Fourth Quarter Fiscal 2024 Highlights
- Net sales totaled $430.2 million
- Operating income of $19.6 million, or 4.6% of net sales
- Adjusted operating income of $20.9 million, or 4.9% of net
sales
- Cash flow generated from operating activities of $48.5 million,
driven by inventory reductions
Kimball Electronics, Inc. (Nasdaq: KE) today announced financial
results for the fourth quarter and fiscal year ended June 30,
2024.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240813648435/en/
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
(Amounts in Thousands, except EPS)
2024
2023
2024
2023
Net Sales
$
430,158
$
496,141
$
1,714,510
$
1,823,429
Operating Income (1)
$
19,608
$
31,449
$
49,277
$
87,729
Adjusted Operating Income (non-GAAP)
(2)
$
20,944
$
31,480
$
74,311
$
88,218
Operating Income %
4.6
%
6.3
%
2.9
%
4.8
%
Adjusted Operating Income (non-GAAP) %
4.9
%
6.3
%
4.3
%
4.8
%
Net Income (1)
$
7,543
$
19,202
$
20,511
$
55,831
Adjusted Net Income (non-GAAP) (2)
$
8,361
$
19,041
$
35,846
$
55,949
Diluted EPS (1)
$
0.30
$
0.76
$
0.81
$
2.22
Adjusted Diluted EPS (non-GAAP) (2)
$
0.33
$
0.76
$
1.42
$
2.23
(1)
Results (GAAP) in the June 30, 2024 three
months and fiscal year periods include asset and goodwill
impairment related to the divestiture of the Automation, Test and
Measurement business.
(2)
A reconciliation of GAAP and non-GAAP
financial measures is included below.
Commenting on today’s announcement, Richard D. Phillips, Chief
Executive Officer, stated, “Q4 was another quarter focused on
‘controlling what we can control’. The operating environment for
the EMS industry remains challenged and many contract manufacturing
organizations, Kimball included, have adjusted expectations on
continued weakness in end market demand. In the verticals we serve,
the pull back has been more significant than originally
anticipated, and we continue to appropriately adjust our cost
structure to maintain competitiveness with stable operating
margins, improve working capital management with lower inventory
levels, and generate positive cash flow.”
Mr. Phillips continued, “Earlier this month, we announced the
completion of the divestiture of the Automation, Test and
Measurement business. Closure on the sale represents a significant
milestone for our Company, and another important step toward
sharpening our strategic focus and returning to profitable growth
and stronger performance. Proceeds from the sale, combined with
actions taken to navigate the current environment, have
strengthened our balance sheet with increased liquidity and
financial flexibility. In addition, recent new program wins, which
will start to impact fiscal 2026, make us excited for the
future.”
The Company ended the fourth quarter of fiscal 2024 with cash
and cash equivalents of $78.0 million and borrowings outstanding on
credit facilities of $294.8 million, including $235.0 million
classified as long term, and $142.1 million of borrowing capacity
available. Capital expenditures were $9.1 million in the fourth
quarter, and the Company invested $3 million to repurchase 136,000
shares of common stock.
Fiscal Year 2024 Highlights:
- Net sales totaled $1,714.5 million, the second highest year in
the history of the Company
- Adjusted operating income of $74.3 million, or 4.3% of net
sales
- Inventory reductions of $112 million, or 25%,
year-over-year
- Cash flow generated from operating activities of $73
million
Net Sales by Vertical Market for Q4 and
Full Year Fiscal 2024:
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
(Amounts in Millions)
2024
*
2023
*
Percent
Change
2024
*
2023
*
Percent
Change
Automotive (1)
$
211.7
49
%
$
228.5
46
%
(7
)%
$
826.4
48
%
$
843.8
46
%
(2
)%
Medical (1)
102.2
24
%
123.6
25
%
(17
)%
425.7
25
%
500.7
28
%
(15
)%
Industrial (1)
116.3
27
%
144.0
29
%
(19
)%
462.4
27
%
478.9
26
%
(3
)%
Total Net Sales
$
430.2
$
496.1
(13
)%
$
1,714.5
$
1,823.4
(6
)%
* As a percent of Total Net Sales
(1) Beginning in fiscal year 2024,
miscellaneous sales previously reported in Other are now reported
in the respective three end market verticals; 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, and public safety
Jana T. Croom, Chief Financial Officer, commented, “Fiscal 2024
was hard fought with a challenging operating environment combined
with divesting the AT&M business, which was not a small
undertaking for our Company. I would like to thank the entire
Kimball team for their efforts involved in closing the transaction
and ensuring a smooth transition. Looking to fiscal 2025, we expect
macro headwinds to persist. We will balance these pressures with
cost controls, a capital allocation strategy focused on longer-term
growth, lasting customer relationships, and opportunistic share
repurchases.”
