Kimball Electronics (KE) 10-Q 8 Feb 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	6 Months Ended
	Dec. 31, 2017	Jan. 26, 2018
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-Q
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		26,694,649

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Current Assets:
Cash and cash equivalents	$ 35,638	$ 44,555
Receivables, net of allowances of $315 and $284, respectively	173,663	169,785
Inventories	179,862	144,606
Prepaid Expense and Other Assets, Current	26,248	29,219
Total current assets	415,411	388,165
Property and Equipment, net of accumulated depreciation of $192,887 and $180,028, respectively	140,978	137,549
Goodwill	6,191	6,191
Other Intangible Assets, net of accumulated amortization of $26,889 and $26,392, respectively	4,700	4,581
Other Assets	17,246	18,458
Total Assets	584,526	554,944
Current Liabilities:
Line of Credit, Current	11,000	10,000
Accounts payable	178,366	154,619
Accrued expenses	29,578	34,630
Total current liabilities	218,944	199,249
Other Liabilities:
Long-term income taxes payable	11,786	0
Other long-term liabilities	12,720	13,423
Total other liabilities	24,506	13,423
Share Owners’ Equity:
Preferred stock-no par value	0	0
Common stock-no par value	0	0
Additional paid-in capital	301,441	302,483
Retained earnings	82,804	82,671
Accumulated other comprehensive loss	(5,098)	(9,084)
Treasury stock, at cost	(38,071)	(33,798)
Total Share Owners’ Equity	341,076	342,272
Total Liabilities and Share Owners’ Equity	$ 584,526	$ 554,944

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
ASSETS
Allowance for Doubtful Accounts, Premiums and Other Receivables	$ 315	$ 284
Property and Equipment Accumulated Depreciation	192,887	180,028
Other Intangible Assets Accumulated Amortization	$ 26,889	$ 26,392
Share Owners' Equity
Preferred Stock, Par or Stated Value Per Share	$ 0	$ 0
Preferred Stock, Shares Authorized	15,000,000	15,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par Value Per Share	$ 0	$ 0
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Shares, Issued	29,430,000	29,430,000
Treasury Stock, Shares	2,735,000	2,592,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Net Sales	$ 258,151	$ 230,265	$ 511,355	$ 456,716
Cost of Sales	237,189	209,712	470,903	417,841
Gross Profit	20,962	20,553	40,452	38,875
Selling and Administrative Expenses	10,769	8,312	20,669	17,817
Other General Income	0	0	0	(4,005)
Operating Income	10,193	12,241	19,783	25,063
Other Income (Expense):
Interest income	18	14	36	37
Interest expense	(113)	(60)	(229)	(99)
Non-operating income (expense), net	488	(968)	1,831	(189)
Other income (expense), net	393	(1,014)	1,638	(251)
Income Before Taxes on Income	10,586	11,227	21,421	24,812
Provision for Income Taxes	18,933	3,415	21,288	6,878
Net Income (Loss)	$ (8,347)	$ 7,812	$ 133	$ 17,934
Earnings (Loss) Per Share of Common Stock:
Earnings Per Share, Basic	$ (0.31)	$ 0.29	$ 0	$ 0.65
Earnings Per Share, Diluted	$ (0.31)	$ 0.28	$ 0	$ 0.65
Weighted Average Number of Shares Outstanding, Basic	26,765	27,350	26,812	27,714
Weighted Average Number of Shares Outstanding, Diluted	26,765	27,455	27,007	27,775

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Net income (loss)	$ (8,347)	$ 7,812	$ 133	$ 17,934
Other comprehensive income (loss):
Foreign currency translation adjustments, Pre-tax	1,648	(5,328)	4,862	(4,518)
Foreign currency translation adjustments, Tax	0	0	0	0
Foreign currency translation adjustments, Net of Tax	1,648	(5,328)	4,862	(4,518)
Postemployment severance actuarial change, Pre-tax	118	(45)	264	312
Postemployment severance actuarial change, Tax	(43)	17	(97)	(117)
Postemployment severance actuarial change, Net of Tax	75	(28)	167	195
Derivative gain (loss), Pre-tax	(445)	(82)	(2,042)	(266)
Derivative gain (loss), Tax	278	187	597	328
Derivative gain (loss), Net of Tax	(167)	105	(1,445)	62
Reclassification to (earnings) loss:
Derivatives, Reclassification to (earnings) loss, Pre-tax	494	617	504	896
Derivatives, Reclassification to (earnings) loss, Tax	(73)	(216)	1	(321)
Derivatives, Reclassification to (earnings) loss, Net of Tax	421	401	505	575
Amortization of actuarial change, Pre-tax	(85)	(78)	(165)	(174)
Amortization of actuarial change, Tax	32	29	62	65
Amortization of actuarial change, Net of Tax	(53)	(49)	(103)	(109)
Other comprehensive income (loss), Pre-tax	1,730	(4,916)	3,423	(3,750)
Other comprehensive income (loss), Tax	194	17	563	(45)
Other comprehensive income (loss), Net of Tax	1,924	(4,899)	3,986	(3,795)
Total comprehensive income (loss)	(6,423)	2,913	4,119	14,139
Foreign Exchange Contract
Other comprehensive income (loss):
Derivative gain (loss), Pre-tax	$ (445)	$ (82)	$ (2,042)	$ (266)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash Flows From Operating Activities:
Net income	$ 133	$ 17,934
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,755	11,429
Gain on sales of assets	(17)	(39)
Deferred income tax and other deferred charges	3,061	(1,617)
Stock-based compensation	2,443	1,941
Bargain purchase gain	0	(925)
Other, net	(53)	(41)
Change in operating assets and liabilities:
Receivables	(2,524)	(8,650)
Inventories	(33,874)	(5,158)
Prepaid expenses and other current assets	1,727	1,099
Accounts payable	22,381	9,468
Accrued expenses and taxes payable	5,369	650
Net cash provided by operating activities	11,401	26,091
Cash Flows From Investing Activities:
Capital expenditures	(14,708)	(19,057)
Proceeds from sales of assets	107	191
Payments for acquisitions, net of cash acquired	0	(2,138)
Purchases of capitalized software	(126)	(677)
Other, net	10	(7)
Net cash used for investing activities	(14,717)	(21,688)
Cash Flows From Financing Activities:
Proceeds from credit facilities	0	4,000
Payments on credit facilities	0	(4,000)
Net change in revolving credit facilities	1,000	0
Repurchases of Common Stock	(6,460)	(14,323)
Repurchase of employee shares for tax withholding	(1,508)	(709)
Net cash used for financing activities	(6,968)	(15,032)
Effect of Exchange Rate Change on Cash and Cash Equivalents	1,367	(1,369)
Net Decrease in Cash and Cash Equivalents	(8,917)	(11,998)
Cash and Cash Equivalents at Beginning of Period	44,555	54,738
Cash and Cash Equivalents at End of Period	35,638	42,740
Cash paid during the period for:
Income taxes	8,795	1,959
Interest expense	$ 120	$ 83

