Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Jun. 30, 2015 | Aug. 18, 2015 | Dec. 31, 2014 | |
Document Information | |||
Entity Registrant Name | Kimball Electronics, Inc. | ||
Entity Central Index Key | 1,606,757 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 29,171,749 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 343,600,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 65,180 | $ 26,260 |
Receivables, net of allowances of $236 and $352, respectively | 139,892 | 128,425 |
Inventories | 125,198 | 116,159 |
Prepaid Expense and Other Assets, Current | 23,922 | 20,490 |
Assets held for sale | 0 | 0 |
Total current assets | 354,192 | 291,334 |
Property and Equipment, net of accumulated depreciation of $151,504 and $151,747, respectively | 106,779 | 97,934 |
Goodwill | 2,564 | 2,564 |
Other Intangible Assets, net of accumulated amortization of $24,952 and $28,606, respectively | 4,509 | 1,830 |
Other Assets | 15,213 | 15,068 |
Total Assets | 483,257 | 408,730 |
Current Liabilities: | ||
Accounts payable | 133,409 | 119,853 |
Accrued expenses | 26,545 | 26,602 |
Total current liabilities | 159,954 | 146,455 |
Other Liabilities: | ||
Other long-term liabilities | 10,854 | 9,903 |
Total Liabilities | 170,808 | 156,358 |
Share Owners’ Equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 0 | 0 |
Net Parent Investment | 0 | 250,753 |
Additional Paid in Capital | 298,491 | 0 |
Retained earnings | 26,205 | 0 |
Accumulated other comprehensive income (loss) | (12,247) | 1,619 |
Total Share Owners’ Equity | 312,449 | 252,372 |
Total Liabilities and Share Owners’ Equity | $ 483,257 | $ 408,730 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
ASSETS | ||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 236 | $ 352 |
Property and Equipment Accumulated Depreciation | 151,504 | 151,747 |
Other Intangible Assets Accumulated Amortization | $ 24,952 | $ 28,606 |
Share Owners' Equity | ||
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Preferred Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Preferred Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares, Issued | 29,172,000 | 29,143,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net Sales | $ 819,350 | $ 741,530 | $ 703,129 |
Cost of Sales | 746,927 | 680,534 | 645,974 |
Gross Profit | 72,423 | 60,996 | 57,155 |
Selling and Administrative Expenses | 36,068 | 36,352 | 30,011 |
Other General Income | 0 | (5,688) | 0 |
Restructuring Expense | 0 | 402 | 416 |
Operating Income | 36,355 | 29,930 | 26,728 |
Other Income (Expense): | |||
Interest income | 36 | 41 | 96 |
Interest expense | (11) | (2) | (9) |
Non-operating income | 227 | 722 | 362 |
Non-operating expense | (1,836) | (449) | (401) |
Other income (expense), net | (1,584) | 312 | 48 |
Income Before Taxes on Income | 34,771 | 30,242 | 26,776 |
Provision for Income Taxes | 8,566 | 5,629 | 5,256 |
Net Income | $ 26,205 | $ 24,613 | $ 21,520 |
Earnings Per Share of Common Stock: | |||
Earnings Per Share, Basic | $ 0.90 | $ 0.84 | $ 0.74 |
Earnings Per Share, Diluted | $ 0.89 | $ 0.84 | $ 0.74 |
Average Number of Shares Outstanding: | |||
Average Number of Shares Outstanding, Basic | 29,162 | 29,143 | 29,143 |
Average Number of Shares Outstanding, Diluted | 29,388 | 29,143 | 29,143 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Net Income | $ 26,205 | $ 24,613 | $ 21,520 |
Other Comprehensive Income (Loss): | |||
Foreign currency translation adjustments, Pre-tax | (14,022) | 4,358 | 1,952 |
Foreign currency translation adjustments, Tax | (16) | (471) | (121) |
Foreign currency translation adjustments, Net of Tax | (14,038) | 3,887 | 1,831 |
Postemployment severance actuarial change, Pre-tax | 638 | (6) | 28 |
Postemployment severance actuarial change, Tax | (244) | 4 | (9) |
Postemployment severance actuarial change, Net of Tax | 394 | (2) | 19 |
Derivative gain (loss), Pre-tax | 3,806 | 73 | 1,206 |
Derivative gain (loss), Tax | (227) | (29) | (357) |
Derivative gain (loss), Net of Tax | 3,579 | 44 | 849 |
Reclassification to (earnings) loss: | |||
Derivatives, Reclassification to (earnings) loss, Pre-tax | (4,307) | 1,187 | (2,136) |
Derivatives, Reclassification to (earnings) loss, Tax | 577 | (277) | 561 |
Derivatives, Reclassification to (earnings) loss, Net of Tax | (3,730) | 910 | (1,575) |
Amortization of prior service cost, Pre-tax | 28 | 40 | 40 |
Amortization of prior service cost, Tax | (11) | (16) | (15) |
Amortization of prior service cost, Net of Tax | 17 | 24 | 25 |
Amortization of actuarial change, Pre-tax | (146) | 53 | 37 |
Amortization of actuarial change, Tax | 58 | (21) | (15) |
Amortization of actuarial change, Net of Tax | (88) | 32 | 22 |
Other comprehensive income (loss), Pre-tax | (14,003) | 5,705 | 1,127 |
Other comprehensive income (loss), Tax | 137 | (810) | 44 |
Other comprehensive income (loss), Net of Tax | (13,866) | 4,895 | 1,171 |
Total Comprehensive Income | $ 12,339 | $ 29,508 | $ 22,691 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Cash Flows From Operating Activities: | |||
Net Income | $ 26,205 | $ 24,613 | $ 21,520 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 19,607 | 17,889 | 17,447 |
(Gain) loss on sales of assets | (33) | 10 | (89) |
Restructuring | 0 | 311 | 188 |
Deferred income tax and other deferred charges | 1,100 | 1,246 | 3,729 |
Deferred Tax Valuation Allowance | (92) | (1,521) | 388 |
Stock-based compensation | 3,506 | 3,298 | 2,397 |
Other, net | 276 | (183) | 671 |
Change in operating assets and liabilities: | |||
Receivables | (14,731) | (10,076) | (24,589) |
Inventories | (12,192) | (12,783) | 1,462 |
Prepaid expenses and other current assets | (4,640) | (1,073) | (395) |
Accounts payable | 13,641 | 9,486 | 11,981 |
Accrued expenses | (4,583) | 8,089 | 5,854 |
Net cash provided by operating activities | 28,064 | 39,306 | 40,564 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (33,042) | (20,404) | (13,861) |
Proceeds from sales of assets | 310 | 254 | 316 |
Purchases of capitalized software | (3,851) | (378) | (629) |
Other, net | 67 | 537 | 393 |
Net cash used for investing activities | (36,516) | (19,991) | (13,781) |
Cash Flows From Financing Activities: | |||
Net transfers from (to) Kimball International, Inc. | 50,295 | (11,620) | (30,617) |
Debt issuance costs | (123) | 0 | 0 |
Net cash provided by (used for) financing activities | 50,172 | (11,620) | (30,617) |
Effect of Exchange Rate Change on Cash and Cash Equivalents | (2,800) | 141 | 283 |
Net Increase (Decrease) in Cash and Cash Equivalents | 38,920 | 7,836 | (3,551) |
Cash and Cash Equivalents at Beginning of Year | 26,260 | 18,424 | 21,975 |
Cash and Cash Equivalents at End of Year | $ 65,180 | $ 26,260 | $ 18,424 |
Consolidated Statements of Shar
Consolidated Statements of Share Owners' Equity - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Net Parent Investment | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Share Owner's Equity at Jun. 30, 2012 | $ 236,715 | $ 0 | $ 241,162 | $ 0 | $ (4,447) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 21,520 | 21,520 | |||
Other comprehensive income (loss), Net of Tax | 1,171 | 1,171 | |||
Net Distribution to Parent | (28,220) | (28,220) | |||
Share Owner's Equity at Jun. 30, 2013 | 231,186 | 0 | 234,462 | 0 | (3,276) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 24,613 | 24,613 | |||
Other comprehensive income (loss), Net of Tax | 4,895 | 4,895 | |||
Net Distribution to Parent | (8,322) | (8,322) | |||
Share Owner's Equity at Jun. 30, 2014 | 252,372 | 0 | 250,753 | 0 | 1,619 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Conversion of Net Parent Investment to Additional Paid In Capital | 0 | 250,753 | (250,753) | ||
Net Income | 26,205 | 26,205 | |||
Other comprehensive income (loss), Net of Tax | (13,866) | (13,866) | |||
Net Parent Contribution | 45,973 | 45,973 | |||
Issuance of non-restricted stock | 309 | 309 | |||
Compensation expense related to stock compensation plan | 1,456 | 1,456 | |||
Share Owner's Equity at Jun. 30, 2015 | $ 312,449 | $ 298,491 | $ 0 | $ 26,205 | $ (12,247) |
Consolidated Statements of Sha8
Consolidated Statements of Share Owners' Equity Parentheticals - shares | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Issuance of non-restricted stock, Shares | |||
Unrestricted Shares Director Compensation | |||
Issuance of non-restricted stock, Shares | 28,700 |
Note 1. Business Description an
Note 1. Business Description and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2015 | |
Summary of Significant 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,” “Kimball,” the “Company,” “we,” “us” or “our”) is a global contract electronic manufacturing services (“EMS”) company that specializes in producing durable electronics for the automotive, medical, industrial, and public safety markets. We offer a package of value that begins with our core competency of producing “durable electronics” and includes our set of robust processes and procedures that help us ensure that we deliver the highest levels of quality, reliability, and service throughout the entire life cycle of our customers’ products. We have been producing safety critical electronic assemblies for our automotive customers for over 30 years. We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service. Kimball Electronics was a wholly owned subsidiary of Kimball International, Inc. (“former Parent” or “Kimball International”) and as of 5:00 p.m. New York time on October 31, 2014 became a stand-alone public company upon the completion of a spin-off from former Parent. In conjunction with the spin-off, on October 31, 2014, Kimball International distributed 29.1 million shares of Kimball Electronics common stock to Kimball International Share Owners. Holders of Kimball International common stock received three shares of Kimball Electronics common stock for every four shares of Kimball International common stock held on October 22, 2014. Kimball International structured the distribution to be tax free to its U.S. Share Owners for U.S. federal income tax purposes. Principles of Consolidation: The Consolidated Financial Statements include the accounts of all domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. On September 30, 2014, the shares of Kimball Electronics Mexico, S.A. de C.V., a wholly owned subsidiary of former Parent, were contributed in a capital transaction to Kimball Electronics Mexico, Inc., a wholly owned subsidiary of Kimball Electronics, Inc. The financial results for Kimball Electronics Mexico, S.A. de C.V. are included in the Consolidated Financial Statements herein for all periods presented. Assets and liabilities were recorded at historical costs or carrying value. The Consolidated Financial Statements include allocations from former Parent for direct costs and indirect costs attributable to the operations of the Company through October 31, 2014, the spin-off date. These allocations were made on a direct usage or cost incurred basis when appropriate, with the remainder allocated using various drivers including average capital deployed, payroll, revenue less material costs, headcount, or other measures. While we believe such allocations are reasonable, these financial statements do not purport to reflect what the results of operations, comprehensive income, financial position, equity, or cash flows would have been had the Company operated as a stand-alone public company for the entirety of the periods presented. Note 2 - Related Party Transactions of Notes to Consolidated Financial Statements provides information regarding direct and indirect cost allocations. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts included in the Consolidated Financial Statements and related note disclosures. While efforts are made to assure estimates used are reasonably accurate based on management’s knowledge of current events, actual results could differ from those estimates. Segment Information: Kimball Electronics has business units located in the United States, Mexico, Poland, China, and Thailand. Each of our business units qualifies as an operating segment with its results regularly reviewed by our chief operating decision maker. Our chief operating decision maker is our Chief Executive Officer. Our business units meet the aggregation criteria under the current accounting guidance for segment reporting. All of our business units operate in the EMS industry with engineering, manufacturing, and supply chain services that provide electronic assemblies primarily in automotive, medical, industrial, and public safety applications, all to the specifications and designs of our customers. The nature of the products and services, the production process, the type of customers, and the methods used to distribute our products and services, all have similar characteristics. Each of our business units service customers in multiple markets and many of our customers’ programs are manufactured and serviced by multiple business units. Our global processes such as component procurement and customer pricing provide commonality and consistency among the various regions in which we operate. All of our business units have similar long-term economic characteristics. As such, our business units have been aggregated into one reportable segment. Revenue Recognition: Our net sales are principally from the manufacturing of electronic assemblies built to customer specifications. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract. Title and risk of loss are transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. Shipping and handling fees billed to customers are recorded as sales while the related shipping and handling costs are included in cost of sales. We recognize sales net of applicable sales tax. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time of the sale, resulting in a reduction of revenue. Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist of bank accounts and money market funds. Bank accounts are stated at cost, which approximates fair value, and money market funds are stated at fair value. Notes Receivable and Trade Accounts Receivable: The Company’s notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. Our policy for estimating the allowance for credit losses on trade accounts receivable and notes 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 determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. 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 may utilize 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 and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. During the fiscal years ended June 30, 2015 and 2014 , we sold, without recourse, $129.1 million and $193.0 million of accounts receivable, respectively. Factoring fees were not material. The Company’s China operation, in limited circumstances, may receive banker’s acceptance drafts from customers as payment for their trade accounts receivable. The banker’s acceptance drafts are non-interest bearing and primarily mature within six months from the origination date. The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $4.3 million at June 30, 2015 , are reflected in the Receivables line on the Consolidated Balance Sheet until the banker’s drafts are sold at a discount, transferred in settlement of current accounts payable, or cash is received at maturity. No banker’s acceptance drafts were sold at a discount or transferred in settlement of current accounts payable during fiscal year 2015. We had no banker’s acceptance drafts at June 30, 2014 . Inventories: Inventories are stated at the lower of cost or market value. Cost includes material, labor, and applicable manufacturing overhead. Costs associated with underutilization of capacity are expensed as incurred. Inventories are valued using the first-in, first-out (“FIFO”) method. Inventories are adjusted for excess and obsolete inventory. Evaluation of excess inventory includes such factors as anticipated usage, inventory turnover, inventory levels, and product demand levels. Factors considered when evaluating obsolescence include the age of on-hand inventory and reduction in value due to damage, design changes, or cessation of product lines. Property, Equipment, and Depreciation: Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful life of the assets using the straight-line method for financial reporting purposes. Major maintenance activities and improvements are capitalized; other maintenance, repairs, and minor renewals are expensed. Depreciation and expenses for maintenance, repairs, and minor renewals are included in both the Cost of Sales line and the Selling and Administrative Expense line of the Consolidated Statements of Income. Impairment of Long-Lived Assets: We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. 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, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount and if it is necessary to perform the quantitative two-step goodwill impairment test. We also have the option to bypass the qualitative assessment and proceed directly to performing the first step of the quantitative goodwill impairment test. If the first step is determined to be necessary, we compare the carrying value of the reporting unit to an estimate of the reporting unit’s fair value to identify potential impairment. If the estimated fair value of the reporting unit is less than the carrying value, a second step is performed to determine the amount of potential goodwill impairment. If impaired, goodwill is written down to its estimated implied fair value. Goodwill is assigned to and the fair value is tested at the reporting unit level. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting units considers current market conditions existing at the assessment date. During fiscal years 2015 , 2014 , and 2013 , no goodwill impairment was recognized. A summary of goodwill is as follows: (Amounts in Thousands) Balance as of June 30, 2013 Goodwill $ 15,337 Accumulated impairment (12,826 ) Goodwill, net 2,511 Effect of Foreign Currency Translation 53 Balance as of June 30, 2014 Goodwill 15,390 Accumulated impairment (12,826 ) Goodwill, net 2,564 Balance as of June 30, 2015 Goodwill 15,390 Accumulated impairment (12,826 ) Goodwill, net $ 2,564 In addition to performing the required annual testing, we will continue to monitor circumstances and events in future periods to determine whether additional goodwill impairment testing is warranted on an interim basis. Other Intangible Assets reported on the Consolidated Balance Sheets consist of capitalized software and customer relationships. Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. A summary of other intangible assets subject to amortization is as follows: June 30, 2015 June 30, 2014 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 28,294 $ 23,924 $ 4,370 $ 29,269 $ 27,625 $ 1,644 Customer Relationships 1,167 1,028 139 1,167 981 186 Other Intangible Assets $ 29,461 $ 24,952 $ 4,509 $ 30,436 $ 28,606 $ 1,830 During fiscal years 2015 , 2014 , and 2013 , amortization expense of other intangible assets was, in thousands, $759 , $797 , and $1,093 , respectively. Amortization expense in future periods is expected to be, in thousands, $814 , $656 , $561 , $443 , and $397 in the five years ending June 30, 2020 , and $1,638 thereafter. The amortization period for the customer relationship intangible asset ranges from 10 to 15 years . The estimated useful life of internal-use software ranges from 3 to 10 years . Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. Capitalized customer relationships are amortized on estimated attrition rate of customers. We have no intangible assets with indefinite useful lives which are not subject to amortization. Research and Development: The costs of research and development are expensed as incurred. Research and development costs were approximately, in millions, $9 , $8 , and $8 in fiscal years 2015 , 2014 , and 2013 , respectively. Insurance and Self-insurance: We are self-insured up to certain limits for general liability, workers’ compensation, and certain employee health benefits including medical, short-term disability, and dental, with the related liabilities included in the accompanying financial statements. