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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number    001-36454
keilogoonelinecolorcmyk2revi.jpg
KIMBALL ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Indiana35-2047713
(State or other jurisdiction of(I.R.S. Employer Identification No.)
incorporation or organization)
1205 Kimball Boulevard, Jasper, Indiana
47546
(Address of principal executive offices)(Zip Code)
(812) 634-4000
Registrant’s telephone number, including area code
Not Applicable
Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading SymbolName of each exchange on which registered
Common Stock, no par valueKEThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
Yes  ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐
Accelerated filer
☒Emerging growth company☐
Non-accelerated filer☐Smaller reporting company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 
Yes ☐    No ☒

The number of shares outstanding of the Registrant’s common stock as of April 23, 2024 was 24,869,206 shares.


KIMBALL ELECTRONICS, INC.
FORM 10-Q
INDEX
Page No.
 
PART I    FINANCIAL INFORMATION
 
 
PART II    OTHER INFORMATION
 

2

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
KIMBALL ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except for Share Data)
(Unaudited) 
March 31,
2024		June 30,
2023
ASSETS  
Current Assets:  
Cash and cash equivalents$65,208 $42,955 
Receivables, net of allowances of $1,193 and $257, respectively
277,894 308,167 
Contract assets76,073 78,798 
Inventories396,199 450,319 
Prepaid expenses and other current assets43,018 49,188 
Assets held for sale29,619 — 
Total current assets888,011 929,427 
Property and Equipment, net of accumulated depreciation of $309,171 and $293,197, respectively
273,823 267,684 
Goodwill6,191 12,011 
Other Intangible Assets, net of accumulated amortization of $27,303 and $38,785, respectively
3,197 12,335 
Other Assets, net
89,606 38,262 
Total Assets$1,260,828 $1,259,719 
LIABILITIES AND SHARE OWNERS’ EQUITY
Current Liabilities:
Current portion of borrowings under credit facilities$84,618 $46,454 
Accounts payable248,174 322,274 
Advances from customers36,099 33,905 
Accrued expenses59,621 72,515 
Liabilities held for sale
9,369 — 
Total current liabilities437,881 475,148 
Other Liabilities:
Long-term debt under credit facilities, less current portion235,000 235,000 
Long-term income taxes payable3,255 5,859 
Other long-term liabilities45,631 19,718 
Total other liabilities283,886 260,577 
Share Owners’ Equity:
Preferred stock-no par value
Shares authorized: 15,000,000
Shares issued: None
— — 
Common stock-no par value
Shares authorized: 150,000,000
Shares issued: 29,430,000
Shares outstanding: 24,869,000 and 24,724,000, respectively
— — 
Additional paid-in capital317,828 315,482 
Retained earnings309,021 296,053 
Accumulated other comprehensive loss(13,064)(11,046)
Treasury stock, at cost:
Shares: 4,561,000 and 4,706,000, respectively
(74,724)(76,495)
Total Share Owners’ Equity539,061 523,994 
Total Liabilities and Share Owners’ Equity$1,260,828 $1,259,719 
3

KIMBALL ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Amounts in Thousands, Except for Per Share Data)
Three Months EndedNine Months Ended
March 31March 31
(Unaudited)2024202320242023
Net Sales$425,036 $484,703 $1,284,352 $1,327,288 
Cost of Sales391,492 441,731 1,180,833 1,220,804 
Gross Profit33,544 42,972 103,519 106,484 
Selling and Administrative Expenses16,861 17,752 50,736 50,204 
Other General Income(892)— (892)— 
Restructuring Expense1,622 — 1,622 — 
Goodwill Impairment5,820 — 5,820 — 
Asset Impairment16,564 — 16,564 — 
Operating Income (Loss)
(6,431)25,220 29,669 56,280 
Other Income (Expense):
Interest income83 45 483 88 
Interest expense(5,875)(4,822)(17,459)(10,790)
Non-operating income (expense), net(530)1,433 (959)2,659 
Other income (expense), net(6,322)(3,344)(17,935)(8,043)
Income (Loss) Before Taxes on Income(12,753)21,876 11,734 48,237 
Provision (Benefit) for Income Taxes
(6,677)5,476 (1,234)11,608 
Net Income (Loss)$(6,076)$16,400 $12,968 $36,629 
Earnings (Loss) Per Share of Common Stock:  
Basic$(0.24)$0.66 $0.52 $1.47 
Diluted$(0.24)$0.65 $0.51 $1.46 
Average Number of Shares Outstanding:
Basic25,118 24,898 25,084 24,868 
Diluted25,118 25,067 25,263 25,031 


4

KIMBALL ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in Thousands)
Three Months EndedThree Months Ended
March 31, 2024March 31, 2023
(Unaudited)Pre-taxTaxNet of TaxPre-taxTaxNet of Tax
Net income (loss)
$(6,076)$16,400 
Other comprehensive income (loss):
Foreign currency translation adjustments$(3,678)$(193)$(3,871)$2,094 $— $2,094 
Postemployment actuarial change(23)5 (18)(68)18 (50)
Derivative gain (loss)2,185 (499)1,686 3,270 (768)2,502 
Reclassification to (earnings) loss:
Derivatives(1,600)352 (1,248)(1,111)293 (818)
Amortization of actuarial change37 (9)28 (19)5 (14)
Other comprehensive income (loss)$(3,079)$(344)$(3,423)$4,166 $(452)$3,714 
Total comprehensive income (loss)
$(9,499)$20,114 
 Nine Months EndedNine Months Ended
March 31, 2024March 31, 2023
(Unaudited)Pre-taxTaxNet of TaxPre-taxTaxNet of Tax
Net income$12,968 $36,629 
Other comprehensive income (loss):
Foreign currency translation adjustments$(1,424)$(193)$(1,617)$5,427 $— $5,427 
Postemployment actuarial change(631)184 (447)(226)62 (164)
Derivative gain (loss)6,156 (1,381)4,775 6,954 (1,501)5,453 
Reclassification to (earnings) loss:
Derivatives(6,092)1,347 (4,745)(2,596)493 (2,103)
Amortization of actuarial change21 (5)16 (157)38 (119)
Other comprehensive income (loss)$(1,970)$(48)$(2,018)$9,402 $(908)$8,494 
Total comprehensive income$10,950 $45,123 

5

KIMBALL ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
 
Nine Months Ended
March 31
(Unaudited)20242023
Cash Flows From Operating Activities:
Net income$12,968 $36,629 
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization28,522 23,840 
(Gain) loss on sales of assets110 (37)
Deferred income taxes(14,149)(1,816)
Goodwill impairment5,820 — 
Asset impairment16,264 — 
Stock-based compensation5,435 5,357 
Other, net5,025 392 
Change in operating assets and liabilities:
Receivables16,446 (74,008)
Contract assets2,725 (11,610)
Inventories1,865 (88,557)
Prepaid expenses and other assets(5,774)(18,235)
Accounts payable(71,214)37,689 
Advances from customers32,200 14,400 
Accrued expenses and taxes payable(11,526)18,071 
Net cash provided by (used for) operating activities24,717 (57,885)
Cash Flows From Investing Activities:
Capital expenditures(37,075)(65,535)
Proceeds from sales of assets241 278 
Purchases of capitalized software(873)(1,293)
Other, net5 53 
Net cash used for investing activities(37,702)(66,497)
Cash Flows From Financing Activities:
Proceeds from credit facilities— 75,000 
Net change in revolving credit facilities38,200 33,665 
Payments related to tax withholding for stock-based compensation(1,479)(1,417)
Debt issuance costs(150)(100)
Net cash provided by financing activities36,571 107,148 
Effect of Exchange Rate Change on Cash and Cash Equivalents(113)(294)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash23,473 (17,528)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period (1)
43,864 49,851 
Cash, Cash Equivalents, and Restricted Cash at End of Period (1)
$67,337 $32,323 
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes$21,544 $12,771 
Interest expense$15,241 $7,642 
Non-cash investing activity:
Unpaid purchases of property and equipment at the end of the period$4,927 $9,740 
(1) The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in Prepaid expenses and other current assets on the balance sheet represents funds held by the Company for a foreign subsidiary’s employee savings plan.
(Unaudited)March 31,
2024		June 30,
2023
Cash and Cash Equivalents$65,208 $42,955 
Restricted Cash included in Prepaid expenses and other current assets$2,129 $909 
Total Cash, Cash Equivalents, and Restricted Cash at end of period$67,337 $43,864 
6

KIMBALL ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHARE OWNERS’ EQUITY
(Amounts in Thousands, Except for Share Data)
Three Months Ended
Retained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Share Owners’ Equity
(Unaudited)Additional Paid-In Capital
Amounts at December 31, 2023$316,309 $315,097 $(9,641)$(74,776)$546,989 
Net income (loss)
(6,076)(6,076)
Other comprehensive income (loss)(3,423)(3,423)
Compensation expense related to stock compensation plans1,658 1,658 
Performance and restricted share issuance (0 and 4,000 shares, respectively)
(139)52 (87)
Amounts at March 31, 2024$317,828 $309,021 $(13,064)$(74,724)$539,061 
Amounts at December 31, 2022$312,085 $260,451 $(14,892)$(76,496)$481,148 
Net income16,400 16,400 
Other comprehensive income (loss)3,714 3,714 
Issuance of non-restricted stock (100 shares)
2 1 3 
Compensation expense related to stock compensation plans1,921 1,921 
Amounts at March 31, 2023$314,008 $276,851 $(11,178)$(76,495)$503,186 
Nine Months Ended
Retained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Share Owners’ Equity
(Unaudited)Additional Paid-In Capital
Amounts at June 30, 2023$315,482 $296,053 $(11,046)$(76,495)$523,994 
Net income12,968 12,968 
Other comprehensive income (loss)(2,018)(2,018)
Issuance of non-restricted stock (18,000 shares)
235 222 457 
Compensation expense related to stock compensation plans5,138 5,138 
Performance and restricted share issuance (108,000 and 19,000 shares)
(3,027)1,549 (1,478)
Amounts at March 31, 2024$317,828 $309,021 $(13,064)$(74,724)$539,061 
Amounts at June 30, 2022$311,090 $240,222 $(19,672)$(77,669)$453,971 
Net income36,629 36,629 
Other comprehensive income (loss)8,494 8,494 
Issuance of non-restricted stock (14,100 shares)
152 173 325 
Compensation expense related to stock compensation plans5,183 5,183 
Performance share issuance (85,000 shares)
(2,417)1,001 (1,416)
Amounts at March 31, 2023$314,008 $276,851 $(11,178)$(76,495)$503,186 
7

KIMBALL ELECTRONICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Business Description and Summary of Significant Accounting Policies
Business Description:
Kimball Electronics, Inc. (also referred to herein as “Kimball Electronics,” the “Company,” “we,” “us,” or “our”) is a global, multifaceted manufacturing solutions provider. We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. We deliver a package of value that begins with our core competency of producing durable electronics, and we further offer contract manufacturing services for non-electronic components, medical disposables, precision molded plastics, and production automation, test, and inspection equipment. Our design and manufacturing expertise coupled with robust processes and procedures help us ensure that we deliver the highest levels of quality, reliability, and service throughout the entire life cycle of our customers’ products. We deliver award-winning service across our highly integrated global footprint, which is enabled by our largely common operating system, procedures, and standardization. We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service.
Basis of Presentation:
The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of March 31, 2024 and June 30, 2023, results of operations for the three and nine months ended March 31, 2024 and 2023, cash flows for the nine months ended March 31, 2024 and 2023, and share owners’ equity for the three and nine months ended March 31, 2024 and 2023. The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2023 and related notes thereto included in our Annual Report on Form 10-K. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year.
Reclassifications:
Advances from customers are now reported separately on the Condensed Consolidated Statements of Cash Flows. Advances from customers were previously reported in accounts payable and accrued expenses. Prior period amounts have been reclassified to conform to current period presentation. See Note 2 - Revenue from Contracts with Customers of Notes to Condensed Consolidated Financial Statements for more information on advances from customers.
Revenue Recognition:
We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments. Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment built to customer’s specifications. Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle. Typically, our customer agreements do not commit the customer to purchase our services until a purchase order is provided, which is generally short term in nature. Customer purchase orders primarily have a single performance obligation. Generally, the prices stated in the customer purchase orders are agreed upon prices for the manufactured product and do not vary over the term of the order, and therefore, the majority of our contracts do not contain variable consideration. In limited circumstances, we may enter into a contract which contains minimum quantity thresholds to cover our capital costs, and we may offer our customer a rebate for specific volume thresholds or other incentives; in these cases, the rebates or incentives are accounted for as variable consideration.
The majority of our revenue is recognized over time as manufacturing services are performed as we manufacture a product to customer specifications with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining revenue for manufacturing services is recognized when the customer obtains control of the product, typically either upon shipment or delivery of the product dependent on the terms of the contract, and the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset. We generally recognize revenue over time using costs
8

based input methods, in which judgment is required to evaluate assumptions including anticipated margins to estimate the corresponding amount of revenue to recognize. Costs used as a basis for estimating anticipated margins include material, direct and indirect labor, and appropriate applied overheads. Anticipated margins are determined based on historical or quoted customer pricing. Costs based input methods are considered a faithful depiction of our efforts and progress toward satisfying our performance obligations for manufacturing services and for which we believe we are entitled to payment for performance completed to date. The cumulative effect of revisions to estimates related to net contract revenues or costs are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.
We have elected to account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated services and products. Accordingly, we record customer payments of shipping and handling costs as a component of net sales and classify such costs as a component of cost of sales. We recognize sales net of applicable sales or value add taxes. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time revenue is recognized, resulting in a reduction of net revenue.
Direct incremental costs to obtain and fulfill a contract are capitalized as a contract asset only if they are material, expected to be recovered, and are not accounted for in accordance with other guidance. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred.
Trade Accounts Receivable:
The Company’s trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. Our policy for estimating the allowance for credit losses on trade accounts receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to estimate expected credit losses. Management believes that historical loss information generally provides a basis for its assessment of expected credit losses. Trade accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income.
In the ordinary course of business, customers periodically negotiate extended payment terms on trade accounts receivable. Customary terms require payment within 30 to 45 days, with any terms beyond 45 days being considered extended payment terms. We utilize factoring arrangements for certain of our accounts receivables with third-party financial institutions in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. We also have the ability to and have periodically utilized additional accounts receivable factoring arrangements to provide flexible access to cash as needed. In the nine months ended March 31, 2024 and 2023, we sold, without recourse, $317.0 million and $357.1 million of accounts receivable, respectively. For the three months ended March 31, 2024 and 2023, factoring fees were $0.9 million and $1.4 million, and $2.6 million and $3.8 million during the nine months ended March 31, 2024 and 2023, respectively. Factoring fees are recorded in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income.
During the three months ended December 31, 2023, changes to the expected timing of payments from and risk of default for a customer resulted in the recording of an allowance for credit losses of $2.0 million in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income. Although the customer is not in bankruptcy and we will continue to pursue full recovery, an allowance was deemed necessary in consideration of the expected timing of payments and risk of default. The amount expected to be collected after twelve months is included in Other Assets, net on the Condensed Consolidated Balance Sheet. At March 31, 2024, the noncurrent receivable associated with this customer in Other Assets, net totaled $2.5 million, which is net of the $2.0 million allowance for expected credit losses. The current portion of receivables from this customer is $2.8 million at March 31, 2024.

9

Goodwill and Other Intangible Assets:
Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, goodwill is assessed or tested at the reporting unit level. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down to its estimated fair value. Other Intangible Assets consist of capitalized software, customer relationships, technology, and trade name, and are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. During the quarter ending March 31, 2024, the Company made the decision to divest of GES, our automation, test and measurement business unit and committed to a plan to sell the business. As a result, the business unit met the criteria to be classified as held for sale, and goodwill and asset impairment were recorded during the quarter. See Note 3 - Assets and Liabilities Held for Sale for more information on goodwill and asset impairment and Note 12 - Goodwill and Other Intangible Assets of Notes to Condensed Consolidated Financial Statements for more information on Goodwill and Other Intangible Assets.
Leases:
The Company leases certain office facilities, warehouse facilities, and equipment under operating leases, in addition to land on which certain office and manufacturing facilities resides. Operating lease costs and cash payments for operating leases are immaterial to the Condensed Consolidated Statements of Income and our Condensed Consolidated Statements of Cash Flows. Lease right-of-use assets and lease liabilities each totaled $1.9 million at March 31, 2024 and $2.6 million at June 30, 2023, respectively. Lease right-of-use assets are included in Other Assets, net and lease liabilities are included in Accrued expenses and Other long-term liabilities on the Condensed Consolidated Balance Sheets.
Other General Income:
Other General Income in the three and nine months ended March 31, 2024 included $0.9 million of pre-tax income resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. These lawsuits alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components.
Restructuring:
We recorded restructuring expense of $1.6 million in the three and nine months ended March 31, 2024 for employee-related costs as we undertook restructuring efforts during the current quarter to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions. We expect to continue executing the restructuring efforts over the remainder of the calendar year and estimate between $1.0 million and $2.0 million of additional pre-tax restructuring charges.
Non-operating Income (Expense), net:
Non-operating income (expense), net includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expenses.
Components of Non-operating income (expense), net:
 Three Months EndedNine Months Ended
 March 31March 31
(Amounts in Thousands)2024202320242023
Foreign currency/derivative gain (loss)$(536)$1,328 $(864)$2,581 
Gain (loss) on SERP investments277 353 584 458 
Other(271)(248)(679)(380)
Non-operating income (expense), net$(530)$1,433 $(959)$2,659 

10

Income Taxes:
In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.
Deferred income tax assets and liabilities, recorded in Other Assets, net and Other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets, are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment.
We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Condensed Consolidated Statements of Income.
The U.S. Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law on December 22, 2017, making broad and complex changes to the U.S. tax code, for which complete guidance may have not yet been issued. Tax Reform, in addition to other changes, required a one-time transition tax on certain unremitted earnings of foreign subsidiaries that is payable over an eight-year period. As of March 31, 2024 and June 30, 2023, the remaining provision recorded for the one-time deemed repatriation tax was $5.9 million and $7.8 million, respectively, payable through fiscal year 2026, with the long-term portion recorded in Long-term income taxes payable on the Condensed Consolidated Balance Sheets. As of March 31, 2024, $2.6 million of the remaining deemed repatriation tax is short term and is recorded in Accrued expenses on the Condensed Consolidated Balance Sheets.
New Accounting Standards:
Not Yet Adopted:
In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance on Improvements to Reportable Segment Disclosures, requiring additional, more detailed information about a reportable segment. The guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.
In December 2023, the FASB issued guidance on Improvements to Income Tax Disclosures, intended to enhance the transparency and decision usefulness of income tax disclosures. The guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.
Note 2. Revenue from Contracts with Customers
Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, electronic and non-electronic components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment in automotive, medical, and industrial applications, to the specifications and designs of our customers. Beginning in fiscal year 2024, the Company changed its presentation of revenue for miscellaneous sales previously included in Other to include in the respective customers’ end market verticals. Prior year periods have been recast to conform to the current year presentation.

