0.61	$	(0.29)
Earnings from discontinued operations, net	—		—		—		0.04
Net earnings (loss)	$	0.29	$	0.06	$	0.61	$	(0.25)
Diluted weighted-average shares outstanding	94,143,034		92,473,318		94,780,940		91,707,702

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Revenue and Earnings from continuing operations by market segment

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Revenues:
Audio	$	177.7	$	164.8	$	490.6	$	389.4
Precision Devices	55.3		41.0		143.2		131.7
Total revenues	$	233.0	$	205.8	$	633.8	$	521.1
Earnings (loss) from continuing operations before interest and income taxes:
Audio	$	36.6	$	17.8	$	95.0	$	(0.5)
Precision Devices	14.0		8.0		28.3		26.2
Total segments	50.6		25.8		123.3		25.7
Corporate expense / other	14.1		13.2		44.7		34.3
Interest expense, net	4.2		4.7		12.3		12.5
Earnings (loss) before income taxes and discontinued operations	32.3		7.9		66.3		(21.1)
Provision for income taxes	4.6		2.3		8.7		5.6
Earnings (loss) from continuing operations	$	27.7	$	5.6	$	57.6	$	(26.7)

Reconciliation of Assets from Segment to Consolidated

Information regarding assets of the Company's reportable segments:

	Total Assets
(in millions)	September 30, 2021		December 31, 2020
Audio	$	1,461.7	$	1,470.4
Precision Devices	257.4		179.2
Corporate / eliminations	4.1		5.3
Total	$	1,723.2	$	1,654.9

Revenue from External Customers by Geographic Areas

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Asia	$	163.4	$	151.7	$	452.0	$	368.3
United States	42.2		28.8		109.3		86.8
Europe	24.6		23.1		65.4		59.8
Other Americas	1.6		1.3		3.9		2.8
Other	1.2		0.9		3.2		3.4
Total	$	233.0	$	205.8	$	633.8	$	521.1

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Basis of Presentation (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Noncash Investing and Financing Items
Payments for Repurchase of Common Stock	$ 20.0	$ 15.0
Treasury Stock, Shares, Acquired	1,011,124
Operating Lease, Liability, Noncurrent	$ 15.8		$ 18.7
Treasury Stock, Shares	2,089,487		1,078,363
Purchases of property and equipment included in accounts payable	$ 3.6	$ 1.9

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Discontinued Operations (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Jul. 07, 2016	Sep. 30, 2021	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Nov. 28, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received for disposal group	$ 45.0						$ 130.0
Proceeds from the sale of business	$ 40.6		$ 135.1
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent						$ 0.6
Benefit from income taxes (1)		$ (0.2)		$ (0.2)
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax		0.0		0.0	$ 0.0
Disposal Group, Including Discontinued Operation, Liabilities		0.0		0.0		$ 0.6
Assets of discontinued operations		0.0		0.0
Discontinued Operations, Disposed of by Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Operating Expense		0.0		0.0	0.0
Discontinued Operation, Income (Loss) from Discontinued Operation During Phase-out Period, Net of Tax		0.2		0.2	3.7
Benefit from income taxes (1)					(3.7)
Disposal Group, Including Discontinued Operation, Revenue		$ 0.0		$ 0.0	$ 0.0

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Business Combinations (Details) - USD ($) $ in Millions		5 Months Ended	9 Months Ended
	Dec. 20, 2019	Sep. 30, 2021	Sep. 30, 2021	May 03, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets
Goodwill		$ 941.3	$ 941.3		$ 910.0
Integrated Microwave Corporation
Business Combination Segment Allocation [Line Items]
Payments to Acquire Businesses, Gross	$ 80.7
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual			7.0
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual			$ 0.2
Finite-Lived Intangible Assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents				$ 2.2
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables				3.0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory				2.6
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment				8.3
Goodwill				31.3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities				(1.2)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net				80.7
Integrated Microwave Corporation | 100000
Finite-Lived Intangible Assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles				5.2
Finite-Lived Intangible Asset, Useful Life		10 years
Finite-Lived Intangible Asset, Useful Life		10 years
Integrated Microwave Corporation | Trademarks
Finite-Lived Intangible Assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles				1.6
Integrated Microwave Corporation | Customer relationships
Finite-Lived Intangible Assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles				$ 27.7
Finite-Lived Intangible Asset, Useful Life		8 years
Finite-Lived Intangible Asset, Useful Life		8 years

