Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Aug. 13, 2020 | |
Document Information | ||
Entity Registrant Name | Kimball Electronics, Inc. | |
Entity Central Index Key | 0001606757 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-K | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 24,987,321 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 419,800,000 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 64,990 | $ 49,276 |
Receivables, net of allowances of $523 and $270, respectively | 180,133 | 225,555 |
Contract Assets | 70,350 | 51,929 |
Inventories | 219,043 | 203,840 |
Prepaid expenses and other current assets | 23,891 | 24,713 |
Total current assets | 558,407 | 555,313 |
Property and Equipment, net of accumulated depreciation of $236,373 and $216,955, respectively | 154,529 | 143,629 |
Goodwill | 12,011 | 18,104 |
Other Intangible Assets, net of accumulated amortization of $32,756 and $29,874, respectively | 19,343 | 22,188 |
Other Assets | 30,539 | 24,877 |
Total Assets | 774,829 | 764,111 |
Current Liabilities: | ||
Current portion of borrowings under credit facilities | 26,638 | 34,713 |
Accounts payable | 203,703 | 197,001 |
Accrued expenses | 42,264 | 43,196 |
Total current liabilities | 272,605 | 274,910 |
Other Liabilities: | ||
Long-term debt under credit facilities, less current portion | 91,500 | 91,500 |
Long-term income taxes payable | 9,765 | 9,765 |
Other long-term liabilities | 21,594 | 18,082 |
Total other liabilities | 122,859 | 119,347 |
Share Owners’ Equity: | ||
Preferred stock-no par value | 0 | 0 |
Common stock-no par value | 0 | 0 |
Additional paid-in capital | 306,808 | 305,917 |
Retained earnings | 152,178 | 133,982 |
Accumulated other comprehensive loss | (10,551) | (7,628) |
Treasury stock, at cost | (69,070) | (62,417) |
Total Share Owners’ Equity | 379,365 | 369,854 |
Total Liabilities and Share Owners’ Equity | $ 774,829 | $ 764,111 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
ASSETS | ||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 523 | $ 270 |
Property and Equipment Accumulated Depreciation | 236,373 | 216,955 |
Other Intangible Assets Accumulated Amortization | $ 32,756 | $ 29,874 |
Share Owners' Equity | ||
Preferred Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Shares, Issued | 29,430,000 | 29,430,000 |
Treasury Stock, Shares | 4,443,000 | 4,011,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Sales | $ 1,200,550 | $ 1,181,844 | $ 1,072,061 |
Cost of Sales | 1,116,709 | 1,093,438 | 986,031 |
Gross Profit | 83,841 | 88,406 | 86,030 |
Selling and Administrative Expenses | 43,920 | 46,653 | 43,992 |
Other General Income | 0 | (307) | 0 |
Goodwill Impairment | 7,925 | 0 | 0 |
Operating Income | 31,996 | 42,060 | 42,038 |
Other Income (Expense): | |||
Interest income | 60 | 62 | 73 |
Interest expense | (4,421) | (4,069) | (527) |
Non-operating income | 2,103 | 1,483 | 3,647 |
Non-operating expense | (4,581) | (1,051) | (456) |
Other income (expense), net | (6,839) | (3,575) | 2,737 |
Income Before Taxes on Income | 25,157 | 38,485 | 44,775 |
Provision for Income Taxes | 6,961 | 6,927 | 28,023 |
Net Income | $ 18,196 | $ 31,558 | $ 16,752 |
Earnings Per Share of Common Stock: | |||
Earnings Per Share, Basic | $ 0.72 | $ 1.22 | $ 0.63 |
Earnings Per Share, Diluted | $ 0.71 | $ 1.21 | $ 0.62 |
Average Number of Shares Outstanding: | |||
Average Number of Shares Outstanding, Basic | 25,243 | 25,857 | 26,745 |
Average Number of Shares Outstanding, Diluted | 25,428 | 26,082 | 27,007 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Income | $ 18,196 | $ 31,558 | $ 16,752 |
Other Comprehensive Income (Loss): | |||
Foreign currency translation adjustments, Pre-tax | (1,046) | (2,491) | 2,519 |
Foreign currency translation adjustments, Tax | 0 | 0 | 0 |
Foreign currency translation adjustments, Net of Tax | (1,046) | (2,491) | 2,519 |
Postemployment severance actuarial change, Pre-tax | 122 | 447 | 533 |
Postemployment severance actuarial change, Tax | (35) | (108) | (188) |
Postemployment severance actuarial change, Net of Tax | 87 | 339 | 345 |
Derivative gain (loss), Pre-tax | (2,079) | 3,337 | (2,669) |
Derivative gain (loss), Tax | 509 | (699) | 704 |
Derivative gain (loss), Net of Tax | (1,570) | 2,638 | (1,965) |
Reclassification to (earnings) loss: | |||
Derivatives, Reclassification to (earnings) loss, Pre-tax | (64) | (1,066) | 1,668 |
Derivatives, Reclassification to (earnings) loss, Tax | (22) | 209 | (213) |
Derivatives, Reclassification to (earnings) loss, Net of Tax | (86) | (857) | 1,455 |
Amortization of actuarial change, Pre-tax | (406) | (472) | (358) |
Amortization of actuarial change, Tax | 98 | 114 | 140 |
Amortization of actuarial change, Net of Tax | (308) | (358) | (218) |
Other comprehensive income (loss), Pre-tax | (3,473) | (245) | 1,693 |
Other comprehensive income (loss), Tax | 550 | (484) | 443 |
Other comprehensive income (loss), Net of Tax | (2,923) | (729) | 2,136 |
Total Comprehensive Income | $ 15,273 | $ 30,829 | $ 18,888 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows From Operating Activities: | |||
Net Income | $ 18,196 | $ 31,558 | $ 16,752 |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | |||
Depreciation and amortization | 30,872 | 28,873 | 26,376 |
(Gain) loss on sales of assets | 69 | (4) | (7) |
Deferred income tax and other deferred charges | (1,070) | (1,541) | 1,213 |
Deferred tax valuation allowance | 979 | 20 | (638) |
Goodwill Impairment | 7,925 | 0 | 0 |
Stock-based compensation | 4,039 | 5,678 | 5,299 |
Net working capital adjustment on acquisition | 3,785 | 0 | 0 |
Other, net | 159 | 431 | 487 |
Change in operating assets and liabilities: | |||
Receivables | 41,928 | (36,535) | (2,876) |
Contract assets | (18,421) | (8,688) | 0 |
Inventories | (15,053) | (35,094) | (55,769) |
Prepaid expenses and other assets | (1,519) | (6,284) | 5,092 |
Accounts payable | 3,622 | 8,001 | 33,272 |
Accrued expenses and taxes payable | (2,703) | 6,837 | 10,999 |
Net cash provided by (used for) operating activities | 72,808 | (6,748) | 40,200 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (38,364) | (24,665) | (25,876) |
Proceeds from sales of assets | 158 | 1,036 | 261 |
Payments for acquisitions, net of cash acquired | 0 | (43,889) | 0 |
Purchases of capitalized software | (385) | (1,178) | (643) |
Other, net | 109 | (13) | 44 |
Net cash used for investing activities | (38,482) | (68,709) | (26,214) |
Cash Flows From Financing Activities: | |||
Proceeds from credit facilities | 0 | 91,500 | 0 |
Payments on credit facilities | 0 | (12,843) | 0 |
Additional net change in revolving credit facilities | (8,083) | 26,415 | (1,542) |
Repurchases of common stock | (8,794) | (23,431) | (9,553) |
Payments related to tax withholding for stock-based compensation | (1,012) | (1,766) | (1,508) |
Debt issuance costs | (45) | (445) | 0 |
Net cash (used for) provided by financing activities | (17,934) | 79,430 | (12,603) |
Effect of Exchange Rate Change on Cash and Cash Equivalents | (678) | (1,125) | 490 |
Net Increase in Cash and Cash Equivalents | 15,714 | 2,848 | 1,873 |
Cash and Cash Equivalents at Beginning of Year | 49,276 | 46,428 | 44,555 |
Cash and Cash Equivalents at End of Year | $ 64,990 | $ 49,276 | $ 46,428 |
Consolidated Statements of Shar
Consolidated Statements of Share Owners' Equity - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Share Owner's Equity at Jun. 30, 2017 | $ 342,272 | $ 302,483 | $ 82,671 | $ (9,084) | $ (33,798) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 16,752 | 16,752 | |||
Other comprehensive income (loss), Net of Tax | 2,136 | 2,136 | |||
Tax Reform impact | 0 | (49) | 49 | ||
Issuance of non-restricted stock | 155 | 65 | 90 | ||
Compensation expense related to stock compensation plan | 5,138 | 5,138 | |||
Performance Share Issuance | (1,508) | (3,471) | 1,963 | ||
Treasury Stock, Value, Acquired, Cost Method | (9,418) | (9,418) | |||
Share Owner's Equity at Jun. 30, 2018 | 355,527 | 304,215 | 99,374 | (6,899) | (41,163) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 31,558 | 31,558 | |||
Other comprehensive income (loss), Net of Tax | (729) | (729) | |||
Cumulative effect of accounting change | 3,050 | 3,050 | |||
Issuance of non-restricted stock | 72 | 28 | 44 | ||
Compensation expense related to stock compensation plan | 5,569 | 5,569 | |||
Performance Share Issuance | (1,762) | (3,895) | 2,133 | ||
Treasury Stock, Value, Acquired, Cost Method | (23,431) | (23,431) | |||
Share Owner's Equity at Jun. 30, 2019 | 369,854 | 305,917 | 133,982 | (7,628) | (62,417) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 18,196 | 18,196 | |||
Other comprehensive income (loss), Net of Tax | (2,923) | (2,923) | |||
Issuance of non-restricted stock | 70 | 22 | 48 | ||
Compensation expense related to stock compensation plan | 3,948 | 3,948 | |||
Performance Share Issuance | (986) | (3,047) | 2,061 | ||
Deferred Share Issuance | 0 | (32) | 32 | ||
Treasury Stock, Value, Acquired, Cost Method | (8,794) | (8,794) | |||
Share Owner's Equity at Jun. 30, 2020 | $ 379,365 | $ 306,808 | $ 152,178 | $ (10,551) | $ (69,070) |
Consolidated Statements of Sh_2
Consolidated Statements of Share Owners' Equity Parentheticals - shares | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Deferred Share Issuance, Shares | 3,000 | 0 | 0 |
Stock Issued During Period, Shares, Issued for Services | 4,000 | 4,000 | 8,000 |
