Kimball Electronics, Inc. (Nasdaq: KE) today announced financial
results for its fourth quarter and fiscal year ended June 30,
2021.
|
Three Months Ended |
|
|
Fiscal Year Ended |
|
June 30, |
|
|
June 30, |
(Amounts in Thousands, except
EPS) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Net Sales |
$ |
329,125 |
|
|
$ |
286,156 |
|
|
$ |
1,291,807 |
|
|
$ |
1,200,550 |
|
Operating Income |
$ |
17,079 |
|
|
$ |
1,609 |
|
|
$ |
65,703 |
|
|
$ |
31,996 |
|
Adjusted Operating Income
(non-GAAP) (1)(2) |
$ |
17,972 |
|
|
$ |
10,816 |
|
|
$ |
67,404 |
|
|
$ |
40,769 |
|
Operating Income % |
5.2 |
% |
|
|
0.6 |
% |
|
5.1 |
% |
|
2.7 |
% |
Adjusted Operating Income
(non-GAAP) % |
5.5 |
% |
|
|
3.8 |
% |
|
5.2 |
% |
|
3.4 |
% |
Net Income (Loss) |
$ |
14,446 |
|
|
$ |
(1,273 |
) |
|
$ |
56,791 |
|
|
$ |
18,196 |
|
Adjusted Net Income (non-GAAP)
(1) |
$ |
14,708 |
|
|
$ |
8,545 |
|
|
$ |
56,388 |
|
|
$ |
28,014 |
|
Diluted EPS |
$ |
0.57 |
|
|
$ |
(0.05 |
) |
|
$ |
2.24 |
|
|
$ |
0.71 |
|
Adjusted Diluted EPS
(non-GAAP) (1) |
$ |
0.58 |
|
|
$ |
0.34 |
|
|
$ |
2.23 |
|
|
$ |
1.10 |
|
(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 fourth quarter and the strong finish to a record setting
fiscal year 2021. Our team remains laser-focused on fulfilling
commitments made to our customers as we work through the ongoing
challenges caused by the pandemic and the global parts shortage.
Despite the headwinds, we delivered strong top line growth,
excellent margin expansion, and impressive earnings growth with
adjusted Q4 EPS increasing 71% over the same period last year. I
could not be more proud of our team and how we’re creating quality
for life.”
Mr. Charron continued, “We are well positioned
to carry the momentum from 2021 into fiscal year 2022. As a result
of the ongoing semiconductor shortage, a portion of our shippable
backlog continues to shift out ahead of us which will likely result
in two very different halves for us in the fiscal year. Our full
year guidance contemplates this as we expect material supply to
steadily catch up with customer demand throughout the first half of
fiscal year 2022, thus enabling us to ship the majority of the
surplus backlog in the second half of fiscal year 2022. We expect
that catching up on the backlog combined with strong organic growth
from new and existing programs will provide significant
year-over-year growth for us in fiscal year 2022.”
Fourth Quarter Fiscal Year 2021 Overview:
- Consolidated net
sales increased 15% compared to the fourth quarter of fiscal year
2020, with strength in the Automotive and Industrial vertical
markets. 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 $26.3 million during the fourth
quarter, which compares to cash provided by operating activities of
$21.5 million in the fourth quarter of fiscal year 2020.
- Cash conversion
days (“CCD”) for the quarter ended June 30, 2021 were 64, down
from 66 days in the third quarter of fiscal year 2021 and 81 days
in the quarter ended June 30, 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 $15.9 million in the fourth quarter.
