- Net sales in the first quarter of fiscal 2023 totaled $405.9
million, an all-time quarterly high and up 39% year-over-year;
foreign currency had a 5% unfavorable impact on net sales compared
to the first quarter of fiscal 2022
- Operating income of $13.6 million, or 3.3% of net sales,
compared to operating income of $4.8 million, or 1.6% of net sales
in the same period last year
- Net income of $9.5 million, or $0.38 per diluted share,
compared to net income of $2.6 million, or $0.10 per diluted share,
in the first quarter of fiscal 2022
Kimball Electronics, Inc. (Nasdaq: KE) today announced financial
results for the first quarter ended September 30, 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20221107005903/en/
Three Months Ended
September 30,
(Amounts in Thousands, except EPS)
2022
2021
Net Sales
$
405,889
$
292,717
Operating Income
$
13,571
$
4,780
Adjusted Operating Income (non-GAAP)
(1)
$
13,336
$
3,309
Operating Income %
3.3
%
1.6
%
Adjusted Operating Income (non-GAAP) %
3.3
%
1.1
%
Net Income
$
9,509
$
2,564
Adjusted Net Income (non-GAAP) (1)
$
9,509
$
1,514
Diluted EPS
$
0.38
$
0.10
Adjusted Diluted EPS (non-GAAP) (1)
$
0.38
$
0.06
(1) A reconciliation of GAAP and non-GAAP
financial measures is included below.
Donald D. Charron, Chairman and Chief Executive Officer, stated,
“I am pleased with our results in Q1 and the strong start to the
new fiscal year. For the third consecutive quarter, net sales
surged to a record-breaking level, setting another all-time high
for our company, and operating margin improved compared to the same
period last year. This was in line with our estimates as we ramp-up
production on new and existing programs, and leverage our facility
expansions in Thailand and Mexico. These investments, however,
increased fixed costs that were not fully absorbed when comparing
the operating margin rate to Q4 of fiscal 2022. New customers and
product start-ups generally cause margin dilution early in the life
cycle, which are recovered as the program matures. As a result, we
expect sequential quarterly increases in a stair stepped fiscal
2023, and we are affirming our guidance for the full year with
results expected at the high end of the range for sales and
operating margin.”
As part of today’s announcement, the Company is affirming its
guidance for fiscal year 2023.
- Net sales in the range of $1.6 - $1.7 billion, a 19% - 26%
increase year-over-year
- Operating income in the range of 4.6% - 5.2% of net sales
- Capital expenditures in the range of $80 - $100 million,
supporting the facility expansion in Poland, new product
introductions, and the addition of equipment with leading-edge
technologies and capabilities
First Quarter Fiscal 2023 Overview
- Cash flow used by operating activities of $60.2 million during
the first quarter of fiscal 2023
- Cash conversion days (“CCD”) for the quarter ended September
30, 2022 were 99 days, up from 91 days in the fourth quarter of
fiscal year 2022, driven by an increase in inventory; 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 $19.5 million during
the quarter
- Cash and cash equivalents of $19.7 million and borrowings
outstanding on credit facilities of $232.5 million at September 30,
2022, including $180.0 million classified as long term
Net Sales by Vertical Market for Q1 Fiscal 2023:
Three Months Ended
September 30,
(Amounts in Millions)
2022
*
2021
*
Percent Change
Automotive
$
184.5
46
%
$
129.4
44
%
43
%
Medical
114.8
28
%
85.0
29
%
35
%
Industrial (1)
100.9
25
%
75.0
26
%
35
%
Other
5.7
1
%
3.3
1
%
75
%
Total Net Sales
$
405.9
$
292.7
39
%
* As a percent of Total Net Sales
(1) Beginning in fiscal year 2023, Public
Safety was combined with Industrial; all prior periods have been
recast to conform to current period presentation
– 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, smart metering, and public
safety
Forward-Looking
Statements
Certain statements contained within this release are considered
forward-looking, including our fiscal year 2023 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 and conflicts such as the war in Ukraine,
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, 2022.