11

The following table disaggregates our revenue by end market vertical for the three and nine months ended March 31, 2024 and 2023.
Three Months EndedNine Months Ended
March 31March 31
(Amounts in Millions)2024202320242023
Vertical Markets:
Automotive (1)
$202.0 $221.9 $614.7 $615.3 
Medical (2)
113.0 135.5 323.5 377.1 
Industrial (3)
110.0 127.3 346.2 334.9 
Total net sales$425.0 $484.7 $1,284.4 $1,327.3 
(1)    For the three and nine months ended March 31, 2023, respectively, $5.9 million and $14.8 million of the Automotive net sales were previously categorized as Other.
(2)    For the three and nine months ended March 31, 2023, respectively, $1.5 million and $3.6 million of the Medical net sales were previously categorized as Other.
(3)    For the three and nine months ended March 31, 2023, respectively, $0.4 million and $2.1 million of the Industrial net sales were previously categorized as Other.
For the three months ended March 31, 2024 and 2023, approximately 97% and 96% of our net sales, respectively, were recognized over time as manufacturing services were performed under a customer contract on a product with no alternative use and we have an enforceable right to payment for performance completed to date. For both the nine months ended March 31, 2024 and 2023, approximately 96% of our net sales, respectively, were recognized over time. The remaining sales revenues were recognized at a point in time when the customer obtained control of the products.
The timing differences of revenue recognition, billings to our customers, and cash collections from our customers result in billed accounts receivable and unbilled accounts receivable. Contract assets on the Condensed Consolidated Balance Sheets relate to unbilled accounts receivable and occur when revenue is recognized over time as manufacturing services are provided and the billing to the customer has not yet occurred as of the balance sheet date, which are generally transferred to receivables in the next fiscal quarter due to the short-term nature of the manufacturing cycle. Contract assets were $76.1 million and $78.8 million as of March 31, 2024 and June 30, 2023, respectively.
The Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for material price variances, inventory purchases, tooling, or other miscellaneous services or costs. These payments are recognized as contract liabilities until the performance obligations are completed and are included in Advances from customers, if inventory related, and Accrued expenses, if not inventory related, on the Condensed Consolidated Balance Sheets, which amounted to $49.6 million and $45.6 million as of March 31, 2024 and June 30, 2023, respectively. Our performance obligations are short term in nature and therefore our contract liabilities are all expected to be settled within twelve months. We also have deposits associated with inventory purchases classified as long term. See Note 4 - Inventories of Notes to Condensed Consolidated Financial Statements for further discussion.
Note 3. Assets and Liabilities Held for Sale
In the third quarter of fiscal year 2024, the Company made the decision to divest of GES, our automation, test and measurement business unit (“disposal group”), and committed to a plan to sell the business, allowing for increased focus and support for the Company’s EMS operations. As a result, the disposal group business has met the criteria to be classified as held for sale. Accordingly, the Company classified the assets and liabilities of the disposal group as held for sale during the third quarter of fiscal year 2024. The Company expects a sale of the disposal group to occur within the next 12 months. The disposal group did not qualify as discontinued operations as it did not represent a strategic shift that will have a major effect on our operations and financial results.
Once the disposal group was classified as held for sale, it was reported at the lower of its carrying value or fair value less costs to sell during the quarter ended March 31, 2024. The carrying value exceeded the fair value less costs to sell, and the Company recognized impairment charges of $5.8 million and $16.6 million on goodwill and assets held for sale, respectively. The Company ceased recording depreciation and amortization on the applicable assets of the disposal group.
We assess goodwill for impairment at the reporting unit level annually or when conditions indicate an earlier review is necessary. In connection with the preparation of our financial statements for the quarter ended March 31, 2024, we completed an impairment analysis for the goodwill recorded in the reporting unit due to the more-likely-than-not expectation of selling the reporting unit. We determined the reporting unit’s carrying value was more than its fair value by an amount greater than the $5.8 million carrying amount of goodwill and thus was fully impaired. See Note 12 - Goodwill and Other Intangible Assets of Notes to Condensed Consolidated Financial Statements for more information on Goodwill.
12

The major classes of assets and liabilities held for sale consisted of the following:
(Amounts in Thousands)March 31,
2024
Assets held for sale:
Receivables, net$8,599 
Inventories7,217 
Prepaid expenses and other current assets4,766 
Property and Equipment, net5,822 
Goodwill— 
Other Intangible Assets, net8,010 
Other Assets, net
11,469 
Valuation Allowance(16,264)
Total Assets held for sale$29,619 
Liabilities held for sale:
Accounts payable$4,239 
Advances from customers944 
Accrued expenses2,302 
Other long-term liabilities1,884 
Total Liabilities held for sale$9,369 
Other assets, net in the table above includes $10.2 million of deferred tax assets.
The following table summarizes net sales and income (loss) before taxes on income for the disposal group:
Three Months EndedNine Months Ended
March 31March 31
(Amounts in Thousands)2024202320242023
Net Sales$8,105 $16,755 $30,903 $40,577 
Income (Loss) Before Taxes on Income (1)
$(25,691)$1,352 $(25,141)$(976)
(1) Includes goodwill impairment of $5.8 million and asset impairment of $16.6 million for the three and nine months ended March 31, 2024. Also includes allocated corporate overhead expenses.
Note 4. Inventories
Inventories were valued using the lower of first-in, first-out (“FIFO”) cost and net realizable value. Inventory components were as follows:
(Amounts in Thousands)March 31, 2024June 30, 2023
Finished products$391 $432 
Work-in-process— 3,117 
Raw materials395,808 446,770 
Total inventory$396,199 $450,319 
Additionally, we have raw materials inventory totaling $44.1 million classified as long-term included in Other Assets, net in our Condensed Consolidated Balance Sheets. This inventory is associated with a customer who is remediating a recall and we do not expect the inventory to be consumed within the next twelve months. We have received deposits totaling $29.1 million from this customer related to this inventory, which is included in Other long-term liabilities in our Condensed Consolidated Balance Sheets. At June 30, 2023, we had no inventory or customer deposits classified as long-term.
13

Note 5. Accumulated Other Comprehensive Income (Loss)
During the nine months ended March 31, 2024 and 2023, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:
Accumulated Other Comprehensive Income (Loss)
(Amounts in Thousands)Foreign Currency Translation AdjustmentsDerivative Gain (Loss)Post Employment Benefits
Net Actuarial Gain (Loss)		Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2023
$(11,832)$1,368 $(582)$(11,046)
Other comprehensive income (loss) before reclassifications(1,617)4,775 (447)2,711 
Reclassification to (earnings) loss— (4,745)16 (4,729)
Net current-period other comprehensive income (loss)(1,617)30 (431)(2,018)
Balance at March 31, 2024
$(13,449)$1,398 $(1,013)$(13,064)
Balance at June 30, 2022
$(17,349)$(2,203)$(120)$(19,672)
Other comprehensive income (loss) before reclassifications5,427 5,453 (164)10,716 
Reclassification to (earnings) loss— (2,103)(119)(2,222)
Net current-period other comprehensive income (loss)5,427 3,350 (283)8,494 
Balance at March 31, 2023
$(11,922)$1,147 $(403)$(11,178)
The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income:
Reclassifications from Accumulated Other Comprehensive Income (Loss)Three Months EndedNine Months EndedAffected Line Item in the Condensed Consolidated Statements of Income
March 31March 31
(Amounts in Thousands)2024202320242023
Derivative gain (loss) (1)
$1,600 $1,111 $6,092 $2,596 Cost of Sales
(352)(293)(1,347)(493)Benefit (Provision) for Income Taxes
$1,248 $818 $4,745 $2,103 Net of Tax
Postemployment Benefits:
  Amortization of actuarial gain (2)
(37)19 (21)157 Non-operating income (expense), net
9 (5)5 (38)Benefit (Provision) for Income Taxes
$(28)$14 $(16)$119 Net of Tax
Total reclassifications for the period$1,220 $832 $4,729 $2,222 Net of Tax
Amounts in parentheses indicate reductions to income.
(1) See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.
(2) See Note 10 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.
Note 6. Commitments and Contingent Liabilities
The Company typically provides only assurance-type warranties for a limited time period, which cover workmanship and assures the product complies with specifications provided by or agreed upon with the customer. We maintain a provision for limited warranty repair or replacement of products manufactured and sold, which has been established in specific manufacturing contract agreements. We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability regularly based on changes in historical cost trends and in certain cases where specific warranty issues become known. This product warranty liability and expense were immaterial during the nine months ended March 31, 2024 and 2023.
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Note 7. Credit Facilities
Credit facilities consisted of the following:
Available
Borrowing Capacity at		Borrowings Outstanding atBorrowings Outstanding at
(Amounts in Millions, in U.S Dollar Equivalents)March 31, 2024March 31, 2024June 30, 2023
Primary credit facility (1)
$— $299.7 $272.1 
Secondary credit facility (2)
89.4 10.6 — 
Thailand overdraft credit facility (3)
10.1 — — 
China revolving credit facility (3)
6.9 — — 
Netherlands revolving credit facility (3)
0.6 9.3 9.4 
Poland revolving credit facility (3)
5.4 — — 
Vietnam credit facility (3)
5.0 — — 
Total credit facilities$117.4 $319.6 $281.5 
Less: current portion $(84.6)$(46.5)
Long-term debt under credit facilities, less current portion (4)
$235.0 $235.0 
(1)    The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N. A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 million upon request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company. A commitment fee is payable on the unused portion of the credit facility at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary credit facility. Types of borrowings available on the primary credit facility include revolving loans, multi-currency term loans, and swingline loans.
The interest rate on borrowings is dependent on the type and currencies of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus the Revolving Commitment ABR spread which can range from 0.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA.

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The Company’s financial covenants under the primary credit facility require:
•a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and,
•an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.
The Company had $0.4 million in letters of credit contingently committed against the credit facility at both March 31, 2024 and June 30, 2023.
(2)    The Company amended its 364-day multi-currency revolving credit facility agreement on January 5, 2024 (the “secondary credit facility”), which allows for borrowings up to $100.0 million, among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., as Documentation Agent. The secondary credit facility has a maturity date of January 3, 2025. The proceeds of the loans are to be used for working capital and general corporate purposes of the Company. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 30.0 basis points per annum.
The interest rate on borrowings is dependent on the type of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus a Revolving Commitment ABR spread of 75.0 basis points.
The Company’s financial covenants under this secondary credit facility are the same as the financial covenants for its primary credit facility.
(3)    The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources. These foreign credit facilities can be canceled at any time by either the bank or us and generally include renewal clauses. Interest on borrowing under these facilities is charged at a rate as defined under the respective foreign credit facility. During the second quarter of fiscal year 2024, the Company entered into a foreign credit facility for its EMS operation in China with a new lender, which allows for borrowings up to 50 million RMB, and canceled the prior credit facility which allowed for borrowings up to $7.5 million.
(4)    The amount of Long-term debt under credit facilities, less current maturities, reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on May 4, 2027.
The weighted-average interest rate on borrowings outstanding under the credit facilities at March 31, 2024 and June 30, 2023 were 6.9% and 6.8%, respectively.

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Note 8. Fair Value
The Company categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
There were no changes in the inputs or valuation techniques used to measure fair values during the nine months ended March 31, 2024. For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2023.
Recurring Fair Value Measurements:
As of March 31, 2024 and June 30, 2023, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:
 March 31, 2024
(Amounts in Thousands)Level 1Level 2Total
Assets   
Derivatives: foreign exchange contracts$— $4,712 $4,712 
Trading securities: mutual funds held in nonqualified SERP5,318 — 5,318 
Total assets at fair value$5,318 $4,712 $10,030 
Liabilities   
Derivatives: foreign exchange contracts$— $794 $794 
Total liabilities at fair value$— $794 $794 
    
 June 30, 2023
(Amounts in Thousands)Level 1Level 2Total
Assets   
Derivatives: foreign exchange contracts$— $6,320 $6,320 
Trading securities: mutual funds held in nonqualified SERP8,668 — 8,668 
Total assets at fair value$8,668 $6,320 $14,988 
Liabilities   
Derivatives: foreign exchange contracts$— $1,245 $1,245 
Total liabilities at fair value$— $1,245 $1,245 
We had no level 3 assets or liabilities at March 31, 2024 and June 30, 2023, or any activity in Level 3 assets or liabilities during the nine months ended March 31, 2024.
The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, bond funds, and a money market fund. The SERP investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants. See Note 10 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.
Non-Recurring Fair Value Measurements:
As of March 31, 2024, the automation, test and measurement business unit met the criteria to be classified as held for sale, and as a result, a valuation allowance of $16.3 million was established to reflect the fair value less cost to sell of the disposal group, which was based on expected proceeds and the estimated carrying value of the net assets to be disposed. We utilized Level 3 inputs based on management’s best estimates and assumptions to estimate the fair value. See Note 3 - Assets and Liabilities Held for Sale of Notes to Condensed Consolidated Financial Statements for additional information.

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Financial Instruments Not Carried At Fair Value:
Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include notes receivable and borrowings under credit facilities. There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the nine months ended March 31, 2024. For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2023.
The carrying values of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximate fair value due to the relatively short maturity and immaterial non-performance risk.
Note 9. Derivative Instruments
Foreign Exchange Contracts:
We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of business. Our primary means of managing this exposure is to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques do not fully offset currency risk, we use derivative instruments with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes.
We use forward contracts designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Non-designated foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances and other balance sheet positions denominated in currencies other than the functional currencies. As of March 31, 2024, we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $25.6 million and to hedge currencies against the Euro in the aggregate notional amount of 67.2 million Euro. The notional amounts are indicators of the volume of derivative activities but may not be indicators of the potential gain or loss on the derivatives.
In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may cease to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, we may either purchase a derivative contract in the opposite position of the undesignated hedge or may retain the hedge until it matures if the hedge continues to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities.
The fair value of outstanding derivative instruments is recognized on the Condensed Consolidated Balance Sheets as a derivative asset or liability and presented with Prepaid expenses and other current assets and Accrued expenses, respectively. When derivatives are settled with the counterparty, the derivative asset or liability is relieved and cash flow is impacted for the net settlement. For derivative instruments that meet the criteria of hedging instruments under FASB guidance, the gain or loss on the derivative instrument is initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners’ Equity, and is subsequently reclassified into earnings in the period or periods during which the hedged transaction is recognized in earnings. The gain or loss associated with derivative instruments that are not designated as hedging instruments or that cease to meet the criteria for hedging under FASB guidance is reported immediately in Non-operating income (expense), net on the Condensed Consolidated Statements of Income.
Based on fair values as of March 31, 2024, we estimate that approximately $3.5 million of pre-tax derivative gain deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next 12 months. Gains on foreign exchange contracts are generally offset by losses in operating income in the income statement when the underlying hedged transaction is recognized in earnings. Because gains or losses on foreign exchange contracts fluctuate partially based on currency spot rates, the future effect on earnings of the cash flow hedges alone is not determinable, but in conjunction with the underlying hedged transactions, the result is expected to be a decline in currency risk. The maximum length of time we had hedged our exposure to the variability in future cash flows was 12 months as of both March 31, 2024 and June 30, 2023.
See Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 5 - Accumulated Other Comprehensive Income (Loss) of Notes to Condensed Consolidated Financial Statements for the changes in deferred derivative gains and losses.

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Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.
Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets
Asset DerivativesLiability Derivatives
Fair Value As of Fair Value As of
(Amounts in Thousands)Balance Sheet LocationMarch 31,
2024		June 30,
2023		Balance Sheet LocationMarch 31,
2024		June 30,
2023
Derivatives Designated as Hedging Instruments:
Foreign exchange contractsPrepaid expenses and other current assets$4,345 $4,772 Accrued expenses$742 $844 
      
Derivatives Not Designated as Hedging Instruments:    
Foreign exchange contractsPrepaid expenses and other current assets367 1,548 Accrued expenses52 401 
Total derivatives $4,712 $6,320  $794 $1,245 
The Effect of Derivative Instruments on Other Comprehensive Income (Loss)
  Three Months EndedNine Months Ended
March 31March 31
(Amounts in Thousands) 2024202320242023
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives:  
Foreign exchange contracts $2,185 $3,270 $6,156 $6,954 
The Effect of Derivative Instruments on Condensed Consolidated Statements of Income
 Three Months EndedNine Months Ended
(Amounts in Thousands)March 31March 31
Derivatives in Cash Flow Hedging RelationshipsLocation of Gain or (Loss) 2024202320242023
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: 
Foreign exchange contractsCost of Sales$1,600 $1,111 $6,092 $2,596 
Derivatives Not Designated as Hedging Instruments   
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives:  
Foreign exchange contractsNon-operating income (expense)$650 $(286)$(223)$171 
   
Total Derivative Pre-Tax Gain (Loss) Recognized in Income$2,250 $825 $5,869 $2,767 
Note 10. Employee Benefit Plans
Defined Contribution Retirement Plan:
The Company maintains a trusteed defined contribution retirement plan which is in effect for substantially all domestic employees meeting the eligibility requirements. The Company matches 50% of eligible employee contributions up to 6%. The Company also provides a discretionary contribution determined annually by the Talent, Culture, and Compensation Committee of the Company’s Board of Directors. Total expense related to employer contributions to the domestic retirement plans was, in millions, $3.7 million and $4.2 million for the nine months ended March 31, 2024 and March 31, 2023, respectively.
The Company also maintains a supplemental employee retirement plan (“SERP”) for executives and other key employees which enables them to defer cash compensation on a pre-tax basis and restore amounts that would otherwise be payable under our tax-qualified retirement plans if the IRS did not have limits on includable compensation and maximum benefits. The SERP is structured as a rabbi trust, and therefore, assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. We recognize SERP investment assets on the balance sheet at current fair value. A SERP liability of the same amount is recorded on the balance sheet representing an obligation to distribute SERP funds to participants. As of March 31, 2024, both total investments and obligations under SERP were $5.4 million, of which $0.3 million were short term and $5.1 million were long term. As of June 30, 2023, both total investments and obligations under SERP were $8.7 million, of which $2.7 million were short term and $6.0 million were long term. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in the Other Income (Expense) category on our Condensed Consolidated Statements of Income. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. The change in net unrealized holding gains for both the nine months ended March 31, 2024 and 2023 was approximately $0.4 million and $0.1 million, respectively.
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Defined Benefit Postemployment Plan:
The Company established and maintains severance plans for all domestic employees and other postemployment plans for certain foreign subsidiaries. There are no statutory requirements for us to contribute to the plans, nor do employees contribute to the plans. The plans hold no assets. Benefits are paid using available cash on hand when eligible employees meet plan qualifications for payment. As of March 31, 2024, total obligations under these plans were $7.4 million of which $5.7 million were long term and $1.7 million were short term. As of June 30, 2023, total obligations under these plans were $6.6 million of which $5.6 million were long term and $1.0 million were short term. Net periodic benefit costs were not material for the nine months ended March 31, 2024 and 2023.
Note 11. Stock Compensation Plans
A stock compensation plan was created and adopted by the Company’s Board of Directors (the “Board”) on October 3, 2014. The Kimball Electronics, Inc. 2014 Stock Option and Incentive Plan (the “2014 Plan”) allows for the issuance of up to 4.5 million shares and may be granted in the form of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units. The Plan is a ten-year plan with no further awards allowed to be made under the Plan after October 1, 2024. On September 20, 2023, on the recommendation of our Talent, Culture, and Compensation (TCC) Committee, our Board adopted the Kimball Electronics, Inc. 2023 Equity Incentive Plan (the “2023 Plan”), subject to Share Owner approval at our 2023 Annual Meeting. The 2023 Plan was approved by our Share Owners on November 17, 2023. The 2023 Plan supersedes our 2014 Plan and allows for the issuance of up to 2.0 million shares. The shares under the 2023 Plan may be granted in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, and other equity awards.
On October 20, 2016, the Board approved a nonqualified deferred stock compensation plan, the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan (the “Deferral Plan”), which allows Non-Employee Directors to elect to defer all, or a portion of, their retainer fees in stock until retirement or termination from the Board or death. The Deferral Plan allows for issuance of up to 1.0 million shares of the Company’s common stock. For more information on the 2014 Plan and the Deferral Plan, refer to our Annual Report on Form 10-K for the year ended June 30, 2023. For more information on the 2023 Plan, refer to our Notice of 2023 Annual Meeting and Proxy Statement.
During the first nine months of fiscal year 2024, the following stock compensation was granted under the 2014 Plan, the 2023 Plan, and the Deferral Plan.
Stock Compensation GrantedQuarter GrantedShares/Units
Grant Date Fair Value (2)
Long-Term Performance Shares (1)
1st Quarter172,079 $29.19 
Restricted Shares (3)
1st Quarter71,422 $29.19 
Long-Term Performance Shares (4)
2nd Quarter35,650 $25.21 
Restricted Shares (4)
2nd Quarter23,768 $25.21 
Unrestricted Shares (5)
2nd Quarter18,128 $25.24 
Deferred Share Units (6)
2nd Quarter26,347 $25.24 
(1) Long-term performance share awards were granted to officers and other key employees. These annual performance share awards were approved by the Talent, Culture, and Compensation Committee of the Board. The awards granted in fiscal year 2024 will cliff vest at the third anniversary of the award date in fiscal year 2027.
Under these awards, a number of shares will be issued to each participant based upon a combination of the Company’s profitability based on its operating income over the performance period as defined in the Company’s operating business plans for the applicable fiscal years and the Company’s growth based on a comparison of its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100% of one or both of the above-mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of either metric. The number of shares issued will exceed the number of targeted shares issuable (up to a maximum of 125%) if the Company exceeds 100% of one or both of the above-mentioned incentive metrics.
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(2) The grant date fair value is the weighted average stock price based on the dates of the grants.
(3) Restricted shares were granted to officers and other key employees. These restricted shares were approved by the Talent, Culture, and Compensation Committee of the Board. The contractual life of the restricted shares is three years, with one-third of the interest in the restricted shares vested after year one of the grant, another one-third after year two of the grant, and the final one-third after year three of the grant. Restricted shares are expensed over the contractual vesting period as earned. If the employment of a holder of restricted shares terminates before the RSU has vested for any reason other than death, retirement, or disability, the restricted shares not yet vested will be forfeited.
(4) Additional long-term performance share and restricted share awards were approved by the Talent, Culture, and Compensation Committee of the Board and were granted in the second quarter of fiscal year 2024. The awards will vest over a 5-year performance cycle, with one-third of the interest in the shares vesting after year three of the grant, another one-third after year four of the grant, and the final one-third after year five of the grant. The vesting of the performance share awards could range from 0% to 100% of the targeted issuable shares, dependent on the achievement of specific performance metrics.
(5) Unrestricted shares were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions.
(6) Deferred share units were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock in a lump sum or installments in accordance with deferral elections upon a Director’s retirement or termination from the Board or death.
Note 12. Goodwill and Other Intangible Assets
A summary of goodwill is as follows, amounts as of March 31, 2024 exclude the amounts classified as held for sale:
(Amounts in Thousands)
Balance as of June 30, 2023
Goodwill$32,762 
Accumulated impairment(20,751)
Goodwill, net$12,011 
Impairment recorded
(5,820)
Goodwill classified as held for sale
(13,745)
Accumulated impairment classified as held for sale
13,745 
Balance as of March 31, 2024
Goodwill19,017 
Accumulated impairment(12,826)
Goodwill, net$6,191 
A summary of other intangible assets subject to amortization is as follows, amounts as of March 31, 2024 exclude the amounts classified as held for sale:
 March 31, 2024June 30, 2023
(Amounts in Thousands)CostAccumulated
Amortization		Net ValueCostAccumulated
Amortization		Net Value
Capitalized Software$30,500 $(27,303)$3,197 $30,867 $(27,385)$3,482 
Customer Relationships— — — 8,618 (3,524)5,094 
Technology— — — 5,060 (4,816)244 
Trade Name— — — 6,575 (3,060)3,515 
Other Intangible Assets$30,500 $(27,303)$3,197 $51,120 $(38,785)$12,335 
For the three months ended March 31, 2024 and 2023, amortization expense of other intangible assets was $0.5 million and $0.9 million, respectively. For the nine months ended March 31, 2024 and 2023, amortization expense of other intangible assets was $2.0 million and $2.6 million, respectively.
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The estimated useful life of internal-use software ranges from 3 years to 10 years. The amortization period for the customer relationships, technology, and trade name intangible assets was 15 years, 5 years, and 10 years, respectively. We ceased amortization on the intangible assets upon meeting the held for sale classification. See Note 3 - Assets and Liabilities Held for Sale of Notes to Condensed Consolidated Financial Statements for additional information. We have no intangible assets with indefinite useful lives which are not subject to amortization.
Note 13. Share Owners’ Equity
The Company has a Board-authorized stock repurchase plan (the “Repurchase Plan”) allowing the repurchase of up to $100 million of our common stock. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Repurchase Plan has no expiration date but may be suspended or discontinued at any time.
During both the nine months ended March 31, 2024 and 2023, the Company had no share repurchases under the Repurchase Plan. Since the inception of the Repurchase Plan, the Company has repurchased $88.8 million of common stock at an average cost of $15.27 per share.
Note 14. Earnings Per Share
Basic and diluted earnings per share were calculated as follows under the two-class method:
Three Months EndedNine Months Ended
March 31March 31
(Amounts in thousands, except per share data)2024202320242023
Basic and Diluted Earnings Per Share:
   Net Income$(6,076)$16,400 $12,968 $36,629 
   Less: Net Income allocated to participating securities— 24 16 53 
   Net Income allocated to common Share Owners$(6,076)$16,376 $12,952 $36,576 
Basic weighted average common shares outstanding25,118 24,898 25,084 24,868 
Dilutive effect of average outstanding stock compensation awards— 169 179 163 
Dilutive weighted average shares outstanding25,118 25,067 25,263 25,031 
Earnings Per Share of Common Stock:
Basic$(0.24)$0.66 $0.52 $1.47 
Diluted$(0.24)$0.65 $0.51 $1.46 
For the three months ended March 31, 2024, all 434,000 outstanding stock compensation awards were antidilutive, as a result of the net loss recognized for the period, and were excluded from the dilutive calculation. The net loss in the three months ended March 31, 2024 was not allocated to participating securities as the holders have no requirements to fund losses. For the nine months ended March 31, 2024 and for the three and nine months ended March 31, 2023, all outstanding stock compensation awards were dilutive and were included in the dilutive calculation.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements contained within this document 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 “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “forecasts,” “seeks,” “likely,” “future,” “may,” “should,” “would,” “could,” “will,” “can,” “potentially,” and similar expressions. These forward-looking statements are subject to risks and uncertainties including, but not limited to, 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 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 Kimball Electronics are contained in our Annual Report on Form 10-K for the year ended June 30, 2023.

