KIMBALL ELECTRONICS, INC.
|
(Exact name of registrant as specified in its charter)
|
Indiana
|
|
35-2047713
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(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)
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(812) 634-4000
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Registrant’s telephone number, including area code
|
Not Applicable
|
Former name, former address and former fiscal year, if changed since last report
|
Large accelerated filer
o
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Accelerated filer
x
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
Emerging growth company
o
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|
Page No.
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PART I FINANCIAL INFORMATION
|
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PART II OTHER INFORMATION
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||
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||
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||
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||
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||
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|
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|
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(Unaudited)
|
|
|
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|||
|
December 31,
2018 |
|
June 30,
2018 |
||||
ASSETS
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
35,863
|
|
|
$
|
46,428
|
|
Receivables, net of allowances of $687 and $482, respectively
|
189,717
|
|
|
173,559
|
|
||
Contract assets
|
49,629
|
|
|
—
|
|
||
Inventories
|
207,006
|
|
|
201,596
|
|
||
Prepaid expenses and other current assets
|
18,043
|
|
|
15,405
|
|
||
Total current assets
|
500,258
|
|
|
436,988
|
|
||
Property and Equipment, net of accumulated depreciation of $207,265 and $198,672, respectively
|
140,283
|
|
|
137,210
|
|
||
Goodwill
|
10,841
|
|
|
6,191
|
|
||
Other Intangible Assets, net of accumulated amortization of $28,217 and $27,276, respectively
|
23,727
|
|
|
4,375
|
|
||
Other Assets
|
25,563
|
|
|
23,994
|
|
||
Total Assets
|
$
|
700,672
|
|
|
$
|
608,758
|
|
|
|
|
|
||||
LIABILITIES AND SHARE OWNERS
’
EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Borrowings under credit facilities
|
$
|
89,144
|
|
|
$
|
8,337
|
|
Accounts payable
|
197,999
|
|
|
187,788
|
|
||
Accrued expenses
|
33,846
|
|
|
32,446
|
|
||
Total current liabilities
|
320,989
|
|
|
228,571
|
|
||
Other Liabilities:
|
|
|
|
||||
Long-term income taxes payable
|
11,084
|
|
|
12,361
|
|
||
Other long-term liabilities
|
16,022
|
|
|
12,299
|
|
||
Total other liabilities
|
27,106
|
|
|
24,660
|
|
||
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
|
303,125
|
|
|
304,215
|
|
||
Retained earnings
|
114,608
|
|
|
99,374
|
|
||
Accumulated other comprehensive loss
|
(7,478
|
)
|
|
(6,899
|
)
|
||
Treasury stock, at cost:
|
|
|
|
||||
Shares: 3,716,000 and 2,898,000, respectively
|
(57,678
|
)
|
|
(41,163
|
)
|
||
Total Share Owners’ Equity
|
352,577
|
|
|
355,527
|
|
||
Total Liabilities and Share Owners’ Equity
|
$
|
700,672
|
|
|
$
|
608,758
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31
|
|
December 31
|
||||||||||||
(Unaudited)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Sales
|
$
|
284,149
|
|
|
$
|
258,151
|
|
|
$
|
549,769
|
|
|
$
|
511,355
|
|
Cost of Sales
|
263,705
|
|
|
237,230
|
|
|
511,139
|
|
|
470,981
|
|
||||
Gross Profit
|
20,444
|
|
|
20,921
|
|
|
38,630
|
|
|
40,374
|
|
||||
Selling and Administrative Expenses
|
10,232
|
|
|
10,802
|
|
|
21,478
|
|
|
20,732
|
|
||||
Other General Income
|
—
|
|
|
—
|
|
|
(92
|
)
|
|
—
|
|
||||
Operating Income
|
10,212
|
|
|
10,119
|
|
|
17,244
|
|
|
19,642
|
|
||||
Other Income (Expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
17
|
|
|
18
|
|
|
23
|
|
|
36
|
|
||||
Interest expense
|
(1,090
|
)
|
|
(113
|
)
|
|
(1,479
|
)
|
|
(229
|
)
|
||||
Non-operating income (expense), net
|
(520
|
)
|
|
562
|
|
|
(691
|
)
|
|
1,972
|
|
||||
Other income (expense), net
|
(1,593
|
)
|
|
467
|
|
|
(2,147
|
)
|
|
1,779
|
|
||||
Income Before Taxes on Income
|
8,619
|
|
|
10,586
|
|
|
15,097
|
|
|
21,421
|
|
||||
Provision for Income Taxes
|
1,504
|
|
|
18,933
|
|
|
2,913
|
|
|
21,288
|
|
||||
Net Income (Loss)
|
$
|
7,115
|
|
|
$
|
(8,347
|
)
|
|
$
|
12,184
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.27
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.46
|
|
|
$
|
—