Performance Share Issuance, Shares | 184,000 | 203,000 | 174,000 |
Treasury Stock, Shares, Acquired | 623,000 | 1,320,000 | 488,000 |
Note 1. Business Description an
Note 1. Business Description and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2020 | |
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, multifaceted manufacturing solutions provider. We provide contract electronics manufacturing services (“EMS”) and diversified manufacturing services, including engineering and supply chain support, to customers in 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 further offer diversified contract manufacturing services for non-electronic components, medical disposables, precision molded plastics, and production automation, test, and inspection equipment. We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service. The Company acquired GES Holdings, Inc., Global Equipment Services and Manufacturing, Inc., and its subsidiaries (collectively referred to as “GES”) on October 1, 2018, which specialize in design, production, and servicing of automation, test, and inspection equipment for industrial applications in the semiconductor, electronics, and life sciences industries. Principles of Consolidation: The Consolidated Financial Statements include the accounts of all domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. The operating results of the GES acquisition are included in the Consolidated Financial Statements beginning as of the acquisition date of October 1, 2018. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts included in the Consolidated Financial Statements and related note disclosures. While efforts are made to assure estimates used are reasonably accurate based on management’s knowledge of current events, actual results could differ from those estimates. We have made estimates and assumptions considering the impacts of the global emergence of COVID-19 on our business. These estimates may change as new events occur and more information is obtained. Segment Information: Kimball Electronics has business units located in the United States, China, Mexico, Poland, Romania, and Thailand, and each of these business units qualify as operating segments. In addition, GES has operations located in the United States, China, India, Japan, and Vietnam. The GES operations qualify as a single operating segment with its group results regularly reviewed by our chief operating decision maker, which is our Chief Executive Officer. Our operating segments meet the aggregation criteria under the current accounting guidance for segment reporting. As of June 30, 2020 , all of our operating segments provide contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including medical disposables, precision molded plastics, and automation, test, and inspection equipment primarily in automotive, medical, industrial, and public safety applications, to the specifications and designs of our customers. The nature of the products, the production process, the type of customers, and the methods used to distribute the products have similar characteristics. Each of our operating segments service customers in multiple markets, and many of our customers’ programs are manufactured and serviced by multiple operating segments. We leverage global processes such as component procurement and customer pricing that provide commonality and consistency among the various regions in which we operate. All of our operating segments have similar long-term economic characteristics, and as such, have been aggregated into one reportable segment. Revenue Recognition: We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments (“New Revenue Guidance”). Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical disposables, precision molded plastics, and automation, test, and inspection equipment built to customer’s specifications. Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle. Typically, our customer agreements do not commit the customer to purchase our services until a purchase order is provided, which is generally short term in nature. Customer purchase orders primarily have a single performance obligation. Generally, the prices stated in the customer purchase orders are agreed upon prices for the manufactured product and do not vary over the term of the order, and therefore, the majority of our contracts do not contain variable consideration. In limited circumstances, we may enter into a contract where we offer our customer a rebate for specific volume thresholds or other incentives; in these cases, the rebates or incentives are accounted for as variable consideration. The majority of our revenue is recognized over time as manufacturing services are performed as we manufacture a product to customer specifications with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining revenue for manufacturing services is recognized when the customer obtains control of the product, typically either upon shipment or delivery of the product dependent on the terms of the contract, and the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset. We generally recognize revenue over time using costs based input methods, in which judgment is required to evaluate assumptions including the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize. Estimated costs include material, direct and indirect labor, and appropriate applied overheads. Costs based input methods are considered a faithful depiction of our efforts and progress toward satisfying our performance obligations for manufacturing services and for which we believe we are entitled to payment for performance completed to date. The cumulative effect of revisions to estimates related to net contract revenues or costs are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. We have elected to account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated services and products. Accordingly, we record customer payments of shipping and handling costs as a component of net sales and classify such costs as a component of cost of sales. We recognize sales net of applicable sales or value add taxes. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time revenue is recognized, resulting in a reduction of net revenue. Direct incremental costs to obtain and fulfill a contract are capitalized as a contract asset only if they are material, expected to be recovered, and are not accounted for in accordance with other guidance. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred. On July 1, 2018, we adopted the New Revenue Guidance for all contracts using the modified retrospective transition method. Prior to fiscal year 2019, we recognized revenue when persuasive evidence of an arrangement existed, delivery occurred, the sales price was fixed or determinable, and collectability was reasonably assured. Delivery was not considered to have occurred until the title and the risk of loss passed to the customer according to the terms of the contract. Title and risk of loss were considered transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist of bank accounts and money market funds. Bank accounts are stated at cost, which approximates fair value, and money market funds are stated at fair value. Notes Receivable and Trade Accounts Receivable: The Company’s notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Management believes that historical loss information generally provides a basis for its assessment of expected credit losses. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. In the ordinary course of business, customers periodically negotiate extended payment terms on trade accounts receivable. Customary terms require payment within 30 to 45 days , with any terms beyond 45 days being considered extended payment terms. We may utilize accounts receivable factoring arrangements with third-party financial institutions in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. During fiscal years 2020 , 2019 , and 2018 , we sold, without recourse, $280.7 million , $261.2 million , and $181.5 million of accounts receivable, respectively. Factoring fees were $1.9 million , $1.7 million , and $1.1 million during fiscal years 2020 , 2019 , and 2018 , respectively, and were included in Selling and Administrative Expense on the Consolidated Statements of Income. One of our China operations, in limited circumstances, may receive banker’s acceptance drafts from customers as payment on account. 