Kimball Electronics Posts Q4 and Fiscal Year 2019 Results

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Kimball Electronics, Inc. has announced financial results for its fourth quarter and fiscal year ended June 30, 2019.

Donald D. Charron, chairman and chief executive officer, stated, “Fiscal year 2019 was another record-breaking year for our company as we reached a new high in net sales and achieved double-digit sales growth for the fourth time in the past five years.”

Charron continued, “We are extremely pleased with the success that we have had with the organic growth of our business, even while experiencing softness in select markets.  We recognize that there is still work to do to achieve our profitability goals.  As new programs ramp up to projected run rates and we drive improvements in the GES operations, we expect to realize the leverage from our sales growth.  With the dedication and commitment of our associates around the world, we will continue our relentless pursuit to create greater value for our Share Owners.”

Fourth Quarter Fiscal Year 2019 Overview:

Consolidated net sales set a new quarterly record while increasing 15% compared to the fourth quarter of fiscal year 2018. The GES acquisition added 2% to net sales during the quarter while unfavorable foreign currency movements decreased net sales by approximately 3% compared to the prior year fourth quarter.

Operating activities provided cash of $12.2 million during the quarter, which compares to cash provided by operating activities of $19.3 million in the fourth quarter of fiscal year 2018.

Cash conversion days (CCD) for the quarter ended June 30, 2019 were 77 days, up from 63 days in the same quarter last year largely related to an increase in raw material inventories to maintain appropriate buffer stock levels in the tight supply environment.  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 $9.8 million during the quarter.

Cash and cash equivalents were $49.3 million and borrowings outstanding on credit facilities were $126.2 million at June 30, 2019, including $91.5 million classified as long-term.

Fiscal Year 2019 Overview:

• Net sales increased 10% from the prior fiscal year, setting a new annual net sales record of $1.18 billion.
• Cash flow used by operating activities for fiscal year 2019 was $6.7 million.
• Investments in capital expenditures were $25.8 million and cash paid, net of cash acquired, for the GES acquisition was $43.9 million during fiscal year 2019.
• Return on invested capital (“ROIC”) was 8.7% for fiscal year 2019, down from 10.1% for the prior fiscal year (see reconciliation of non-GAAP financial measures for ROIC calculation).
• During the year, $23.4 million was returned to Share Owners in the form of common stock repurchases.

Financial Goals

• Net sales goal remains 8% annual organic growth rate
• Operating income percent goal remains 4.5%
• ROIC long-term goal remains 12.5%

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.