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Press release content from Business Wire. The AP news staff was not involved in its creation.

Kimball Electronics, Inc. Reports First Quarter Fiscal 2022 Results; Reiterates Guidance for Fiscal Year 2022, Driven by Strong Second Half

November 3, 2021 GMT

JASPER, Ind.--(BUSINESS WIRE)--Nov 3, 2021--

Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the first quarter ended September 30, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211103006226/en/

Three Months Ended

 

September 30,

(Amounts in Thousands, except EPS)

2021

 

2020

Net Sales

$

292,717

 

 

$

331,749

 

Operating Income

$

4,780

 

 

$

17,807

 

Adjusted Operating Income (non-GAAP) (1)

$

3,309

 

 

$

18,016

 

Operating Income %

1.6

%

 

5.4

%

Adjusted Operating Income (non-GAAP) %

1.1

%

 

5.4

%

Net Income

$

2,564

 

 

$

16,811

 

Adjusted Net Income (non-GAAP) (1)

$

1,514

 

 

$

16,552

 

Diluted EPS

$

0.10

 

 

$

0.66

 

Adjusted Diluted EPS (non-GAAP) (1)

$

0.06

 

 

$

0.65

 

 

(1) A reconciliation of GAAP and non-GAAP financial measures is included below.

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Donald D. Charron, Chairman and Chief Executive Officer, stated, “I am proud of our people, our company, and the results for Q1, considering the difficult operating environment caused by issues in the global supply chain. Component shortages, which are impacting companies worldwide, continue to make it challenging to keep pace with strong market demand. We were disappointed by the lack of improvement in the overall situation in the September ending quarter, when we were actually expecting some level of recovery. Conditions deteriorated in the period due to COVID related restrictions in Malaysia, and the worsening of the backlog in U.S. west coast ports.”

Mr. Charron continued, “While these supply chain challenges had a more significant impact on absorption than anticipated, we are committed to retaining our experienced and talented workforce around the world as we see these disruptions as a short-term issue. As supply constraints ease, we are well positioned to ramp production on our record backlog and support our strong funnel of new product introductions. We are reiterating our guidance for fiscal 2022, although the bifurcation between the first and second halves will be more pronounced.”

First Quarter Fiscal Year 2022 Overview

  • Net sales decreased 12% compared to the first quarter of fiscal year 2021. Foreign currency had a favorable impact of 1% on net sales in the quarter compared to the same period a year ago.
  • Cash flow used for operating activities of $8.2 million during the first quarter of fiscal 2022.
  • Cash conversion days (“CCD”) for the quarter ended September 30, 2021 were 73 days, down from 76 days in the first quarter of fiscal year 2021. CCD is calculated as the sum of days sales outstanding plus contract asset days plus production days supply on hand less accounts payable days.
  • Investments in capital expenditures were $12.7 million during the quarter.
  • Cash and cash equivalents were $89.3 million and borrowings outstanding on credit facilities were $72.6 million at September 30, 2021, including $40.0 million classified as long term.

Fiscal Year 2022 Guidance

As part of today’s announcement, the Company is reiterating its guidance for fiscal year 2022.

  • Net sales in the range of $1.4 - $1.5 billion, an 8% to 16% increase year-over-year.
  • Operating income in the range of 4.5% - 5.0% of net sales.
  • Capital expenditures of $60 - $70 million in support of the expansions of the facilities in Thailand and Mexico.

Net Sales by Vertical Market for Q1 Fiscal 2022:

 

Three Months Ended

 

 

 

September 30,

 

 

(Amounts in Millions)

2021

 

*

 

2020

 

*

 

Percent Change

Automotive

$

129.4

 

 

44

%

 

$

118.3

 

 

36

%

 

9

%

Medical

85.0

 

 

29

%

 

127.1

 

 

38

%

 

(33)

%

Industrial

63.9

 

 

22

%

 

70.0

 

 

21

%

 

(9)

%

Public Safety

11.1

 

 

4

%

 

13.3

 

 

4

%

 

(16)

%

Other

3.3

 

 

1

%

 

3.0

 

 

1

%

 

7

%

Total Net Sales

$

292.7

 

 

 

 

$

331.7

 

 

 

 

(12)