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Business Overview
We are a global, multifaceted manufacturing solutions provider. We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. Our core competency is producing durable electronics, and we further offer contract manufacturing services for non-electronic components, medical devices, medical disposables, drug delivery devices and solutions, precision molded plastics, and production automation, test, and inspection equipment. Our manufacturing services, including engineering and supply chain support, utilize common production and support capabilities globally. We are well recognized by our customers and the industry for our excellent quality, reliability, and innovative service. CIRCUITS ASSEMBLY, a leading brand and technical publication for electronics manufacturers worldwide, has previously recognized us four times for achieving the Highest Overall Customer Rating in their Service Excellence Awards, and most recently, we received Highest Overall Customer Ratings in four of the seven categories in 2023.
The contract manufacturing services industry is very competitive. As a mid-sized player, we can expect to be challenged by the agility and flexibility of the smaller, regional players, and we can expect to be challenged by the scale and price competitiveness of the larger, global players. We enjoy a unique market position between these extremes which allows us to compete with the larger scale players for high-volume projects, but also maintain our competitive position in the generally lower volume durable electronics market space. We expect to continue to effectively operate in this market space; however, one significant challenge will be maintaining our profit margins while we continue our revenue growth. Pricing is competitive in the market as production efficiencies and material pricing advantages for most projects drive costs and prices down over the life of the projects. This characteristic of the contract electronics marketplace is expected to continue.
The Worldwide Manufacturing Services Market - 2023 Edition, a comprehensive study on the worldwide EMS market published by New Venture Research (“NVR”), provided worldwide forecast trends through 2027. NVR projects the worldwide assembly market for electronics products to grow at a compound annual growth rate (“CAGR”) of 4.3% over the next five years, with the EMS industry projected to grow at a CAGR of 5.5%.
We continue to monitor the current economic and industry conditions for uncertainties that may pose a threat to our future growth or cause disruption in business strategy, execution, and timing in the markets in which we compete.
The EMS industry is experiencing the impacts of softening demand from global macroeconomic headwinds, especially in the current fiscal year. The financial impact on our future results cannot be reasonably estimated but could be material. Such headwinds include pressure from elevated levels of inflation, higher interest rates, and geopolitical uncertainty. Our inventory levels, already elevated from strategic inventory purchases to mitigate part shortages in the prior fiscal year, remain high as softening demand has challenged our ability to work them down. Additionally, as lead times dictate the ordering of components, demand softening results in deliveries of components that may exceed production needs in the short term. To mitigate our inventory levels and the impacts to our balance sheet, we are working with our customers to consign excess inventory, make inventory deposits, or pay carrying costs.
Net sales in the third quarter of the current fiscal year decreased 12% compared to the prior fiscal year third quarter, with decreases in each of our end market verticals. The decrease in sales to customers in the automotive market were largely driven by decreased demand. In the medical market, sales decreased due to decreased sales with a large medical customer who is remediating a recall. The cause of the recall is unrelated to the products we provided. In the industrial market, sales decreased in large part due to a program at our automation, test, and measurement business in the third quarter of fiscal 2023 not recurring this quarter.
We have a strong focus on cost control balanced with managing the future growth prospects of our business. We expect to make investments that will strengthen or add new capabilities to our package of value as a multifaceted manufacturing solutions company, including through our recently completed capacity expansions. Managing working capital in conjunction with fluctuating demand levels is likewise key. In addition, a long-standing component of our profit-sharing incentive bonus plan is that it is linked to our financial performance which results in varying amounts of compensation expense as profits change.
To support our renewed strategic focus, in the third quarter of fiscal year 2024, we made the decision to divest of our automation, test and measurement business unit and committed to a plan to sell the business. This will allow us to increase focus and support our EMS operations. As a result, the disposal group has met the criteria to be classified as held for sale and is now reported at the lower of its carrying value or fair value less costs to sell. In addition, we undertook restructuring efforts to align our cost structure with reduced end-market demand levels.

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We continue to maintain a strong balance sheet, which included a current ratio of 2.0, a debt-to-equity ratio of 0.6, and Share Owners’ equity of $539 million at March 31, 2024. Recently, we have invested to support our expansions and growth in Mexico, Thailand, and Poland. We expect our balance sheet to continue to normalize as we negotiate with customers on excess inventory and as certain component shortages subside. Refer to the Future Liquidity section of Liquidity and Capital Resources below for further discussion of our liquidity.
The continuing success of our business is dependent upon our ability to replace expiring customers/programs with new customers/programs. We monitor our success in this area by tracking the number of customers and the percentage of our net sales generated from them by years of service as depicted in the table below. While variation in the size of program awards makes it difficult to directly correlate this data to our sales trends, we believe it does provide useful information regarding our customer loyalty and new business growth.
Nine Months Ended
March 31
Customer Service Years20242023
More than 10 Years
% of Net Sales75 %78 %
# of Customers35 31 
5 to 10 Years
% of Net Sales20 %17 %
# of Customers18 19 
Less than 5 Years
% of Net Sales5 %5 %
# of Customers12 12 
Total
% of Net Sales100 %100 %
 # of Customers65 62 
A detailed discussion of risk factors and uncertainties that could have an effect on our performance are located within the “Risk Factors” section of our Annual Report on Form 10-K for the year ended June 30, 2023.
Results of Operations
At or for the
 Three Months Ended 
 March 31
(Amounts in Millions, Except for Per Share Data)2024as a % of Net Sales2023as a % of Net Sales% Change
Net Sales$425.0 $484.7 (12)%
Gross Profit$33.5 7.9 %$43.0 8.9 %(22)%
Selling and Administrative Expenses16.8 3.9 %17.8 3.7 %(5)%
Other General Income(0.9)(0.2)%— — %— %
Restructuring Expense1.6 0.4 %— — %— %
Goodwill Impairment5.8 1.4 %— — %— %
Asset Impairment16.6 3.9 %— — %— %
Operating Income (6.4)(1.5)%25.2 5.2 %(125)%
Other Income (Expense)(6.4)(3.3)
Provision for Income Taxes(6.7)5.5 (222)%
Net Income$(6.1)$16.4 (137)%
Diluted Earnings per Share$(0.24)$0.65 (137)%
Open Orders$831 $882 (6)%
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For the Nine Months Ended
 
 March 31
(Amounts in Millions, Except for Per Share Data)2024as a % of Net Sales2023as a % of Net Sales% Change
Net Sales$1,284.4 $1,327.3 (3)%
Gross Profit$103.5 8.1 %$106.5 8.0 %(3)%
Selling and Administrative Expenses50.7 4.0 %50.2 3.8 %1 %
Other General Income(0.9)(0.1)%— — %— %
Restructuring Expense1.6 0.1 %— — %— %
Goodwill Impairment5.8 0.5 %— — %— %
Asset Impairment16.6 1.3 %— — %— %
Operating Income29.7 2.3 %56.3 4.2 %(47)%
Other Income (Expense)(17.9)(8.1)
Provision for Income Taxes(1.2)11.6 (111)%
Net Income$13.0 $36.6 (65)%
Diluted Earnings per Share$0.51 $1.46 (65)%
Net Sales by Vertical MarketThree Months Ended Nine Months Ended 
 March 31 March 31 
(Amounts in Millions)20242023% Change20242023% Change
Automotive$202.0 $221.9 (9)%$614.7 $615.3 — %
Medical113.0 135.5 (17)%323.5 377.1 (14)%
Industrial110.0 127.3 (14)%346.2 334.9 3 %
Total Net Sales$425.0 $484.7 (12)%$1,284.4 $1,327.3 (3)%
Third quarter fiscal year 2024 consolidated net sales decreased 12% compared to the third quarter of fiscal year 2023, while the year-to-date fiscal year 2024 consolidated net sales decreased 3% compared to the year-to-date period of fiscal year 2023. The impact from foreign currency fluctuations on net sales was less than 1% in the current quarter and current year-to-date compared to the third quarter and the year-to-date period of fiscal year 2023. Beginning in fiscal year 2024, we changed our presentation of revenue for miscellaneous sales previously included in Other to include in the respective customers’ end market verticals. Prior year periods have been recast to conform to the current year presentation. By end market vertical, our market verticals fluctuated as follows:
•Sales to customers in the automotive market decreased 9% during the third quarter of fiscal year 2024, compared to the third quarter of fiscal year 2023 but remained flat in the year-to-date period of fiscal year 2024 compared to the year-to-date period of fiscal year 2023. The decrease in the third quarter is due to overall decrease in demand across most of our major customers.
•Sales to customers in the medical market declined in both the third quarter of fiscal year 2024, compared to the third quarter of fiscal year 2023 and the year-to-date period of the current fiscal year when compared to the year-to-date period of the prior fiscal year. This decrease is primarily due to decreased sales with a large medical customer who is remediating a recall. The cause of the recall is unrelated to the products we provided. Partially offsetting this decrease in sales was a ramp-up of certain programs and new product launches.
•Sales to customers in the industrial market decreased 14% during the third quarter of fiscal year 2024, when compared to the third quarter of fiscal year 2023 but increased 3% in the year-to-date period of the current fiscal year when compared to the year-to-date period of the prior fiscal year. The decrease in the third quarter is largely due to lower demand with our climate control customers as well as a program at our automation, test, and measurement business from the third quarter of fiscal 2023 not recurring this quarter. In the year-to-date period, the moderate increase is driven by higher end market demand for charging systems and public safety products, offset by declines with climate control products and our automation, test, and measurement business.

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Sales to Nexteer Automotive, Philips, ZF, and HL Mando accounted for the following portions of our net sales:
Three Months EndedNine Months Ended
  March 31March 31
 2024202320242023
Nexteer Automotive16%15%16%15%
Philips*14%*15%
ZF12%12%12%12%
HL Mando**10%*
* amount is less than 10% of total
Gross profit as a percent of net sales in the third quarter of fiscal year 2024 declined when compared to the third quarter of fiscal year 2023 as we experienced lost absorption on lower revenue. Gross profit as a percent of net sales in the first nine months of fiscal year 2024 remained relatively flat when compared to the first nine months of fiscal year 2023.
Selling and administrative expenses increased as a percent of net sales but decreased in absolute dollars in the third quarter of fiscal year 2024 when compared to the third quarter of fiscal year 2023. The absolute dollar decrease was driven by decreased profit-sharing bonus expense and supplier financing charges due to decreased sales. Selling and administrative expenses increased as a percent of sales and in absolute dollars in first nine months of fiscal year 2024 when compared to the first nine months of fiscal year 2023 driven by increased allowance for credit losses offset by a decrease in supplier financing charges.
Other General Income in the three and nine months ended March 31, 2024 included $0.9 million of pre-tax income resulting from payments received related to the settlement of a class action lawsuit in which Kimball Electronics was a class member. No Other General Income was recorded during the three and nine months ended March 31, 2023.
In the three and nine months ended March 31, 2024, we recorded pre-tax restructuring expense of $1.6 million, for employee-related costs as we undertook a restructuring efforts to align our cost structure with reduced end market demand levels.
In the third quarter of fiscal year 2024, we made the decision to divest of our automation, test and measurement business unit and committed to a plan to sell the business. As a result, the disposal group has met the criteria to be classified as held for sale and we have reported the business unit at the lower of its carrying value or fair value less costs to sell. The carrying value exceeded the fair value less costs to sell, and we recorded pre-tax impairment charges of $5.8 million and $16.6 million on goodwill and assets held for sale, respectively, for the three and nine months ended March 31, 2024. See Note 3 - Assets and Liabilities Held for Sale of Notes to Condensed Consolidated Financial Statements for more information.
Other Income (Expense) consisted of the following:
Three Months EndedNine Months Ended
 March 31March 31
(Amounts in Thousands)2024202320242023
Interest income$83 $45 $483 $88 
Interest expense(5,875)(4,822)(17,459)(10,790)
Foreign currency/derivative gain (loss)(536)1,328 (864)2,581 
Gain (loss) on SERP investments277 353 584 458 
Other(271)(248)(679)(380)
Other income (expense), net$(6,322)$(3,344)$(17,935)$(8,043)
Interest expense has increased in the three months and nine months ended March 31, 2024 compared to the three months and nine months ended March 31, 2023 due to higher interest rates and higher borrowings on credit facilities. Foreign currency/derivative gains (losses) result from net foreign currency exchange rate movements during the periods. The revaluation to fair value of the SERP investments recorded in Other Income (Expense) is offset by the revaluation of the SERP liability recorded in Selling and Administrative Expenses, and thus there is no effect on net income.
Our provision for income taxes for the nine months ended March 31, 2024 and March 31, 2023 was $(1.2) million, or (10.5)% of income before taxes on income, and $11.6 million, or 24.1% of income before taxes on income, respectively. Income taxes and tax rate for the nine months ended March 31, 2024 reflect the tax impacts of the goodwill impairment and asset impairment charges.
We recorded a net loss of $6.1 million in the third quarter of fiscal year 2024, or $(0.24) per diluted share, a decrease of 137% from the third quarter fiscal year 2023 net income of $16.4 million, or $0.65 per diluted share. In the year-to-date period of
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fiscal year 2024, we recorded net income of $13.0 million, or $0.51 per diluted share, a decrease of 65% compared to the year-to-date period of fiscal 2023 net income of $36.6 million, or $1.46 per diluted share. Third quarter and fiscal year to date 2024 results include the following non-recurring charges previously discussed: a $4.4 million after-tax goodwill impairment charge, or $0.18 per diluted share, a $9.5 million after-tax asset impairment charge, or $0.38 per diluted share, and a $1.2 million after-tax restructuring charge, or $0.05 per diluted share.
Open orders were down 6% as of March 31, 2024 compared to March 31, 2023. The decrease in open orders from March 31, 2023 is primarily driven by reduced orders from a large medical customer who is remediating a recall. Open orders are the aggregate sales price of production pursuant to unfulfilled customer orders, which may be delayed or canceled by the customer subject to contractual termination provisions. The majority of open orders as of March 31, 2024 are expected to be filled within the next twelve months. Open orders at a point in time may not be indicative of future sales trends due to the contract nature of our business and the variability of order lead times among our customers.
Liquidity and Capital Resources
Working capital at March 31, 2024 was $450.1 million compared to working capital of $454.3 million at June 30, 2023. The current ratio was 2.0 at both March 31, 2024 and June 30, 2023. The debt-to-equity ratio was 0.6 at March 31, 2024 and 0.5 at June 30, 2023. Our short-term liquidity available, represented as cash and cash equivalents plus the unused amount of our credit facilities, some of which are uncommitted, totaled $182.6 million at March 31, 2024 and $149.1 million at June 30, 2023.
Cash Conversion Days (“CCD”) are calculated as the sum of Days Sales Outstanding (“DSO”) plus Contract Asset Days (“CAD”) plus Production Days Supply on Hand (“PDSOH”) less Accounts Payable Days (“APD”) and less Advances from Customers Days (“ACD”). CCD, or a similar metric, is used in our industry and by our management to measure the efficiency of managing working capital. The following table summarizes our CCD for the quarterly periods indicated.
Three Months Ended
March 31, 2024December 31, 2023March 31, 2023
Days Sales Outstanding596454
Contract Asset Days171814
Production Days Supply on Hand103109101
Accounts Payable Days586569
Advances from Customers Days1198
Cash Conversion Days11011792
We define Days Sales Outstanding as the average of monthly trade accounts and notes receivable divided by an average day’s net sales, Contract Asset Days as the average monthly contract assets divided by an average day’s net sales, Production Days Supply on Hand as the average of monthly gross inventory divided by an average day’s cost of sales, Accounts Payable Days as the average of monthly accounts payable divided by an average day’s cost of sales, and Advances from Customers Days as the total customer deposits divided by an average day’s cost of sales. Inventory and customer deposits classified as long-term are included in the calculation of PDSOH and ACD, respectively. Over the past several quarters, we have supported our customers through strategic inventory builds to mitigate parts shortages, which adversely impacted our PDSOH and CCD metrics. Additionally, through the first nine months of fiscal year 2024, we have experienced customers push out deliveries due to softening consumer demand. As lead times dictate the ordering of components, these push outs negatively impact our cash conversion days and working capital. In these situations, we negotiate with our customers for inventory deposits or consignment arrangements to limit the impact to our balance sheet. We expect inventory levels and working capital to continue to normalize as we seek relief through customer negotiations.
Cash Flows
The following table reflects the major categories of cash flows for the first nine months of fiscal years 2024 and 2023.
Nine Months Ended
March 31
(Amounts in Millions)20242023
Net cash provided by (used for) operating activities$24.7 $(57.9)
Net cash used for investing activities$(37.7)$(66.5)
Net cash provided by financing activities$36.6 $107.1 
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Cash Flows from Operating Activities
Net cash provided by operating activities for the first nine months of fiscal year 2024 was driven by net income adjusted for non-cash items, partially offset by changes in operating assets and liabilities. Net cash used for operating activities for the first nine months of the prior year was driven by changes in operating assets and liabilities. Net income and non-cash adjustments provided cash of $60.0 million, while changes in operating assets and liabilities used $35.3 million of cash in the first nine months of fiscal year 2024. In the first nine months of the prior year, cash used by changes in operating assets and liabilities was $122.3 million.
Net income adjusted for non-cash items provided cash of $60.0 million in the first nine months of fiscal year 2024. Partially offsetting this was cash used of $35.3 million from changes in operating assets and liabilities in the first nine months of fiscal year 2024, largely due to a decrease in accounts payable, which used cash of $71.2 million driven by decreased inventory purchases due to lower sales, and a decrease in accrued expenses and taxes payable, which used $11.5 million primarily driven by timing of income tax and profit-sharing incentive bonus payments. Partially offsetting cash used by accounts payable and accrued expenses and taxes payable was an increase in advances from customers, which provided cash of $32.2 million.
The cash used of $122.3 million from changes in operating assets and liabilities in the first nine months of fiscal year 2023 is largely due to an increase in inventory, which used cash of $88.6 million, driven by investment to support our expansions and growth in Mexico and Thailand, as well as supporting our customers through strategic inventory purchases to mitigate parts shortages, and an increase in accounts receivable, which used cash of $74.0 million primarily resulting from increased sales volumes. Partially offsetting cash used by inventory was an increase in accounts payable, which provided cash of $45.1 million largely resulting from increased inventory purchases.
Cash Flows from Investing Activities
For the first nine months of fiscal years 2024 and 2023, net cash used for investing activities was $37.7 million and $66.5 million, respectively. During the first nine months of fiscal year 2024, we invested $37.9 million into capital expenditures primarily to support new business awards, facility expansions, and replacement of older machinery and equipment. During the first nine months of fiscal year 2023, we invested $66.8 million into capital expenditures primarily for expansions at our Mexico, Thailand, and Poland facilities and to support new business awards.
Cash Flows from Financing Activities
For the first nine months of fiscal year 2024, net cash provided by financing activities of $36.6 million resulted largely from net borrowings on our credit facilities of $38.2 million primarily for working capital purposes and capital expenditures. For the first nine months of fiscal year 2023, net cash provided by financing activities of $107.1 million resulted largely from net borrowings on our credit facilities of $108.7 million primarily for working capital purposes and capital expenditures supporting our expansions.
Credit Facilities
The Company maintains a U.S. primary credit facility (the “primary credit facility”) scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 million at the Company’s request, subject to the consent of each lender participating in such increase. The Company also maintains a 364-day multi-currency revolving credit facility (the “secondary credit facility”), which allows for borrowings up to $100 million and has a maturity date of January 3, 2025. The proceeds of the loans on the primary credit facility and the secondary credit facility are to be used for working capital and general corporate purposes of the Company. We were in compliance with the financial covenants of the primary and secondary credit facilities during the period ended March 31, 2024. As noted in the Future Liquidity section below, we amended our secondary credit facility on January 5, 2024 to increase the borrowings to $100 million.
We also maintain foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources. These foreign credit facilities can be canceled at any time by either the bank or us and generally include renewal clauses. As of March 31, 2024, we maintained foreign credit facilities at our Thailand operation, our EMS operation in China, our Netherlands subsidiary, our Poland operation, and our Vietnam operation.
See Note 7 - Credit Facilities of Notes to Consolidated Financial Statements for more information on our credit facilities, including the terms of the credit facilities such as interest, commitment fees, and debt covenants.

