Kimball Electronics, Inc. Reports First Quarter Fiscal Year 2016 Results
November 05 2015 - 7:00AM
Kimball Electronics, Inc. (Nasdaq:KE), a leading global electronic
manufacturing services provider of high-quality, durable electronic
products, today announced financial results for its first quarter
of fiscal year 2016 which ended September 30, 2015.
|
|
|
Three Months Ended |
|
September 30, |
(Amounts in Thousands,
except EPS) |
2015 |
|
2014 |
Net Sales |
$ |
200,418 |
|
|
$ |
203,803 |
|
Operating Income |
$ |
6,921 |
|
|
$ |
7,787 |
|
Adjusted Operating
Income (non-GAAP) |
$ |
7,058 |
|
|
$ |
8,751 |
|
Operating Income % |
3.5 |
% |
|
3.8 |
% |
Adjusted Operating
Income (non-GAAP) % |
3.5 |
% |
|
4.3 |
% |
Net Income |
$ |
4,475 |
|
|
$ |
5,391 |
|
Adjusted Net Income
(non-GAAP) |
$ |
4,560 |
|
|
$ |
6,355 |
|
Diluted EPS |
$ |
0.15 |
|
|
$ |
0.18 |
|
Adjusted Diluted EPS
(non-GAAP) |
$ |
0.16 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
Donald D. Charron, Chairman and Chief Executive Officer, stated,
“The softness that we felt in the fourth quarter of fiscal year
2015 continued into the first quarter of fiscal year 2016. We
were, however, encouraged by the firmer demand that we began to see
at the end of the quarter. We are focused on the successful
launch of a number of new business awards with both existing and
new customers. Our new business opportunities pipeline
remains healthy, and we continue to work diligently to achieve our
medium range goal of $1 billion in annual sales by fiscal year
2018.”
Mr. Charron continued, “This has been a challenging quarter for
us. In addition to the slowing China automotive market,
incremental costs related to the Romania greenfield start-up, the
ramp up of a significant new product introduction, and foreign
exchange headwinds impacted our results. We remain committed
to our four percent operating income goal and are responding with
the appropriate short-term actions while maintaining alignment with
our long-term strategic plan.”
First Quarter Fiscal Year 2016 Overview:
- Net sales declined 2% from the prior year first quarter due, in
part, to a $12.9 million reduction related to the exit of Johnson
ControIs, Inc. compared to the same quarter last year.
- Spin-off expenses in the current year first quarter were $0.1
million. Prior year first quarter spin-off costs were $1.0
million.
- Incremental costs associated with the start-up of the Company’s
new Romania facility reduced net income by $0.3 million in the
fiscal year 2016 first quarter.
- Investments in capital expenditures were $11.3 million during
the three months ended September 30, 2015.
- Cash and cash equivalents at September 30, 2015 were $52.7
million.
- Days sales outstanding, calculated as the average of monthly
trade accounts and notes receivable divided by one day’s average
net sales, was 58.7 days for the three months ended
September 30, 2015 compared to 57.4 days for the three months
ended September 30, 2014.
- Production days supply on hand, defined as the average of the
monthly gross inventory divided by an average day’s cost of sales,
was 65.2 days for the current year first quarter compared to 59.7
days for the same period a year ago.
|
|
|
|
Net Sales by Vertical Market: |
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
|
|
(Amounts in
Millions) |
2015 |
|
2014 |
|
Percent Change |
Automotive |
$ |
72.0 |
|
|
$ |
71.2 |
|
|
1 |
% |
Medical |
58.5 |
|
|
61.6 |
|
|
(5 |
)% |
Industrial |
49.5 |
|
|
53.6 |
|
|
(8 |
)% |
Public Safety |
16.4 |
|
|
14.2 |
|
|
16 |
% |
Other |
4.0 |
|
|
3.2 |
|
|
26 |
% |
Total Net Sales |
$ |
200.4 |
|
|
$ |
203.8 |
|
|
(2 |
)% |
|
Forward-Looking Statements
Certain statements contained within this release are considered
forward-looking under the Private Securities Litigation Reform Act
of 1995 and are subject to risks and uncertainties including, but
not limited to, our ability to fully realize the expected benefits
of the completed spin-off, the global economic conditions,
significant volume reductions from key contract customers, loss of
key customers or suppliers, financial stability of key customers
and suppliers, availability or cost of raw materials, and increased
competitive pricing pressures reflecting excess industry
capacities. Additional cautionary statements regarding other
risk factors that could have an effect on the future performance of
the Company are contained in its Annual Report on Form 10-K for the
year ended June 30, 2015.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. A
non-GAAP financial measure is a numerical measure of a company’s
financial performance that excludes or includes amounts so as to be
different than the most directly comparable measure calculated and
presented in accordance with Generally Accepted Accounting
Principles (GAAP) in the United States in the statement of income,
statement of comprehensive income, balance sheet, statement of cash
flows, or statement of equity of the company. The non-GAAP
financial measures contained herein include an adjustment for
spin-off expenses. Reconciliations of the reported GAAP
numbers to these non-GAAP financial measures are included in the
financial highlights table below. Management believes it is
useful for investors to understand how its core operations
performed without the effects of the spin-off expenses.