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.46
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Average Number of Shares Outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
25,993
|
|
|
26,765
|
|
|
26,250
|
|
|
26,812
|
|
||||
Diluted
|
26,036
|
|
|
26,765
|
|
|
26,404
|
|
|
27,007
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(Unaudited)
|
Pre-tax
|
|
Tax
|
|
Net of Tax
|
|
Pre-tax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
Net income (loss)
|
|
|
|
|
$
|
7,115
|
|
|
|
|
|
|
$
|
(8,347
|
)
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
$
|
(1,366
|
)
|
|
$
|
—
|
|
|
$
|
(1,366
|
)
|
|
$
|
1,648
|
|
|
$
|
—
|
|
|
$
|
1,648
|
|
Postemployment severance actuarial change
|
97
|
|
|
(22
|
)
|
|
75
|
|
|
118
|
|
|
(43
|
)
|
|
75
|
|
||||||
Derivative gain (loss)
|
(208
|
)
|
|
68
|
|
|
(140
|
)
|
|
(445
|
)
|
|
278
|
|
|
(167
|
)
|
||||||
Reclassification to (earnings) loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
(85
|
)
|
|
11
|
|
|
(74
|
)
|
|
494
|
|
|
(73
|
)
|
|
421
|
|
||||||
Amortization of actuarial change
|
(117
|
)
|
|
28
|
|
|
(89
|
)
|
|
(85
|
)
|
|
32
|
|
|
(53
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
(1,679
|
)
|
|
$
|
85
|
|
|
$
|
(1,594
|
)
|
|
$
|
1,730
|
|
|
$
|
194
|
|
|
$
|
1,924
|
|
Total comprehensive income (loss)
|
|
|
|
|
$
|
5,521
|
|
|
|
|
|
|
$
|
(6,423
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(Unaudited)
|
Pre-tax
|
|
Tax
|
|
Net of Tax
|
|
Pre-tax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
Net income
|
|
|
|
|
$
|
12,184
|
|
|
|
|
|
|
$
|
133
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
$
|
(2,024
|
)
|
|
$
|
—
|
|
|
$
|
(2,024
|
)
|
|
$
|
4,862
|
|
|
$
|
—
|
|
|
$
|
4,862
|
|
Postemployment severance actuarial change
|
310
|
|
|
(74
|
)
|
|
236
|
|
|
264
|
|
|
(97
|
)
|
|
167
|
|
||||||
Derivative gain (loss)
|
1,739
|
|
|
(356
|
)
|
|
1,383
|
|
|
(2,042
|
)
|
|
597
|
|
|
(1,445
|
)
|
||||||
Reclassification to (earnings) loss:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
15
|
|
|
(16
|
)
|
|
(1
|
)
|
|
504
|
|
|
1
|
|
|
505
|
|
||||||
Amortization of actuarial change
|
(228
|
)
|
|
55
|
|
|
(173
|
)
|
|
(165
|
)
|
|
62
|
|
|
(103
|
)
|
||||||
Other comprehensive income (loss)
|
$
|
(188
|
)
|
|
$
|
(391
|
)
|
|
$
|
(579
|
)
|
|
$
|
3,423
|
|
|
$
|
563
|
|
|
$
|
3,986
|
|
Total comprehensive income
|
|
|
|
|
$
|
11,605
|
|
|
|
|
|
|
$
|
4,119
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended
|
||||||
|
December 31
|
||||||
(Unaudited)
|
2018
|
|
2017
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
12,184
|
|
|
$
|
133
|
|
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
|
|
|
|||||
Depreciation and amortization
|
14,007
|
|
|
12,755
|
|
||
Gain on sales of assets
|
(150
|
)
|
|
(17
|
)
|
||
Deferred income tax and other deferred charges
|
(1,473
|
)
|
|
3,061
|
|
||
Deferred tax valuation allowance
|
(445
|
)
|
|
—
|
|
||
Stock-based compensation
|
2,854
|
|
|
2,443
|
|
||
Other, net
|
(335
|
)
|
|
(53
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
282
|
|
|
(2,524
|
)
|
||
Contract assets
|
(6,388
|
)
|
|
—
|
|
||
Inventories
|
(36,635
|
)
|
|
(33,874
|
)
|
||
Prepaid expenses and other current assets
|
(765
|
)
|
|
1,727
|
|
||
Accounts payable
|
12,257
|
|
|
22,381
|
|
||
Accrued expenses and taxes payable
|
213
|
|
|
5,369
|
|
||
Net cash (used for) provided by operating activities
|
(4,394
|
)
|
|
11,401
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(8,517
|
)
|
|
(14,708
|
)
|
||
Proceeds from sales of assets
|
401
|
|
|
107
|
|
||
Payments for acquisitions, net of cash acquired
|
(43,889
|
)
|
|
—
|
|
||
Purchases of capitalized software
|
(648
|
)
|
|
(126
|
)
|
||
Other, net
|
172
|
|
|
10
|
|
||
Net cash used for investing activities
|
(52,481
|
)
|
|
(14,717
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Proceeds from credit facilities
|
66,000
|
|
|
—
|
|
||
Payments on credit facilities
|
(10,386
|
)
|
|
—
|
|
||
Additional net change in revolving credit facilities
|
12,398
|
|
|
1,000
|
|
||
Repurchases of common stock
|
(18,537
|
)
|
|
(6,460
|
)
|
||
Payments related to tax withholding for stock-based compensation
|
(1,766
|
)
|
|
(1,508
|
)
|
||
Debt issuance costs
|
(445
|
)
|
|
—
|
|
||
Net cash provided by (used for) financing activities
|
47,264
|
|
|
(6,968
|
)
|
||
Effect of Exchange Rate Change on Cash and Cash Equivalents
|
(954
|
)
|
|
1,367
|
|
||
Net Decrease in Cash and Cash Equivalents
|
(10,565
|
)
|
|
(8,917
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
