Kimball Electronics, Inc. Reports Third Quarter Fiscal Year 2021 Results
May 05 2021 - 4:05PM
Kimball Electronics, Inc. (Nasdaq: KE) today announced financial
results for the third quarter ended March 31, 2021.
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
March 31, |
(Amounts in Thousands, except
EPS) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Net Sales |
$ |
310,329 |
|
|
$ |
293,925 |
|
|
$ |
962,682 |
|
|
$ |
914,394 |
|
Operating Income |
$ |
14,638 |
|
|
$ |
10,588 |
|
|
$ |
48,624 |
|
|
$ |
30,387 |
|
Adjusted Operating Income
(non-GAAP) (1)(2) |
$ |
14,426 |
|
|
$ |
9,674 |
|
|
$ |
49,432 |
|
|
$ |
29,953 |
|
Operating Income % |
4.7 |
% |
|
3.6 |
% |
|
5.1 |
% |
|
3.3 |
% |
Adjusted Operating Income
(non-GAAP) % |
4.6 |
% |
|
3.3 |
% |
|
5.1 |
% |
|
3.3 |
% |
Net Income |
$ |
10,472 |
|
|
$ |
6,259 |
|
|
$ |
42,345 |
|
|
$ |
19,469 |
|
Adjusted Net Income (non-GAAP)
(1) |
$ |
9,933 |
|
|
$ |
6,259 |
|
|
$ |
41,680 |
|
|
$ |
19,469 |
|
Diluted EPS |
$ |
0.41 |
|
|
$ |
0.25 |
|
|
$ |
1.67 |
|
|
$ |
0.76 |
|
Adjusted Diluted EPS
(non-GAAP) (1) |
$ |
0.39 |
|
|
$ |
0.25 |
|
|
$ |
1.65 |
|
|
$ |
0.76 |
|
(1) A reconciliation of GAAP and non-GAAP financial
measures is included below.
(2) Beginning in the first quarter of fiscal year 2021,
adjusted operating income excludes changes in the fair value of our
supplemental employee retirement plan, or SERP, liability which are
exactly offset by the revaluation to fair value of the SERP
investments in Other Income (Expense), net, and as a result have no
impact on net income. Prior reported periods have been
revised accordingly.
Donald D. Charron, Chairman and Chief Executive Officer, stated,
“We are very pleased with our operating results for the third
quarter of fiscal year 2021. Our team remains resilient as we
work through the ongoing challenges caused by the pandemic and the
global semiconductor shortage. Despite the adversity, we
again delivered solid operating income exceeding our goal of 4.5%,
and we continued to deliver excellent cash flow from operations,
which on a year-to-date basis has more than doubled from the prior
year.”
Mr. Charron continued, “Due to the global semiconductor
shortage, a significant amount of our shippable backlog shifted out
of Q3 and Q4 of fiscal year 2021 to the first half of fiscal year
2022. Many industry experts are forecasting the global
semiconductor shortage will remain with us for most of this
calendar year. However, when considering the semiconductor
delivery commitments that we currently have from our suppliers, we
are still expecting a very strong fourth quarter of fiscal year
2021 both sequentially and year-over-year.”
Third Quarter Fiscal Year 2021 Overview:
- Consolidated net sales increased 6% compared to the third
quarter of fiscal year 2020. Foreign currency had a favorable
3% impact on net sales in the current quarter compared to the same
period a year ago.
- Operating activities provided cash of $31.5 million during the
quarter, which compares to cash provided by operating activities of
$12.0 million in the third quarter of fiscal year 2020.
- Cash conversion days (“CCD”) for the quarter ended
March 31, 2021 were 66 days, down from 75 days in the second
quarter of fiscal year 2021 and 81 days in the quarter ended March
31, 2020. 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 $8.7 million during
the quarter.
- Cash and cash equivalents were $89.7 million and borrowings
outstanding on credit facilities were $60.5 million at March 31,
2021, including $40.0 million classified as long term.
Net Sales by Vertical Market:
|
Three Months Ended |
|
|
|
March 31, |
|
|
(Amounts in Millions) |
2021 |
|
2020 |
|
PercentChange |
Automotive |
$ |
139.6 |
|
$ |
124.4 |
|
12% |
Medical |
85.4 |
|
87.1 |
|
(2)% |
Industrial |
69.2 |
|
65.6 |
|
5% |
Public Safety |
13.5 |
|
12.5 |
|
9% |
Other |
2.6 |
|
4.3 |
|
(41)% |
Total Net Sales |
$ |
310.3 |
|
$ |
293.9 |
|
6% |
Forward-Looking StatementsCertain statements
contained within this release are considered forward-looking under
the Private Securities Litigation Reform Act of 1995. The
statements may be identified by the use of words such as “expect,”
“should,” “goal,” “predict,” “will,” “future,” “optimistic,”
“confident,” and “believe.” These forward-looking statements
are subject to risks and uncertainties including, without
limitation, global economic conditions, geopolitical environment,
global health emergencies including the COVID-19 pandemic,
availability or cost of raw materials and components, foreign
exchange rate fluctuations, and our ability to convert new business
opportunities into customers and revenue. 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,
2020.
