Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Aug. 15, 2016 | Dec. 31, 2015 | |
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 | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 28,155,140 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 319,700,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 54,738 | $ 65,180 |
Receivables, net of allowances of $192 and $236, respectively | 149,652 | 139,892 |
Inventories | 132,877 | 125,198 |
Prepaid Expense and Other Assets, Current | 24,944 | 23,922 |
Assets held for sale | 0 | 0 |
Total current assets | 362,211 | 354,192 |
Property and Equipment, net of accumulated depreciation of $161,034 and $151,504, respectively | 120,701 | 106,779 |
Goodwill | 6,191 | 2,564 |
Other Intangible Assets, net of accumulated amortization of $25,817 and $24,952, respectively | 4,593 | 4,509 |
Other Assets | 16,869 | 15,213 |
Total Assets | 510,565 | 483,257 |
Current Liabilities: | ||
Line of Credit, Current | 9,000 | 0 |
Accounts payable | 142,152 | 133,409 |
Accrued expenses | 23,651 | 26,545 |
Total current liabilities | 174,803 | 159,954 |
Other Liabilities: | ||
Other long-term liabilities | 11,393 | 10,854 |
Total Liabilities | 186,196 | 170,808 |
Share Owners’ Equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 0 | 0 |
Additional Paid in Capital | 301,581 | 298,491 |
Retained earnings | 48,492 | 26,205 |
Accumulated other comprehensive income (loss) | (12,190) | (12,247) |
Treasury Stock, Value | (13,514) | 0 |
Total Share Owners’ Equity | 324,369 | 312,449 |
Total Liabilities and Share Owners’ Equity | $ 510,565 | $ 483,257 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
ASSETS | ||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 192 | $ 236 |
Property and Equipment Accumulated Depreciation | 161,034 | 151,504 |
Other Intangible Assets Accumulated Amortization | $ 25,817 | $ 24,952 |
Share Owners' Equity | ||
Preferred Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Shares, Issued | 29,430,000 | 29,172,000 |
Treasury Stock, Shares | 1,210,000 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Sales | $ 842,060 | $ 819,350 | $ 741,530 |
Cost of Sales | 777,522 | 746,927 | 680,534 |
Gross Profit | 64,538 | 72,423 | 60,996 |
Selling and Administrative Expenses | 34,816 | 36,068 | 36,352 |
Other General Income | 0 | 0 | (5,688) |
Restructuring Expense | 0 | 0 | 402 |
Operating Income | 29,722 | 36,355 | 29,930 |
Other Income (Expense): | |||
Interest income | 79 | 36 | 41 |
Interest expense | (80) | (11) | (2) |
Non-operating income | 166 | 227 | 722 |
Non-operating expense | (1,911) | (1,836) | (449) |
Other income (expense), net | (1,746) | (1,584) | 312 |
Income Before Taxes on Income | 27,976 | 34,771 | 30,242 |
Provision for Income Taxes | 5,689 | 8,566 | 5,629 |
Net Income | $ 22,287 | $ 26,205 | $ 24,613 |
Earnings Per Share of Common Stock: | |||
Earnings Per Share, Basic | $ 0.77 | $ 0.90 | $ 0.84 |
Earnings Per Share, Diluted | $ 0.76 | $ 0.89 | $ 0.84 |
Average Number of Shares Outstanding: | |||
Average Number of Shares Outstanding, Basic | 28,916 | 29,162 | 29,143 |
Average Number of Shares Outstanding, Diluted | 29,176 | 29,388 | 29,143 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Income | $ 22,287 | $ 26,205 | $ 24,613 |
Other Comprehensive Income (Loss): | |||
Foreign currency translation adjustments, Pre-tax | (540) | (14,022) | 4,358 |
Foreign currency translation adjustments, Tax | 0 | (16) | (471) |
Foreign currency translation adjustments, Net of Tax | (540) | (14,038) | 3,887 |
Postemployment severance actuarial change, Pre-tax | 507 | 638 | (6) |
Postemployment severance actuarial change, Tax | (195) | (244) | 4 |
Postemployment severance actuarial change, Net of Tax | 312 | 394 | (2) |
Derivative gain (loss), Pre-tax | (2,869) | 3,806 | 73 |
Derivative gain (loss), Tax | 937 | (227) | (29) |
Derivative gain (loss), Net of Tax | (1,932) | 3,579 | 44 |
Reclassification to (earnings) loss: | |||
Derivatives, Reclassification to (earnings) loss, Pre-tax | 3,537 | (4,307) | 1,187 |
Derivatives, Reclassification to (earnings) loss, Tax | (1,185) | 577 | (277) |
Derivatives, Reclassification to (earnings) loss, Net of Tax | 2,352 | (3,730) | 910 |
Amortization of prior service cost, Pre-tax | 28 | 28 | 40 |
Amortization of prior service cost, Tax | (10) | (11) | (16) |
Amortization of prior service cost, Net of Tax | 18 | 17 | 24 |
Amortization of actuarial change, Pre-tax | (254) | (146) | 53 |
Amortization of actuarial change, Tax | 101 | 58 | (21) |
Amortization of actuarial change, Net of Tax | (153) | (88) | 32 |
Other comprehensive income (loss), Pre-tax | 409 | (14,003) | 5,705 |
Other comprehensive income (loss), Tax | (352) | 137 | (810) |
Other comprehensive income (loss), Net of Tax | 57 | (13,866) | 4,895 |
Total Comprehensive Income | $ 22,344 | $ 12,339 | $ 29,508 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities: | |||
Net Income | $ 22,287 | $ 26,205 | $ 24,613 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 19,869 | 19,607 | 17,889 |
(Gain) loss on sales of assets | (145) | (33) | 10 |
Restructuring | 0 | 0 | 311 |
Deferred income tax and other deferred charges | 1,449 | 1,100 | 1,246 |
Deferred Tax Valuation Allowance | 0 | (92) | (1,521) |
Stock-based compensation | 3,406 | 3,506 | 3,298 |
Excess tax benefits from stock-based compensation | (203) | 0 | 0 |
Other, net | 137 | 276 | (183) |
Change in operating assets and liabilities: | |||
Receivables | (9,192) | (14,731) | (10,076) |
Inventories | (3,513) | (12,192) | (12,783) |
Prepaid expenses and other current assets | (3,713) | (4,640) | (1,073) |
Accounts payable | 8,270 | 13,641 | 9,486 |
Accrued expenses | (1,820) | (4,583) | 8,089 |
Net cash provided by operating activities | 36,832 | 28,064 | 39,306 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (33,664) | (33,042) | (20,404) |
Proceeds from sales of assets | 209 | 310 | 254 |
Payments for acquisitions | (8,267) | 0 | 0 |
Purchases of capitalized software | (968) | (3,851) | (378) |
Other, net | 100 | 67 | 537 |
Net cash used for investing activities | (42,590) | (36,516) | (19,991) |
Cash Flows From Financing Activities: | |||
Proceeds from revolving credit facility | 12,000 | 0 | 0 |
Payments on revolving credit facility | (3,000) | 0 | 0 |
Excess tax benefits from stock-based compensation | 203 | 0 | 0 |
Repurchases of common stock | (12,606) | 0 | 0 |
Repurchase of employee shares for tax withholding | (897) | 0 | 0 |
Net transfers from (to) Kimball International, Inc. | 0 | 50,295 | (11,620) |
Debt issuance costs | 0 | (123) | 0 |
Net cash (used for) provided by financing activities | (4,300) | 50,172 | (11,620) |
Effect of Exchange Rate Change on Cash and Cash Equivalents | (384) | (2,800) | 141 |
Net (Decrease) Increase in Cash and Cash Equivalents | (10,442) | 38,920 | 7,836 |
Cash and Cash Equivalents at Beginning of Year | 65,180 | 26,260 | 18,424 |
Cash and Cash Equivalents at End of Year | $ 54,738 | $ 65,180 | $ 26,260 |
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) | Treasury Stock |
Share Owner's Equity at Jun. 30, 2013 | $ 231,186 | $ 0 | $ 234,462 | $ 0 | $ (3,276) | $ 0 |
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 | 0 |
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) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 22,287 | 22,287 | ||||
Other comprehensive income (loss), Net of Tax | 57 | 57 | ||||
Issuance of non-restricted stock | 517 | (28) | 545 | |||
Compensation expense related to stock compensation plan | 2,915 | 2,915 | ||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 203 | 203 | ||||
Adjustments Related to Tax Withholding for Share-based Compensation | (897) | (897) | ||||
Treasury Stock, Value, Acquired, Cost Method | (13,162) | (13,162) | ||||
Share Owner's Equity at Jun. 30, 2016 | $ 324,369 | $ 301,581 | $ 0 | $ 48,492 | $ (12,190) | $ (13,514) |
Consolidated Statements of Sha8
Consolidated Statements of Share Owners' Equity Parentheticals - shares | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock Issued During Period, Shares, Issued for Services | 47,000 | 29,000 | |
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 258,000 | ||
Shares Paid for Tax Withholding for Share Based Compensation | 78,000 | ||
Treasury Stock, Shares, Acquired | 1,179,000 |
Note 1. Business Description an
Note 1. Business Description and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
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,” 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 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, the 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 fiscal years 2014 and 2015. 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, China, Mexico, Poland, Romania, 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. As of June 30, 2016, all of our business units operated 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, the production process, the type of customers, and the methods used to distribute the products, 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 Electronics 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, 2016 and 2015 , we sold, without recourse, $126.5 million and $129.1 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 $5.7 million at June 30, 2016 and $4.3 million at June 30, 2015 , are reflected in the Receivables line on the Consolidated Balance Sheets until the banker’s drafts are sold at a discount, transferred in settlement of current accounts payable, or cash is received at maturity. Banker’s acceptance drafts sold at a discount or transferred in settlement of current accounts payable during fiscal year 2016 was $14.9 million . No banker’s acceptance drafts were sold at a discount or transferred in settlement of current accounts payable during fiscal year 2015 . See Note 6 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements for more information on banker’s acceptance drafts. 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 2016 , 2015 , and 2014 , no goodwill impairment was recognized. A summary of goodwill is as follows: (Amounts in Thousands) 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 Goodwill Acquired 3,627 Balance as of June 30, 2016 Goodwill 19,017 Accumulated impairment (12,826 ) Goodwill, net $ 6,191 During the fiscal year ended June 30, 2016 , we acquired $3.6 million in goodwill from the acquisition of Medivative Technologies, LLC. See Note 3 - Acquisition of Notes to Consolidated Financial Statements for more information on this acquisition. 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, 2016 June 30, 2015 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 29,243 $ 24,750 $ 4,493 $ 28,294 $ 23,924 $ 4,370 Customer Relationships 1,167 1,067 100 1,167 1,028 139 Other Intangible Assets $ 30,410 $ 25,817 $ 4,593 $ 29,461 $ 24,952 $ 4,509 During fiscal years 2016 , 2015 , and 2014 , amortization expense of other intangible assets was, in thousands, $883 , $759 , and $797 , respectively. Amortization expense in future periods is expected to be, in thousands, $836 , $692 , $550 , $469 , and $452 in the five years ending June 30, 2021 , and $1,594 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 , $9 , and $8 in fiscal years 2016 , 2015 , and 2014 , 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 for all years included 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. 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, 2016 and 2015 , amounts outstanding under notes receivables were $1.7 million and $0.8 million , respectively. See Note 2 - Related Party Transactions and Note 3 - Acquisition of Notes to Consolidated Financial Statements for more information regarding the outstanding notes receivable at June 30, 2016 and 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, 2016 June 30, 2015 Net Sales Trade Receivables Net Sales Trade Receivables Philips 15.3 % 8.0 % 15.4 % 7.4 % ZF TRW 10.8 % 13.7 % 8.7 % 11.7 % Nexteer Automotive 9.5 % 10.8 % 7.2 % 9.1 % Off-Balance Sheet Risk: Off-balance sheet arrangements are limited to banker’s acceptance drafts transferred with recourse provisions at the Company’s China operation, standby letters of credit, and operating leases entered into in the normal course of business as described in Note 6 - 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 2016 and 2015 . 