46,428
|
|
|
44,555
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
35,863
|
|
|
$
|
35,638
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Income taxes
|
$
|
4,733
|
|
|
$
|
8,795
|
|
Interest expense
|
$
|
1,020
|
|
|
$
|
120
|
|
|
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Treasury Stock
|
|
Total Share Owners’ Equity
|
||||||||||
(Unaudited)
|
Additional Paid-In Capital
|
|
|||||||||||||||||
Amounts at June 30, 2018
|
$
|
304,215
|
|
|
$
|
99,374
|
|
|
$
|
(6,899
|
)
|
|
$
|
(41,163
|
)
|
|
$
|
355,527
|
|
Net income
|
|
|
12,184
|
|
|
|
|
|
|
12,184
|
|
||||||||
Other comprehensive income (loss)
|
|
|
|
|
(579
|
)
|
|
|
|
(579
|
)
|
||||||||
Cumulative effect of accounting change
|
|
|
3,050
|
|
|
|
|
|
|
3,050
|
|
||||||||
Issuance of non-restricted stock
(4,000 shares)
|
28
|
|
|
|
|
|
|
44
|
|
|
72
|
|
|||||||
Compensation expense related to stock compensation plans
|
2,777
|
|
|
|
|
|
|
|
|
2,777
|
|
||||||||
Performance share issuance
(203,000 shares)
|
(3,895
|
)
|
|
|
|
|
|
2,133
|
|
|
(1,762
|
)
|
|||||||
Repurchase of Common Stock
(1,025,000 shares)
|
|
|
|
|
|
|
(18,692
|
)
|
|
(18,692
|
)
|
||||||||
Amounts at December 31, 2018
|
$
|
303,125
|
|
|
$
|
114,608
|
|
|
$
|
(7,478
|
)
|
|
$
|
(57,678
|
)
|
|
$
|
352,577
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31
|
|
December 31
|
||||||||||||
(Amounts in Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Foreign currency/derivative gain (loss)
|
$
|
45
|
|
|
$
|
333
|
|
|
$
|
(655
|
)
|
|
$
|
1,394
|
|
Gain (loss) on supplemental employee retirement plan investments
|
(626
|
)
|
|
282
|
|
|
(507
|
)
|
|
585
|
|
||||
Foreign government subsidies
|
105
|
|
|
—
|
|
|
571
|
|
|
54
|
|
||||
Other
|
(44
|
)
|
|
(53
|
)
|
|
(100
|
)
|
|
(61
|
)
|
||||
Non-operating income (expense), net
|
$
|
(520
|
)
|
|
$
|
562
|
|
|
$
|
(691
|
)
|
|
$
|
1,972
|
|
(Amounts in Thousands)
(Unaudited)
|
Balance at
June 30, 2018
|
|
Adjustments from Adoption of New Revenue Guidance
|
|
Balance at
July 1, 2018
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Contract assets
|
$
|
—
|
|
|
$
|
43,241
|
|
|
$
|
43,241
|
|
Inventories
|
201,596
|
|
|
(39,169
|
)
|
|
162,427
|
|
|||
Other Assets
|
23,994
|
|
|
(871
|
)
|
|
23,123
|
|
|||
|
|
|
|
|
|
||||||
LIABILITIES AND SHARE OWNERS’ EQUITY
|
|
|
|
|
|
||||||
Accrued expenses
|
32,446
|
|
|
151
|
|
|
32,597
|
|
|||
|
|
|
|
|
|
||||||
Retained earnings
|
99,374
|
|
|
3,050
|
|
|
102,424
|
|
|
For the Three Months Ended
December 31, 2018
|
||||||||||
(Amounts in Thousands)
(Unaudited)
|
As Reported
|
|
Amounts Excluding Changes Related to New Revenue Guidance
|
|
Effect of Change
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Net Sales
|
$
|
284,149
|
|
|
$
|
278,139
|
|
|
$
|
6,010
|
|
Cost of Sales
|
263,705
|
|
|
257,920
|
|
|
5,785
|
|
|||
Gross Profit
|
20,444
|
|
|
20,219
|
|
|
225
|
|
|||
|
|
|
|
|
|
||||||
Operating Income
|
10,212
|
|
|
9,987
|
|
|
225
|
|
|||
|
|
|
|
|
|
||||||
Income Before Taxes on Income
|
8,619
|
|
|
8,394
|
|
|
225
|
|
|||
Provision for Income Taxes
|
1,504
|
|
|
1,444
|
|
|
60
|
|
|||
Net Income
|
$
|
7,115
|
|
|
$
|
6,950
|
|
|
$
|
165
|
|
|
|
|
|
|
|
||||||
Earnings Per Share of Common Stock
|
|
|
|
|
|
||||||
Basic
|
$
|
0.27
|
|
|
$
|
0.27
|
|
|
$
|
—
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
0.27
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
At or For the Six Months Ended
December 31, 2018
|
||||||||||
(Amounts in Thousands)
(Unaudited)
|
As Reported
|
|
Amounts Excluding Changes Related to New Revenue Guidance
|
|
Effect of Change
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Net Sales
|
$
|
549,769
|
|
|
$
|
543,381
|
|
|
$
|
6,388
|
|
Cost of Sales
|
511,139
|
|
|
505,069
|
|
|
6,070
|
|
|||
Gross Profit
|
38,630
|
|
|
38,312
|
|
|
318
|
|
|||
|
|
|
|
|
|
||||||
Operating Income
|
17,244
|
|
|
16,926
|
|
|
318
|
|
|||
|
|
|
|
|
|
||||||
Income Before Taxes on Income
|
15,097
|
|
|
14,779
|
|
|
318
|
|
|||
Provision for Income Taxes
|
2,913
|
|
|
2,851
|
|
|
62
|
|
|||
Net Income
|
$
|
12,184
|
|
|
$
|
11,928
|
|
|
$
|
256
|
|
|
|
|
|
|
|
||||||
Earnings Per Share of Common Stock
|
|
|
|
|
|
||||||
Basic
|
$
|
0.46
|
|
|
$
|
0.45
|
|
|
$
|
0.01
|
|
Diluted
|
$
|
0.46
|
|
|
$
|
0.45
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Contract assets
|
$
|
49,629
|
|
|
$
|
—
|
|
|
$
|
49,629
|
|
Inventories
|
207,006
|
|
|
252,254
|
|
|
(45,248
|
)
|
|||
Other Assets
|
25,563
|
|
|
25,563
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