Fiscal Year 2025 Guidance
- Net sales in the range of $1.440 - $1.540 billion, an 8% to 14%
decline year-over-year when excluding net sales from Automation,
Test and Measurement. (a)
- Adjusted operating income of 4.0% - 4.5% of net sales. (b)
- Capital expenditures of $40 - $50 million.
(a)
A reconciliation of net sales excluding
Automation, Test and Measurement is included in the Non-GAAP
Reconciliations section.
(b)
Fiscal year 2025 guidance reflects a
change in our adjusted operating income calculation beginning in
fiscal year 2025, which will exclude stock compensation expense,
currently included in adjusted operating income. This change better
aligns our presentation with others in our industry. Fiscal year
2024, under this new calculation, by comparison, would have been
4.8%. A reconciliation of GAAP and non-GAAP financial measures is
included below.
Forward-Looking Statements
Certain statements contained within this release are considered
forward-looking, including our 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, 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, 2023.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. The
non-GAAP financial measures contained herein include constant
currency growth, net sales excluding Automation, Test &
Measurement, adjusted selling and administrative expenses, 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 global, multifaceted
manufacturing solutions provider of electronics and diversified
contract manufacturing services to customers around the world. From
our operations in the United States, China, Mexico, Poland,
Romania, and Thailand, 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 14, 2024
Time:
10:00 AM Eastern Time
Live Webcast:
investors.kimballelectronics.com/events-and-presentations/events
Dial-In #:
877-407-8293 (or
201-689-8349)
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, 2024 are as
follows:
Condensed Consolidated Statements of
Income
(Unaudited)
Three Months Ended
(Amounts in Thousands, except Per Share
Data)
June 30, 2024
June 30, 2023
Net Sales
$
430,158
100.0
%
$
496,141
100.0
%
Cost of Sales
393,420
91.5
%
446,460
90.0
%
Gross Profit
36,738
8.5
%
49,681
10.0
%
Selling and Administrative Expenses
15,890
3.6
%
18,444
3.7
%
Other General Expense (Income)
—
—
%
(212
)
—
%
Restructuring Expense
764
0.2
%
—
—
%
Asset Impairment
476
0.1
%
—
—
%
Operating Income
19,608
4.6
%
31,449
6.3
%
Interest Income
155
—
%
65
—
%
Interest Expense
(5,380
)
(1.3
)%
(5,473
)
(1.1
)%
Non-Operating Income (Expense), net
(918
)
(0.2
)%
466
0.1
%
Other Income (Expense), net
(6,143
)
(1.5
)%
(4,942
)
(1.0
)%
Income Before Taxes on Income
13,465
3.1
%
26,507
5.3
%
Provision for Income Taxes
5,922
1.3
%
7,305
1.4
%
Net Income
$
7,543
1.8
%
$
19,202
3.9
%
Earnings Per Share of Common Stock:
Basic
$
0.30
$
0.77
Diluted
$
0.30
$
0.76
Average Number of Shares Outstanding:
Basic
25,064
25,009
Diluted
25,246
25,161
(Unaudited)
Fiscal Year Ended
(Amounts in Thousands, except Per Share
Data)
June 30, 2024
June 30, 2023
Net Sales
$
1,714,510
100.0
%
$
1,823,429
100.0
%
Cost of Sales
1,574,253
91.8
%
1,667,264
91.4
%
Gross Profit
140,257
8.2
%
156,165
8.6
%
Selling and Administrative Expenses
