Indiana | 001-36454 | 35-2047713 | ||
(State or other jurisdiction of | (Commission File | (IRS Employer Identification No.) | ||
incorporation) | Number) |
1205 Kimball Boulevard, Jasper, Indiana | 47546 | |
(Address of principal executive offices) | (Zip Code) |
Not Applicable |
(Former name or former address, if changed since last report) |
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, no par value | KE | The NASDAQ Stock Market LLC |
Exhibit | ||
Number | Description | |
99.1 | ||
99.2 |
KIMBALL ELECTRONICS, INC. | |
By: | /s/ Michael K. Sergesketter |
MICHAEL K. SERGESKETTER Vice President, Chief Financial Officer |
• | Net sales in the fourth quarter were $286 million, down 10% year-over-year |
• | Fourth quarter net loss of $1.3 million, which includes a non-cash after-tax goodwill impairment charge of $6.9 million and after-tax non-operating charge of $2.9 million related to the finalization of the net working capital adjustment after the measurement period for the GES acquisition |
• | Adjusted net income (non-GAAP) of $8.5 million |
• | Loss per share of $0.05 and adjusted diluted earnings per share (non-GAAP) of $0.34 for the quarter |
• | Strong cash flows provided by operating activities of $21.5 million during the fourth quarter |
Three Months Ended | Fiscal Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(Amounts in Thousands, except EPS) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net Sales | $ | 286,156 | $ | 318,621 | $ | 1,200,550 | $ | 1,181,844 | |||||||
Operating Income | $ | 1,609 | $ | 10,319 | $ | 31,996 | $ | 42,060 | |||||||
Adjusted Operating Income (non-GAAP) (1) | $ | 9,534 | $ | 10,104 | $ | 39,921 | $ | 41,753 | |||||||
Operating Income % | 0.6 | % | 3.2 | % | 2.7 | % | 3.6 | % | |||||||
Adjusted Operating Income (non-GAAP) % | 3.3 | % | 3.2 | % | 3.3 | % | 3.5 | % | |||||||
Net Income (Loss) | $ | (1,273 | ) | $ | 7,525 | $ | 18,196 | $ | 31,558 | ||||||
Adjusted Net Income (non-GAAP) (1) | $ | 8,545 | $ | 7,362 | $ | 28,014 | $ | 31,074 | |||||||
Diluted EPS | $ | (0.05 | ) | $ | 0.29 | $ | 0.71 | $ | 1.21 | ||||||
Adjusted Diluted EPS (non-GAAP) (1) | $ | 0.34 | $ | 0.29 | $ | 1.10 | $ | 1.19 |
• | Consolidated net sales decreased 10% compared to the fourth quarter of fiscal year 2019. Foreign currency headwinds had an unfavorable 1% impact on net sales in the current quarter. |
• | Non-cash goodwill impairment charge of $7.9 million, $6.9 million net of tax, was recognized in the quarter for the GES reporting unit as a result of a reduction in future anticipated revenues. This impairment charge is an adjustment that does not affect the Company’s cash position, cash flow from operations, or debt covenants and is excluded for the non-GAAP measures. |
• | Adjusted net income (non-GAAP) in the current year fourth quarter also excludes expense of $3.8 million, $2.9 million net of tax, recorded in Non-operating expense for the final net working capital adjustment after the measurement period related to the GES acquisition. |
• | Operating activities provided cash of $21.5 million during the quarter, which compares to cash provided by operating activities of $12.2 million in the fourth quarter of fiscal year 2019. |
• | Cash conversion days (“CCD”) for the quarter ended June 30, 2020 were 81 days, flat sequentially with the third quarter of fiscal year 2020 and up from 77 days for the prior year quarter ended June 30, 2019. CCD is calculated as the sum of days sales outstanding plus contract asset days plus production days supply on hand less accounts payable days. |
• | Investments in capital expenditures were $11.0 million during the quarter. |
• | Cash and cash equivalents were $65.0 million and borrowings outstanding on credit facilities were $118.1 million at June 30, 2020, including $91.5 million classified as long term. |
Three Months Ended | ||||||||||
June 30, | ||||||||||
(Amounts in Millions) | 2020 | 2019 | Percent Change | |||||||
Automotive | $ | 73.7 | $ | 128.7 | (43 | )% | ||||
Medical | 123.7 | 100.5 | 23 | % | ||||||
Industrial | 74.3 | 68.3 | 9 | % | ||||||
Public Safety | 12.0 | 16.1 | (26 | )% | ||||||