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Factoring Arrangements
The Company utilizes accounts receivable factoring arrangements with third-party financial institutions in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. In the nine months ended March 31, 2024 and 2023, we sold, without recourse, $317.0 million and $357.1 million of accounts receivable, respectively. See Note 1 - Business Description and Summary of Significant Accounting Policies of Notes to Condensed Consolidated Financial Statements for more information regarding the factoring arrangements.
Future Liquidity
We believe our principal sources of liquidity from available funds on hand, cash generated from operations, and the availability of borrowing under our credit facilities, will be sufficient to meet our working capital and other operating needs for at least the next 12 months. The unused borrowings in USD equivalent under all of our credit facilities totaled $117.4 million at March 31, 2024, including the $100 million secondary credit facility. We amended our secondary credit facility on January 5, 2024 to increase the borrowing limit to $100 million from $50 million and change the maturity date to January 3, 2025. The increased borrowing limit will provide us with more liquidity at the enterprise level to meet working capital and other operating needs. Additionally, accounts receivable factoring arrangements could provide flexible access to cash as needed. While our primary credit facility includes a covenant that limits the amount of sold receivables outstanding at any time, currently and historically, we have been considerably below this limit.
We expect to continue to prudently invest in capital expenditures, including for capacity expansions and potential acquisitions, that would help us continue our growth as a multifaceted manufacturing solutions company. We recently completed our Thailand facility expansion in the third quarter of fiscal year 2022, our Mexico facility expansion in the first quarter of fiscal year 2023, and our Poland expansion in the fourth quarter of fiscal year 2023.
At March 31, 2024, our capital expenditure commitments were approximately $14 million, consisting primarily of capital related to new program wins, equipment for facility expansions, and replacement of older machinery and equipment. We anticipate our available liquidity will be sufficient to fund these capital expenditures.
We have purchase obligations that arise in the normal course of business for items such as raw materials, services, and software acquisitions/license commitments. In certain instances, such as when lead times dictate, we enter into contractual agreements for material in excess of the levels required to fulfill customer orders to help mitigate the potential impact related to component shortages, which require longer lead times. In turn, our material authorization agreements with customers cover a portion of the exposure for material which is purchased prior to having a firm order.
At March 31, 2024, our foreign operations held cash totaling $64.7 million. Most of our accumulated unremitted foreign earnings have been invested in active non-U.S. business operations, and it is not anticipated such earnings will be remitted to the United States. Our intent is to permanently reinvest the remaining funds outside of the United States, and our current plans do not demonstrate a need to repatriate these funds to our U.S. operations. However, if such funds were repatriated, a portion of the funds remitted may be subject to applicable non-U.S. income and withholding taxes.
The Company’s Repurchase Plan allows the repurchase of up to $100 million of our common stock. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Repurchase Plan has no expiration date but may be suspended or discontinued at any time. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements, and other corporate considerations, as determined by the Company’s management team. The Company expects to finance the purchases with existing liquidity. The Company has repurchased $88.8 million of common stock under the Repurchase Plan through March 31, 2024.
Our ability to generate cash from operations to meet our liquidity obligations could be adversely affected in the future by factors such as general economic and market conditions, lack of availability of raw material components in the supply chain, a decline in demand for our services, loss of key contract customers, unsuccessful integration of acquisitions and new operations, global health emergencies, and the related uncertainties around the financial impact, and other unforeseen circumstances. In particular, should demand for our customers’ products and, in turn, our services decrease significantly over the next 12 months, the available cash provided by operations could be adversely impacted. Additional cautionary statements regarding our risk factors are contained in our Annual Report on Form 10-K for the year ended June 30, 2023.
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Fair Value
During the third quarter of fiscal year 2024, no level 1 or level 2 financial instruments were affected by a lack of market liquidity. For level 1 financial assets, readily available market pricing was used to value the financial instruments. Our foreign currency derivative assets and liabilities, which were classified as level 2, were independently valued using observable market inputs such as forward interest rate yield curves, current spot rates, and time value calculations. To verify the reasonableness of the independently determined fair values, these derivative fair values were compared to fair values calculated by the counterparty banks. Our own credit risk and counterparty credit risk had an immaterial impact on the valuation of the foreign currency derivatives. See Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements for additional information.
Off-Balance Sheet Arrangements
As of March 31, 2024, we do not have any material off-balance sheet arrangements.
Critical Accounting Policies
Kimball Electronics’ Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates and assumptions that affect amounts reported and disclosed in the Condensed Consolidated Financial Statements and related notes. Actual results could differ from these estimates and assumptions. Management uses its best judgment in the assumptions used to value these estimates, which are based on current facts and circumstances, prior experience, and other assumptions that are believed to be reasonable.
There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the year ended June 30, 2023. For further information regarding our critical accounting policies, refer to “Note 1 - Business Description and Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements and “Critical Accounting Policies” in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2023.
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New Accounting Standards
See Note 1 - Business Description and Summary of Significant Accounting Policies of Notes to Condensed Consolidated Financial Statements for information regarding New Accounting Standards.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes in our exposure to market risks for changes in foreign currency exchange rates and interest rates as compared to the fiscal year ended June 30, 2023.
Comprehensive disclosures of quantitative and qualitative market risk can be found in our Annual Report on Form 10-K for the year ended June 30, 2023.
Item 4. Controls and Procedures
(a)Evaluation of disclosure controls and procedures.
Kimball Electronics maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon their evaluation of those controls and procedures performed, the Chief Executive Officer and Chief Financial Officer of the Company concluded that the disclosure controls and procedures were effective as of March 31, 2024.
(b)Changes in internal control over financial reporting.
There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2024 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
We and our subsidiaries are not parties to any pending legal proceedings, other than ordinary routine litigation incidental to the business. The outcome of current routine pending litigation and claims, individually and in the aggregate, is not expected to have a material adverse impact on our business or financial condition.
Item 1A. Risk Factors
We are subject to various risks and uncertainties in the course of our business. A comprehensive disclosure of risk factors related to Kimball Electronics can be found in our Annual Report on Form 10-K for the year ended June 30, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On October 21, 2015, our Board of Directors (the “Board”) approved an 18-month stock repurchase plan (the “Repurchase Plan”), authorizing the repurchase of up to $20 million worth of our common stock. Then, separately on each of September 29, 2016, August 23, 2017, November 8, 2018, and November 10, 2020, the Board extended and increased the Repurchase Plan to allow the repurchase of up to an additional $20 million worth of common stock with no expiration date, which brought the total authorized stock repurchases under the Repurchase Plan to $100 million.
During the three months ended March 31, 2024, the Company did not purchase any common stock. The Company’s maximum value of remaining shares that may be purchased under the Repurchase Plan was $11.2 million at March 31, 2024.
Item 5. Other Information
During the three months ended March 31, 2024, no officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”


32

Item 6. Exhibits
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Incorporated by Reference
Exhibit No.DescriptionFormPeriod EndingExhibitFiling Date
3.18-K3.12/18/2021
3.28-K3.211/15/2022
31.1Filed Herewith
31.2Filed Herewith
32.1(a)
Furnished Herewith
32.2(a)
Furnished Herewith
101.INS
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document
Filed Herewith
101.SCH
Inline XBRL Taxonomy Extension Schema Document
Filed Herewith
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Filed Herewith
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
Filed Herewith
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
Filed Herewith
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Filed Herewith
104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)Filed Herewith
(a) In accordance with Item 601(b)(32)(ii) of Regulation S-K, the certifications furnished in Exhibit 32.1 and 32.2 will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.



33

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  KIMBALL ELECTRONICS, INC.
   
 By:/s/ RICHARD D. PHILLIPS
  Richard D. Phillips
Chief Executive Officer
  May 8, 2024
   
   
 By:/s/ JANA T. CROOM
  Jana T. Croom
Chief Financial Officer
  May 8, 2024

34

Exhibit 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard D. Phillips, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Kimball Electronics, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 8, 2024 
 /s/ RICHARD D. PHILLIPS
 RICHARD D. PHILLIPS
Chief Executive Officer and Director



Exhibit 31.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jana T. Croom, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Kimball Electronics, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 8, 2024 
  /s/ JANA T. CROOM
  JANA T. CROOM
Chief Financial Officer
   



Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kimball Electronics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard D. Phillips, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:May 8, 2024 
 /s/ RICHARD D. PHILLIPS
 RICHARD D. PHILLIPS
Chief Executive Officer and Director




Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kimball Electronics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jana T. Croom, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:May 8, 2024 
 /s/ JANA T. CROOM
 JANA T. CROOM
Chief Financial Officer