Net Sales By Vertical Market:
|
|
|
Three Months Ended |
|
|
|
|
Fiscal Year Ended |
|
|
|
June 30, |
|
|
|
|
June 30, |
(Amounts in
Millions) |
2021 |
|
* |
|
2020 |
|
* |
|
PercentChange |
|
2021 |
|
* |
|
2020 |
|
* |
|
PercentChange |
Automotive |
$ |
141.7 |
|
43 |
% |
|
$ |
73.7 |
|
26 |
% |
|
92 |
% |
|
$ |
551.5 |
|
43 |
% |
|
$ |
457.4 |
|
38 |
% |
|
21 |
% |
Medical |
85.1 |
|
26 |
% |
|
123.7 |
|
43 |
% |
|
(31 |
)% |
|
384.8 |
|
30 |
% |
|
397.8 |
|
33 |
% |
|
(3 |
)% |
Industrial |
86.7 |
|
26 |
% |
|
74.3 |
|
26 |
% |
|
17 |
% |
|
293.7 |
|
23 |
% |
|
271.0 |
|
23 |
% |
|
8 |
% |
Public Safety |
10.8 |
|
3 |
% |
|
12.0 |
|
4 |
% |
|
(10 |
)% |
|
48.1 |
|
3 |
% |
|
56.2 |
|
5 |
% |
|
(14 |
)% |
Other |
4.8 |
|
2 |
% |
|
2.5 |
|
1 |
% |
|
93 |
% |
|
13.7 |
|
1 |
% |
|
18.2 |
|
1 |
% |
|
(25 |
)% |
|
Total Net
Sales |
$ |
329.1 |
|
|
|
|
$ |
286.2 |
|
|
|
|
15 |
% |
|
$ |
1,291.8 |
|
|
|
|
$ |
1,200.6 |
|
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
As a percent of Total Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
Automotive includes
electronic power steering, body controls, automated driver assist
systems, and electronic braking systems |
|
- |
Medical includes
sleep therapy and respiratory care, image guided therapy, in vitro
diagnostics, drug delivery, AED, and patient monitoring |
|
- |
Industrial includes
climate controls, automation controls, optical inspection, and
smart metering |
|
- |
Public Safety
includes thermal imaging, first responder electronics, and
security |
|
|
|
Fiscal Year 2021 Overview:
- Net sales increased 8% in fiscal year
2021, with strength in the Automotive and Industrial vertical
markets. Foreign currency had a favorable 3% impact on net sales
compared to fiscal year 2020.
- Operating income of 5.1% of net sales. Adjusted non-GAAP
operating income of 5.2% of net sales, a 180 bps improvement over
fiscal year 2020.
- Net income of $56.8 million, or $2.24 per diluted share.
- Adjusted non-GAAP net income of $56.4 million, or $2.23 per
diluted share, more than double fiscal 2020.
- Cash flow from operating activities of $130.1 million.
- Return on invested capital (“ROIC”) of 13.1% compared to 7.1%
in fiscal 2020. ROIC is a non-GAAP financial measure, see
reconciliation of non-GAAP financial measures.
- Investments in capital expenditures of $39 million.
Jana T. Croom, Vice President, Chief Financial
Officer stated, “Fiscal 2021 was a record year for our company with
many financial metrics including net sales, margin rates, earnings,
cash flow from operating activities, and return on invested capital
reaching all-time highs. Our team has demonstrated remarkable
resilience throughout these unprecedented times.”
Fiscal Year 2022 Guidance:
- Net sales in the range of $1.4 - $1.5
billion, an 8% to 16% increase year-over-year
- Operating income in the range of 4.5% - 5.0% of net sales
- Capital expenditures of $60 - $70 million in support of our
Thailand and Mexico expansions
Forward-Looking Statements
Certain statements contained within this release
are considered forward-looking, including our fiscal year 2022
guidance, 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.” Undue reliance should not
be placed on these forward-looking statements. These statements are
based on current expectations of future events and thus are
inherently subject to uncertainty. If underlying assumptions prove
inaccurate or known or unknown risks or uncertainties materialize,
actual results could vary materially from our expectations and
projections. 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, adjusted diluted
EPS, and ROIC. 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.
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.
Conference
Call / Webcast |
|
|
Date: |
August 5, 2021 |
Time: |
10:00 AM Eastern Time |
Live Webcast: |
investors.kimballelectronics.com/events-presentations |
Dial-In #: |
877-248-9893 (International Calls
– 873-415-0287) |
Conference ID: |
6559168 |
For those unable to participate in the live webcast, the
call will be archived at investors.kimballelectronics.com.
Lasting relationships. Global
success.