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 13 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. Stock-Based Compensation: As described in Note 9 - 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, or June 30, 2020; • 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 February 2016, the FASB issued guidance on leases. The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases with terms of more than 12 months. Under the current guidance, only capital leases are recognized on the balance sheet. The new guidance requires additional qualitative and quantitative disclosures. The new guidance is effective for our fiscal year 2020 financial statements. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In November 2015, the FASB issued guidance on the balance sheet classification of deferred taxes. Under the current guidance, deferred tax liabilities and assets must be separated into current and noncurrent amounts in a classified statement of financial position. The new guidance requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The new guidance does not change the requirement that deferred tax liabilities and assets of a tax-paying component of an entity to be offset and presented as a single amount. The guidance is effective for our fiscal year 2019 annual financial statements and interim periods within our fiscal year 2020 financial statements, with earlier application permitted as of the beginning of an interim or annual reporting period. The guidance offers two acceptable adoption methods: (i) retrospective adoption to all periods presented; or (ii) prospective adoption to all deferred tax liabilities and assets. We do not expect the adoption of this standard to have a material effect on our financial position, results of operations, or cash flows. In July 2015, the 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 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 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. |
Note 2. Related Party Transacti
Note 2. Related Party Transactions (Notes) | 12 Months Ended |
Jun. 30, 2016 | |
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 and $12.6 million in fiscal year 2014 . Additionally, former Parent charged us approximately $2.1 million in fiscal year 2015 and $5.0 million in fiscal year 2014 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. 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, 2016 and June 30, 2015 , the Company has a receivable from Kimball International recorded for $0.7 million and $0.8 million , respectively. As of both June 30, 2016 and June 30, 2015 , $0.6 million of the receivable from Kimball International is a long-term receivable and was recorded in Other Assets on the Consolidated Balance Sheets, relating to benefits from domestic 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. Our cash balance prior to the spin-off 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 and Note 11 - Share Owners’ Equity 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 were provided at cost and the services have been completed as of June 30, 2016. Tax Matters Agreement: See section entitled “Taxes” above for information on the Tax Matters Agreement. |
Note 3. Acquisition (Notes)
Note 3. Acquisition (Notes) | 12 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | Acquisition On May 2, 2016 , the Company acquired certain assets and assumed certain liabilities of Medivative Technologies, LLC (the “acquisition”) located in Indianapolis, Indiana, a wholly owned subsidiary of privately held Aircom Manufacturing, Inc. The acquisition adds capabilities in mechanical design, precision plastics, combination devices, instruments, and complex system assembly to our package of value. It is expected to position us to better serve both existing and new customers in the medical end market vertical. The acquisition was accounted for as a business combination with a total purchase price of $7.3 million , which included a cash payment of $8.3 million less a working capital adjustment of $1.0 million recorded in the Receivables line item on the Consolidated Balance Sheets as of June 30, 2016. Assets acquired were $11.6 million , which included $3.6 million of tax deductible goodwill, and liabilities assumed were $4.3 million . The allocation of the purchase price to the assets acquired and liabilities assumed was based on their estimated fair values as of the date of acquisition. The Company is in the process of finalizing fair value amounts for certain assets acquired and liabilities assumed. Direct costs of the acquisition were not material. Operating results are included in the Company’s consolidated financial statements beginning on May 2, 2016 and had an immaterial effect on the fiscal year 2016 financial results. |
Note 4. Inventories
Note 4. Inventories | 12 Months Ended |
Jun. 30, 2016 | |
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) 2016 2015 Finished products $ 21,577 $ 21,415 Work-in-process 10,678 13,029 Raw materials 100,622 90,754 Total inventory $ 132,877 $ 125,198 |
Note 5. Property and Equipment
Note 5. Property and Equipment | 12 Months Ended |
Jun. 30, 2016 | |
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) 2016 2015 Land $ 8,683 $ 8,726 Buildings and improvements 58,579 57,524 Machinery and equipment 199,792 177,148 Construction-in-progress 14,681 14,885 Total $ 281,735 $ 258,283 Less: Accumulated depreciation (161,034 ) (151,504 ) Property and equipment, net $ 120,701 $ 106,779 The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 3 to 40 Machinery and equipment 3 to 10 Leasehold improvements Lesser of Useful Life or Term of Lease Depreciation of property and equipment totaled, in millions, $19.5 for fiscal year 2016 , $19.0 for fiscal year 2015 , and $17.1 for fiscal year 2014 . At both June 30, 2016 and 2015 , 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 of $311 thousand . The loss on sale was included in the Restructuring Expense line of the Consolidated Statements of Income. |
Note 6. Commitments and Conting
Note 6. Commitments and Contingent Liabilities | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingent Liabilities Leases: Operating leases for a manufacturing facility and for land on which certain office and manufacturing facilities reside expire from fiscal year 2023 to 2056 and contain provisions under which minimum annual lease payments are $0.3 million , for each of the five years ending June 30, 2021 and aggregate $1.2 million from fiscal year 2022 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, $0.5 , $0.3 , and $0.5 in fiscal years 2016 , 2015 , and 2014 , respectively. As of June 30, 2016 and 2015 , the Company had no capital leases. Guarantees: As of June 30, 2016 and 2015 , we had no guarantees issued which were contingent on the future performance of another entity. Standby letters of credit are issued to third-party suppliers, lessors, and insurance institutions and can only be drawn upon in the event of the Company’s failure to pay its obligations to the beneficiary. We had a maximum financial exposure from unused standby letters of credit totaling $0.4 million as of June 30, 2016 and $0.3 million as of June 30, 2015 . We don’t expect circumstances to arise 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, 2016 and 2015 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. Banker’s Acceptance Drafts: The Company’s China operation, in limited circumstances, receives banker’s acceptance drafts from customers as settlement for their trade accounts receivable. We in turn may transfer the acceptance drafts to a supplier of ours in settlement of current accounts payable. These drafts contain certain recourse provisions afforded to the transferee under laws of the People’s Republic of China. If a transferee were to exercise its available recourse rights, our China operation would be required to satisfy the obligation with the transferee and the draft would revert back to our China operation. At June 30, 2016 , the drafts transferred and outstanding totaled $2.7 million . We had no transferred and outstanding drafts at June 30, 2015 . No transferee has exercised their recourse rights against us. For additional information on banker’s acceptance drafts, see Note 1 – Business Description and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements. 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 2016 , 2015 , and 2014 were as follows: (Amounts in Thousands) 2016 2015 2014 Product Warranty Liability at the beginning of the year $ 621 $ 911 $ 507 Additions to warranty accrual (including changes in estimates) 160 625 721 Settlements made (in cash or in kind) (176 ) (915 ) (317 ) Product Warranty Liability at the end of the year $ 605 $ 621 $ 911 |
Note 7. Credit Facilities
Note 7. Credit Facilities | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 June 30, 2016 June 30, 2015 Primary credit facility (1) $ 40.6 $ 9.0 $ — Thailand overdraft credit facility (2) 2.6 — — China revolving credit facility (3) 7.5 — — Total $ 50.7 $ 9.0 $ — (1) In connection with the spin-off, the Company entered into a 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 2016 and 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 weighted-average interest rate on borrowings outstanding at June 30, 2016 was 1.69% . 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 $0.4 million in letters of credit contingently committed against the credit facility at June 30, 2016 . (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 $2.6 million at June 30, 2016 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 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, 2017 . Cash payments for interest on borrowings in fiscal years 2016 and 2014 were, in thousands, $44 , and $2 , respectively, and no cash payments were made for interest on borrowings in fiscal year 2015 . Capitalized interest expense was immaterial during fiscal years 2016 , 2015 , and 2014 . |
Note 8. Employee Benefit Plans
Note 8. Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2016 | |
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, $1.4 , $1.5 , and $1.3 for fiscal years 2016 , 2015 , and 2014 , 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 $0.3 million in 2016 and $0.2 million in each of fiscal years 2015 and 2014 . 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) 2016 2015 Changes and Components of Benefit Obligation: Benefit obligation at beginning of year $ 1,977 $ 1,495 Service cost 328 327 Interest cost 50 50 Actuarial (gain) loss for the period (507 ) (638 ) Benefits paid (43 ) (8 ) Remeasurement of liabilities at spin-off — 751 Benefit obligation at end of year $ 1,805 $ 1,977 Balance in current liabilities $ 317 $ 347 Balance in noncurrent liabilities 1,488 1,630 Total benefit obligation recognized in the Consolidated Balance Sheets $ 1,805 $ 1,977 June 30 (Amounts in Thousands) 2016 2015 Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): Accumulated Other Comprehensive Income (Loss) at beginning of year $ (680 ) $ (160 ) Change in unrecognized prior service cost (28 ) (28 ) Net change in unrecognized actuarial (gain) loss (253 ) (492 ) Accumulated Other Comprehensive Income (Loss) at end of year $ (961 ) $ (680 ) Balance in unrecognized prior service cost $ — $ 28 Balance in unrecognized actuarial (gain) loss (961 ) (708 ) Total Accumulated Other Comprehensive Income (Loss) recognized in Share Owners’ Equity $ (961 ) $ (680 ) (Amounts in Thousands) Year Ended June 30 Components of Net Periodic Benefit Cost (before tax): 2016 2015 2014 Service cost $ 328 $ 327 $ 267 Interest cost 50 50 37 Amortization of prior service cost 28 28 40 Amortization of actuarial (gain) loss (254 ) (146 ) 53 Net periodic benefit cost recognized in the Consolidated Statements of Income $ 152 $ 259 $ 397 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 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 is $(277) thousand . No prior service cost remains to be amortized for next fiscal year. Assumptions used to determine fiscal year end benefit obligations are as follows: 2016 2015 Discount Rate 2.2% 2.8% Rate of Compensation Increase 3.0% 3.0% Weighted average assumptions used to determine fiscal year net periodic benefit costs are as follows: 2016 2015 2014 Discount Rate 2.7% 2.7% 2.5% Rate of Compensation Increase 3.0% 3.0% 3.0% |