v3.24.1.u1
Document and Entity Information - shares
 9 Months Ended
Mar. 31, 2024
Apr. 23, 2024
Document Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2024  
Document Transition Report false  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Entity Information    
Entity Registrant Name KIMBALL ELECTRONICS, INC.  
Entity Central Index Key 0001606757  
Entity File Number 001-36454  
Entity Incorporation, State or Country Code IN  
Entity Tax Identification Number 35-2047713  
Current Fiscal Year End Date --06-30  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Addresses    
Entity Address, Address Line One 1205 Kimball Boulevard  
Entity Address, City or Town Jasper  
Entity Address, State or Province IN  
Entity Address, Postal Zip Code 47546  
City Area Code 812  
Local Phone Number 634-4000  
Entity Listings    
Title of 12(b) Security Common Stock, no par value  
Trading Symbol KE  
Security Exchange Name NASDAQ  
Entity Common Stock, Shares Outstanding   24,869,206
v3.24.1.u1
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Current Assets:    
Cash and cash equivalents $ 65,208 $ 42,955
Receivables, net of allowances of $1,193 and $257, respectively 277,894 308,167
Contract assets 76,073 78,798
Inventories 396,199 450,319
Prepaid expenses and other current assets 43,018 49,188
Assets held for sale 29,619 0
Total current assets 888,011 929,427
Property and Equipment, net of accumulated depreciation of $309,171 and $293,197, respectively 273,823 267,684
Goodwill 6,191 12,011
Other Intangible Assets, net of accumulated amortization of $27,303 and $38,785, respectively 3,197 12,335
Other Assets, net 89,606 38,262
Total Assets 1,260,828 1,259,719
Current Liabilities:    
Current portion of borrowings under credit facilities 84,618 46,454
Accounts payable 248,174 322,274
Advances from customers 36,099 33,905
Accrued expenses 59,621 72,515
Liabilities held for sale 9,369 0
Total current liabilities 437,881 475,148
Other Liabilities:    
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 45,631 19,718
Total other liabilities 283,886 260,577
Share Owners’ Equity:    
Preferred stock-no par value 0 0
Common stock-no par value 0 0
Additional paid-in capital 317,828 315,482
Retained earnings 309,021 296,053
Accumulated other comprehensive loss (13,064) (11,046)
Treasury stock, at cost (74,724) (76,495)
Total Share Owners’ Equity 539,061 523,994
Total Liabilities and Share Owners’ Equity $ 1,260,828 $ 1,259,719
Preferred Stock, Par or Stated Value Per Share $ 0 $ 0
Common Stock, Par Value Per Share $ 0 $ 0
Common Stock, Shares, Issued 29,430,000 29,430,000
Preferred Stock, Shares Authorized 15,000,000 15,000,000
Preferred Stock, Shares Issued 0 0
v3.24.1.u1
Condensed Consolidated Balance Sheets Parentheticals - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
ASSETS    
Allowance for Doubtful Accounts, Premiums and Other Receivables $ 1,193 $ 257
Property and Equipment Accumulated Depreciation 309,171 293,197
Other Intangible Assets Accumulated Amortization $ 27,303 $ 38,785
Share Owners' Equity    
Preferred Stock, Par or Stated Value Per Share $ 0 $ 0
Preferred Stock, Shares Authorized 15,000,000 15,000,000
Preferred Stock, Shares Issued 0 0
Common Stock, Par Value Per Share $ 0 $ 0
Common Stock, Shares Authorized 150,000,000 150,000,000
Common Stock, Shares, Issued 29,430,000 29,430,000
Common Stock, Shares, Outstanding 24,869,000 24,724,000
Treasury Stock, Shares 4,561,000 4,706,000
v3.24.1.u1
Condensed Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Net Sales $ 425,036 $ 484,703 $ 1,284,352 $ 1,327,288
Cost of Sales 391,492 441,731 1,180,833 1,220,804
Gross Profit 33,544 42,972 103,519 106,484
Selling and Administrative Expenses 16,861 17,752 50,736 50,204
Other General Income (892) 0 (892) 0
Restructuring Expense 1,622 0 1,622 0
Goodwill impairment 5,820 0 5,820 0
Asset Impairment 16,564 0 16,564 0
Operating Income (Loss) (6,431) 25,220 29,669 56,280
Other Income (Expense):        
Interest income 83 45 483 88
Interest expense (5,875) (4,822) (17,459) (10,790)
Non-operating income (expense), net (530) 1,433 (959) 2,659
Other income (expense), net (6,322) (3,344) (17,935) (8,043)
Income (Loss) Before Taxes on Income (12,753) 21,876 11,734 48,237
Provision (Benefit) for Income Taxes (6,677) 5,476 (1,234) 11,608
Net Income (Loss) $ (6,076) $ 16,400 $ 12,968 $ 36,629
Earnings (Loss) Per Share of Common Stock:        
Earnings Per Share, Basic $ (0.24) $ 0.66 $ 0.52 $ 1.47
Earnings Per Share, Diluted $ (0.24) $ 0.65 $ 0.51 $ 1.46
Weighted Average Number of Shares Outstanding, Basic 25,118 24,898 25,084 24,868
Weighted Average Number of Shares Outstanding, Diluted 25,118 25,067 25,263 25,031
v3.24.1.u1
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Net income (loss) $ (6,076) $ 16,400 $ 12,968 $ 36,629
Other comprehensive income (loss):        
Foreign currency translation adjustments, Pre-tax (3,678) 2,094 (1,424) 5,427
Foreign currency translation adjustments, Tax (193) 0 (193) 0
Foreign currency translation adjustments, Net of Tax (3,871) 2,094 (1,617) 5,427
Postemployment actuarial change, Pre-tax (23) (68) (631) (226)
Postemployment actuarial change, Tax 5 18 184 62
Postemployment actuarial change, Net of Tax (18) (50) (447) (164)
Derivative gain (loss), Pre-tax 2,185 3,270 6,156 6,954
Derivative gain (loss), Tax (499) (768) (1,381) (1,501)
Derivative gain (loss), Net of Tax 1,686 2,502 4,775 5,453
Reclassification to (earnings) loss:        
Derivatives, Reclassification to (earnings) loss, Pre-tax (1,600) (1,111) (6,092) (2,596)
Derivatives, Reclassification to (earnings) loss, Tax 352 293 1,347 493
Derivatives, Reclassification to (earnings) loss, Net of Tax (1,248) (818) (4,745) (2,103)
Amortization of actuarial change, Pre-tax 37 (19) 21 (157)
Amortization of actuarial change, Tax (9) 5 (5) 38
Amortization of actuarial change, Net of Tax 28 (14) 16 (119)
Other comprehensive income (loss), Pre-tax (3,079) 4,166 (1,970) 9,402
Other comprehensive income (loss), Tax (344) (452) (48) (908)
Other comprehensive income (loss), Net of Tax (3,423) 3,714 (2,018) 8,494
Total comprehensive income (loss) (9,499) 20,114 10,950 45,123
Foreign Exchange Contract        
Other comprehensive income (loss):        
Derivative gain (loss), Pre-tax $ 2,185 $ 3,270 $ 6,156 $ 6,954
v3.24.1.u1
Condensed Consolidated Statements of Cash Flows
$ in Thousands
 9 Months Ended
Mar. 31, 2024
USD ($)
Mar. 31, 2023
USD ($)
Cash Flows From Operating Activities:    
Net income (loss) $ 12,968 $ 36,629
Adjustments to reconcile net income to net cash provided by (used for) operating activities:    
Depreciation and amortization 28,522 23,840
(Gain) loss on sales of assets 110 (37)
Deferred income taxes (14,149) (1,816)
Goodwill impairment 5,820 0
Asset impairment Charges, Non-cash 16,264 0
Stock-based compensation 5,435 5,357
Other, net 5,025 392
Change in operating assets and liabilities:    
Receivables 16,446 (74,008)
Contract assets 2,725 (11,610)
Inventories 1,865 (88,557)
Prepaid expenses and other assets (5,774) (18,235)
Accounts payable (71,214) 37,689
Advances from customers 32,200 14,400
Accrued expenses and taxes payable (11,526) 18,071
Net cash provided by (used for) operating activities 24,717 (57,885)
Cash Flows From Investing Activities:    
Capital expenditures (37,075) (65,535)
Proceeds from sales of assets 241 278
Purchases of capitalized software (873) (1,293)
Other, net 5 53
Net cash used for investing activities (37,702) (66,497)
Cash Flows From Financing Activities:    
Proceeds from credit facilities 0 75,000
Net change in revolving credit facilities 38,200 33,665
Payments related to tax withholding for stock-based compensation (1,479) (1,417)
Debt issuance costs 150 100
Net cash provided by financing activities 36,571 107,148
Effect of Exchange Rate Change on Cash and Cash Equivalents (113) (294)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 23,473 (17,528)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period (1) 43,864 49,851
Cash, Cash Equivalents, and Restricted Cash at End of Period (1) 67,337 [1] 32,323
Cash paid during the period for:    
Income taxes 21,544 12,771
Interest expense 15,241 7,642
Non-cash investing activity:    
Unpaid purchases of property and equipment at the end of the period 4,927 $ 9,740
Cash and cash equivalents 65,208  
Restricted Cash $ 2,129  
[1]
(1) The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in Prepaid expenses and other current assets on the balance sheet represents funds held by the Company for a foreign subsidiary’s employee savings plan.
v3.24.1.u1
Condensed Consolidated Statements of Cash Flows - Cash Reconciliation - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]        
Cash and cash equivalents $ 65,208 $ 42,955    
Restricted Cash 2,129 909    
Cash, Cash Equivalents, and Restricted Cash $ 67,337 [1] $ 43,864 $ 32,323 $ 49,851
[1]
(1) The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in Prepaid expenses and other current assets on the balance sheet represents funds held by the Company for a foreign subsidiary’s employee savings plan.
v3.24.1.u1
Condensed Consolidated Statement of Share Owners' Equity Statement - USD ($)
$ in Thousands
Total
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Treasury Stock, Common
Share Owners' Equity at Jun. 30, 2022 $ 453,971 $ 311,090 $ 240,222 $ (19,672) $ (77,669)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 36,629   36,629    
Other Comprehensive Income (Loss), Net of Tax 8,494     8,494  
Issuance of non-restricted stock 325 152     173
Compensation expense related to stock compensation plan 5,183 5,183      
Performance Share Issuance (1,416) (2,417)     1,001
Share Owners' Equity at Mar. 31, 2023 503,186 314,008 276,851 (11,178) (76,495)
Share Owners' Equity at Dec. 31, 2022 481,148 312,085 260,451 (14,892) (76,496)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 16,400   16,400    
Other Comprehensive Income (Loss), Net of Tax 3,714     3,714  
Issuance of non-restricted stock 3 2     1
Compensation expense related to stock compensation plan 1,921 1,921      
Share Owners' Equity at Mar. 31, 2023 503,186 314,008 276,851 (11,178) (76,495)
Share Owners' Equity at Jun. 30, 2023 523,994 315,482 296,053 (11,046) (76,495)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 12,968   12,968    
Other Comprehensive Income (Loss), Net of Tax (2,018)     (2,018)  
Issuance of non-restricted stock 457 235     222
Compensation expense related to stock compensation plan 5,138 5,138      
Performance Share Issuance (1,478) (3,027)     1,549
Share Owners' Equity at Mar. 31, 2024 539,061 317,828 309,021 (13,064) (74,724)
Share Owners' Equity at Dec. 31, 2023 546,989 316,309 315,097 (9,641) (74,776)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) (6,076)   (6,076)    
Other Comprehensive Income (Loss), Net of Tax (3,423)     (3,423)  
Compensation expense related to stock compensation plan 1,658 1,658      
Performance Share Issuance (87) (139)     52
Share Owners' Equity at Mar. 31, 2024 $ 539,061 $ 317,828 $ 309,021 $ (13,064) $ (74,724)
v3.24.1.u1
Condensed Consolidated Statement of Share Owners' Equity Parentheticals - shares
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Performance Share Issuance, Shares 0 0 108,000 85,000
Restricted Share Units Issuance, Shares 4,000 0 19,000 0
Stock Issued During Period, Shares, Issued for Services 0 100 18,000 14,100
v3.24.1.u1
Note 1. Business Description and Summary of Significant Accounting Policies
 9 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Significant Accounting Policies Business Description and Summary of Significant Accounting Policies
Business Description:
Kimball Electronics, Inc. (also referred to herein as “Kimball Electronics,” the “Company,” “we,” “us,” or “our”) is a global, multifaceted manufacturing solutions provider. We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. We deliver a package of value that begins with our core competency of producing durable electronics, and we further offer contract manufacturing services for non-electronic components, medical disposables, precision molded plastics, and production automation, test, and inspection equipment. Our design and manufacturing expertise coupled with robust processes and procedures help us ensure that we deliver the highest levels of quality, reliability, and service throughout the entire life cycle of our customers’ products. We deliver award-winning service across our highly integrated global footprint, which is enabled by our largely common operating system, procedures, and standardization. We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service.
Basis of Presentation:
The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of March 31, 2024 and June 30, 2023, results of operations for the three and nine months ended March 31, 2024 and 2023, cash flows for the nine months ended March 31, 2024 and 2023, and share owners’ equity for the three and nine months ended March 31, 2024 and 2023. The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2023 and related notes thereto included in our Annual Report on Form 10-K. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year.
Reclassifications:
Advances from customers are now reported separately on the Condensed Consolidated Statements of Cash Flows. Advances from customers were previously reported in accounts payable and accrued expenses. Prior period amounts have been reclassified to conform to current period presentation. See Note 2 - Revenue from Contracts with Customers of Notes to Condensed Consolidated Financial Statements for more information on advances from customers.
Revenue Recognition:
We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments. Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment built to customer’s specifications. Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle. Typically, our customer agreements do not commit the customer to purchase our services until a purchase order is provided, which is generally short term in nature. Customer purchase orders primarily have a single performance obligation. Generally, the prices stated in the customer purchase orders are agreed upon prices for the manufactured product and do not vary over the term of the order, and therefore, the majority of our contracts do not contain variable consideration. In limited circumstances, we may enter into a contract which contains minimum quantity thresholds to cover our capital costs, and we may offer our customer a rebate for specific volume thresholds or other incentives; in these cases, the rebates or incentives are accounted for as variable consideration.
The majority of our revenue is recognized over time as manufacturing services are performed as we manufacture a product to customer specifications with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining revenue for manufacturing services is recognized when the customer obtains control of the product, typically either upon shipment or delivery of the product dependent on the terms of the contract, and the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset. We generally recognize revenue over time using costs
based input methods, in which judgment is required to evaluate assumptions including anticipated margins to estimate the corresponding amount of revenue to recognize. Costs used as a basis for estimating anticipated margins include material, direct and indirect labor, and appropriate applied overheads. Anticipated margins are determined based on historical or quoted customer pricing. Costs based input methods are considered a faithful depiction of our efforts and progress toward satisfying our performance obligations for manufacturing services and for which we believe we are entitled to payment for performance completed to date. The cumulative effect of revisions to estimates related to net contract revenues or costs are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.
We have elected to account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated services and products. Accordingly, we record customer payments of shipping and handling costs as a component of net sales and classify such costs as a component of cost of sales. We recognize sales net of applicable sales or value add taxes. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time revenue is recognized, resulting in a reduction of net revenue.
Direct incremental costs to obtain and fulfill a contract are capitalized as a contract asset only if they are material, expected to be recovered, and are not accounted for in accordance with other guidance. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred.
Trade Accounts Receivable:
The Company’s trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. Our policy for estimating the allowance for credit losses on trade accounts receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to estimate expected credit losses. Management believes that historical loss information generally provides a basis for its assessment of expected credit losses. Trade accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income.
In the ordinary course of business, customers periodically negotiate extended payment terms on trade accounts receivable. Customary terms require payment within 30 to 45 days, with any terms beyond 45 days being considered extended payment terms. We utilize factoring arrangements for certain of our accounts receivables with third-party financial institutions in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. We also have the ability to and have periodically utilized additional accounts receivable factoring arrangements to provide flexible access to cash as needed. In the nine months ended March 31, 2024 and 2023, we sold, without recourse, $317.0 million and $357.1 million of accounts receivable, respectively. For the three months ended March 31, 2024 and 2023, factoring fees were $0.9 million and $1.4 million, and $2.6 million and $3.8 million during the nine months ended March 31, 2024 and 2023, respectively. Factoring fees are recorded in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income.
During the three months ended December 31, 2023, changes to the expected timing of payments from and risk of default for a customer resulted in the recording of an allowance for credit losses of $2.0 million in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income. Although the customer is not in bankruptcy and we will continue to pursue full recovery, an allowance was deemed necessary in consideration of the expected timing of payments and risk of default. The amount expected to be collected after twelve months is included in Other Assets, net on the Condensed Consolidated Balance Sheet. At March 31, 2024, the noncurrent receivable associated with this customer in Other Assets, net totaled $2.5 million, which is net of the $2.0 million allowance for expected credit losses. The current portion of receivables from this customer is $2.8 million at March 31, 2024.
Goodwill and Other Intangible Assets:
Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, goodwill is assessed or tested at the reporting unit level. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down to its estimated fair value. Other Intangible Assets consist of capitalized software, customer relationships, technology, and trade name, and are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. During the quarter ending March 31, 2024, the Company made the decision to divest of GES, our automation, test and measurement business unit and committed to a plan to sell the business. As a result, the business unit met the criteria to be classified as held for sale, and goodwill and asset impairment were recorded during the quarter. See Note 3 - Assets and Liabilities Held for Sale for more information on goodwill and asset impairment and Note 12 - Goodwill and Other Intangible Assets of Notes to Condensed Consolidated Financial Statements for more information on Goodwill and Other Intangible Assets.
Leases:
The Company leases certain office facilities, warehouse facilities, and equipment under operating leases, in addition to land on which certain office and manufacturing facilities resides. Operating lease costs and cash payments for operating leases are immaterial to the Condensed Consolidated Statements of Income and our Condensed Consolidated Statements of Cash Flows. Lease right-of-use assets and lease liabilities each totaled $1.9 million at March 31, 2024 and $2.6 million at June 30, 2023, respectively. Lease right-of-use assets are included in Other Assets, net and lease liabilities are included in Accrued expenses and Other long-term liabilities on the Condensed Consolidated Balance Sheets.
Other General Income:
Other General Income in the three and nine months ended March 31, 2024 included $0.9 million of pre-tax income resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. These lawsuits alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components.
Restructuring:
We recorded restructuring expense of $1.6 million in the three and nine months ended March 31, 2024 for employee-related costs as we undertook restructuring efforts during the current quarter to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions. We expect to continue executing the restructuring efforts over the remainder of the calendar year and estimate between $1.0 million and $2.0 million of additional pre-tax restructuring charges.
Non-operating Income (Expense), net:
Non-operating income (expense), net includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expenses.
Components of Non-operating income (expense), net:
 Three Months EndedNine Months Ended
 March 31March 31
(Amounts in Thousands)2024202320242023
Foreign currency/derivative gain (loss)$(536)$1,328 $(864)$2,581 
Gain (loss) on SERP investments277 353 584 458 
Other(271)(248)(679)(380)
Non-operating income (expense), net$(530)$1,433 $(959)$2,659 
Income Taxes:
In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.
Deferred income tax assets and liabilities, recorded in Other Assets, net and Other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets, are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment.
We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Condensed Consolidated Statements of Income.
The U.S. Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law on December 22, 2017, making broad and complex changes to the U.S. tax code, for which complete guidance may have not yet been issued. Tax Reform, in addition to other changes, required a one-time transition tax on certain unremitted earnings of foreign subsidiaries that is payable over an eight-year period. As of March 31, 2024 and June 30, 2023, the remaining provision recorded for the one-time deemed repatriation tax was $5.9 million and $7.8 million, respectively, payable through fiscal year 2026, with the long-term portion recorded in Long-term income taxes payable on the Condensed Consolidated Balance Sheets. As of March 31, 2024, $2.6 million of the remaining deemed repatriation tax is short term and is recorded in Accrued expenses on the Condensed Consolidated Balance Sheets.
New Accounting Standards:
Not Yet Adopted:
In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance on Improvements to Reportable Segment Disclosures, requiring additional, more detailed information about a reportable segment. The guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.
In December 2023, the FASB issued guidance on Improvements to Income Tax Disclosures, intended to enhance the transparency and decision usefulness of income tax disclosures. The guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.
Reclassifications
Reclassifications:
Advances from customers are now reported separately on the Condensed Consolidated Statements of Cash Flows. Advances from customers were previously reported in accounts payable and accrued expenses. Prior period amounts have been reclassified to conform to current period presentation. See Note 2 - Revenue from Contracts with Customers of Notes to Condensed Consolidated Financial Statements for more information on advances from customers.
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Note 2. Revenue from Contracts with Customers
 9 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer Revenue from Contracts with Customers
Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, electronic and non-electronic components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment in automotive, medical, and industrial applications, to the specifications and designs of our customers. Beginning in fiscal year 2024, the Company changed its presentation of revenue for miscellaneous sales previously included in Other to include in the respective customers’ end market verticals. Prior year periods have been recast to conform to the current year presentation.
The following table disaggregates our revenue by end market vertical for the three and nine months ended March 31, 2024 and 2023.
Three Months EndedNine Months Ended
March 31March 31
(Amounts in Millions)2024202320242023
Vertical Markets:
Automotive (1)
$202.0 $221.9 $614.7 $615.3 
Medical (2)
113.0 135.5 323.5 377.1 
Industrial (3)
110.0 127.3 346.2 334.9 
Total net sales$425.0 $484.7 $1,284.4 $1,327.3 
(1)    For the three and nine months ended March 31, 2023, respectively, $5.9 million and $14.8 million of the Automotive net sales were previously categorized as Other.
(2)    For the three and nine months ended March 31, 2023, respectively, $1.5 million and $3.6 million of the Medical net sales were previously categorized as Other.
(3)    For the three and nine months ended March 31, 2023, respectively, $0.4 million and $2.1 million of the Industrial net sales were previously categorized as Other.
For the three months ended March 31, 2024 and 2023, approximately 97% and 96% of our net sales, respectively, were recognized over time as manufacturing services were performed under a customer contract on a product with no alternative use and we have an enforceable right to payment for performance completed to date. For both the nine months ended March 31, 2024 and 2023, approximately 96% of our net sales, respectively, were recognized over time. The remaining sales revenues were recognized at a point in time when the customer obtained control of the products.
The timing differences of revenue recognition, billings to our customers, and cash collections from our customers result in billed accounts receivable and unbilled accounts receivable. Contract assets on the Condensed Consolidated Balance Sheets relate to unbilled accounts receivable and occur when revenue is recognized over time as manufacturing services are provided and the billing to the customer has not yet occurred as of the balance sheet date, which are generally transferred to receivables in the next fiscal quarter due to the short-term nature of the manufacturing cycle. Contract assets were $76.1 million and $78.8 million as of March 31, 2024 and June 30, 2023, respectively.
The Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for material price variances, inventory purchases, tooling, or other miscellaneous services or costs. These payments are recognized as contract liabilities until the performance obligations are completed and are included in Advances from customers, if inventory related, and Accrued expenses, if not inventory related, on the Condensed Consolidated Balance Sheets, which amounted to $49.6 million and $45.6 million as of March 31, 2024 and June 30, 2023, respectively. Our performance obligations are short term in nature and therefore our contract liabilities are all expected to be settled within twelve months. We also have deposits associated with inventory purchases classified as long term. See Note 4 - Inventories of Notes to Condensed Consolidated Financial Statements for further discussion.
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Note 3. Assets and Liabilities Held for Sale
 9 Months Ended
Mar. 31, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure Assets and Liabilities Held for Sale
In the third quarter of fiscal year 2024, the Company made the decision to divest of GES, our automation, test and measurement business unit (“disposal group”), and committed to a plan to sell the business, allowing for increased focus and support for the Company’s EMS operations. As a result, the disposal group business has met the criteria to be classified as held for sale. Accordingly, the Company classified the assets and liabilities of the disposal group as held for sale during the third quarter of fiscal year 2024. The Company expects a sale of the disposal group to occur within the next 12 months. The disposal group did not qualify as discontinued operations as it did not represent a strategic shift that will have a major effect on our operations and financial results.
Once the disposal group was classified as held for sale, it was reported at the lower of its carrying value or fair value less costs to sell during the quarter ended March 31, 2024. The carrying value exceeded the fair value less costs to sell, and the Company recognized impairment charges of $5.8 million and $16.6 million on goodwill and assets held for sale, respectively. The Company ceased recording depreciation and amortization on the applicable assets of the disposal group.
We assess goodwill for impairment at the reporting unit level annually or when conditions indicate an earlier review is necessary. In connection with the preparation of our financial statements for the quarter ended March 31, 2024, we completed an impairment analysis for the goodwill recorded in the reporting unit due to the more-likely-than-not expectation of selling the reporting unit. We determined the reporting unit’s carrying value was more than its fair value by an amount greater than the $5.8 million carrying amount of goodwill and thus was fully impaired. See Note 12 - Goodwill and Other Intangible Assets of Notes to Condensed Consolidated Financial Statements for more information on Goodwill.
The major classes of assets and liabilities held for sale consisted of the following:
(Amounts in Thousands)March 31,
2024
Assets held for sale:
Receivables, net$8,599 
Inventories7,217 
Prepaid expenses and other current assets4,766 
Property and Equipment, net5,822 
Goodwill— 
Other Intangible Assets, net8,010 
Other Assets, net
11,469 
Valuation Allowance(16,264)
Total Assets held for sale$29,619 
Liabilities held for sale:
Accounts payable$4,239 
Advances from customers944 
Accrued expenses2,302 
Other long-term liabilities1,884 
Total Liabilities held for sale$9,369 
Other assets, net in the table above includes $10.2 million of deferred tax assets.
The following table summarizes net sales and income (loss) before taxes on income for the disposal group:
Three Months EndedNine Months Ended
March 31March 31
(Amounts in Thousands)2024202320242023
Net Sales$8,105 $16,755 $30,903 $40,577 
Income (Loss) Before Taxes on Income (1)
$(25,691)$1,352 $(25,141)$(976)
(1) Includes goodwill impairment of $5.8 million and asset impairment of $16.6 million for the three and nine months ended March 31, 2024. Also includes allocated corporate overhead expenses.
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Note 4. Inventories
 9 Months Ended
Mar. 31, 2024
Inventory Disclosure [Abstract]  
Inventory Disclosure Inventories
Inventories were valued using the lower of first-in, first-out (“FIFO”) cost and net realizable value. Inventory components were as follows:
(Amounts in Thousands)March 31, 2024June 30, 2023
Finished products$391 $432 
Work-in-process— 3,117 
Raw materials395,808 446,770 
Total inventory$396,199 $450,319 
Additionally, we have raw materials inventory totaling $44.1 million classified as long-term included in Other Assets, net in our Condensed Consolidated Balance Sheets. This inventory is associated with a customer who is remediating a recall and we do not expect the inventory to be consumed within the next twelve months. We have received deposits totaling $29.1 million from this customer related to this inventory, which is included in Other long-term liabilities in our Condensed Consolidated Balance Sheets. At June 30, 2023, we had no inventory or customer deposits classified as long-term.
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Note 5. Accumulated Other Comprehensive Income (Loss)
 9 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Accumulated Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss)
During the nine months ended March 31, 2024 and 2023, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:
Accumulated Other Comprehensive Income (Loss)
(Amounts in Thousands)Foreign Currency Translation AdjustmentsDerivative Gain (Loss)Post Employment Benefits
Net Actuarial Gain (Loss)		Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2023
$(11,832)$1,368 $(582)$(11,046)
Other comprehensive income (loss) before reclassifications(1,617)4,775 (447)2,711 
Reclassification to (earnings) loss— (4,745)16 (4,729)
Net current-period other comprehensive income (loss)(1,617)30 (431)(2,018)
Balance at March 31, 2024
$(13,449)$1,398 $(1,013)$(13,064)
Balance at June 30, 2022
$(17,349)$(2,203)$(120)$(19,672)
Other comprehensive income (loss) before reclassifications5,427 5,453 (164)10,716 
Reclassification to (earnings) loss— (2,103)(119)(2,222)
Net current-period other comprehensive income (loss)5,427 3,350 (283)8,494 
Balance at March 31, 2023
$(11,922)$1,147 $(403)$(11,178)
The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income:
Reclassifications from Accumulated Other Comprehensive Income (Loss)Three Months EndedNine Months EndedAffected Line Item in the Condensed Consolidated Statements of Income
March 31March 31
(Amounts in Thousands)2024202320242023
Derivative gain (loss) (1)
$1,600 $1,111 $6,092 $2,596 Cost of Sales
(352)(293)(1,347)(493)Benefit (Provision) for Income Taxes
$1,248 $818 $4,745 $2,103 Net of Tax
Postemployment Benefits:
  Amortization of actuarial gain (2)
(37)19 (21)157 Non-operating income (expense), net
9 (5)5 (38)Benefit (Provision) for Income Taxes
$(28)$14 $(16)$119 Net of Tax
Total reclassifications for the period$1,220 $832 $4,729 $2,222 Net of Tax
Amounts in parentheses indicate reductions to income.
(1) See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.
(2) See Note 10 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.
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Note 6. Commitments and Contingent Liabilities
 9 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure Commitments and Contingent Liabilities
The Company typically provides only assurance-type warranties for a limited time period, which cover workmanship and assures the product complies with specifications provided by or agreed upon with the customer. We maintain a provision for limited warranty repair or replacement of products manufactured and sold, which has been established in specific manufacturing contract agreements. We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability regularly based on changes in historical cost trends and in certain cases where specific warranty issues become known. This product warranty liability and expense were immaterial during the nine months ended March 31, 2024 and 2023.
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Note 7. Credit Facilities
 9 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Debt Disclosure Credit Facilities
Credit facilities consisted of the following:
Available
Borrowing Capacity at		Borrowings Outstanding atBorrowings Outstanding at
(Amounts in Millions, in U.S Dollar Equivalents)March 31, 2024March 31, 2024June 30, 2023
Primary credit facility (1)
$— $299.7 $272.1 
Secondary credit facility (2)
89.4 10.6 — 
Thailand overdraft credit facility (3)
10.1 — — 
China revolving credit facility (3)
6.9 — — 
Netherlands revolving credit facility (3)
0.6 9.3 9.4 
Poland revolving credit facility (3)
5.4 — — 
Vietnam credit facility (3)
5.0 — — 
Total credit facilities$117.4 $319.6 $281.5 
Less: current portion $(84.6)$(46.5)
Long-term debt under credit facilities, less current portion (4)
$235.0 $235.0 
(1)    The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N. A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 million upon request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company. A commitment fee is payable on the unused portion of the credit facility at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary credit facility. Types of borrowings available on the primary credit facility include revolving loans, multi-currency term loans, and swingline loans.
The interest rate on borrowings is dependent on the type and currencies of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus the Revolving Commitment ABR spread which can range from 0.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA.
The Company’s financial covenants under the primary credit facility require:
•a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and,
•an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.
The Company had $0.4 million in letters of credit contingently committed against the credit facility at both March 31, 2024 and June 30, 2023.
(2)    The Company amended its 364-day multi-currency revolving credit facility agreement on January 5, 2024 (the “secondary credit facility”), which allows for borrowings up to $100.0 million, among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., as Documentation Agent. The secondary credit facility has a maturity date of January 3, 2025. The proceeds of the loans are to be used for working capital and general corporate purposes of the Company. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 30.0 basis points per annum.
The interest rate on borrowings is dependent on the type of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus a Revolving Commitment ABR spread of 75.0 basis points.
The Company’s financial covenants under this secondary credit facility are the same as the financial covenants for its primary credit facility.
(3)    The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources. These foreign credit facilities can be canceled at any time by either the bank or us and generally include renewal clauses. Interest on borrowing under these facilities is charged at a rate as defined under the respective foreign credit facility. During the second quarter of fiscal year 2024, the Company entered into a foreign credit facility for its EMS operation in China with a new lender, which allows for borrowings up to 50 million RMB, and canceled the prior credit facility which allowed for borrowings up to $7.5 million.
(4)    The amount of Long-term debt under credit facilities, less current maturities, reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on May 4, 2027.
The weighted-average interest rate on borrowings outstanding under the credit facilities at March 31, 2024 and June 30, 2023 were 6.9% and 6.8%, respectively.
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Note 8. Fair Value
 9 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value
The Company categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
There were no changes in the inputs or valuation techniques used to measure fair values during the nine months ended March 31, 2024. For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2023.
Recurring Fair Value Measurements:
As of March 31, 2024 and June 30, 2023, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:
 March 31, 2024
(Amounts in Thousands)Level 1Level 2Total
Assets   
Derivatives: foreign exchange contracts$— $4,712 $4,712 
Trading securities: mutual funds held in nonqualified SERP5,318 — 5,318 
Total assets at fair value$5,318 $4,712 $10,030 
Liabilities   
Derivatives: foreign exchange contracts$— $794 $794 
Total liabilities at fair value$— $794 $794 
    