Financial highlights for the fourth quarter and fiscal year
ended June 30, 2021 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Income |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
Three Months Ended |
(Amounts in Thousands, except
Per Share Data) |
June 30, 2021 |
|
June 30, 2020 |
Net Sales |
$ |
329,125 |
|
100.0 |
% |
|
$ |
286,156 |
|
|
100.0 |
% |
Cost of Sales |
297,344 |
|
90.3 |
% |
|
265,231 |
|
|
92.7 |
% |
Gross Profit |
31,781 |
|
9.7 |
% |
|
20,925 |
|
|
7.3 |
% |
Selling and Administrative
Expenses |
14,357 |
|
4.4 |
% |
|
11,391 |
|
|
4.0 |
% |
Other General Expense
/(Income) |
345 |
|
0.1 |
% |
|
— |
|
|
— |
% |
Goodwill Impairment |
— |
|
— |
% |
|
7,925 |
|
|
2.7 |
% |
Operating Income |
17,079 |
|
5.2 |
% |
|
1,609 |
|
|
0.6 |
% |
Other Income (Expense),
net |
446 |
|
0.1 |
% |
|
|
(2,687 |
) |
|
(1.0 |
)% |
Income (Loss) Before Taxes on
Income |
17,525 |
|
5.3 |
% |
|
|
(1,078 |
) |
|
(0.4 |
)% |
Provision for Income
Taxes |
3,079 |
|
0.9 |
% |
|
195 |
|
|
0.0 |
% |
Net Income (Loss) |
$ |
14,446 |
|
4.4 |
% |
|
$ |
(1,273 |
) |
|
(0.4 |
)% |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share of
Common Stock: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.58 |
|
|
|
|
$ |
(0.05 |
) |
|
|
Diluted |
$ |
0.57 |
|
|
|
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of Shares
Outstanding: (1) |
|
|
|
|
|
|
|
|
|
Basic |
25,049 |
|
|
|
|
25,049 |
|
|
|
Diluted |
25,232 |
|
|
|
|
25,049 |
|
|
|
(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, 2021 |
|
June 30, 2020 |
Net Sales |
$ |
1,291,807 |
|
|
100.0 |
% |
|
$ |
1,200,550 |
|
|
100.0 |
% |
Cost of Sales |
1,173,772 |
|
|
90.9 |
% |
|
1,116,709 |
|
|
93.0 |
% |
Gross Profit |
118,035 |
|
|
9.1 |
% |
|
83,841 |
|
|
7.0 |
% |
Selling and Administrative
Expenses |
52,704 |
|
|
4.0 |
% |
|
43,920 |
|
|
3.7 |
% |
Other General Expense
/(Income) |
(372 |
) |
|
— |
% |
|
— |
|
|
— |
% |
Goodwill Impairment |
— |
|
|
— |
% |
|
7,925 |
|
|
0.6 |
% |
Operating Income |
65,703 |
|
|
5.1 |
% |
|
31,996 |
|
|
2.7 |
% |
Other Income (Expense),
net |
4,351 |
|
|
0.3 |
% |
|
(6,839 |
) |
|
(0.6 |
)% |
Income Before Taxes on
Income |
70,054 |
|
|
5.4 |
% |
|
25,157 |
|
|
2.1 |
% |
Provision for Income
Taxes |
13,263 |
|
|
1.0 |
% |
|
6,961 |
|
|
0.6 |
% |
Net Income |
$ |
56,791 |
|
|
4.4 |
% |
|
$ |
18,196 |
|
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share of Common
Stock: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
2.26 |
|
|
|
|
|
$ |
0.72 |
|
|
|
|
Diluted |
$ |
2.24 |
|
|
|
|
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Number of Shares
Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
25,088 |
|
|
|
|
|
25,243 |
|
|
|
|
Diluted |
25,284 |
|
|
|
|
|
25,428 |
|
|
|
|
Condensed Consolidated
Statements of Cash Flows |
Fiscal Year Ended |
(Unaudited) |
June 30, |
(Amounts in Thousands) |
2021 |
|
2020 |
Net Cash Flow provided by Operating Activities |
$ |
130,095 |
|
|
$ |
72,808 |
|
Net Cash Flow used for
Investing Activities |
(38,796 |
) |
|
(38,482 |
) |
Net Cash Flow used for
Financing Activities |
(53,078 |
) |
|
(17,934 |
) |
Effect of Exchange Rate Change
on Cash and Cash Equivalents |
3,231 |
|
|
(678 |
) |
Net Increase in Cash and Cash
Equivalents |
41,452 |
|
|
15,714 |
|
Cash and Cash Equivalents at
Beginning of Period |
64,990 |
|
|
49,276 |
|
Cash and Cash Equivalents at
End of Period |
$ |
106,442 |
|
|
$ |
64,990 |
|
|
(Unaudited) |