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:
November 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:
924286
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 first quarter ended September 30,
2022 are as follows:
Condensed Consolidated Statements of
Income
(Unaudited)
Three Months Ended
(Amounts in Thousands, except Per Share
Data)
September 30, 2022
September 30, 2021
Net Sales
$
405,889
100.0
%
$
292,717
100.0
%
Cost of Sales
376,568
92.8
%
277,117
94.7
%
Gross Profit
29,321
7.2
%
15,600
5.3
%
Selling and Administrative Expenses
15,750
3.9
%
12,204
4.2
%
Other General Expense (Income)
—
—
%
(1,384
)
(0.5
)%
Operating Income
13,571
3.3
%
4,780
1.6
%
Other Income (Expense), net
(1,403
)
(0.3
)%
(1,249
)
(0.4
)%
Income Before Taxes on Income
12,168
3.0
%
3,531
1.2
%
Provision for Income Taxes
2,659
0.7
%
967
0.3
%
Net Income
$
9,509
2.3
%
$
2,564
0.9
%
Earnings Per Share of Common Stock:
Basic
$
0.38
$
0.10
Diluted
$
0.38
$
0.10
Average Number of Shares Outstanding:
Basic
24,826
25,145
Diluted
24,955
25,301
Condensed Consolidated Statements of
Cash Flows
Three Months Ended
(Unaudited)
September 30,
(Amounts in Thousands)
2022
2021
Net Cash Flow used for Operating
Activities
$
(60,194
)
$
(8,187
)
Net Cash Flow used for Investing
Activities
(19,320
)
(12,868
)
Net Cash Flow provided by Financing
Activities
50,769
4,965
Effect of Exchange Rate Change on Cash and
Cash Equivalents
(1,391
)
(1,028
)
Net Decrease in Cash and Cash
Equivalents
(30,136
)
(17,118
)
Cash and Cash Equivalents at Beginning of
Period
49,851
106,442
Cash and Cash Equivalents at End of
Period
$
19,715
$
89,324
(Unaudited)
Condensed Consolidated Balance
Sheets
September 30,
2022
June 30, 2022
(Amounts in Thousands)
ASSETS
Cash and cash equivalents
$
19,715
$
49,851
Receivables, net
253,823
222,857
Contract assets
68,314
64,080
Inventories
449,528
395,630
Prepaid expenses and other current
assets
28,637
28,665
Property and Equipment, net
215,469
206,835
Goodwill
12,011
12,011
Other Intangible Assets, net
13,792
14,707
Other Assets
40,474
41,131
Total Assets
$
1,101,763
$
1,035,767
LIABILITIES AND SHARE OWNERS’
EQUITY
Current portion of borrowings under credit
facilities
$
52,505
$
35,580
Accounts payable
322,199
308,617
Accrued expenses
65,258
64,545
Long-term debt under credit facilities,
less current portion
180,000
145,000
Long-term income taxes payable
5,859
7,812
Other long-term liabilities
19,697
20,242
Share Owners’ Equity
456,245
453,971
Total Liabilities and Share Owners’
Equity
$
1,101,763
$
1,035,767
Reconciliation of Non-GAAP Financial
Measures
(Unaudited)
(Amounts in Thousands, except Per Share
Data)
Three Months Ended
September 30,
2022
2021
Operating Income, as reported
$
13,571
$
4,780
SERP
(235
)
(87
)
Legal Settlements (Recovery)
—
(1,384
)
Adjusted Operating Income
$
13,336
$
3,309
Net Income, as reported
$
9,509
$
2,564
Legal Settlements (Recovery),
After-Tax
—
(1,050
)
Adjusted Net Income
$
9,509
$
1,514
Diluted Earnings per Share, as
reported
$
0.38
$
0.10
Legal Settlements (Recovery)
—
(0.04
)
Adjusted Diluted Earnings per Share
$
0.38
$
0.06
Twelve Months Ended
September 30,
2022
2021
Operating Income
$
61,340
$
52,676
SERP
(1,711
)
1,436
Legal Recovery
—
(1,415
)
Adjusted Operating Income (non-GAAP)
$
59,629
$
52,697
Tax Effect
16,356
11,017
After-tax Adjusted Operating Income
$
43,273
$
41,680
Average Invested Capital (1)
$
544,711
$
414,121
ROIC
7.9
%
10.1
%
(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/20221107005903/en/
Andrew D. Regrut Vice President, Investor Relations 812.827.4151
Investor.Relations@kimballelectronics.com
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