66,626
4.0
%
68,648
3.8
%
Other General Expense (Income)
(892
)
(0.1
)%
(212
)
—
%
Restructuring Expense
2,386
0.1
%
—
—
%
Goodwill Impairment
5,820
0.3
%
—
—
%
Asset Impairment
17,040
1.0
%
—
—
%
Operating Income
49,277
2.9
%
87,729
4.8
%
Interest Income
638
—
%
153
—
%
Interest Expense
(22,839
)
(1.3
)%
(16,263
)
(0.9
)%
Non-Operating Income (Expense), net
(1,877
)
(0.1
)%
3,125
0.2
%
Other Income (Expense), net
(24,078
)
(1.4
)%
(12,985
)
(0.7
)%
Income Before Taxes on Income
25,199
1.5
%
74,744
4.1
%
Provision for Income Taxes
4,688
0.3
%
18,913
1.0
%
Net Income
$
20,511
1.2
%
$
55,831
3.1
%
Earnings Per Share of Common Stock:
Basic
$
0.82
$
2.24
Diluted
$
0.81
$
2.22
Average Number of Shares Outstanding:
Basic
25,079
24,904
Diluted
25,278
25,076
Condensed Consolidated Statements of
Cash Flows
Fiscal Year Ended
(Unaudited)
June 30,
(Amounts in Thousands)
2024
2023
Net Cash Flow provided by (used for)
Operating Activities
$
73,217
$
(13,804
)
Net Cash Flow used for Investing
Activities
(46,521
)
(90,467
)
Net Cash Flow provided by Financing
Activities
8,974
99,179
Effect of Exchange Rate Change on Cash,
Cash Equivalents, and Restricted Cash
(755
)
(895
)
Net Increase (Decrease) in Cash, Cash
Equivalents, and Restricted Cash
34,915
(5,987
)
Cash, Cash Equivalents, and Restricted
Cash at Beginning of Period
43,864
49,851
Cash, Cash Equivalents, and Restricted
Cash at End of Period
$
78,779
$
43,864
(Unaudited)
Condensed Consolidated Balance
Sheets
June 30,
2024
June 30,
2023
(Amounts in Thousands)
ASSETS
Cash and cash equivalents
$
77,965
$
42,955
Receivables, net
282,336
308,167
Contract assets
76,320
78,798
Inventories
338,116
450,319
Prepaid expenses and other current
assets
44,682
49,188
Assets held for sale
27,587
—
Property and Equipment, net
269,659
267,684
Goodwill
6,191
12,011
Other Intangible Assets, net
2,994
12,335
Other Assets, net
82,069
38,262
Total Assets
$
1,207,919
$
1,259,719
LIABILITIES AND SHARE OWNERS’
EQUITY
Current portion of borrowings under credit
facilities
$
59,837
$
46,454
Accounts payable
213,551
322,274
Advances from customers
30,151
33,905
Accrued expenses
63,189
72,515
Liabilities held for sale
8,594
—
Long-term debt under credit facilities,
less current portion
235,000
235,000
Long-term income taxes payable
3,255
5,859
Other long-term liabilities
53,881
19,718
Share Owners’ Equity
540,461
523,994
Total Liabilities and Share Owners’
Equity
$
1,207,919
$
1,259,719
Other Financial Metrics
(Unaudited)
(Amounts in Millions, except CCD)
At or For the
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2024
2023
2024
2023
Depreciation and Amortization
$
9.5
$
8.6
$
38.0
$
32.4
Stock-Based Compensation
$
1.8
$
1.6
$
7.2
$
6.9
Cash Conversion Days (CCD) (1)
100
94
Open Orders (2)
$
714
$
798
(1)
Cash Conversion Days (“CCD”) are
calculated as the sum of Days Sales Outstanding plus Contract Asset
Days plus Production Days Supply on Hand less Accounts Payable Days
and less Advances from Customers Days. CCD, or a similar metric, is
used in our industry and by our management to measure the
efficiency of managing working capital.
(2)
Open Orders are the aggregate sales price
of production pursuant to unfulfilled customer orders.