LIABILITIES AND SHARE OWNERS’ EQUITY
|
|
|
|
|
|
||||||
Accrued expenses
|
$
|
33,846
|
|
|
$
|
32,771
|
|
|
$
|
1,075
|
|
|
|
|
|
|
|
||||||
Retained earnings
|
$
|
114,608
|
|
|
$
|
111,302
|
|
|
$
|
3,306
|
|
(Amounts in Thousands)
|
October 1, 2018
|
||
Receivables
|
$
|
19,947
|
|
Inventories
|
8,044
|
|
|
Prepaid expenses and other current assets
|
1,424
|
|
|
Property and Equipment
|
9,100
|
|
|
Other Intangible Assets
|
19,259
|
|
|
Other Assets
|
553
|
|
|
Goodwill
|
4,650
|
|
|
Total assets acquired
|
$
|
62,977
|
|
|
|
||
Borrowings under Credit Facilities
|
$
|
12,843
|
|
Accounts payable
|
5,186
|
|
|
Accrued expenses
|
940
|
|
|
Other long-term liabilities
|
3,884
|
|
|
Total liabilities assumed
|
$
|
22,853
|
|
Net assets acquired
|
$
|
40,124
|
|
(Amounts in Thousands)
|
Estimated
Fair Value
|
|
Estimated useful life
(years)
|
||
Software
|
$
|
379
|
|
|
3 to 7
|
Technology
|
$
|
5,060
|
|
|
5
|
Trade name
|
$
|
6,369
|
|
|
10
|
Customer relationships
|
$
|
7,451
|
|
|
15
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(Amounts in Millions)
|
December 31, 2018
|
|
December 31, 2018
|
||||
Vertical Markets:
|
|
|
|
||||
Automotive
|
$
|
112.4
|
|
|
$
|
218.3
|
|
Medical
|
85.7
|
|
|
167.9
|
|
||
Industrial
|
62.2
|
|
|
119.6
|
|
||
Public Safety
|
17.9
|
|
|
35.0
|
|
||
Other
|
5.9
|
|
|
9.0
|
|
||
Total net sales
|
$
|
284.1
|
|
|
$
|
549.8
|
|
(Amounts in Thousands)
|
December 31, 2018
|
|
June 30,
2018 |
||||
Finished products
|
$
|
5,642
|
|
|
$
|
25,552
|
|
Work-in-process
|
4,770
|
|
|
17,254
|
|
||
Raw materials
|
196,594
|
|
|
158,790
|
|
||
Total inventory
|
$
|
207,006
|
|
|
$
|
201,596
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|||||||||
(Amounts in Thousands)
|
Foreign Currency Translation Adjustments
|
|
Derivative Gain (Loss)
|
|
Post Employment Benefits
Net Actuarial Gain
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
Balance at June 30, 2018
|
$
|
(4,357
|
)
|
|
$
|
(3,379
|
)
|
|
$
|
837
|
|
|
$
|
(6,899
|
)
|
Other comprehensive income (loss) before reclassifications
|
(2,024
|
)
|
|
1,383
|
|
|
236
|
|
|
(405
|
)
|
||||
Reclassification to (earnings) loss
|
—
|
|
|
(1
|
)
|
|
(173
|
)
|
|
(174
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(2,024
|
)
|
|
1,382
|
|
|
63
|
|
|
(579
|
)
|
||||
Balance at December 31, 2018
|
$
|
(6,381
|
)
|
|
$
|
(1,997
|
)
|
|
$
|
900
|
|
|
$
|
(7,478
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2017
|
$
|
(6,876
|
)
|
|
$
|
(2,788
|
)
|
|
$
|
580
|
|
|
$
|
(9,084
|
)
|
Other comprehensive income (loss) before reclassifications
|
4,862
|
|
|
(1,445
|
)
|
|
167
|
|
|
3,584
|
|
||||
Reclassification to (earnings) loss
|
—
|
|
|
505
|
|
|
(103
|
)
|
|
402
|
|
||||
Net current-period other comprehensive income (loss)
|
4,862
|
|
|
(940
|
)
|
|
64
|
|
|
3,986
|
|
||||
Balance at December 31, 2017
|
$
|
(2,014
|
)
|
|
$
|
(3,728
|
)
|
|
$
|
644
|
|
|
$
|
(5,098
|
)
|
Reclassifications from Accumulated Other Comprehensive Income (Loss)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Affected Line Item in the Condensed Consolidated Statements of Income
|
||||||||||||
|
December 31
|
|
December 31
|
|
||||||||||||||
(Amounts in Thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||
Derivative gain (loss)
(1)
|
|
$
|
87
|
|
|
$
|
(494
|
)
|
|
$
|
(30
|
)
|
|
$
|
(504
|
)
|
|
Cost of Sales
|
|
|
(2
|
)
|
|
—
|
|
|
15
|
|
|
—
|
|
|
Non-operating income (expense), net
|
||||
|
|
(11
|
)
|
|
73
|
|
|
16
|
|
|
(1
|
)
|
|
Benefit (Provision) for Income Taxes
|
||||
|
|
$
|
74
|
|
|
$
|
(421
|
)
|
|
$
|
1
|
|
|
$
|
(505
|
)
|
|
Net of Tax
|
Postemployment Benefits:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of actuarial gain
(2)
|
|
117
|
|
|
85
|
|
|
228
|
|
165
|
|
Non-operating income (expense), net
|
||||||
|
|
(28
|
)
|
|
(32
|
)
|
|
(55
|
)
|
|
(62
|
)
|
|
Benefit (Provision) for Income Taxes
|
||||
|
|
$
|
89
|
|
|
$
|
53
|
|
|
$
|
173
|
|
|
$
|
103
|
|
|
Net of Tax
|
Total reclassifications for the period
|
|
$
|
163
|
|
|
$
|
(368
|
)
|
|
$
|
174
|
|
|
$
|
(402
|
)
|
|
Net of Tax
|
|
Six Months Ended
|
||||||
|
December 31
|
||||||
(Amounts in Thousands)
|
2018
|
|
2017
|
||||
Product warranty liability at the beginning of the period
|
$
|
656
|
|
|
$
|
593
|
|
Additions to warranty accrual (including changes in estimates)
|
66
|
|
|
186
|
|
||
Settlements made (in cash or in kind)
|
(39
|
)
|
|
(79
|
)
|
||
Product warranty liability at the end of the period
|
$
|
683
|
|
|
$
|
700
|
|
•
|
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.