Note 9. Stock Compensation Plan
Note 9. Stock Compensation Plans | 12 Months Ended |
Jun. 30, 2016 | |
Stock Compensation Plans [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments | Stock Compensation Plans A stock compensation 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 former Parent plans were based on former Parent’s Common Stock. Performance share awards issued and outstanding to Kimball Electronics employees under the former Parent plans as of the spin-off date 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 years 2016 and 2015 was $3.4 million and $3.5 million , including $1.8 million allocated to us by former Parent prior to the spin-off. For fiscal year 2014 , the pre-tax stock compensation cost allocated to us by former Parent was $3.3 million . 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 granted prior to fiscal year 2016, 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. Under these awards granted in and subsequent to fiscal year 2016, a number of shares will be issued to each participant based upon a combination of the bonus percentage attainment component above, adjusted to a three-year average bonus percentage, and a growth attainment component, which is the Company’s growth in sales revenue based on comparison of its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. 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 have been or 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 2016 is presented below: Number of Shares Weighted Average Grant Date Fair Value Performance shares outstanding at July 1, 2015 789,774 $ 10.27 Granted 294,540 $ 12.07 Vested (279,923 ) $ 9.48 Forfeited — — Performance shares outstanding at June 30, 2016 804,391 $ 11.21 As of June 30, 2016 , there was approximately $7.3 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 2016 through August 2019, with a weighted average vesting period of one year, three months . The fair value of performance shares is based on the stock price at the date of grant. During fiscal year 2016 , 279,923 performance shares vested at a fair value of $2.7 million . The performance shares vested represent the total number of shares vested prior to the reduction of shares withheld to satisfy tax withholding obligations. 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 2016 and 2015 , respectively, the Company granted a total of 47,262 and 28,700 unrestricted shares at an average grant date fair value of $10.94 and $10.76 , for a total fair value of $0.5 million and $0.3 million . Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director’s fees, including 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 10. Income Taxes
Note 10. Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 and 2015 , were as follows: (Amounts in Thousands) 2016 2015 Deferred Tax Assets: Receivables $ 116 $ 138 Inventory 1,288 1,524 Employee benefits 180 164 Deferred compensation 7,075 7,786 Other current liabilities 783 712 Tax credit carryforwards 700 240 Goodwill 1,823 2,149 Net operating loss carryforward 845 5 Net foreign currency losses — 2 Property and equipment 2,174 1,838 Miscellaneous 890 1,268 Total asset $ 15,874 $ 15,826 Deferred Tax Liabilities: Net foreign currency gains $ 8 $ — Miscellaneous 258 353 Total liability $ 266 $ 353 Net Deferred Income Taxes $ 15,608 $ 15,473 Income tax benefits associated with the net operating loss carryforward expire in fiscal year 2023 . Income tax benefits associated with tax credit carryforwards primarily expire from fiscal year 2016 to 2025 . No valuation allowances were recognized on deferred tax assets as of June 30, 2016 or 2015 . The components of income before taxes on income are as follows: Year Ended June 30 (Amounts in Thousands) 2016 2015 2014 United States $ 1,919 $ 1,195 $ 5,412 Foreign 26,057 33,576 24,830 Total income before taxes on income $ 27,976 $ 34,771 $ 30,242 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 $187 million as of June 30, 2016 . 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) 2016 2015 2014 Currently Payable (Refundable): Federal $ 280 $ 186 $ (40 ) Foreign 5,848 6,586 4,505 State 50 108 519 Total current $ 6,178 $ 6,880 $ 4,984 Deferred Taxes: Federal $ 153 $ (188 ) $ 2,360 Foreign (501 ) 1,957 (55 ) State (141 ) (83 ) (139 ) Total deferred $ (489 ) $ 1,686 $ 2,166 Valuation allowance — — (1,521 ) Total provision for income taxes $ 5,689 $ 8,566 $ 5,629 A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows: Year Ended June 30 2016 2015 2014 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 9,791 35.0 % $ 12,170 35.0 % $ 10,585 35.0 % State income taxes, net of federal income tax benefit (59 ) (0.2 ) 16 — 210 0.7 Foreign tax rate differential (2,998 ) (10.7 ) (4,482 ) (12.9 ) (3,923 ) (13.0 ) Impact of foreign exchange rates on foreign income taxes 1,026 3.7 1,274 3.7 153 0.5 Foreign subsidiary capitalization (1,801 ) (6.4 ) — — — — Valuation allowance — — — — (1,521 ) (5.0 ) Research credit (320 ) (1.2 ) (421 ) (1.2 ) (187 ) (0.6 ) Spin-off costs — — 625 1.8 753 2.5 Other - net 50 0.1 (616 ) (1.8 ) (441 ) (1.5 ) Total provision for income taxes $ 5,689 20.3 % $ 8,566 24.6 % $ 5,629 18.6 % During the year ended June 30, 2016 , we recognized a foreign tax benefit, in thousands, of $1,801 as a result of a favorable tax ruling related to the fiscal year 2015 capitalization of our Romania subsidiary. 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 . Net cash payments for income taxes were, in thousands, $8,975 , $11,783 and $4,347 in fiscal years 2016 , 2015 , and 2014 , respectively. Cash payments for fiscal year 2014 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 2016 , 2015 , and 2014 were as follows: (Amounts in Thousands) 2016 2015 2014 Beginning balance - July 1 $ — $ 792 $ 965 Tax positions related to prior fiscal years: Additions 46 — 92 Reductions — (792 ) — Tax positions related to current fiscal year: Additions — — 77 Reductions — — — Settlements — — — Lapses in statute of limitations — — (342 ) Ending balance - June 30 $ 46 $ — $ 792 Portion that, if recognized, would reduce tax expense and effective tax rate $ 37 $ — $ 565 Unrecognized tax benefits for fiscal year 2014 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 consolidated 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) 2016 2015 2014 Accrued Interest and Penalties: Interest $ 1 $ — $ 65 Penalties $ — $ — $ 69 Interest and penalties expense recognized in fiscal years 2016 and 2014 were, in thousands, $1 and $7 , respectively. No interest or penalties expense was recognized in fiscal year 2015 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 2014. 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, 2010. |
Note 11. Share Owners' Equity
Note 11. Share Owners' Equity | 12 Months Ended |
Jun. 30, 2016 | |
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. On October 21, 2015 , the Company’s Board of Directors authorized an 18 -month stock repurchase plan (the “Plan”) allowing a repurchase of up to $20 million worth of common stock. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Plan may be suspended or discontinued at any time. Through June 30, 2016 , the Company has repurchased $13.2 million of common stock under the Plan at an average cost of $11.16 per share, which was recorded as Treasury stock, at cost in the Consolidated Balance Sheet. The repurchases include $12.6 million paid for in cash and $0.6 million in Accounts payable as of June 30, 2016. During fiscal year 2016 , the Company acquired an additional 78 thousand shares of its common stock, recorded as Treasury stock, at cost in the Consolidated Balance Sheet. These shares were not acquired in open market purchases as part of the Plan but were acquired in connection with automatically withholding shares from employees upon the vesting of performance share awards to satisfy minimum statutory withholding tax obligations. 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 12. Fair Value
Note 12. Fair Value | 12 Months Ended |
Jun. 30, 2016 | |
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 2016 and 2015 . There were also no changes in the inputs or valuation techniques used to measure fair values during fiscal year 2016 . 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, 2016 and 2015 , 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, 2016 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 21,225 $ — $ 21,225 Derivatives: foreign exchange contracts — 754 754 Trading securities: mutual funds held in nonqualified SERP 6,166 — 6,166 Total assets at fair value $ 27,391 $ 754 $ 28,145 Liabilities Derivatives: foreign exchange contracts $ — $ 1,300 $ 1,300 Total liabilities at fair value $ — $ 1,300 $ 1,300 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 We had no Level 3 assets or liabilities during fiscal years 2016 and 2015 . 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 14 - Investments of Notes to Consolidated Financial Statements for further information regarding the SERP. 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 Borrowings under credit facilities 2 Market - Based on observable market rates taking into account Kimball Electronics’ 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 13. Derivative Instruments
Note 13. Derivative Instruments | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 , we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $27.6 million and to hedge currencies against the Euro in the aggregate notional amount of 67.9 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, 2016 , we estimate that approximately $1.4 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, 2017 . 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, 2016 and June 30, 2015 . See Note 12 - Fair Value of Notes to Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 18 - 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 $ 517 $ 1,255 Accrued expenses $ 1,156 $ 2,143 Derivatives not designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets 237 1,749 Accrued expenses 144 175 Total derivatives $ 754 $ 3,004 $ 1,300 $ 2,318 The Effect of Derivative Instruments on Other Comprehensive Income (Loss) June 30 (Amounts in Thousands) 2016 2015 2014 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): Foreign exchange contracts $ (2,869 ) $ 3,806 $ 73 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) 2016 2015 2014 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): Foreign exchange contracts Cost of Sales $ (3,535 ) $ 1,310 $ (1,024 ) Foreign exchange contracts Non-operating income (expense) (1 ) 2,998 (163 ) Total $ (3,536 ) $ 4,308 $ (1,187 ) Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Ineffective Portion): Foreign exchange contracts Non-operating income (expense) $ (1 ) $ (1 ) $ — 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) $ 381 $ 1,734 $ (487 ) Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ (3,156 ) $ 6,041 $ (1,674 ) |
Note 14. Investments
Note 14. Investments | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 , 2015 , and 2014 was, in thousands, $(321) , $(27) , and $315 , respectively. SERP asset and liability balances applicable to Kimball Electronics participants were as follows: June 30 (Amounts in Thousands) 2016 2015 SERP investment - current asset $ 214 $ 192 SERP investment - other long-term asset 5,952 5,621 Total SERP investment $ 6,166 $ 5,813 SERP obligation - current liability $ 214 $ 192 SERP obligation - other long-term liability 5,952 5,621 Total SERP obligation $ 6,166 $ 5,813 |
Note 15. Accrued Expenses
Note 15. Accrued Expenses | 12 Months Ended |
Jun. 30, 2016 | |
Accrued Expenses [Abstract] | |
Accrued Liabilities Disclosure | Accrued Expenses Accrued expenses consisted of: June 30 (Amounts in Thousands) 2016 2015 Taxes $ 1,878 $ 2,022 Compensation 13,503 15,547 Derivatives 1,300 2,318 Retirement plan 1,283 1,397 Insurance 1,087 741 Other expenses 4,600 4,520 Total accrued expenses $ 23,651 $ 26,545 |