Excluding these amounts allows investors to meaningfully
trend, analyze, and benchmark the performance of the Company’s core
operations. Many of the Company’s internal performance
measures that management uses to make certain operating decisions
exclude these charges to enable meaningful trending of core
operating metrics.
|
Conference Call / Webcast |
|
|
|
Date: |
|
November 5, 2015 |
Time: |
|
10:00 AM Eastern
Time |
Dial-In #: |
|
800-992-4934
(International Calls - 937-502-2251) |
Conference ID: |
|
56702561 |
|
|
|
The live webcast of the conference call can be accessed at
investors.kimballelectronics.com. For those unable to
participate in the live webcast, the call will be archived
at investors.kimballelectronics.com.
About Kimball Electronics, Inc.
Recognized with a reputation for excellence, Kimball Electronics
is committed to a high performance culture that values personal and
organizational commitment to quality, reliability, value, speed,
and ethical behavior. Kimball Electronics employees know they are
part of a company culture that builds lasting relationships and
global success for customers while enabling employees to share in
the Company’s success through personal, professional, and financial
growth.
Kimball Electronics trades under the symbol “KE” on The NASDAQ
Stock Market. Kimball Electronics is a global contract
electronic manufacturing services (“EMS”) company that specializes
in durable electronics for the medical, automotive, industrial, and
public safety markets. Kimball Electronics is well recognized
by customers and industry trade publications for its excellent
quality, reliability, and innovative service. From its
manufacturing operations in the United States, Mexico, Thailand,
Poland, China, and Romania, Kimball Electronics provides
engineering, manufacturing, and supply chain services which utilize
common production and support capabilities to a variety of
industries globally. Kimball Electronics is headquartered in
Jasper, Indiana.
To learn more about Kimball Electronics, visit:
www.kimballelectronics.com.
Lasting relationships. Global
success.
Financial highlights for the first quarter ended
September 30, 2015 are as follows:
Condensed Consolidated Statements of Income |
|
|
|
|
|
|
(Unaudited) |
Three Months Ended |
(Amounts in Thousands,
except per share data) |
September 30, 2015 |
|
September 30, 2014 |
Net Sales |
$ |
200,418 |
|
|
100.0 |
% |
|
$ |
203,803 |
|
|
100.0 |
% |
Cost of Sales |
185,138 |
|
|
92.4 |
% |
|
185,900 |
|
|
91.2 |
% |
Gross Profit |
15,280 |
|
|
7.6 |
% |
|
17,903 |
|
|
8.8 |
% |
Selling and
Administrative Expenses |
8,359 |
|
|
4.1 |
% |
|
10,116 |
|
|
5.0 |
% |
Operating Income |
6,921 |
|
|
3.5 |
% |
|
7,787 |
|
|
3.8 |
% |
Other Income (Expense),
net |
(666 |
) |
|
(0.4 |
)% |
|
(497 |
) |
|
(0.2 |
)% |
Income Before Taxes on
Income |
6,255 |
|
|
3.1 |
% |
|
7,290 |
|
|
3.6 |
% |
Provision for Income
Taxes |
1,780 |
|
|
0.9 |
% |
|
1,899 |
|
|
1.0 |
% |
Net Income |
$ |
4,475 |
|
|
2.2 |
% |
|
$ |
5,391 |
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
Earnings Per Share of
Common Stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