 June 30, 2023
(Amounts in Thousands)Level 1Level 2Total
Assets   
Derivatives: foreign exchange contracts$— $6,320 $6,320 
Trading securities: mutual funds held in nonqualified SERP8,668 — 8,668 
Total assets at fair value$8,668 $6,320 $14,988 
Liabilities   
Derivatives: foreign exchange contracts$— $1,245 $1,245 
Total liabilities at fair value$— $1,245 $1,245 
We had no level 3 assets or liabilities at March 31, 2024 and June 30, 2023, or any activity in Level 3 assets or liabilities during the nine months ended March 31, 2024.
The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, bond funds, and a money market fund. The SERP investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants. See Note 10 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.
Non-Recurring Fair Value Measurements:
As of March 31, 2024, the automation, test and measurement business unit met the criteria to be classified as held for sale, and as a result, a valuation allowance of $16.3 million was established to reflect the fair value less cost to sell of the disposal group, which was based on expected proceeds and the estimated carrying value of the net assets to be disposed. We utilized Level 3 inputs based on management’s best estimates and assumptions to estimate the fair value. See Note 3 - Assets and Liabilities Held for Sale of Notes to Condensed Consolidated Financial Statements for additional information.
Financial Instruments Not Carried At Fair Value:
Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include notes receivable and borrowings under credit facilities. There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the nine months ended March 31, 2024. For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2023.
The carrying values of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximate fair value due to the relatively short maturity and immaterial non-performance risk.
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Note 9. Derivative Instruments
 9 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure Derivative Instruments
Foreign Exchange Contracts:
We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of business. Our primary means of managing this exposure is to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques do not fully offset currency risk, we use derivative instruments with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes.
We use forward contracts designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Non-designated foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances and other balance sheet positions denominated in currencies other than the functional currencies. As of March 31, 2024, we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $25.6 million and to hedge currencies against the Euro in the aggregate notional amount of 67.2 million Euro. The notional amounts are indicators of the volume of derivative activities but may not be indicators of the potential gain or loss on the derivatives.
In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may cease to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, we may either purchase a derivative contract in the opposite position of the undesignated hedge or may retain the hedge until it matures if the hedge continues to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities.
The fair value of outstanding derivative instruments is recognized on the Condensed Consolidated Balance Sheets as a derivative asset or liability and presented with Prepaid expenses and other current assets and Accrued expenses, respectively. When derivatives are settled with the counterparty, the derivative asset or liability is relieved and cash flow is impacted for the net settlement. For derivative instruments that meet the criteria of hedging instruments under FASB guidance, the gain or loss on the derivative instrument is initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners’ Equity, and is subsequently reclassified into earnings in the period or periods during which the hedged transaction is recognized in earnings. The gain or loss associated with derivative instruments that are not designated as hedging instruments or that cease to meet the criteria for hedging under FASB guidance is reported immediately in Non-operating income (expense), net on the Condensed Consolidated Statements of Income.
Based on fair values as of March 31, 2024, we estimate that approximately $3.5 million of pre-tax derivative gain deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next 12 months. Gains on foreign exchange contracts are generally offset by losses in operating income in the income statement when the underlying hedged transaction is recognized in earnings. Because gains or losses on foreign exchange contracts fluctuate partially based on currency spot rates, the future effect on earnings of the cash flow hedges alone is not determinable, but in conjunction with the underlying hedged transactions, the result is expected to be a decline in currency risk. The maximum length of time we had hedged our exposure to the variability in future cash flows was 12 months as of both March 31, 2024 and June 30, 2023.
See Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 5 - Accumulated Other Comprehensive Income (Loss) of Notes to Condensed Consolidated Financial Statements for the changes in deferred derivative gains and losses.
Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.
Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets
Asset DerivativesLiability Derivatives
Fair Value As of Fair Value As of
(Amounts in Thousands)Balance Sheet LocationMarch 31,
2024		June 30,
2023		Balance Sheet LocationMarch 31,
2024		June 30,
2023
Derivatives Designated as Hedging Instruments:
Foreign exchange contractsPrepaid expenses and other current assets$4,345 $4,772 Accrued expenses$742 $844 
      
Derivatives Not Designated as Hedging Instruments:    
Foreign exchange contractsPrepaid expenses and other current assets367 1,548 Accrued expenses52 401 
Total derivatives $4,712 $6,320  $794 $1,245 
The Effect of Derivative Instruments on Other Comprehensive Income (Loss)
  Three Months EndedNine Months Ended
March 31March 31
(Amounts in Thousands) 2024202320242023
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives:  
Foreign exchange contracts $2,185 $3,270 $6,156 $6,954 
The Effect of Derivative Instruments on Condensed Consolidated Statements of Income
 Three Months EndedNine Months Ended
(Amounts in Thousands)March 31March 31
Derivatives in Cash Flow Hedging RelationshipsLocation of Gain or (Loss) 2024202320242023
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: 
Foreign exchange contractsCost of Sales$1,600 $1,111 $6,092 $2,596 
Derivatives Not Designated as Hedging Instruments   
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives:  
Foreign exchange contractsNon-operating income (expense)$650 $(286)$(223)$171 
   
Total Derivative Pre-Tax Gain (Loss) Recognized in Income$2,250 $825 $5,869 $2,767 
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Note 10. Employee Benefit Plans
 9 Months Ended
Mar. 31, 2024
Retirement Benefits [Abstract]  
Postemployment Benefits Disclosure Employee Benefit Plans
Defined Contribution Retirement Plan:
The Company maintains a trusteed defined contribution retirement plan which is in effect for substantially all domestic employees meeting the eligibility requirements. The Company matches 50% of eligible employee contributions up to 6%. The Company also provides a discretionary contribution determined annually by the Talent, Culture, and Compensation Committee of the Company’s Board of Directors. Total expense related to employer contributions to the domestic retirement plans was, in millions, $3.7 million and $4.2 million for the nine months ended March 31, 2024 and March 31, 2023, respectively.
The Company also maintains a supplemental employee retirement plan (“SERP”) for executives and other key employees which enables them to defer cash compensation on a pre-tax basis and restore amounts that would otherwise be payable under our tax-qualified retirement plans if the IRS did not have limits on includable compensation and maximum benefits. The SERP is structured as a rabbi trust, and therefore, assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. We recognize SERP investment assets on the balance sheet at current fair value. A SERP liability of the same amount is recorded on the balance sheet representing an obligation to distribute SERP funds to participants. As of March 31, 2024, both total investments and obligations under SERP were $5.4 million, of which $0.3 million were short term and $5.1 million were long term. As of June 30, 2023, both total investments and obligations under SERP were $8.7 million, of which $2.7 million were short term and $6.0 million were long term. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in the Other Income (Expense) category on our Condensed Consolidated Statements of Income. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. The change in net unrealized holding gains for both the nine months ended March 31, 2024 and 2023 was approximately $0.4 million and $0.1 million, respectively.
Defined Benefit Postemployment Plan:
The Company established and maintains severance plans for all domestic employees and other postemployment plans for certain foreign subsidiaries. There are no statutory requirements for us to contribute to the plans, nor do employees contribute to the plans. The plans hold no assets. Benefits are paid using available cash on hand when eligible employees meet plan qualifications for payment. As of March 31, 2024, total obligations under these plans were $7.4 million of which $5.7 million were long term and $1.7 million were short term. As of June 30, 2023, total obligations under these plans were $6.6 million of which $5.6 million were long term and $1.0 million were short term. Net periodic benefit costs were not material for the nine months ended March 31, 2024 and 2023.
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Note 11. Stock Compensation Plans
 9 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments Stock Compensation Plans
A stock compensation plan was created and adopted by the Company’s Board of Directors (the “Board”) on October 3, 2014. The Kimball Electronics, Inc. 2014 Stock Option and Incentive Plan (the “2014 Plan”) allows for the issuance of up to 4.5 million shares and may be granted in the form of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units. The Plan is a ten-year plan with no further awards allowed to be made under the Plan after October 1, 2024. On September 20, 2023, on the recommendation of our Talent, Culture, and Compensation (TCC) Committee, our Board adopted the Kimball Electronics, Inc. 2023 Equity Incentive Plan (the “2023 Plan”), subject to Share Owner approval at our 2023 Annual Meeting. The 2023 Plan was approved by our Share Owners on November 17, 2023. The 2023 Plan supersedes our 2014 Plan and allows for the issuance of up to 2.0 million shares. The shares under the 2023 Plan may be granted in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, cash awards, and other equity awards.
On October 20, 2016, the Board approved a nonqualified deferred stock compensation plan, the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan (the “Deferral Plan”), which allows Non-Employee Directors to elect to defer all, or a portion of, their retainer fees in stock until retirement or termination from the Board or death. The Deferral Plan allows for issuance of up to 1.0 million shares of the Company’s common stock. For more information on the 2014 Plan and the Deferral Plan, refer to our Annual Report on Form 10-K for the year ended June 30, 2023. For more information on the 2023 Plan, refer to our Notice of 2023 Annual Meeting and Proxy Statement.
During the first nine months of fiscal year 2024, the following stock compensation was granted under the 2014 Plan, the 2023 Plan, and the Deferral Plan.
Stock Compensation GrantedQuarter GrantedShares/Units
Grant Date Fair Value (2)
Long-Term Performance Shares (1)
1st Quarter172,079 $29.19 
Restricted Shares (3)
1st Quarter71,422 $29.19 
Long-Term Performance Shares (4)
2nd Quarter35,650 $25.21 
Restricted Shares (4)
2nd Quarter23,768 $25.21 
Unrestricted Shares (5)
2nd Quarter18,128 $25.24 
Deferred Share Units (6)
2nd Quarter26,347 $25.24 
(1) Long-term performance share awards were granted to officers and other key employees. These annual performance share awards were approved by the Talent, Culture, and Compensation Committee of the Board. The awards granted in fiscal year 2024 will cliff vest at the third anniversary of the award date in fiscal year 2027.
Under these awards, a number of shares will be issued to each participant based upon a combination of the Company’s profitability based on its operating income over the performance period as defined in the Company’s operating business plans for the applicable fiscal years and the Company’s growth based on a comparison of its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100% of one or both of the above-mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of either metric. The number of shares issued will exceed the number of targeted shares issuable (up to a maximum of 125%) if the Company exceeds 100% of one or both of the above-mentioned incentive metrics.
(2) The grant date fair value is the weighted average stock price based on the dates of the grants.
(3) Restricted shares were granted to officers and other key employees. These restricted shares were approved by the Talent, Culture, and Compensation Committee of the Board. The contractual life of the restricted shares is three years, with one-third of the interest in the restricted shares vested after year one of the grant, another one-third after year two of the grant, and the final one-third after year three of the grant. Restricted shares are expensed over the contractual vesting period as earned. If the employment of a holder of restricted shares terminates before the RSU has vested for any reason other than death, retirement, or disability, the restricted shares not yet vested will be forfeited.
(4) Additional long-term performance share and restricted share awards were approved by the Talent, Culture, and Compensation Committee of the Board and were granted in the second quarter of fiscal year 2024. The awards will vest over a 5-year performance cycle, with one-third of the interest in the shares vesting after year three of the grant, another one-third after year four of the grant, and the final one-third after year five of the grant. The vesting of the performance share awards could range from 0% to 100% of the targeted issuable shares, dependent on the achievement of specific performance metrics.
(5) Unrestricted shares were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions.
(6) Deferred share units were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock in a lump sum or installments in accordance with deferral elections upon a Director’s retirement or termination from the Board or death.
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Note 12. Goodwill and Other Intangible Assets
 9 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure Goodwill and Other Intangible Assets
A summary of goodwill is as follows, amounts as of March 31, 2024 exclude the amounts classified as held for sale:
(Amounts in Thousands)
Balance as of June 30, 2023
Goodwill$32,762 
Accumulated impairment(20,751)
Goodwill, net$12,011 
Impairment recorded
(5,820)
Goodwill classified as held for sale
(13,745)
Accumulated impairment classified as held for sale
13,745 
Balance as of March 31, 2024
Goodwill19,017 
Accumulated impairment(12,826)
Goodwill, net$6,191 
A summary of other intangible assets subject to amortization is as follows, amounts as of March 31, 2024 exclude the amounts classified as held for sale:
 March 31, 2024June 30, 2023
(Amounts in Thousands)CostAccumulated
Amortization		Net ValueCostAccumulated
Amortization		Net Value
Capitalized Software$30,500 $(27,303)$3,197 $30,867 $(27,385)$3,482 
Customer Relationships— — — 8,618 (3,524)5,094 
Technology— — — 5,060 (4,816)244 
Trade Name— — — 6,575 (3,060)3,515 
Other Intangible Assets$30,500 $(27,303)$3,197 $51,120 $(38,785)$12,335 
For the three months ended March 31, 2024 and 2023, amortization expense of other intangible assets was $0.5 million and $0.9 million, respectively. For the nine months ended March 31, 2024 and 2023, amortization expense of other intangible assets was $2.0 million and $2.6 million, respectively.
The estimated useful life of internal-use software ranges from 3 years to 10 years. The amortization period for the customer relationships, technology, and trade name intangible assets was 15 years, 5 years, and 10 years, respectively. We ceased amortization on the intangible assets upon meeting the held for sale classification. See Note 3 - Assets and Liabilities Held for Sale of Notes to Condensed Consolidated Financial Statements for additional information. We have no intangible assets with indefinite useful lives which are not subject to amortization.
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Note 13. Share Owners' Equity
 9 Months Ended
Mar. 31, 2024
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure Share Owners’ Equity
The Company has a Board-authorized stock repurchase plan (the “Repurchase Plan”) allowing the repurchase of up to $100 million of our common stock. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Repurchase Plan has no expiration date but may be suspended or discontinued at any time.
During both the nine months ended March 31, 2024 and 2023, the Company had no share repurchases under the Repurchase Plan. Since the inception of the Repurchase Plan, the Company has repurchased $88.8 million of common stock at an average cost of $15.27 per share.
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Note 14. Earnings Per Share
 9 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
Basic and diluted earnings per share were calculated as follows under the two-class method:
Three Months EndedNine Months Ended
March 31March 31
(Amounts in thousands, except per share data)2024202320242023
Basic and Diluted Earnings Per Share:
   Net Income$(6,076)$16,400 $12,968 $36,629 
   Less: Net Income allocated to participating securities— 24 16 53 
   Net Income allocated to common Share Owners$(6,076)$16,376 $12,952 $36,576 
Basic weighted average common shares outstanding25,118 24,898 25,084 24,868 
Dilutive effect of average outstanding stock compensation awards— 169 179 163 
Dilutive weighted average shares outstanding25,118 25,067 25,263 25,031 
Earnings Per Share of Common Stock:
Basic$(0.24)$0.66 $0.52 $1.47 
Diluted$(0.24)$0.65 $0.51 $1.46 
For the three months ended March 31, 2024, all 434,000 outstanding stock compensation awards were antidilutive, as a result of the net loss recognized for the period, and were excluded from the dilutive calculation. The net loss in the three months ended March 31, 2024 was not allocated to participating securities as the holders have no requirements to fund losses. For the nine months ended March 31, 2024 and for the three and nine months ended March 31, 2023, all outstanding stock compensation awards were dilutive and were included in the dilutive calculation.
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Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure        
Net income (loss) $ (6,076) $ 16,400 $ 12,968 $ 36,629
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Insider Trading Arrangements
 9 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
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Note 1. Business Description and Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation:
The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of March 31, 2024 and June 30, 2023, results of operations for the three and nine months ended March 31, 2024 and 2023, cash flows for the nine months ended March 31, 2024 and 2023, and share owners’ equity for the three and nine months ended March 31, 2024 and 2023. The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2023 and related notes thereto included in our Annual Report on Form 10-K. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year.
Revenue Recognition
Revenue Recognition:
We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments. Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment built to customer’s specifications. Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle. Typically, our customer agreements do not commit the customer to purchase our services until a purchase order is provided, which is generally short term in nature. Customer purchase orders primarily have a single performance obligation. Generally, the prices stated in the customer purchase orders are agreed upon prices for the manufactured product and do not vary over the term of the order, and therefore, the majority of our contracts do not contain variable consideration. In limited circumstances, we may enter into a contract which contains minimum quantity thresholds to cover our capital costs, and we may offer our customer a rebate for specific volume thresholds or other incentives; in these cases, the rebates or incentives are accounted for as variable consideration.
The majority of our revenue is recognized over time as manufacturing services are performed as we manufacture a product to customer specifications with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining revenue for manufacturing services is recognized when the customer obtains control of the product, typically either upon shipment or delivery of the product dependent on the terms of the contract, and the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset. We generally recognize revenue over time using costs
based input methods, in which judgment is required to evaluate assumptions including anticipated margins to estimate the corresponding amount of revenue to recognize. Costs used as a basis for estimating anticipated margins include material, direct and indirect labor, and appropriate applied overheads. Anticipated margins are determined based on historical or quoted customer pricing. Costs based input methods are considered a faithful depiction of our efforts and progress toward satisfying our performance obligations for manufacturing services and for which we believe we are entitled to payment for performance completed to date. The cumulative effect of revisions to estimates related to net contract revenues or costs are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.
We have elected to account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated services and products. Accordingly, we record customer payments of shipping and handling costs as a component of net sales and classify such costs as a component of cost of sales. We recognize sales net of applicable sales or value add taxes. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time revenue is recognized, resulting in a reduction of net revenue.
Direct incremental costs to obtain and fulfill a contract are capitalized as a contract asset only if they are material, expected to be recovered, and are not accounted for in accordance with other guidance. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred.
Trade Accounts Receivable
Trade Accounts Receivable:
The Company’s trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. Our policy for estimating the allowance for credit losses on trade accounts receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to estimate expected credit losses. Management believes that historical loss information generally provides a basis for its assessment of expected credit losses. Trade accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income.
In the ordinary course of business, customers periodically negotiate extended payment terms on trade accounts receivable. Customary terms require payment within 30 to 45 days, with any terms beyond 45 days being considered extended payment terms. We utilize factoring arrangements for certain of our accounts receivables with third-party financial institutions in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. We also have the ability to and have periodically utilized additional accounts receivable factoring arrangements to provide flexible access to cash as needed.
Goodwill Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, goodwill is assessed or tested at the reporting unit level. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down to its estimated fair value.
Intangible Assets Other Intangible Assets consist of capitalized software, customer relationships, technology, and trade name, and are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets.
Leases The Company leases certain office facilities, warehouse facilities, and equipment under operating leases, in addition to land on which certain office and manufacturing facilities resides. Operating lease costs and cash payments for operating leases are immaterial to the Condensed Consolidated Statements of Income and our Condensed Consolidated Statements of Cash Flows. Lease right-of-use assets and lease liabilities each totaled $1.9 million at March 31, 2024 and $2.6 million at June 30, 2023, respectively. Lease right-of-use assets are included in Other Assets, net and lease liabilities are included in Accrued expenses and Other long-term liabilities on the Condensed Consolidated Balance Sheets.
Non-operating Income (Expense), net
Non-operating Income (Expense), net:
Non-operating income (expense), net includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expenses.
Income Taxes
Income Taxes:
In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.
Deferred income tax assets and liabilities, recorded in Other Assets, net and Other long-term liabilities, respectively, in the Condensed Consolidated Balance Sheets, are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment.
Income Tax Uncertainties
We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Condensed Consolidated Statements of Income.
New Accounting Standards
New Accounting Standards:
Not Yet Adopted:
In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance on Improvements to Reportable Segment Disclosures, requiring additional, more detailed information about a reportable segment. The guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.
In December 2023, the FASB issued guidance on Improvements to Income Tax Disclosures, intended to enhance the transparency and decision usefulness of income tax disclosures. The guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy During the quarter ending March 31, 2024, the Company made the decision to divest of GES, our automation, test and measurement business unit and committed to a plan to sell the business. As a result, the business unit met the criteria to be classified as held for sale, and goodwill and asset impairment were recorded during the quarter.
OtherGeneralIncome Other General Income in the three and nine months ended March 31, 2024 included $0.9 million of pre-tax income resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. These lawsuits alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components.
Costs Associated with Exit or Disposal Activity or Restructuring We recorded restructuring expense of $1.6 million in the three and nine months ended March 31, 2024 for employee-related costs as we undertook restructuring efforts during the current quarter to align our cost structure with reduced end market demand levels, including resizing our workforce and taking specific cost actions.
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Note 2. Revenue from Contracts with Customers (Policies)
 9 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition, Deferred Revenue The Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for material price variances, inventory purchases, tooling, or other miscellaneous services or costs. These payments are recognized as contract liabilities until the performance obligations are completed and are included in Advances from customers, if inventory related, and Accrued expenses, if not inventory related, on the Condensed Consolidated Balance Sheets
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Note 4. Inventories (Policies)
 9 Months Ended
Mar. 31, 2024
Inventory Disclosure [Abstract]  
Inventory Inventories were valued using the lower of first-in, first-out (“FIFO”) cost and net realizable value.
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Note 6. Commitments and Contingent Liabilities (Policies)
 9 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Product Warranties The Company typically provides only assurance-type warranties for a limited time period, which cover workmanship and assures the product complies with specifications provided by or agreed upon with the customer. We maintain a provision for limited warranty repair or replacement of products manufactured and sold, which has been established in specific manufacturing contract agreements. We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability regularly based on changes in historical cost trends and in certain cases where specific warranty issues become known.
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Note 7. Credit Facilities (Policies)
 9 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Debt The amount of Long-term debt under credit facilities, less current maturities, reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on May 4, 2027.
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Note 8. Fair Value (Policies)
 9 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value
The Company categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
•Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
•Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
There were no changes in the inputs or valuation techniques used to measure fair values during the nine months ended March 31, 2024. For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2023.
Fair Value of Financial Instruments Not Carried at Fair Value
Financial Instruments Not Carried At Fair Value:
Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include notes receivable and borrowings under credit facilities. There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the nine months ended March 31, 2024. For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2023.
The carrying values of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximate fair value due to the relatively short maturity and immaterial non-performance risk.
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Note 9. Derivative Instruments (Policies)
 9 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Our primary means of managing this exposure is to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques do not fully offset currency risk, we use derivative instruments with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes.
We use forward contracts designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Non-designated foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances and other balance sheet positions denominated in currencies other than the functional currencies. As of March 31, 2024, we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $25.6 million and to hedge currencies against the Euro in the aggregate notional amount of 67.2 million Euro. The notional amounts are indicators of the volume of derivative activities but may not be indicators of the potential gain or loss on the derivatives.
In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may cease to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, we may either purchase a derivative contract in the opposite position of the undesignated hedge or may retain the hedge until it matures if the hedge continues to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities.
Derivatives, Reporting of Derivative Activity
The fair value of outstanding derivative instruments is recognized on the Condensed Consolidated Balance Sheets as a derivative asset or liability and presented with Prepaid expenses and other current assets and Accrued expenses, respectively. When derivatives are settled with the counterparty, the derivative asset or liability is relieved and cash flow is impacted for the net settlement. For derivative instruments that meet the criteria of hedging instruments under FASB guidance, the gain or loss on the derivative instrument is initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners’ Equity, and is subsequently reclassified into earnings in the period or periods during which the hedged transaction is recognized in earnings. The gain or loss associated with derivative instruments that are not designated as hedging instruments or that cease to meet the criteria for hedging under FASB guidance is reported immediately in Non-operating income (expense), net on the Condensed Consolidated Statements of Income.
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Note 10. Employee Benefit Plans (Policies)
 9 Months Ended
Mar. 31, 2024
Retirement Benefits [Abstract]  
Investment The Company also maintains a supplemental employee retirement plan (“SERP”) for executives and other key employees which enables them to defer cash compensation on a pre-tax basis and restore amounts that would otherwise be payable under our tax-qualified retirement plans if the IRS did not have limits on includable compensation and maximum benefits. The SERP is structured as a rabbi trust, and therefore, assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. We recognize SERP investment assets on the balance sheet at current fair value. A SERP liability of the same amount is recorded on the balance sheet representing an obligation to distribute SERP funds to participants. As of March 31, 2024, both total investments and obligations under SERP were $5.4 million, of which $0.3 million were short term and $5.1 million were long term. As of June 30, 2023, both total investments and obligations under SERP were $8.7 million, of which $2.7 million were short term and $6.0 million were long term. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in the Other Income (Expense) category on our Condensed Consolidated Statements of Income. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets.
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Note 12. Goodwill and Other Intangible Assets (Policies)
 9 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets, Finite-Lived The estimated useful life of internal-use software ranges from 3 years to 10 years. The amortization period for the customer relationships, technology, and trade name intangible assets was 15 years, 5 years, and 10 years, respectively. We ceased amortization on the intangible assets upon meeting the held for sale classification.
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Earnings Per Share (Policies)
 9 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
Earnings Per Share, Policy
For the three months ended March 31, 2024, all 434,000 outstanding stock compensation awards were antidilutive, as a result of the net loss recognized for the period, and were excluded from the dilutive calculation. The net loss in the three months ended March 31, 2024 was not allocated to participating securities as the holders have no requirements to fund losses. For the nine months ended March 31, 2024 and for the three and nine months ended March 31, 2023, all outstanding stock compensation awards were dilutive and were included in the dilutive calculation.
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Note 1. Business Description and Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Components of Non-operating income (expense), net
Components of Non-operating income (expense), net:
 Three Months EndedNine Months Ended
 March 31March 31
(Amounts in Thousands)2024202320242023
Foreign currency/derivative gain (loss)$(536)$1,328 $(864)$2,581 
Gain (loss) on SERP investments277 353 584 458 
Other(271)(248)(679)(380)
Non-operating income (expense), net$(530)$1,433 $(959)$2,659 
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Note 2. Revenue from Contracts with Customers (Tables)
 9 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following table disaggregates our revenue by end market vertical for the three and nine months ended March 31, 2024 and 2023.
Three Months EndedNine Months Ended
March 31March 31
(Amounts in Millions)2024202320242023
Vertical Markets:
Automotive (1)
$202.0 $221.9 $614.7 $615.3 
Medical (2)
113.0 135.5 323.5 377.1 
Industrial (3)
110.0 127.3 346.2 334.9 
Total net sales$425.0 $484.7 $1,284.4 $1,327.3 
(1)    For the three and nine months ended March 31, 2023, respectively, $5.9 million and $14.8 million of the Automotive net sales were previously categorized as Other.
(2)    For the three and nine months ended March 31, 2023, respectively, $1.5 million and $3.6 million of the Medical net sales were previously categorized as Other.
(3)    For the three and nine months ended March 31, 2023, respectively, $0.4 million and $2.1 million of the Industrial net sales were previously categorized as Other.
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Note 3. Assets and Liabilities Held for Sale (Tables)
 9 Months Ended
Mar. 31, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations
The major classes of assets and liabilities held for sale consisted of the following:
(Amounts in Thousands)March 31,
2024
Assets held for sale:
Receivables, net$8,599 
Inventories7,217 
Prepaid expenses and other current assets4,766 
Property and Equipment, net5,822 
Goodwill— 
Other Intangible Assets, net8,010 
Other Assets, net
11,469 
Valuation Allowance(16,264)
Total Assets held for sale$29,619 
Liabilities held for sale:
Accounts payable$4,239 
Advances from customers944 
Accrued expenses2,302 
Other long-term liabilities1,884 
Total Liabilities held for sale$9,369 
Other assets, net in the table above includes $10.2 million of deferred tax assets.
The following table summarizes net sales and income (loss) before taxes on income for the disposal group:
Three Months EndedNine Months Ended
March 31March 31
(Amounts in Thousands)2024202320242023
Net Sales$8,105 $16,755 $30,903 $40,577 
Income (Loss) Before Taxes on Income (1)
$(25,691)$1,352 $(25,141)$(976)
(1) Includes goodwill impairment of $5.8 million and asset impairment of $16.6 million for the three and nine months ended March 31, 2024. Also includes allocated corporate overhead expenses.
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Note 4. Inventories (Tables)
 9 Months Ended
Mar. 31, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventory, Current Inventory components were as follows:
(Amounts in Thousands)March 31, 2024June 30, 2023
Finished products$391 $432 
Work-in-process— 3,117 
Raw materials395,808 446,770 
Total inventory$396,199 $450,319 
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Note 5. Accumulated Other Comprehensive Income (Loss) (Tables)
 9 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
During the nine months ended March 31, 2024 and 2023, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:
Accumulated Other Comprehensive Income (Loss)
(Amounts in Thousands)Foreign Currency Translation AdjustmentsDerivative Gain (Loss)Post Employment Benefits
Net Actuarial Gain (Loss)		Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2023
$(11,832)$1,368 $(582)$(11,046)
Other comprehensive income (loss) before reclassifications(1,617)4,775 (447)2,711 
Reclassification to (earnings) loss— (4,745)16 (4,729)
Net current-period other comprehensive income (loss)(1,617)30 (431)(2,018)
Balance at March 31, 2024
$(13,449)$1,398 $(1,013)$(13,064)
Balance at June 30, 2022
$(17,349)$(2,203)$(120)$(19,672)
Other comprehensive income (loss) before reclassifications5,427 5,453 (164)10,716 
Reclassification to (earnings) loss— (2,103)(119)(2,222)
Net current-period other comprehensive income (loss)5,427 3,350 (283)8,494 
Balance at March 31, 2023
$(11,922)$1,147 $(403)$(11,178)
Reclassification out of Accumulated Other Comprehensive Income (Loss)
The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income:
Reclassifications from Accumulated Other Comprehensive Income (Loss)Three Months EndedNine Months EndedAffected Line Item in the Condensed Consolidated Statements of Income
March 31March 31
(Amounts in Thousands)2024202320242023
Derivative gain (loss) (1)
$1,600 $1,111 $6,092 $2,596 Cost of Sales
(352)(293)(1,347)(493)Benefit (Provision) for Income Taxes
$1,248 $818 $4,745 $2,103 Net of Tax
Postemployment Benefits:
  Amortization of actuarial gain (2)
(37)19 (21)157 Non-operating income (expense), net
9 (5)5 (38)Benefit (Provision) for Income Taxes
$(28)$14 $(16)$119 Net of Tax
Total reclassifications for the period$1,220 $832 $4,729 $2,222 Net of Tax
Amounts in parentheses indicate reductions to income.
(1) See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.
(2) See Note 10 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.
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Note 7. Credit Facilities (Tables)
 9 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Line of Credit Facilities
Credit facilities consisted of the following:
Available
Borrowing Capacity at		Borrowings Outstanding atBorrowings Outstanding at
(Amounts in Millions, in U.S Dollar Equivalents)March 31, 2024March 31, 2024June 30, 2023
Primary credit facility (1)
$— $299.7 $272.1 
Secondary credit facility (2)
89.4 10.6 — 
Thailand overdraft credit facility (3)
10.1 — — 
China revolving credit facility (3)
6.9 — — 
Netherlands revolving credit facility (3)
0.6 9.3 9.4 
Poland revolving credit facility (3)
5.4 — — 
Vietnam credit facility (3)
5.0 — — 
Total credit facilities$117.4 $319.6 $281.5 
Less: current portion $(84.6)$(46.5)
Long-term debt under credit facilities, less current portion (4)
$235.0 $235.0 
(1)    The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N. A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 million upon request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company. A commitment fee is payable on the unused portion of the credit facility at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary credit facility. Types of borrowings available on the primary credit facility include revolving loans, multi-currency term loans, and swingline loans.
The interest rate on borrowings is dependent on the type and currencies of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus the Revolving Commitment ABR spread which can range from 0.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA.
The Company’s financial covenants under the primary credit facility require:
•a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and,
•an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.
The Company had $0.4 million in letters of credit contingently committed against the credit facility at both March 31, 2024 and June 30, 2023.
(2)    The Company amended its 364-day multi-currency revolving credit facility agreement on January 5, 2024 (the “secondary credit facility”), which allows for borrowings up to $100.0 million, among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., as Documentation Agent. The secondary credit facility has a maturity date of January 3, 2025. The proceeds of the loans are to be used for working capital and general corporate purposes of the Company. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 30.0 basis points per annum.
The interest rate on borrowings is dependent on the type of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus a Revolving Commitment ABR spread of 75.0 basis points.
The Company’s financial covenants under this secondary credit facility are the same as the financial covenants for its primary credit facility.
(3)    The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources. These foreign credit facilities can be canceled at any time by either the bank or us and generally include renewal clauses. Interest on borrowing under these facilities is charged at a rate as defined under the respective foreign credit facility. During the second quarter of fiscal year 2024, the Company entered into a foreign credit facility for its EMS operation in China with a new lender, which allows for borrowings up to 50 million RMB, and canceled the prior credit facility which allowed for borrowings up to $7.5 million.
(4)    The amount of Long-term debt under credit facilities, less current maturities, reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on May 4, 2027.
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Note 8. Fair Value (Tables)
 9 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
As of March 31, 2024 and June 30, 2023, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:
 March 31, 2024
(Amounts in Thousands)Level 1Level 2Total
Assets   
Derivatives: foreign exchange contracts$— $4,712 $4,712 
Trading securities: mutual funds held in nonqualified SERP5,318 — 5,318 
Total assets at fair value$5,318 $4,712 $10,030 
Liabilities   
Derivatives: foreign exchange contracts$— $794 $794 
Total liabilities at fair value$— $794 $794 
    