Other | 2.5 | 5.0 | (51 | )% | ||||||
Total Net Sales | $ | 286.2 | $ | 318.6 | (10 | )% |
• | Net sales increased 2% in fiscal year 2020, setting a new annual record of $1.2 billion. |
• | Cash flow provided by operating activities for fiscal year 2020 was $72.8 million, a new annual record. |
• | Investments in capital expenditures were $38.7 million during fiscal year 2020. |
• | Return on invested capital (“ROIC”) was 6.9% and 8.7% for fiscal years 2020 and 2019, respectively (ROIC is a non-GAAP financial measure, see reconciliation of non-GAAP financial measures for ROIC calculation). |
Conference Call / Webcast | ||
Date: | August 19, 2020 | |
Time: | 10:00 AM Eastern Time | |
Live Webcast: | investors.kimballelectronics.com/events-and-presentations | |
Dial-In #: | 800-992-4934 (International Calls - 937-502-2251) | |
Conference ID: | 5677104 |
Condensed Consolidated Statements of Income | |||||||||||||
(Unaudited) | Three Months Ended | ||||||||||||
(Amounts in Thousands, except Per Share Data) | June 30, 2020 | June 30, 2019 | |||||||||||
Net Sales | $ | 286,156 | 100.0 | % | $ | 318,621 | 100.0 | % | |||||
Cost of Sales | 265,231 | 92.7 | % | 295,399 | 92.7 | % | |||||||
Gross Profit | 20,925 | 7.3 | % | 23,222 | 7.3 | % | |||||||
Selling and Administrative Expenses | 11,391 | 4.0 | % | 13,118 | 4.2 | % | |||||||
Other General Income | — | — | % | (215 | ) | (0.1 | )% | ||||||
Goodwill Impairment | 7,925 | 2.7 | % | — | 0.0 | % | |||||||
Operating Income | 1,609 | 0.6 | % | 10,319 | 3.2 | % | |||||||
Other Income (Expense), net | (2,687 | ) | (1.0 | )% | (1,605 | ) | (0.5 | )% | |||||
Income (Loss) Before Taxes on Income | (1,078 | ) | (0.4 | )% | 8,714 | 2.7 | % | ||||||
Provision for Income Taxes | 195 | 0.0 | % | 1,189 | 0.3 | % | |||||||
Net Income (Loss) | $ | (1,273 | ) | (0.4 | )% | $ | 7,525 | 2.4 | % | ||||
Earnings (Loss) Per Share of Common Stock: | |||||||||||||
Basic | $ | (0.05 | ) | $ | 0.30 | ||||||||
Diluted | $ | (0.05 | ) | $ | 0.29 | ||||||||
Average Number of Shares Outstanding: (1) | |||||||||||||
Basic | 25,049 | 25,450 | |||||||||||
Diluted | 25,049 | 25,622 | |||||||||||
(1) For the three months ended June 30, 2020, all outstanding stock compensation awards were antidilutive, as a result of the net loss recognized for the period, and were excluded from the dilutive calculation, including 210,000 average outstanding performance shares and 30,000 outstanding average deferred stock units. |
(Unaudited) | Fiscal Year Ended | ||||||||||||
(Amounts in Thousands, except Per Share Data) | June 30, 2020 | June 30, 2019 | |||||||||||
Net Sales | $ | 1,200,550 | 100.0 | % | $ | 1,181,844 | 100.0 | % | |||||
Cost of Sales | 1,116,709 | 93.0 | % | 1,093,438 | 92.5 | % | |||||||
Gross Profit | 83,841 | 7.0 | % | 88,406 | 7.5 | % | |||||||
Selling and Administrative Expenses | 43,920 | 3.7 | % | 46,653 | 3.9 | % | |||||||
Other General Income | — | — | % | (307 | ) | — | % | ||||||
Goodwill Impairment | 7,925 | 0.6 | % | — | — | % | |||||||
Operating Income | 31,996 | 2.7 | % | 42,060 | 3.6 | % | |||||||
Other Income (Expense), net | (6,839 | ) | (0.6 | )% | (3,575 | ) | (0.3 | )% | |||||
Income Before Taxes on Income | 25,157 | 2.1 | % | 38,485 | 3.3 | % | |||||||
Provision for Income Taxes | 6,961 | 0.6 | % | 6,927 | 0.6 | % | |||||||
Net Income | $ | 18,196 | 1.5 | % | $ | 31,558 | 2.7 | % | |||||
Earnings Per Share of Common Stock: | |||||||||||||
Basic | $ | 0.72 | $ | 1.22 | |||||||||
Diluted | $ | 0.71 | $ | 1.21 | |||||||||
Average Number of Shares Outstanding: | |||||||||||||
Basic | 25,243 | 25,857 | |||||||||||
Diluted | 25,428 | 26,082 |
Condensed Consolidated Statements of Cash Flows | Fiscal Year Ended | ||||||
(Unaudited) | June 30, | ||||||
(Amounts in Thousands) | 2020 | 2019 | |||||
Net Cash Flow provided by (used for) Operating Activities | $ | 72,808 | $ | (6,748 | ) | ||
Net Cash Flow used for Investing Activities | (38,482 | ) | (68,709 | ) | |||
Net Cash Flow (used for) provided by Financing Activities | (17,934 | ) | 79,430 | ||||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (678 | ) | (1,125 | ) | |||