%

 

∗ As a percent of Total Net Sales

 

– Automotive includes electronic power steering, body controls, automated driver assist systems, and electronic braking systems

– Medical includes sleep therapy and respiratory care, image guided therapy, in vitro diagnostics, drug delivery, AED, and patient monitoring

– Industrial includes climate controls, automation controls, optical inspection, and smart metering

– Public Safety includes thermal imaging, first responder electronics, and security

Forward-Looking Statements

Certain statements contained within this release are considered forward-looking, including our fiscal year 2022 guidance, under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “expect,” “should,” “goal,” “predict,” “will,” “future,” “optimistic,” “confident,” and “believe.” Undue reliance should not be placed on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. These forward-looking statements are subject to risks and uncertainties including, without limitation, global economic conditions, geopolitical environment, global health emergencies including the COVID-19 pandemic, availability or cost of raw materials and components, foreign exchange rate fluctuations, and our ability to convert new business opportunities into customers and revenue. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in its Annual Report on Form 10-K for the year ended June 30, 2021.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include adjusted operating income, adjusted net income, adjusted diluted EPS, and ROIC. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the Reconciliation of Non-GAAP Financial Measures section below. Management believes these measures are useful and allow investors to meaningfully trend, analyze, and benchmark the performance of the Company’s core operations. The Company’s non-GAAP financial measures are not necessarily comparable to non-GAAP information used by other companies.

About Kimball Electronics, Inc.

Kimball Electronics is a multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in the United States, China, India, Japan, Mexico, Poland, Romania, Thailand, and Vietnam, our teams are proud to provide manufacturing services for a variety of industries. Recognized for a reputation of excellence, we are committed to a high-performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Kimball Electronics, Inc. (Nasdaq: KE) is headquartered in Jasper, Indiana.

To learn more about Kimball Electronics, visit: www.kimballelectronics.com.

Conference Call / Webcast

Date:

 

November 4, 2021

Time:

 

10:00 AM Eastern Time

Live Webcast:

 

investors.kimballelectronics.com/events-and-presentations/events

Dial-In #:

 

877-248-9893 (International Calls - 873-415-0287)

Conference ID:

 

8062466

For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com.

Lasting relationships. Global success.

Financial highlights for the first quarter ended September 30, 2021 are as follows:

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended

(Amounts in Thousands, except Per Share Data)

September 30, 2021

 

September 30, 2020

Net Sales

$

292,717

 

 

100.0

%

 

$

331,749

 

 

100.0

%

Cost of Sales

277,117

 

 

94.7

%

 

301,166

 

 

90.8

%

Gross Profit

15,600

 

 

5.3

%

 

30,583

 

 

9.2

%

Selling and Administrative Expenses

12,204

 

 

4.2

%

 

13,117

 

 

3.9

%

Other General Expense (Income)

(1,384)

 

 

(0.5)

%

 

(341)

 

 

(0.1)

%

Operating Income

4,780

 

 

1.6

%

 

17,807

 

 

5.4

%

Other Income (Expense), net

(1,249)

 

 

(0.4)

%

 

2,135

 

 

0.6

%

Income Before Taxes on Income

3,531

 

 

1.2

%

 

19,942

 

 

6.0

%

Provision for Income Taxes

967

 

 

0.3

%

 

3,131

 

 

0.9

%

Net Income

$

2,564

 

 

0.9

%

 

$

16,811

 

 

5.1

%

 

 

 

 

 

 

 

 

Earnings Per Share of Common Stock:

 

 

 

 

 

 

 

Basic

$

0.10

 

 

 

 

$

0.67

 

 

 

Diluted

$

0.10

 

 

 

 

$

0.66

 

 

 

 

 

 

 

 

 

 

 

Average Number of Shares Outstanding:

 

 

 

 

 

 

 

Basic

25,145

 

 

 

 

25,153

 

 

 

Diluted

25,301

 

 

 

 

25,270

 

 

 

Condensed Consolidated Statements of Cash Flows

Three Months Ended

(Unaudited)

September 30,

(Amounts in Thousands)

2021

 

2020

Net Cash Flow (used for) provided by Operating Activities

$

(8,187)

 

 

$

20,701

 