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. Approximately 20% of the workforce is covered under self-insured medical and short-term disability plans. We carry external medical and disability insurance coverage for the remainder of our eligible workforce not covered by self-insured plans. Insurance benefits are not provided to retired employees. Income Taxes: Through October 31, 2014, the Company was included in the consolidated United States federal income tax return of former Parent, as well as certain state tax returns where former Parent filed on a combined basis. The provisions for income taxes for these jurisdictions were determined on a separate return basis and presented as such in these Consolidated Financial Statements. Deferred income tax assets and liabilities 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 the Provision for Income Taxes line of the Consolidated Statements of Income. In September 2013, the United States Treasury Department and the Internal Revenue Service (“IRS”) issued final regulations effective for our first quarter of fiscal year 2015, that provide guidance on a number of matters with regard to tangible property, including whether expenditures qualify as deductible repairs, the treatment of materials and supplies, capitalization of tangible property, dispositions of property, and related elections. The regulations as issued did not have a material effect on our Consolidated Financial Statements. Concentrations of Credit Risk: We have business and credit risks concentrated in the automotive, medical, industrial, and public safety industries. The Company monitors credit quality and associated risks of notes receivable on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. At June 30, 2015 and 2014 , amounts outstanding under notes receivables were $0.8 million and less than $0.1 million, respectively. Note 2 - Related Party Transactions of Notes to Consolidated Financial Statements provides information regarding the outstanding notes receivable at June 30, 2015 . A summary of significant customers’ net sales and trade receivables as a percentage of consolidated net sales and consolidated trade receivables is as follows: At or For the Year Ended At or For the Year Ended June 30, 2015 June 30, 2014 Net Sales Trade Receivables Net Sales Trade Receivables Johnson Controls, Inc. 3.6 % 2.0 % 13.0 % 5.8 % Philips 15.4 % 7.4 % 12.4 % 7.8 % Regal Beloit Corporation 8.8 % 9.5 % 8.8 % 11.9 % TRW 8.7 % 11.7 % 9.6 % 13.5 % Off-Balance Sheet Risk: Off-balance sheet arrangements are limited to standby letters of credit and operating leases entered into in the normal course of business as described in Note 5 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. Other General Income: Other General Income in fiscal year 2014 included pre-tax settlements received of $5.7 million related to two antitrust class action lawsuits in which Kimball Electronics was a class member. We recorded no Other General Income during fiscal years 2015 and 2013 . Non-operating Income and Expense: Non-operating income and expense include 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, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses. Foreign Currency Translation: The Company predominantly uses the U.S. dollar and Euro as its functional currencies. Foreign currency assets and liabilities are remeasured into functional currencies at end-of-period exchange rates, except for nonmonetary assets and equity, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the weighted average exchange rate during the fiscal year, except for expenses related to nonmonetary assets, which are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement are reported in the Non-operating income or expense line item on the Consolidated Statements of Income. For business units whose functional currency is other than the U.S. dollar, the translation of functional currency statements to U.S. dollar statements uses end-of-period exchange rates for assets and liabilities, weighted average exchange rates for revenue and expenses, and historical rates for equity. The resulting currency translation adjustment is recorded in Accumulated Other Comprehensive Income (Loss), as a component of Equity. Derivative Instruments and Hedging Activities: Derivative financial instruments are recognized on the balance sheet as assets and liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated Other Comprehensive Income (Loss), depending on whether a derivative is designated and effective as part of a hedge transaction, and if it is, the type of hedge transaction. Hedge accounting is utilized when a derivative is expected to be highly effective upon execution and continues to be highly effective over the duration of the hedge transaction. Hedge accounting permits gains and losses on derivative instruments to be deferred in Accumulated Other Comprehensive Income (Loss) and subsequently included in earnings in the periods in which earnings are affected by the hedged item, or when the derivative is determined to be ineffective. We use derivatives primarily for forward purchases of foreign currency to manage exposure to the variability of cash flows, primarily related to the foreign exchange rate risks inherent in forecasted transactions denominated in foreign currency. See Note 12 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. Stock-Based Compensation: As described in Note 8 - Stock Compensation Plans of Notes to Consolidated Financial Statements, the Company maintains a stock-based compensation plan which allows for the issuance of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units for grant to officers and other key employees and to members of the Board of Directors who are not employees. We recognize the cost resulting from share-based payment transactions using a fair-value-based method. The estimated fair value of outstanding performance shares is based on the stock price at the date of the grant. Stock-based compensation expense is recognized for the portion of the award that is ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. “Emerging Growth Company” Reporting Requirements: The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as a company is deemed to be an “emerging growth company,” it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. Among other things, we are not required to provide an auditor attestation report on the assessment of the internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Section 107 of the JOBS Act also provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. We would cease to be an “emerging growth company” upon the earliest of: • the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act; • the last day of the fiscal year in which our total annual gross revenues exceed $1 billion ; • the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or • the date on which we become a “large accelerated filer,” as defined in Rule 12b-2 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter. New Accounting Standards: In July 2015, the Financial Accounting Standards Board (“FASB”) issued guidance on Simplifying the Measurement of Inventory. The guidance amends the subsequent measurement of inventory from the lower of cost or market to the lower of cost and net realizable value. Under the current guidance, market value could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. Within the scope of the new guidance, an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for our fiscal year 2018 financial statements. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In April 2015, the FASB issued guidance to customers of cloud computing arrangements about whether an arrangement includes a software license. If a software license exists in the arrangement, the guidance requires the software license element of the arrangement to be accounted for consistently with the acquisition of other software licenses by the customer. Otherwise, the customer should account for the arrangement as a service contract. The guidance is effective for our fiscal year 2017 financial statements using either of two acceptable adoption methods: (i) retrospective adoption; or (ii) prospective adoption to all arrangements entered into or materially modified after the effective date. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements. We do not expect the adoption to have a material effect on our consolidated financial statements. In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued additional guidance deferring the effective date for one year while allowing entities the option to adopt one year early. The guidance is now effective for our fiscal year 2020 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements. In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance is effective prospectively for disposals or components of our business classified as held for sale for our fiscal year 2016. We do not expect the adoption to have a material effect on our consolidated financial statements. In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance is effective prospectively for our first quarter fiscal year 2015 financial statements. The adoption did not have a material effect on our consolidated financial statements. |
Note 2. Related Party Transacti
Note 2. Related Party Transactions (Notes) | 12 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure | Related Party Transactions Services Provided by Kimball International, Inc.: Prior to the spin-off on October 31, 2014, Kimball Electronics operated as a reportable segment within Kimball International. The Consolidated Financial Statements include allocations of general corporate expenses from former Parent including, but not limited to, spin-off costs, finance, legal, information technology, human resources, employee benefits administration, treasury, risk management, and other shared services. The allocations were primarily made using various drivers including average capital deployed, payroll, revenue less material costs, headcount, or other measures, with the remainder allocated on a direct usage or cost incurred basis when appropriate. Former Parent charged us for such services and indirect general and corporate overhead expenses of approximately $4.5 million in fiscal year 2015 , $12.6 million in fiscal year 2014 , and $10.5 million in fiscal year 2013 . Additionally, former Parent charged us approximately $2.1 million in fiscal year 2015 , $5.0 million in fiscal year 2014 , and $2.4 million in fiscal year 2013 for corporate incentive plan expenses, including stock-based compensation. These costs are primarily included in Selling and Administrative Expenses and were charged through October 31, 2014, the spin-off date. We consider the basis on which the expenses were allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us through the spin-off date. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company through the spin-off date. Actual costs that might have been incurred had we been a stand-alone company would depend on a number of factors, including what functions we might have performed ourselves or outsourced and strategic decisions we might have made in areas such as information technology and infrastructure. As an independent company, we are performing these functions using our own resources or purchased services from third parties, or, for a limited time, former Parent. Taxes: The Company entered into a Tax Matters Agreement with former Parent that governs the Company’s rights and obligations after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests, and other tax sharing regarding income taxes, other tax matters, and related tax returns. The Company will continue to have joint and several liabilities with former Parent with the IRS and certain U.S. state tax authorities for U.S. federal income and state taxes for the taxable periods in which the Company was a part of former Parent’s consolidated group. The tax matters agreement specifies the portion, if any, of this liability for which the Company bears responsibility, and former Parent has agreed to indemnify the Company against any amounts for which the Company is not responsible. As of June 30, 2015 , the Company has a receivable from Kimball International recorded for $0.8 million , of which $0.6 million is a long-term receivable and was recorded in Other Assets on the balance sheet, relating to benefits from federal and state research and development tax credits. Cash Management: For purposes of the historical Consolidated Financial Statements, former Parent did not allocate to us the cash and cash equivalents held at former Parent’s corporate level for the periods presented prior to the spin-off. Cash in our Consolidated Balance Sheet as of June 30, 2014 primarily represented cash held by international entities at the local level. In connection with the spin-off, net distributions of cash were made from former Parent to us of $44.3 million on or around October 31, 2014. We began operations as an independent company with approximately $63 million of cash, including cash held by our foreign facilities. Former Parent provided centralized treasury functions for us, whereby, former Parent regularly transferred cash both to and from our subsidiaries, as necessary. Intercompany receivables/payables from/to related parties arising from the corporate overhead activity described above were included in Net Parent investment in the Consolidated Financial Statements. As of July 1, 2014, Net Parent investment was converted to Additional paid-in capital. For additional information, see Note 1 – Business Description and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements. Agreements with Kimball International, Inc.: As part of the spin-off, the Company entered into various agreements with former Parent which provide for the allocation between the Company and former Parent of the assets, liabilities, and obligations, of former Parent and its subsidiaries, and govern the relationship between former Parent and the Company after the spin-off. These agreements became effective on October 31, 2014 and included the following: Separation and Distribution Agreement: The Separation and Distribution Agreement, among other things, (1) provides for the transfers of assets and assumptions of liabilities; (2) governs the rights and obligations of the parties regarding the distribution; (3) provides that following the spin-off the Company is responsible for obtaining and maintaining its own insurance coverage; and (4) governs other matters, including, but not limited to access and provision of records, intellectual property, confidentiality, treatment of outstanding guarantees and similar credit support, and dispute resolution procedures. Employee Matters Agreement: The Employee Matters Agreement provides (1) that generally the Company has responsibility for its own employees and compensation plans, subject to certain exceptions; (2) that following the spin-off, the Company’s employees will generally participate in various retirement, welfare, and other employee benefit and compensation plans established and maintained by the Company; (3) for the treatment of outstanding equity awards in connection with the spin-off; (4) for the assumption of certain employment related contracts that the Company’s employees originally entered into with former Parent; and (5) the allocation of certain employee liabilities and the cooperation between the Company and former Parent in sharing employee information. Transition Services Agreement: The Transition Services Agreement provides the Company and former Parent will provide to each other specified services on a transitional basis to help ensure an orderly transition following the spin-off. These services include information technology, financial, telecommunications, benefits support services, and other specified services. The services are provided at cost and the majority of services have been completed as of June 30, 2015 while certain services extend to December 31, 2015, per the agreement. Tax Matters Agreement: See section entitled “Taxes” above for information on the Tax Matters Agreement. |
Note 3. Inventories
Note 3. Inventories | 12 Months Ended |
Jun. 30, 2015 | |
Inventories [Abstract] | |
Inventory Disclosure | Inventories Inventories are valued using the lower of first-in, first-out (“FIFO”) cost or market value. Inventory components at June 30 were as follows: (Amounts in Thousands) 2015 2014 Finished products $ 21,415 $ 18,818 Work-in-process 13,029 12,530 Raw materials 90,754 84,811 Total inventory $ 125,198 $ 116,159 |
Note 4. Property and Equipment
Note 4. Property and Equipment | 12 Months Ended |
Jun. 30, 2015 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Property and Equipment Major classes of property and equipment at June 30 consist of the following: (Amounts in Thousands) 2015 2014 Land $ 8,726 $ 9,392 Buildings and improvements 57,524 57,756 Machinery and equipment 177,148 175,984 Construction-in-progress 14,885 6,549 Total $ 258,283 $ 249,681 Less: Accumulated depreciation (151,504 ) (151,747 ) Property and equipment, net $ 106,779 $ 97,934 The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 Depreciation of property and equipment, including asset write-downs associated with restructuring plans, totaled, in millions, $19.0 for fiscal year 2015 , $17.1 for fiscal year 2014 , and $16.5 for fiscal year 2013 . At both June 30, 2015 and 2014 , no assets were classified as held for sale. During fiscal year 2014 , we sold a facility and land located in Gaylord, Michigan, recognizing a pre-tax loss, in thousands, of $311 . During fiscal year 2013, we recognized pre-tax impairment on this property, in thousands, of $188 . The loss on sale and impairment charges were included in the Restructuring Expense line of the Consolidated Statements of Income. |
Note 5. Commitments and Conting
Note 5. Commitments and Contingent Liabilities | 12 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingent Liabilities Leases: Operating leases for land on which certain office and manufacturing facilities reside expire from fiscal year 2030 to 2056 and contain provisions under which minimum annual lease payments are $0.1 million , for each of the five years ending June 30, 2020 and aggregate $0.8 million from fiscal year 2021 to the expiration of the leases in fiscal year 2056 . We are obligated under certain real estate leases to maintain the properties and pay real estate taxes. Certain leases include renewal options and escalation clauses. Total rental expense amounted to, in millions, $0.3 , $0.5 , and $0.4 in fiscal years 2015 , 2014 , and 2013 , respectively. As of June 30, 2015 and 2014 , the Company had no capital leases. Guarantees: As of June 30, 2015 , we had no guarantees issued which were contingent on the future performance of another entity. Prior to the spin-off, Kimball Electronics and certain of its subsidiaries guaranteed former Parent’s obligation under former Parent’s credit facility. As of June 30, 2014 , former Parent had no borrowings under its credit facility, and as a result, the potential obligation under this guarantee was not deemed to be material and no liability was recorded. No other guarantees existed as of June 30, 2014 , which were contingent on the future performance of another entity. The Company, and former Parent prior to the spin-off, issued standby letters of credit to third-party suppliers, lessors, and insurance and financial institutions and can only be drawn upon in the event of Kimball Electronics’ failure to pay its obligations to the beneficiary. We had a maximum financial exposure from unused standby letters of credit totaling $0.3 million as of June 30, 2015 and $0.1 million as of June 30, 2014 . We are not aware of circumstances that would require us to perform under any of these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of June 30, 2015 and 2014 with respect to the standby letters of credit. We also may enter into commercial letters of credit to facilitate payments to vendors and from customers. Product Warranties: 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 periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. Changes in the product warranty accrual during fiscal years 2015 , 2014 , and 2013 were as follows: (Amounts in Thousands) 2015 2014 2013 Product Warranty Liability at the beginning of the year $ 911 $ 507 $ 329 Additions to warranty accrual (including changes in estimates) 625 721 279 Settlements made (in cash or in kind) (915 ) (317 ) (101 ) Product Warranty Liability at the end of the year $ 621 $ 911 $ 507 |