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Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Inventory, Net [Abstract]
Raw materials	$ 87.6	$ 89.7
Work in progress	33.6	31.0
Finished goods	71.2	48.4
Subtotal	192.4	169.1
Less reserves	(36.7)	(39.0)
Total	$ 155.7	$ 130.1

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Property, Plant and Equipment, net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Property, Plant and Equipment
Cost	$ 702.3		$ 702.3		$ 682.7
Less accumulated depreciation	(511.7)		(511.7)		(491.2)
Total	190.6		190.6		191.5
Depreciation	11.5	$ 11.9	35.1	$ 35.9
Restructuring charges	0.0	0.1	0.3	10.5
Severance Pay and Contract Termination and Other Costs
Property, Plant and Equipment
Restructuring charges	0.0	0.1	0.3	$ 12.8
Severance Pay and Contract Termination and Other Costs | Operating Segments | Corporate, Non-Segment [Member]
Property, Plant and Equipment
Restructuring charges	0.0	$ 0.0
Land
Property, Plant and Equipment
Cost	13.0		13.0		8.0
Buildings and improvements
Property, Plant and Equipment
Cost	117.7		117.7		111.9
Machinery, equipment, and other
Property, Plant and Equipment
Cost	$ 571.6		$ 571.6		$ 562.8

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Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2020	$ 910.0
Goodwill, Acquired During Period	31.3
44469	941.3
Audio
Goodwill [Roll Forward]
Balance at December 31, 2020	878.8
Goodwill, Acquired During Period	0.0
44469	878.8
Precision Devices
Goodwill [Roll Forward]
Balance at December 31, 2020	31.2
Goodwill, Acquired During Period	31.3
44469	$ 62.5

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Goodwill and Other Intangible Assets - Intangible Assets and Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		5 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Finite-Lived Intangible Assets
Gross carrying amount	$ 130.3		$ 130.3	$ 130.3		$ 92.1
Accumulated amortization	60.6		60.6	60.6		49.1
Unamortized intangible assets, gross carrying amount	32.0		32.0	32.0		35.7
Intangible assets, net	101.7		101.7	101.7		78.7
Amortization expense	4.3	$ 3.3		11.5	$ 9.8
2021	4.4		4.4	4.4
2022	12.2		12.2	12.2
2023	11.6		11.6	11.6
2024	11.6		11.6	11.6
2025	11.2		11.2	11.2
Trademarks
Finite-Lived Intangible Assets
Unamortized intangible assets, gross carrying amount	32.0		32.0	32.0		32.0
In Process Research and Development [Member]
Finite-Lived Intangible Assets
Unamortized intangible assets, gross carrying amount	0.0		0.0	0.0		3.7
Trademarks
Finite-Lived Intangible Assets
Gross carrying amount	2.0		2.0	2.0		1.0
Accumulated amortization	0.5		0.5	0.5		0.4
Patents
Finite-Lived Intangible Assets
Gross carrying amount	40.8		40.8	40.8		40.8
Accumulated amortization	39.6		39.6	39.6		36.1
Customer relationships
Finite-Lived Intangible Assets
Gross carrying amount	39.7		39.7	39.7		12.0
Accumulated amortization	7.9		$ 7.9	7.9		5.2
Customer relationships | Integrated Microwave Corporation
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life			8 years
100000
Finite-Lived Intangible Assets
Gross carrying amount	45.4		$ 45.4	45.4		36.5
Accumulated amortization	11.5		$ 11.5	11.5		6.7
100000 | Integrated Microwave Corporation
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life			10 years
Other
Finite-Lived Intangible Assets
Gross carrying amount	2.4		$ 2.4	2.4		1.8
Accumulated amortization	$ 1.1		$ 1.1	$ 1.1		$ 0.7
In Process Research and Development [Member]
Finite-Lived Intangible Assets
Finite-Lived Intangible Asset, Useful Life	9 years