Net Cash Flow used for Investing Activities

(12,868)

 

 

(8,322)

 

Net Cash Flow provided by (used for) Financing Activities

4,965

 

 

(5,787)

 

Effect of Exchange Rate Change on Cash and Cash Equivalents

(1,028)

 

 

1,793

 

Net (Decrease) Increase in Cash and Cash Equivalents

(17,118)

 

 

8,385

 

Cash and Cash Equivalents at Beginning of Period

106,442

 

 

64,990

 

Cash and Cash Equivalents at End of Period

$

89,324

 

 

$

73,375

 

(Unaudited)

 

 

Condensed Consolidated Balance Sheets

September 30,
2021

 

June 30,
2021

(Amounts in Thousands)

ASSETS

 

 

 

Cash and cash equivalents

$

89,324

 

 

$

106,442

 

Receivables, net

176,881

 

 

203,382

 

Contract assets

46,080

 

 

45,863

 

Inventories

262,125

 

 

200,386

 

Prepaid expenses and other current assets

27,773

 

 

27,320

 

Property and Equipment, net

166,085

 

 

163,251

 

Goodwill

12,011

 

 

12,011

 

Other Intangible Assets, net

16,606

 

 

17,008

 

Other Assets

41,381

 

 

38,398

 

Total Assets

$

838,266

 

 

$

814,061

 

 

 

 

 

LIABILITIES AND SHARE OWNERSEQUITY

 

 

 

Current portion of borrowings under credit facilities

$

32,636

 

 

$

26,214

 

Accounts payable

247,175

 

 

216,544

 

Accrued expenses

46,772

 

 

58,016

 

Long-term debt under credit facilities, less current portion

40,000

 

 

40,000

 

Long-term income taxes payable

7,812

 

 

8,854

 

Other

24,057

 

 

22,461

 

Share Owners’ Equity

439,814

 

 

441,972

 

Total Liabilities and Share Owners’ Equity

$

838,266

 

 

$

814,061

 

Reconciliation of Non-GAAP Financial Measures

(Unaudited)

(Amounts in Thousands, except Per Share Data)

 

 

 

 

 

Three Months Ended

 

September 30,

 

2021

 

2020

Operating Income, as reported

$

4,780

 

 

$

17,807

 

SERP

(87)

 

 

550

 

Legal Recovery

(1,384)

 

 

(341)

 

Adjusted Operating Income

$

3,309

 

 

$

18,016

 

 

 

 

 

Net Income, as reported

$

2,564

 

 

$

16,811

 

Legal Recovery, After-Tax

(1,050)

 

 

(259)

 

Adjusted Net Income

$

1,514

 

 

$

16,552

 

 

 

 

 

Diluted Earnings per Share, as reported

$

0.10

 

 

$

0.66

 

Legal Recovery

(0.04)

 

 

(0.01)

 

Adjusted Diluted Earnings per Share

$

0.06

 

 

$

0.65

 

 

 

 

 

 

Twelve Months Ended

 

September 30,

 

2021

 

2020

Operating Income

$

52,676

 

 

$

38,688

 

Goodwill Impairment

 

 

7,925

 

SERP

1,436

 

 

1,420

 

Legal Recovery

(1,415)

 

 

(341)

 

Adjusted Operating Income (non-GAAP)

$

52,697

 

 

$

47,692

 

Tax Effect

11,017

 

 

9,940

 

After-tax Adjusted Operating Income

$

41,680

 

 

$

37,752

 

Average Invested Capital (1)

$

414,121

 

 

$

435,465

 

ROIC

10.1

%

 

8.7

%

 

(1) Average invested capital is computed using Share Owners’ equity plus current and non-current debt less cash and cash equivalents averaged for the last five quarters.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20211103006226/en/

CONTACT: Andrew D. Regrut

Head of Investor Relations

812.827.4151

Investor.Relations@kimballelectronics.com

KEYWORD: INDIANA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: HARDWARE MANUFACTURING OTHER MANUFACTURING OTHER TECHNOLOGY TECHNOLOGY

SOURCE: Kimball Electronics, Inc.

Copyright Business Wire 2021.

PUB: 11/03/2021 04:08 PM/DISC: 11/03/2021 04:08 PM

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