Note 6. Credit Facilities
Note 6. Credit Facilities | 12 Months Ended |
Jun. 30, 2015 | |
Long-Term Debt and Credit Facility [Abstract] | |
Debt Disclosure | Credit Facilities Credit facilities consisted of the following: Availability to Borrow at Borrowings Outstanding at Borrowings Outstanding at (Amounts in Millions, in U.S Dollar Equivalents) June 30, 2015 June 30, 2015 June 30, 2014 Primary credit facility (1) $ 49.7 $ — $ — Thailand overdraft credit facility (2) 2.7 — — China revolving credit facility (3) 7.5 — — Total $ 59.9 $ — $ — (1) In connection with the spin-off, the Company entered into a new U.S. primary credit facility (the “primary facility”) dated as of October 31, 2014. The credit facility expires in October 2019 and provides for up to $50 million in borrowings, with an option to increase the amount available for borrowing to $75 million upon request, subject to participating banks’ consent. We will use this facility for acquisitions and general corporate purposes. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2015 . The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA. The interest rate on borrowings is dependent on the type of borrowings. 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 U.S. 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, and • a fixed charge coverage ratio, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be less than 1.10 to 1.00. The Company had $0.3 million in letters of credit contingently committed against the credit facility at June 30, 2015 . (2) The Company also maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to 90.0 million Thai Baht (approximately $2.7 million at June 30, 2015 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. (3) An uncommitted revolving credit facility was established in the fourth quarter of fiscal year 2015 for our China operation. The China credit facility allows for borrowings of up to $7.5 million , which borrowings can be made in either Chinese Renminbi (RMB) or U.S. dollars. The availability of this facility is at the sole discretion of the bank and is subject to the availability of funds and other relevant conditions. The bank may, at its sole discretion, agree to provide the facility on such terms and conditions as the bank deems appropriate. Further, the availability of the facility is also subject to the determination by the bank of the borrower’s actual need for such facility. Proceeds from the facility are to be used for general working capital purposes. Interest on borrowing under this facility is charged at a rate of interest determined by the bank and is dependent on the denomination of the currency borrowed. The facility matures on May 31, 2016 . The Company previously maintained a credit facility for the operation in Poland which allowed for multi-currency borrowings up to a 6 million Euro equivalent, and as of October 31, 2014, the Poland credit facility was canceled by mutual agreement between us and the bank. We had no borrowings under the Poland foreign credit facility at June 30, 2014. No cash payments were made for interest on borrowings in fiscal year 2015 . Cash payments for interest on borrowings in fiscal years 2014 and 2013 were, in thousands, $2 , and $9 , respectively. Capitalized interest expense was immaterial during fiscal years 2015 , 2014 , and 2013 . |
Note 7. Employee Benefit Plans
Note 7. Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2015 | |
Employee Benefit Plans [Abstract] | |
Pension and Postemployment Benefits | Employee Benefit Plans Retirement Plans: In connection with the spin-off, the Company established a trusteed defined contribution retirement plan which is in effect for substantially all domestic employees meeting the eligibility requirements. All contributions for Kimball Electronics’ employees in former Parent’s plan at the spin date were transferred to the Company’s new plan on or around the spin date and were immediately fully vested. The Company also established a supplemental employee retirement plan (“SERP”) for executives and other key employees which enables them to defer cash compensation on a pre-tax basis in excess of IRS limitations. Assets in the former Parent SERP plan for Kimball Electronics employees were transferred to the Company’s plan on or around the spin date. 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. The discretionary employer contribution for domestic employees is determined annually by the Compensation and Governance Committee of the Company’s Board of Directors, and prior to the spin-off, the Compensation and Governance Committee of former Parent’s Board of Directors. Total expense related to employer contributions to the domestic retirement plans was, in millions, $1.5 , $1.3 , and $1.2 for fiscal years 2015 , 2014 , and 2013 , respectively. Employees of certain foreign subsidiaries are covered by local pension or retirement plans. Total expense related to employer contributions to these foreign plans was $0.2 million in each of fiscal years 2015 , 2014 , and 2013 . Severance Plans: The Company established and maintains severance plans for all domestic employees, and prior to the spin-off, the Company’s domestic employees participated in severance plans sponsored by former Parent. These plans provide severance benefits to eligible employees meeting the plans’ qualifications, primarily involuntary termination without cause. There are no statutory requirements for the Company 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. Benefits are based upon an employee’s years of service and accumulate up to certain limits specified in the plans and include both salary and an allowance for medical benefits. The benefit obligation for periods prior to the spin-off was determined in total for each of the plans and allocated by the number of Kimball Electronics domestic employees participating in the plans. In conjunction with the spin-off, these plans were remeasured and legally separated. There were no significant changes to the actuarial assumptions used in the remeasurement. The components and changes in the Benefit Obligation, Accumulated Other Comprehensive Income (Loss), and Net Periodic Benefit Cost are as follows: June 30 (Amounts in Thousands) 2015 2014 Changes and Components of Benefit Obligation: Benefit obligation at beginning of year $ 1,495 $ 1,560 Service cost 327 267 Interest cost 50 37 Actuarial (gain) loss for the period (638 ) 6 Benefits paid (8 ) (375 ) Remeasurement of liabilities at spin-off 751 — Benefit obligation at end of year $ 1,977 $ 1,495 Balance in current liabilities $ 347 $ 262 Balance in noncurrent liabilities 1,630 1,233 Total benefit obligation recognized in the Consolidated Balance Sheets $ 1,977 $ 1,495 June 30 (Amounts in Thousands) 2015 2014 Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): Accumulated Other Comprehensive Income (Loss) at beginning of year $ (160 ) $ (73 ) Change in unrecognized prior service cost (28 ) (40 ) Net change in unrecognized actuarial (gain) loss (492 ) (47 ) Accumulated Other Comprehensive Income (Loss) at end of year $ (680 ) $ (160 ) Balance in unrecognized prior service cost $ 28 $ 55 Balance in unrecognized actuarial (gain) loss (708 ) (215 ) Total Accumulated Other Comprehensive Income (Loss) recognized in Share Owners’ Equity $ (680 ) $ (160 ) (Amounts in Thousands) Year Ended June 30 Components of Net Periodic Benefit Cost (before tax): 2015 2014 2013 Service cost $ 327 $ 267 $ 230 Interest cost 50 37 50 Amortization of prior service cost 28 40 40 Amortization of actuarial (gain) loss (146 ) 53 37 Net periodic benefit cost recognized in the Consolidated Statements of Income $ 259 $ 397 $ 357 The benefit cost in the above table includes only normal recurring levels of severance activity, as estimated using an actuarial method. Unusual or non-recurring severance actions are not estimable using actuarial methods and are expensed in accordance with other applicable U.S. GAAP. Prior service cost is amortized on a straight-line basis over the average remaining service period of employees that were active at the time of the plan initiation and actuarial (gain) loss is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. The estimated prior service cost and actuarial net (gain) loss for the severance plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year are, pre-tax in thousands, $28 and $(231) , respectively. Assumptions used to determine fiscal year end benefit obligations are as follows: 2015 2014 Discount Rate 2.8% 2.3% Rate of Compensation Increase 3.0% 3.0% Weighted average assumptions used to determine fiscal year net periodic benefit costs are as follows: 2015 2014 2013 Discount Rate 2.7% 2.5% 3.8% Rate of Compensation Increase 3.0% 3.0% 3.8% |
Note 8. Stock Compensation Plan
Note 8. Stock Compensation Plans | 12 Months Ended |
Jun. 30, 2015 | |
Stock Compensation Plans [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments | Stock Compensation Plans A stock compensation plan similar to the former Parent plan was created and adopted by the Company’s Board of Directors on October 3, 2014. The Kimball Electronics, Inc. 2014 Stock Option and Incentive Plan (the “Plan”) allows for the issuance of up to 4.5 million shares and may be awarded 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. Prior to the spin-off, former Parent maintained stock compensation plans in which our executives and certain key employees participated. All awards granted under the plans were based on former Parent’s Common Stock. Performance share awards issued and outstanding to Kimball Electronics employees under the former Parent plans were amended, in accordance with the terms of the plans, to provide an equitable adjustment as a result of the spin-off. Pre-tax stock compensation charged against income in fiscal year 2015 was $3.5 million , including $1.8 million allocated to us by former Parent prior to the spin-off. For fiscal years 2014 and 2013 , the pre-tax stock compensation cost allocated to us by former Parent was $3.3 million and $2.4 million , respectively. These costs are primarily included in Selling and Administrative Expenses. Performance Shares: The Company awards performance shares to officers and other key employees. Under these awards, a number of shares will be issued to each participant based upon the attainment of the applicable bonus percentage calculated under the Company’s profit sharing incentive bonus plan as applied to a total potential share award made and approved by the Compensation and Governance Committee of the Company’s Board of Directors. Performance shares are vested when shares of the Company’s Common Stock are issued shortly after the end of the fiscal year in which the performance measurement period is complete. Certain outstanding performance shares are applicable to performance measurement periods in future fiscal years and will be measured at fair value when the performance targets are established in future fiscal years. The contractual life of performance shares ranges from one year to five years . If a participant is not employed on the date shares are issued, the performance share award is forfeited, except in the case of death, retirement at age 62 or older, total permanent disability, or certain other circumstances described in the Plan. On December 2, 2014, Performance Share Awards issued and outstanding to Kimball Electronics employees under the former Parent plans were amended, in accordance with the terms of the plans, to provide an equitable adjustment as a result of the spin-off. The awards will be granted in shares of the Company’s Common Stock, instead of Kimball International, Inc. shares, under the Kimball Electronics Plan. The amended awards retained the same terms and conditions and vesting schedule, issuance dates, and expiration dates of the original Kimball International awards. A summary of the Company’s performance share activity during fiscal year 2015 is presented below: Number of Shares Weighted Average Grant Date Fair Value Performance shares outstanding at July 1, 2014 — — Converted on December 2, 2014 in connection with the spin-off 548,552 $8.43 Granted 241,222 $14.47 Vested — — Forfeited — — Performance shares outstanding at June 30, 2015 789,774 $10.27 As of June 30, 2015 , there was approximately $5.9 million of unrecognized compensation cost related to performance shares, based on the latest estimated attainment of performance goals. That cost is expected to be recognized over annual performance periods ending August 2015 through August 2019, with a weighted average vesting period of one year, seven months . The fair value of performance shares is based on the stock price at the date of grant. No Kimball Electronics performance shares vested during fiscal year 2015 . The number of shares presented in the above table, the amounts of unrecognized compensation, and the weighted average period include performance shares awarded that are applicable to future performance measurement periods and will be measured at fair value when the performance targets are established in future fiscal years. Unrestricted Share Grants: Unrestricted shares may be granted to employees and members of the Board of Directors as consideration for services rendered. Unrestricted share grants do not have vesting periods, holding periods, restrictions on sale, or other restrictions. The fair value of unrestricted shares is based on the stock price at the date of the award. During fiscal year 2015 , the Company granted a total of 28,700 unrestricted shares at an average grant date fair value of $10.76 , for a total fair value of $0.3 million . Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director’s fees, as a result of directors’ elections to receive unrestricted shares in lieu of cash payment. Director’s fees are expensed over the period that directors earn the compensation. |
Note 9. Income Taxes
Note 9. Income Taxes | 12 Months Ended |
Jun. 30, 2015 | |
Income Taxes [Abstract] | |
Income Tax Disclosure | Income Taxes The Company and its subsidiaries, prior to the spin-off, were included in former Parent’s tax returns in certain taxing jurisdictions. The provisions for income taxes for those certain jurisdictions were determined on a separate return basis and presented as such in these Consolidated Financial Statements. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities as of June 30, 2015 and 2014 , were as follows: (Amounts in Thousands) 2015 2014 Deferred Tax Assets: Receivables $ 138 $ 185 Inventory 1,524 1,457 Employee benefits 164 174 Deferred compensation 7,786 8,850 Other current liabilities 712 408 Tax credit carryforwards 240 3,069 Goodwill 2,149 2,440 Net operating loss carryforward 5 564 Net foreign currency losses 2 81 Property and equipment 1,838 1,063 Miscellaneous 1,268 2,332 Valuation Allowance — (92 ) Total asset $ 15,826 $ 20,531 Deferred Tax Liabilities: Miscellaneous $ 353 $ 199 Total liability $ 353 $ 199 Net Deferred Income Taxes $ 15,473 $ 20,332 Income tax benefits associated with the net operating loss carryforward expires in fiscal year 2023 . Income tax benefits associated with tax credit carryforwards primarily expire from fiscal year 2016 to 2025 . The components of income before taxes on income are as follows: Year Ended June 30 (Amounts in Thousands) 2015 2014 2013 United States $ 1,195 $ 5,412 $ 6,638 Foreign 33,576 24,830 20,138 Total income before taxes on income $ 34,771 $ 30,242 $ 26,776 Foreign unremitted earnings of entities not included in the United States tax return have been included in the Consolidated Financial Statements without giving effect to the United States taxes that may be payable on distribution to the United States because it is not anticipated such earnings will be remitted to the United States. Under current applicable tax laws, if we chose to remit some or all of the funds we have designated as indefinitely reinvested outside the United States rather than making nontaxable repayments on our intercompany loans, the amount remitted would be subject to United States income taxes and applicable non-U.S. income and withholding taxes. Such earnings would also become taxable upon the sale or liquidation of these subsidiaries or upon remittance of dividends. The aggregate unremitted earnings of the Company’s foreign subsidiaries for which a deferred income tax liability has not been recorded was approximately $158 million as of June 30, 2015 . Determination of the amount of unrecognized deferred tax liability on unremitted earnings is not practicable. The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2015 2014 2013 Currently Payable (Refundable): Federal $ 186 $ (40 ) $ 40 Foreign 6,586 4,505 2,861 State 108 519 239 Total current $ 6,880 $ 4,984 $ 3,140 Deferred Taxes: Federal $ (188 ) $ 2,360 $ 1,780 Foreign 1,957 (55 ) 134 State (83 ) (139 ) (186 ) Total deferred $ 1,686 $ 2,166 $ 1,728 Valuation allowance — (1,521 ) 388 Total provision for income taxes $ 8,566 $ 5,629 $ 5,256 A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows: Year Ended June 30 2015 2014 2013 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 12,170 35.0 % $ 10,585 35.0 % $ 9,372 35.0 % State income taxes, net of federal income tax benefit 16 — 210 0.7 41 0.1 Foreign tax rate differential (4,336 ) (12.5 ) (3,800 ) (12.6 ) (3,645 ) (13.6 ) Impact of foreign exchange rates on foreign income taxes 1,274 3.7 153 0.5 (72 ) (0.3 ) Foreign tax credits (146 ) (0.4 ) (123 ) (0.4 ) (498 ) (1.9 ) Valuation allowance — — (1,521 ) (5.0 ) 388 1.4 Research credit (421 ) (1.2 ) (187 ) (0.6 ) (347 ) (1.3 ) Spin-off costs 625 1.8 753 2.5 — — Other - net (616 ) (1.8 ) (441 ) (1.5 ) 17 0.2 Total provision for income taxes $ 8,566 24.6 % $ 5,629 18.6 % $ 5,256 19.6 % During the year ended June 30, 2014 , we recognized an income tax benefit, in thousands, of $1,521 from the release of valuation allowances on our foreign deferred tax assets, in thousands, of $1,399 and on our state deferred tax assets, in thousands, of $122 . During the year ended June 30, 2013 , we recognized income tax expense, in thousands, of $388 consisting of an increase in the valuation allowance on our foreign deferred tax assets, in thousands, of $408 , partially offset by a benefit, in thousands, of $20 from the release of a portion of our valuation allowance on our state deferred tax assets. Net cash payments (refunds) for income taxes were, in thousands, $11,783 , $4,347 and $775 in fiscal years 2015 , 2014 , and 2013 , respectively. Cash payments for fiscal years 2014 and 2013 include only payments in foreign jurisdictions as the cash payments for federal and state income taxes were submitted by former Parent. Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2015 , 2014 , and 2013 were as follows: (Amounts in Thousands) 2015 2014 2013 Beginning balance - July 1 $ 792 $ 965 $ 870 Tax positions related to prior fiscal years: Additions — 92 10 Reductions (792 ) — — Tax positions related to current fiscal year: Additions — 77 104 Reductions — — — Settlements — — — Lapses in statute of limitations — (342 ) (19 ) Ending balance - June 30 $ — $ 792 $ 965 Portion that, if recognized, would reduce tax expense and effective tax rate $ — $ 565 $ 772 Unrecognized tax benefits for fiscal years 2014 and 2013 were allocated to us by former Parent. The unrecognized tax benefits at the spin-off date reverted back to former Parent for the prior fiscal years in which we were included in former Parent’s consolidate tax returns resulting in the reductions in the tax positions during fiscal year 2015. We do not expect the change in the amount of unrecognized tax benefits in the next 12 months to have a significant impact on our results of operations or financial position. We recognize interest and penalties related to unrecognized tax benefits in the Provision for Income Taxes line of the Consolidated Statements of Income. Amounts accrued for interest and penalties were as follows: As of June 30 (Amounts in Thousands) 2015 2014 2013 Accrued Interest and Penalties: Interest $ — $ 65 $ 72 Penalties $ — $ 69 $ 55 No interest or penalties expense was recognized in fiscal year 2015 . Interest and penalties expense recognized in fiscal years 2014 and 2013 were, in thousands, $7 and $16 , respectively. In connection with the spin-off, the Company entered into a Tax Matters Agreement with former Parent that governs the Company’s rights and obligations after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests, and other tax sharing regarding income taxes, other tax matters, and related tax returns. The Company will continue to have joint and several liabilities with former Parent with the IRS and certain U.S. state tax authorities for U.S. federal income and state taxes for the taxable periods in which the Company was a part of former Parent’s consolidated group. For additional information, see Note 2 - Related Party Transactions of Notes to Consolidated Financial Statements. The Company, former Parent, or one of our wholly-owned subsidiaries, files U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions. Former Parent is no longer subject to any significant U.S. federal tax examinations by tax authorities for years before fiscal year 2012. We or former Parent are subject to various state and local income tax examinations by tax authorities for years after June 30, 2006 and various foreign jurisdictions for years after June 30, 2008. |