Note 1. Business Description an

Note 1. Business Description and Summary of Significant Accounting Policies	6 Months Ended
	Dec. 31, 2017
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 end 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. Basis of Presentation: The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of December 31, 2017 and June 30, 2017 , results of operations for the three and six months ended December 31, 2017 and 2016 , and cash flows for the six months ended December 31, 2017 and 2016 . The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2017 and related notes thereto included in our Annual Report on Form 10-K. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. Notes Receivable and Trade Accounts Receivable: 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. 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. In the six months ended December 31, 2017 and 2016 , we sold, without recourse, $81.2 million and $72.2 million of accounts receivable, respectively. Factoring fees were not material. The Company’s China operation, in limited circumstances, may receive banker’s acceptance drafts from customers as payment for their trade accounts receivable. The banker’s acceptance drafts are non-interest bearing and primarily mature within six months from the origination date. The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $4.3 million at December 31, 2017 and $5.3 million at June 30, 2017 , are reflected in Receivables on the Condensed 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 the six months ended December 31, 2017 and 2016 were $1.9 million and $4.2 million , respectively. See Note 4 - Commitments and Contingent Liabilities of Notes to Condensed Consolidated Financial Statements for more information on banker’s acceptance drafts. Other General Income: Other General Income in the six months ended December 31, 2016 included $4.0 million of pre-tax income resulting from a payment received related to a class action lawsuit in which Kimball Electronics was a class member. 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. No Other General Income was recorded in the six months ended December 31, 2017 . Non-operating Income (Expense), net: Non-operating income (expense), net includes 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 bargain purchase gain on acquisition relates to the acquisition of Aircom Manufacturing, Inc. during the six months ended December 31, 2016 and resulted from the estimated fair values of the assets acquired and liabilities recorded being greater than the consideration paid. For more information on the bargain purchase gain, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 . The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expenses. Components of Non-operating income (expense), net: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands) 2017 2016 2017 2016 Foreign currency/derivative gain (loss) $ 333 $ (1,185 ) $ 1,394 $ (1,470 ) Gain (loss) on supplemental employee retirement plan investments 282 (1 ) 585 259 Bargain purchase gain on acquisition — — — 925 Other (127 ) 218 (148 ) 97 Non-operating income (expense), net $ 488 $ (968 ) $ 1,831 $ (189 ) Income Taxes: In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur. The U.S. Tax Cuts and Jobs Act (“Tax Reform”) was enacted into law on December 22, 2017. Tax Reform makes broad and complex changes to the U.S. tax code, for which complete guidance has not yet been issued. Tax Reform will affect our current fiscal year ending June 30, 2018, including, but not limited to, (i) reducing the U.S. corporate statutory tax rate, (ii) requiring a one-time transition tax on certain unremitted earnings of foreign subsidiaries that is payable over an eight-year period, (iii) eliminating U.S. federal income taxes on dividends from foreign subsidiaries, and (iv) bonus depreciation that will allow for full expensing of qualifying property. Tax Reform reduces the U.S. corporate statutory tax rate from 35% to 21% . For our fiscal year ending June 30, 2018, we will have a blended corporate tax rate of 28.1% , which is based on the applicable tax rates before and after Tax Reform and the number of days in the year. The Company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments including the revaluation of its net deferred tax assets at the new applicable rates as of December 31, 2017, and the one-time deemed repatriation tax on accumulated unremitted foreign earnings. Approximately $3.8 million of additional tax expense was recorded for the revaluation of the net deferred tax assets. The Company recorded approximately $12.8 million of tax expense for the deemed repatriation tax, of which $11.8 million of the tax payable was recorded in Long-term income taxes payable on the Condensed Consolidated Balance Sheet. The one-time deemed repatriation tax is based on 15.5% of the accumulated unremitted foreign earnings held in foreign cash and other liquid assets and 8.0% of the residual accumulated unremitted foreign earnings. Both the revaluation of the net deferred tax assets and the deemed repatriation tax were treated as discrete items and were recognized in Provision for Income Taxes on the Condensed Consolidated Statements of Income for the three and six months ended December 31, 2017. The Company considers these provisional recorded amounts to be reasonable estimates as of December 31, 2017, and these amounts could be affected by additional information and other analysis related to Tax Reform. As a result, these amounts could be adjusted during the measurement period ending December 2018. Tax Reform also subjects U.S. corporations to tax on Global Intangible Low-Taxed Income (“GILTI”), which imposes tax on foreign earnings in excess of a deemed return on tangible assets. Due to the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision for which no provisional amounts have been recorded in the Company’s Condensed Consolidated Financial Statements. An accounting policy election can be made to either record deferred taxes related to GILTI or to record the related taxes in the period in which they occur. The Company has not yet elected an accounting policy related to GILTI and will only do so after completion of further evaluation and analysis. The provisions related to GILTI are subject to adjustment during the measurement period ending December 2018. The Company entered into a Tax Matters Agreement with Kimball International, Inc. (our “former Parent”) that governs the Company’s rights and obligations after the spin-off from former Parent on October 31, 2014 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 both December 31, 2017 and June 30, 2017 , the Company has a receivable from Kimball International recorded for $0.6 million , of which $0.5 million is a long-term receivable, and was recorded in Other Assets on the Condensed Consolidated Balance Sheets, relating to benefits from domestic research and development tax credits. “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 $1.07 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. We continue to monitor our status as an “emerging growth company” and are currently preparing, and expect to be ready, to comply with the additional reporting and regulatory requirements that will be applicable to us when we cease to qualify as an “emerging growth company.” New Accounting Standards: In August 2017, the Financial Accounting Standards Board (“FASB”) issued guidance on accounting for derivatives and hedging activities. The objective of this guidance is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. For public companies, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For as long as we remain an “emerging growth company” the new guidance will be effective for our fiscal year 2020 annual financial statements and for interim statements beginning in fiscal year 2021. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In March 2016, the FASB issued guidance on accounting for share-based payment transactions. The objective of this guidance is to simplify certain aspects of the accounting for share-based payment transactions, including the treatment of excess income tax benefits and deficiencies, allowing an election to account for forfeitures as they occur, and classification of excess tax benefits on the statement of cash flows. For public companies, the guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company adopted this guidance effective July 1, 2017. There was no impact on the Company’s financial statements upon the initial adoption as there were no tax benefits that were not previously recognized because the related tax deduction had not reduced taxes payable, and therefore no cumulative-effect adjustment to the Company’s beginning retained earnings was required. The Company has elected to reverse the compensation cost of any forfeited awards when they occur and will classify the cash flows related to excess tax benefits for share-based payment arrangements as cash flows from operating activities on a prospective basis. The new guidance requires prospective application of the tax effects of differences recognized on or after the effective date between the deduction for an award for tax purposes and the compensation costs of that award recognized for financial reporting purposes. As a result, during the six months ended December 31, 2017 , the Company recorded a discrete income tax adjustment related to the excess tax benefit on performance shares granted of $0.6 million in Provision for Income Taxes on the Condensed Consolidated Statements of Income, or $0.02 per diluted share. Due to including the income tax effects from excess tax benefits in the provision for income taxes, the effects of the excess tax benefits are no longer included in the calculation of diluted shares outstanding, which generally will result in an increase in the number of diluted shares outstanding. The Company adopted this change in the method of calculating diluted shares outstanding on a prospective basis. 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. For public companies, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For as long as we remain an “emerging growth company” the new guidance will be effective for our fiscal year 2020 annual financial statements and for interim statements beginning in fiscal year 2021. Early application is permitted. 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. For public companies, the guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, including interim periods within those annual periods. For as long as we remain an “emerging growth company” 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. For public companies, the guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For as long as we remain an “emerging growth company” the guidance is effective for our fiscal year 2018 annual financial statements and for interim statements beginning in fiscal year 2019. Early application is permitted as of the beginning of an interim or annual reporting period. 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 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. For public companies, the guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that annual reporting period. For as long as we remain an “emerging growth company” the guidance will be effective for our fiscal year 2020 annual financial statements and for interim periods beginning in fiscal year 2021. The Company continues to evaluate the impact the adoption of this new standard will have on its consolidated financial statements; however, it anticipates, for the majority of its contracts for manufacturing services, it will change from a point-in-time recognition method upon transfer of title to an over-time model based on the progress of completing customer orders. We believe the adoption of the standard will have a material effect on the Company’s consolidated financial statements primarily from the recognition of contract assets for unbilled receivables and a corresponding reduction in inventories. Under the guidance there are 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 finalized our selection of a transition method for adoption.