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 $7.1 million and $4.2 million at June 30, 2020 and 2019 , respectively, are reflected in Receivables on the Consolidated Balance Sheets until the banker’s drafts are sold at a discount, transferred in settlement of current accounts payable, or cash is received at maturity. Banker’s acceptance drafts sold at a discount or transferred in settlement of current accounts payable during fiscal years 2020 , 2019 , and 2018 were $6.8 million , $2.7 million , and $5.5 million , respectively. See Note 7 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements for more information on banker’s acceptance drafts. Inventories: Inventories are stated at the lower of cost and net realizable value. Cost includes material, labor, and applicable manufacturing overhead. Costs associated with underutilization of capacity are expensed as incurred. Inventories are valued using the first-in, first-out (“FIFO”) method. Inventories are adjusted for excess and obsolete inventory. Evaluation of excess inventory includes such factors as anticipated usage, inventory turnover, inventory levels, and product demand levels. Factors considered when evaluating obsolescence include the age of on-hand inventory and reduction in value due to damage, design changes, or cessation of product lines. Property, Equipment, and Depreciation: Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful life of the assets using the straight-line method for financial reporting purposes. Major maintenance activities and improvements are capitalized; other maintenance and repairs are expensed. Depreciation and expenses for maintenance and repairs are included in both Cost of Sales and Selling and Administrative Expense on the Consolidated Statements of Income. Impairment of Long-Lived Assets: We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. Impairment of long-lived assets was not material during fiscal years 2020 , 2019 , and 2018 . Goodwill: Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, goodwill is assessed or tested at the reporting unit level. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down to its estimated fair value. See section entitled “New Accounting Standards” below for more information on the adoption of accounting guidance for simplifying the test for goodwill impairment. To test for goodwill impairment, we use a combination of the Income Approach and the Market Approach. The discounted cash flow method (Income Approach) uses forecasted information based on management’s strategic plans and projections. Discount rates are developed using a weighted average cost of capital (“WACC”) methodology. The WACC represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors. In the Market Approach, fair value is determined using transactional evidence for similar publicly traded equity. See Note 6 - Goodwill and Other Intangible Assets for more information on the June 30, 2020 GES goodwill impairment test. Other Intangible Assets: Other Intangible Assets reported on the Consolidated Balance Sheets consist of capitalized software, customer relationships, technology, and trade name. Intangible assets are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and could include internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. We have not recognized impairment on intangible assets during fiscal years 2020 , 2019 , or 2018 . Research and Development: The costs of research and development are expensed as incurred. Research and development costs were approximately, in millions, $17 , $15 , and $11 in fiscal years 2020 , 2019 , and 2018 , respectively. Insurance and Self-insurance: We are self-insured up to certain limits for general liability, workers’ compensation, and certain domestic employee health benefits including medical, short-term disability, and dental, with the related liabilities included in the accompanying financial statements. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. Approximately 20% of the workforce is covered under self-insured medical and short-term disability plans. At June 30, 2020 and 2019 , accrued liabilities for self-insurance exposure were $1.6 million and $1.7 million , respectively. The remainder of our workforce not covered by self-insured plans have medical and disability coverage through either our external plans or government plans. Insurance benefits are not provided to retired employees. Income Taxes: Deferred income tax assets and liabilities, recorded in Other Assets and Other long-term liabilities, respectively, in the Consolidated Balance Sheets, are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment. We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Consolidated Statements of Income. Concentrations of Credit Risk: We have business and credit risks associated with our customers concentrated in the automotive, medical, industrial, and public safety industries. The Company monitors credit quality and associated risks of receivables on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. A summary of significant customers’ net sales and trade receivables as a percentage of consolidated net sales and consolidated trade receivables is as follows: Net Sales Trade Receivables Year Ended June 30 As of June 30 2020 2019 2018 2020 2019 Philips 16% 14% 13% * * ZF * 12% 15% * 14% Nexteer Automotive 14% 12% 13% 17% 16% Regal Beloit Corporation * * * * 10% * amount is less than 10% of total Off-Balance Sheet Risk: Off-balance sheet arrangements are limited to banker’s acceptance drafts transferred with recourse provisions at one of the Company’s China operations and standby letters of credit entered into in the normal course of business as described in Note 7 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. Other General Income: Other General Income in fiscal year 2019 consisted of $0.3 million resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. We recorded no Other General Income during fiscal years 2020 and 2018. Non-operating Income and Expense: Non-operating income and expense include the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expense. Non-operating expense in fiscal year 2020 included a $3.8 million final net working capital adjustment recorded after the end of the measurement period of the GES acquisition that was determined through the dispute resolution procedure provided for under the terms of the asset purchase agreement. Foreign Currency Translation: The Company predominantly uses the U.S. dollar and Euro as its functional currencies. Foreign currency assets and liabilities are remeasured into functional currencies at end-of-period exchange rates, except for nonmonetary assets and equity, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the weighted average exchange rate during the fiscal year, except for expenses related to nonmonetary assets, which are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement are reported in Non-operating income or expense on the Consolidated Statements of Income. For business units whose functional currency is other than the U.S. dollar, the translation of functional currency statements to U.S. dollar statements uses end-of-period exchange rates for assets and liabilities, weighted average exchange rates for revenue and expenses, and historical rates for equity. The resulting currency translation adjustment is recorded in Accumulated Other Comprehensive Income (Loss), as a component of Share Owners’ Equity. Derivative Instruments and Hedging Activities: Derivative financial instruments are recognized on the balance sheet as assets and liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated Other Comprehensive Income (Loss), depending on whether a derivative is designated and effective as part of a hedge transaction, and if it is, the type of hedge transaction. Hedge accounting is utilized when a derivative is expected to be highly effective upon execution and continues to be highly effective over the duration of the hedge transaction. Hedge accounting permits gains and losses on derivative instruments to be deferred in Accumulated Other Comprehensive Income (Loss) and subsequently included in earnings in the periods in which earnings are affected by the hedged item, or when the derivative is determined to be ineffective. We use derivatives primarily for forward purchases of foreign currency to manage exposure to the variability of cash flows, primarily related to the foreign exchange rate risks inherent in forecasted transactions denominated in foreign currency. Cash receipts and cash payments related to derivative instruments are recorded in the same category as the cash flows from the items being hedged on the Consolidated Statements of Cash Flows. See section entitled “New Accounting Standards” below for information on the adoption of new derivative guidance and Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. Stock-Based Compensation: As described in Note 10 - Stock Compensation Plans of Notes to Consolidated Financial Statements, the Company maintains the 2014 Stock Option and Incentive Plan, which allows for the issuance of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units for grant to officers and other key employees, and to members of the Board of Directors who are not employees. The Company also maintains the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan (the “Deferral Plan”), which allows Non-Employee Directors to elect to defer all, or a portion of, their retainer fees in stock. We recognize the cost resulting from share-based payment transactions using a fair-value-based method. The estimated fair value of outstanding performance shares is based on the stock price at the date of the grant. Stock-based compensation expense is recognized for the portion of the award for which performance targets have been established and is expected to vest. The Company has elected to account for forfeitures by reversing the compensation costs at the time a forfeiture occurs. New Accounting Standards: Adopted in Fiscal Year 2020: In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on leases with subsequent amendments to this new guidance in January 2018, July 2018, and December 2018. The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases and requires additional qualitative and quantitative disclosures. Under previous guidance, only capital leases were recognized on the balance sheet. We adopted this standard on July 1, 2019, the beginning of our first quarter of fiscal year 2020, under the modified retrospective method. As allowed by the July 2018 amendment, the Company has not recast the comparative periods. We elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusions about lease identification, classification, and initial direct costs. We also elected the short-term lease recognition exemption, permitting us not to recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Lease assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our estimated incremental borrowing rate, unless the implicit rate is readily determinable. The estimated incremental borrowing rate is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The adoption resulted in the recognition of $2.6 million of right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheet, primarily for our real estate operating leases, on the adoption date. The adoption did not have a material effect on our results of operations or cash flows. There was no cumulative-effect adjustment to equity. See Note 20 - Leases of Notes to Consolidated Financial Statements for more information on leases. In August 2017, the FASB issued guidance on Derivatives and Hedging. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The Company adopted this during the first quarter of fiscal year 2020 with an immaterial effect on our Consolidated Financial Statements. In January 2017, the FASB issued guidance for Intangibles - Goodwill and Other, which simplifies the goodwill impairment test by eliminating the requirement to compare the implied fair value of goodwill with its carrying amount as part of step two of the goodwill impairment test. An entity should perform its goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount, recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption allowed and should be applied on a prospective basis. The Company elected to early adopt this guidance beginning in the fourth quarter of fiscal year 2020, and applied to its fourth quarter goodwill impairment tests discussed in Note 6 - Goodwill and Other Intangible Assets . Not Yet Adopted: In June 2016, the FASB issued guidance on the Measurement of Credit Losses on Financial Instruments, which replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We will adopt this standard effective July 1, 2020, and the adoption will not have a material effect on our consolidated financial statements. In August 2018, the FASB issued guidance on Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This new guidance amends the accounting for implementation, setup, and other upfront costs incurred in a cloud computing hosting arrangement. The amendment aligns the requirement for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendment also requires companies to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, including options to extend the agreement that is in control of the customer. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The guidance is to be adopted either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We plan to adopt prospectively effective July 1, 2020, and the adoption of this standard will not have a material effect on our consolidated financial statements. In December 2019, the FASB issued guidance on Simplifying the Accounting for Income Taxes, intended to simplify various aspects related to the accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. |
Note 2. Acquisitions (Notes)
Note 2. Acquisitions (Notes) | 12 Months Ended |
Jun. 30, 2020 | |
Acquisitions [Abstract] | |
Business Combination Disclosure | Acquisitions On October 1, 2018 , the Company completed the acquisition of GES Holdings, Inc., Global Equipment Services and Manufacturing, Inc., and its subsidiaries (collectively referred to as “GES”). The acquisition included purchasing substantially all of the assets and assuming certain liabilities of GES Holdings, Inc., Global Equipment Services and Manufacturing, Inc., GES Infotek Pvt. Ltd., (India), GES Japan KK, Global Equipment Services and Manufacturing (Suzhou) Co., Ltd., (China), Suzhou Global Equipment Services and Trading Co., Ltd. (China), and acquiring 100% of the capital stock of Global Equipment Services & Manufacturing Vietnam Company Limited. This acquisition supported the Company’s strategy for growth and diversification into a multifaceted manufacturing solutions company. GES specializes in design, production, and servicing of automation, test, and inspection equipment for industrial applications in the semiconductor, electronics, and life sciences industries. Incremental costs expensed as incurred directly related to the acquisition has totaled $2.2 million , of which $0.8 million , $0.5 million , and $0.9 million were expensed during the fiscal years ended June 30, 2020 , 2019 , and 2018 , respectively. These costs were recorded in Selling and Administrative Expenses on our Consolidated Statements of Income. The operating results of this acquisition are included in the Company’s consolidated financial statements beginning on the acquisition date of October 1, 2018. The acquisition was primarily funded with the Company’s primary credit facility. The GES acquisition was accounted for as a business combination. The Company recorded a net adjusted purchase price of $42.4 million which included a reduction for a net working capital adjustment of $7.6 million . The net working capital adjustment was disputed by the sellers, and in July 2020, it was determined, through the dispute resolution procedure provided for under the terms of the asset purchase agreement, the final net working capital adjustment to be $3.8 million . As a result, for fiscal year 2020, after the end of the twelve-month measurement period, the Company recorded a $3.8 million pre-tax charge in the Non-operating expense line on the Consolidated Statements of Income. The twelve-month measurement period ended on September 30, 2019. The following table summarizes the final purchase price allocation to assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess allocated to goodwill. Measurement period adjustments during the first quarter of fiscal year 2020 included a reduction of $2.0 million to Property and Equipment as a result of additional information obtained related to the valuation of certain equipment as of the acquisition date and a $0.2 million reduction in Other long-term liabilities to adjust deferred tax liabilities on the equipment. These measurement period adjustments to the purchase price allocation in the first quarter of fiscal year 2020 increased Goodwill by $1.8 million . For tax purposes, $8.9 million of the goodwill in the following table is expected to be deductible. See Note 1 – Business Description and Summary of Significant Accounting Policies and Note 6 - Goodwill and Other Intangible Assets of Notes to Consolidated Financial Statements for information on subsequent testing and measurement of Goodwill. (Amounts in Thousands) October 1, 2018 Cash $ 2,257 Receivables 15,656 Inventories 6,454 Prepaid expenses and other current assets 1,424 Property and Equipment 7,037 Other Intangible Assets 19,259 Other Assets 498 Goodwill 13,745 Total assets acquired $ 66,330 Borrowings under Credit Facilities $ 12,843 Accounts payable 4,113 Accrued expenses 1,340 Other long-term liabilities 5,653 Total liabilities assumed $ 23,949 Net assets acquired $ 42,381 Income tax liabilities, indirect tax liabilities, and liabilities for unrecognized tax benefits, including interest and penalties, of $4.2 million were recorded as of October 1, 2018 related to pre-closing tax periods of Global Equipment Services & Manufacturing Vietnam Company Limited of which $3.9 million was recorded in Other long-term liabilities and $0.3 million was included in Accrued expenses. This reflects management’s best assessment of the estimated taxes, interest, and penalties as of the acquisition date that are more likely than not to be paid, or for indirect taxes the probable amounts due to the tax authorities, including interest and penalties, under the applicable laws in the various jurisdictions. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is significantly different from our current estimate of the tax liabilities. Included in the Receivables line above is a related indemnification asset of $4.2 million for these estimated tax liabilities. The seller has agreed to indemnify the buyer in the purchase agreements for all taxes allocable to all pre-closing tax periods. Other Intangible Assets include the estimated fair values for finite-lived intangible assets acquired and are listed in the table below along with their estimated useful lives which are being amortized on a straight-line basis. (Amounts in Thousands) Estimated Fair Value Estimated useful life (years) Software $ 379 3 to 7 Technology 5,060 5 Trade name 6,369 10 Customer relationships 7,451 15 Total other intangible assets $ 19,259 |
Note 3. Revenue from Contracts
Note 3. Revenue from Contracts with Customers (Notes) | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contracts with Customers [Abstract] | |