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Restructuring and Related Activities - Restructuring Charges by Segment (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Restructuring Cost and Reserve
Restructuring charges	$ 0.0	$ 0.1	$ 0.3	$ 10.5
Restructuring and Related Cost, Incurred Cost			0.3
Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges		0.0		8.3
Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.1	0.3	12.8
Severance Pay and Benefits
Restructuring Cost and Reserve
Restructuring and Related Cost, Incurred Cost			0.3
Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring and Related Cost, Incurred Cost			0.0
Operating Segments | Audio | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.0	0.3	11.0
Operating Segments | Precision Devices | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.1	0.0	0.1
Operating Segments | Corporate, Non-Segment [Member] | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.0
Corporate, Non-Segment [Member] | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges			0.0	1.7
Cost of Goods Sold, Restructuring Charges | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.0		2.3
Cost of Goods Sold, Restructuring Charges | Severance Pay and Benefits | Audio
Restructuring Cost and Reserve
Restructuring charges		0.1		4.5
Cost of Goods Sold, Restructuring Charges | Severance Pay and Benefits | Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges				5.4
Cost of Goods Sold, Restructuring Charges | Contract Termination and Other Costs | Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges				1.7
Cost of Goods Sold, Restructuring Charges | Contract Termination [Member] | Intelligent Audio [Member]
Restructuring Cost and Reserve
Restructuring charges		1.2
Operating Expense | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	$ 0.0		$ 0.3
Restructuring Charges | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges		$ 0.1		$ 10.5

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Restructuring and Related Activities - Restructuring Accrual Activities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Restructuring Cost and Reserve
Restructuring charges	$ 0.0	$ 0.1	$ 0.3	$ 10.5
Restructuring Reserve [Roll Forward]
Severance and other restructuring reserve, beginning balance			2.6
Restructuring charges			0.3
Payments			(2.4)
Severance and other restructuring reserve, ending balance	0.5		0.5
Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.1	0.3	12.8
Severance Pay and Benefits
Restructuring Reserve [Roll Forward]
Severance and other restructuring reserve, beginning balance			1.9
Restructuring charges			0.3
Payments			(1.7)
Severance and other restructuring reserve, ending balance	0.5		0.5
Contract Termination and Other Costs
Restructuring Reserve [Roll Forward]
Severance and other restructuring reserve, beginning balance			0.7
Restructuring charges			0.0
Payments			(0.7)
Severance and other restructuring reserve, ending balance	0.0		0.0
Cost of Goods Sold, Restructuring Charges | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	0.0	0.0		2.3
Operating Expense | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges	$ 0.0		$ 0.3
Restructuring Charges | Severance Pay and Contract Termination and Other Costs
Restructuring Cost and Reserve
Restructuring charges		$ 0.1		$ 10.5

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Restructuring and Related Activities - Balance Sheet Location (Details) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Restructuring Cost and Reserve
Severance and restructuring accrual	$ 0.5	$ 2.6
Other accrued expenses
Restructuring Cost and Reserve
Severance and restructuring accrual	0.5	2.4
Other liabilities
Restructuring Cost and Reserve
Severance and restructuring accrual	$ 0.0	$ 0.2

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Hedging Transaction and Derivative Instruments - Gain (Loss) of Derivative Instruments Recognized on Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Derivative
Cost of goods sold	$ 136.1	$ 130.6	$ 375.2	$ 339.6
Interest expense, net	(4.2)	(4.7)	(12.3)	(12.5)
Other expense (income), net	$ 1.9	$ (1.0)	$ 3.4	$ (0.2)