Note 2. Inventories

Note 2. Inventories	6 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory Disclosure	Inventories Inventories are valued using the lower of first-in, first-out (“FIFO”) cost or market value. Inventory components were as follows: (Amounts in Thousands) December 31, 2017 June 30, Finished products $ 27,526 $ 18,916 Work-in-process 14,980 15,480 Raw materials 137,356 110,210 Total inventory $ 179,862 $ 144,606

Note 3. Accumulated Other Compr

Note 3. Accumulated Other Comprehensive Income (Loss)	6 Months Ended
	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Abstract]
Accumulated Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) During the six months ended December 31, 2017 and 2016 , the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: Accumulated Other Comprehensive Income (Loss) (Amounts in Thousands) Foreign Currency Translation Adjustments Derivative Gain (Loss) Post Employment Benefits Net Actuarial Gain Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2017 $ (6,876 ) $ (2,788 ) $ 580 $ (9,084 ) Other comprehensive income (loss) before reclassifications 4,862 (1,445 ) 167 3,584 Reclassification to (earnings) loss — 505 (103 ) 402 Net current-period other comprehensive income (loss) 4,862 (940 ) 64 3,986 Balance at December 31, 2017 $ (2,014 ) $ (3,728 ) $ 644 $ (5,098 ) Balance at June 30, 2016 $ (9,653 ) $ (3,137 ) $ 600 $ (12,190 ) Other comprehensive income (loss) before reclassifications (4,518 ) 62 195 (4,261 ) Reclassification to (earnings) loss — 575 (109 ) 466 Net current-period other comprehensive income (loss) (4,518 ) 637 86 (3,795 ) Balance at December 31, 2016 $ (14,171 ) $ (2,500 ) $ 686 $ (15,985 ) The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statements of Income December 31 December 31 (Amounts in Thousands) 2017 2016 2017 2016 Derivative gain (loss) (1) $ (494 ) $ (611 ) $ (504 ) $ (890 ) Cost of Sales — (6 ) — (6 ) Non-operating income (expense), net 73 216 (1 ) 321 Benefit (Provision) for Income Taxes $ (421 ) $ (401 ) $ (505 ) $ (575 ) Net of Tax Postemployment Benefits: Amortization of actuarial gain (2) $ 47 $ 45 $ 92 $ 101 Cost of Sales 38 33 73 73 Selling and Administrative Expenses (32 ) (29 ) (62 ) (65 ) Provision for Income Taxes $ 53 $ 49 $ 103 $ 109 Net of Tax Total reclassifications for the period $ (368 ) $ (352 ) $ (402 ) $ (466 ) Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 6 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments. (2) See Note 8 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

Note 4. Commitments and Conting

Note 4. Commitments and Contingent Liabilities	6 Months Ended
	Dec. 31, 2017
Commitments and Contingent Liabilities [Abstract]
Commitments and Contingencies Disclosure	Commitments and Contingent Liabilities Standby letters of credit may be issued to third-party suppliers and insurance institutions and can only be drawn upon in the event of the Company’s failure to pay its obligations to a beneficiary. As of December 31, 2017 , we had a maximum financial exposure from unused standby letters of credit totaling $0.4 million . 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 condensed consolidated financial statements. Accordingly, no liability has been recorded as of December 31, 2017 with respect to the standby letters of credit. The Company also may enter into commercial letters of credit to facilitate payments to vendors and from customers. 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 December 31, 2017 , the drafts transferred and outstanding totaled $1.4 million . 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 Condensed Consolidated Financial Statements. 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 for the six months ended December 31, 2017 and 2016 were as follows: Six Months Ended December 31 (Amounts in Thousands) 2017 2016 Product warranty liability at the beginning of the period $ 593 $ 605 Additions to warranty accrual (including changes in estimates) 186 263 Settlements made (in cash or in kind) (79 ) (256 ) Product warranty liability at the end of the period $ 700 $ 612

Note 5. Fair Value

Note 5. Fair Value	6 Months Ended
	Dec. 31, 2017
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 the six months ended December 31, 2017 . There were also no changes in the inputs or valuation techniques used to measure fair values during the six months ended December 31, 2017 . For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 . Recurring Fair Value Measurements: As of December 31, 2017 and June 30, 2017 , 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: December 31, 2017 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,092 $ — $ 1,092 Derivatives: foreign exchange contracts — 921 921 Trading securities: mutual funds held in nonqualified SERP 8,487 — 8,487 Total assets at fair value $ 9,579 $ 921 $ 10,500 Liabilities Derivatives: foreign exchange contracts $ — $ 4,053 $ 4,053 Total liabilities at fair value $ — $ 4,053 $ 4,053 June 30, 2017 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,087 $ — $ 1,087 Derivatives: foreign exchange contracts — 1,810 1,810 Trading securities: mutual funds held in nonqualified SERP 7,607 — 7,607 Total assets at fair value $ 8,694 $ 1,810 $ 10,504 Liabilities Derivatives: foreign exchange contracts $ — $ 2,928 $ 2,928 Total liabilities at fair value $ — $ 2,928 $ 2,928 We had no level 3 assets or liabilities measured at fair value during the six months ended December 31, 2017 . 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 Kimball Electronics’ obligation to distribute SERP funds to participants. See Note 7 - Investments of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP. Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include notes receivable and borrowings under credit facilities. There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the six months ended December 31, 2017 . For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 . The carrying value of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximates fair value due to the relatively short maturity and immaterial non-performance risk.

Note 6. Derivative Instruments

Note 6. Derivative Instruments	6 Months Ended
	Dec. 31, 2017
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 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 December 31, 2017 , we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $29.7 million and to hedge currencies against the Euro in the aggregate notional amount of 78.0 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 Non-operating income (expense), net on the Condensed 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 Non-operating income (expense), net on the Condensed Consolidated Statements of Income immediately. Based on fair values as of December 31, 2017 , we estimate that approximately $1.7 million of pre-tax derivative loss deferred in Accumulated Other Comprehensive Loss will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the next 12 months. Losses on foreign exchange contracts are generally offset by gains in operating income 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 December 31, 2017 and June 30, 2017 . See Note 5 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and the Condensed Consolidated Statements of Comprehensive Income for the changes in deferred derivative gains and losses. Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below. Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location December 31, June 30, Balance Sheet Location December 31, June 30, Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 909 $ 1,810 Accrued expenses $ 2,737 $ 2,009 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets 12 — Accrued expenses 1,316 919 Total derivatives $ 921 $ 1,810 $ 4,053 $ 2,928 The Effect of Derivative Instruments on Other Comprehensive Income (Loss) Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands) 2017 2016 2017 2016 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): Foreign exchange contracts $ (445 ) $ (82 ) $ (2,042 ) $ (266 ) The Effect of Derivative Instruments on Condensed Consolidated Statements of Income Three Months Ended Six Months Ended (Amounts in Thousands) December 31 December 31 Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2017 2016 2017 2016 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): Foreign exchange contracts Cost of Sales $ (494 ) $ (611 ) $ (504 ) $ (890 ) Foreign exchange contracts Non-operating income (expense) — (6 ) — (6 ) Total $ (494 ) $ (617 ) $ (504 ) $ (896 ) 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) $ (263 ) $ 1,885 $ (1,081 ) $ 1,662 Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ (757 ) $ 1,268 $ (1,585 ) $ 766