Note 16. Geographic Area Inform
Note 16. Geographic Area Information | 12 Months Ended |
Jun. 30, 2016 | |
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) 2016 2015 2014 Net Sales: United States $ 383,678 $ 396,516 $ 363,211 Germany 64,679 73,966 77,338 China 150,080 127,761 67,665 Other Foreign 243,623 221,107 233,316 Total net sales $ 842,060 $ 819,350 $ 741,530 Long-Lived Assets: United States $ 53,596 $ 49,689 $ 33,004 Poland 34,588 33,692 45,287 China 15,922 16,676 12,174 Other Foreign 21,088 11,092 9,113 Total long-lived assets $ 125,194 $ 111,149 $ 99,578 |
Note 17. Earnings Per Share
Note 17. Earnings Per Share | 12 Months Ended |
Jun. 30, 2016 | |
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 2016 2015 2014 Basic and Diluted Earnings Per Share: Net Income $ 22,287 $ 26,205 $ 24,613 Basic weighted average common shares outstanding 28,916 29,162 29,143 Dilutive effect of average outstanding performance shares 260 226 — Dilutive weighted average shares outstanding 29,176 29,388 29,143 Earnings Per Share of Common Stock: Basic $ 0.77 $ 0.90 $ 0.84 Diluted $ 0.76 $ 0.89 $ 0.84 Basic and diluted earnings per share and the average number of common shares outstanding for the fiscal year ended June 30, 2014 were retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 11 - 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 year ended June 30, 2014 since no Kimball Electronics stock-based awards were outstanding prior to the spin-off. |
Note 18. Accumulated Other Comp
Note 18. Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Jun. 30, 2016 | |
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, 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 ) Other comprehensive income (loss) before reclassifications (540 ) (1,932 ) — 312 (2,160 ) Reclassification to (earnings) loss — 2,352 18 (153 ) 2,217 Net current-period other comprehensive income (loss) (540 ) 420 18 159 57 Balance at June 30, 2016 $ (9,653 ) $ (3,137 ) $ — $ 600 $ (12,190 ) 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) 2016 2015 Derivative Gain (Loss) (1) $ (3,535 ) $ 1,310 Cost of Sales (2 ) 2,997 Non-operating income (expense), net 1,185 (577 ) Benefit (Provision) for Income Taxes $ (2,352 ) $ 3,730 Net of Tax Postemployment Benefits: Amortization of Prior Service Costs (2) $ (16 ) $ (18 ) Cost of Sales (12 ) (10 ) Selling and Administrative Expenses 10 11 Benefit (Provision) for Income Taxes $ (18 ) $ (17 ) Net of Tax Amortization of Actuarial Gain (Loss) (2) $ 144 $ 88 Cost of Sales 110 58 Selling and Administrative Expenses (101 ) (58 ) Benefit (Provision) for Income Taxes $ 153 $ 88 Net of Tax Total Reclassifications for the Period $ (2,217 ) $ 3,801 Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 8 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 19. Restructuring Expense
Note 19. Restructuring Expense | 12 Months Ended |
Jun. 30, 2016 | |
Restructuring Expense [Abstract] | |
Restructuring and Related Activities Disclosure | Restructuring Expense We recognized consolidated pre-tax restructuring expense of $0.4 million in fiscal year 2014 . 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 cleanup costs. Completed restructuring plans include the European Consolidation, Fremont, and Gaylord plans. No restructuring expense was recorded related to these plans in fiscal years 2016 and 2015 and we do not expect these plans to have any restructuring charges in the future. Restructuring charges are included in the Restructuring Expense line item on our Consolidated Statements of Income. |
Note 20. Quarterly Financial In
Note 20. Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2016 | |
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 2016: Net Sales $ 200,418 $ 207,129 $ 214,111 $ 220,402 Gross Profit 15,280 16,115 16,185 16,958 Net Income 4,475 4,564 7,477 5,771 Basic Earnings Per Share $ 0.15 $ 0.16 $ 0.26 $ 0.20 Diluted Earnings Per Share $ 0.15 $ 0.16 $ 0.26 $ 0.20 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 (1) $ 0.18 $ 0.21 $ 0.25 $ 0.25 Diluted Earnings Per Share (1) $ 0.18 $ 0.21 $ 0.25 $ 0.25 (1) Basic and diluted earnings per share for the period ended prior to the spin-off on October 31, 2014 was retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 11 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Note 21. Subsequent Events (Not
Note 21. Subsequent Events (Notes) | 12 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 18, 2016, the Company acquired certain assets and assumed certain liabilities of Aircom Manufacturing, Inc. (“Aircom”), located in Indianapolis, Indiana, for total consideration of approximately $3.5 million . The Company will account for this acquisition as a business combination and is in the process of determining the fair value of the assets acquired and liabilities assumed. Aircom was the parent of former Medivative Technologies, LLC, from which the Company acquired certain assets and assumed certain liabilities on May 2, 2016. Aircom provided component parts and services to the Company prior to the acquisition. The acquisition is expected to add expertise in the manufacturing of precision metals and plastics to the Company’s package of value. The Company was a party to a class action lawsuit from which we received a pre-tax distribution of $4.0 million subsequent to June 30, 2016 . The lawsuit alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 Valuation Allowances: Short-Term Receivables $ 236 $ 67 $ (96 ) $ (15 ) $ 192 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 |
Note 1. Business Description 31
Note 1. Business Description and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
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, the 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 fiscal years 2014 and 2015. 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, China, Mexico, Poland, Romania, 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. As of June 30, 2016, all of our business units operated 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, the production process, the type of customers, and the methods used to distribute the products, 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 Electronics 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 for all years included 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. |
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. |
Off-Balance-Sheet Risk | Off-Balance Sheet Risk: Off-balance sheet arrangements are limited to banker’s acceptance drafts transferred with recourse provisions at the Company’s China operation, standby letters of credit, and operating leases entered into in the normal course of business as described in Note 6 - 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 2016 and 2015 . |
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 13 - 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 9 - 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 February 2016, the FASB issued guidance on leases. The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases with terms of more than 12 months. Under the current guidance, only capital leases are recognized on the balance sheet. The new guidance requires additional qualitative and quantitative disclosures. The new guidance is effective for our fiscal year 2020 financial statements. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In November 2015, the FASB issued guidance on the balance sheet classification of deferred taxes. Under the current guidance, deferred tax liabilities and assets must be separated into current and noncurrent amounts in a classified statement of financial position. The new guidance requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The new guidance does not change the requirement that deferred tax liabilities and assets of a tax-paying component of an entity to be offset and presented as a single amount. The guidance is effective for our fiscal year 2019 annual financial statements and interim periods within our fiscal year 2020 financial statements, with earlier application permitted as of the beginning of an interim or annual reporting period. The guidance offers two acceptable adoption methods: (i) retrospective adoption to all periods presented; or (ii) prospective adoption to all deferred tax liabilities and assets. We do not expect the adoption of this standard to have a material effect on our financial position, results of operations, or cash flows. In July 2015, the 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 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 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. |
Note 6. Commitments and Conti32
Note 6. Commitments and Contingent Liabilities (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
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 8. Employee Benefit Plans
Note 8. Employee Benefit Plans (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
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 12. Fair Value (Policies)
Note 12. Fair Value (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
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 2016 and 2015 . There were also no changes in the inputs or valuation techniques used to measure fair values during fiscal year 2016 . 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 |
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 Borrowings under credit facilities 2 Market - Based on observable market rates taking into account Kimball Electronics’ 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 13. Derivative Instrumen35
Note 13. Derivative Instruments (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
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 14. Investments (Policies)
Note 14. Investments (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
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 1. Business Description 37
Note 1. Business Description and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Goodwill | A summary of goodwill is as follows: (Amounts in Thousands) 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 Goodwill Acquired 3,627 Balance as of June 30, 2016 Goodwill 19,017 Accumulated impairment (12,826 ) Goodwill, net $ 6,191 |
Summary of Other Intangible Assets | A summary of other intangible assets subject to amortization is as follows: June 30, 2016 June 30, 2015 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 29,243 $ 24,750 $ 4,493 $ 28,294 $ 23,924 $ 4,370 Customer Relationships 1,167 1,067 100 1,167 1,028 139 Other Intangible Assets $ 30,410 $ 25,817 $ 4,593 $ 29,461 $ 24,952 $ 4,509 |
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, 2016 June 30, 2015 Net Sales Trade Receivables Net Sales Trade Receivables Philips 15.3 % 8.0 % 15.4 % 7.4 % ZF TRW 10.8 % 13.7 % 8.7 % 11.7 % Nexteer Automotive 9.5 % 10.8 % 7.2 % 9.1 % |
Note 4. Inventories (Tables)
Note 4. Inventories (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Inventories [Abstract] | |
Schedule of Inventory, Current | Inventory components at June 30 were as follows: (Amounts in Thousands) 2016 2015 Finished products $ 21,577 $ 21,415 Work-in-process 10,678 13,029 Raw materials 100,622 90,754 Total inventory $ 132,877 $ 125,198 |
Note 5. Property and Equipment
Note 5. Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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) 2016 2015 Land $ 8,683 $ 8,726 Buildings and improvements 58,579 57,524 Machinery and equipment 199,792 177,148 Construction-in-progress 14,681 14,885 Total $ 281,735 $ 258,283 Less: Accumulated depreciation (161,034 ) (151,504 ) Property and equipment, net $ 120,701 $ 106,779 |
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 3 to 40 Machinery and equipment 3 to 10 Leasehold improvements Lesser of Useful Life or Term of Lease |
Note 6. Commitments and Conti40
Note 6. Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingent Liabilities [Abstract] | |
Schedule of Product Warranty Liability | Changes in the product warranty accrual during fiscal years 2016 , 2015 , and 2014 were as follows: (Amounts in Thousands) 2016 2015 2014 Product Warranty Liability at the beginning of the year $ 621 $ 911 $ 507 Additions to warranty accrual (including changes in estimates) 160 625 721 Settlements made (in cash or in kind) (176 ) (915 ) (317 ) Product Warranty Liability at the end of the year $ 605 $ 621 $ 911 |