 June 30, 2023
(Amounts in Thousands)Level 1Level 2Total
Assets   
Derivatives: foreign exchange contracts$— $6,320 $6,320 
Trading securities: mutual funds held in nonqualified SERP8,668 — 8,668 
Total assets at fair value$8,668 $6,320 $14,988 
Liabilities   
Derivatives: foreign exchange contracts$— $1,245 $1,245 
Total liabilities at fair value$— $1,245 $1,245 
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Note 9. Derivative Instruments (Tables)
 9 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets
Asset DerivativesLiability Derivatives
Fair Value As of Fair Value As of
(Amounts in Thousands)Balance Sheet LocationMarch 31,
2024		June 30,
2023		Balance Sheet LocationMarch 31,
2024		June 30,
2023
Derivatives Designated as Hedging Instruments:
Foreign exchange contractsPrepaid expenses and other current assets$4,345 $4,772 Accrued expenses$742 $844 
      
Derivatives Not Designated as Hedging Instruments:    
Foreign exchange contractsPrepaid expenses and other current assets367 1,548 Accrued expenses52 401 
Total derivatives $4,712 $6,320  $794 $1,245 
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
The Effect of Derivative Instruments on Other Comprehensive Income (Loss)
  Three Months EndedNine Months Ended
March 31March 31
(Amounts in Thousands) 2024202320242023
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives:  
Foreign exchange contracts $2,185 $3,270 $6,156 $6,954 
The Effect of Derivative Instruments on Condensed Consolidated Statements of Income
 Three Months EndedNine Months Ended
(Amounts in Thousands)March 31March 31
Derivatives in Cash Flow Hedging RelationshipsLocation of Gain or (Loss) 2024202320242023
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: 
Foreign exchange contractsCost of Sales$1,600 $1,111 $6,092 $2,596 
Derivatives Not Designated as Hedging Instruments   
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives:  
Foreign exchange contractsNon-operating income (expense)$650 $(286)$(223)$171 
   