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Borrowings (Details) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Long-term borrowings
Long-term debt	$ 171.8	$ 165.1
Less: current maturities	171.8	165.1
Long-term portion	0.0	0.0
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year	172.5
Long-term Debt, Maturities, Repayments of Principal in Year Two	0.0
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	171.8	165.1
Long-term Debt, Maturities, Repayments of Principal in Year Four	0.0
Debt Instrument, Unamortized Discount	0.7	7.4
Line of Credit | Credit Facility due October 11, 2022
Long-term borrowings
Long-term Line of Credit	0.0	$ 0.0
Long-term Debt, Maturities, Repayments of Principal in Year Five	$ 0.0

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Borrowings Convertible Debt (Details) - Convertible Debt - Convertible Notes Due Twenty Twenty One $ / shares in Units, $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2021 USD ($) $ / shares	Sep. 30, 2020 USD ($)	Jun. 30, 2016 USD ($)	Sep. 30, 2021 USD ($) $ / shares	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	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	(0.7)			(0.7)		(7.4)
Convertible Notes Payable	171.8			171.8		165.1
Convertible Notes Payable, Current	(171.8)			(171.8)		(165.1)
Convertible Notes Payable, Noncurrent	0.0			0.0		0.0
Debt Instrument, Convertible, Carrying Amount of Equity Component	29.9			29.9		$ 29.9
Debt Instrument, Fair Value Disclosure	186.4			186.4
Interest Expense, Debt, Excluding Amortization	1.4	$ 1.4		4.2	$ 4.2
Amortization of Debt Issuance Costs	0.2	0.2		0.7	0.7
Amortization of Debt Discount (Premium)	2.1	1.9		6.0	5.5
Interest Expense, Debt	$ 3.7	$ 3.5		$ 10.9	$ 10.4
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

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Borrowings Schedule of Revolving Credit Facility (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020	Dec. 31, 2020 USD ($)
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Covenant, EBITDA to Interest Ratio, Minimum		3.25
Debt Instrument, Covenant, Debt to EBITDA, Maximum		3.75
Debt Instrument, Covenant, Senior Secured Leverage Ratio, Maximum		3.25
Line of Credit | Weighted Average
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Commitment Fee Percentage		0.26%	0.25%
Line of Credit | Weighted Average | London Interbank Offered Rate (LIBOR)
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Interest Rate, Effective Percentage			2.18%
Credit Facility due January 2, 2024 [Member]
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 400,000,000	$ 400,000,000
Credit Facility due January 2, 2024 [Member] | Minimum [Member]
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Commitment Fee Percentage		0.225%
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR)
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Credit Facility due January 2, 2024 [Member] | Minimum [Member] | Applicable margin alternate base rate [Member]
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Credit Facility due January 2, 2024 [Member] | Maximum [Member]
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Line of Credit Facility, Commitment Fee Percentage		0.375%
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR)
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.50%
Credit Facility due January 2, 2024 [Member] | Maximum [Member] | Applicable margin alternate base rate [Member]
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Credit Facility due October 11, 2022 | Line of Credit
Schedule of Term Loan and Revolving Credit Facilities [Line Items]
Long-term Line of Credit	$ 0	$ 0		$ 0

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Other Comprehensive Loss - OCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Foreign currency translation adjustments [Abstract]
Foreign currency translation	$ (3.7)	$ 9.2	$ (6.4)	$ 5.1
Foreign currency translation, tax	0.0	0.0	0.0	0.0
Foreign currency translation, net of tax	(3.7)	9.2	(6.4)	5.1
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent [Abstract]
Other Comprehensive (Income) Loss, Defined Benefit Plan, before Tax, after Reclassification Adjustment, Attributable to Parent	0.2	0.2	0.6	0.5
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent	(0.1)	0.1	0.1	0.0
Net change in employee benefit plans	0.1	0.3	0.7	0.5
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(0.1)	0.9	(1.9)	0.4
Changes in fair value of cash flow hedges:
Changes in fair value of cash flow hedges, before tax	(0.3)	1.1	(2.1)	0.5
Changes in fair value of cash flow hedges, tax	0.2	(0.2)	0.2	(0.1)
Total other comprehensive earnings [Abstract]
Other comprehensive loss, before tax	(3.8)	10.5	(7.9)	6.1
Other comprehensive loss, tax	0.1	(0.1)	0.3	(0.1)
Other comprehensive (loss) earnings, net of tax	(3.7)	10.4	(7.6)	6.0
Net losses (gains) reclassified into earnings	$ 0.1	$ (0.5)	$ (1.4)	$ (0.1)