Net Increase in Cash and Cash Equivalents | 15,714 | 2,848 | |||||
Cash and Cash Equivalents at Beginning of Period | 49,276 | 46,428 | |||||
Cash and Cash Equivalents at End of Period | $ | 64,990 | $ | 49,276 |
(Unaudited) | |||||||
Condensed Consolidated Balance Sheets | June 30, 2020 | June 30, 2019 | |||||
(Amounts in Thousands) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 64,990 | $ | 49,276 | |||
Receivables, net | 180,133 | 225,555 | |||||
Contract assets | 70,350 | 51,929 | |||||
Inventories | 219,043 | 203,840 | |||||
Prepaid expenses and other current assets | 23,891 | 24,713 | |||||
Property and Equipment, net | 154,529 | 143,629 | |||||
Goodwill | 12,011 | 18,104 | |||||
Other Intangible Assets, net | 19,343 | 22,188 | |||||
Other Assets | 30,539 | 24,877 | |||||
Total Assets | $ | 774,829 | $ | 764,111 | |||
LIABILITIES AND SHARE OWNERS’ EQUITY | |||||||
Current portion of borrowings under credit facilities | $ | 26,638 | $ | 34,713 | |||
Accounts payable | 203,703 | 197,001 | |||||
Accrued expenses | 42,264 | 43,196 | |||||
Long-term debt under credit facilities, less current portion | 91,500 | 91,500 | |||||
Long-term income taxes payable | 9,765 | 9,765 | |||||
Other | 21,594 | 18,082 | |||||
Share Owners’ Equity | 379,365 | 369,854 | |||||
Total Liabilities and Share Owners’ Equity | $ | 774,829 | $ | 764,111 |
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
(Unaudited) | |||||||||||||||
(Amounts in Thousands, except Per Share Data) | |||||||||||||||
Operating Income excluding Goodwill Impairment and Lawsuit Proceeds | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Operating Income, as reported | $ | 1,609 | $ | 10,319 | $ | 31,996 | $ | 42,060 | |||||||
Add: Goodwill Impairment | 7,925 | — | 7,925 | — | |||||||||||
Less: Pre-tax Settlement Proceeds from Lawsuit | — | 215 | — | 307 | |||||||||||
Adjusted Operating Income | $ | 9,534 | $ | 10,104 | $ | 39,921 | $ | 41,753 | |||||||
Net Income excluding Goodwill Impairment, Net Working Capital Adjustment from GES Acquisition, Tax Reform, and Lawsuit Proceeds | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net Income (Loss), as reported | $ | (1,273 | ) | $ | 7,525 | $ | 18,196 | $ | 31,558 | ||||||
Add: After-tax Goodwill Impairment | 6,947 | — | 6,947 | — | |||||||||||
Add: After-tax Net Working Capital Adjustment on GES Acquisition | 2,871 | — | 2,871 | — | |||||||||||
Add: Adjustments to Provision for Income Taxes from Tax Reform | — | — | — | (251 | ) | ||||||||||
Less: After-tax Settlement Proceeds from Lawsuit | — | 163 | — | 233 | |||||||||||
Adjusted Net Income | $ | 8,545 | $ | 7,362 | $ | 28,014 | $ | 31,074 | |||||||
Diluted Earnings per Share excluding Goodwill Impairment, Net Working Capital Adjustment from GES Acquisition, Tax Reform, and Lawsuit Proceeds | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Diluted Earnings (Loss) per Share, as reported | $ | (0.05 | ) | $ | 0.29 | $ | 0.71 | $ | 1.21 | ||||||
Add: Impact of Goodwill Impairment | 0.28 | 0.28 | |||||||||||||
Add: Impact of Net Working Capital Adjustment on GES Acquisition | 0.11 | — | 0.11 | — | |||||||||||
Add: Adjustments to Provision for Income Taxes from Tax Reform | — | — | — | (0.01 | ) | ||||||||||
Less: Impact of Settlement Proceeds from Lawsuit | — | — | — | 0.01 | |||||||||||
Adjusted Diluted Earnings per Share | $ | 0.34 | $ | 0.29 | $ | 1.10 | $ | 1.19 | |||||||
Return on Invested Capital (ROIC) excluding Goodwill Impairment and Lawsuit Proceeds | |||||||||||||||
Fiscal Year Ended | |||||||||||||||
June 30, | |||||||||||||||
2020 | 2019 | ||||||||||||||
Operating Income | $ | 31,996 | $ | 42,060 | |||||||||||
Add: Goodwill Impairment | $ | 7,925 | $ | — | |||||||||||
Less: Pre-tax Settlement Proceeds from Lawsuits | $ | — | $ | 307 | |||||||||||
Adjusted Operating Income (non-GAAP) | $ | 39,921 | $ | 41,753 | |||||||||||
Tax Effect (1) | $ | 9,715 | $ | 7,729 | |||||||||||
After-tax Adjusted Operating Income | $ | 30,206 | $ | 34,024 | |||||||||||
Average Invested Capital (2) | $ | 437,263 | $ | 390,528 | |||||||||||
ROIC | 6.9 | % | 8.7 | % |
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