Total Derivative Pre-Tax Gain (Loss) Recognized in Income$2,250 $825 $5,869 $2,767 
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Note 11. Stock Compensation Plans (Tables)
 9 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award
During the first nine months of fiscal year 2024, the following stock compensation was granted under the 2014 Plan, the 2023 Plan, and the Deferral Plan.
Stock Compensation GrantedQuarter GrantedShares/Units
Grant Date Fair Value (2)
Long-Term Performance Shares (1)
1st Quarter172,079 $29.19 
Restricted Shares (3)
1st Quarter71,422 $29.19 
Long-Term Performance Shares (4)
2nd Quarter35,650 $25.21 
Restricted Shares (4)
2nd Quarter23,768 $25.21 
Unrestricted Shares (5)
2nd Quarter18,128 $25.24 
Deferred Share Units (6)
2nd Quarter26,347 $25.24 
(1) Long-term performance share awards were granted to officers and other key employees. These annual performance share awards were approved by the Talent, Culture, and Compensation Committee of the Board. The awards granted in fiscal year 2024 will cliff vest at the third anniversary of the award date in fiscal year 2027.
Under these awards, a number of shares will be issued to each participant based upon a combination of the Company’s profitability based on its operating income over the performance period as defined in the Company’s operating business plans for the applicable fiscal years and the Company’s growth based on a comparison of its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100% of one or both of the above-mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of either metric. The number of shares issued will exceed the number of targeted shares issuable (up to a maximum of 125%) if the Company exceeds 100% of one or both of the above-mentioned incentive metrics.
(2) The grant date fair value is the weighted average stock price based on the dates of the grants.
(3) Restricted shares were granted to officers and other key employees. These restricted shares were approved by the Talent, Culture, and Compensation Committee of the Board. The contractual life of the restricted shares is three years, with one-third of the interest in the restricted shares vested after year one of the grant, another one-third after year two of the grant, and the final one-third after year three of the grant. Restricted shares are expensed over the contractual vesting period as earned. If the employment of a holder of restricted shares terminates before the RSU has vested for any reason other than death, retirement, or disability, the restricted shares not yet vested will be forfeited.
(4) Additional long-term performance share and restricted share awards were approved by the Talent, Culture, and Compensation Committee of the Board and were granted in the second quarter of fiscal year 2024. The awards will vest over a 5-year performance cycle, with one-third of the interest in the shares vesting after year three of the grant, another one-third after year four of the grant, and the final one-third after year five of the grant. The vesting of the performance share awards could range from 0% to 100% of the targeted issuable shares, dependent on the achievement of specific performance metrics.
(5) Unrestricted shares were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions.
(6) Deferred share units were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock in a lump sum or installments in accordance with deferral elections upon a Director’s retirement or termination from the Board or death.
v3.24.1.u1
Note 12. Goodwill and Other Intangible Assets (Tables)
 9 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
A summary of goodwill is as follows, amounts as of March 31, 2024 exclude the amounts classified as held for sale:
(Amounts in Thousands)
Balance as of June 30, 2023
Goodwill$32,762 
Accumulated impairment(20,751)
Goodwill, net$12,011 
Impairment recorded
(5,820)
Goodwill classified as held for sale
(13,745)
Accumulated impairment classified as held for sale
13,745 
Balance as of March 31, 2024
Goodwill19,017 
Accumulated impairment(12,826)
Goodwill, net$6,191 
Schedule of Finite-Lived Intangible Assets
A summary of other intangible assets subject to amortization is as follows, amounts as of March 31, 2024 exclude the amounts classified as held for sale:
 March 31, 2024June 30, 2023
(Amounts in Thousands)CostAccumulated
Amortization		Net ValueCostAccumulated
Amortization		Net Value
Capitalized Software$30,500 $(27,303)$3,197 $30,867 $(27,385)$3,482 
Customer Relationships— — — 8,618 (3,524)5,094 
Technology— — — 5,060 (4,816)244 
Trade Name— — — 6,575 (3,060)3,515 
Other Intangible Assets$30,500 $(27,303)$3,197 $51,120 $(38,785)$12,335 
v3.24.1.u1
Note 14. Earnings Per Share (Tables)
 9 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
Basic and diluted earnings per share were calculated as follows under the two-class method:
Three Months EndedNine Months Ended
March 31March 31
(Amounts in thousands, except per share data)2024202320242023
Basic and Diluted Earnings Per Share:
   Net Income$(6,076)$16,400 $12,968 $36,629 
   Less: Net Income allocated to participating securities— 24 16 53 
   Net Income allocated to common Share Owners$(6,076)$16,376 $12,952 $36,576 
Basic weighted average common shares outstanding25,118 24,898 25,084 24,868 
Dilutive effect of average outstanding stock compensation awards— 169 179 163 
Dilutive weighted average shares outstanding25,118 25,067 25,263 25,031 
Earnings Per Share of Common Stock:
Basic$(0.24)$0.66 $0.52 $1.47 
Diluted$(0.24)$0.65 $0.51 $1.46 
v3.24.1.u1
Note 1. Business Description and Summary of Significant Accounting Policies - Components of Non-operating income (expense), net (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Foreign Currency/Derivative Gain (Loss) $ (536) $ 1,328 $ (864) $ 2,581
Gain (loss) on SERP investments 277 353 584 458
Other (271) (248) (679) (380)
Non-operating income (expense), net $ (530) $ 1,433 $ (959) $ 2,659
v3.24.1.u1
Note 1. Business Description and Summary of Significant Accounting Policies - Textuals (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Depreciation and amortization       $ 28,522 $ 23,840  
Net income (loss) $ (6,076)   $ 16,400 $ 12,968 $ 36,629  
Earnings Per Share, Diluted $ (0.24)   $ 0.65 $ 0.51 $ 1.46  
Accounts Receivable, Extended Payment Terms       45 days    
Accounts Receivable Sold Without Recourse       $ 317,000 $ 357,100  
Factoring Fees $ 900   $ 1,400 2,600 3,800  
Operating Lease, Right-of-Use Asset 1,900     1,900   $ 2,600
Operating Lease, Liability 1,900     1,900   2,600
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability 5,900     5,900   7,800
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability, Current 2,600     2,600    
Goodwill 6,191     6,191   12,011
Accounts Receivable, Allowance for Credit Loss, Noncurrent 2,000     2,000    
Receivables, net of allowances of $1,193 and $257, respectively 277,894     277,894   $ 308,167
Accounts Receivable, Credit Loss Expense (Reversal)   $ 2,000        
Other General Income (892)   0 (892) 0  
Restructuring Expense 1,622   $ 0 1,622 $ 0  
Maximum Restructuring Charge            
Restructuring and Related Cost, Expected Cost Remaining 2,000     2,000    
Minimum Restructuring Charge            
Restructuring and Related Cost, Expected Cost Remaining 1,000     1,000    
NES            
Receivables, net of allowances of $1,193 and $257, respectively 2,800     2,800    
Accounts Receivable, after Allowance for Credit Loss, Noncurrent $ 2,500     $ 2,500    
Minimum            
Accounts Receivable, Customary Payment Terms       30 days    
Maximum            
Accounts Receivable, Customary Payment Terms       45 days    
v3.24.1.u1
Note 2. Revenue from Contracts with Customers (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Disaggregation of Revenue          
Net Sales $ 425,036 $ 484,703 $ 1,284,352 $ 1,327,288  
Contract assets 76,073   76,073   $ 78,798
Contract with Customer, Liability $ 49,600   $ 49,600   $ 45,600
Transferred over Time          
Disaggregation of Revenue          
Revenue from Contract with Customer, Excluding Assessed Tax, Percentage 97.00% 96.00% 96.00% 96.00%  
Automotive          
Disaggregation of Revenue          
Net Sales $ 202,000 $ 221,900 [1] $ 614,700 $ 615,300 [1]  
Automotive | Reclassification, Other          
Disaggregation of Revenue          
Net Sales   5,900   14,800  
Medical          
Disaggregation of Revenue          
Net Sales 113,000 135,500 [2] 323,500 377,100 [2]  
Medical | Reclassification, Other          
Disaggregation of Revenue          
Net Sales   1,500   3,600  
Industrial          
Disaggregation of Revenue          
Net Sales $ 110,000 127,300 [3] $ 346,200 334,900 [3]  
Industrial | Reclassification, Other          
Disaggregation of Revenue          
Net Sales   $ 400   $ 2,100  
[1]
(1)    For the three and nine months ended March 31, 2023, respectively, $5.9 million and $14.8 million of the Automotive net sales were previously categorized as Other.
[2]
(2)    For the three and nine months ended March 31, 2023, respectively, $1.5 million and $3.6 million of the Medical net sales were previously categorized as Other.
[3] (3)    For the three and nine months ended March 31, 2023, respectively, $0.4 million and $2.1 million of the Industrial net sales were previously categorized as Other
v3.24.1.u1
Note 3. Assets and Liabilities Held for Sale (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Jun. 30, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]            
Goodwill $ 6,191   $ 6,191     $ 12,011
Asset Impairment 16,564 $ 0 16,564 $ 0    
GES            
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]            
Goodwill         $ 5,800  
GES Disposal Group            
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]            
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net 8,599   8,599      
Disposal Group, Including Discontinued Operation, Inventory, Current 7,217   7,217      
Disposal Group, Including Discontinued Operation, Other Assets, Current 4,766   4,766      
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Noncurrent 5,822   5,822      
Disposal Group, Including Discontinued Operation, Goodwill, Noncurrent 0   0      
Disposal Group, Including Discontinued Operation, Intangible Assets, Noncurrent 8,010   8,010      
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent 11,469   11,469      
DisposalGroupIncludingDiscontinuedOperationValuationAllowance (16,264)   (16,264)      
Disposal Group, Including Discontinued Operation, Assets 29,619   29,619      
Disposal Group, Including Discontinued Operation, Accounts Payable, Current 4,239   4,239      
DisposalGroupIncludingDiscontinuedOperationAdvancesFromCustomers 944   944      
DisposalGroupIncludingDiscontinuedOperationAccruedExpenses 2,302   2,302      
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent 1,884   1,884      
Disposal Group, Including Discontinued Operation, Liabilities 9,369   9,369      
Disposal Group, Including Discontinued Operation, Revenue 8,105 16,755 30,903 40,577    
Disposal Group, Including Discontinued Operation, Income Before Taxes [1] (25,691) $ 1,352 (25,141) $ (976)    
Disposal Group, Including Discontinued Operation, Deferred Tax Assets $ 10,200   $ 10,200      
[1]
(1) Includes goodwill impairment of $5.8 million and asset impairment of $16.6 million for the three and nine months ended March 31, 2024. Also includes allocated corporate overhead expenses.
v3.24.1.u1
Note 4. Inventories - Inventory Components (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Inventory, Finished Goods, Net of Reserves $ 391 $ 432
Inventory, Work in Process, Net of Reserves 0 3,117
Inventory, Raw Materials, Net of Reserves 395,808 446,770
Total inventory 396,199 $ 450,319
Other Noncurrent Liabilities    
Contract with Customer, Liability, Noncurrent 29,100  
Other Noncurrent Assets    
Inventory, Noncurrent $ 44,100  
v3.24.1.u1
Note 5. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Share Owners' Equity $ 523,994 $ 453,971
Other comprehensive income (loss) before reclassifications 2,711 10,716
Reclassification to (earnings) loss (4,729) (2,222)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent (2,018) 8,494
Share Owners' Equity 539,061 503,186
Accumulated Other Comprehensive Income (Loss)    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Share Owners' Equity (11,046) (19,672)
Share Owners' Equity (13,064) (11,178)
Foreign Currency Translation Adjustments    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Share Owners' Equity (11,832) (17,349)
Other comprehensive income (loss) before reclassifications (1,617) 5,427
Reclassification to (earnings) loss 0 0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent (1,617) 5,427
Share Owners' Equity (13,449) (11,922)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Share Owners' Equity 1,368 (2,203)
Other comprehensive income (loss) before reclassifications 4,775 5,453
Reclassification to (earnings) loss (4,745) (2,103)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent 30 3,350
Share Owners' Equity 1,398 1,147
Post Employment Benefits Net Actuarial Gain (Loss)    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Share Owners' Equity (582) (120)
Other comprehensive income (loss) before reclassifications (447) (164)
Reclassification to (earnings) loss 16 (119)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent (431) (283)
Share Owners' Equity $ (1,013) $ (403)
v3.24.1.u1
Note 5. Accumulated Other Comprehensive Income (Loss) - Reclassifications from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)        
Cost of Sales $ (391,492) $ (441,731) $ (1,180,833) $ (1,220,804)
Benefit (Provision) for Income Taxes 6,677 (5,476) 1,234 (11,608)
Net Income (6,076) 16,400 12,968 36,629
Reclassification out of Accumulated Other Comprehensive Income        
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)        
Net Income 1,220 832 4,729 2,222
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Foreign Exchange Contract        
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)        
Cost of Sales [1] 1,600 1,111 6,092 2,596
Benefit (Provision) for Income Taxes [1] (352) (293) (1,347) (493)
Net Income [1] 1,248 818 4,745 2,103
Reclassification out of Accumulated Other Comprehensive Income | Postemployment Benefits, Amortization of actuarial gain (loss)        
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)        
Non-operating income (expense), net [2] (37) 19 (21) 157
Benefit (Provision) for Income Taxes [2] 9 (5) 5 (38)
Net Income [2] $ (28) $ 14 $ (16) $ 119
[1] See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.
[2] See Note 10 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.
v3.24.1.u1
Note 7. Credit Facilities (Details)
$ in Thousands, ¥ in Millions
 9 Months Ended
Mar. 31, 2024
USD ($)
Mar. 31, 2024
CNY (¥)
Jun. 30, 2023
USD ($)
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity $ 117,400    
Long-term Line of Credit 319,600   $ 281,500
Current portion of borrowings under credit facilities 84,618   46,454
Long-term debt under credit facilities, less current portion $ 235,000   $ 235,000
Debt, Weighted Average Interest Rate 6.90% 6.90% 6.80%
Primary Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [1] $ 0    
Long-term Line of Credit [1] 299,700   $ 272,100
Long-term debt under credit facilities, less current portion [2] 235,000   235,000
Line of Credit Facility, Maximum Borrowing Capacity 300,000    
Line of Credit Facility, Maximum Borrowing Capacity Upon Request $ 450,000    
Line of Credit Facility, Above the Adjusted SOFR Rate to Calculate Alternate Base Rate 1.00%    
Adjusted Leverage Ratio Covenant 3.0    
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash $ 15,000    
Line of Credit Facility, Above the Federal Funds Rate to Calculate Alternate Base Rate 0.50%    
Adjusted Leverage Ratio Covenant Material Acquisition 3.5    
Interest Coverage Ratio Covenant 3.5    
Secondary Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [3] $ 89,400    
Current portion of borrowings under credit facilities [3] 10,600   0
Line of Credit Facility, Maximum Borrowing Capacity $ 100,000    
Line of Credit Facility, Commitment Fee Percentage 0.30%    
Line of Credit Facility, Term Benchmark Loans Spread for SOFR 0.01750    
Line of Credit Facility, Term Benchmark Loans Spread for EURIBOR 0.01750    
Line of Credit Facility, Above the Adjusted SOFR Rate to Calculate Alternate Base Rate 1.00%    
Adjusted Leverage Ratio Covenant 3.0    
Line of Credit Facility, Alternate Base Rate Loans Spread 0.00750    
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash $ 15,000    
Line of Credit Facility, Above the Federal Funds Rate to Calculate Alternate Base Rate 0.50%    
Adjusted Leverage Ratio Covenant Material Acquisition 3.5    
Interest Coverage Ratio Covenant 3.5    
Thailand Overdraft Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [4] $ 10,100    
Current portion of borrowings under credit facilities [4] 0   0
China Revolving Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [4] 6,900    
Current portion of borrowings under credit facilities [4] 0   0
Line of Credit Facility, Maximum Borrowing Capacity   ¥ 50 7,500
Netherlands Revolving Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [4] 600    
Current portion of borrowings under credit facilities [4] 9,300   9,400
Poland Revolving Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [4] 5,400    
Current portion of borrowings under credit facilities [4] 0   0
Vietnam Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Remaining Borrowing Capacity [4] 5,000    
Current portion of borrowings under credit facilities [4] 0   0
Financial Standby Letter of Credit      
Line of Credit Facility      
Guarantor Obligations, Maximum Exposure, Undiscounted $ 400   $ 400
Minimum | Primary Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Commitment Fee Percentage 0.10%    
Line of Credit Facility, Term Benchmark Loans Spread for SOFR 0.01000    
Line of Credit Facility, Term Benchmark Loans Spread for EURIBOR 0.01000    
Line of Credit Facility, Alternate Base Rate Loans Spread 0.00000    
Maximum | Primary Credit Facility      
Line of Credit Facility      
Line of Credit Facility, Commitment Fee Percentage 0.25%    
Line of Credit Facility, Term Benchmark Loans Spread for SOFR 0.01750    
Line of Credit Facility, Term Benchmark Loans Spread for EURIBOR 0.01750    
Line of Credit Facility, Alternate Base Rate Loans Spread 0.00750    
[1] The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N. A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 million upon request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company. A commitment fee is payable on the unused portion of the credit facility at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary credit facility. Types of borrowings available on the primary credit facility include revolving loans, multi-currency term loans, and swingline loans.
The interest rate on borrowings is dependent on the type and currencies of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus the Revolving Commitment ABR spread which can range from 0.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA.
The Company’s financial covenants under the primary credit facility require:
•a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and,
•an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.
The Company had $0.4 million in letters of credit contingently committed against the credit facility at both March 31, 2024 and June 30, 2023.
[2] The amount of Long-term debt under credit facilities, less current maturities, reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on May 4, 2027.
[3] The Company amended its 364-day multi-currency revolving credit facility agreement on January 5, 2024 (the “secondary credit facility”), which allows for borrowings up to $100.0 million, among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., as Documentation Agent. The secondary credit facility has a maturity date of January 3, 2025. The proceeds of the loans are to be used for working capital and general corporate purposes of the Company. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 30.0 basis points per annum.
The interest rate on borrowings is dependent on the type of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus a Revolving Commitment Term Benchmark spread of 175.0 basis points; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility);
plus a Revolving Commitment ABR spread of 75.0 basis points.
The Company’s financial covenants under this secondary credit facility are the same as the financial covenants for its primary credit facility.
[4] The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources. These foreign credit facilities can be canceled at any time by either the bank or us and generally include renewal clauses. Interest on borrowing under these facilities is charged at a rate as defined under the respective foreign credit facility. During the second quarter of fiscal year 2024, the Company entered into a foreign credit facility for its EMS operation in China with a new lender, which allows for borrowings up to 50 million RMB, and canceled the prior credit facility which allowed for borrowings up to $7.5 million.
v3.24.1.u1
Note 8. Fair Value - Recurring Fair Value Measurements (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Recurring Fair Value Measurements:    
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement $ 4,712 $ 6,320
Debt Securities, Trading, and Equity Securities, FV-NI 5,400 8,700
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement 794 1,245
Fair Value, Measurements, Recurring    
Recurring Fair Value Measurements:    
Debt Securities, Trading, and Equity Securities, FV-NI 5,318 8,668
Total assets at fair value 10,030 14,988
Total liabilities at fair value 794 1,245
Fair Value, Measurements, Recurring | Foreign Exchange Contract    
Recurring Fair Value Measurements:    
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 4,712 6,320
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement 794 1,245
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1    
Recurring Fair Value Measurements:    
Debt Securities, Trading, and Equity Securities, FV-NI 5,318 8,668
Total assets at fair value 5,318 8,668
Total liabilities at fair value 0 0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Foreign Exchange Contract    
Recurring Fair Value Measurements:    
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 0 0
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement 0 0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2    
Recurring Fair Value Measurements:    
Debt Securities, Trading, and Equity Securities, FV-NI 0 0
Total assets at fair value 4,712 6,320
Total liabilities at fair value 794 1,245
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract    
Recurring Fair Value Measurements:    
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 4,712 6,320
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement $ 794 $ 1,245
v3.24.1.u1
Note 8. Fair Value - Textuals (Details) - USD ($)
$ in Thousands
 9 Months Ended
Mar. 31, 2024
Jun. 30, 2023
Recurring Fair Value Measurements:    
Fair Value, Purchases and Sales of Level 3 Assets $ 0  
Fair Value, Purchases and Sales of Level 3 Liabilities 0  
Fair Value, Measurements, Recurring    
Recurring Fair Value Measurements:    
Total assets at fair value 10,030 $ 14,988
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring    
Recurring Fair Value Measurements:    
Total assets at fair value 0 0
Nonfinancial Liabilities Fair Value Disclosure $ 0 $ 0
v3.24.1.u1
Note 9. Derivative Instruments - Textuals (Details) - Foreign Exchange Contract
€ in Millions, $ in Millions
 9 Months Ended
Mar. 31, 2024
USD ($)
Mar. 31, 2023
Mar. 31, 2024
EUR (€)
Derivatives, Fair Value      
Derivative, Notional Amount $ 25.6   € 67.2
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months $ 3.5    
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer 12 months 12 months  
v3.24.1.u1
Note 9. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheet (Details) - USD ($)
$ in Thousands
Mar. 31, 2024
Jun. 30, 2023
Derivatives, Fair Value    
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement $ 794 $ 1,245
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 4,712 6,320
Foreign Exchange Contract | Fair Value, Measurements, Recurring    
Derivatives, Fair Value    
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement 794 1,245
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 4,712 6,320
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets    
Derivatives, Fair Value    
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 4,345 4,772
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities    
Derivatives, Fair Value    
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement 742 844
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets    
Derivatives, Fair Value    
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement 367 1,548
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities    
Derivatives, Fair Value    
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement $ 52 $ 401
v3.24.1.u1
Note 9. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Derivative Instruments, Gain (Loss)        
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax $ 2,185 $ 3,270 $ 6,156 $ 6,954
Foreign Exchange Contract        
Derivative Instruments, Gain (Loss)        
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax $ 2,185 $ 3,270 $ 6,156 $ 6,954
v3.24.1.u1
Note 9. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Derivative Instruments, Gain (Loss)        
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification before Tax $ 1,600 $ 1,111 $ 6,092 $ 2,596
Total Derivative Pre-Tax Gain (Loss) Recognized in Income 2,250 825 5,869 2,767
Foreign Exchange Contract | Nonoperating Income (Expense)        
Derivative Instruments, Gain (Loss)        
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income 650 (286) (223) 171
Cash Flow Hedging | Foreign Exchange Contract | Cost of Sales        
Derivative Instruments, Gain (Loss)        
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification before Tax $ 1,600 $ 1,111 $ 6,092 $ 2,596
v3.24.1.u1
Note 10. Employee Benefit Plans (Details) - USD ($)
 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Components of Net Periodic Benefit Cost (before tax):      
Assets for Plan Benefits, Defined Benefit Plan $ 0   $ 0
SERP investments 5,400,000   8,700,000
SERP obligation 5,400,000   8,700,000
Equity Securities, FV-NI, Unrealized Gain (Loss) $ 400,000 $ 100,000  
Defined Contribution Plan, Description The Company matches 50% of eligible employee contributions up to 6%. The Company also provides a discretionary contribution determined annually by the Talent, Culture, and Compensation Committee of the Company’s Board of Directors.    
Liability, Defined Benefit Plan $ 7,400,000   6,600,000
Liability, Defined Benefit Plan, Noncurrent 5,700,000   5,600,000
Liability, Defined Benefit Plan, Current 1,700,000   1,000,000
Other Current Liabilities      
Components of Net Periodic Benefit Cost (before tax):      
SERP obligation 300,000   2,700,000
Other Noncurrent Liabilities      
Components of Net Periodic Benefit Cost (before tax):      
SERP obligation 5,100,000   6,000,000
Prepaid Expenses and Other Current Assets      
Components of Net Periodic Benefit Cost (before tax):      
SERP investments 300,000   2,700,000
Other Noncurrent Assets      
Components of Net Periodic Benefit Cost (before tax):      
SERP investments 5,100,000   $ 6,000,000
Domestic Defined Contribution Plan [Member]      
Components of Net Periodic Benefit Cost (before tax):      
Defined Contribution Plan, Cost $ 3,700,000 $ 4,200,000  
v3.24.1.u1
Note 11. Stock Compensation Plans - Textuals (Details) - $ / shares
 3 Months Ended 9 Months Ended
Dec. 31, 2023
Sep. 30, 2023
Mar. 31, 2024
Nov. 17, 2023
Oct. 20, 2016
Oct. 03, 2014
Stock Option and Incentive Plan 2014            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized           4,500,000
Non-Employee Directors Stock Compensation Deferral Plan            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized         1,000,000  
2023 Equity Incentive Plan            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized       2,000,000    
Performance Shares | Stock Option and Incentive Plan 2014            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period [1] 35,650          
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value [1],[2] $ 25.21          
ShareBasedCompensationArrangementByShareBasedPaymentAwardContractualLife     5 years      
Performance Shares | Stock Option and Incentive Plan 2014 | Grant Date - 11/15/2023 [Member]            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period [3]   172,079        
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value [2],[3]   $ 29.19        
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage     100.00%      
Performance Shares | Stock Option and Incentive Plan 2014 | Maximum            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage     100.00%      
Performance Shares | Stock Option and Incentive Plan 2014 | Maximum | Grant Date - 11/15/2023 [Member]            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage     125.00%      
Performance Shares | Stock Option and Incentive Plan 2014 | Minimum            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage     0.00%      
Performance Shares | Stock Option and Incentive Plan 2014 | Minimum | Grant Date - 11/15/2023 [Member]            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage     0.00%      
Restricted Stock | Stock Option and Incentive Plan 2014            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period [1] 23,768          
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value [1],[2] $ 25.21          
Restricted Stock | Stock Option and Incentive Plan 2014 | Grant Date - 11/15/2023 [Member]            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period [4]   71,422        
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value [2],[4]   $ 29.19        
Restricted Stock | Stock Option and Incentive Plan 2014 | Maximum | Grant Date - 11/15/2023 [Member]            
Share-based Compensation Arrangement by Share-based Payment Award            
ShareBasedCompensationArrangementByShareBasedPaymentAwardContractualLife     3 years      
Unrestricted Shares | 2023 Equity Incentive Plan            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period [5] 18,128          
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value [2],[5] $ 25.24          
Deferred Share Units Director Compensation | Non-Employee Directors Stock Compensation Deferral Plan            
Share-based Compensation Arrangement by Share-based Payment Award            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period [6] 26,347          
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value [2],[6] $ 25.24          
[1] Additional long-term performance share and restricted share awards were approved by the Talent, Culture, and Compensation Committee of the Board and were granted in the second quarter of fiscal year 2024. The awards will vest over a 5-year performance cycle, with one-third of the interest in the shares vesting after year three of the grant, another one-third after year four of the grant, and the final one-third after year five of the grant. The vesting of the performance share awards could range from 0% to 100% of the targeted issuable shares, dependent on the achievement of specific performance metrics.
[2] The grant date fair value is the weighted average stock price based on the dates of the grants.
[3] Long-term performance share awards were granted to officers and other key employees. These annual performance share awards were approved by the Talent, Culture, and Compensation Committee of the Board. The awards granted in fiscal year 2024 will cliff vest at the third anniversary of the award date in fiscal year 2027.
Under these awards, a number of shares will be issued to each participant based upon a combination of the Company’s profitability based on its operating income over the performance period as defined in the Company’s operating business plans for the applicable fiscal years and the Company’s growth based on a comparison of its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100% of one or both of the above-mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of either metric. The number of shares issued will exceed the number of targeted shares issuable (up to a maximum of 125%) if the Company exceeds 100% of one or both of the above-mentioned incentive metrics.
[4] Restricted shares were granted to officers and other key employees. These restricted shares were approved by the Talent, Culture, and Compensation Committee of the Board. The contractual life of the restricted shares is three years, with one-third of the interest in the restricted shares vested after year one of the grant, another one-third after year two of the grant, and the final one-third after year three of the grant. Restricted shares are expensed over the contractual vesting period as earned. If the employment of a holder of restricted shares terminates before the RSU has vested for any reason other than death, retirement, or disability, the restricted shares not yet vested will be forfeited.
[5] Unrestricted shares were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions.
[6] Deferred share units were awarded to non-employee members of the Board as compensation for the portion of their annual retainer fees resulting from their elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock in a lump sum or installments in accordance with deferral elections upon a Director’s retirement or termination from the Board or death
v3.24.1.u1
Note 12. Goodwill and Other Intangible Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Jun. 30, 2023
Goodwill          
Goodwill $ 6,191   $ 6,191   $ 12,011
Goodwill, Impaired, Accumulated Impairment Loss (12,826)   (12,826)   (20,751)
Goodwill, Gross 19,017   19,017   32,762
Goodwill, Other Increase (Decrease)     13,745    
Goodwill Classified as Held for Sale     (13,745)    
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Assets, Gross 30,500   30,500   51,120
Finite-Lived Intangible Assets, Accumulated Amortization (27,303)   (27,303)   (38,785)
Finite-Lived Intangible Assets, Net 3,197   3,197   12,335
Amortization of Intangible Assets 500 $ 900 2,000 $ 2,600  
Indefinite-lived Intangible Assets (Excluding Goodwill) 0   0    
Computer Software, Intangible Asset          
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Assets, Gross 30,500   30,500   30,867
Finite-Lived Intangible Assets, Accumulated Amortization (27,303)   (27,303)   (27,385)
Finite-Lived Intangible Assets, Net 3,197   3,197   3,482
Customer Relationships          
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Assets, Gross 0   0   8,618
Finite-Lived Intangible Assets, Accumulated Amortization 0   0   (3,524)
Finite-Lived Intangible Assets, Net $ 0   $ 0   5,094
Finite-Lived Intangible Asset, Useful Life 15 years   15 years    
Technology-Based Intangible Assets          
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Assets, Gross $ 0   $ 0   5,060
Finite-Lived Intangible Assets, Accumulated Amortization 0   0   (4,816)
Finite-Lived Intangible Assets, Net $ 0   $ 0   244
Finite-Lived Intangible Asset, Useful Life 5 years   5 years    
Trade Names          
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Assets, Gross $ 0   $ 0   6,575
Finite-Lived Intangible Assets, Accumulated Amortization 0   0   (3,060)
Finite-Lived Intangible Assets, Net $ 0   $ 0   $ 3,515
Finite-Lived Intangible Asset, Useful Life 10 years   10 years    
Maximum | Computer Software, Intangible Asset          
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Asset, Useful Life 10 years   10 years    
Minimum | Computer Software, Intangible Asset          
Indefinite-lived Intangible Assets          
Finite-Lived Intangible Asset, Useful Life 3 years   3 years    
v3.24.1.u1
Note 13. Share Owners' Equity (Details) - USD ($)
 9 Months Ended 101 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Stock Repurchase Program, Authorized Amount $ 100,000,000   $ 100,000,000
Treasury Stock Acquired, Average Cost Per Share     $ 15.27
Treasury Stock, Common      
Repurchase of Common Stock $ 0 $ 0 $ 88,800,000
v3.24.1.u1
Note 14. Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Net income (loss) $ (6,076) $ 16,400 $ 12,968 $ 36,629
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic 0 24 16 53
Net Income (Loss) Available to Common Stockholders, Basic $ (6,076) $ 16,376 $ 12,952 $ 36,576
Weighted Average Number of Shares Outstanding, Basic 25,118 24,898 25,084 24,868
Dilutive effect of average outstanding stock compensation awards 0 169 179 163
Weighted Average Number of Shares Outstanding, Diluted 25,118 25,067 25,263 25,031
Earnings Per Share, Basic $ (0.24) $ 0.66 $ 0.52 $ 1.47
Earnings Per Share, Diluted $ (0.24) $ 0.65 $ 0.51 $ 1.46
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 434,000      
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