Revenue from Contract with Customer | Revenue from Contracts with Customers Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, electronic and non-electronic components, medical disposables, precision molded plastics, and automation, test, and inspection equipment in automotive, medical, industrial, and public safety applications, to the specifications and designs of our customers. The following table disaggregates our revenue by end market vertical for fiscal years 2020 and 2019 : Year Ended (Amounts in Millions) 2020 2019 Vertical Markets: Automotive $ 457.4 $ 474.3 Medical 397.8 367.5 Industrial 271.0 255.9 Public Safety 56.2 66.2 Other 18.2 17.9 Total net sales $ 1,200.6 $ 1,181.8 For fiscal years 2020 and 2019 , approximately 78% and 70% of our net sales, respectively, were recognized over time as manufacturing services were performed under a customer contract on a product with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining sales revenues were primarily recognized at a point in time when the customer obtained control of the manufactured product. Revenue recognized for tooling, excess inventory, and other services was not material for fiscal year 2020 and 2019 . The timing differences of revenue recognition, billings to our customers, and cash collections from our customers result in billed accounts receivable and unbilled accounts receivable. Contract assets on the Consolidated Balance Sheets relate to unbilled accounts receivable and occur when revenue is recognized over time as manufacturing services are provided and the billing to the customer has not yet occurred as of the balance sheet date, which are generally transferred to receivables in the next fiscal quarter due to the short-term nature of the manufacturing cycle. Contract assets were $70.4 million and $51.9 million as of June 30, 2020 and 2019 , respectively. In limited circumstances, the Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for tooling or other miscellaneous services or costs. These advance payments are recognized as contract liabilities until the performance obligations are completed and are included in Accrued expenses on the Consolidated Balance Sheets, which amounted to $7.1 million and $6.3 million as of June 30, 2020 and 2019 , respectively. |
Note 4. Inventories
Note 4. Inventories | 12 Months Ended |
Jun. 30, 2020 | |
Inventories [Abstract] | |
Inventory Disclosure | Inventories Inventories were valued using the lower of first-in, first-out (“FIFO”) cost and net realizable value. Inventory components were as follows at June 30: (Amounts in Thousands) 2020 2019 Finished products $ 4,529 $ 2,708 Work-in-process 3,577 4,119 Raw materials 210,937 197,013 Total inventory $ 219,043 $ 203,840 |
Note 5. Property and Equipment
Note 5. Property and Equipment | 12 Months Ended |
Jun. 30, 2020 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Property and Equipment Major classes of property and equipment consist of the following at June 30: (Amounts in Thousands) 2020 2019 Land and land use rights $ 11,792 $ 11,836 Buildings and improvements 80,606 78,508 Machinery and equipment 278,858 255,978 Construction-in-progress 19,646 14,262 Total $ 390,902 $ 360,584 Less: Accumulated depreciation (236,373 ) (216,955 ) Property and equipment, net $ 154,529 $ 143,629 The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 5 to 40 Machinery and equipment 3 to 11 Land use rights 39 Leasehold improvements Lesser of Useful Life or Term of Lease Depreciation of property and equipment totaled, in millions, $27.7 for fiscal year 2020 , $26.3 for fiscal year 2019 , and $25.5 for fiscal year 2018 . |
Note 6. Goodwill and Other Inta
Note 6. Goodwill and Other Intangible Assets (Notes) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Intangible Assets Disclosure | Goodwill and Other Intangible Assets A summary of goodwill is as follows: (Amounts in Thousands) Balance as of June 30, 2018 Goodwill $ 19,017 Accumulated impairment (12,826 ) Goodwill, net 6,191 Goodwill Acquired 11,913 Balance as of June 30, 2019 Goodwill 30,930 Accumulated impairment (12,826 ) Goodwill, net 18,104 Purchase Accounting Adjustments 1,832 Impairment (7,925 ) Balance as of June 30, 2020 Goodwill 32,762 Accumulated impairment (20,751 ) Goodwill, net $ 12,011 We acquired $13.7 million in goodwill resulting from the GES acquisition, with $11.9 million reported in fiscal year 2019 and $1.8 million added in fiscal year 2020 as a result of fair value measurement period adjustments. See Note 2 - Acquisitions of Notes to Consolidated Financial Statements for more information on this acquisition. During fiscal year 2020 , $7.9 million of goodwill impairment was recognized at the GES reporting unit. During fiscal years 2019 and 2018 , no goodwill impairment was recognized. GES’s annual goodwill impairment test date is April 30th. Subsequent to our annual test date, we identified an indicator of impairment related to future anticipated revenues, which triggered an additional impairment test as of June 30, 2020 . The June 30, 2020 test (the “GES impairment test”) resulted in a $7.9 million goodwill impairment charge, partially offset by a $1.0 million reduction in income tax expense associated with the deferred tax asset established for the deductible portion of the impaired goodwill. For the GES impairment test, we used an independent, third-party valuation specialist to assist in the determination of fair value for the GES reporting unit. We used a combination of the Income Approach, using a discounted cash flow model, and the Market Approach, based on projected fiscal year 2021 results. Significant assumptions include: • Income Approach and Market Approach each weighted at 50% • Weighted average cost of capital (“WACC”) of 20% , based on observed market return data and size and company-specific risk premiums; a change of 100 basis points in the determined WACC has an approximate $1.7 million impact on the calculated fair value • Forecasted revenue growth rates ranging from 20% to 50% in fiscal years 2021 through 2023, and ranging from 3% to 12% thereafter • Terminal growth rate of 3% • Improved operating margins driven by revenue growth and product mix The forecast assumptions are considered management’s best projections for the outlook of this business but are uncertain, and potential events or circumstances, such as not receiving the award of certain identified new business programs in fiscal year 2021 and beyond, not realizing revenue growth projections from new and existing customers and markets, and not achieving forecasted operating margins, could have a negative effect on GES’s estimated fair value and result in additional impairment charges that could be material to the Consolidated Financial Statements. Other macroeconomic events or circumstances, such as a sustained downturn in global economies or the industries GES serves, also could negatively affect estimated fair values. A summary of other intangible assets subject to amortization is as follows: June 30, 2020 June 30, 2019 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 32,052 $ 27,851 $ 4,201 $ 32,015 $ 27,124 $ 4,891 Customer Relationships 8,618 2,014 6,604 8,618 1,506 7,112 Technology 5,060 1,777 3,283 5,060 766 4,294 Trade Name 6,369 1,114 5,255 6,369 478 5,891 Other Intangible Assets $ 52,099 $ 32,756 $ 19,343 $ 52,062 $ 29,874 $ 22,188 During fiscal years 2020 , 2019 , and 2018 , amortization expense of other intangible assets was, in millions, $3.2 , $2.6 , and $0.9 , respectively. Amortization expense in future periods is expected to be, in millions, $3.1 , $3.0 , $2.9 , $2.1 , and $1.6 in the five years ending June 30, 2025 , and $6.6 thereafter. The estimated useful life of internal-use software ranges from 3 to 10 years . The amortization period for the customer relationships, technology, and trade name intangible assets is 15 years , 5 years, and 10 years, respectively. We have no intangible assets with indefinite useful lives which are not subject to amortization. Substantially all the customer relationships, technology, and trade name intangible assets were acquired in fiscal year 2019 as a result of the GES acquisition. See Note 2 - Acquisitions of Notes to Consolidated Financial Statements for more information on this acquisition. No customer relationships, technology, and trade name intangible assets were acquired in fiscal year 2020. Intangible assets are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. During the fourth quarter of fiscal year 2020, as a result of the indicator of impairment that led to goodwill impairment, we determined that the carrying amount of the GES long-lived asset group, including their other intangible assets, may not be recoverable. As a result, we tested the GES long-lived asset group for recoverability as of June 30, 2020. The test resulted in no impairment as the undiscounted cash flows of the GES long-lived asset group exceeded the carrying amount. Significant judgment was used in performing the impairment test, including the use of customer relationships as the primary asset to determine the remaining useful life of the asset group, and the assumptions around the undiscounted cash flows of the asset group. If the estimated undiscounted cash flows related to GES’s long-lived assets are not realized, an impairment charge may result, which could be material to the Consolidated Financial Statements. |
Note 7. Commitments and Conting