|
|
December 31, 2018
|
||||||||||
(Amounts in Thousands)
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents
|
$
|
1,110
|
|
|
$
|
—
|
|
|
$
|
1,110
|
|
Derivatives: foreign exchange contracts
|
—
|
|
|
2,269
|
|
|
2,269
|
|
|||
Trading securities: mutual funds held in nonqualified SERP
|
8,543
|
|
|
—
|
|
|
8,543
|
|
|||
Total assets at fair value
|
$
|
9,653
|
|
|
$
|
2,269
|
|
|
$
|
11,922
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|||
Derivatives: foreign exchange contracts
|
$
|
—
|
|
|
$
|
704
|
|
|
$
|
704
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
704
|
|
|
$
|
704
|
|
|
|
|
|
|
|
|
|
|
|||
|
June 30, 2018
|
||||||||||
(Amounts in Thousands)
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents
|
$
|
1,099
|
|
|
$
|
—
|
|
|
$
|
1,099
|
|
Derivatives: foreign exchange contracts
|
—
|
|
|
1,713
|
|
|
1,713
|
|
|||
Trading securities: mutual funds held in nonqualified SERP
|
8,769
|
|
|
—
|
|
|
8,769
|
|
|||
Total assets at fair value
|
$
|
9,868
|
|
|
$
|
1,713
|
|
|
$
|
11,581
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|||
Derivatives: foreign exchange contracts
|
$
|
—
|
|
|
$
|
1,867
|
|
|
$
|
1,867
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
1,867
|
|
|
$
|
1,867
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
|
Fair Value As of
|
|
|
|
Fair Value As of
|
||||||||||||
(Amounts in Thousands)
|
Balance Sheet Location
|
|
December 31,
2018 |
|
June 30,
2018 |
|
Balance Sheet Location
|
|
December 31,
2018 |
|
June 30,
2018 |
||||||||
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
1,116
|
|
|
$
|
758
|
|
|
Accrued expenses
|
|
$
|
595
|
|
|
$
|
1,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives Not Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
1,153
|
|
|
955
|
|
|
Accrued expenses
|
|
109
|
|
|
10
|
|
||||
Total derivatives
|
|
|
$
|
2,269
|
|
|
$
|
1,713
|
|
|
|
|
$
|
704
|
|
|
$
|
1,867
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
|
|
December 31
|
|
December 31
|
||||||||||||
(Amounts in Thousands)
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
|
|
|
$
|
(208
|
)
|
|
$
|
(445
|
)
|
|
$
|
1,739
|
|
|
$
|
(2,042
|
)
|
(Amounts in Thousands)
|
December 31,
2018 |
|
June 30,
2018 |
||||
SERP investments - current asset
|
$
|
303
|
|
|
$
|
294
|
|
SERP investments - other long-term asset
|
8,240
|
|
|
8,475
|
|
||
Total SERP investments
|
$
|
8,543
|
|
|
$
|
8,769
|
|
|
|
|
|
||||
SERP obligation - current liability
|
$
|
303
|
|
|
$
|
294
|
|
SERP obligation - other long-term liability
|
8,240
|
|
|
8,475
|
|
||
Total SERP obligation
|
$
|
8,543
|
|
|
$
|
8,769
|
|
|
|
|
|
|
Stock Compensation Awarded
|
|
Quarter Awarded
|
|
Shares/Units
|
|
Grant Date Fair Value
(2)
|
|||
Long-Term Performance Shares
(1)
|
|
1st Quarter
|
|
192,868
|
|
|
|
$20.05
|
|
|
|
|
|
|
|
|
|||
Unrestricted shares
(3)
|
|
2nd Quarter
|
|
4,236
|
|
|
|
$17.69
|
|
|
|
|
|
|
|
|
|||
Deferred share units (Director compensation)
(4)
|
|
2nd Quarter
|
|
32,758
|
|
|
|
$17.40
|
|
(Amounts in Thousands)
|
|
||
Balance as of June 30, 2018
|
|
||
Goodwill
|
$
|
19,017
|
|
Accumulated impairment
|
(12,826
|
)
|
|
Goodwill, net
|
6,191
|
|
|
Goodwill Acquired
|
4,650
|
|
|
Balance as of December 31, 2018
|
|
||
Goodwill
|
23,667
|
|
|
Accumulated impairment
|
(12,826
|
)
|
|
Goodwill, net
|
$
|
10,841
|
|
|
December 31, 2018
|
|
June 30, 2018
|
||||||||||||||||||||
(Amounts in Thousands)
|
Cost
|
|
Accumulated
Amortization
|
|
Net Value
|
|
Cost
|
|
Accumulated
Amortization |
|
Net Value
|
||||||||||||
Capitalized Software
|
$
|
31,895
|
|
|
$
|
26,613
|
|
|
$
|
5,282
|
|
|
$
|
30,484
|
|
|
$
|
26,154
|
|
|
$
|
4,330
|
|
Customer Relationships
|
8,618
|
|
|
1,313
|
|
|
7,305
|
|
|
1,167
|
|
|
1,122
|
|
|
45
|
|
||||||
Technology
|
5,060
|
|
|
132
|
|
|
4,928
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Trade Name
|
6,371
|
|
|
159
|
|
|
6,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other Intangible Assets
|
$
|
51,944
|
|
|
$
|
28,217
|
|
|
$
|
23,727
|
|
|
$
|
31,651
|
|
|
$
|
27,276
|
|
|
$
|
4,375
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31
|
|
December 31
|
||||||||||||
(Amounts in thousands, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Basic and Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss)
|
$
|
7,115
|
|
|
$
|
(8,347
|
)
|
|
$
|
12,184
|
|
|
$
|
133
|
|
Less: Net Income allocated to participating securities
|
7
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Net Income (Loss) allocated to common Share Owners
|
$
|
7,108
|
|
|
$
|
(8,347
|
)
|
|
$
|
12,175
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
25,993
|
|
|
26,765
|
|
|
26,250
|
|
|
26,812
|
|
||||
Dilutive effect of average outstanding performance shares
|
24
|
|
|
—
|
|
|
136
|
|
|
191
|
|
||||
Dilutive effect of average outstanding deferred stock units
|
19
|
|
|
—
|
|
|
18
|
|
|
4
|
|
||||
Dilutive weighted average shares outstanding
|
26,036
|
|
|
26,765
|
|
|
26,404
|
|
|
27,007
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.27
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.46
|
|
|
$
|
—
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.46
|
|
|
$
|
—
|
|
•
|
Due to the contract and project nature of the EMS industry, fluctuation in the demand for our products and variation in the gross margin on those projects is inherent to our business. Effective management of manufacturing capacity is, and will continue to be, critical to our success.