Note 7. Investments

Note 7. Investments	6 Months Ended
	Dec. 31, 2017
Investments [Abstract]
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure	Investments The Company maintains a self-directed supplemental employee retirement plan (“SERP”) for executive and other key employees. The Company SERP utilizes a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. The Company recognizes 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 six months ended December 31, 2017 and 2016 was, in thousands, $480 and $(186) , respectively. SERP asset and liability balances applicable to Kimball Electronics participants were as follows: (Amounts in Thousands) December 31, June 30, SERP investments - current asset $ 286 $ 258 SERP investments - other long-term asset 8,201 7,349 Total SERP investments $ 8,487 $ 7,607 SERP obligation - current liability $ 286 $ 258 SERP obligation - other long-term liability 8,201 7,349 Total SERP obligation $ 8,487 $ 7,607

Note 8. Postemployment Benefits

Note 8. Postemployment Benefits	6 Months Ended
	Dec. 31, 2017
Defined Benefit Plan [Abstract]
Postemployment Benefits Disclosure	Postemployment Benefits The Company maintains severance plans for all domestic employees. These plans provide severance benefits to eligible employees meeting the plans’ qualifications, primarily involuntary termination without cause. There are no statutory requirements for us 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 net periodic postemployment benefit costs were not material for the three and six months ended December 31, 2017 and 2016 . Unusual or non-recurring severance actions are not estimable using actuarial methods and are expensed in accordance with the applicable U.S. GAAP.

Note 9. Stock Compensation Plan

Note 9. Stock Compensation Plans	6 Months Ended
	Dec. 31, 2017
Stock Compensation Plans [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments	Stock Compensation Plans The Company maintains a stock compensation plan, the Kimball Electronics, Inc. 2014 Stock Option and Incentive Plan (the “Plan”), which 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. The Company also maintains a nonqualified deferred compensation plan, the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan (the “Deferral Plan”), which allows Non-Employee Directors of the Company’s Board of Directors (the “Board”) to elect to defer all, or a portion of, their retainer fees in stock until retirement or termination from the Board or death. The Deferral Plan allows for issuance of up to 1.0 million shares of the Company’s common stock. For more information on the Plan and the Deferral Plan, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 . During the first six months of fiscal year 2018 , the following stock compensation was awarded under the Plan and the Deferral Plan. Stock Compensation Awarded Quarter Awarded Shares/Units Grant Date Fair Value (2) Long-Term Performance Shares (1) 1st Quarter 205,821 $18.30 Unrestricted shares (Director compensation) (3) 2nd Quarter 7,694 $20.15 Deferred share units (Director compensation) (4) 2nd Quarter 12,159 $20.15 (1) Long-term performance shares were awarded to officers and other key employees. Payouts will be based upon a combination of a bonus percentage attainment component calculated under the Company’s profit sharing incentive bonus plan, 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. The long-term performance shares awarded are based on three successive annual performance measurement periods, with each annual tranche having a grant date when economic profit tiers are established and approved by the Compensation and Governance Committee of the Board near the beginning of the applicable fiscal year and a vesting date shortly after the end of each annual period. The number of shares issued will be less than the maximum shares issuable if one or both of the above-mentioned incentive metric maximum thresholds are not obtained. (2) The grant date fair value is based on the stock price at the date of the award and for long-term performance shares is applicable to the first tranche only. (3) Unrestricted shares which were awarded to non-employee members of the Company’s Board of Directors as compensation for the portion of director’s annual retainer fees as a result of the directors’ election to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions. (4) Deferred share units were awarded to non-employee members of the Company’s Board of Directors as compensation for the portion of director’s annual retainer fees as a result of directors’ elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock upon a Director’s retirement or termination from the Board or death.

Note 10. Share Owners' Equity (

Note 10. Share Owners' Equity (Notes)	6 Months Ended
	Dec. 31, 2017
Share Owners' Equity [Abstract]
Stockholders' Equity Note Disclosure	Share Owners’ Equity On October 21, 2015 , the Company’s Board of Directors (the “Board”) authorized an 18-month stock repurchase plan (the “Plan”) allowing a repurchase of up to $20 million worth of common stock. On September 29, 2016, the Board extended the Plan to allow the repurchase of up to an additional $20 million worth of common stock with no expiration date. On August 23, 2017, the Board increased the Plan to allow the repurchase of up to an additional $20 million worth of common stock with no expiration date. This latest increase brings the total authorized stock repurchases under the Plan to $60 million . 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. During the six months ended December 31, 2017 , the Company repurchased $6.3 million of common stock at an average price of $19.45 which was recorded as Treasury stock, at cost in the Condensed Consolidated Balance Sheets. Since the inception of the Plan, the Company has repurchased $41.4 million of common stock under the Plan at an average cost of $13.65 per share.

Note 11. Earnings Per Share (No

Note 11. Earnings Per Share (Notes)	6 Months Ended
	Dec. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share Basic and diluted earnings per share were calculated as follows under the two-class method: Three Months Ended Six Months Ended December 31 December 31 (Amounts in thousands, except per share data) 2017 2016 2017 2016 Basic and Diluted Earnings Per Share: Net Income (Loss) $ (8,347 ) $ 7,812 $ 133 $ 17,934 Less: Net Income allocated to participating securities — 3 — 4 Net Income (Loss) allocated to common Share Owners $ (8,347 ) $ 7,809 $ 133 $ 17,930 Basic weighted average common shares outstanding 26,765 27,350 26,812 27,714 Dilutive effect of average outstanding performance shares — 102 191 58 Dilutive effect of average outstanding deferred stock units — 3 4 3 Dilutive weighted average shares outstanding 26,765 27,455 27,007 27,775 Earnings (Loss) Per Share of Common Stock: Basic $ (0.31 ) $ 0.29 $ — $ 0.65 Diluted $ (0.31 ) $ 0.28 $ — $ 0.65 For the three months ended December 31, 2017 , all outstanding stock compensation awards were antidilutive, as a result of the net loss recognized for the period, and were excluded from the dilutive calculation, including 290,000 average outstanding performance shares and 15,000 average outstanding unvested deferred stock units. The net loss in the three months ended December 31, 2017 was not allocated to participating securities as the holders have no requirements to fund losses. For the six months ended December 31, 2017 and for the three and six months ended December 31, 2016 , all outstanding stock compensation awards were dilutive and were included in the dilutive calculation.