Note 10. Share Owners' Equity
Note 10. Share Owners' Equity | 12 Months Ended |
Jun. 30, 2015 | |
Common Stock [Abstract] | |
Stockholders' Equity Note Disclosure | Share Owners’ Equity Effective October 16, 2014, the Company’s authorized capital was increased to 165 million shares comprised of 15 million preferred shares without par value and 150 million common shares without par value. On the same day, 50 thousand common shares outstanding were split into 29.1 million common shares. On October 31, 2014, Kimball International, Inc., the Company’s sole Share Owner, distributed all 29.1 million outstanding shares of Kimball Electronics common stock to Kimball International Share Owners in connection with the spin-off. Upon the spin-off, holders of Kimball International common stock received three shares of Kimball Electronics common stock for every four shares of Kimball International common stock held on October 22, 2014. Preferred and common shares were retrospectively restated for the number of Kimball Electronics shares authorized and outstanding immediately following these events. A stock compensation plan similar to the former Parent plan was created and adopted by the Company’s Board of Directors on October 3, 2014. The Kimball Electronics, Inc. 2014 Stock Option and Incentive Plan (the “Plan”) allows for the issuance of up to 4.5 million shares and may be awarded in the form of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units. For additional information, see Note 8 - Stock Compensation Plans of Notes to Consolidated Financial Statements. Net Parent investment in the Consolidated Financial Statements represents former Parent’s historical investment in us, our accumulated net earnings after taxes, and the net effect of the transactions with and allocations from former Parent. As of July 1, 2014, Net Parent investment was converted to Additional paid-in capital. During fiscal year 2015 , Net contributions from Parent of $46.0 million included non-cash net transfers to Parent of $4.3 million including net transfers of assets and liabilities and allocation of stock compensation. For additional information, see Note 1 – Business Description and Summary of Significant Accounting Policies and Note 2 – Related Party Transactions of Notes to Consolidated Financial Statements. |
Note 11. Fair Value
Note 11. Fair Value | 12 Months Ended |
Jun. 30, 2015 | |
Fair Value [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. Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during fiscal years 2015 and 2014 . Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents 1 Market - Quoted market prices Derivative Assets: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk Trading securities: Mutual funds held in SERP 1 Market - Quoted market prices Derivative Liabilities: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball Electronics’ non-performance risk Recurring Fair Value Measurements: As of June 30, 2015 and 2014 , 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: June 30, 2015 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 28,722 $ — $ 28,722 Derivatives: foreign exchange contracts — 3,004 3,004 Trading securities: mutual funds held in nonqualified SERP 5,813 — 5,813 Total assets at fair value $ 34,535 $ 3,004 $ 37,539 Liabilities Derivatives: foreign exchange contracts $ — $ 2,318 $ 2,318 Total liabilities at fair value $ — $ 2,318 $ 2,318 June 30, 2014 (Amounts in Thousands) Level 1 Level 2 Total Assets Derivatives: foreign exchange contracts $ — $ 800 $ 800 Trading securities: mutual funds held in nonqualified SERP 5,260 — 5,260 Total assets at fair value $ 5,260 $ 800 $ 6,060 Liabilities Derivatives: foreign exchange contracts $ — $ 699 $ 699 Total liabilities at fair value $ — $ 699 $ 699 We had no Level 3 assets during fiscal years 2015 and 2014 . The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, a bond fund, 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 13 - Investments of Notes to Consolidated Financial Statements for further information regarding the SERP. Non-Recurring Fair Value Measurements: Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Non-recurring fair value adjustment Level Valuation Technique/Inputs Used Impairment of assets held for sale (real estate) 3 Market - Estimated potential net selling price. Due to declines in the market value of a held for sale facility, we recognized pre-tax impairment of, in millions, $0.2 during fiscal year 2013 . Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk The carrying value of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximates fair value due to their relatively short maturity and immaterial non-performance risk. |
Note 12. Derivative Instruments
Note 12. Derivative Instruments | 12 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments [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 our 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. Foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances denominated in currencies other than the functional currencies. As of June 30, 2015 , we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $33.5 million and to hedge currencies against the Euro in the aggregate notional amount of 52.2 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 balance sheet as a derivative asset or liability. 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 effective portions of the gain or loss on the derivative instrument are initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners’ Equity, and are subsequently reclassified into earnings in the period or periods during which the hedged transaction is recognized in earnings. The ineffective portion of the derivative gain or loss is reported in the Non-operating income or expense line item on the Consolidated Statements of Income immediately. 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 also reported in the Non-operating income or expense line item on the Consolidated Statements of Income immediately. Based on fair values as of June 30, 2015 , we estimate that approximately $0.4 million of pre-tax derivative loss deferred in Accumulated Other Comprehensive Income (Loss) will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the fiscal year ending June 30, 2016 . Losses on foreign exchange contracts are generally offset by gains in operating costs 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 June 30, 2015 and June 30, 2014 . See Note 11 - Fair Value of Notes to Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 17 - Accumulated Other Comprehensive Income (Loss) of Notes to Consolidated Financial Statements for the amount and changes in derivative gains and losses deferred in Accumulated Other Comprehensive Income (Loss). Information on the location and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Income are presented below. Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 1,255 $ 599 Accrued expenses $ 2,143 $ 241 Derivatives not designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets 1,749 201 Accrued expenses 175 458 Total derivatives $ 3,004 $ 800 $ 2,318 $ 699 The Effect of Derivative Instruments on Other Comprehensive Income (Loss) June 30 (Amounts in Thousands) 2015 2014 2013 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): Foreign exchange contracts $ 3,806 $ 73 $ 1,206 The Effect of Derivative Instruments on Consolidated Statements of Income (Amounts in Thousands) Fiscal Year Ended June 30 Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2015 2014 2013 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): Foreign exchange contracts Cost of Sales $ 1,310 $ (1,024 ) $ 2,212 Foreign exchange contracts Non-operating income (expense) 2,998 (163 ) (73 ) Total $ 4,308 $ (1,187 ) $ 2,139 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Ineffective Portion): Foreign exchange contracts Non-operating income (expense) $ (1 ) $ — $ (3 ) Derivatives Not Designated as Hedging Instruments Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives: Foreign exchange contracts Non-operating income (expense) $ 1,734 $ (487 ) $ (322 ) Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ 6,041 $ (1,674 ) $ 1,814 |
Note 13. Investments
Note 13. Investments | 12 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure | Investments Supplemental Employee Retirement Plan Investments: The Company established and maintains a self-directed supplemental employee retirement plan (“SERP”), similar to former Parent’s plan, for executive and other key employees. Subsequent to the spin-off, the assets and liabilities of former Parent’s SERP related to Kimball Electronics’ employees were transferred to the Company sponsored SERP. The Company SERP utilizes 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. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. 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 (losses) for the fiscal years ended June 30, 2015 , 2014 , and 2013 was, in thousands, $(27) , $315 , and $208 , respectively. SERP asset and liability balances applicable to Kimball Electronics participants were as follows: June 30 (Amounts in Thousands) 2015 2014 SERP investment - current asset $ 192 $ 167 SERP investment - other long-term asset 5,621 5,093 Total SERP investment $ 5,813 $ 5,260 SERP obligation - current liability $ 192 $ 167 SERP obligation - other long-term liability 5,621 5,093 Total SERP obligation $ 5,813 $ 5,260 |
Note 14. Accrued Expenses
Note 14. Accrued Expenses | 12 Months Ended |
Jun. 30, 2015 | |
Accrued Expenses [Abstract] | |
Accrued Liabilities Disclosure | Accrued Expenses Accrued expenses consisted of: June 30 (Amounts in Thousands) 2015 2014 Taxes $ 2,022 $ 1,742 Compensation 15,547 18,488 Derivatives 2,318 699 Retirement plan 1,397 1,213 Insurance 741 1,598 Other expenses 4,520 2,862 Total accrued expenses $ 26,545 $ 26,602 |
Note 15. Geographic Area Inform
Note 15. Geographic Area Information | 12 Months Ended |
Jun. 30, 2015 | |
Geographic Area Information [Abstract] | |
Segment Reporting Disclosure | Geographic Information The following geographic area data includes net sales based on the location where title transfers and long-lived assets based on physical location. Long-lived assets include property and equipment and other long-term assets such as software. At or For the Year Ended June 30 (Amounts in Thousands) 2015 2014 2013 Net Sales: United States $ 396,516 $ 363,211 $ 389,510 Germany 73,966 77,338 68,925 China 127,761 67,665 46,794 Other Foreign 221,107 233,316 197,900 Total net sales $ 819,350 $ 741,530 $ 703,129 Long-Lived Assets: United States $ 49,689 $ 33,004 $ 28,942 Poland 33,692 45,287 45,971 China 16,676 12,174 10,069 Other Foreign 11,092 9,113 8,877 Total long-lived assets $ 111,149 $ 99,578 $ 93,859 |
Note 16. Earnings Per Share
Note 16. Earnings Per Share | 12 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and diluted earnings per share were calculated as follows: (Amounts in thousands, except per share data) Year Ended June 30 2015 2014 2013 Basic and Diluted Earnings Per Share: Net Income $ 26,205 $ 24,613 $ 21,520 Basic weighted average common shares outstanding 29,162 29,143 29,143 Dilutive effect of average outstanding performance shares 226 — — Dilutive weighted average shares outstanding 29,388 29,143 29,143 Earnings Per Share of Common Stock: Basic $ 0.90 $ 0.84 $ 0.74 Diluted $ 0.89 $ 0.84 $ 0.74 Basic and diluted earnings per share and the average number of common shares outstanding for the fiscal years ended June 30, 2014 and 2013 were retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 10 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. The same number of shares was used to calculate basic and diluted earnings per share for the fiscal years ended June 30, 2014 and 2013 since no Kimball Electronics stock-based awards were outstanding prior to the spin-off. |
Note 17. Accumulated Other Comp
Note 17. Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Jun. 30, 2015 | |
Comprehensive Income [Abstract] | |
Comprehensive Income (Loss) Note | Accumulated Other Comprehensive Income (Loss) The changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: Postemployment Benefits (Amounts in Thousands) Foreign Currency Translation Adjustments Derivative Gain (Loss) Prior Service Costs Net Actuarial Gain (Loss) Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2013 $ 1,038 $ (4,360 ) $ (59 ) $ 105 $ (3,276 ) Other comprehensive income (loss) before reclassifications 3,887 44 — (2 ) 3,929 Reclassification to (earnings) loss — 910 24 32 966 Net current-period other comprehensive income (loss) $ 3,887 $ 954 $ 24 $ 30 $ 4,895 Balance at June 30, 2014 $ 4,925 $ (3,406 ) $ (35 ) $ 135 $ 1,619 Other comprehensive income (loss) before reclassifications (14,038 ) 3,579 — 394 (10,065 ) Reclassification to (earnings) loss — (3,730 ) 17 (88 ) (3,801 ) Net current-period other comprehensive income (loss) (14,038 ) (151 ) 17 306 (13,866 ) Balance at June 30, 2015 $ (9,113 ) $ (3,557 ) $ (18 ) $ 441 $ (12,247 ) The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income (Loss) Fiscal Year Ended Affected Line Item in the Consolidated Statements of Income June 30, (Amounts in Thousands) 2015 2014 Derivative Gain (Loss) (1) $ 1,310 $ (1,024 ) Cost of Sales 2,997 (163 ) Non-operating income (expense), net (577 ) 277 Benefit (Provision) for Income Taxes $ 3,730 $ (910 ) Net of Tax Postemployment Benefits: Amortization of Prior Service Costs (2) $ (18 ) $ (28 ) Cost of Sales (10 ) (12 ) Selling and Administrative Expenses 11 16 Benefit (Provision) for Income Taxes $ (17 ) $ (24 ) Net of Tax Amortization of Actuarial Gain (Loss) (2) $ 88 $ (37 ) Cost of Sales 58 (16 ) Selling and Administrative Expenses (58 ) 21 Benefit (Provision) for Income Taxes $ 88 $ (32 ) Net of Tax Total Reclassifications for the Period $ 3,801 $ (966 ) Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 12 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 7 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 18. Restructuring Expense
Note 18. Restructuring Expense | 12 Months Ended |
Jun. 30, 2015 | |
Restructuring Expense [Abstract] | |
Restructuring and Related Activities Disclosure | Restructuring Expense We recognized consolidated pre-tax restructuring expense of $0.4 million in both fiscal years 2014 and 2013 . All restructuring plans were completed prior to fiscal year 2014 but we continued to incur miscellaneous exit costs in each of the plans related to facility exit and clean up costs or market value adjustments. Completed restructuring plans include the European Consolidation, Fremont, and Gaylord plans. No restructuring expense was recorded related to these plans in fiscal year 2015 and we do not expect these plans to have any restructuring charges in the future. We utilized available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on our Consolidated Statements of Income. |
Note 19. Quarterly Financial In
Note 19. Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2015 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Quarterly Financial Information | Quarterly Financial Information (Unaudited) Three Months Ended (Amounts in Thousands, Except for Per Share Data) September 30 December 31 March 31 June 30 Fiscal Year 2015: Net Sales $ 203,803 $ 207,563 $ 206,858 $ 201,126 Gross Profit 17,903 17,858 18,953 17,709 Net Income 5,391 6,229 7,191 7,394 Basic Earnings Per Share (2) $ 0.18 $ 0.21 $ 0.25 $ 0.25 Diluted Earnings Per Share (2) $ 0.18 $ 0.21 $ 0.25 $ 0.25 Fiscal Year 2014: Net Sales $ 175,637 $ 181,264 $ 185,680 $ 198,949 Gross Profit 12,425 13,937 16,553 18,081 Other General Income (1) (5,022 ) — (666 ) — Net Income 7,698 5,200 6,356 5,359 Basic Earnings Per Share (2) $ 0.26 $ 0.18 $ 0.22 $ 0.18 Diluted Earnings Per Share (2) $ 0.26 $ 0.18 $ 0.22 $ 0.18 (1) Other General Income included $5.0 million and $0.7 million , pre-tax, for the quarters ended September 30, 2013 and March 31, 2014, respectively, for the settlement proceeds received related to two antitrust class action lawsuits in which the Company was a class member. (2) Basic and diluted earnings per share for the periods ended prior to the spin-off on October 31, 2014 were retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 10 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | Schedule II. - Valuation and Qualifying Accounts Description Balance at Beginning of Year Additions (Reductions) to Expense Adjustments to Other Accounts Write-offs and Recoveries Balance at End of Year (Amounts in Thousands) Year Ended June 30, 2015 Valuation Allowances: Short-Term Receivables $ 352 $ (80 ) $ 1 $ (37 ) $ 236 Long-Term Deferred Tax Asset $ 92 $ — $ (92 ) $ — $ — Year Ended June 30, 2014 Valuation Allowances: Short-Term Receivables $ 750 $ (350 ) $ 45 $ (93 ) $ 352 Long-Term Deferred Tax Asset $ 1,613 $ — $ — $ (1,521 ) $ 92 Year Ended June 30, 2013 Valuation Allowances: Short-Term Receivables $ 381 $ 463 $ (120 ) $ 26 $ 750 Long-Term Deferred Tax Asset $ 1,224 $ 409 $ — $ (20 ) $ 1,613 |
Note 1. Business Description 29
Note 1. Business Description and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The Consolidated Financial Statements include the accounts of all domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. On September 30, 2014, the shares of Kimball Electronics Mexico, S.A. de C.V., a wholly owned subsidiary of former Parent, were contributed in a capital transaction to Kimball Electronics Mexico, Inc., a wholly owned subsidiary of Kimball Electronics, Inc. The financial results for Kimball Electronics Mexico, S.A. de C.V. are included in the Consolidated Financial Statements herein for all periods presented. Assets and liabilities were recorded at historical costs or carrying value. The Consolidated Financial Statements include allocations from former Parent for direct costs and indirect costs attributable to the operations of the Company through October 31, 2014, the spin-off date. These allocations were made on a direct usage or cost incurred basis when appropriate, with the remainder allocated using various drivers including average capital deployed, payroll, revenue less material costs, headcount, or other measures. While we believe such allocations are reasonable, these financial statements do not purport to reflect what the results of operations, comprehensive income, financial position, equity, or cash flows would have been had the Company operated as a stand-alone public company for the entirety of the periods presented. Note 2 - Related Party Transactions of Notes to Consolidated Financial Statements provides information regarding direct and indirect cost allocations. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts included in the Consolidated Financial Statements and related note disclosures. While efforts are made to assure estimates used are reasonably accurate based on management’s knowledge of current events, actual results could differ from those estimates. |