Non-GAAP Financial Measures This press release
contains non-GAAP financial measures. The non-GAAP financial
measures contained herein include adjusted operating income,
adjusted net income, and adjusted diluted EPS.
Reconciliations of the reported GAAP numbers to these non-GAAP
financial measures are included in the Reconciliation of Non-GAAP
Financial Measures section below. Management believes these
measures are useful and allow investors to meaningfully trend,
analyze, and benchmark the performance of the Company’s core
operations. The Company’s non-GAAP financial measures are not
necessarily comparable to non-GAAP information used by other
companies.
Conference
Call / Webcast |
|
|
Date: |
May 6, 2021 |
Time: |
10:00 AM Eastern Time |
Live Webcast: |
investors.kimballelectronics.com/events-presentations |
Dial-In #: |
800-992-4934 (International
Calls - 937-502-2251) |
Conference ID: |
5958058 |
For those unable to participate in the live webcast, the call
will be archived at investors.kimballelectronics.com.
About Kimball Electronics, Inc.Kimball
Electronics is a multifaceted manufacturing solutions provider of
electronics and diversified contract manufacturing services to
customers around the world. From our operations in the United
States, China, India, Japan, Mexico, Poland, Romania, Thailand, and
Vietnam, our teams are proud to provide manufacturing services for
a variety of industries. Recognized for a reputation of
excellence, we are committed to a high-performance culture that
values personal and organizational commitment to quality,
reliability, value, speed, and ethical behavior. Kimball
Electronics, Inc. (Nasdaq: KE) is headquartered in Jasper,
Indiana.
To learn more about Kimball Electronics, visit:
www.kimballelectronics.com.
Lasting relationships. Global
success.
Financial highlights for the third quarter and year-to-date
period ended March 31, 2021 are as follows:
Condensed
Consolidated Statements of Income |
(Unaudited) |
Three Months Ended |
(Amounts in Thousands, except
Per Share Data) |
March 31, 2021 |
|
March 31, 2020 |
Net Sales |
$ |
310,329 |
|
100.0% |
|
$ |
293,925 |
|
100.0% |
Cost of Sales |
284,323 |
|
91.6% |
|
273,713 |
|
93.1% |
Gross Profit |
26,006 |
|
8.4% |
|
20,212 |
|
6.9% |
Selling and Administrative
Expenses |
11,744 |
|
3.8% |
|
9,624 |
|
3.3% |
Other General Income |
(376) |
|
(0.1)% |
|
— |
|
—% |
Operating Income |
14,638 |
|
4.7% |
|
10,588 |
|
3.6% |
Other Income (Expense),
net |
(641) |
|
(0.2)% |
|
(1,893) |
|
(0.6)% |
Income Before Taxes on
Income |
13,997 |
|
4.5% |
|
8,695 |
|
3.0% |
Provision for Income
Taxes |
3,525 |
|
1.1% |
|
2,436 |
|
0.9% |
Net Income |
$ |
10,472 |
|
3.4% |
|
$ |
6,259 |
|
2.1% |
|
|
|
|
|
|
|
|
Earnings Per Share of Common
Stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.42 |
|
|
|
$ |
0.25 |
|
|
Diluted |
$ |
0.41 |
|
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
Average Number of Shares
Outstanding: |
|
|
|
|
|
|
|
Basic |
25,049 |
|
|
|
25,181 |
|
|
Diluted |
25,217 |
|
|
|
25,287 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
Nine Months Ended |
(Amounts in Thousands, except Per Share Data) |
March 31, 2021 |
|
March 31, 2020 |
Net Sales |
$ |
962,682 |
|
100.0% |
|
$ |
914,394 |
|
100.0% |
Cost of Sales |
876,428 |
|
91.0% |
|
851,478 |
|
93.1% |
Gross Profit |
86,254 |
|
9.0% |
|
62,916 |
|
6.9% |
Selling and Administrative Expenses |
38,347 |
|
4.0% |
|
32,529 |
|
3.6% |
Other General Income |
(717) |
|
(0.1)% |
|
— |
|
—% |
Operating Income |
48,624 |
|
5.1% |
|
30,387 |
|
3.3% |
Other Income (Expense), net |
3,905 |
|
0.4% |
|
(4,152) |
|
(0.4)% |
Income Before Taxes on Income |
52,529 |
|
5.5% |
|
26,235 |
|
2.9% |
Provision for Income Taxes |
10,184 |
|
1.1% |
|
6,766 |
|
0.8% |
Net Income |
$ |
42,345 |
|
4.4% |
|
$ |
19,469 |
|
2.1% |
|
|
|
|
|
|
|
|
Earnings Per Share of Common Stock: |
|
|
|
|
|
|
|
Basic |
$ |
1.68 |
|
|
|
$ |
0.77 |
|
|
Diluted |
$ |
1.67 |
|
|
|
$ |
0.76 |
|
|
|
|
|
|
|
|
|
|
Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
25,101 |
|
|
|
25,308 |
|
|
Diluted |
25,288 |
|
|
|
25,466 |
|
|
Condensed Consolidated
Statements of Cash Flows |