Note 7. Commitments and Contingent Liabilities | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingent Liabilities Guarantees: As of June 30, 2020 and 2019 , we had no guarantees issued which were contingent on the future performance of another entity. 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 the beneficiary. We had a maximum financial exposure from unused standby letters of credit totaling $0.4 million as of both June 30, 2020 and 2019 . We do not expect circumstances to arise that would require us to perform under any of these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of June 30, 2020 and 2019 with respect to the standby letters of credit. We also may enter into commercial letters of credit to facilitate payments to vendors and from customers. Banker’s Acceptance Drafts: One of the Company’s China operations, 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, the draft would revert back to our China operation and we would be required to satisfy the obligation with the transferee. At June 30, 2020 and 2019 , the drafts transferred and outstanding totaled $0.4 million and $0.9 million , respectively. No transferee has exercised their recourse rights against us. For additional information on banker’s acceptance drafts, see Note 1 – Business Description and Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements. Product Warranties: The Company provides only assurance-type warranties for a limited time period, which cover workmanship and assures the product complies with specifications provided by or agreed upon with the customer. We maintain a provision for limited warranty repair or replacement of products manufactured and sold, which has been established in specific manufacturing contract agreements. We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. Changes in the product warranty accrual during fiscal years 2020 , 2019 , and 2018 were as follows: (Amounts in Thousands) 2020 2019 2018 Product Warranty Liability at the beginning of the year $ 958 $ 656 $ 593 Additions to warranty accrual (including changes in estimates) (271 ) 361 346 Settlements made (in cash or in kind) (40 ) (59 ) (283 ) Product Warranty Liability at the end of the year $ 647 $ 958 $ 656 |
Note 8. Credit Facilities
Note 8. Credit Facilities | 12 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt and Credit Facilities [Abstract] | |
Debt Disclosure | Credit Facilities Credit facilities consisted of the following: Unused Borrowings at Borrowings Outstanding at Borrowings Outstanding at (Amounts in Millions, in U.S Dollar Equivalents) June 30, 2020 June 30, 2020 June 30, 2019 Primary credit facility (1) $ 38.2 $ 111.4 $ 122.8 Secondary credit facility (2) 30.0 — — Thailand overdraft credit facility (3) 0.1 — — Netherlands revolving credit facility (4) 3.6 6.7 3.4 Poland revolving credit facility (5) 5.6 — — Total credit facilities $ 77.5 118.1 126.2 Less: current portion (26.6 ) (34.7 ) Long-term debt under credit facilities, less current portion (6) $ 91.5 $ 91.5 (1) The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature July 27, 2023. The primary credit facility provides for $150 million in borrowings, with an option to increase the amount available for borrowing to $225 million at the Company’s request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company including capital expenditures and acquisitions. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2020 , 2019 , and 2018 . The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary facility. Types of borrowings available on the primary facility include revolving loans, multi-currency term loans, and swingline loans. The interest rate on borrowings is dependent on the type of borrowings and will be one of the following two options: • the London Interbank Offered Rate (“LIBOR”) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined under the primary credit facility, plus the Eurocurrency Loans spread which can range from 125.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or • the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of a. JPMorgan’s prime rate; b. 1% per annum above the Adjusted LIBO Rate (as defined under the primary credit facility); or c. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA. The Company’s financial covenants under the primary credit facility require: • a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, and • a fixed charge coverage ratio, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be less than 1.10 to 1.00. The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2020 and 2019 . (2) During the current fiscal year, the Company established a 364-day multi-currency revolving credit facility (the “secondary credit facility”) among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, National Association, as Administrative Agent, and Bank of America, N.A., as Documentation Agent, which allows for borrowings of up to $30 million and has a maturity date of May 18, 2021. This secondary credit facility is to be used for working capital and general corporate purposes. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 50.0 basis points per annum. The interest rate on borrowings is dependent on the type of borrowings and will be one of the following two options: • the LIBOR in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined under the secondary credit facility, plus the Eurocurrency Loans spread of 2.125% ; or • the ABR, which is defined as the highest of the fluctuating rate per annum equal to the higher of a. JPMorgan’s prime rate; b. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the secondary credit facility); or c. 1% per annum above the Adjusted LIBO Rate (as defined under the secondary credit facility); plus the ABR Loans spread of 1.125% . The Company’s financial covenants under this secondary credit facility are the same as the financial covenants listed above for its primary credit facility. (3) The Company also maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to 2.4 million Thai Baht (approximately $0.1 million at June 30, 2020 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. (4) The Company also maintains an uncommitted revolving credit facility for our Netherlands subsidiary. The Netherlands credit facility allows for borrowings of up to 9.2 million Euro (approximately $10.3 million at June 30, 2020 exchange rates), which borrowings can be made in Euro, U.S. dollars, or other optional currency. The availability of funds under this facility is at the sole discretion of the bank. Proceeds from the facility are to be used for general corporate purposes. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed. The facility matures on June 22, 2021 . (5) The Company also maintains an uncommitted revolving credit facility for our Poland operation, which allows for borrowings up to 5 million Euro (approximately $5.6 million at June 30, 2020 exchange rates) that can be drawn in Euro, U.S. dollars, or Polish Zloty. The availability of funds under this uncommitted facility is at the sole discretion of the bank. Proceeds from the facility are to be used for general working capital purposes. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed. The facility matures on December 20, 2020 . (6) The amount of Long-term debt under credit facilities, less current maturities reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on July 27, 2023. The weighted-average interest rate on borrowings outstanding under the credit facilities at June 30, 2020 and June 30, 2019 were 2.5% and 4.5% , respectively. Cash payments for interest on borrowings in fiscal years 2020 , 2019 , and 2018 were, in millions, $4.9 , $3.0 , and $0.4 , respectively. Capitalized interest expense was immaterial during fiscal years 2020 , 2019 , and 2018 . |
Note 9. Employee Benefit Plans
Note 9. Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Postemployment Benefits Disclosure | Employee Benefit Plans Defined Contribution Retirement Plans: The Company maintains a trusteed defined contribution retirement plan which is in effect for substantially all domestic employees meeting the eligibility requirements. The Company also maintains a supplemental employee retirement plan (“SERP”) for executives and other key employees which enables them to defer cash compensation on a pre-tax basis in excess of IRS limitations. The SERP is structured as a rabbi trust, and therefore, assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. The discretionary employer contribution for domestic employees is determined annually by the Compensation and Governance Committee of the Company’s Board of Directors. Total expense related to employer contributions to the domestic retirement plans was, in millions, $2.4 , $2.1 , and $2.0 for fiscal years 2020 , 2019 , and 2018 , respectively. Defined Benefit Postemployment Plans: The Company established and maintains severance plans for all domestic employees and other postemployment plans for certain foreign subsidiaries. There are no statutory requirements for the Company to contribute to the plans, nor do employees contribute to the plans. The plans hold no assets. Benefits are paid using available cash on hand when eligible employees meet plan qualifications for payment. As of June 30, 2020 and 2019 , total obligations under these plans were $4.2 million and $3.4 million , respectively, of which $3.6 million and $3.1 million were long term and $0.6 million and $0.3 million were short term. Of the total obligation at June 30, 2020 and 2019 , domestic plans were $1.1 million and $1.5 million and foreign plans were $3.1 million and $1.9 million , respectively. Actuarial (gain) loss is recorded in Accumulated Other Comprehensive (Income) Loss and amortized into net period benefit cost on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plans. Net periodic benefit cost recognized for these plans in fiscal years 2020 , 2019 , and 2018 were $0.3 million , $0.8 million , and $0.3 million , respectively. |
