ke-20210930

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 September 30, 2021

☐ 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


KIMBALL ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)

Indiana

35-2047713

(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 Class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	KE	The 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 October 22, 2021 was 25,100,911 shares.

KIMBALL ELECTRONICS, INC.

FORM 10-Q

INDEX


		Page No.

PART I FINANCIAL INFORMATION

	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets - September 30, 2021 (Unaudited) and June 30, 2021	3
	Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended September 30, 2021 and 2020	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended September 30, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended September 30, 2021 and 2020	6
	Condensed Consolidated Statement of Share Owners’ Equity (Unaudited) - Three Months Ended September 30, 2021 and 2020	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4. Controls and Procedures	30

PART II OTHER INFORMATION

	Item 1. Legal Proceedings	31
	Item 1A. Risk Factors	31
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 6. Exhibits	32

SIGNATURES		33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except for Share Data)


	(Unaudited)
	September 30, 2021		June 30, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	89,324	$	106,442
Receivables, net of allowances of $181 and $177, respectively	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

Total current assets	602,183		583,393
Property and Equipment, net of accumulated depreciation of $269,008 and $264,907, respectively	166,085		163,251
Goodwill	12,011		12,011
Other Intangible Assets, net of accumulated amortization of $36,651 and $35,813, respectively	16,606		17,008
Other Assets	41,381		38,398
Total Assets	$	838,266	$	814,061

LIABILITIES AND SHARE OWNERS’ EQUITY
Current Liabilities:

Current portion of borrowings under credit facilities	$	32,636	$	26,214
Accounts payable	247,175		216,544

Accrued expenses	46,772		58,016
Total current liabilities	326,583		300,774
Other Liabilities:
Long-term debt under credit facilities, less current portion	40,000		40,000
Long-term income taxes payable	7,812		8,854
Other long-term liabilities	24,057		22,461
Total other liabilities	71,869		71,315

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	—		—
Additional paid-in capital	306,086		308,123
Retained earnings	211,533		208,969
Accumulated other comprehensive loss	(9,149)		(4,883)
Treasury stock, at cost:
Shares: 4,329,000 and 4,473,000, respectively	(68,656)		(70,237)
Total Share Owners’ Equity	439,814		441,972
Total Liabilities and Share Owners’ Equity	$	838,266	$	814,061

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except for Per Share Data)



	Three Months Ended
	September 30
(Unaudited)	2021		2020
Net Sales	$	292,717	$	331,749
Cost of Sales	277,117		301,166
Gross Profit	15,600		30,583
Selling and Administrative Expenses	12,204		13,117
Other General Income	(1,384)		(341)


Operating Income	4,780		17,807
Other Income (Expense):
Interest income	24		7
Interest expense	(395)		(823)
Non-operating income (expense), net	(878)		2,951
Other income (expense), net	(1,249)		2,135
Income Before Taxes on Income	3,531		19,942
Provision for Income Taxes	967		3,131
Net Income	$	2,564	$	16,811

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

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)


	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
(Unaudited)	Pre-tax		Tax		Net of Tax		Pre-tax		Tax		Net of Tax
Net income					$	2,564					$	16,811
Other comprehensive income (loss):
Foreign currency translation adjustments	$	(2,953)	$	—	$	(2,953)	$	4,412	$	—	$	4,412

Postemployment actuarial change	37		(15)		22		(5)		4		(1)
Derivative gain (loss)	(1,561)		317		(1,244)		(625)		82		(543)
Reclassification to (earnings) loss:
Derivatives	(101)		59		(42)		738		(148)		590

Amortization of actuarial change

SEC Form 10-Q filed by Kimball Electronics, Inc.