Note 7. Credit Facilities (Tabl
Note 7. Credit Facilities (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 June 30, 2016 June 30, 2015 Primary credit facility (1) $ 40.6 $ 9.0 $ — Thailand overdraft credit facility (2) 2.6 — — China revolving credit facility (3) 7.5 — — Total $ 50.7 $ 9.0 $ — (1) In connection with the spin-off, the Company entered into a 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 2016 and 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 weighted-average interest rate on borrowings outstanding at June 30, 2016 was 1.69% . 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 $0.4 million in letters of credit contingently committed against the credit facility at June 30, 2016 . (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 $2.6 million at June 30, 2016 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 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, 2017 . |
Note 8. Employee Benefit Plan42
Note 8. Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Employee Benefit Plans [Abstract] | |
Schedule of Changes in Projected Benefit Obligations | June 30 (Amounts in Thousands) 2016 2015 Changes and Components of Benefit Obligation: Benefit obligation at beginning of year $ 1,977 $ 1,495 Service cost 328 327 Interest cost 50 50 Actuarial (gain) loss for the period (507 ) (638 ) Benefits paid (43 ) (8 ) Remeasurement of liabilities at spin-off — 751 Benefit obligation at end of year $ 1,805 $ 1,977 Balance in current liabilities $ 317 $ 347 Balance in noncurrent liabilities 1,488 1,630 Total benefit obligation recognized in the Consolidated Balance Sheets $ 1,805 $ 1,977 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | June 30 (Amounts in Thousands) 2016 2015 Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): Accumulated Other Comprehensive Income (Loss) at beginning of year $ (680 ) $ (160 ) Change in unrecognized prior service cost (28 ) (28 ) Net change in unrecognized actuarial (gain) loss (253 ) (492 ) Accumulated Other Comprehensive Income (Loss) at end of year $ (961 ) $ (680 ) Balance in unrecognized prior service cost $ — $ 28 Balance in unrecognized actuarial (gain) loss (961 ) (708 ) Total Accumulated Other Comprehensive Income (Loss) recognized in Share Owners’ Equity $ (961 ) $ (680 ) |
Schedule of Net Benefit Costs | (Amounts in Thousands) Year Ended June 30 Components of Net Periodic Benefit Cost (before tax): 2016 2015 2014 Service cost $ 328 $ 327 $ 267 Interest cost 50 50 37 Amortization of prior service cost 28 28 40 Amortization of actuarial (gain) loss (254 ) (146 ) 53 Net periodic benefit cost recognized in the Consolidated Statements of Income $ 152 $ 259 $ 397 |
Severance Plan Assumptions, Year End | Assumptions used to determine fiscal year end benefit obligations are as follows: 2016 2015 Discount Rate 2.2% 2.8% 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: 2016 2015 2014 Discount Rate 2.7% 2.7% 2.5% Rate of Compensation Increase 3.0% 3.0% 3.0% |
Note 9. Stock Compensation Pl43
Note 9. Stock Compensation Plans (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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 2016 is presented below: Number of Shares Weighted Average Grant Date Fair Value Performance shares outstanding at July 1, 2015 789,774 $ 10.27 Granted 294,540 $ 12.07 Vested (279,923 ) $ 9.48 Forfeited — — Performance shares outstanding at June 30, 2016 804,391 $ 11.21 |
Note 10. Income Taxes (Tables)
Note 10. Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Taxes [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities as of June 30, 2016 and 2015 , were as follows: (Amounts in Thousands) 2016 2015 Deferred Tax Assets: Receivables $ 116 $ 138 Inventory 1,288 1,524 Employee benefits 180 164 Deferred compensation 7,075 7,786 Other current liabilities 783 712 Tax credit carryforwards 700 240 Goodwill 1,823 2,149 Net operating loss carryforward 845 5 Net foreign currency losses — 2 Property and equipment 2,174 1,838 Miscellaneous 890 1,268 Total asset $ 15,874 $ 15,826 Deferred Tax Liabilities: Net foreign currency gains $ 8 $ — Miscellaneous 258 353 Total liability $ 266 $ 353 Net Deferred Income Taxes $ 15,608 $ 15,473 |
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) 2016 2015 2014 United States $ 1,919 $ 1,195 $ 5,412 Foreign 26,057 33,576 24,830 Total income before taxes on income $ 27,976 $ 34,771 $ 30,242 |
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) 2016 2015 2014 Currently Payable (Refundable): Federal $ 280 $ 186 $ (40 ) Foreign 5,848 6,586 4,505 State 50 108 519 Total current $ 6,178 $ 6,880 $ 4,984 Deferred Taxes: Federal $ 153 $ (188 ) $ 2,360 Foreign (501 ) 1,957 (55 ) State (141 ) (83 ) (139 ) Total deferred $ (489 ) $ 1,686 $ 2,166 Valuation allowance — — (1,521 ) Total provision for income taxes $ 5,689 $ 8,566 $ 5,629 |
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 2016 2015 2014 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 9,791 35.0 % $ 12,170 35.0 % $ 10,585 35.0 % State income taxes, net of federal income tax benefit (59 ) (0.2 ) 16 — 210 0.7 Foreign tax rate differential (2,998 ) (10.7 ) (4,482 ) (12.9 ) (3,923 ) (13.0 ) Impact of foreign exchange rates on foreign income taxes 1,026 3.7 1,274 3.7 153 0.5 Foreign subsidiary capitalization (1,801 ) (6.4 ) — — — — Valuation allowance — — — — (1,521 ) (5.0 ) Research credit (320 ) (1.2 ) (421 ) (1.2 ) (187 ) (0.6 ) Spin-off costs — — 625 1.8 753 2.5 Other - net 50 0.1 (616 ) (1.8 ) (441 ) (1.5 ) Total provision for income taxes $ 5,689 20.3 % $ 8,566 24.6 % $ 5,629 18.6 % |
Summary of Income Tax Contingencies | Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2016 , 2015 , and 2014 were as follows: (Amounts in Thousands) 2016 2015 2014 Beginning balance - July 1 $ — $ 792 $ 965 Tax positions related to prior fiscal years: Additions 46 — 92 Reductions — (792 ) — Tax positions related to current fiscal year: Additions — — 77 Reductions — — — Settlements — — — Lapses in statute of limitations — — (342 ) Ending balance - June 30 $ 46 $ — $ 792 Portion that, if recognized, would reduce tax expense and effective tax rate $ 37 $ — $ 565 |
Accrued Interest and Penalties on Unrecognized Tax Benefits | Amounts accrued for interest and penalties were as follows: As of June 30 (Amounts in Thousands) 2016 2015 2014 Accrued Interest and Penalties: Interest $ 1 $ — $ 65 Penalties $ — $ — $ 69 |
Note 12. Fair Value (Tables)
Note 12. Fair Value (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 and 2015 , 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, 2016 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 21,225 $ — $ 21,225 Derivatives: foreign exchange contracts — 754 754 Trading securities: mutual funds held in nonqualified SERP 6,166 — 6,166 Total assets at fair value $ 27,391 $ 754 $ 28,145 Liabilities Derivatives: foreign exchange contracts $ — $ 1,300 $ 1,300 Total liabilities at fair value $ — $ 1,300 $ 1,300 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 |
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 Borrowings under credit facilities 2 Market - Based on observable market rates taking into account Kimball Electronics’ non-performance risk |
Note 13. Derivative Instrumen46
Note 13. Derivative Instruments (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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 $ 517 $ 1,255 Accrued expenses $ 1,156 $ 2,143 Derivatives not designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets 237 1,749 Accrued expenses 144 175 Total derivatives $ 754 $ 3,004 $ 1,300 $ 2,318 |
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) 2016 2015 2014 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): Foreign exchange contracts $ (2,869 ) $ 3,806 $ 73 |
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) 2016 2015 2014 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): Foreign exchange contracts Cost of Sales $ (3,535 ) $ 1,310 $ (1,024 ) Foreign exchange contracts Non-operating income (expense) (1 ) 2,998 (163 ) Total $ (3,536 ) $ 4,308 $ (1,187 ) Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Ineffective Portion): Foreign exchange contracts Non-operating income (expense) $ (1 ) $ (1 ) $ — 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) $ 381 $ 1,734 $ (487 ) Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ (3,156 ) $ 6,041 $ (1,674 ) |
Note 14. Investments (Tables)
Note 14. Investments (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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) 2016 2015 SERP investment - current asset $ 214 $ 192 SERP investment - other long-term asset 5,952 5,621 Total SERP investment $ 6,166 $ 5,813 SERP obligation - current liability $ 214 $ 192 SERP obligation - other long-term liability 5,952 5,621 Total SERP obligation $ 6,166 $ 5,813 |
Note 15. Accrued Expenses (Tabl
Note 15. Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of: June 30 (Amounts in Thousands) 2016 2015 Taxes $ 1,878 $ 2,022 Compensation 13,503 15,547 Derivatives 1,300 2,318 Retirement plan 1,283 1,397 Insurance 1,087 741 Other expenses 4,600 4,520 Total accrued expenses $ 23,651 $ 26,545 |
Note 16. Geographic Area Info49
Note 16. Geographic Area Information (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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) 2016 2015 2014 Net Sales: United States $ 383,678 $ 396,516 $ 363,211 Germany 64,679 73,966 77,338 China 150,080 127,761 67,665 Other Foreign 243,623 221,107 233,316 Total net sales $ 842,060 $ 819,350 $ 741,530 Long-Lived Assets: United States $ 53,596 $ 49,689 $ 33,004 Poland 34,588 33,692 45,287 China 15,922 16,676 12,174 Other Foreign 21,088 11,092 9,113 Total long-lived assets $ 125,194 $ 111,149 $ 99,578 |
Note 17. Earnings Per Share (Ta
Note 17. Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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 2016 2015 2014 Basic and Diluted Earnings Per Share: Net Income $ 22,287 $ 26,205 $ 24,613 Basic weighted average common shares outstanding 28,916 29,162 29,143 Dilutive effect of average outstanding performance shares 260 226 — Dilutive weighted average shares outstanding 29,176 29,388 29,143 Earnings Per Share of Common Stock: Basic $ 0.77 $ 0.90 $ 0.84 Diluted $ 0.76 $ 0.89 $ 0.84 |
Note 18. Accumulated Other Co51
Note 18. Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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, 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 ) Other comprehensive income (loss) before reclassifications (540 ) (1,932 ) — 312 (2,160 ) Reclassification to (earnings) loss — 2,352 18 (153 ) 2,217 Net current-period other comprehensive income (loss) (540 ) 420 18 159 57 Balance at June 30, 2016 $ (9,653 ) $ (3,137 ) $ — $ 600 $ (12,190 ) |
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) 2016 2015 Derivative Gain (Loss) (1) $ (3,535 ) $ 1,310 Cost of Sales (2 ) 2,997 Non-operating income (expense), net 1,185 (577 ) Benefit (Provision) for Income Taxes $ (2,352 ) $ 3,730 Net of Tax Postemployment Benefits: Amortization of Prior Service Costs (2) $ (16 ) $ (18 ) Cost of Sales (12 ) (10 ) Selling and Administrative Expenses 10 11 Benefit (Provision) for Income Taxes $ (18 ) $ (17 ) Net of Tax Amortization of Actuarial Gain (Loss) (2) $ 144 $ 88 Cost of Sales 110 58 Selling and Administrative Expenses (101 ) (58 ) Benefit (Provision) for Income Taxes $ 153 $ 88 Net of Tax Total Reclassifications for the Period $ (2,217 ) $ 3,801 Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 8 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 20. Quarterly Financial 52
Note 20. Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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 2016: Net Sales $ 200,418 $ 207,129 $ 214,111 $ 220,402 Gross Profit 15,280 16,115 16,185 16,958 Net Income 4,475 4,564 7,477 5,771 Basic Earnings Per Share $ 0.15 $ 0.16 $ 0.26 $ 0.20 Diluted Earnings Per Share $ 0.15 $ 0.16 $ 0.26 $ 0.20 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 (1) $ 0.18 $ 0.21 $ 0.25 $ 0.25 Diluted Earnings Per Share (1) $ 0.18 $ 0.21 $ 0.25 $ 0.25 (1) Basic and diluted earnings per share for the period ended prior to the spin-off on October 31, 2014 was retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 11 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Schedule II Valuation and Qua53