Note 1. Business Description 18

Note 1. Business Description and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation: The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of December 31, 2017 and June 30, 2017 , results of operations for the three and six months ended December 31, 2017 and 2016 , and cash flows for the six months ended December 31, 2017 and 2016 . The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2017 and related notes thereto included in our Annual Report on Form 10-K. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year.
Notes Receivable and Trade Accounts Receivable	Notes Receivable and Trade Accounts Receivable: 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. 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. These drafts, which totaled $4.3 million at December 31, 2017 and $5.3 million at June 30, 2017 , are reflected in Receivables on the Condensed 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.
Non-operating Income (Expense), net	Non-operating Income (Expense), net: Non-operating income (expense), net includes 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 bargain purchase gain on acquisition relates to the acquisition of Aircom Manufacturing, Inc. during the six months ended December 31, 2016 and resulted from the estimated fair values of the assets acquired and liabilities recorded being greater than the consideration paid. For more information on the bargain purchase gain, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 . The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expenses.
Income Taxes	Income Taxes: In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.
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 August 2017, the Financial Accounting Standards Board (“FASB”) issued guidance on accounting for derivatives and hedging activities. The objective of this guidance is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. For public companies, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For as long as we remain an “emerging growth company” the new guidance will be effective for our fiscal year 2020 annual financial statements and for interim statements beginning in fiscal year 2021. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. In March 2016, the FASB issued guidance on accounting for share-based payment transactions. The objective of this guidance is to simplify certain aspects of the accounting for share-based payment transactions, including the treatment of excess income tax benefits and deficiencies, allowing an election to account for forfeitures as they occur, and classification of excess tax benefits on the statement of cash flows. For public companies, the guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. The Company adopted this guidance effective July 1, 2017. There was no impact on the Company’s financial statements upon the initial adoption as there were no tax benefits that were not previously recognized because the related tax deduction had not reduced taxes payable, and therefore no cumulative-effect adjustment to the Company’s beginning retained earnings was required. The Company has elected to reverse the compensation cost of any forfeited awards when they occur and will classify the cash flows related to excess tax benefits for share-based payment arrangements as cash flows from operating activities on a prospective basis. The new guidance requires prospective application of the tax effects of differences recognized on or after the effective date between the deduction for an award for tax purposes and the compensation costs of that award recognized for financial reporting purposes. As a result, during the six months ended December 31, 2017 , the Company recorded a discrete income tax adjustment related to the excess tax benefit on performance shares granted of $0.6 million in Provision for Income Taxes on the Condensed Consolidated Statements of Income, or $0.02 per diluted share. Due to including the income tax effects from excess tax benefits in the provision for income taxes, the effects of the excess tax benefits are no longer included in the calculation of diluted shares outstanding, which generally will result in an increase in the number of diluted shares outstanding. The Company adopted this change in the method of calculating diluted shares outstanding on a prospective basis. 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. For public companies, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For as long as we remain an “emerging growth company” the new guidance will be effective for our fiscal year 2020 annual financial statements and for interim statements beginning in fiscal year 2021. Early application is permitted. 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. For public companies, the guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, including interim periods within those annual periods. For as long as we remain an “emerging growth company” 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. For public companies, the guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For as long as we remain an “emerging growth company” the guidance is effective for our fiscal year 2018 annual financial statements and for interim statements beginning in fiscal year 2019. Early application is permitted as of the beginning of an interim or annual reporting period. 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 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. For public companies, the guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that annual reporting period. For as long as we remain an “emerging growth company” the guidance will be effective for our fiscal year 2020 annual financial statements and for interim periods beginning in fiscal year 2021. The Company continues to evaluate the impact the adoption of this new standard will have on its consolidated financial statements; however, it anticipates, for the majority of its contracts for manufacturing services, it will change from a point-in-time recognition method upon transfer of title to an over-time model based on the progress of completing customer orders. We believe the adoption of the standard will have a material effect on the Company’s consolidated financial statements primarily from the recognition of contract assets for unbilled receivables and a corresponding reduction in inventories. Under the guidance there are 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 finalized our selection of a transition method for adoption.

Note 2. Inventories (Policies)

Note 2. Inventories (Policies)	6 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory	Inventories are valued using the lower of first-in, first-out (“FIFO”) cost or market value.

Note 4. Commitments and Conti20

Note 4. Commitments and Contingent Liabilities (Policies)	6 Months Ended
	Dec. 31, 2017
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 5. Fair Value (Policies)

Note 5. Fair Value (Policies)	6 Months Ended
	Dec. 31, 2017
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 the six months ended December 31, 2017 . There were also no changes in the inputs or valuation techniques used to measure fair values during the six months ended December 31, 2017 . For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 .
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 Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include notes receivable and borrowings under credit facilities. There were no changes to the inputs and valuation techniques used to assess the fair value of these financial instruments during the six months ended December 31, 2017 . For more information on inputs and fair valuation techniques used, refer to our Annual Report on Form 10-K for the year ended June 30, 2017 . The carrying value of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximates fair value due to the relatively short maturity and immaterial non-performance risk.

Note 6. Derivative Instruments

Note 6. Derivative Instruments (Policies)	6 Months Ended
	Dec. 31, 2017
Derivative Instruments [Abstract]
Derivatives	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.
Derivatives, Hedge Discontinuances	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 Non-operating income (expense), net on the Condensed 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 Non-operating income (expense), net on the Condensed Consolidated Statements of Income immediately.

Note 7. Investments (Policies)

Note 7. Investments (Policies)	6 Months Ended
	Dec. 31, 2017
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. The Company recognizes 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 24

Note 1. Business Description and Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies [Abstract]
Components of Non-operating income (expense), net	Components of Non-operating income (expense), net: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands) 2017 2016 2017 2016 Foreign currency/derivative gain (loss) $ 333 $ (1,185 ) $ 1,394 $ (1,470 ) Gain (loss) on supplemental employee retirement plan investments 282 (1 ) 585 259 Bargain purchase gain on acquisition — — — 925 Other (127 ) 218 (148 ) 97 Non-operating income (expense), net $ 488 $ (968 ) $ 1,831 $ (189 )

Note 2. Inventories (Tables)

Note 2. Inventories (Tables)	6 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventory components were as follows: (Amounts in Thousands) December 31, 2017 June 30, Finished products $ 27,526 $ 18,916 Work-in-process 14,980 15,480 Raw materials 137,356 110,210 Total inventory $ 179,862 $ 144,606

Note 3. Accumulated Other Com26

Note 3. Accumulated Other Comprehensive Income (Loss) (Tables)	6 Months Ended
	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss)	During the six months ended December 31, 2017 and 2016 , the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: Accumulated Other Comprehensive Income (Loss) (Amounts in Thousands) Foreign Currency Translation Adjustments Derivative Gain (Loss) Post Employment Benefits Net Actuarial Gain Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2017 $ (6,876 ) $ (2,788 ) $ 580 $ (9,084 ) Other comprehensive income (loss) before reclassifications 4,862 (1,445 ) 167 3,584 Reclassification to (earnings) loss — 505 (103 ) 402 Net current-period other comprehensive income (loss) 4,862 (940 ) 64 3,986 Balance at December 31, 2017 $ (2,014 ) $ (3,728 ) $ 644 $ (5,098 ) Balance at June 30, 2016 $ (9,653 ) $ (3,137 ) $ 600 $ (12,190 ) Other comprehensive income (loss) before reclassifications (4,518 ) 62 195 (4,261 ) Reclassification to (earnings) loss — 575 (109 ) 466 Net current-period other comprehensive income (loss) (4,518 ) 637 86 (3,795 ) Balance at December 31, 2016 $ (14,171 ) $ (2,500 ) $ 686 $ (15,985 )
Reclassification out of Accumulated Other Comprehensive Income (Loss)	The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income (Loss) Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statements of Income December 31 December 31 (Amounts in Thousands) 2017 2016 2017 2016 Derivative gain (loss) (1) $ (494 ) $ (611 ) $ (504 ) $ (890 ) Cost of Sales — (6 ) — (6 ) Non-operating income (expense), net 73 216 (1 ) 321 Benefit (Provision) for Income Taxes $ (421 ) $ (401 ) $ (505 ) $ (575 ) Net of Tax Postemployment Benefits: Amortization of actuarial gain (2) $ 47 $ 45 $ 92 $ 101 Cost of Sales 38 33 73 73 Selling and Administrative Expenses (32 ) (29 ) (62 ) (65 ) Provision for Income Taxes $ 53 $ 49 $ 103 $ 109 Net of Tax Total reclassifications for the period $ (368 ) $ (352 ) $ (402 ) $ (466 ) Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 6 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments. (2) See Note 8 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

