- Net sales in the second quarter of fiscal 2022 totaled $315.3
million.
- Net income of $5.1 million, or $0.20 per diluted share.
Kimball Electronics, Inc. (Nasdaq: KE) today announced financial
results for the second quarter ended December 31, 2021.
Three Months Ended
Six Months Ended
December 31,
December 31,
(Amounts in Thousands, except EPS)
2021
2020
2021
2020
Net Sales
$
315,264
$
320,604
$
607,981
$
652,353
Operating Income
$
6,914
$
16,179
$
11,694
$
33,986
Adjusted Operating Income (non-GAAP)
(1)
$
7,316
$
16,990
$
10,625
$
35,006
Operating Income %
2.2
%
5.0
%
1.9
%
5.2
%
Adjusted Operating Income (non-GAAP) %
2.3
%
5.3
%
1.7
%
5.4
%
Net Income
$
5,113
$
15,062
$
7,677
$
31,873
Adjusted Net Income (non-GAAP) (1)
$
5,113
$
15,195
$
6,627
$
31,747
Diluted EPS
$
0.20
$
0.60
$
0.30
$
1.26
Adjusted Diluted EPS (non-GAAP) (1)
$
0.20
$
0.60
$
0.26
$
1.25
(1) A reconciliation of GAAP and non-GAAP
financial measures is included below.
Donald D. Charron, Chairman and Chief Executive Officer, stated,
“Q2 was another hard fought quarter for our company, as global
supply chain issues stemming from the COVID-19 pandemic persisted
and adversely impacted our results. Component shortages continued
to make it extremely challenging to obtain the materials needed to
support customer demand. While conditions improved modestly in
December with sales accelerating, the lost absorption was
significant once again this quarter, as we remained committed to
retaining our highly skilled workforce in anticipation of a strong
second half to the fiscal year. We continue to be well positioned
with record levels of backlog, and we are reiterating our sales
guidance for fiscal 2022, although we expect to finish the year at
the lower end of the range. We are revising our operating income
margin guidance to reflect the difficult first half and our outlook
for the balance of the fiscal year.”
Mr. Charron continued, “We are also excited to announce our
plans to expand the facility in Poznan, Poland. This is our third
facility expansion in the last 15 months, and representative of the
high level of success we’ve experienced in winning new business.
Similar to Thailand and Mexico, the additional capacity is needed
for programs with new and existing customers. We expect the
expansion in Poznan to add approximately 40% to existing production
square footage, and will leverage our team in Poland to support our
customers based in Europe when the expansion is complete in early
fiscal 2024. We are updating our guidance for capital expenditures
for fiscal 2022, which will include the early investments in Poznan
and additional capital related to a major win in the next
generation of electronic braking systems for a longstanding
customer.”
Second Quarter Fiscal Year 2022 Overview
- Net sales decreased 2% compared to the second quarter of fiscal
year 2021. Foreign currency had a negligible impact on net sales in
the quarter compared to the same period a year ago.
- Cash flow used for operating activities of $48.3 million during
the second quarter of fiscal 2022.
- Cash conversion days (“CCD”) for the quarter ended December 31,
2021 were 81 days, up from 75 days in the second quarter of fiscal
year 2021. 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 $15.1 million during
the quarter.
- Cash and cash equivalents were $56.7 million and borrowings
outstanding on credit facilities were $103.0 million at December
31, 2021, including $40.0 million classified as long term.
Facility Expansion in Poznan, Poland
The company also announced its intent to expand the facility in
Poznan, Poland. The additional capacity is needed for programs with
new and existing customers. The expansion is expected to require
approximately $8 million of capital investment, adding
approximately 40% to the facility’s existing production square
footage, and will leverage the team in Poland to support customers
based in Europe when complete in early fiscal 2024.