Segment Reporting, Policy | Segment Information: Kimball Electronics has business units located in the United States, Mexico, Poland, China, and Thailand. Each of our business units qualifies as an operating segment with its results regularly reviewed by our chief operating decision maker. Our chief operating decision maker is our Chief Executive Officer. Our business units meet the aggregation criteria under the current accounting guidance for segment reporting. All of our business units operate in the EMS industry with engineering, manufacturing, and supply chain services that provide electronic assemblies primarily in automotive, medical, industrial, and public safety applications, all to the specifications and designs of our customers. The nature of the products and services, the production process, the type of customers, and the methods used to distribute our products and services, all have similar characteristics. Each of our business units service customers in multiple markets and many of our customers’ programs are manufactured and serviced by multiple business units. Our global processes such as component procurement and customer pricing provide commonality and consistency among the various regions in which we operate. All of our business units have similar long-term economic characteristics. As such, our business units have been aggregated into one reportable segment. |
Revenue Recognition | Revenue Recognition: Our net sales are principally from the manufacturing of electronic assemblies built to customer specifications. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract. Title and risk of loss are transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. Shipping and handling fees billed to customers are recorded as sales while the related shipping and handling costs are included in cost of sales. We recognize sales net of applicable sales tax. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time of the sale, resulting in a reduction of revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist of bank accounts and money market funds. Bank accounts are stated at cost, which approximates fair value, and money market funds are stated at fair value. |
Notes Receivable and Trade Accounts Receivable | Notes Receivable and Trade Accounts Receivable: The Company’s notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. Our policy for estimating the allowance for credit losses on trade accounts receivable and notes 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 determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. 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 may utilize 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 and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. |
Banker's Acceptance Drafts | The Company’s China operation, in limited circumstances, may receive banker’s acceptance drafts from customers as payment for their trade accounts receivable. The banker’s acceptance drafts are non-interest bearing and primarily mature within six months from the origination date. The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to the scheduled maturity date. |
Inventories | Inventories: Inventories are stated at the lower of cost or market value. Cost includes material, labor, and applicable manufacturing overhead. Costs associated with underutilization of capacity are expensed as incurred. Inventories are valued using the first-in, first-out (“FIFO”) method. Inventories are adjusted for excess and obsolete inventory. Evaluation of excess inventory includes such factors as anticipated usage, inventory turnover, inventory levels, and product demand levels. Factors considered when evaluating obsolescence include the age of on-hand inventory and reduction in value due to damage, design changes, or cessation of product lines. |
Property, Equipment, and Depreciation | Property, Equipment, and Depreciation: Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful life of the assets using the straight-line method for financial reporting purposes. Major maintenance activities and improvements are capitalized; other maintenance, repairs, and minor renewals are expensed. Depreciation and expenses for maintenance, repairs, and minor renewals are included in both the Cost of Sales line and the Selling and Administrative Expense line of the Consolidated Statements of Income. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. |
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, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount and if it is necessary to perform the quantitative two-step goodwill impairment test. We also have the option to bypass the qualitative assessment and proceed directly to performing the first step of the quantitative goodwill impairment test. If the first step is determined to be necessary, we compare the carrying value of the reporting unit to an estimate of the reporting unit’s fair value to identify potential impairment. If the estimated fair value of the reporting unit is less than the carrying value, a second step is performed to determine the amount of potential goodwill impairment. If impaired, goodwill is written down to its estimated implied fair value. Goodwill is assigned to and the fair value is tested at the reporting unit level. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting units considers current market conditions existing at the assessment date. |
Impairment or Disposal of Intangible Assets | Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. |
Other Intangible Assets | Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. Capitalized customer relationships are amortized on estimated attrition rate of customers. We have no intangible assets with indefinite useful lives which are not subject to amortization. |
Research and Development | Research and Development: The costs of research and development are expensed as incurred. |
Insurance and Self-insurance | Insurance and Self-insurance: We are self-insured up to certain limits for general liability, workers’ compensation, and certain employee health benefits including medical, short-term disability, and dental, with the related liabilities included in the accompanying financial statements. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. Approximately 20% of the workforce is covered under self-insured medical and short-term disability plans. We carry external medical and disability insurance coverage for the remainder of our eligible workforce not covered by self-insured plans. Insurance benefits are not provided to retired employees. |
Income Taxes | Income Taxes: Through October 31, 2014, the Company was included in the consolidated United States federal income tax return of former Parent, as well as certain state tax returns where former Parent filed on a combined basis. The provisions for income taxes for these jurisdictions were determined on a separate return basis and presented as such in these Consolidated Financial Statements. Deferred income tax assets and liabilities 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 the Provision for Income Taxes line of the Consolidated Statements of Income. |
Off-Balance-Sheet Risk | Off-Balance Sheet Risk: Off-balance sheet arrangements are limited to standby letters of credit and operating leases entered into in the normal course of business as described in Note 5 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. |
Other General Income | Other General Income: Other General Income in fiscal year 2014 included pre-tax settlements received of $5.7 million related to two antitrust class action lawsuits in which Kimball Electronics was a class member. We recorded no Other General Income during fiscal years 2015 and 2013 . |
Concentration of Credit Risk | Concentrations of Credit Risk: We have business and credit risks concentrated in the automotive, medical, industrial, and public safety industries. The Company monitors credit quality and associated risks of notes receivable on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. |
Non-operating Income and Expense | Non-operating Income and Expense: Non-operating income and expense include 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, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses. |
Foreign Currency Translation | Foreign Currency Translation: The Company predominantly uses the U.S. dollar and Euro as its functional currencies. Foreign currency assets and liabilities are remeasured into functional currencies at end-of-period exchange rates, except for nonmonetary assets and equity, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the weighted average exchange rate during the fiscal year, except for expenses related to nonmonetary assets, which are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement are reported in the Non-operating income or expense line item on the Consolidated Statements of Income. For business units whose functional currency is other than the U.S. dollar, the translation of functional currency statements to U.S. dollar statements uses end-of-period exchange rates for assets and liabilities, weighted average exchange rates for revenue and expenses, and historical rates for equity. The resulting currency translation adjustment is recorded in Accumulated Other Comprehensive Income (Loss), as a component of Equity. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities: Derivative financial instruments are recognized on the balance sheet as assets and liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated Other Comprehensive Income (Loss), depending on whether a derivative is designated and effective as part of a hedge transaction, and if it is, the type of hedge transaction. Hedge accounting is utilized when a derivative is expected to be highly effective upon execution and continues to be highly effective over the duration of the hedge transaction. Hedge accounting permits gains and losses on derivative instruments to be deferred in Accumulated Other Comprehensive Income (Loss) and subsequently included in earnings in the periods in which earnings are affected by the hedged item, or when the derivative is determined to be ineffective. We use derivatives primarily for forward purchases of foreign currency to manage exposure to the variability of cash flows, primarily related to the foreign exchange rate risks inherent in forecasted transactions denominated in foreign currency. See Note 12 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. |
Stock-Based Compensation | Stock-Based Compensation: As described in Note 8 - Stock Compensation Plans of Notes to Consolidated Financial Statements, the Company maintains a stock-based compensation plan which allows for the issuance of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units for grant to officers and other key employees and to members of the Board of Directors who are not employees. We recognize the cost resulting from share-based payment transactions using a fair-value-based method. The estimated fair value of outstanding performance shares is based on the stock price at the date of the grant. Stock-based compensation expense is recognized for the portion of the award that is ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Emerging Growth Company Reporting Requirements | “Emerging Growth Company” Reporting Requirements: The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as a company is deemed to be an “emerging growth company,” it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. Among other things, we are not required to provide an auditor attestation report on the assessment of the internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Section 107 of the JOBS Act also provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. |
New Accounting Standards | New Accounting Standards: In July 2015, the Financial Accounting Standards Board (“FASB”) issued guidance on Simplifying the Measurement of Inventory. The guidance amends the subsequent measurement of inventory from the lower of cost or market to the lower of cost and net realizable value. Under the current guidance, market value could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. Within the scope of the new guidance, an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for our fiscal year 2018 financial statements. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In April 2015, the FASB issued guidance to customers of cloud computing arrangements about whether an arrangement includes a software license. If a software license exists in the arrangement, the guidance requires the software license element of the arrangement to be accounted for consistently with the acquisition of other software licenses by the customer. Otherwise, the customer should account for the arrangement as a service contract. The guidance is effective for our fiscal year 2017 financial statements using either of two acceptable adoption methods: (i) retrospective adoption; or (ii) prospective adoption to all arrangements entered into or materially modified after the effective date. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements. We do not expect the adoption to have a material effect on our consolidated financial statements. In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued additional guidance deferring the effective date for one year while allowing entities the option to adopt one year early. The guidance is now effective for our fiscal year 2020 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements. In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance is effective prospectively for disposals or components of our business classified as held for sale for our fiscal year 2016. We do not expect the adoption to have a material effect on our consolidated financial statements. In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance is effective prospectively for our first quarter fiscal year 2015 financial statements. The adoption did not have a material effect on our consolidated financial statements. |
Note 5. Commitments and Conti30
Note 5. Commitments and Contingent Liabilities (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingent Liabilities [Abstract] | |
Product Warranties | 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 periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. |
Note 7. Employee Benefit Plans
Note 7. Employee Benefit Plans (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Employee Benefit Plans [Abstract] | |
Postemployment Benefit Plans | Prior service cost is amortized on a straight-line basis over the average remaining service period of employees that were active at the time of the plan initiation and actuarial (gain) loss is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. |
Note 11. Fair Value (Policies)
Note 11. Fair Value (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Fair Value [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. Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during fiscal years 2015 and 2014 . Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents 1 Market - Quoted market prices Derivative Assets: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk Trading securities: Mutual funds held in SERP 1 Market - Quoted market prices Derivative Liabilities: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball Electronics’ non-performance risk |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets | Non-Recurring Fair Value Measurements: Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Non-recurring fair value adjustment Level Valuation Technique/Inputs Used Impairment of assets held for sale (real estate) 3 Market - Estimated potential net selling price. |
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 Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk The carrying value of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximates fair value due to their relatively short maturity and immaterial non-performance risk. |
Note 12. Derivative Instrumen33
Note 12. Derivative Instruments (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments [Abstract] | |
Derivatives, Hedge Discontinuances, Anticipated Transactions | 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 balance sheet as a derivative asset or liability. 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 effective portions of the gain or loss on the derivative instrument are initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners’ Equity, and are subsequently reclassified into earnings in the period or periods during which the hedged transaction is recognized in earnings. The ineffective portion of the derivative gain or loss is reported in the Non-operating income or expense line item on the Consolidated Statements of Income immediately. 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 also reported in the Non-operating income or expense line item on the Consolidated Statements of Income immediately. |
Note 13. Investments (Policies)
Note 13. Investments (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Investment | The Company SERP utilizes 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. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. 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. |
Note 18. Restructuring Expense
Note 18. Restructuring Expense Restructuring (Policies) | 12 Months Ended |
Jun. 30, 2015 | |
Restructuring Expense Accounting Policies [Abstract] | |
Costs Associated with Exit or Disposal Activities or Restructurings | We utilized available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on our Consolidated Statements of Income. |
Note 1. Business Description 36
Note 1. Business Description and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Goodwill | A summary of goodwill is as follows: (Amounts in Thousands) Balance as of June 30, 2013 Goodwill $ 15,337 Accumulated impairment (12,826 ) Goodwill, net 2,511 Effect of Foreign Currency Translation 53 Balance as of June 30, 2014 Goodwill 15,390 Accumulated impairment (12,826 ) Goodwill, net 2,564 Balance as of June 30, 2015 Goodwill 15,390 Accumulated impairment (12,826 ) Goodwill, net $ 2,564 |
Summary of Other Intangible Assets | A summary of other intangible assets subject to amortization is as follows: June 30, 2015 June 30, 2014 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 28,294 $ 23,924 $ 4,370 $ 29,269 $ 27,625 $ 1,644 Customer Relationships 1,167 1,028 139 1,167 981 186 Other Intangible Assets $ 29,461 $ 24,952 $ 4,509 $ 30,436 $ 28,606 $ 1,830 |
Schedules of Concentration of Risk, by Risk Factor | A summary of significant customers’ net sales and trade receivables as a percentage of consolidated net sales and consolidated trade receivables is as follows: At or For the Year Ended At or For the Year Ended June 30, 2015 June 30, 2014 Net Sales Trade Receivables Net Sales Trade Receivables Johnson Controls, Inc. 3.6 % 2.0 % 13.0 % 5.8 % Philips 15.4 % 7.4 % 12.4 % 7.8 % Regal Beloit Corporation 8.8 % 9.5 % 8.8 % 11.9 % TRW 8.7 % 11.7 % 9.6 % 13.5 % |
Note 3. Inventories (Tables)
Note 3. Inventories (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Inventories [Abstract] | |