Note 4. Commitments and Conti27

Note 4. Commitments and Contingent Liabilities (Tables)	6 Months Ended
	Dec. 31, 2017
Commitments and Contingent Liabilities [Abstract]
Schedule of Product Warranty Liability	Changes in the product warranty accrual for the six months ended December 31, 2017 and 2016 were as follows: Six Months Ended December 31 (Amounts in Thousands) 2017 2016 Product warranty liability at the beginning of the period $ 593 $ 605 Additions to warranty accrual (including changes in estimates) 186 263 Settlements made (in cash or in kind) (79 ) (256 ) Product warranty liability at the end of the period $ 700 $ 612

Note 5. Fair Value (Tables)

Note 5. Fair Value (Tables)	6 Months Ended
	Dec. 31, 2017
Fair Value [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	As of December 31, 2017 and June 30, 2017 , 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: December 31, 2017 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,092 $ — $ 1,092 Derivatives: foreign exchange contracts — 921 921 Trading securities: mutual funds held in nonqualified SERP 8,487 — 8,487 Total assets at fair value $ 9,579 $ 921 $ 10,500 Liabilities Derivatives: foreign exchange contracts $ — $ 4,053 $ 4,053 Total liabilities at fair value $ — $ 4,053 $ 4,053 June 30, 2017 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,087 $ — $ 1,087 Derivatives: foreign exchange contracts — 1,810 1,810 Trading securities: mutual funds held in nonqualified SERP 7,607 — 7,607 Total assets at fair value $ 8,694 $ 1,810 $ 10,504 Liabilities Derivatives: foreign exchange contracts $ — $ 2,928 $ 2,928 Total liabilities at fair value $ — $ 2,928 $ 2,928

Note 6. Derivative Instrument29

Note 6. Derivative Instruments (Tables)	6 Months Ended
	Dec. 31, 2017
Derivative Instruments [Abstract]
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value	Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location December 31, June 30, Balance Sheet Location December 31, June 30, Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 909 $ 1,810 Accrued expenses $ 2,737 $ 2,009 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets 12 — Accrued expenses 1,316 919 Total derivatives $ 921 $ 1,810 $ 4,053 $ 2,928
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)	The Effect of Derivative Instruments on Other Comprehensive Income (Loss) Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands) 2017 2016 2017 2016 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): Foreign exchange contracts $ (445 ) $ (82 ) $ (2,042 ) $ (266 )
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance	The Effect of Derivative Instruments on Condensed Consolidated Statements of Income Three Months Ended Six Months Ended (Amounts in Thousands) December 31 December 31 Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2017 2016 2017 2016 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): Foreign exchange contracts Cost of Sales $ (494 ) $ (611 ) $ (504 ) $ (890 ) Foreign exchange contracts Non-operating income (expense) — (6 ) — (6 ) Total $ (494 ) $ (617 ) $ (504 ) $ (896 ) 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) $ (263 ) $ 1,885 $ (1,081 ) $ 1,662 Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ (757 ) $ 1,268 $ (1,585 ) $ 766

Note 7. Investments (Tables)

Note 7. Investments (Tables)	6 Months Ended
	Dec. 31, 2017
Investments [Abstract]
Trading Securities (and Certain Trading Assets)	SERP asset and liability balances applicable to Kimball Electronics participants were as follows: (Amounts in Thousands) December 31, June 30, SERP investments - current asset $ 286 $ 258 SERP investments - other long-term asset 8,201 7,349 Total SERP investments $ 8,487 $ 7,607 SERP obligation - current liability $ 286 $ 258 SERP obligation - other long-term liability 8,201 7,349 Total SERP obligation $ 8,487 $ 7,607

Note 9. Stock Compensation Pl31

Note 9. Stock Compensation Plans (Tables)	6 Months Ended
	Dec. 31, 2017
Stock Compensation Plans [Abstract]
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award	During the first six months of fiscal year 2018 , the following stock compensation was awarded under the Plan and the Deferral Plan. Stock Compensation Awarded Quarter Awarded Shares/Units Grant Date Fair Value (2) Long-Term Performance Shares (1) 1st Quarter 205,821 $18.30 Unrestricted shares (Director compensation) (3) 2nd Quarter 7,694 $20.15 Deferred share units (Director compensation) (4) 2nd Quarter 12,159 $20.15 (1) Long-term performance shares were awarded to officers and other key employees. Payouts will be based upon a combination of a bonus percentage attainment component calculated under the Company’s profit sharing incentive bonus plan, 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. The long-term performance shares awarded are based on three successive annual performance measurement periods, with each annual tranche having a grant date when economic profit tiers are established and approved by the Compensation and Governance Committee of the Board near the beginning of the applicable fiscal year and a vesting date shortly after the end of each annual period. The number of shares issued will be less than the maximum shares issuable if one or both of the above-mentioned incentive metric maximum thresholds are not obtained. (2) The grant date fair value is based on the stock price at the date of the award and for long-term performance shares is applicable to the first tranche only. (3) Unrestricted shares which were awarded to non-employee members of the Company’s Board of Directors as compensation for the portion of director’s annual retainer fees as a result of the directors’ election to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions. (4) Deferred share units were awarded to non-employee members of the Company’s Board of Directors as compensation for the portion of director’s annual retainer fees as a result of directors’ elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock upon a Director’s retirement or termination from the Board or death.

Note 11. Earnings Per Share (Ta

Note 11. Earnings Per Share (Tables)	6 Months Ended
	Dec. 31, 2017
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	Basic and diluted earnings per share were calculated as follows under the two-class method: Three Months Ended Six Months Ended December 31 December 31 (Amounts in thousands, except per share data) 2017 2016 2017 2016 Basic and Diluted Earnings Per Share: Net Income (Loss) $ (8,347 ) $ 7,812 $ 133 $ 17,934 Less: Net Income allocated to participating securities — 3 — 4 Net Income (Loss) allocated to common Share Owners $ (8,347 ) $ 7,809 $ 133 $ 17,930 Basic weighted average common shares outstanding 26,765 27,350 26,812 27,714 Dilutive effect of average outstanding performance shares — 102 191 58 Dilutive effect of average outstanding deferred stock units — 3 4 3 Dilutive weighted average shares outstanding 26,765 27,455 27,007 27,775 Earnings (Loss) Per Share of Common Stock: Basic $ (0.31 ) $ 0.29 $ — $ 0.65 Diluted $ (0.31 ) $ 0.28 $ — $ 0.65

Note 1. Business Description 33

Note 1. Business Description and Summary of Significant Accounting Policies - Components of Non-operating income (expense), net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Foreign Currency/Derivative Gain (Loss)	$ 333	$ (1,185)	$ 1,394	$ (1,470)
Gain (loss) on supplemental employee retirement plan investments	282	(1)	585	259
Business Combination, Bargain Purchase, Gain Recognized, Amount	0	0	0	925
Other non-operating income (expense)	(127)	218	(148)	97
Non-operating income (expense), net	$ 488	$ (968)	$ 1,831	$ (189)

Note 1. Business Description 34

Note 1. Business Description and Summary of Significant Accounting Policies - Textuals (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2017
Share Based Compensation Excess Tax Benefit			$ 600,000
Other General Income	$ 0	$ 0	$ 0	$ (4,005,000)
Accounts Receivable, Extended Payment Terms			45 days
Accounts Receivable Sold Without Recourse			$ 81,200,000	72,200,000
Due From Bankers Acceptance Drafts	$ 4,300,000		4,300,000		$ 5,300,000
SettlementofBankersAcceptanceDrafts			$ 1,900,000	$ 4,200,000
Share Based Compensation Excess Tax Benefit Effect on Diluted Earnings Per Share			$ 0.02
Total Annual Gross Revenue on Last Day of Fiscal Year Based on Which Entity Will Cease Status of Emerging Growth Company			$ 1,070,000,000
Non-Convertible Debt Securities Issued in Specified Period upon Which Company Will Cease Status of Emerging Growth Company			1,000,000,000
Market Value of Common Stock Held by Non-Affiliates upon Which Company Will Cease Status of Emerging Growth Company			$ 700,000,000
Minimum
Accounts Receivable, Customary Payment Terms			30 days
Maximum
Accounts Receivable, Customary Payment Terms			45 days