Fiscal Year 2022 Guidance
The company is reiterating its sales guidance for fiscal year
2022 with net sales in the range of $1.4 - $1.5 billion, an 8% to
16% increase year-over-year, although the final result is expected
to be at the lower end of the range. Operating income is estimated
to be 3.75% - 4.25% of net sales, compared to the original guidance
of 4.5% - 5.0% of net sales. The change in the operating income
estimate reflects a difficult first half due to the unavailability
of material. Under normal operating conditions, the company expects
an annual run rate for operating income in the range of 4.5% - 5.0%
of net sales. The second half of fiscal 2022 is expected to ramp up
significantly throughout the period, with a very strong finish to
the fiscal year and operating income above that range, as the
backlog of open orders is worked down. Capital expenditures for
fiscal year 2022 are now expected to be in the range of $70 - $80
million compared to the original guidance of $60 - $70 million.
This update includes the facility expansions in Thailand, Mexico,
and the early investments associated with today’s announcement of
the facility expansion in Poland.
Net Sales by Vertical Market for Q2 Fiscal 2022:
Three Months Ended
December 31,
(Amounts in Millions)
2021
*
2020
*
Percent Change
Automotive
$
139.0
44
%
$
151.9
48
%
(8
)%
Medical
89.8
29
%
87.1
27
%
3
%
Industrial
71.8
23
%
67.7
21
%
6
%
Public Safety
10.8
3
%
10.5
3
%
3
%
Other
3.9
1
%
3.4
1
%
17
%
Total Net Sales
$
315.3
$
320.6
(2
)%
* 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
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, 2021.
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:
February 8, 2022
Time:
10:00 AM Eastern Time
Live Webcast:
investors.kimballelectronics.com/events-and-presentations/events
Dial-In #:
844-200-6205 (other locations -
929-526-1599)
Conference ID:
262854
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 second quarter and year-to-date
period ended December 31, 2021 are as follows:
Condensed Consolidated Statements of
Income
(Unaudited)
Three Months Ended
(Amounts in Thousands, except Per Share
Data)
December 31, 2021
December 31, 2020
Net Sales
$
315,264
100.0
%
$
320,604
100.0
%
Cost of Sales
294,427
93.4
%
290,939
90.7
%
Gross Profit
20,837
6.6
%
29,665
9.3
%
Selling and Administrative Expenses
13,923
4.4
%
13,486
4.3
%
Operating Income
6,914
2.2
%
16,179
5.0
%
Other Income (Expense), net
(209
)
(0.1
)%
2,411
0.8
%
Income Before Taxes on Income
6,705
2.1
%
18,590
5.8
%
Provision for Income Taxes
1,592
0.5
%
3,528
1.1
%
Net Income
$
5,113
1.6
%
$
15,062
4.7
%
Earnings Per Share of Common Stock:
Basic
$
0.20
$
0.60
Diluted
$
0.20
$
0.60
Average Number of Shares Outstanding:
Basic
25,238
25,101
Diluted
25,282
25,171
(Unaudited)
Six Months Ended
(Amounts in Thousands, except Per Share
Data)
December 31, 2021
December 31, 2020
Net Sales
$
607,981
100.0
%
$
652,353
100.0
%
Cost of Sales
571,544
94.0
%
592,105
90.8
%
Gross Profit
36,437
6.0
%
60,248
9.2
%
Selling and Administrative Expenses
26,127
4.3
%
26,603
4.1
%
Other General Expense (Income)
(1,384
)
(0.2
)%
(341
)
(0.1
)%
Operating Income
11,694
1.9
%
33,986
5.2
%
Other Income (Expense), net
(1,458
)
(0.2
)%
4,546
0.7
%
Income Before Taxes on Income
10,236