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Other Comprehensive Loss - AOCI (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Amortization or settlement of actuarial losses and prior service costs	$ 0.2	$ 0.2	$ 0.6	$ 0.5
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax	0.1	(0.1)	(0.1)	0.0
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax	0.1	0.3	0.7	0.5
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax	0.0	(0.6)	(1.9)	(0.2)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax	0.1	0.1	0.5	0.1
Net losses (gains) reclassified into earnings	0.1	(0.5)	(1.4)	(0.1)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			(100.5)	(112.0)
Other comprehensive (loss) earnings, net of tax	(3.7)	10.4	(7.6)	6.0
Ending balance	(108.1)	(106.0)	(108.1)	(106.0)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			1.6	0.5
Other comprehensive (loss) earnings, net of tax			(1.9)	0.4
Ending balance	(0.3)	0.9	(0.3)	0.9
Employee benefit plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			(22.1)	(18.7)
Other comprehensive (loss) earnings, net of tax			0.7	0.5
Ending balance	(21.4)	(18.2)	(21.4)	(18.2)
Cumulative foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance			(80.0)	(93.8)
Other comprehensive (loss) earnings, net of tax			(6.4)	5.1
Ending balance	$ (86.4)	$ (88.7)	$ (86.4)	$ (88.7)

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Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Holiday [Line Items]
Share-based Payment Arrangement, Expense	$ 7.1	$ 4.8	$ 25.6	$ 12.4
Effective tax rate (benefit) provision	14.20%	29.10%	13.10%	(26.50%)
Income Tax Expense (Benefit)	$ 4.6	$ 2.3	$ 8.7	$ 5.6
Other expense (income), net	1.9	(1.0)	3.4	$ (0.2)
Effective Income Tax Rate Reconciliation, Discrete Items	$ 0.4	$ (1.2)	$ (0.9)
Effective Tax Rate Excluding Discrete Items	(13.00%)	(44.30%)	(14.50%)	(32.20%)
Foreign Tax Authority
Income Tax Holiday [Line Items]
Effective income tax rate reconciliation, tax holiday	$ 3.9	$ 2.7	$ 9.3	$ 4.2
Holiday benefit (usd per share)	$ 0.04	$ 0.03	$ 0.10	$ 0.05