Note 1. Business Description 35

Note 1. Business Description and Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($)	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2017	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2018	Jun. 30, 2017
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			35.00%
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Net Deferred Tax Assets, Provisional Income Tax Expense (Benefit)	$ 3,800,000
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense (Benefit)	12,800,000
Long-term income taxes payable	11,786,000		$ 11,786,000		$ 0
Tax Cuts and Jobs Act of 2017, Transition Tax Rate for Accumulated Foreign Earnings Held in Foreign Cash and Other Liquid Assets, Percent			15.50%
Tax Cuts and Jobs Act of 2017, Transition Tax Rate for Accumulated Foreign Earnings Residual Amount, Percent			8.00%
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Related to GILTI, Provisional Income Tax Expense (Benefit)	0
former parent
Nontrade Receivables	600,000		$ 600,000		600,000
Nontrade Receivables, Noncurrent	$ 500,000		$ 500,000		$ 500,000
Scenario, Forecast
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%
Effective Income Tax Rate Reconciliation, at Blended Statutory Income Tax Rate, Percent				28.10%

Note 2. Inventories - Inventory

Note 2. Inventories - Inventory Components (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Inventory, Finished Goods, Net of Reserves	$ 27,526	$ 18,916
Inventory, Work in Process, Net of Reserves	14,980	15,480
Inventory, Raw Materials, Net of Reserves	137,356	110,210
Total inventory	$ 179,862	$ 144,606

Note 3. Accumulated Other Com37

Note 3. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance			$ 342,272
Other comprehensive income (loss) before reclassifications			3,584	$ (4,261)
Reclassification to (earnings) loss	$ 368	$ 352	402	466
Net current-period other comprehensive income (loss)			3,986	(3,795)
Accumulated other comprehensive income (loss), ending balance	341,076		341,076
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance			(9,084)	(12,190)
Accumulated other comprehensive income (loss), ending balance	(5,098)	(15,985)	(5,098)	(15,985)
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance			(6,876)	(9,653)
Other comprehensive income (loss) before reclassifications			4,862	(4,518)
Reclassification to (earnings) loss			0	0
Net current-period other comprehensive income (loss)			4,862	(4,518)
Accumulated other comprehensive income (loss), ending balance	(2,014)	(14,171)	(2,014)	(14,171)
Derivative Gain (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance			(2,788)	(3,137)
Other comprehensive income (loss) before reclassifications			(1,445)	62
Reclassification to (earnings) loss			505	575
Net current-period other comprehensive income (loss)			(940)	637
Accumulated other comprehensive income (loss), ending balance	(3,728)	(2,500)	(3,728)	(2,500)
Postemployment Benefits, Net Actuarial Gain
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive income (loss), beginning balance			580	600
Other comprehensive income (loss) before reclassifications			167	195
Reclassification to (earnings) loss			(103)	(109)
Net current-period other comprehensive income (loss)			64	86
Accumulated other comprehensive income (loss), ending balance	$ 644	$ 686	$ 644	$ 686

Note 3. Accumulated Other Com38

Note 3. Accumulated Other Comprehensive Income (Loss) - Reclassifications from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Cost of Sales		$ 237,189	$ 209,712	$ 470,903	$ 417,841
Non-operating income (expense), net		488	(968)	1,831	(189)
Selling and Administrative Expenses		10,769	8,312	20,669	17,817
Provision for Income Taxes		(18,933)	(3,415)	(21,288)	(6,878)
Net income (loss)		(8,347)	7,812	133	17,934
Total reclassifications for the period		(368)	(352)	(402)	(466)
Derivative gain (loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Total reclassifications for the period				(505)	(575)
Derivative gain (loss) | Reclassification out of Accumulated Other Comprehensive Income | Foreign Exchange Contract
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Cost of Sales	[1]	(494)	(611)	(504)	(890)
Non-operating income (expense), net	[1]	0	(6)	0	(6)
Provision for Income Taxes	[1]	73	216	(1)	321
Net income (loss)	[1]	(421)	(401)	(505)	(575)
Postemployment Benefits, Amortization of actuarial gain (loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Total reclassifications for the period				103	109
Postemployment Benefits, Amortization of actuarial gain (loss) | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Cost of Sales	[2]	47	45	92	101
Selling and Administrative Expenses	[2]	38	33	73	73
Provision for Income Taxes	[2]	(32)	(29)	(62)	(65)
Net income (loss)	[2]	$ 53	$ 49	$ 103	$ 109
[1]	See Note 6 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.
[2]	See Note 8 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

Note 4. Commitments and Conti39

Note 4. Commitments and Contingent Liabilities - Commitments and Contingent Liabilities Textuals (Details)	Dec. 31, 2017USD ($)
Guarantor Obligations
Bankers acceptance drafts transferred and outstanding	$ 1,400,000
Financial Standby Letter of Credit
Guarantor Obligations
Letters of Credit, Amount	400,000
Loss Contingency Accrual, at Carrying Value	$ 0

Note 4. Commitments and Conti40

Note 4. Commitments and Contingent Liabilities - Product Warranty (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Product warranty liability at the beginning of the period	$ 593	$ 605
Additions to warranty accrual (including changes in estimates)	186	263
Settlements made (in cash or in kind)	(79)	(256)
Product warranty liability at the end of the period	$ 700	$ 612

Note 5. Fair Value - Recurring

Note 5. Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Recurring Fair Value Measurements:
Derivative Asset	$ 921	$ 1,810
Trading Securities	8,487	7,607
Derivative Liability	4,053	2,928
Fair Value, Measurements, Recurring
Recurring Fair Value Measurements:
Cash Equivalents, at Carrying Value	1,092	1,087
Trading Securities	8,487	7,607
Total assets at fair value	10,500	10,504
Total liabilities at fair value	4,053	2,928
Fair Value, Measurements, Recurring | Foreign Exchange Contract
Recurring Fair Value Measurements:
Derivative Asset	921	1,810
Derivative Liability	4,053	2,928
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Recurring Fair Value Measurements:
Cash Equivalents, at Carrying Value	1,092	1,087
Trading Securities	8,487	7,607
Total assets at fair value	9,579	8,694
Total liabilities at fair value	0	0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Foreign Exchange Contract
Recurring Fair Value Measurements:
Derivative Asset	0	0
Derivative Liability	0	0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Recurring Fair Value Measurements:
Cash Equivalents, at Carrying Value	0	0
Trading Securities	0	0
Total assets at fair value	921	1,810
Total liabilities at fair value	4,053	2,928
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract
Recurring Fair Value Measurements:
Derivative Asset	921	1,810
Derivative Liability	$ 4,053	$ 2,928

Note 5. Fair Value - Textuals (

Note 5. Fair Value - Textuals (Details)	6 Months Ended
	Dec. 31, 2017USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value, Transfers Between Levels, Amount	$ 0
Fair Value, Purchases and Sales of Level 3 Assets	0
Fair Value, Purchases and Sales of Level 3 Liabilities	$ 0