1.7
%
38,532
5.9
%
Provision for Income Taxes
2,559
0.4
%
6,659
1.0
%
Net Income
$
7,677
1.3
%
$
31,873
4.9
%
Earnings Per Share of Common Stock:
Basic
$
0.30
$
1.27
Diluted
$
0.30
$
1.26
Average Number of Shares Outstanding:
Basic
25,201
25,127
Diluted
25,283
25,265
Condensed Consolidated Statements of Cash Flows
Six Months Ended
(Unaudited)
December 31,
(Amounts in Thousands)
2021
2020
Net Cash Flow (used for) provided by
Operating Activities
$
(56,463
)
$
72,256
Net Cash Flow used for Investing
Activities
(27,805
)
(14,417
)
Net Cash Flow provided by (used for)
Financing Activities
35,465
(33,433
)
Effect of Exchange Rate Change on Cash and
Cash Equivalents
(901
)
4,222
Net (Decrease) Increase in Cash and Cash
Equivalents
(49,704
)
28,628
Cash and Cash Equivalents at Beginning of
Period
106,442
64,990
Cash and Cash Equivalents at End of
Period
$
56,738
$
93,618
(Unaudited)
Condensed Consolidated Balance
Sheets
December 31,
2021
June 30, 2021
(Amounts in Thousands)
ASSETS
Cash and cash equivalents
$
56,738
$
106,442
Receivables, net
186,175
203,382
Contract assets
57,186
45,863
Inventories
304,194
200,386
Prepaid expenses and other current
assets
28,469
27,320
Property and Equipment, net
179,046
163,251
Goodwill
12,011
12,011
Other Intangible Assets, net
15,893
17,008
Other Assets
43,513
38,398
Total Assets
$
883,225
$
814,061
LIABILITIES AND SHARE OWNERS’
EQUITY
Current portion of borrowings under credit
facilities
$
63,038
$
26,214
Accounts payable
254,987
216,544
Accrued expenses
49,441
58,016
Long-term debt under credit facilities,
less current portion
40,000
40,000
Long-term income taxes payable
7,812
8,854
Other
22,780
22,461
Share Owners’ Equity
445,167
441,972
Total Liabilities and Share Owners’
Equity
$
883,225
$
814,061
Reconciliation of Non-GAAP Financial
Measures
(Unaudited)
(Amounts in Thousands, except Per Share
Data)
Three Months Ended
Six Months Ended
December 31,
December 31,
2021
2020
2021
2020
Operating Income, as reported
$
6,914
$
16,179
$
11,694
$
33,986
SERP
402
811
315
1,361
Legal Recovery
—
—
(1,384
)
(341
)
Adjusted Operating Income
$
7,316
$
16,990
$
10,625
$
35,006
Net Income, as reported
$
5,113
$
15,062
$
7,677
$
31,873
Adjustments After Measurement Period on
GES Acquisition
—
133
—
133
Legal Recovery, After-Tax
—
—
(1,050
)
(259
)
Adjusted Net Income
$
5,113
$
15,195
$
6,627
$
31,747
Diluted Earnings per Share, as
reported
$
0.20
$
0.60
$
0.30
$
1.26
Adjustments After Measurement Period on
GES Acquisition
—
—
—
—
Legal Recovery
—
—
(0.04
)
(0.01
)
Adjusted Diluted Earnings per Share
$
0.20
$
0.60
$
0.26
$
1.25
Twelve Months Ended
December 31,
2021
2020
Operating Income
$
43,411
$
46,183
Goodwill Impairment
—
7,925
SERP
1,027
1,729
Legal Recovery
(1,415
)
(341
)
Adjusted Operating Income (non-GAAP)
$
43,023
$
55,496
Tax Effect
9,530
10,859
After-tax Adjusted Operating Income
$
33,493
$
44,637
Average Invested Capital (1)
$
424,854
$
433,192
ROIC
7.9
%
10.3
%
(1) 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220207005702/en/
Andrew D. Regrut Head of Investor Relations 812.827.4151
Investor.Relations@kimballelectronics.com
Kimball Electronics (NASDAQ:KE)
Historical Stock Chart
From May 2024 to Jun 2024
Kimball Electronics (NASDAQ:KE)
Historical Stock Chart
From Jun 2023 to Jun 2024