|
•
|
The nature of the EMS industry is such that the start-up of new customers and new programs to replace expiring programs occurs frequently. While our agreements with customers generally do not have a definitive term and thus could be canceled at any time with little or no notice, we generally realize relatively few cancellations prior to the end of the product’s life cycle. We attribute this to our focus on long-term customer relationships, meeting customer expectations, required capital investment, and product qualification cycle times. As such, our ability to continue contractual relationships with our customers, including our principal customers, is not certain. New customers and program start-ups generally cause losses early in the life of a program, which are generally recovered as the program becomes established and matures. Risk factors within our business include, but are not limited to, general economic and market conditions, customer order delays, globalization, impact related to tariffs and other trade barriers, foreign currency exchange rate fluctuations, rapid technological changes, component availability, supplier and customer financial stability, the contract nature of this industry, the concentration of sales to large customers, and the potential for customers to choose a dual sourcing strategy or to in-source a greater portion of their electronics manufacturing. 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 award 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. Additional risk factors 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, 2018
.
|
|
|
Six Months Ended
|
||||
|
|
December 31
|
||||
Customer Service Years
|
|
2018
|
|
2017
|
||
More than 10 Years
|
|
|
|
|
||
% of Net Sales
|
|
77
|
%
|
|
55
|
%
|
# of Customers
|
|
30
|
|
|
27
|
|
5 to 10 Years
|
|
|
|
|
||
% of Net Sales
|
|
9
|
%
|
|
34
|
%
|
# of Customers
|
|
16
|
|
|
19
|
|
Less than 5 Years
|
|
|
|
|
||
% of Net Sales
|
|
14
|
%
|
|
11
|
%
|
# of Customers
|
|
29
|
|
|
30
|
|
Total
|
|
|
|
|
||
% of Net Sales
|
|
100
|
%
|
|
100
|
%
|
# of Customers
|
|
75
|
|
|
76
|
|
•
|
Globalization continues to reshape not only the industries in which we operate but also for our key customers, suppliers, and competitors.
|
•
|
Employees throughout our business operations are an integral part of our ability to compete successfully, and the stability of the management team is critical to long-term Share Owner value. Our talent management and succession planning processes help to maintain stability in management.
|
|
At or for the
Three Months Ended
|
|
|
|||||||||||||
|
December 31
|
|
|
|||||||||||||
(Amounts in Millions, Except for Per Share Data)
|
2018
|
|
as a % of Net Sales
|
|
2017
|
|
as a % of Net Sales
|
|
% Change
|
|||||||
Net Sales
|
$
|
284.1
|
|
|
|
|
$
|
258.2
|
|
|
|
|
10
|
%
|
||
Gross Profit
|
$
|
20.4
|
|
|
7.2
|
%
|
|
$
|
20.9
|
|
|
8.1
|
%
|
|
(2
|
)%
|
Selling and Administrative Expenses
|
$
|
10.2
|
|
|
3.6
|
%
|
|
$
|
10.8
|
|
|
4.2
|
%
|
|
(5
|
)%
|
Operating Income
(1)
|
$
|
10.2
|
|
|
3.6
|
%
|
|
$
|
10.1
|
|
|
3.9
|
%
|
|
1
|
%
|
Provision for Income Taxes
|
$
|
1.5
|
|
|
|
|
$
|
18.9
|
|
|
|
|
|
|
||
Net Income (Loss)
|
$
|
7.1
|
|
|
|
|
$
|
(8.3
|
)
|
|
|
|
|
|
||
Diluted Earnings (Loss) per Share
|
$
|
0.27
|
|
|
|
|
$
|
(0.31
|
)
|
|
|
|
|
|||
Open Orders
|
$
|
321.5
|
|
|
|
|
$
|
241.7
|
|
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
For the Six Months Ended
|
|
|
|||||||||||||
|
December 31
|
|
|
|||||||||||||
(Amounts in Millions, Except for Per Share Data)
|
2018
|
|
as a % of Net Sales
|
|
2017
|
|
as a % of Net Sales
|
|
% Change
|
|||||||
Net Sales
|
$
|
549.8
|
|
|
|
|
$
|
511.4
|
|
|
|
|
8
|
%
|
||
Gross Profit
|