Schedule of Inventory, Current | Inventory components at June 30 were as follows: (Amounts in Thousands) 2015 2014 Finished products $ 21,415 $ 18,818 Work-in-process 13,029 12,530 Raw materials 90,754 84,811 Total inventory $ 125,198 $ 116,159 |
Note 4. Property and Equipment
Note 4. Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Property and Equipment [Abstract] | |
Components of Property and Equipment | Major classes of property and equipment at June 30 consist of the following: (Amounts in Thousands) 2015 2014 Land $ 8,726 $ 9,392 Buildings and improvements 57,524 57,756 Machinery and equipment 177,148 175,984 Construction-in-progress 14,885 6,549 Total $ 258,283 $ 249,681 Less: Accumulated depreciation (151,504 ) (151,747 ) Property and equipment, net $ 106,779 $ 97,934 |
Property, Plant and Equipment | The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 5 to 40 Machinery and equipment 3 to 10 |
Note 5. Commitments and Conti39
Note 5. Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingent Liabilities [Abstract] | |
Schedule of Product Warranty Liability | Changes in the product warranty accrual during fiscal years 2015 , 2014 , and 2013 were as follows: (Amounts in Thousands) 2015 2014 2013 Product Warranty Liability at the beginning of the year $ 911 $ 507 $ 329 Additions to warranty accrual (including changes in estimates) 625 721 279 Settlements made (in cash or in kind) (915 ) (317 ) (101 ) Product Warranty Liability at the end of the year $ 621 $ 911 $ 507 |
Note 6. Credit Facilities (Tabl
Note 6. Credit Facilities (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Long-Term Debt and Credit Facility [Abstract] | |
Schedule of Line of Credit Facilities | Credit facilities consisted of the following: Availability to Borrow at Borrowings Outstanding at Borrowings Outstanding at (Amounts in Millions, in U.S Dollar Equivalents) June 30, 2015 June 30, 2015 June 30, 2014 Primary credit facility (1) $ 49.7 $ — $ — Thailand overdraft credit facility (2) 2.7 — — China revolving credit facility (3) 7.5 — — Total $ 59.9 $ — $ — (1) In connection with the spin-off, the Company entered into a new U.S. primary credit facility (the “primary facility”) dated as of October 31, 2014. The credit facility expires in October 2019 and provides for up to $50 million in borrowings, with an option to increase the amount available for borrowing to $75 million upon request, subject to participating banks’ consent. We will use this facility for acquisitions and general corporate purposes. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2015 . The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA. The interest rate on borrowings is dependent on the type of borrowings. 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 U.S. 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, and • a fixed charge coverage ratio, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be less than 1.10 to 1.00. The Company had $0.3 million in letters of credit contingently committed against the credit facility at June 30, 2015 . (2) The Company also maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to 90.0 million Thai Baht (approximately $2.7 million at June 30, 2015 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. (3) An uncommitted revolving credit facility was established in the fourth quarter of fiscal year 2015 for our China operation. The China credit facility allows for borrowings of up to $7.5 million , which borrowings can be made in either Chinese Renminbi (RMB) or U.S. dollars. The availability of this facility is at the sole discretion of the bank and is subject to the availability of funds and other relevant conditions. The bank may, at its sole discretion, agree to provide the facility on such terms and conditions as the bank deems appropriate. Further, the availability of the facility is also subject to the determination by the bank of the borrower’s actual need for such facility. Proceeds from the facility are to be used for general working capital purposes. Interest on borrowing under this facility is charged at a rate of interest determined by the bank and is dependent on the denomination of the currency borrowed. The facility matures on May 31, 2016 . |
Note 7. Employee Benefit Plan41
Note 7. Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Employee Benefit Plans [Abstract] | |
Schedule of Changes in Projected Benefit Obligations | June 30 (Amounts in Thousands) 2015 2014 Changes and Components of Benefit Obligation: Benefit obligation at beginning of year $ 1,495 $ 1,560 Service cost 327 267 Interest cost 50 37 Actuarial (gain) loss for the period (638 ) 6 Benefits paid (8 ) (375 ) Remeasurement of liabilities at spin-off 751 — Benefit obligation at end of year $ 1,977 $ 1,495 Balance in current liabilities $ 347 $ 262 Balance in noncurrent liabilities 1,630 1,233 Total benefit obligation recognized in the Consolidated Balance Sheets $ 1,977 $ 1,495 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | June 30 (Amounts in Thousands) 2015 2014 Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): Accumulated Other Comprehensive Income (Loss) at beginning of year $ (160 ) $ (73 ) Change in unrecognized prior service cost (28 ) (40 ) Net change in unrecognized actuarial (gain) loss (492 ) (47 ) Accumulated Other Comprehensive Income (Loss) at end of year $ (680 ) $ (160 ) Balance in unrecognized prior service cost $ 28 $ 55 Balance in unrecognized actuarial (gain) loss (708 ) (215 ) Total Accumulated Other Comprehensive Income (Loss) recognized in Share Owners’ Equity $ (680 ) $ (160 ) |
Schedule of Net Benefit Costs | (Amounts in Thousands) Year Ended June 30 Components of Net Periodic Benefit Cost (before tax): 2015 2014 2013 Service cost $ 327 $ 267 $ 230 Interest cost 50 37 50 Amortization of prior service cost 28 40 40 Amortization of actuarial (gain) loss (146 ) 53 37 Net periodic benefit cost recognized in the Consolidated Statements of Income $ 259 $ 397 $ 357 |
Severance Plan Assumptions, Year End | Assumptions used to determine fiscal year end benefit obligations are as follows: 2015 2014 Discount Rate 2.8% 2.3% Rate of Compensation Increase 3.0% 3.0% |
Severance Plan Assumptions, Weighted Average | Weighted average assumptions used to determine fiscal year net periodic benefit costs are as follows: 2015 2014 2013 Discount Rate 2.7% 2.5% 3.8% Rate of Compensation Increase 3.0% 3.0% 3.8% |
Note 8. Stock Compensation Pl42
Note 8. Stock Compensation Plans (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Stock Compensation Plans [Abstract] | |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Performance-Based Units, Vested and Expected to Vest | A summary of the Company’s performance share activity during fiscal year 2015 is presented below: Number of Shares Weighted Average Grant Date Fair Value Performance shares outstanding at July 1, 2014 — — Converted on December 2, 2014 in connection with the spin-off 548,552 $8.43 Granted 241,222 $14.47 Vested — — Forfeited — — Performance shares outstanding at June 30, 2015 789,774 $10.27 |
Note 9. Income Taxes (Tables)
Note 9. Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Income Taxes [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities as of June 30, 2015 and 2014 , were as follows: (Amounts in Thousands) 2015 2014 Deferred Tax Assets: Receivables $ 138 $ 185 Inventory 1,524 1,457 Employee benefits 164 174 Deferred compensation 7,786 8,850 Other current liabilities 712 408 Tax credit carryforwards 240 3,069 Goodwill 2,149 2,440 Net operating loss carryforward 5 564 Net foreign currency losses 2 81 Property and equipment 1,838 1,063 Miscellaneous 1,268 2,332 Valuation Allowance — (92 ) Total asset $ 15,826 $ 20,531 Deferred Tax Liabilities: Miscellaneous $ 353 $ 199 Total liability $ 353 $ 199 Net Deferred Income Taxes $ 15,473 $ 20,332 |
Schedule of Income before Income Tax, Domestic and Foreign | The components of income before taxes on income are as follows: Year Ended June 30 (Amounts in Thousands) 2015 2014 2013 United States $ 1,195 $ 5,412 $ 6,638 Foreign 33,576 24,830 20,138 Total income before taxes on income $ 34,771 $ 30,242 $ 26,776 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2015 2014 2013 Currently Payable (Refundable): Federal $ 186 $ (40 ) $ 40 Foreign 6,586 4,505 2,861 State 108 519 239 Total current $ 6,880 $ 4,984 $ 3,140 Deferred Taxes: Federal $ (188 ) $ 2,360 $ 1,780 Foreign 1,957 (55 ) 134 State (83 ) (139 ) (186 ) Total deferred $ 1,686 $ 2,166 $ 1,728 Valuation allowance — (1,521 ) 388 Total provision for income taxes $ 8,566 $ 5,629 $ 5,256 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows: Year Ended June 30 2015 2014 2013 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 12,170 35.0 % $ 10,585 35.0 % $ 9,372 35.0 % State income taxes, net of federal income tax benefit 16 — 210 0.7 41 0.1 Foreign tax rate differential (4,336 ) (12.5 ) (3,800 ) (12.6 ) (3,645 ) (13.6 ) Impact of foreign exchange rates on foreign income taxes 1,274 3.7 153 0.5 (72 ) (0.3 ) Foreign tax credits (146 ) (0.4 ) (123 ) (0.4 ) (498 ) (1.9 ) Valuation allowance — — (1,521 ) (5.0 ) 388 1.4 Research credit (421 ) (1.2 ) (187 ) (0.6 ) (347 ) (1.3 ) Spin-off costs 625 1.8 753 2.5 — — Other - net (616 ) (1.8 ) (441 ) (1.5 ) 17 0.2 Total provision for income taxes $ 8,566 24.6 % $ 5,629 18.6 % $ 5,256 19.6 % |
Summary of Income Tax Contingencies | Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2015 , 2014 , and 2013 were as follows: (Amounts in Thousands) 2015 2014 2013 Beginning balance - July 1 $ 792 $ 965 $ 870 Tax positions related to prior fiscal years: Additions — 92 10 Reductions (792 ) — — Tax positions related to current fiscal year: Additions — 77 104 Reductions — — — Settlements — — — Lapses in statute of limitations — (342 ) (19 ) Ending balance - June 30 $ — $ 792 $ 965 Portion that, if recognized, would reduce tax expense and effective tax rate $ — $ 565 $ 772 |
Accrued Interest and Penalties on Unrecognized Tax Benefits | Amounts accrued for interest and penalties were as follows: As of June 30 (Amounts in Thousands) 2015 2014 2013 Accrued Interest and Penalties: Interest $ — $ 65 $ 72 Penalties $ — $ 69 $ 55 |
Note 11. Fair Value (Tables)
Note 11. Fair Value (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Fair Value [Abstract] | |
Fair Value Measurements, Recurring, Valuation Techniques | The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents 1 Market - Quoted market prices Derivative Assets: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk Trading securities: Mutual funds held in SERP 1 Market - Quoted market prices Derivative Liabilities: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball Electronics’ non-performance risk |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of June 30, 2015 and 2014 , 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: June 30, 2015 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 28,722 $ — $ 28,722 Derivatives: foreign exchange contracts — 3,004 3,004 Trading securities: mutual funds held in nonqualified SERP 5,813 — 5,813 Total assets at fair value $ 34,535 $ 3,004 $ 37,539 Liabilities Derivatives: foreign exchange contracts $ — $ 2,318 $ 2,318 Total liabilities at fair value $ — $ 2,318 $ 2,318 June 30, 2014 (Amounts in Thousands) Level 1 Level 2 Total Assets Derivatives: foreign exchange contracts $ — $ 800 $ 800 Trading securities: mutual funds held in nonqualified SERP 5,260 — 5,260 Total assets at fair value $ 5,260 $ 800 $ 6,060 Liabilities Derivatives: foreign exchange contracts $ — $ 699 $ 699 Total liabilities at fair value $ — $ 699 $ 699 |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | Non-recurring fair value adjustment Level Valuation Technique/Inputs Used Impairment of assets held for sale (real estate) 3 Market - Estimated potential net selling price. |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk |
Note 12. Derivative Instrumen45
Note 12. Derivative Instruments (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 1,255 $ 599 Accrued expenses $ 2,143 $ 241 Derivatives not designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets 1,749 201 Accrued expenses 175 458 Total derivatives $ 3,004 $ 800 $ 2,318 $ 699 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The Effect of Derivative Instruments on Other Comprehensive Income (Loss) June 30 (Amounts in Thousands) 2015 2014 2013 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): Foreign exchange contracts $ 3,806 $ 73 $ 1,206 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The Effect of Derivative Instruments on Consolidated Statements of Income (Amounts in Thousands) Fiscal Year Ended June 30 Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2015 2014 2013 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): Foreign exchange contracts Cost of Sales $ 1,310 $ (1,024 ) $ 2,212 Foreign exchange contracts Non-operating income (expense) 2,998 (163 ) (73 ) Total $ 4,308 $ (1,187 ) $ 2,139 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Ineffective Portion): Foreign exchange contracts Non-operating income (expense) $ (1 ) $ — $ (3 ) Derivatives Not Designated as Hedging Instruments Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives: Foreign exchange contracts Non-operating income (expense) $ 1,734 $ (487 ) $ (322 ) Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ 6,041 $ (1,674 ) $ 1,814 |
Note 13. Investments (Tables)
Note 13. Investments (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Trading Securities (and Certain Trading Assets) | SERP asset and liability balances applicable to Kimball Electronics participants were as follows: June 30 (Amounts in Thousands) 2015 2014 SERP investment - current asset $ 192 $ 167 SERP investment - other long-term asset 5,621 5,093 Total SERP investment $ 5,813 $ 5,260 SERP obligation - current liability $ 192 $ 167 SERP obligation - other long-term liability 5,621 5,093 Total SERP obligation $ 5,813 $ 5,260 |
Note 14. Accrued Expenses (Tabl
Note 14. Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of: June 30 (Amounts in Thousands) 2015 2014 Taxes $ 2,022 $ 1,742 Compensation 15,547 18,488 Derivatives 2,318 699 Retirement plan 1,397 1,213 Insurance 741 1,598 Other expenses 4,520 2,862 Total accrued expenses $ 26,545 $ 26,602 |
Note 15. Geographic Area Info48
Note 15. Geographic Area Information (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Geographic Area Information [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following geographic area data includes net sales based on the location where title transfers and long-lived assets based on physical location. Long-lived assets include property and equipment and other long-term assets such as software. At or For the Year Ended June 30 (Amounts in Thousands) 2015 2014 2013 Net Sales: United States $ 396,516 $ 363,211 $ 389,510 Germany 73,966 77,338 68,925 China 127,761 67,665 46,794 Other Foreign 221,107 233,316 197,900 Total net sales $ 819,350 $ 741,530 $ 703,129 Long-Lived Assets: United States $ 49,689 $ 33,004 $ 28,942 Poland 33,692 45,287 45,971 China 16,676 12,174 10,069 Other Foreign 11,092 9,113 8,877 Total long-lived assets $ 111,149 $ 99,578 $ 93,859 |
Note 16. Earnings Per Share (Ta
Note 16. Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted earnings per share were calculated as follows: (Amounts in thousands, except per share data) Year Ended June 30 2015 2014 2013 Basic and Diluted Earnings Per Share: Net Income $ 26,205 $ 24,613 $ 21,520 Basic weighted average common shares outstanding 29,162 29,143 29,143 Dilutive effect of average outstanding performance shares 226 — — Dilutive weighted average shares outstanding 29,388 29,143 29,143 Earnings Per Share of Common Stock: Basic $ 0.90 $ 0.84 $ 0.74 Diluted $ 0.89 $ 0.84 $ 0.74 |
Note 17. Accumulated Other Co50
Note 17. Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: Postemployment Benefits (Amounts in Thousands) Foreign Currency Translation Adjustments Derivative Gain (Loss) Prior Service Costs Net Actuarial Gain (Loss) Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2013 $ 1,038 $ (4,360 ) $ (59 ) $ 105 $ (3,276 ) Other comprehensive income (loss) before reclassifications 3,887 44 — (2 ) 3,929 Reclassification to (earnings) loss — 910 24 32 966 Net current-period other comprehensive income (loss) $ 3,887 $ 954 $ 24 $ 30 $ 4,895 Balance at June 30, 2014 $ 4,925 $ (3,406 ) $ (35 ) $ 135 $ 1,619 Other comprehensive income (loss) before reclassifications (14,038 ) 3,579 — 394 (10,065 ) Reclassification to (earnings) loss — (3,730 ) 17 (88 ) (3,801 ) Net current-period other comprehensive income (loss) (14,038 ) (151 ) 17 306 (13,866 ) Balance at June 30, 2015 $ (9,113 ) $ (3,557 ) $ (18 ) $ 441 $ (12,247 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income (Loss) Fiscal Year Ended Affected Line Item in the Consolidated Statements of Income June 30, (Amounts in Thousands) 2015 2014 Derivative Gain (Loss) (1) $ 1,310 $ (1,024 ) Cost of Sales 2,997 (163 ) Non-operating income (expense), net (577 ) 277 Benefit (Provision) for Income Taxes $ 3,730 $ (910 ) Net of Tax Postemployment Benefits: Amortization of Prior Service Costs (2) $ (18 ) $ (28 ) Cost of Sales (10 ) (12 ) Selling and Administrative Expenses 11 16 Benefit (Provision) for Income Taxes $ (17 ) $ (24 ) Net of Tax Amortization of Actuarial Gain (Loss) (2) $ 88 $ (37 ) Cost of Sales 58 (16 ) Selling and Administrative Expenses (58 ) 21 Benefit (Provision) for Income Taxes $ 88 $ (32 ) Net of Tax Total Reclassifications for the Period $ 3,801 $ (966 ) Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 12 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 7 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 19. Quarterly Financial 51
Note 19. Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Schedule of Quarterly Financial Information | Three Months Ended (Amounts in Thousands, Except for Per Share Data) September 30 December 31 March 31 June 30 Fiscal Year 2015: Net Sales $ 203,803 $ 207,563 $ 206,858 $ 201,126 Gross Profit 17,903 17,858 18,953 17,709 Net Income 5,391 6,229 7,191 7,394 Basic Earnings Per Share (2) $ 0.18 $ 0.21 $ 0.25 $ 0.25 Diluted Earnings Per Share (2) $ 0.18 $ 0.21 $ 0.25 $ 0.25 Fiscal Year 2014: Net Sales $ 175,637 $ 181,264 $ 185,680 $ 198,949 Gross Profit 12,425 13,937 16,553 18,081 Other General Income (1) (5,022 ) — (666 ) — Net Income 7,698 5,200 6,356 5,359 Basic Earnings Per Share (2) $ 0.26 $ 0.18 $ 0.22 $ 0.18 Diluted Earnings Per Share (2) $ 0.26 $ 0.18 $ 0.22 $ 0.18 (1) Other General Income included $5.0 million and $0.7 million , pre-tax, for the quarters ended September 30, 2013 and March 31, 2014, respectively, for the settlement proceeds received related to two antitrust class action lawsuits in which the Company was a class member. (2) Basic and diluted earnings per share for the periods ended prior to the spin-off on October 31, 2014 were retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 10 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Schedule II Valuation and Qua52
Schedule II Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jun. 30, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts | Schedule II. - Valuation and Qualifying Accounts Description Balance at Beginning of Year Additions (Reductions) to Expense Adjustments to Other Accounts Write-offs and Recoveries Balance at End of Year (Amounts in Thousands) Year Ended June 30, 2015 Valuation Allowances: Short-Term Receivables $ 352 $ (80 ) $ 1 $ (37 ) $ 236 Long-Term Deferred Tax Asset $ 92 $ — $ (92 ) $ — $ — Year Ended June 30, 2014 Valuation Allowances: Short-Term Receivables $ 750 $ (350 ) $ 45 $ (93 ) $ 352 Long-Term Deferred Tax Asset $ 1,613 $ — $ — $ (1,521 ) $ 92 Year Ended June 30, 2013 Valuation Allowances: Short-Term Receivables $ 381 $ 463 $ (120 ) $ 26 $ 750 Long-Term Deferred Tax Asset $ 1,224 $ 409 $ — $ (20 ) $ 1,613 |
Note 1. Business Description 53
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Goodwill | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Goodwill | 15,390 | 15,390 | 15,337 |
Accumulated impairment | (12,826) | (12,826) | (12,826) |
Goodwill, net | $ 2,564 | 2,564 | $ 2,511 |
Effect of Foreign Currency Translation | $ 53 |