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Equity Incentive Program - Stock Options and SSARs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Expense	$ 7,100,000	$ 4,800,000	$ 25,600,000	$ 12,400,000
SSARs
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 0		$ 0
Number of Shares [Roll Forward]
Beginning balance			596,537
Granted			0
Exercised			0
Forfeited			0
Expired			(106,477)
Ending balance	490,060		490,060
Exercised	490,060		490,060
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Options, Expired in Period, Weighted Average Exercise Price			$ 22.17
Weighted Average Grant Date Fair Value
Beginning balance			22.72
Granted			0
Exercised			0
Forfeited			0
Ending balance	$ 22.84		22.84
Exercisable	$ 22.84		$ 22.84
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			10 months 24 days
SSARs, weighted average remaining contractual term, exercisable			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	$ 3,300,000		$ 3,300,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate			0.06%
Dividend yield			0.00%	0.00%
Expected life (years)			4 years 6 months
Volatility			36.00%
Stock Options, Number of Shares
Beginning balance			5,765,903
Granted			216,963
Exercised			(867,386)
Forfeited			(90,074)
Expired			(848,452)
Ending balance	4,176,954		4,176,954
Exercisable	3,309,977		3,309,977
Stock Options, Weighted Average Exercise Price
Beginning balance			$ 17.44
Granted			20.61
Exercised			16.54
Forfeited			17.01
Expired			29.52
Ending balance	$ 15.34		15.34
Exercisable	$ 14.75		$ 14.75
SARS and Options, Additional Disclosures
Options, aggregate intrinsic value, outstanding	$ 14,800,000		$ 14,800,000
Options, aggregate intrinsic value, exercisable	$ 13,400,000		$ 13,400,000
Options, weighted average remaining contractual term, outstanding			3 years
Options, weighted average remaining contractual term, exercisable			2 years 4 months 24 days
Minimum [Member] | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate				0.11%
Expected life (years)				4 years 3 months 18 days
Volatility				38.80%
Fair value at date of grant			$ 6.14	$ 4.78
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%
Expected life (years)				4 years 6 months
Volatility				40.60%
Fair value at date of grant			$ 6.31	$ 5.95

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Equity Incentive Program - RSUs (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	1 year 9 months 18 days
Number of Shares [Roll Forward]
Beginning balance | shares	1,909,786
Granted | shares	1,117,408
Vested (1) | shares	(1,049,222)
Forfeited | shares	(157,176)
Ending balance | shares	1,820,796
Weighted Average Grant Date Fair Value
Beginning balance | $ / shares	$ 16.14
Granted | $ / shares	20.58
Vested (1) | $ / shares	15.79
Forfeited | $ / shares	18.26
Ending balance | $ / shares	$ 18.82

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Equity Incentive Program Equity Incentive Program - PSUs (Details) - Performance Shares $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 numberOfGrantees	Sep. 30, 2019 numberOfGrantees	Sep. 30, 2018 numberOfGrantees
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $	$ 11.9
Number of Shares [Roll Forward]
Beginning balance | shares	920,973
Granted | shares	277,183
Vested (1) | shares	(329,092)
Forfeited | shares	(101,483)
Ending balance | shares	767,581
Weighted Average Grant Date Fair Value
Beginning balance | $ / shares	$ 16.04
Granted | $ / shares	28.46
Vested (1) | $ / shares	13.75
Forfeited | $ / shares	19.05
Ending balance | $ / shares	$ 21.11
Share-based Payment Arrangement, Plan Modification, Number of Grantees Affected | numberOfGrantees		8	8	9
2019
Weighted Average Grant Date Fair Value
Share-based Payment Arrangement, Plan Modification, Incremental Cost | $	$ 2.4
2018
Weighted Average Grant Date Fair Value
Share-based Payment Arrangement, Plan Modification, Incremental Cost | $	3.9
2020
Weighted Average Grant Date Fair Value
Share-based Payment Arrangement, Plan Modification, Incremental Cost | $	$ 4.7

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Equity Incentive Program - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Expense	$ 7,100,000	$ 4,800,000	$ 25,600,000	$ 12,400,000
SSARs
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	0		0
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	3,300,000		$ 3,300,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 4 months 24 days
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	23,400,000		$ 23,400,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 9 months 18 days
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 11,900,000		$ 11,900,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			1 year 4 months 24 days
Minimum [Member] | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Percentage increase of initial grant value			0.00%
Maximum [Member] | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Percentage increase of initial grant value			225.00%