Condensed Consolidated Balance Sheets |
June 30, |
|
June 30, |
(Amounts in Thousands) |
2021 |
2020 |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
106,442 |
|
|
$ |
64,990 |
|
Receivables, net |
203,382 |
|
|
180,133 |
|
Contract assets |
45,863 |
|
|
70,350 |
|
Inventories |
200,386 |
|
|
219,043 |
|
Prepaid expenses and other current assets |
27,320 |
|
|
23,891 |
|
Property and Equipment, net |
163,251 |
|
|
154,529 |
|
Goodwill |
12,011 |
|
|
12,011 |
|
Other Intangible Assets, net |
17,008 |
|
|
19,343 |
|
Other Assets |
38,398 |
|
|
30,539 |
|
Total Assets |
$ |
814,061 |
|
|
$ |
774,829 |
|
|
|
|
|
LIABILITIES AND SHARE
OWNERS’ EQUITY |
|
|
|
Current portion of borrowings under credit facilities |
$ |
26,214 |
|
|
$ |
26,638 |
|
Accounts payable |
216,544 |
|
|
203,703 |
|
Accrued expenses |
58,016 |
|
|
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 |
22,461 |
|
|
21,594 |
|
Share Owners’ Equity |
441,972 |
|
|
379,365 |
|
Total Liabilities and Share Owners’ Equity |
$ |
814,061 |
|
|
$ |
774,829 |
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
(Amounts in Thousands, except
Per Share Data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
June 30, |
|
June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Operating Income, as reported |
$ |
17,079 |
|
$ |
1,609 |
|
|
$ |
65,703 |
|
|
$ |
31,996 |
|
Goodwill Impairment |
— |
|
7,925 |
|
|
— |
|
|
7,925 |
|
SERP (1) |
548 |
|
1,282 |
|
|
2,073 |
|
|
848 |
|
Legal Settlements
(Recovery) |
345 |
|
— |
|
|
(372 |
) |
|
— |
|
Adjusted Operating Income |
$ |
17,972 |
|
$ |
10,816 |
|
|
$ |
67,404 |
|
|
$ |
40,769 |
|
|
|
|
|
|
|
|
|
Net Income (Loss), as
reported |
$ |
14,446 |
|
$ |
(1,273 |
) |
|
$ |
56,791 |
|
|
$ |
18,196 |
|
Goodwill Impairment |
— |
|
6,947 |
|
|
— |
|
|
6,947 |
|
Adjustments After Measurement
Period on GES Acquisition |
— |
|
2,871 |
|
|
(121 |
) |
|
2,871 |
|
Legal Settlements
(Recovery) |
262 |
|
— |
|
|
(282 |
) |
|
— |
|
Adjusted Net Income |
$ |
14,708 |
|
$ |
8,545 |
|
|
$ |
56,388 |
|
|
$ |
28,014 |
|
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) per
Share, as reported |
$ |
0.57 |
|
$ |
(0.05 |
) |
|
$ |
2.24 |
|
|
$ |
0.71 |
|
Goodwill Impairment |
— |
|
0.28 |
|
|
— |
|
|
0.28 |
|
Adjustments After Measurement
Period on GES Acquisition |
— |
|
0.11 |
|
|
— |
|
|
0.11 |
|
Legal Settlements
(Recovery) |
0.01 |
|
— |
|
|
(0.01 |
) |
|
— |
|
Adjusted Diluted Earnings per
Share |
$ |
0.58 |
|
$ |
0.34 |
|
|
$ |
2.23 |
|
|
$ |
1.10 |
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
$ |
65,703 |
|
|
$ |
31,996 |
|
Goodwill Impairment |
|
|
|
|
$ |
— |
|
|
$ |
7,925 |
|
SERP (1) |
|
|
|
|
$ |
2,073 |
|
|
$ |
848 |
|
Legal Settlements
(Recovery) |
|
|
|
|
$ |
(372 |
) |
|
$ |
— |
|
Adjusted Operating Income
(non-GAAP) |
|
|
|
|
$ |
67,404 |
|
|
$ |
40,769 |
|
Tax Effect |
|
|
|
|
$ |
12,844 |
|
|
$ |
9,831 |
|
After-tax Adjusted Operating
Income |
|
|
|
|
$ |
54,560 |
|
|
$ |
30,938 |
|
Average Invested Capital
(2) |
|
|
|
|
$ |
415,999 |
|
|
$ |
437,263 |
|
ROIC |
|
|
|
|
13.1 |
% |
|
7.1 |
% |
(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.
(2) Average Invested capital is computed using Share Owners’
equity plus current and non-current debt less cash and cash
equivalents averaged for the last five quarters.
CONTACT:Andrew D. RegrutHead of Investor RelationsTelephone:
812.827.4151E-mail: Investor.Relations@kimballelectronics.com
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