Note 1. Business Description 54
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Other Intangible Assets | |||
Other Intangible Assets, Future Amortization Expense, Year One | $ 814 | ||
Other Intangible Assets, Future Amortization Expense, Year Two | 656 | ||
Other Intangible Assets, Future Amortization Expense, Year Three | 561 | ||
Other Intangible Assets, Future Amortization Expense, Year Four | 443 | ||
Other Intangible Assets, Future Amortization Expense, Year Five | 397 | ||
Other Intangible Assets, Future Amortization Expense, after Year Five | 1,638 | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 0 | $ 0 | |
Other Intangible Assets, Amortization Expense | 759 | 797 | $ 1,093 |
Other Intangible Assets, Cost | 29,461 | 30,436 | |
Other Intangible Assets, Accumulated Amortization | 24,952 | 28,606 | |
Other Intangible Assets, Net Value | 4,509 | 1,830 | |
Capitalized Software | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | 28,294 | 29,269 | |
Other Intangible Assets, Accumulated Amortization | 23,924 | 27,625 | |
Other Intangible Assets, Net Value | 4,370 | 1,644 | |
Customer Relationships | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | 1,167 | 1,167 | |
Other Intangible Assets, Accumulated Amortization | 1,028 | 981 | |
Other Intangible Assets, Net Value | $ 139 | $ 186 | |
Maximum | Capitalized Software | |||
Other Intangible Assets | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||
Maximum | Customer Relationships | |||
Other Intangible Assets | |||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Minimum | Capitalized Software | |||
Other Intangible Assets | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||
Minimum | Customer Relationships | |||
Other Intangible Assets | |||
Finite-Lived Intangible Asset, Useful Life | 10 years |
Note 1. Business Description 55
Note 1. Business Description and Summary of Significant Accounting Policies - Textuals (Details) - Fair Value, Measurement Frequency [Domain] - USD ($) shares in Millions | Oct. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | [1] | Dec. 31, 2013 | [1] | Sep. 30, 2013 | [1] | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Total Annual Gross Revenue on Last Day of Fiscal Year Based on Which Entity Will Cease Status of Emerging Growth Company | $ 1,000,000,000 | |||||||||||
Non-Convertible Debt Securities Issued in Specified Period upon Which Company Will Cease Status of Emerging Growth Company | 1,000,000,000 | |||||||||||
Market Value of Common Stock Held by Non-Affiliates upon Which Company Will Cease Status of Emerging Growth Company | $ 700,000,000 | |||||||||||
Common Stock Dividends, Shares | 29.1 | |||||||||||
Accounts Receivable, Extended Payment Terms | 45 days | |||||||||||
Accounts Receivable Sold Without Recourse | $ 129,100,000 | $ 193,000,000 | ||||||||||
Research and Development Costs | $ 9,000,000 | 8,000,000 | $ 8,000,000 | |||||||||
Self-Insured Workforce Coverage Percent | 20.00% | |||||||||||
Other General Income | $ 0 | [1] | $ (666,000) | $ 0 | $ (5,022,000) | $ 0 | (5,688,000) | $ 0 | ||||
DueFromBankersAcceptanceDrafts | $ 0 | 4,300,000 | $ 0 | |||||||||
SettlementofBankersAcceptanceDrafts | $ 0 | |||||||||||
Minimum | ||||||||||||
Accounts Receivable, Customary Payment Terms | 30 days | |||||||||||
Maximum | ||||||||||||
Accounts Receivable, Customary Payment Terms | 45 days | |||||||||||
[1] | Other General Income included $5.0 million and $0.7 million, pre-tax, for the quarters ended September 30, 2013 and March 31, 2014, respectively, for the settlement proceeds received related to two antitrust class action lawsuits in which the Company was a class member. |
Note 1. Business Description 56
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Concentration Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Philips | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.40% | 12.40% |
Philips | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 7.40% | 7.80% |
Regal Beloit Corporation | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 8.80% | 8.80% |
Regal Beloit Corporation | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 9.50% | 11.90% |
TRW | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 8.70% | 9.60% |
TRW | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 11.70% | 13.50% |
Johnson Controls Inc. | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 3.60% | 13.00% |
Johnson Controls Inc. | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 2.00% | 5.80% |
Notes Receivable | ||
Concentration Risk [Line Items] | ||
Financing Receivable, Net | $ 800 | $ 45 |
Note 2. Related Party Transac57
Note 2. Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Oct. 31, 2014 | Jun. 30, 2012 | |
Related Party Transaction [Line Items] | |||||
Related Party Transactions Selling and Administrative Expenses Excluding Incentive Compensation | $ 4,500 | $ 12,600 | $ 10,500 | ||
Related Party Transactions Selling and Administrative Incentive Compensation | 2,100 | 5,000 | 2,400 | ||
Cash Distribution from Parent | $ 44,300 | ||||
Cash and cash equivalents | $ 65,180 | $ 26,260 | $ 18,424 | $ 63,000 | $ 21,975 |
Note 2. Related Party Transac58
Note 2. Related Party Transactions Former Parent (Details) $ in Millions | Jun. 30, 2015USD ($) |
Related Party Transaction [Line Items] | |
Nontrade Receivables | $ 0.8 |
Nontrade Receivables, Noncurrent | $ 0.6 |
Note 3. Inventories - Inventory
Note 3. Inventories - Inventory Components (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Inventory, Finished Goods, Net of Reserves | $ 21,415 | $ 18,818 |
Inventory, Work in Process, Net of Reserves | 13,029 | 12,530 |
Inventory, Raw Materials, Net of Reserves | 90,754 | 84,811 |
Total inventory | $ 125,198 | $ 116,159 |
Note 4. Property and Equipmen60
Note 4. Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Property and Equipment | ||
Total Property and Equipment | $ 258,283 | $ 249,681 |
Less: Accumulated depreciation | (151,504) | (151,747) |
Property and equipment, net | 106,779 | 97,934 |
Land | ||
Property and Equipment | ||
Total Property and Equipment | 8,726 | 9,392 |
Building and Building Improvements | ||
Property and Equipment | ||
Total Property and Equipment | 57,524 | 57,756 |
Machinery and Equipment | ||
Property and Equipment | ||
Total Property and Equipment | 177,148 | 175,984 |
Construction in Progress | ||
Property and Equipment | ||
Total Property and Equipment | $ 14,885 | $ 6,549 |
Note 4. Property and Equipmen61
Note 4. Property and Equipment - Asset Lives (Details) | 12 Months Ended |
Jun. 30, 2015 | |
Building and Building Improvements | Minimum | |
Property, Plant and Equipment, Useful Life | 5 years |
Building and Building Improvements | Maximum | |
Property, Plant and Equipment, Useful Life | 40 years |
Machinery and Equipment | Minimum | |
Property, Plant and Equipment, Useful Life | 3 years |
Machinery and Equipment | Maximum | |
Property, Plant and Equipment, Useful Life | 10 years |
Note 4. Property and Equipmen62
Note 4. Property and Equipment - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Depreciation of property and equipment | $ 19,000 | $ 17,100 | $ 16,500 |
Assets held for sale | 0 | 0 | |
Gain (Loss) on Disposition of Property Plant Equipment | $ 33 | (10) | 89 |
Held for Sale Facilty and Land Related to the Gaylord, Michigan Exited Operation | FY 2007 Gaylord Restructuring Plan | |||
Gain (Loss) on Disposition of Property Plant Equipment | $ 311 | ||
Held for Sale Facilty and Land Related to the Gaylord, Michigan Exited Operation | FY 2007 Gaylord Restructuring Plan | Fair Value, Measurements, Nonrecurring | |||
Impairment loss, Pre-tax | $ 188 |
Note 5. Commitments and Conti63
Note 5. Commitments and Contingent Liabilities - Leases Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Operating Leased Assets | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 100 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 100 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 100 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 100 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 100 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 800 | ||
Rental expenses | 300 | $ 500 | $ 400 |
Capital Lease Obligations | $ 0 | $ 0 |
Note 5. Commitments and Conti64
Note 5. Commitments and Contingent Liabilities - Guarantees Textuals (Details) - USD ($) | Jun. 30, 2015 | Jun. 30, 2014 |
Guarantee Obligations | ||
Contingent Liabilities | ||
Loss Contingency Accrual, at Carrying Value | $ 0 | $ 0 |
Financial Standby Letter of Credit | ||
Contingent Liabilities | ||
Unused standby letters of credit | 300,000 | 100,000 |
Loss Contingency Accrual, at Carrying Value | $ 0 | 0 |
Affiliated Entity | ||
Contingent Liabilities | ||
Line of Credit, Current | $ 0 |
Note 5. Commitments and Conti65
Note 5. Commitments and Contingent Liabilities - Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Product Warranty Liability at the beginning of the year | $ 911 | $ 507 | $ 329 |
Additions to warranty accrual (including changes in estimates) | 625 | 721 | 279 |
Settlements made (in cash or in kind) | (915) | (317) | (101) |
Product Warranty Liability at the end of the year | $ 621 | $ 911 | $ 507 |
Note 6. Credit Facilities - Tex
Note 6. Credit Facilities - Textuals (Details) $ in Thousands, € in Millions, THB in Millions | 12 Months Ended | |||||||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($) | Jun. 30, 2015THB | Jun. 30, 2015USD ($) | Jun. 30, 2014EUR (€) | Jun. 30, 2014USD ($) | ||
Credit Facility, Borrowings Outstanding | $ 0 | $ 0 | ||||||
Credit Facility, Availability to Borrow | 59,900 | |||||||
Interest Paid on Borrowings | $ 0 | $ 2 | $ 9 | |||||
Primary Credit Facility | ||||||||
Credit Facility, Maximum Borrowing Capacity | 50,000 | |||||||
Credit Facility, Borrowings Outstanding | [1] | 0 | 0 | |||||
Credit Facility, Availability to Borrow | [1] | 49,700 | ||||||
Credit Facility, Maximum Borrowing Capacity Upon Request | 75,000 | |||||||
Thailand Overdraft Credit Facility | ||||||||
Credit Facility, Maximum Borrowing Capacity | THB 90 | 2,700 | ||||||
Credit Facility, Borrowings Outstanding | [2] | 0 | 0 | |||||
Credit Facility, Availability to Borrow | [2] | 2,700 | ||||||
Poland Overdraft Credit Facility | ||||||||
Credit Facility, Maximum Borrowing Capacity | € | € 6 | |||||||
Credit Facility, Borrowings Outstanding | 0 | |||||||
China Revolving Credit Facility | ||||||||
Credit Facility, Maximum Borrowing Capacity | 7,500 | |||||||
Credit Facility, Borrowings Outstanding | [3] | 0 | 0 | |||||
Credit Facility, Availability to Borrow | [3] | 7,500 | ||||||
Financial Standby Letter of Credit | ||||||||
Unused standby letters of credit | $ 300 | $ 100 | ||||||
[1] | U.S. primary credit facility (the “primary facility”) dated as of October 31, 2014. The credit facility expires in October 2019 and provides for up to $50 million in borrowings, with an option to increase the amount available for borrowing to $75 million upon request, subject to participating banks’ consent. We will use this facility for acquisitions and general corporate purposes. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2015. The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA. The interest rate on borrowings is dependent on the type of borrowings. 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 U.S. 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, and•a fixed charge coverage ratio, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be less than 1.10 to 1.00. The Company had $0.3 million in letters of credit contingently committed against the credit facility at June 30, 2015. | |||||||
[2] | also maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to 90.0 million Thai Baht (approximately $2.7 million at June 30, 2015 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. | |||||||
[3] | uncommitted revolving credit facility was established in the fourth quarter of fiscal year 2015 for our China operation. The China credit facility allows for borrowings of up to $7.5 million, which borrowings can be made in either Chinese Renminbi (RMB) or U.S. dollars. The availability of this facility is at the sole discretion of the bank and is subject to the availability of funds and other relevant conditions. The bank may, at its sole discretion, agree to provide the facility on such terms and conditions as the bank deems appropriate. Further, the availability of the facility is also subject to the determination by the bank of the borrower’s actual need for such facility. Proceeds from the facility are to be used for general working capital purposes. Interest on borrowing under this facility is charged at a rate of interest determined by the bank and is dependent on the denomination of the currency borrowed. The facility matures on May 31, 2016. |
Note 6. Credit Facilities Coven
Note 6. Credit Facilities Covenant Textuals (Details) - Jun. 30, 2015 - Primary Credit Facility $ in Millions | USD ($) |
Line of Credit Facility, Commitment Fee Basis Points, Minimum | 20 |
Line of Credit Facility, Commitment Fee Basis Points, Maximum | 25 |
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash | $ 15 |
Adjusted Leverage Ratio Covenant | 3 |
Fixed Charge Coverage Ratio Covenant | 1.10 |
Note 7. Employee Benefit Plan68
Note 7. Employee Benefit Plans - Retirement Plans Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Domestic Plans | |||
Employer's contribution to retirement plans | $ 1.5 | $ 1.3 | $ 1.2 |
Foreign Plans | |||
Employer's contribution to retirement plans | $ 0.2 | $ 0.2 | $ 0.2 |
Note 7. Employee Benefit Plan69
Note 7. Employee Benefit Plans - Severance Plans - Components and Changes of Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Changes and Components of Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 1,495 | $ 1,560 | |
Service cost | 327 | 267 | $ 230 |
Interest cost | 50 | 37 | 50 |
Actuarial (gain) loss for the period | (638) | 6 | |
Benefits paid | (8) | (375) | |
Remeasurement of liabilities at spin-off | 751 | 0 | |
Benefit obligation at end of year | 1,977 | 1,495 | $ 1,560 |
Balance in current liabilities | 347 | 262 | |
Balance in noncurrent liabilities | 1,630 | 1,233 | |
Total benefit obligation recognized in the Consolidated Balance Sheets | $ 1,977 | $ 1,495 |
Note 7. Employee Benefit Plan70
Note 7. Employee Benefit Plans - Severance Plans - Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | |
Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): | |||||
Accumulated Other Comprehensive Income (Loss) at beginning of year | $ (160) | $ (73) | |||
Change in unrecognized prior service cost | (28) | (40) | $ (40) | ||
Net change in unrecognized actuarial (gain) loss | (492) | (47) | |||
Accumulated Other Comprehensive Income (Loss) at end of year | (680) | (160) | (73) | ||
Balance in unrecognized prior service cost | $ 28 | $ 55 | |||
Balance in unrecognized actuarial (gain) loss | (708) | (215) | |||
Total Accumulated Other Comprehensive Income (Loss) recognized in Share Owners’ Equity | $ (160) | $ (73) | $ (73) | $ (680) | $ (160) |
Note 7. Employee Benefit Plan71
Note 7. Employee Benefit Plans - Severance Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Components of Net Periodic Benefit Cost (before tax): | |||
Service cost | $ 327 | $ 267 | $ 230 |
Interest cost | 50 | 37 | 50 |
Amortization of prior service cost | 28 | 40 | 40 |
Amortization of actuarial (gain) loss | (146) | 53 | 37 |
Net periodic benefit cost recognized in the Consolidated Statements of Income | $ 259 | $ 397 | $ 357 |
Note 7. Employee Benefit Plan72
Note 7. Employee Benefit Plans - Severance Plans Textuals (Details) - Jun. 30, 2015 - USD ($) $ in Thousands | Total |
Estimated amortization over the next fiscal year: | |
Defined Benefit Plan, Assets for Plan Benefits | $ 0 |
Estimated prior service cost that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year | 28 |
Estimated actuarial net (gain) loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year | $ (231) |
Note 7. Employee Benefit Plan73
Note 7. Employee Benefit Plans - Severance Plan Assumptions, Fiscal Year End (Details) | Jun. 30, 2015 | Jun. 30, 2014 |
Defined Benefit Plan Disclosure Line Items | ||
Discount Rate | 2.80% | 2.30% |
Rate of Compensation Increase | 3.00% | 3.00% |
Note 7. Employee Benefit Plan74
Note 7. Employee Benefit Plans - Severance Plan Assumptions, Weighted Average (Details) | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Defined Benefit Plan Disclosure Line Items | |||
Discount Rate | 2.70% | 2.50% | 3.80% |
Rate of Compensation Increase | 3.00% | 3.00% | 3.80% |
Note 8. Stock Compensation Pl75
Note 8. Stock Compensation Plans - Textuals (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Oct. 03, 2014 | |
Share-based Compensation Arrangements | ||||
Stock Compensation Plan, Shares Reserved | 4.5 | |||
Stock Compensation Plan, Pre-tax Compensation Cost | $ 3.5 | $ 3.3 | $ 2.4 | |
former parent [Domain] | ||||
Share-based Compensation Arrangements | ||||
Stock Compensation Plan, Pre-tax Compensation Cost | $ 1.8 |
Note 8. Stock Compensation Pl76
Note 8. Stock Compensation Plans - Performance Share Activity (Details) - Performance Shares - $ / shares | 1 Months Ended | 12 Months Ended |
Dec. 02, 2014 | Jun. 30, 2015 | |
Share-based Compensation Arrangements | ||
Performance Shares, Impact of Spin-Off | 548,552 | |
Performance Shares, Shares Outstanding, Beginning of Period | 0 | |
Performance Shares, Shares Granted | 241,222 | |
Performance Shares, Shares Vested | 0 | |
Performance Shares, Shares Forfeited | 0 | |
Performance Shares, Shares Outstanding, End of Period | 789,774 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 0 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Granted | $ 8.43 | 14.47 |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Vested | 0 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Forfeited | 0 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, End of Period | $ 10.27 |
Note 8. Stock Compensation Pl77
Note 8. Stock Compensation Plans - Performance Shares Textuals (Details) - Jun. 30, 2015 - Performance Shares - USD ($) $ in Millions | Total |
Share-based Compensation Arrangements | |
Performance Shares, Unrecognized Compensation Cost | $ 5.9 |
Performance Shares, Average Vesting Period for Unrecognized Compensation Cost | 1 year 7 months |
Performance Shares, Shares Vested | 0 |
Minimum | |
Share-based Compensation Arrangements | |
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 1 year |
Maximum | |
Share-based Compensation Arrangements | |
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 5 years |
Note 8. Stock Compensation Pl78
Note 8. Stock Compensation Plans - Unrestricted Share Grants Textuals (Details) - 12 months ended Jun. 30, 2015 - Unrestricted Shares Director Compensation - USD ($) $ / shares in Units, $ in Millions | Total |
Share-based Compensation Arrangements | |
Unrestricted Shares, Shares Granted | 28,700 |
Unrestricted Share Grants, Weighted Average Grant Date Fair Value of Shares Granted | $ 10.76 |
Unrestricted Share Grants, Fair Value of Shares Granted, Total Fair Value | $ 0.3 |
Note 9. Income Taxes - Textuals
Note 9. Income Taxes - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Aggregate Foreign Unremitted Earnings on Which Determination of Deferred Tax Liability Is Not Practicable | $ 158,000 | ||
Income Taxes Paid (Refunded), Net | 11,783 | $ 4,347 | $ 775 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Income (Expense) | $ 0 | $ (7) | $ (16) |
Note 9. Income Taxes - Componen
Note 9. Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Deferred Tax Assets: | ||
Deferred Tax Assets, Receivables | $ 138 | $ 185 |
Deferred Tax Assets, Inventory | 1,524 | 1,457 |
Deferred Tax Assets, Employee Benefits | 164 | 174 |
Deferred Tax Assets, Deferred Compensation | 7,786 | 8,850 |
Deferred Tax Assets, Other Current Liabilities | 712 | 408 |
Deferred Tax Assets, Tax Credit Carryforwards | 240 | 3,069 |
Deferred Tax Assets, Goodwill | 2,149 | 2,440 |
Deferred Tax Assets, Net Operating Loss Carryforwards | 5 | 564 |