Schedule II Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
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, 2016 Valuation Allowances: Short-Term Receivables $ 236 $ 67 $ (96 ) $ (15 ) $ 192 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 |
Note 1. Business Description 54
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Goodwill | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Goodwill | 19,017 | 15,390 | 15,390 |
Accumulated impairment | (12,826) | (12,826) | (12,826) |
Goodwill, net | 6,191 | $ 2,564 | $ 2,564 |
Goodwill, Acquired During Period | $ 3,627 |
Note 1. Business Description 55
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other Intangible Assets | |||
Other Intangible Assets, Future Amortization Expense, Year One | $ 836 | ||
Other Intangible Assets, Future Amortization Expense, Year Two | 692 | ||
Other Intangible Assets, Future Amortization Expense, Year Three | 550 | ||
Other Intangible Assets, Future Amortization Expense, Year Four | 469 | ||
Other Intangible Assets, Future Amortization Expense, Year Five | 452 | ||
Other Intangible Assets, Future Amortization Expense, after Year Five | 1,594 | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 0 | $ 0 | |
Other Intangible Assets, Amortization Expense | 883 | 759 | $ 797 |
Other Intangible Assets, Cost | 30,410 | 29,461 | |
Other Intangible Assets, Accumulated Amortization | 25,817 | 24,952 | |
Other Intangible Assets, Net Value | 4,593 | 4,509 | |
Capitalized Software | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | 29,243 | 28,294 | |
Other Intangible Assets, Accumulated Amortization | 24,750 | 23,924 | |
Other Intangible Assets, Net Value | 4,493 | 4,370 | |
Customer Relationships | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | 1,167 | 1,167 | |
Other Intangible Assets, Accumulated Amortization | 1,067 | 1,028 | |
Other Intangible Assets, Net Value | $ 100 | $ 139 | |
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 56
Note 1. Business Description and Summary of Significant Accounting Policies - Textuals (Details) - USD ($) $ in Thousands, shares in Millions | Oct. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 |
Total Annual Gross Revenue on Last Day of Fiscal Year Based on Which Entity Will Cease Status of Emerging Growth Company | $ 1,000,000 | |||
Non-Convertible Debt Securities Issued in Specified Period upon Which Company Will Cease Status of Emerging Growth Company | 1,000,000 | |||
Market Value of Common Stock Held by Non-Affiliates upon Which Company Will Cease Status of Emerging Growth Company | $ 700,000 | |||
Common Stock Dividends, Shares | 29.1 | |||
Accounts Receivable, Extended Payment Terms | 45 days | |||
Accounts Receivable Sold Without Recourse | $ 126,500 | $ 129,100 | ||
Research and Development Costs | $ 9,000 | 9,000 | $ 8,000 | |
Self-Insured Workforce Coverage Percent | 20.00% | |||
Other General Income | $ 0 | 0 | $ (5,688) | |
DueFromBankersAcceptanceDrafts | 5,700 | 4,300 | ||
SettlementofBankersAcceptanceDrafts | $ 14,900 | $ 0 | ||
Minimum | ||||
Accounts Receivable, Customary Payment Terms | 30 days | |||
Maximum | ||||
Accounts Receivable, Customary Payment Terms | 45 days |
Note 1. Business Description 57
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Concentration Risk (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Concentration Risk [Line Items] | ||
Nontrade Receivables | $ 1.7 | $ 0.8 |
Philips | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.30% | 15.40% |
Philips | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 8.00% | 7.40% |
ZF TRW | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.80% | 8.70% |
ZF TRW | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 13.70% | 11.70% |
Nexteer Automotive | Sales Revenue, Net | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 9.50% | 7.20% |
Nexteer Automotive | Accounts Receivable | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.80% | 9.10% |
Note 2. Related Party Transac58
Note 2. Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2016 | Oct. 31, 2014 | Jun. 30, 2013 | |
Related Party Transaction [Line Items] | |||||
Related Party Transactions Selling and Administrative Expenses Excluding Incentive Compensation | $ 4,500 | $ 12,600 | |||
Related Party Transactions Selling and Administrative Incentive Compensation | 2,100 | 5,000 | |||
Cash Distribution from Parent | $ 44,300 | ||||
Cash and cash equivalents | $ 65,180 | $ 26,260 | $ 54,738 | $ 63,000 | $ 18,424 |
Note 2. Related Party Transac59
Note 2. Related Party Transactions Former Parent (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Jun. 30, 2015 |
Related Party Transaction [Line Items] | ||
Nontrade Receivables | $ 1.7 | $ 0.8 |
former parent | ||
Related Party Transaction [Line Items] | ||
Nontrade Receivables | 0.7 | 0.8 |
Nontrade Receivables, Noncurrent | $ 0.6 | $ 0.6 |
Note 3. Acquisition (Details)
Note 3. Acquisition (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | May 02, 2016 | |
Business Acquisition, Date of Acquisition Agreement | May 2, 2016 | |||
Business Combination, Consideration Transferred | $ 7,300 | |||
Payments to Acquire Businesses, Gross | 8,267 | $ 0 | $ 0 | |
Goodwill, Acquired During Period | $ 3,627 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | $ 11,600 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 4,300 | |||
Medivative | ||||
Nontrade Receivables, Current | $ 1,000 |
Note 4. Inventories - Inventory
Note 4. Inventories - Inventory Components (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Inventory, Finished Goods, Net of Reserves | $ 21,577 | $ 21,415 |
Inventory, Work in Process, Net of Reserves | 10,678 | 13,029 |
Inventory, Raw Materials, Net of Reserves | 100,622 | 90,754 |
Total inventory | $ 132,877 | $ 125,198 |
Note 5. Property and Equipmen62
Note 5. Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Property and Equipment | ||
Total Property and Equipment | $ 281,735 | $ 258,283 |
Less: Accumulated depreciation | (161,034) | (151,504) |
Property and equipment, net | 120,701 | 106,779 |
Land | ||
Property and Equipment | ||
Total Property and Equipment | 8,683 | 8,726 |
Building and Building Improvements | ||
Property and Equipment | ||
Total Property and Equipment | 58,579 | 57,524 |
Machinery and Equipment | ||
Property and Equipment | ||
Total Property and Equipment | 199,792 | 177,148 |
Construction in Progress | ||
Property and Equipment | ||
Total Property and Equipment | $ 14,681 | $ 14,885 |
Note 5. Property and Equipmen63
Note 5. Property and Equipment - Asset Lives (Details) | 12 Months Ended |
Jun. 30, 2016 | |
Building and Building Improvements | Minimum | |
Property, Plant and Equipment, Useful Life | 3 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 5. Property and Equipmen64
Note 5. Property and Equipment - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Depreciation of property and equipment | $ 19,500 | $ 19,000 | $ 17,100 |
Assets held for sale | 0 | 0 | |
Gain (Loss) on Disposition of Property Plant Equipment | $ 145 | $ 33 | (10) |
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) |
Note 6. Commitments and Conti65
Note 6. Commitments and Contingent Liabilities - Leases Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Leased Assets | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 300 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 300 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 300 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 300 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 300 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 1,200 | ||
Rental expenses | 500 | $ 300 | $ 500 |
Capital Lease Obligations | $ 0 | $ 0 |
Note 6. Commitments and Conti66
Note 6. Commitments and Contingent Liabilities - Guarantees Textuals (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Contingent Liabilities | ||
Other Commitment | $ 2,700,000 | $ 0 |
Guarantee Obligations | ||
Contingent Liabilities | ||
Loss Contingency Accrual, at Carrying Value | 0 | 0 |
Financial Standby Letter of Credit | ||
Contingent Liabilities | ||
Unused standby letters of credit | 400,000 | 300,000 |
Loss Contingency Accrual, at Carrying Value | $ 0 | $ 0 |
Note 6. Commitments and Conti67
Note 6. Commitments and Contingent Liabilities - Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Product Warranty Liability at the beginning of the year | $ 621 | $ 911 | $ 507 |
Additions to warranty accrual (including changes in estimates) | 160 | 625 | 721 |
Settlements made (in cash or in kind) | (176) | (915) | (317) |
Product Warranty Liability at the end of the year | $ 605 | $ 621 | $ 911 |
Note 7. Credit Facilities - Tex
Note 7. Credit Facilities - Textuals (Details) $ in Thousands, THB in Millions | 12 Months Ended | |||||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2016THB | Jun. 30, 2016USD ($) | ||
Line of Credit, Current | $ 0 | $ 9,000 | ||||
Credit Facility, Availability to Borrow | $ 50,700 | |||||
Interest Paid on Borrowings | $ 44 | 0 | $ 2 | |||
Primary Credit Facility | ||||||
Short-term Debt, Weighted Average Interest Rate | 1.69% | 1.69% | ||||
Credit Facility, Maximum Borrowing Capacity | $ 50,000 | |||||
Line of Credit, Current | [1] | 0 | 9,000 | |||
Credit Facility, Availability to Borrow | [1] | 40,600 | ||||
Credit Facility, Maximum Borrowing Capacity Upon Request | 75,000 | |||||
Thailand Overdraft Credit Facility | ||||||
Credit Facility, Maximum Borrowing Capacity | THB 90 | 2,600 | ||||
Line of Credit, Current | [2] | 0 | 0 | |||
Credit Facility, Availability to Borrow | [2] | 2,600 | ||||
China Revolving Credit Facility | ||||||
Credit Facility, Maximum Borrowing Capacity | 7,500 | |||||
Line of Credit, Current | [3] | 0 | 0 | |||
Credit Facility, Availability to Borrow | [3] | 7,500 | ||||
Financial Standby Letter of Credit | ||||||
Unused standby letters of credit | $ 300 | $ 400 | ||||
[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 2016 and 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 weighted-average interest rate on borrowings outstanding at June 30, 2016 was 1.69%.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 $0.4 million in letters of credit contingently committed against the credit facility at June 30, 2016. | |||||
[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 $2.6 million at June 30, 2016 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 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, 2017. |
Note 7. Credit Facilities Coven
Note 7. Credit Facilities Covenant Textuals (Details) - Primary Credit Facility $ in Millions | Jun. 30, 2016USD ($) |
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 8. Employee Benefit Plan70
Note 8. Employee Benefit Plans - Retirement Plans Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
UNITED STATES | |||
Employer's contribution to retirement plans | $ 1.4 | $ 1.5 | $ 1.3 |
Foreign Plans | |||
Employer's contribution to retirement plans | $ 0.3 | $ 0.2 | $ 0.2 |
Note 8. Employee Benefit Plan71
Note 8. Employee Benefit Plans - Severance Plans - Components and Changes of Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Changes and Components of Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 1,977 | $ 1,495 | |
Service cost | 328 | 327 | $ 267 |
Interest cost | 50 | 50 | 37 |
Actuarial (gain) loss for the period | (507) | (638) | |
Benefits paid | (43) | (8) | |
Remeasurement of liabilities at spin-off | 0 | 751 | |
Benefit obligation at end of year | 1,805 | 1,977 | $ 1,495 |
Balance in current liabilities | 317 | 347 | |
Balance in noncurrent liabilities | 1,488 | 1,630 | |
Total benefit obligation recognized in the Consolidated Balance Sheets | $ 1,805 | $ 1,977 |
Note 8. Employee Benefit Plan72
Note 8. 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, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | |
Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): | |||||