|
|
$ |
0.18 |
|
|
|
Diluted |
$ |
0.15 |
|
|
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
Average Number of
Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
29,292 |
|
|
|
|
29,143 |
|
|
|
Diluted |
29,349 |
|
|
|
|
29,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows |
Three Months Ended |
(Unaudited) |
September 30, |
(Amounts in
Thousands) |
2015 |
|
2014 |
Net Cash Flow used for
Operating Activities |
$ |
(529 |
) |
|
$ |
(4,505 |
) |
Net Cash Flow used for
Investing Activities |
(11,114 |
) |
|
(7,719 |
) |
Net Cash Flow (used
for) provided by Financing Activities |
(694 |
) |
|
7,827 |
|
Effect of Exchange Rate
Change on Cash |
(160 |
) |
|
(1,162 |
) |
Net Decrease in Cash
and Cash Equivalents |
(12,497 |
) |
|
(5,559 |
) |
Cash and Cash
Equivalents at Beginning of Period |
65,180 |
|
|
26,260 |
|
Cash and Cash
Equivalents at End of Period |
$ |
52,683 |
|
|
$ |
20,701 |
|
|
|
|
|
|
|
(Unaudited) |
|
|
Condensed
Consolidated Balance Sheets |
September 30,
2015 |
|
June 30, 2015 |
(Amounts in
Thousands) |
|
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
52,683 |
|
|
$ |
65,180 |
|
Receivables, net |
132,363 |
|
|
139,892 |
|
Inventories |
132,566 |
|
|
125,198 |
|
Prepaid expenses and other current
assets |
24,126 |
|
|
23,922 |
|
Property and Equipment, net |
112,940 |
|
|
106,779 |
|
Goodwill |
2,564 |
|
|
2,564 |
|
Other Intangible Assets, net |
5,033 |
|
|
4,509 |
|
Other Assets |
14,085 |
|
|
15,213 |
|
Total Assets |
$ |
476,360 |
|
|
$ |
483,257 |
|
|
|
|
|
LIABILITIES AND
SHARE OWNERS’ EQUITY |
|
|
|
Accounts payable |
$ |
127,450 |
|
|
$ |
133,409 |
|
Accrued expenses |
21,858 |
|
|
26,545 |
|
Other |
10,827 |
|
|
10,854 |
|
Share Owners’ Equity |
316,225 |
|
|
312,449 |
|
Total Liabilities and Share Owners’
Equity |
$ |
476,360 |
|
|
$ |
483,257 |
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
(Unaudited) |
|
|
|
(Amounts in Thousands,
except per share data) |
|
|
|
|
|
|
|
Operating Income excluding Spin-off Expenses |
|
Three Months Ended |
|
September 30, |
Kimball
Electronics, Inc. |
2015 |
|
2014 |
Operating Income, as
reported |
$ |
6,921 |
|
|
$ |
7,787 |
|
Add: Pre-tax Spin-off
Expenses |
137 |
|
|
964 |
|
Adjusted Operating
Income |
$ |
7,058 |
|
|
$ |
8,751 |
|
|
|
|
|
|
|
|
|
Net
Income excluding Spin-off Expenses |
|
Three Months Ended |
|
September 30, |
Kimball
Electronics, Inc. |
2015 |
|
2014 |
Net Income, as
reported |
$ |
4,475 |
|
|
$ |
5,391 |
|
Add: After-tax Spin-off
Expenses * |
85 |
|
|
964 |
|
Adjusted Net
Income |
$ |
4,560 |
|
|
$ |
6,355 |
|
|
|
|
|
* Spin-off
expenses in the prior year first quarter were non-deductible. |
|
|
|
|
Diluted Earnings per Share excluding Spin-off
Expenses |
|
Three Months Ended |
|
September 30, |
Kimball
Electronics, Inc. |
2015 |
|
2014 |
Diluted Earnings per
Share, as reported |
$ |
0.15 |
|
|
$ |
0.18 |
|
Add: Impact of Spin-off
Expenses |
0.01 |
|
|
0.04 |
|
Adjusted Diluted
Earnings per Share |
$ |
0.16 |
|
|
$ |
0.22 |
|
|
CONTACT:
Adam W. Smith
Treasurer
Telephone 812.634.4000
E-mail: Investor.Relations@kimballelectronics.com
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