Select Financial Results of Automation,
Test and Measurement
(Unaudited)
(Amounts in Millions)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2024
2023
2024
2023
Net Sales
$
14.8
$
28.0
$
45.7
$
68.6
Operating Income (Loss) (1)
$
2.0
$
6.6
$
(22.2
)
$
6.7
(1)
Includes asset impairment of $0.5 million
for the three months ended June 30, 2024 and goodwill impairment of
$5.8 million and asset impairment of $17.0 million for the fiscal
year ended June 30, 2024. Also includes allocated corporate
overhead expenses.
Reconciliation of Non-GAAP Financial
Measures
(Unaudited, Amounts in Thousands, except
Per Share Data)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2024
2023
2024
2023
Net Sales Growth (vs. same period in prior
year)
(13
)%
33
%
(6
)%
35
%
Foreign Currency Exchange Impact
—
%
—
%
—
%
(3
)%
Constant Currency Growth
(13
)%
33
%
(6
)%
38
%
Net Sales, as reported
$
430,158
$
496,141
$
1,714,510
$
1,823,429
Net Sales from Automation, Test &
Measurement
14,771
28,031
45,674
68,608
Net Sales excluding Automation, Test &
Measurement
$
415,387
$
468,110
$
1,668,836
$
1,754,821
Selling and Administrative Expenses, as
reported
$
15,890
$
18,444
$
66,626
$
68,648
SERP
(96
)
(243
)
(680
)
(701
)
Adjusted Selling and Administrative
Expenses
$
15,794
$
18,201
$
65,946
$
67,947
Operating Income (Loss), as reported
$
19,608
$
31,449
$
49,277
$
87,729
SERP
96
243
680
701
Legal Settlements (Recovery)
—
(212
)
(892
)
(212
)
Restructuring Expense
764
—
2,386
—
Goodwill Impairment
—
—
5,820
—
Asset Impairment
476
—
17,040
—
Adjusted Operating Income
$
20,944
$
31,480
$
74,311
$
88,218
Adjusted Operating Income %
4.3
%
4.8
%
Stock Compensation Expense
7,185
6,914
Adjusted Operating Income - FY25 Guidance
Comparison
$
81,496
$
95,132
Adjusted Operating Income % - FY25
Guidance Comparison
4.8
%
5.2
%
Net Income (Loss), as reported
$
7,543
$
19,202
$
20,511
$
55,831
Adjustments After Measurement Period on
GES Acquisition
—
—
—
279
Legal Settlements (Recovery),
After-Tax
—
(161
)
(676
)
(161
)
Restructuring Expense, After-Tax
580
—
1,810
—
Goodwill Impairment, After-Tax
—
—
4,414
—
Asset Impairment, After-Tax
238
—
9,787
—
Adjusted Net Income
$
8,361
$
19,041
$
35,846
$
55,949
Diluted Earnings per Share, as
reported
$
0.30
$
0.76
$
0.81
$
2.22
Adjustments After Measurement Period on
GES Acquisition
—
—
—
0.01
Legal Settlements (Recovery)
—
—
(0.03
)
—
Restructuring Expense
0.02
—
0.07
—
Goodwill Impairment
—
—
0.18
—
Asset Impairment
0.01
—
0.39
—
Adjusted Diluted Earnings per Share
$
0.33
$
0.76
$
1.42
$
2.23
Fiscal Year Ended
June 30,
2024
2023
Operating Income
$
49,277
$
87,729
Goodwill Impairment
5,820
—
SERP
680
701
Legal Recovery
(892
)
(212
)
Restructuring Expense
2,386
—
Asset Impairment
17,040
—
Adjusted Operating Income (non-GAAP)
$
74,311
$
88,218
Tax Effect
16,332
22,235
After-tax Adjusted Operating Income
$
57,979
$
65,983
Average Invested Capital (1)
$
782,093
$
701,364
ROIC
7.4
%
9.4
%
(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/20240813648435/en/
Andrew D. Regrut Treasurer and Investor Relations Officer
812.827.4151 Investor.Relations@kimballelectronics.com
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