Accumulated Other Comprehensive Income (Loss) at beginning of year | $ (680) | $ (160) | |||
Change in unrecognized prior service cost | (28) | (28) | $ (40) | ||
Net change in unrecognized actuarial (gain) loss | (253) | (492) | |||
Accumulated Other Comprehensive Income (Loss) at end of year | (961) | (680) | (160) | ||
Balance in unrecognized prior service cost | $ 0 | $ 28 | |||
Balance in unrecognized actuarial (gain) loss | (961) | (708) | |||
Total Accumulated Other Comprehensive Income (Loss) recognized in Share Owners’ Equity | $ (680) | $ (160) | $ (160) | $ (961) | $ (680) |
Note 8. Employee Benefit Plan73
Note 8. Employee Benefit Plans - Severance Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Components of Net Periodic Benefit Cost (before tax): | |||
Service cost | $ 328 | $ 327 | $ 267 |
Interest cost | 50 | 50 | 37 |
Amortization of prior service cost | 28 | 28 | 40 |
Amortization of actuarial (gain) loss | (254) | (146) | 53 |
Net periodic benefit cost recognized in the Consolidated Statements of Income | $ 152 | $ 259 | $ 397 |
Note 8. Employee Benefit Plan74
Note 8. Employee Benefit Plans - Severance Plans Textuals (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2016USD ($) | |
Estimated amortization over the next fiscal year: | |
Defined Benefit Plan, Assets for Plan Benefits | $ 0 |
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 | (277) |
Estimated prior service cost that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year | $ 0 |
Note 8. Employee Benefit Plan75
Note 8. Employee Benefit Plans - Severance Plan Assumptions, Fiscal Year End (Details) | Jun. 30, 2016 | Jun. 30, 2015 |
Defined Benefit Plan Disclosure | ||
Discount Rate | 2.20% | 2.80% |
Rate of Compensation Increase | 3.00% | 3.00% |
Note 8. Employee Benefit Plan76
Note 8. Employee Benefit Plans - Severance Plan Assumptions, Weighted Average (Details) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Benefit Plan Disclosure | |||
Discount Rate | 2.70% | 2.70% | 2.50% |
Rate of Compensation Increase | 3.00% | 3.00% | 3.00% |
Note 9. Stock Compensation Pl77
Note 9. Stock Compensation Plans - Textuals (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Oct. 03, 2014 | |
Stock Compensation Plan, Shares Reserved | 4.5 | |||
Stock Compensation Plan, Pre-tax Compensation Cost | $ 3.4 | $ 3.5 | $ 3.3 | |
Allocated Share-Based Compensation Expense from Former Parent | $ 1.8 |
Note 9. Stock Compensation Pl78
Note 9. Stock Compensation Plans - Performance Share Activity (Details) - Performance Shares - $ / shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangements | ||
Performance Shares, Shares Outstanding, Beginning of Period | 789,774 | |
Performance Shares, Shares Granted | 294,540 | |
Performance Shares, Shares Vested | 279,923 | 0 |
Performance Shares, Shares Forfeited | 0 | |
Performance Shares, Shares Outstanding, End of Period | 804,391 | 789,774 |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 10.27 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Granted | 12.07 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Vested | 9.48 | |
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 | $ 11.21 | $ 10.27 |
Note 9. Stock Compensation Pl79
Note 9. Stock Compensation Plans - Performance Shares Textuals (Details) - Performance Shares - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangements | ||
Performance Shares, Unrecognized Compensation Cost | $ 7.3 | |
Performance Shares, Average Vesting Period for Unrecognized Compensation Cost | 1 year 3 months | |
Performance Shares, Shares Vested | 279,923 | 0 |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 2.7 | |
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 9. Stock Compensation Pl80
Note 9. Stock Compensation Plans - Unrestricted Share Grants Textuals (Details) - Unrestricted Shares Director Compensation - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangements | ||
Unrestricted Shares, Shares Granted | 47,262 | 28,700 |
Unrestricted Share Grants, Weighted Average Grant Date Fair Value of Shares Granted | $ 10.94 | $ 10.76 |
Unrestricted Share Grants, Fair Value of Shares Granted, Total Fair Value | $ 0.5 | $ 0.3 |
Note 10. Income Taxes - Textual
Note 10. Income Taxes - Textuals (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Deferred Tax Assets, Valuation Allowance | $ 0 | $ 0 | |
Undistributed Earnings of Foreign Subsidiaries | 187,000,000 | ||
Income Taxes Paid (Refunded), Net | 8,975,000 | 11,783,000 | $ 4,347,000 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Income (Expense) | $ 1,000 | $ 0 | $ 7,000 |
Note 10. Income Taxes - Compone
Note 10. Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Deferred Tax Assets: | ||
Deferred Tax Assets, Receivables | $ 116 | $ 138 |
Deferred Tax Assets, Inventory | 1,288 | 1,524 |
Deferred Tax Assets, Employee Benefits | 180 | 164 |
Deferred Tax Assets, Deferred Compensation | 7,075 | 7,786 |
Deferred Tax Assets, Other Current Liabilities | 783 | 712 |
Deferred Tax Assets, Tax Credit Carryforwards | 700 | 240 |
Deferred Tax Assets, Goodwill | 1,823 | 2,149 |
Deferred Tax Assets, Net Operating Loss Carryforwards | 845 | 5 |
Deferred Tax Assets, Unrealized Currency Losses | 0 | 2 |
Deferred Tax Assets, Property, Plant and Equipment | 2,174 | 1,838 |
Deferred Tax Assets, Miscellaneous | 890 | 1,268 |
Deferred Tax Assets | 15,874 | 15,826 |
Deferred Tax Liabilities: | ||
Deferred Tax Liabilities, Unrealized Currency Transaction Gains | 8 | 0 |
Deferred Tax Liabilities, Miscellaneous | 258 | 353 |
Deferred Tax Liabilities, Net | 266 | 353 |
Net Deferred Income Taxes | $ 15,608 | $ 15,473 |
Note 10. Income Taxes - Compo83
Note 10. Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income (Loss) Before Taxes on Income, United States | $ 1,919 | $ 1,195 | $ 5,412 |
Income (Loss) Before Taxes on Income, Foreign | 26,057 | 33,576 | 24,830 |
Income Before Taxes on Income | $ 27,976 | $ 34,771 | $ 30,242 |
Note 10. Income Taxes - Compo84
Note 10. Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Currently Payable (Refundable): | |||
Current Federal Income Tax Expense (Benefit) | $ 280 | $ 186 | $ (40) |
Current Foreign Income Tax Expense (Benefit) | 5,848 | 6,586 | 4,505 |
Current State Income Tax Expense (Benefit) | 50 | 108 | 519 |
Current Income Tax Expense (Benefit) | 6,178 | 6,880 | 4,984 |
Deferred Taxes: | |||
Deferred Federal Income Tax Expense (Benefit) | 153 | (188) | 2,360 |
Deferred Foreign Income Tax Expense (Benefit) | (501) | 1,957 | (55) |
Deferred State Income Tax Expense (Benefit) | (141) | (83) | (139) |
Deferred Income Tax Expense (Benefit) | (489) | 1,686 | 2,166 |
Income Tax Expense (Benefit), Valuation Allowance | 0 | 0 | (1,521) |
Total provision for income taxes | $ 5,689 | $ 8,566 | $ 5,629 |
Note 10. Income Taxes - Reconci
Note 10. Income Taxes - Reconciliation of Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Reconciliation, Income Tax Expense (Benefit), Tax Computed at U.S. Federal Statutory Rate | $ 9,791 | $ 12,170 | $ 10,585 |
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 | $ (59) | $ 16 | $ 210 |
Effective Income Tax Rate Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | (0.20%) | 0.00% | 0.70% |
Income Tax Reconciliation, Foreign Tax Effect | $ (2,998) | $ (4,482) | $ (3,923) |
Effective Income Tax Rate Reconciliation, Foreign Tax Effect | (10.70%) | (12.90%) | (13.00%) |
Income Tax Rate Reconciliation, Impact of Foreign Exchange Rates, Amount | $ 1,026 | $ 1,274 | $ 153 |
Effective Income Tax Rate Reconciliation Impact of Foreign Exchange Rates, Foreign, Percent | 3.70% | 3.70% | 0.50% |
Income Tax Rate Reconciliation, Tax Settlement, Foreign, Amount | $ (1,801) | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation, Tax Settlement, Foreign, Percent | (6.40%) | 0.00% | 0.00% |
Income Tax Reconciliation, Valuation Allowance | $ 0 | $ 0 | $ (1,521) |
Effective Income Tax Rate Reconciliation, Valuation Allowance | 0.00% | 0.00% | (5.00%) |
Income Tax Reconciliation, Research Credit | $ (320) | $ (421) | $ (187) |
Effective Income Tax Rate Reconciliation, Research Credit | (1.20%) | (1.20%) | (0.60%) |
Income Tax Reconciliation, Spin-off costs | $ 0 | $ 625 | $ 753 |
Effective Income Tax Rate Reconciliation, Spin-off costs | 0.00% | 1.80% | 2.50% |
Income Tax Reconciliation, Other-Net | $ 50 | $ (616) | $ (441) |
Effective Income Tax Rate Reconciliation, Other-Net | 0.10% | (1.80%) | (1.50%) |
Total provision for income taxes | $ 5,689 | $ 8,566 | $ 5,629 |
Effective Income Tax Rate | 20.30% | 24.60% | 18.60% |
Income Tax Expense (Benefit), Valuation Allowance | $ 0 | $ 0 | $ (1,521) |
Tax Adjustments, Settlements, and Unusual Provisions | $ (1,801) | ||
Foreign Tax Authority | |||
Income Tax Expense (Benefit), Valuation Allowance | (1,399) | ||
State and Local Jurisdiction | |||
Income Tax Expense (Benefit), Valuation Allowance | $ (122) |
Note 10. Income Taxes - Recon86
Note 10. Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 0 | $ 792 | $ 965 |
Unrecognized Tax Benefits, Additions Resulting from Prior Period Tax Positions | 46 | 0 | 92 |
Unrecognized Tax Benefits, Reductions Resulting from Prior Period Tax Positions | 0 | (792) | 0 |
Unrecognized Tax Benefits, Additions Resulting from Current Period Tax Positions | 0 | 0 | 77 |
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 | 0 | (342) |
Unrecognized Tax Benefits, Ending Balance | 46 | 0 | 792 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 37 | $ 0 | $ 565 |
Note 10. Income Taxes - Accrued
Note 10. Income Taxes - Accrued Interest and Penalties Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | |||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 1 | $ 0 | $ 65 |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | $ 0 | $ 0 | $ 69 |
Note 11. Share Owners' Equity -
Note 11. Share Owners' Equity - Textuals (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Apr. 21, 2017 | Oct. 21, 2015 | Oct. 16, 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 | ||||||
Stock Repurchase Program, Period in Force | 18 months | ||||||
Stock Repurchase Program, Authorized Amount | $ 20,000 | ||||||
Treasury Stock, Value, Acquired, Cost Method | $ 13,162 | ||||||
Treasury Stock Acquired, Average Cost Per Share | $ 11.16 | ||||||
Payments for Repurchase of Common Stock | $ 12,606 | $ 0 | $ 0 | ||||
Shares Paid for Tax Withholding for Share Based Compensation | 78,000 | ||||||
Net Parent Contribution | 45,973 | ||||||
Treasury Stock | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 13,162 | ||||||
Additional Paid-In Capital | |||||||
Net Parent Contribution | 45,973 | ||||||
Net Parent Contribution, Non-Cash | $ (4,300) | ||||||
Accounts Payable | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 600 |
Note 12. Fair Value - Textuals
Note 12. Fair Value - Textuals (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
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 |
Fair Value, Purchases and Sales of Level 3 Liabilities | $ 0 | $ 0 |
Note 12. Fair Value - Recurring
Note 12. Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Recurring Fair Value Measurments: | ||
Derivative Asset | $ 754 | $ 3,004 |
Trading Securities, Total | 6,166 | 5,813 |
Derivative Liability | 1,300 | 2,318 |
Fair Value, Measurements, Recurring | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 21,225 | 28,722 |
Trading Securities, Total | 6,166 | 5,813 |
Total assets at fair value | 28,145 | 37,539 |
Total liabilities at fair value | 1,300 | 2,318 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 754 | 3,004 |
Derivative Liability | 1,300 | 2,318 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 21,225 | 28,722 |
Trading Securities, Total | 6,166 | 5,813 |
Total assets at fair value | 27,391 | 34,535 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 0 | 0 |
Trading Securities, Total | 0 | 0 |
Total assets at fair value | 754 | 3,004 |
Total liabilities at fair value | 1,300 | 2,318 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 754 | 3,004 |
Derivative Liability | $ 1,300 | $ 2,318 |
Note 13. Derivative Instrumen91
Note 13. Derivative Instruments - Textuals (Details) - Foreign Exchange Contract € in Millions, $ in Millions | 12 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015 | Jun. 30, 2016EUR (€) | |