$
|
38.6
|
|
|
7.0
|
%
|
|
$
|
40.4
|
|
|
7.9
|
%
|
|
(4
|
)%
|
Selling and Administrative Expenses
|
$
|
21.5
|
|
|
3.9
|
%
|
|
$
|
20.7
|
|
|
4.1
|
%
|
|
4
|
%
|
Other General Income
|
$
|
0.1
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|||
Operating Income
(1)
|
$
|
17.2
|
|
|
3.1
|
%
|
|
$
|
19.6
|
|
|
3.8
|
%
|
|
(12
|
)%
|
Provision for Income Taxes
|
$
|
2.9
|
|
|
|
|
$
|
21.3
|
|
|
|
|
|
|
||
Net Income
|
$
|
12.2
|
|
|
|
|
$
|
0.1
|
|
|
|
|
|
|
||
Diluted Earnings per Share
|
$
|
0.46
|
|
|
|
|
$
|
—
|
|
|
|
|
|
Net Sales by Vertical Market
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
December 31
|
|
|
|
December 31
|
|
|
||||||||||||||
(Amounts in Millions)
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Automotive
|
$
|
112.4
|
|
|
$
|
116.4
|
|
|
(3
|
)%
|
|
$
|
218.3
|
|
|
$
|
218.4
|
|
|
—
|
%
|
Medical
|
85.7
|
|
|
72.9
|
|
|
18
|
%
|
|
167.9
|
|
|
149.1
|
|
|
13
|
%
|
||||
Industrial
|
62.2
|
|
|
52.0
|
|
|
20
|
%
|
|
119.6
|
|
|
106.8
|
|
|
12
|
%
|
||||
Public Safety
|
17.9
|
|
|
13.8
|
|
|
29
|
%
|
|
35.0
|
|
|
31.0
|
|
|
13
|
%
|
||||
Other
|
5.9
|
|
|
3.1
|
|
|
92
|
%
|
|
9.0
|
|
|
6.1
|
|
|
46
|
%
|
||||
Total Net Sales
|
$
|
284.1
|
|
|
$
|
258.2
|
|
|
10
|
%
|
|
$
|
549.8
|
|
|
$
|
511.4
|
|
|
8
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
December 31
|
|
December 31
|
||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Philips
|
14%
|
|
13%
|
|
15%
|
|
14%
|
ZF
|
11%
|
|
14%
|
|
12%
|
|
14%
|
Nexteer Automotive
|
12%
|
|
13%
|
|
11%
|
|
12%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31
|
|
December 31
|
||||||||||||
(Amounts in Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest income
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
23
|
|
|
$
|
36
|
|
Interest expense
|
(1,090
|
)
|
|
(113
|
)
|
|
(1,479
|
)
|
|
(229
|
)
|
||||
Foreign currency/derivative gain (loss)
|
45
|
|
|
333
|
|
|
(655
|
)
|
|
1,394
|
|
||||
Gain (loss) on supplemental employee retirement plan (“SERP”) investments
|
(626
|
)
|
|
282
|
|
|
(507
|
)
|
|
585
|
|
||||
Foreign government subsidies
|
105
|
|
|
—
|
|
|
571
|
|
|
54
|
|
||||
Other
|
(44
|
)
|
|
(53
|
)
|
|
(100
|
)
|
|
(61
|
)
|
||||
Other income (expense), net
|
$
|
(1,593
|
)
|
|
$
|
467
|
|
|
$
|
(2,147
|
)
|
|
$
|
1,779
|
|
|
For the Six Months Ended
|
||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
(Amounts in Thousands)
|
Income Before Taxes
|
|
Effective Tax Rate
|
|
Income Before Taxes
|
|
Effective Tax Rate
|
||||||
United States
|
$
|
7,843
|
|
|
13.3
|
%
|
|
$
|
3,308
|
|
|
515.0
|
%
|
Foreign
|
7,254
|
|
|
25.8
|
%
|
|
18,113
|
|
|
23.5
|
%
|
||
Total
|
$
|
15,097
|
|
|
19.3
|
%
|
|
$
|
21,421
|
|
|
99.4
|
%
|
|
|
Three Months Ended
|
||||
|
|
December 31, 2018
|
|
June 30, 2018
|
|
December 31, 2017
|
DSO
|
|
58
|
|
57
|
|
62
|
CAD
|
|
14
|
|
—
|
|
—
|
PDSOH
|
|
72
|
|
72
|
|
66
|
APD
|
|
68
|
|
66
|
|
68
|
CCD
|
|
76
|
|
63
|
|
60
|
|
|
Six Months Ended
|
||||||
|
|
December 31
|
||||||
(Amounts in thousands)
|
|
2018
|
|
2017
|
||||
Net cash (used for) provided by operating activities
|
|
$
|
(4,394
|
)
|
|
$
|
11,401
|
|
Net cash used for investing activities
|
|
$
|
(52,481
|
)
|
|
$
|
(14,717
|
)
|
Net cash provided by (used for) financing activities
|
|
$
|
47,264
|
|
|
$
|
(6,968
|
)
|
|
|
|
|
|
||||
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan
(1)(2) (3) (4)
|
||||
October 1, 2018 - October 31, 2018
|
231,995
|
$
|
18.89
|
|
231,995
|
$
|
5,710,114
|
|
November 1, 2018 - November 30, 2018
|
272,811
|
$
|
17.92
|
|
272,811
|
$
|
20,822,122
|
|
December 1, 2018 - December 31, 2018
|
243,942
|
$
|
16.39
|
|
243,942
|
$
|
16,824,202
|
|
Total
|
748,748
|
$
|
17.72
|
|
748,748
|
|
|
|
KIMBALL ELECTRONICS, INC.