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Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Reconciliation of information used in computing basic and diluted earnings per share [Abstract]
Earnings (loss) from continuing operations	$ 27.7	$ 5.6	$ 57.6	$ (26.7)
Earnings from discontinued operations, net	0.0	0.0	0.2	3.7
Net earnings (loss)	$ 27.7	$ 5.6	$ 57.8	$ (23.0)
Basic earnings (loss) per common share:
Earnings (loss) from continuing operations, per basic share	$ 0.30	$ 0.06	$ 0.62	$ (0.29)
Earnings from discontinued operations, per basic share	0	0	0.01	0.04
Net earnings (loss) per share, basic	$ 0.30	$ 0.06	$ 0.63	$ (0.25)
Weighted average shares outstanding	92,189,329	91,688,765	92,315,146	91,707,702
Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations, per diluted share	$ 0.29	$ 0.06	$ 0.61	$ (0.29)
Loss from discontinued operations, net	0	0	0	0.04
Net earnings (loss) per share, diluted	$ 0.29	$ 0.06	$ 0.61	$ (0.25)
Diluted (in shares)	94,143,034	92,473,318	94,780,940	91,707,702
Weighted average number of anti-dilutive shares excluded from the calculation (in shares)	1,129,231	4,559,131	1,299,454	5,102,219

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Segment Information (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) segments	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Segment Reporting Information
Billed Contracts Receivable	$ 120.3		$ 120.3		$ 123.8
Number of reportable segments | segments			2
Assets	1,723.2		$ 1,723.2		1,654.9
Revenues	233.0	$ 205.8	633.8	$ 521.1
Reconciliation of Net Earnings from Segments [Abstract]
Interest expense, net	4.2	4.7	12.3	12.5
Earnings (loss) before income taxes and discontinued operations	32.3	7.9	66.3	(21.1)
Provision for income taxes	4.6	2.3	8.7	5.6
Earnings (loss) from continuing operations	27.7	5.6	57.6	(26.7)
Asia
Segment Reporting Information
Revenues	163.4	151.7	452.0	368.3
United States
Segment Reporting Information
Revenues	42.2	28.8	109.3	86.8
Europe
Segment Reporting Information
Revenues	24.6	23.1	65.4	59.8
Other Americas
Segment Reporting Information
Revenues	1.6	1.3	3.9	2.8
Other Geographical Locations
Segment Reporting Information
Revenues	1.2	0.9	3.2	3.4
Operating Segments
Reconciliation of Net Earnings from Segments [Abstract]
Earnings (loss) before interest and income taxes	50.6	25.8	123.3	25.7
Operating Segments | Audio
Segment Reporting Information
Assets	1,461.7		1,461.7		1,470.4
Revenues	177.7	164.8	490.6	389.4
Reconciliation of Net Earnings from Segments [Abstract]
Earnings (loss) before interest and income taxes	36.6	17.8	95.0	(0.5)
Operating Segments | Precision Devices
Segment Reporting Information
Assets	257.4		257.4		179.2
Revenues	55.3	41.0	143.2	131.7
Reconciliation of Net Earnings from Segments [Abstract]
Earnings (loss) before interest and income taxes	14.0	8.0	28.3	26.2
Corporate, Non-Segment [Member]
Segment Reporting Information
Assets	4.1		4.1		$ 5.3
Reconciliation of Net Earnings from Segments [Abstract]
Corporate expense / other	14.1	13.2	44.7	34.3
Interest expense, net	$ 4.2	$ 4.7	$ 12.3	$ 12.5

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Unusual or Infrequently Occurring Items (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Jun. 30, 2020
Impairments [Line Items]
Asset Impairment Charges	$ 4.0	$ 7.6	$ 4.0	$ 7.6
Operating Lease, Right-of-Use Asset	17.0		$ 17.0		$ 23.3
Mountain View, California
Impairments [Line Items]
Asset Impairment Charges	3.2	5.4
Santa Clara, California [Member]
Impairments [Line Items]
Asset Impairment Charges	$ 0.8	$ 2.2
Santa Clara, California [Member]
Impairments [Line Items]
Operating Lease, Liability						$ 4.0
Operating Lease, Right-of-Use Asset						$ 2.4

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Subsequent Events (Details) - Subsequent Event - Convertible Notes Due Twenty Twenty One - Convertible Debt shares in Millions, $ in Millions	Nov. 01, 2021 USD ($) shares
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	0.4
Repayments of Convertible Debt | $	$ 172.5
Proceeds from convertible note hedges, in shares	0.4