Note 6. Derivative Instrument43

Note 6. Derivative Instruments - Textuals (Details) - Foreign Exchange Contract € in Millions, $ in Millions	6 Months Ended
	Dec. 31, 2017USD ($)	Dec. 31, 2016	Dec. 31, 2017EUR (€)	Dec. 31, 2017USD ($)
Derivatives, Fair Value
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months	$ (1.7)
Derivative, Notional Amount			€ 78	$ 29.7
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer	12 months	12 months

Note 6. Derivative Instrument44

Note 6. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Derivatives, Fair Value
Derivative Asset	$ 921	$ 1,810
Derivative Liability	4,053	2,928
Foreign Exchange Contract | Fair Value, Measurements, Recurring
Derivatives, Fair Value
Derivative Asset	921	1,810
Derivative Liability	4,053	2,928
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets
Derivatives, Fair Value
Derivative Asset	909	1,810
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities
Derivatives, Fair Value
Derivative Liability	2,737	2,009
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets
Derivatives, Fair Value
Derivative Asset	12	0
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities
Derivatives, Fair Value
Derivative Liability	$ 1,316	$ 919

Note 6. Derivative Instrument45

Note 6. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Derivative Instruments, Gain (Loss)
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion	$ (445)	$ (82)	$ (2,042)	$ (266)
Foreign Exchange Contract
Derivative Instruments, Gain (Loss)
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion	$ (445)	$ (82)	$ (2,042)	$ (266)

Note 6. Derivative Instrument46

Note 6. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Derivative Instruments, Gain (Loss)
Total Derivative Pre-Tax Gain (Loss) Recognized in Income	$ (757)	$ 1,268	$ (1,585)	$ 766
Foreign Exchange Contract | Nonoperating Income (Expense)
Derivative Instruments, Gain (Loss)
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income	(263)	1,885	(1,081)	1,662
Cash Flow Hedging
Derivative Instruments, Gain (Loss)
Derivatives, Pre-Tax Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion	(494)	(617)	(504)	(896)
Cash Flow Hedging | Foreign Exchange Contract | Cost of Sales
Derivative Instruments, Gain (Loss)
Derivatives, Pre-Tax Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion	(494)	(611)	(504)	(890)
Cash Flow Hedging | Foreign Exchange Contract | Nonoperating Income (Expense)
Derivative Instruments, Gain (Loss)
Derivatives, Pre-Tax Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion	$ 0	$ (6)	$ 0	$ (6)

Note 7. Investments - Supplemen

Note 7. Investments - Supplemental Employee Retirement Investments Textuals (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Schedule of Trading Securities and Other Trading Assets
Trading Securities, Change in net unrealized holding gains (losses)	$ 480	$ (186)

Note 7. Investments - Supplem48

Note 7. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Schedule of Trading Securities and Other Trading Assets
SERP investments	$ 8,487	$ 7,607
SERP obligation	8,487	7,607
Prepaid Expenses and Other Current Assets
Schedule of Trading Securities and Other Trading Assets
SERP investments	286	258
Other Noncurrent Assets
Schedule of Trading Securities and Other Trading Assets
SERP investments	8,201	7,349
Other Current Liabilities
Schedule of Trading Securities and Other Trading Assets
SERP obligation	286	258
Other Noncurrent Liabilities
Schedule of Trading Securities and Other Trading Assets
SERP obligation	$ 8,201	$ 7,349

Note 8. Postemployment Benefi49

Note 8. Postemployment Benefits (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Components of Net Periodic Benefit Cost (before tax):
Assets for Plan Benefits, Defined Benefit Plan	$ 0	$ 0

Note 9. Stock Compensation Pl50

Note 9. Stock Compensation Plans - Textuals (Details) - $ / shares		3 Months Ended	6 Months Ended
		Dec. 31, 2017	Dec. 31, 2017	Oct. 20, 2016	Oct. 03, 2014
Stock Option and Incentive Plan 2014
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					4,500,000
Non-Employee Directors Stock Compensation Deferral Plan
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				1,000,000
Unrestricted Shares Director Compensation | Stock Option and Incentive Plan 2014
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	[1]	7,694
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1],[2]	$ 20.15
Deferred Share Units Director Compensation | Non-Employee Directors Stock Compensation Deferral Plan
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	[3]	12,159
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[2],[3]	$ 20.15
Performance Shares | Stock Option and Incentive Plan 2014
Share-based Compensation Arrangement by Share-based Payment Award
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	[4]		205,821
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[2],[4]		$ 18.30
[1]	Unrestricted shares which were awarded to non-employee members of the Company’s Board of Directors as compensation for the portion of director’s annual retainer fees as a result of the directors’ election to be paid in unrestricted shares in lieu of cash payment or deferred share units. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sales, or other restrictions.
[2]	The grant date fair value is based on the stock price at the date of the award and for long-term performance shares is applicable to the first tranche only.
[3]	Deferred share units were awarded to non-employee members of the Company’s Board of Directors as compensation for the portion of director’s annual retainer fees as a result of directors’ elections to receive deferred share units in lieu of cash payment or unrestricted shares. Director’s fees are expensed over the period that directors earn the compensation. Deferred share units are participating securities and are payable in common stock upon a Director’s retirement or termination from the Board or death.
[4]	Long-term performance shares were awarded to officers and other key employees. Payouts will be based upon a combination of a bonus percentage attainment component calculated under the Company’s profit sharing incentive bonus plan, 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. The long-term performance shares awarded are based on three successive annual performance measurement periods, with each annual tranche having a grant date when economic profit tiers are established and approved by the Compensation and Governance Committee of the Board near the beginning of the applicable fiscal year and a vesting date shortly after the end of each annual period. The number of shares issued will be less than the maximum shares issuable if one or both of the above-mentioned incentive metric maximum thresholds are not obtained.

Note 10. Share Owners' Equity51

Note 10. Share Owners' Equity (Details) - USD ($)	6 Months Ended	26 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Aug. 23, 2017	Sep. 29, 2016	Oct. 21, 2015
Stock Repurchase Program, Authorized Amount	$ 60,000,000	$ 60,000,000
Treasury Stock Acquired, Average Cost Per Share	$ 19.45	$ 13.65
Treasury Stock
Treasury Stock, Value, Acquired, Cost Method	$ 6,300,000	$ 41,400,000
Share Repurchase Program October 2015
Stock Repurchase Program, Authorized Amount					$ 20,000,000
Share Repurchase Program September 2016 Extension
Stock Repurchase Program, Authorized Amount				$ 20,000,000
Share Repurchase Program August 2017 Extension
Stock Repurchase Program, Authorized Amount			$ 20,000,000

Note 11. Earnings Per Share (De

Note 11. Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Net income (loss)	$ (8,347)	$ 7,812	$ 133	$ 17,934
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic	0	3	0	4
Net Income (Loss) Available to Common Stockholders, Basic	$ (8,347)	$ 7,809	$ 133	$ 17,930
Weighted Average Number of Shares Outstanding, Basic	26,765	27,350	26,812	27,714
Dilutive effect of average outstanding performance shares	0	102	191	58
Incremental Common Shares Attributable to Participating Nonvested Shares with Non-forfeitable Dividend Rights	0	3	4	3
Weighted Average Number of Shares Outstanding, Diluted	26,765	27,455	27,007	27,775
Earnings Per Share, Basic	$ (0.31)	$ 0.29	$ 0	$ 0.65
Earnings Per Share, Diluted	$ (0.31)	$ 0.28	$ 0	$ 0.65

Note 11. Earnings Per Share Tex

Note 11. Earnings Per Share Textuals (Details)	3 Months Ended
	Dec. 31, 2017shares
Performance Shares | Stock Option and Incentive Plan 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	290,000
Deferred Share Units Director Compensation | Non-Employee Directors Stock Compensation Deferral Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	15,000