Deferred Tax Assets, Unrealized Currency Losses | 2 | 81 |
Deferred Tax Assets, Property, Plant and Equipment | 1,838 | 1,063 |
Deferred Tax Assets, Miscellaneous | 1,268 | 2,332 |
Deferred Tax Assets, Valuation Allowance | 0 | (92) |
Deferred Tax Assets | 15,826 | 20,531 |
Deferred Tax Liabilities: | ||
Deferred Tax Liabilities, Miscellaneous | 353 | 199 |
Deferred Tax Liabilities, Net | 353 | 199 |
Net Deferred Income Taxes | $ 15,473 | $ 20,332 |
Note 9. Income Taxes - Compon81
Note 9. Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income (Loss) Before Taxes on Income, United States | $ 1,195 | $ 5,412 | $ 6,638 |
Income (Loss) Before Taxes on Income, Foreign | 33,576 | 24,830 | 20,138 |
Income Before Taxes on Income | $ 34,771 | $ 30,242 | $ 26,776 |
Note 9. Income Taxes - Compon82
Note 9. Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Currently Payable (Refundable): | |||
Current Federal Income Tax Expense (Benefit) | $ 186 | $ (40) | $ 40 |
Current Foreign Income Tax Expense (Benefit) | 6,586 | 4,505 | 2,861 |
Current State Income Tax Expense (Benefit) | 108 | 519 | 239 |
Current Income Tax Expense (Benefit) | 6,880 | 4,984 | 3,140 |
Deferred Taxes: | |||
Deferred Federal Income Tax Expense (Benefit) | (188) | 2,360 | 1,780 |
Deferred Foreign Income Tax Expense (Benefit) | 1,957 | (55) | 134 |
Deferred State Income Tax Expense (Benefit) | (83) | (139) | (186) |
Deferred Income Tax Expense (Benefit) | 1,686 | 2,166 | 1,728 |
Income Tax Expense (Benefit), Valuation Allowance | 0 | (1,521) | 388 |
Total provision for income taxes | $ 8,566 | $ 5,629 | $ 5,256 |
Note 9. Income Taxes - Reconcil
Note 9. Income Taxes - Reconciliation of Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Reconciliation, Income Tax Expense (Benefit), Tax Computed at U.S. Federal Statutory Rate | $ 12,170 | $ 10,585 | $ 9,372 |
Effective Income Tax Rate Reconciliation, Tax Computed at U.S. Federal Statutory Rate | 35.00% | 35.00% | 35.00% |
Income Tax Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | $ 16 | $ 210 | $ 41 |
Effective Income Tax Rate Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | 0.00% | 0.70% | 0.10% |
Income Tax Reconciliation, Foreign Tax Effect | $ (4,336) | $ (3,800) | $ (3,645) |
Effective Income Tax Rate Reconciliation, Foreign Tax Effect | (12.50%) | (12.60%) | (13.60%) |
Effective Income Tax Rate Reconciliation, Impact of Foreign Exchange Rates, Amount | $ 1,274 | $ 153 | $ (72) |
Effective Income Tax Rate Reconciliation Impact of Foreign Exchange Rates, Foreign, Percent | 3.70% | 0.50% | (0.30%) |
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | $ (146) | $ (123) | $ (498) |
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Percent | (0.40%) | (0.40%) | (1.90%) |
Income Tax Reconciliation, Valuation Allowance | $ 0 | $ (1,521) | $ 388 |
Effective Income Tax Rate Reconciliation, Valuation Allowance | 0.00% | (5.00%) | 1.40% |
Income Tax Reconciliation, Research Credit | $ (421) | $ (187) | $ (347) |
Effective Income Tax Rate Reconciliation, Research Credit | (1.20%) | (0.60%) | (1.30%) |
Income Tax Reconciliation, Spin-off costs | $ 625 | $ 753 | $ 0 |
Effective Income Tax Rate Reconciliation, Spin-off costs | 1.80% | 2.50% | 0.00% |
Income Tax Reconciliation, Other-Net | $ (616) | $ (441) | $ 17 |
Effective Income Tax Rate Reconciliation, Other-Net | (1.80%) | (1.50%) | 0.20% |
Total provision for income taxes | $ 8,566 | $ 5,629 | $ 5,256 |
Effective Income Tax Rate | 24.60% | 18.60% | 19.60% |
Income Tax Expense (Benefit), Valuation Allowance | $ 0 | $ (1,521) | $ 388 |
Foreign Tax Authority | |||
Income Tax Expense (Benefit), Valuation Allowance | (1,399) | 408 | |
State and Local Jurisdiction | |||
Income Tax Expense (Benefit), Valuation Allowance | $ (122) | $ (20) |
Note 9. Income Taxes - Reconc84
Note 9. Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 792 | $ 965 | $ 870 |
Unrecognized Tax Benefits, Additions Resulting from Prior Period Tax Positions | 0 | 92 | 10 |
Unrecognized Tax Benefits, Reductions Resulting from Prior Period Tax Positions | (792) | 0 | 0 |
Unrecognized Tax Benefits, Additions Resulting from Current Period Tax Positions | 0 | 77 | 104 |
Unrecognized Tax Benefits, Reductions Resulting from Current Period Tax Positions | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Settlements with Taxing Authorities | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | 0 | (342) | (19) |
Unrecognized Tax Benefits, Ending Balance | 0 | 792 | 965 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 0 | $ 565 | $ 772 |
Note 9. Income Taxes - Accrued
Note 9. Income Taxes - Accrued Interest and Penalties Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | |||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 0 | $ 65 | $ 72 |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | $ 0 | $ 69 | $ 55 |
Note 10. Share Owners' Equity -
Note 10. Share Owners' Equity - Textuals (Details) - USD ($) $ in Thousands | Oct. 31, 2014 | Jun. 30, 2015 | Oct. 16, 2014 | Oct. 03, 2014 | Jun. 30, 2014 |
Total Shares Authorized | 165,000,000 | ||||
Preferred Stock, Shares Authorized | 15,000,000 | 15,000,000 | 15,000,000 | ||
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 | 150,000,000 | ||
Common Shares Outstanding Prior to Stock Split | 50,000 | ||||
Common Stock, Shares, Outstanding | 29,100,000 | ||||
Common Stock Dividends, Shares | 29,100,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 4,500,000 | ||||
Net Parent Contribution | $ 45,973 | ||||
Additional Paid-In Capital | |||||
Net Parent Contribution | 45,973 | ||||
Net Parent Contribution, Non-Cash | $ (4,300) |
Note 11. Fair Value - Textuals
Note 11. Fair Value - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Fair Value, Transfers Between Levels, Amount | $ 0 | $ 0 | |
Fair Value, Purchases and Sales of Level 3 Assets | $ 0 | $ 0 | |
FY 2007 Gaylord Restructuring Plan | Held for Sale Facilty and Land Related to the Gaylord, Michigan Exited Operation | Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Assets, Non-recurring fair value adjustment, impairment loss | $ (188) |
Note 11. Fair Value - Recurring
Note 11. Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Recurring Fair Value Measurments: | ||
Derivative Asset | $ 3,004 | $ 800 |
Trading Securities, Total | 5,813 | 5,260 |
SERP investment - current asset | 192 | 167 |
Derivative Liability | 2,318 | 699 |
Fair Value, Measurements, Recurring | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 28,722 | |
Trading Securities, Total | 5,813 | 5,260 |
Total assets at fair value | 37,539 | 6,060 |
Total liabilities at fair value | 2,318 | 699 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 3,004 | 800 |
Derivative Liability | 2,318 | 699 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 28,722 | |
Trading Securities, Total | 5,813 | 5,260 |
Total assets at fair value | 34,535 | 5,260 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Recurring Fair Value Measurments: | ||
Total assets at fair value | 3,004 | 800 |
Total liabilities at fair value | 2,318 | 699 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 3,004 | 800 |
Derivative Liability | $ 2,318 | $ 699 |
Note 12. Derivative Instrumen89
Note 12. Derivative Instruments - Textuals (Details) - Foreign Exchange Contract € in Millions, $ in Millions | 12 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014 | Jun. 30, 2015EUR (€) | Jun. 30, 2015USD ($) | |
Derivatives, Fair Value | ||||
Derivative, Notional Amount | € 52.2 | $ 33.5 | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ (0.4) | |||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Maximum Time to Transfer | 12 months | 12 months |
Note 12. Derivative Instrumen90
Note 12. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheets(Details) - Fair Value, Measurements, Fair Value Hierarchy [Domain] - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Derivatives, Fair Value | ||
Derivative Asset | $ 3,004 | $ 800 |
Derivative Liability | 2,318 | 699 |
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 1,255 | 599 |
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | 2,143 | 241 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 1,749 | 201 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | 175 | 458 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Derivatives, Fair Value | ||
Derivative Asset | 3,004 | 800 |
Derivative Liability | $ 2,318 | $ 699 |
Note 12. Derivative Instrumen91
Note 12. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Derivative Instruments, Gain (Loss) | |||
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 3,806 | $ 73 | $ 1,206 |
Foreign Exchange Contract | |||
Derivative Instruments, Gain (Loss) | |||
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 3,806 | $ 73 | $ 1,206 |
Note 12. Derivative Instrumen92
Note 12. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |||
Derivative Instruments, Gain (Loss) | |||||
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | $ 6,041 | $ (1,674) | $ 1,814 | ||
Foreign Exchange Contract | Non-operating income/expense | |||||
Derivative Instruments, Gain (Loss) | |||||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | 1,734 | (487) | (322) | ||
Cash Flow Hedging | |||||
Derivative Instruments, Gain (Loss) | |||||
Derivative Gain (Loss) | 4,308 | (1,187) | 2,139 | ||
Cash Flow Hedging | Foreign Exchange Contract | Cost of Sales | |||||
Derivative Instruments, Gain (Loss) | |||||
Derivative Gain (Loss) | 1,310 | [1] | (1,024) | [1] | 2,212 |
Cash Flow Hedging | Foreign Exchange Contract | Non-operating income/expense | |||||
Derivative Instruments, Gain (Loss) | |||||
Derivative Gain (Loss) | 2,998 | (163) | (73) | ||
Derivatives, Pre-Tax Gain (Loss) Reclassified from Accumulated OCI into Income, Ineffective Portion | $ (1) | $ 0 | $ (3) | ||
[1] | See Note 12 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. |
Note 13. Investments - Investme
Note 13. Investments - Investments-Supplemental Employee Retirement Plan Investments Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Schedule of Trading Securities and Other Trading Assets | |||
Trading Securities, Change in net unrealized holding gains (losses) | $ (27) | $ 315 | $ 208 |
Note 13. Investments - Suppleme
Note 13. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Schedule of Trading Securities and Other Trading Assets | ||
SERP investment - current asset | $ 192 | $ 167 |
SERP investment - other long-term asset | 5,621 | 5,093 |
Total SERP investment | 5,813 | 5,260 |
SERP obligation - current liability | 192 | 167 |
SERP obligation - other long-term liability | 5,621 | 5,093 |
Total SERP obligation | $ 5,813 | $ 5,260 |
Note 14. Accrued Expenses - Acc
Note 14. Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 30, 2014 |
Taxes | $ 2,022 | $ 1,742 |
Compensation | 15,547 | 18,488 |
Derivative Liability | 2,318 | 699 |
Retirement plan | 1,397 | 1,213 |
Insurance | 741 | 1,598 |
Other expenses | 4,520 | 2,862 |
Total accrued expenses | $ 26,545 | $ 26,602 |
Note 15. Geographic Area Info96
Note 15. Geographic Area Information - Segments, Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | $ 201,126 | $ 206,858 | $ 207,563 | $ 203,803 | $ 198,949 | $ 185,680 | $ 181,264 | $ 175,637 | $ 819,350 | $ 741,530 | $ 703,129 |
Long-Lived Assets: | 111,149 | 99,578 | 111,149 | 99,578 | 93,859 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 396,516 | 363,211 | 389,510 | ||||||||
Long-Lived Assets: | 49,689 | 33,004 | 49,689 | 33,004 | 28,942 | ||||||
GERMANY | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 73,966 | 77,338 | 68,925 | ||||||||
Poland | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Long-Lived Assets: | 33,692 | 45,287 | 33,692 | 45,287 | 45,971 | ||||||
CHINA | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 127,761 | 67,665 | 46,794 | ||||||||
Long-Lived Assets: | 16,676 | 12,174 | 16,676 | 12,174 | 10,069 | ||||||
Other Foreign | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 221,107 | 233,316 | 197,900 | ||||||||
Long-Lived Assets: | $ 11,092 | $ 9,113 | $ 11,092 | $ 9,113 | $ 8,877 |
Note 16. Earnings Per Share Sta
Note 16. Earnings Per Share Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Oct. 30, 2014 | |||||||||
Net Income (Loss) | $ 7,394 | $ 7,191 | $ 6,229 | $ 5,391 | $ 5,359 | $ 6,356 | $ 5,200 | $ 7,698 | $ 26,205 | $ 24,613 | $ 21,520 | |||||||||
Weighted Average Number of Shares Outstanding, Basic | 29,162,000 | 29,143,000 | 29,143,000 | |||||||||||||||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 226,000 | 0 | 0 | |||||||||||||||||
Weighted Average Number of Shares Outstanding, Diluted | 29,388,000 | 29,143,000 | 29,143,000 | |||||||||||||||||
Earnings Per Share, Basic | $ 0.25 | [1] | $ 0.25 | [1] | $ 0.21 | [1] | $ 0.18 | [1] | $ 0.18 | [1] | $ 0.22 | [1] | $ 0.18 | [1] | $ 0.26 | [1] | $ 0.90 | $ 0.84 | $ 0.74 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | |||||||||||||||||||
Earnings Per Share, Diluted | $ 0.25 | [1] | $ 0.25 | [1] | $ 0.21 | [1] | $ 0.18 | [1] | $ 0.18 | [1] | $ 0.22 | [1] | $ 0.18 | [1] | $ 0.26 | [1] | $ 0.89 | $ 0.84 | $ 0.74 | |
[1] | Basic and diluted earnings per share for the periods ended prior to the spin-off on October 31, 2014 were retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 10 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Note 17. Accumulated Other Co98
Note 17. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income (Loss) | $ 1,619 | $ (3,276) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (10,065) | 3,929 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (3,801) | 966 |
Current-period other comprehensive income (loss) | (13,866) | 4,895 |
Accumulated Other Comprehensive Income (Loss) | (12,247) | 1,619 |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income (Loss) | 4,925 | 1,038 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (14,038) | 3,887 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 |
Current-period other comprehensive income (loss) | (14,038) | 3,887 |
Accumulated Other Comprehensive Income (Loss) | (9,113) | 4,925 |
Derivative Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income (Loss) | (3,406) | (4,360) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 3,579 | 44 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (3,730) | 910 |
Current-period other comprehensive income (loss) | (151) | 954 |
Accumulated Other Comprehensive Income (Loss) | (3,557) | (3,406) |
Postemployment Benefits, Prior Service Costs | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income (Loss) | (35) | (59) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 17 | 24 |
Current-period other comprehensive income (loss) | 17 | 24 |
Accumulated Other Comprehensive Income (Loss) | (18) | (35) |
Postemployment Benefits, Net Actuarial Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income (Loss) | 135 | 105 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 394 | (2) |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (88) | 32 |
Current-period other comprehensive income (loss) | 306 | 30 |
Accumulated Other Comprehensive Income (Loss) | $ 441 | $ 135 |
Note 17. Accumulated Other Co99
Note 17. Accumulated Other Comprehensive Income (Loss) - Reclassification from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Amortization of prior service cost | $ (28) | $ (40) | $ (40) | |||||||||||
Amortization of actuarial gain (loss) | 146 | (53) | (37) | |||||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 3,801 | (966) | ||||||||||||
Net Income (Loss) | $ 7,394 | $ 7,191 | $ 6,229 | $ 5,391 | $ 5,359 | $ 6,356 | $ 5,200 | $ 7,698 | 26,205 | 24,613 | 21,520 | |||
Cash Flow Hedging | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Derivative Gain (Loss) | 4,308 | (1,187) | 2,139 | |||||||||||
Cost of Sales | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Amortization of prior service cost | [1] | (18) | (28) | |||||||||||
Amortization of actuarial gain (loss) | [1] | 88 | (37) | |||||||||||
Cost of Sales | Cash Flow Hedging | Foreign Exchange Contract | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Derivative Gain (Loss) | 1,310 | [2] | (1,024) | [2] | 2,212 | |||||||||
Selling, General and Administrative Expenses | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Amortization of prior service cost | [1] | (10) | (12) | |||||||||||
Amortization of actuarial gain (loss) | [1] | 58 | (16) | |||||||||||
Non-operating income/expense | Cash Flow Hedging | Foreign Exchange Contract | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Derivative Gain (Loss) | 2,998 | (163) | $ (73) | |||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Net | [2] | 2,997 | (163) | |||||||||||
Provision (Benefit) for Income Taxes | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Amortization of prior service cost | [1] | 11 | 16 | |||||||||||
Amortization of actuarial gain (loss) | [1] | (58) | 21 | |||||||||||
Provision (Benefit) for Income Taxes | Cash Flow Hedging | Foreign Exchange Contract | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Net | [2] | (577) | 277 | |||||||||||
Net Income (Loss) | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Amortization of prior service cost | [1] | (17) | (24) | |||||||||||
Amortization of actuarial gain (loss) | [1] | 88 | (32) | |||||||||||
Net Income (Loss) | Cash Flow Hedging | Foreign Exchange Contract | ||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Net | [2] | $ 3,730 | $ (910) | |||||||||||
[1] | See Note 7 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. | |||||||||||||
[2] | See Note 12 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. |
Note 18. Restructuring Expen100
Note 18. Restructuring Expense - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Restructuring Expense and Other Related Items | |||
Restructuring Expense | $ 0 | $ 402 | $ 416 |
Note 19. Quarterly Financial101
Note 19. Quarterly Financial Information (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |||||||||
Net Sales | $ 201,126 | $ 206,858 | $ 207,563 | $ 203,803 | $ 198,949 | $ 185,680 | $ 181,264 | $ 175,637 | $ 819,350 | $ 741,530 | $ 703,129 | ||||||||
Gross Profit | 17,709 | 18,953 | 17,858 | 17,903 | 18,081 | 16,553 | 13,937 | 12,425 | 72,423 | 60,996 | 57,155 | ||||||||
Other General Income | 0 | [1] | (666) | [1] | 0 | [1] | (5,022) | [1] | 0 | (5,688) | 0 | ||||||||
Net Income (Loss) | $ 7,394 | $ 7,191 | $ 6,229 | $ 5,391 | $ 5,359 | $ 6,356 | $ 5,200 | $ 7,698 | $ 26,205 | $ 24,613 | $ 21,520 | ||||||||
Earnings Per Share, Basic | $ 0.25 | [2] | $ 0.25 | [2] | $ 0.21 | [2] | $ 0.18 | [2] | $ 0.18 | [2] | $ 0.22 | [2] | $ 0.18 | [2] | $ 0.26 | [2] | $ 0.90 | $ 0.84 | $ 0.74 |
Earnings Per Share, Diluted | $ 0.25 | [2] | $ 0.25 | [2] | $ 0.21 | [2] | $ 0.18 | [2] | $ 0.18 | [2] | $ 0.22 | [2] | $ 0.18 | [2] | $ 0.26 | [2] | $ 0.89 | $ 0.84 | $ 0.74 |
[1] | Other General Income included $5.0 million and $0.7 million, pre-tax, for the quarters ended September 30, 2013 and March 31, 2014, respectively, for the settlement proceeds received related to two antitrust class action lawsuits in which the Company was a class member. | ||||||||||||||||||
[2] | Basic and diluted earnings per share for the periods ended prior to the spin-off on October 31, 2014 were retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 10 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Schedule II Valuation and Qu102
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Short-Term Receivables | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | $ 352 | $ 750 | $ 381 |
Valuation Allowances, Additions to Expense | (80) | (350) | 463 |
Valuation Allowances, Adjustments to Other Accounts | 1 | 45 | (120) |
Valuation Allowances, Write-offs and Recoveries | (37) | (93) | 26 |
Valuation Allowances, Balance at End of Year | 236 | 352 | 750 |
Deferred Tax Asset | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | 92 | 1,613 | 1,224 |
Valuation Allowances, Additions to Expense | 0 | 0 | 409 |
Valuation Allowances, Adjustments to Other Accounts | (92) | 0 | 0 |
Valuation Allowances, Write-offs and Recoveries | 0 | (1,521) | (20) |
Valuation Allowances, Balance at End of Year | $ 0 | $ 92 | $ 1,613 |