Derivatives, Fair Value | |||
Derivative, Notional Amount | $ 27.6 | € 67.9 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ (1.4) | ||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Maximum Time to Transfer | 12 months | 12 months |
Note 13. Derivative Instrumen92
Note 13. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheets(Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Derivatives, Fair Value | ||
Derivative Asset | $ 754 | $ 3,004 |
Derivative Liability | 1,300 | 2,318 |
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 517 | 1,255 |
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | 1,156 | 2,143 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 237 | 1,749 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | 144 | 175 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Derivatives, Fair Value | ||
Derivative Asset | 754 | 3,004 |
Derivative Liability | $ 1,300 | $ 2,318 |
Note 13. Derivative Instrumen93
Note 13. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments, Gain (Loss) | |||
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion | $ (2,869) | $ 3,806 | $ 73 |
Foreign Exchange Contract | |||
Derivative Instruments, Gain (Loss) | |||
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion | $ (2,869) | $ 3,806 | $ 73 |
Note 13. Derivative Instrumen94
Note 13. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments, Gain (Loss) | |||
Cost of Sales | $ 777,522 | $ 746,927 | $ 680,534 |
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | (3,156) | 6,041 | (1,674) |
Foreign Exchange Contract | Non-operating income/expense | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | 381 | 1,734 | (487) |
Cash Flow Hedging | |||
Derivative Instruments, Gain (Loss) | |||
Derivative Gain (Loss) | (3,536) | 4,308 | (1,187) |
Cash Flow Hedging | Foreign Exchange Contract | Cost of Sales | |||
Derivative Instruments, Gain (Loss) | |||
Cost of Sales | (3,535) | 1,310 | (1,024) |
Cash Flow Hedging | Foreign Exchange Contract | Non-operating income/expense | |||
Derivative Instruments, Gain (Loss) | |||
Derivative Gain (Loss) | (1) | 2,998 | (163) |
Derivatives, Pre-Tax Gain (Loss) Reclassified from Accumulated OCI into Income, Ineffective Portion | $ (1) | $ (1) | $ 0 |
Note 14. Investments - Investme
Note 14. Investments - Investments-Supplemental Employee Retirement Plan Investments Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Schedule of Trading Securities and Other Trading Assets | |||
Trading Securities, Change in net unrealized holding gains (losses) | $ (321) | $ (27) | $ 315 |
Note 14. Investments - Suppleme
Note 14. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Schedule of Trading Securities and Other Trading Assets | ||
SERP investment - current asset | $ 214 | $ 192 |
SERP investment - other long-term asset | 5,952 | 5,621 |
Total SERP investment | 6,166 | 5,813 |
SERP obligation - current liability | 214 | 192 |
SERP obligation - other long-term liability | 5,952 | 5,621 |
Total SERP obligation | $ 6,166 | $ 5,813 |
Note 15. Accrued Expenses - Acc
Note 15. Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Taxes | $ 1,878 | $ 2,022 |
Compensation | 13,503 | 15,547 |
Derivative Liability | 1,300 | 2,318 |
Retirement plan | 1,283 | 1,397 |
Insurance | 1,087 | 741 |
Other expenses | 4,600 | 4,520 |
Total accrued expenses | $ 23,651 | $ 26,545 |
Note 16. Geographic Area Info98
Note 16. Geographic Area Information - Segments, Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | $ 220,402 | $ 214,111 | $ 207,129 | $ 200,418 | $ 201,126 | $ 206,858 | $ 207,563 | $ 203,803 | $ 842,060 | $ 819,350 | $ 741,530 |
Long-Lived Assets: | 125,194 | 111,149 | 125,194 | 111,149 | 99,578 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 383,678 | 396,516 | 363,211 | ||||||||
Long-Lived Assets: | 53,596 | 49,689 | 53,596 | 49,689 | 33,004 | ||||||
GERMANY | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 64,679 | 73,966 | 77,338 | ||||||||
Poland | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Long-Lived Assets: | 34,588 | 33,692 | 34,588 | 33,692 | 45,287 | ||||||
CHINA | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 150,080 | 127,761 | 67,665 | ||||||||
Long-Lived Assets: | 15,922 | 16,676 | 15,922 | 16,676 | 12,174 | ||||||
Other Foreign | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 243,623 | 221,107 | 233,316 | ||||||||
Long-Lived Assets: | $ 21,088 | $ 11,092 | $ 21,088 | $ 11,092 | $ 9,113 |
Note 17. Earnings Per Share Sta
Note 17. Earnings Per Share Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Oct. 30, 2014 | ||
Net Income (Loss) | $ 5,771 | $ 7,477 | $ 4,564 | $ 4,475 | $ 7,394 | $ 7,191 | $ 6,229 | $ 5,391 | $ 22,287 | $ 26,205 | $ 24,613 | ||
Weighted Average Number of Shares Outstanding, Basic | 28,916,000 | 29,162,000 | 29,143,000 | ||||||||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 260,000 | 226,000 | 0 | ||||||||||
Weighted Average Number of Shares Outstanding, Diluted | 29,176,000 | 29,388,000 | 29,143,000 | ||||||||||
Earnings Per Share, Basic | $ 0.20 | $ 0.26 | $ 0.16 | $ 0.15 | $ 0.25 | $ 0.25 | $ 0.21 | $ 0.18 | [1] | $ 0.77 | $ 0.90 | $ 0.84 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | ||||||||||||
Earnings Per Share, Diluted | $ 0.20 | $ 0.26 | $ 0.16 | $ 0.15 | $ 0.25 | $ 0.25 | $ 0.21 | $ 0.18 | [1] | $ 0.76 | $ 0.89 | $ 0.84 | |
[1] | Basic and diluted earnings per share for the period ended prior to the spin-off on October 31, 2014 was retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 11 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Note 18. Accumulated Other C100
Note 18. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | $ 312,449 | $ 252,372 |
Other comprehensive income (loss) before reclassifications | (2,160) | (10,065) |
Reclassification to (earnings) loss | 2,217 | (3,801) |
Net current-period other comprehensive income (loss) | 57 | (13,866) |
Share Owner's Equity | 324,369 | 312,449 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (12,247) | 1,619 |
Share Owner's Equity | (12,190) | (12,247) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (9,113) | 4,925 |
Other comprehensive income (loss) before reclassifications | (540) | (14,038) |
Reclassification to (earnings) loss | 0 | 0 |
Net current-period other comprehensive income (loss) | (540) | (14,038) |
Share Owner's Equity | (9,653) | (9,113) |
Derivative Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (3,557) | (3,406) |
Other comprehensive income (loss) before reclassifications | (1,932) | 3,579 |
Reclassification to (earnings) loss | 2,352 | (3,730) |
Net current-period other comprehensive income (loss) | 420 | (151) |
Share Owner's Equity | (3,137) | (3,557) |
Postemployment Benefits, Prior Service Costs | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (18) | (35) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Reclassification to (earnings) loss | 18 | 17 |
Net current-period other comprehensive income (loss) | 18 | 17 |
Share Owner's Equity | 0 | (18) |
Postemployment Benefits, Net Actuarial Gain | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | 441 | 135 |
Other comprehensive income (loss) before reclassifications | 312 | 394 |
Reclassification to (earnings) loss | (153) | (88) |
Net current-period other comprehensive income (loss) | 159 | 306 |
Share Owner's Equity | $ 600 | $ 441 |
Note 18. Accumulated Other C101
Note 18. Accumulated Other Comprehensive Income (Loss) - Reclassification from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Cost of Sales | $ 777,522 | $ 746,927 | $ 680,534 | ||||||||
Selling and Administrative Expenses | 34,816 | 36,068 | 36,352 | ||||||||
Benefit (Provision) for Income Taxes | (5,689) | (8,566) | (5,629) | ||||||||
Net Income (Loss) | $ 5,771 | $ 7,477 | $ 4,564 | $ 4,475 | $ 7,394 | $ 7,191 | $ 6,229 | $ 5,391 | 22,287 | 26,205 | $ 24,613 |
Total reclassifications for the period | (2,217) | 3,801 | |||||||||
Derivative Gain (Loss) | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Total reclassifications for the period | (2,352) | 3,730 | |||||||||
Postemployment Benefits, Amortization of prior service costs | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Total reclassifications for the period | (18) | (17) | |||||||||
Postemployment Benefits, Amortization of actuarial gain (loss) | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Total reclassifications for the period | 153 | 88 | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Derivative Gain (Loss) | Foreign Exchange Contract | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Cost of Sales | (3,535) | 1,310 | |||||||||
Non-operating income (expense), net | (2) | 2,997 | |||||||||
Benefit (Provision) for Income Taxes | 1,185 | (577) | |||||||||
Net Income (Loss) | (2,352) | 3,730 | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Postemployment Benefits, Amortization of prior service costs | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Cost of Sales | (16) | (18) | |||||||||
Selling and Administrative Expenses | (12) | (10) | |||||||||
Benefit (Provision) for Income Taxes | 10 | 11 | |||||||||
Net Income (Loss) | (18) | (17) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Postemployment Benefits, Amortization of actuarial gain (loss) | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||||||||
Cost of Sales | 144 | 88 | |||||||||
Selling and Administrative Expenses | 110 | 58 | |||||||||
Benefit (Provision) for Income Taxes | (101) | (58) | |||||||||
Net Income (Loss) | $ 153 | $ 88 |
Note 19. Restructuring Expense
Note 19. Restructuring Expense - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Restructuring Expense and Other Related Items | |||
Restructuring Expense | $ 0 | $ 0 | $ 402 |
Note 20. Quarterly Financial103
Note 20. Quarterly Financial Information (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Net Sales | $ 220,402 | $ 214,111 | $ 207,129 | $ 200,418 | $ 201,126 | $ 206,858 | $ 207,563 | $ 203,803 | $ 842,060 | $ 819,350 | $ 741,530 | |
Gross Profit | 16,958 | 16,185 | 16,115 | 15,280 | 17,709 | 18,953 | 17,858 | 17,903 | 64,538 | 72,423 | 60,996 | |
Other General Income | 0 | 0 | (5,688) | |||||||||
Net Income (Loss) | $ 5,771 | $ 7,477 | $ 4,564 | $ 4,475 | $ 7,394 | $ 7,191 | $ 6,229 | $ 5,391 | $ 22,287 | $ 26,205 | $ 24,613 | |
Earnings Per Share, Basic | $ 0.20 | $ 0.26 | $ 0.16 | $ 0.15 | $ 0.25 | $ 0.25 | $ 0.21 | $ 0.18 | [1] | $ 0.77 | $ 0.90 | $ 0.84 |
Earnings Per Share, Diluted | $ 0.20 | $ 0.26 | $ 0.16 | $ 0.15 | $ 0.25 | $ 0.25 | $ 0.21 | $ 0.18 | [1] | $ 0.76 | $ 0.89 | $ 0.84 |
[1] | Basic and diluted earnings per share for the period ended prior to the spin-off on October 31, 2014 was retrospectively restated adjusting the number of Kimball Electronics shares outstanding for the stock split effective on October 16, 2014. See Note 11 - Share Owners’ Equity of Notes to Consolidated Financial Statements for more information regarding the stock split. |
Note 21. Subsequent Events (Det
Note 21. Subsequent Events (Details) - USD ($) $ in Thousands | Jul. 18, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 |
Subsequent Event [Line Items] | |||||
Business Combination, Consideration Transferred | $ 7,300 | ||||
Other General Income | $ 0 | $ 0 | $ (5,688) | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Business Combination, Consideration Transferred | $ 3,500 | ||||
Other General Income | $ (4,000) |
Schedule II Valuation and Qu105
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Short-Term Receivables | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | $ 236 | $ 352 | $ 750 |
Valuation Allowances, Additions to Expense | 67 | (80) | (350) |
Valuation Allowances, Adjustments to Other Accounts | (96) | 1 | 45 |
Valuation Allowances, Write-offs and Recoveries | (15) | (37) | (93) |
Valuation Allowances, Balance at End of Year | 192 | 236 | 352 |
Deferred Tax Asset | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | $ 0 | 92 | 1,613 |
Valuation Allowances, Additions to Expense | 0 | 0 | |
Valuation Allowances, Adjustments to Other Accounts | (92) | 0 | |
Valuation Allowances, Write-offs and Recoveries | 0 | (1,521) | |
Valuation Allowances, Balance at End of Year | $ 0 | $ 92 |