|
|
|
|
|
By:
|
/s/ DONALD D. CHARRON
|
|
|
Donald D. Charron
Chairman of the Board,
Chief Executive Officer
|
|
|
February 7, 2019
|
|
|
|
|
|
|
|
By:
|
/s/ MICHAEL K. SERGESKETTER
|
|
|
Michael K. Sergesketter
Vice President,
Chief Financial Officer
|
|
|
February 7, 2019
|
SELLERS:
|
|
|
|
|
GES Holdings, Inc.,
a California corporation |
|
Global Equipment Services and Manufacturing (Suzhou) Co., Ltd.,
a limited liability company registered under the laws of China |
||
|
|
|
|
|
By:
|
/s/ Don Tran
|
|
By:
|
/s/ Seo Ping Ng
|
Name:
Title:
|
Don Tran
CEO
|
|
Name:
Title:
|
Seo Ping Ng
CEO/President
|
|
|
|
|
|
Global Equipment Services and Manufacturing, Inc.,
a California Corporation |
|
Suzhou Global Equipment Services and Trading Co., Ltd.,
a limited liability company registered under the laws of China |
||
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By:
|
/s/ Don Tran
|
|
By:
|
/s/ Seo Ping Ng
|
Name:
Title:
|
Don Tran
CEO
|
|
Name:
Title:
|
Seo Ping Ng
CEO/President
|
|
|
|
|
|
|
|
|
|
|
GES Japan KK,
a kabushiki kaisha registered under the laws of Japan |
|
GES Infotek Pvt. Ltd.,
a private limited company registered under the laws of India |
||
|
|
|
|
|
By:
|
/s/ Gautam Shankar
|
|
By:
|
/s/ Gautam Shankar
|
Name:
Title:
|
Gautam Shankar
CEO
|
|
Name:
Title:
|
Gautam Shankar
CEO
|
|
|
|
|
|
|
|
|
|
|
SELLERS’ REPRESENTATIVE:
|
|
|
|
|
GES Holdings, Inc.,
a California corporation |
|
|
|
|
|
|
|
|
|
By:
|
/s/ Don Tran
|
|
|
|
Name:
Title:
|
Don Tran
CEO
|
|
|
|
BUYER:
|
|
|
|
Kimball Electronics Indiana, Inc.,
an Indiana corporation
|
|
|
|
By:
|
/s/ John H. Kahle
|
Name:
Title: |
John H. Kahle
VP, GC, Secretary, CCO
|
SELLERS:
|
|
|
|
|
GES Holdings, Inc.,
a California corporation |
|
Global Equipment Services and Manufacturing (Suzhou) Co., Ltd.,
a limited liability company registered under the laws of China |
||
|
|
|
|
|
By:
|
/s/ Don Tran
|
|
By:
|
/s/ Seo Ping Ng
|
Name:
Title:
|
Don Tran
CEO
|
|
Name:
Title:
|
Seo Ping Ng
CEO/President APAC
|
|
|
|
|
|
Global Equipment Services and Manufacturing, Inc.,
a California Corporation |
|
Suzhou Global Equipment Services and Trading Co., Ltd.,
a limited liability company registered under the laws of China |
||
|
|
|
|
|
By:
|
/s/ Don Tran
|
|
By:
|
/s/ Seo Ping Ng
|
Name:
Title:
|
Don Tran
CEO
|
|
Name:
Title:
|
Seo Ping Ng
CEO/President APAC
|
|
|
|
|
|
|
|
|
|
|
GES Japan KK,
a kabushiki kaisha registered under the laws of Japan |
|
GES Infotek Pvt. Ltd.,
a private limited company registered under the laws of India |
||
|
|
|
|
|
By:
|
/s/ Gautam Shankar
|
|
By:
|
/s/ Gautam Shankar
|
Name:
Title:
|
Gautam Shankar
President, GES Japan
|
|
Name:
Title:
|
Gautam Shankar
CEO, GES Infotek
|
|
|
|
|
|
|
|
|
|
|
SELLERS’ REPRESENTATIVE:
|
|
|
|
|
GES Holdings, Inc.,
a California corporation |
|
|
|
|
|
|
|
|
|
By:
|
/s/ Don Tran
|
|
|
|
Name:
Title:
|
Don Tran
CEO
|
|
|
|
BUYER:
|
|
|
|
Kimball Electronics Indiana, Inc.,
an Indiana corporation
|
|
|
|
By:
|
/s/ Chris Thyen
|
Name:
Title:
|
Chris Thyen
Vice President
|
Donald D. Charron, Chairman of the Board, Chief Executive Officer
|
$
|
692,441
|
|
John H. Kahle, Vice President, General Counsel, Chief Compliance Officer, Secretary
|
$
|
397,800
|
|
Steven T. Korn, Vice President, North American Operations
|
$
|
315,297
|
|
Michael K. Sergesketter, Vice President, Chief Financial Officer
|
$
|
312,878
|
|
Christopher J. Thyen, Vice President, New Platforms
|
$
|
294,899
|
|
Donald D. Charron, Chairman of the Board, Chief Executive Officer
|
$
|
461,584
|
|
John H. Kahle, Vice President, General Counsel, Chief Compliance Officer, Secretary
|
$
|
270,504
|
|
Steven T. Korn, Vice President, North American Operations
|
$
|
210,279
|
|
Michael K. Sergesketter, Vice President, Chief Financial Officer
|
$
|
207,871
|
|
Christopher J. Thyen, Vice President, New Platforms
|
$
|
196,675
|
|
|
|
LTPS Grant
(Shares Issued)
(1)
|
|
Donald D. Charron, Chairman of the Board, Chief Executive Officer
|
|
74,351
|
|
John H. Kahle, Vice President, General Counsel, Chief Compliance Officer, Secretary
|
|
26,802
|
|
Steven T. Korn, Vice President, North American Operations
|
|
15,493
|
|
Michael K. Sergesketter, Vice President, Chief Financial Officer
|
|
14,948
|
|
Christopher J. Thyen, Vice President, New Platforms
|
|
14,590
|
|
|
|
|
|
(1) Shares have not been reduced by the number of shares withheld to satisfy tax withholding obligations.
|
|
|
LTPS Award
(number of shares)
|
|
Donald D. Charron, Chairman of the Board, Chief Executive Officer
|
|
65,692
|
|
John H. Kahle, Vice President, General Counsel, Chief Compliance Officer, Secretary
|
|
16,746
|
|
Steven T. Korn, Vice President, North American Operations
|
|
13,181
|
|
Michael K. Sergesketter, Vice President, Chief Financial Officer
|
|
12,934
|
|
Christopher J. Thyen, Vice President, New Platforms
|
|
12,351
|
|
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:
|
February 7, 2019
|
|
|
|
/s/ DONALD D. CHARRON
|
|
|
DONALD D. CHARRON
Chairman of the Board,
Chief Executive Officer
|
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:
|
February 7, 2019
|
|
|
|
/s/ MICHAEL K. SERGESKETTER
|
|
|
MICHAEL K. SERGESKETTER
Vice President,
Chief Financial Officer
|
|
|
|
(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:
|
February 7, 2019
|
|
|
|
/s/ DONALD D. CHARRON
|
|
|
DONALD D. CHARRON
Chairman of the Board,
Chief Executive Officer
|
(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:
|
February 7, 2019
|
|
|
|
/s/ MICHAEL K. SERGESKETTER
|
|
|
MICHAEL K. SERGESKETTER
Vice President,
Chief Financial Officer
|