Nine Months Ended |
(Unaudited) |
March 31, |
(Amounts in Thousands) |
2021 |
|
2020 |
Net Cash Flow provided by Operating Activities |
$ |
103,755 |
|
$ |
51,318 |
Net Cash Flow used for
Investing Activities |
(22,972) |
|
(27,602) |
Net Cash Flow used for
Financing Activities |
(58,729) |
|
(13,489) |
Effect of Exchange Rate Change
on Cash and Cash Equivalents |
2,607 |
|
(1,191) |
Net Increase in Cash and Cash
Equivalents |
24,661 |
|
9,036 |
Cash and Cash Equivalents at
Beginning of Period |
64,990 |
|
49,276 |
Cash and Cash Equivalents at
End of Period |
$ |
89,651 |
|
$ |
58,312 |
|
(Unaudited) |
|
|
Condensed Consolidated
Balance Sheets |
March 31, 2021 |
|
June 30, 2020 |
(Amounts in Thousands) |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
89,651 |
|
|
$ |
64,990 |
|
Receivables, net |
197,769 |
|
|
180,133 |
|
Contract
assets |
53,171 |
|
|
70,350 |
|
Inventories |
181,131 |
|
|
219,043 |
|
Prepaid
expenses and other current assets |
31,959 |
|
|
23,891 |
|
Property
and Equipment, net |
154,409 |
|
|
154,529 |
|
Goodwill |
12,011 |
|
|
12,011 |
|
Other
Intangible Assets, net |
17,590 |
|
|
19,343 |
|
Other
Assets |
37,542 |
|
|
30,539 |
|
Total Assets |
$ |
775,233 |
|
|
$ |
774,829 |
|
|
|
|
|
LIABILITIES AND SHARE
OWNERS’ EQUITY |
|
|
|
Current
portion of borrowings under credit facilities |
$ |
20,518 |
|
|
$ |
26,638 |
|
Accounts
payable |
208,281 |
|
|
203,703 |
|
Accrued
expenses |
49,985 |
|
|
42,264 |
|
Long-term
debt under credit facilities, less current portion |
40,000 |
|
|
91,500 |
|
Long-term
income taxes payable |
8,854 |
|
|
9,765 |
|
Other |
22,630 |
|
|
21,594 |
|
Share
Owners’ Equity |
424,965 |
|
|
379,365 |
|
Total Liabilities and
Share Owners’ Equity |
$ |
775,233 |
|
|
$ |
774,829 |
|
Reconciliation of Non-GAAP Financial Measures |
(Unaudited) |
(Amounts in
Thousands, except Per Share Data) |
|
|
|
|
|
|
|
|
Operating Income
excluding SERP and Lawsuit Proceeds |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
March 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Operating Income, as reported |
$ |
14,638 |
|
$ |
10,588 |
|
$ |
48,624 |
|
$ |
30,387 |
Add: SERP (1) |
164 |
|
(914) |
|
1,525 |
|
(434) |
Less: Settlement Proceeds from
Lawsuit |
376 |
|
— |
|
717 |
|
— |
Adjusted Operating Income |
$ |
14,426 |
|
$ |
9,674 |
|
$ |
49,432 |
|
$ |
29,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income excluding
Adjustments After Measurement Period on GES Acquisition and Lawsuit
Proceeds |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
March 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net Income, as reported |
$ |
10,472 |
|
$ |
6,259 |
|
$ |
42,345 |
|
$ |
19,469 |
Less: After-Tax Adjustments
After Measurement Period on GES Acquisition |
254 |
|
— |
|
121 |
|
— |
Less: After-Tax Settlement
Proceeds from Lawsuit |
285 |
|
— |
|
544 |
|
— |
Adjusted Net Income |
$ |
9,933 |
|
$ |
6,259 |
|
$ |
41,680 |
|
$ |
19,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Share excluding Adjustments After Measurement Period on GES
Acquisition and Lawsuit Proceeds |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
March 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Diluted Earnings per Share, as
reported |
$ |
0.41 |
|
$ |
0.25 |
|
$ |
1.67 |
|
$ |
0.76 |
Less: After-Tax Adjustments
After Measurement Period on GES Acquisition |
0.01 |
|
— |
|
— |
|
— |
Less: Impact of Settlement
Proceeds from Lawsuit |
0.01 |
|
— |
|
0.02 |
|
— |
Adjusted Diluted Earnings per
Share |
$ |
0.39 |
|
$ |
0.25 |
|
$ |
1.65 |
|
$ |
0.76 |
|
|
|
|
|
|
|
|
(1) Beginning in the first quarter of fiscal year 2021,
adjusted operating income excludes changes in the fair value of our
supplemental employee retirement plan, or SERP, liability which are
exactly offset by the revaluation of the fair value of the SERP
investments in Other Income (Expense), net, and as a result have no
impact on net income. Prior reported periods have been
revised accordingly. CONTACT:Andy RegrutHead of Investor
RelationsTelephone: 812.827.4151E-mail:
Investor.Relations@kimballelectronics.com
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