Note 10. Stock Compensation Pla
Note 10. Stock Compensation Plans | 12 Months Ended |
Jun. 30, 2020 | |
Stock Compensation Plans [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments | Stock Compensation Plans A stock compensation plan was created and adopted by the Company’s Board of Directors (the “Board”) on October 3, 2014. The Kimball Electronics, Inc. 2014 Stock Option and Incentive Plan (the “Plan”) allows for the issuance of up to 4.5 million shares and may be awarded in the form of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units. The Plan is a ten-year plan with no further awards allowed to be made under the Plan after October 1, 2024. On October 20, 2016, the Board approved a nonqualified deferred stock compensation plan, the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan (the “Deferral Plan”), which allows Non-Employee Directors 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. Pre-tax stock compensation charged against income in fiscal years 2020 , 2019 , and 2018 was $4.0 million , $5.7 million , and $5.3 million , respectively. These costs are included in Selling and Administrative Expenses. Performance Shares: The Company awards performance shares to officers and other key employees. Under these awards granted prior to fiscal year 2016, a number of shares will be issued to each participant based upon the attainment of the applicable bonus percentage calculated under the Company’s profit sharing incentive bonus plan as applied to a total potential share award made and approved by the Compensation and Governance Committee of the Board. Under these awards granted in and subsequent to fiscal year 2016, a number of shares will be issued to each participant based upon a combination of the bonus percentage attainment component above, adjusted to a three-year average bonus percentage, and a growth attainment component, which is the Company’s growth in sales revenue based on comparison of its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. Performance shares are vested when shares of the Company’s Common Stock are issued shortly after the end of the fiscal year in which the performance measurement period is complete. Certain outstanding performance shares are applicable to performance measurement periods in future fiscal years and will be measured at fair value when the performance targets are established in future fiscal years. The contractual life of performance shares ranges from one year to five years . If a participant is not employed on the date shares are issued, the performance share award is forfeited, except in the case of death, retirement at age 62 or older, total permanent disability, or certain other circumstances described in the Plan. A summary of the Company’s performance share activity during fiscal year 2020 is presented below: Number of Shares Weighted Average Grant Date Fair Value Performance shares outstanding at July 1, 2019 447,260 $ 17.16 Granted 252,878 $ 14.39 Vested (253,483 ) $ 15.47 Forfeited (3,119 ) $ 11.87 Performance shares outstanding at June 30, 2020 443,536 $ 16.58 As of June 30, 2020 , there was approximately $4.3 million of unrecognized compensation cost related to performance shares, based on the latest estimated attainment of performance goals. That cost is expected to be recognized over annual performance periods ending August 2020 through August 2022, with a weighted average vesting period of ten months . The fair value of performance shares is based on the stock price at the date of grant. During fiscal years 2020 , 2019 , and 2018 , respectively, 253,483 , 292,175 , and 255,757 performance shares vested at a fair value of $3.9 million , $3.9 million , and $2.9 million . The performance shares vested represent the total number of shares vested prior to the reduction of shares withheld to satisfy tax withholding obligations. The number of shares presented in the above table, the amounts of unrecognized compensation, and the weighted average period include performance shares awarded that are applicable to future performance measurement periods and will be measured at fair value when the performance targets are established in future fiscal years. Unrestricted Share Grants: Unrestricted shares may be granted to employees and members of the Board as consideration for services rendered. Unrestricted share grants do not have vesting periods, holding periods, restrictions on sale, or other restrictions. The fair value of unrestricted shares is based on the stock price at the date of the award. During fiscal years 2020 , 2019 , and 2018 , respectively, the Company granted a total of 4,258 , 4,236 , and 7,694 unrestricted shares at an average grant date fair value of $16.99 , $17.69 , and $20.15 for a total fair value of $0.1 million , $0.1 million , and $0.2 million . Unrestricted shares were awarded to non-employee members of the Board as compensation for director’s fees, including directors’ elections to receive unrestricted shares in lieu of cash payment. Director’s fees are expensed over the period that directors earn the compensation. Unrestricted shares were also awarded to a key employee which were expensed immediately. Deferred Share Units: Deferred share units may be granted to non-employee members of the Board under the Deferral Plan as compensation for the portion of their annual retainer fees resulting from their election 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 in a lump sum or installments in accordance with deferral elections upon a director’s retirement or termination from the Board or death. During fiscal years 2020 , 2019 , and 2018 , respectively, 32,950 , 32,758 , and 12,159 deferred share units were granted to non-employee members of the Board at an average grant date fair value of $17.30 , $17.40 , and $20.15 for a total fair value of $0.6 million , $0.6 million , and $0.2 million . During fiscal year 2020, 2,754 shares of common stock were issued under the Deferral Plan to a former non-employee member of the Board in accordance with their deferral election at an average fair value of $17.51 . |
Note 11. Income Taxes
Note 11. Income Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Income Taxes [Abstract] | |
Income Tax Disclosure | Income Taxes 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 may have not yet been issued. Tax Reform changes included, but were 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 ended June 30, 2018, we had a blended U.S. corporate tax rate of 28.1% , which was based on the applicable tax rates before and after Tax Reform and the number of days in the fiscal year. The aggregate unremitted earnings of the Company’s foreign subsidiaries were approximately $270 million as of June 30, 2020 . Most of these accumulated unremitted foreign earnings have been invested in active non-U.S. business operations, and it is not anticipated such earnings will be remitted to the United States. Our intent is to permanently reinvest these funds outside of the United States. However, if such funds were repatriated, a portion of the funds remitted may be subject to applicable non-U.S. income and withholding taxes. Accounting guidance provided a measurement period of one year from the Tax Reform enactment date, during which a company could complete the accounting for the impacts of Tax Reform. In accordance with the accounting guidance, the Company recorded provisional tax expense of $17.8 million related to Tax Reform for fiscal year 2018, including $4.4 million for the revaluation of the net deferred tax assets and $13.4 million for the deemed repatriation tax. In accordance with the expiration of the one-year measurement period, the Company completed the assessment of the income tax effects of Tax Reform in fiscal year 2019. In finalizing the tax expense resulting from Tax Reform, the Company reversed $0.4 million of previous tax expense for the deemed repatriation tax. At June 30, 2020, $9.8 million is recorded in Long-term income taxes payable on the Consolidated Balance Sheet for the deemed repatriation tax. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities as of June 30, 2020 and 2019 , were as follows: (Amounts in Thousands) 2020 2019 Deferred Tax Assets: Receivables $ 145 $ 105 Inventory 1,894 1,914 Employee benefits 224 193 Deferred compensation 5,338 6,149 Other current liabilities 265 1,275 Tax credit carryforwards 2,445 1,638 Goodwill 1,608 268 Net operating loss carryforward 2,398 2,339 Net foreign currency losses — 11 Miscellaneous 4,020 2,970 Valuation Allowance (1,637 ) (658 ) Total asset $ 16,700 $ 16,204 Deferred Tax Liabilities: Other intangible assets $ 1,313 $ 1,412 Property and equipment 1,211 1,116 Net foreign currency gains 22 — Miscellaneous 581 477 Total liability $ 3,127 $ 3,005 Net Deferred Income Taxes $ 13,573 $ 13,199 Income tax benefits associated with the net operating loss carryforwards expire from fiscal year 2023 to 2040 . Income tax benefits associated with tax credit carryforwards primarily expire from fiscal year 2021 to 2029 . A valuation allowance was provided as of June 30, 2020 and 2019 for deferred tax assets related to certain state credits of, in millions, $1.6 and $0.7 , respectively. Except as reserved for in the valuation allowance, we believe our tax credit and net operating loss carryforwards are more likely than not to be realized in the future. The components of income before taxes on income are as follows: Year Ended June 30 (Amounts in Thousands) 2020 2019 2018 United States $ (6,117 ) $ 11,191 $ 5,609 Foreign 31,274 27,294 39,166 Total income before taxes on income $ 25,157 $ 38,485 $ 44,775 The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2020 2019 2018 Current Taxes: Federal $ (1,666 ) $ 872 $ 13,132 Foreign 8,479 7,545 11,982 State (29 ) 203 459 Total payable $ 6,784 $ 8,620 $ 25,573 Deferred Taxes: Federal $ 99 $ 67 $ 5,015 Foreign 237 (1,177 ) (2,427 ) State (1,138 ) (603 ) (776 ) Valuation allowance 979 20 638 Total deferred $ 177 $ (1,693 ) $ 2,450 Total provision for income taxes $ 6,961 $ 6,927 $ 28,023 A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows: Year Ended June 30 2020 2019 2018 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 5,283 21.0 % $ 8,082 21.0 % $ 12,582 28.1 % State income taxes, net of federal income tax benefit (1,128 ) (4.5 ) (320 ) (0.8 ) (408 ) (0.9 ) Foreign tax rate differential 714 2.8 313 0.8 (1,615 ) (3.6 ) Impact of foreign exchange rates on foreign income taxes 867 3.4 156 0.4 180 0.4 Non-deductible goodwill impairment 388 1.5 — — — — Valuation allowance 979 3.9 20 0.1 638 1.4 Research credit (1,056 ) (4.2 ) (627 ) (1.6 ) (378 ) (0.8 ) Deemed repatriation — — (416 ) (1.1 ) 13,436 30.0 Revaluation of net deferred tax assets — — (10 ) — 4,357 9.7 Global intangible low tax income 607 2.4 — — — — Other - net 307 1.4 (271 ) (0.8 ) (769 ) (1.7 ) Total provision for income taxes $ 6,961 27.7 % $ 6,927 18.0 % $ 28,023 62.6 % Net cash payments for income taxes were, in thousands, $9,096 , $10,172 and $14,724 in fiscal years 2020 , 2019 , and 2018 , respectively. Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2020 , 2019 , and 2018 were as follows: (Amounts in Thousands) 2020 2019 2018 Beginning balance - July 1 $ 904 $ 160 $ 102 Tax positions related to prior fiscal years: Additions 116 758 78 Reductions — — (20 ) Tax positions related to current fiscal year: Additions — — — Reductions — — — Settlements — — — Lapses in statute of limitations (66 ) (14 ) — Ending balance - June 30 $ 954 $ 904 $ 160 Portion that, if recognized, would reduce tax expense and effective tax rate $ 262 $ 214 $ 137 We do not expect the change in the amount of unrecognized tax benefits in the next 12 months to have a significant impact on our results of operations or financial position. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Consolidated Statements of Income. Interest and penalties accrued for unrecognized tax benefits as of both June 30, 2020 and 2019 was $1.6 million . Interest and penalties accrued for unrecognized tax benefits as of June 30, 2018 and expenses related to interest and penalties in fiscal years 2020 , 2019 , and 2018 were not material. Liabilities for unrecognized tax benefits, including interest and penalties, have been recorded as a result of the GES acquisition related to pre-closing tax periods of Global Equipment Services & Manufacturing Vietnam Company Limited. This reflects management’s best assessment of the estimated taxes, interest, and penalties that are more likely than not to be paid under the applicable laws in the various jurisdictions. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. See Note 2 - Acquisitions of Notes to Consolidated Financial Statements for more information related to the GES acquisition. The Company or its wholly-owned subsidiaries file U.S. federal income tax returns and income tax returns in various state, local, and foreign jurisdictions. We are no longer subject to any significant U.S. federal tax examinations by tax authorities for years before fiscal year 2017. We are subject to various state and local income tax examinations by tax authorities for years after June 30, 2015, and various foreign jurisdictions for years after June 30, 2015. Global Equipment Services & Manufacturing Vietnam Company Limited is subject to U.S. federal tax examinations and various state and local jurisdictions by tax authorities for years after December 31, 2007 and for various foreign jurisdictions for years after December 31, 2009 relating to periods prior to the acquisition date. |
Note 12. Share Owners' Equity
Note 12. Share Owners' Equity | 12 Months Ended |
Jun. 30, 2020 | |
Common Stock [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. Then, separately on each of September 29, 2016, August 23, 2017, and November 8, 2018, the Board extended and increased the Plan to allow the repurchase of up to an additional $20 million worth of common stock with no expiration date, which brought the total authorized stock repurchases under the Plan to $80 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, and as of June 30, 2020, the Plan is temporarily suspended as a result of the COVID-19 environment. During fiscal year 2020 , the Company repurchased $8.8 million of common stock under the Plan at an average price of $14.12 per share, which was recorded as Treasury stock, at cost in the Consolidated Balance Sheet. Since the inception of the Plan, the Company has repurchased $76.7 million of common stock under that Plan at an average cost of $14.93 per share. |
Note 13. Fair Value
Note 13. Fair Value | 12 Months Ended |
Jun. 30, 2020 | |
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. There were no changes in the inputs or valuation techniques used to measure fair values during fiscal year 2020 . Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents 1 Market - Quoted market prices Derivative Assets: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk Trading securities: Mutual funds held in SERP 1 Market - Quoted market prices Derivative Liabilities: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball Electronics’ non-performance risk Recurring Fair Value Measurements: As of June 30, 2020 and 2019 , the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows: June 30, 2020 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,140 $ — $ 1,140 Derivatives: foreign exchange contracts — 741 741 Trading securities: mutual funds held in nonqualified SERP 10,477 — 10,477 Total assets at fair value $ 11,617 $ 741 $ 12,358 Liabilities Derivatives: foreign exchange contracts $ — $ 2,134 $ 2,134 Total liabilities at fair value $ — $ 2,134 $ 2,134 June 30, 2019 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,123 $ — $ 1,123 Derivatives: foreign exchange contracts — 1,832 1,832 Trading securities: mutual funds held in nonqualified SERP 9,268 — 9,268 Total assets at fair value $ 10,391 $ 1,832 $ 12,223 Liabilities Derivatives: foreign exchange contracts $ — $ 299 $ 299 Total liabilities at fair value $ — $ 299 $ 299 We had no Level 3 assets or liabilities during fiscal years 2020 and 2019 . The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, bond funds, and a money market fund. The SERP investment assets are offset by a SERP liability which represents the Company’s obligation to distribute SERP funds to participants. See Note 15 - Investments of Notes to Consolidated Financial Statements for further information regarding the SERP. Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk Borrowings under credit facilities 2 Market - Based on observable market rates, taking into account Kimball Electronics’ non-performance risk The carrying values of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximate fair value due to their relatively short maturity and immaterial non-performance risk. |
Note 14. Derivative Instruments
Note 14. Derivative Instruments | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | Derivative Instruments Foreign Exchange Contracts: We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business. Our primary means of managing this exposure is to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques do not fully offset currency risk, we use derivative instruments with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes. We use forward contracts designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances denominated in currencies other than the functional currencies. As of June 30, 2020 , we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $32.3 million and to hedge currencies against the Euro in the aggregate notional amount of 62.5 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 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 reported immediately in Non-operating income or expense on the Consolidated Statements of Income. Based on fair values as of June 30, 2020 , we estimate that approximately $1.7 million of pre-tax derivative loss deferred in Accumulated Other Comprehensive Income (Loss) will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the fiscal year ending June 30, 2021 . Losses on foreign exchange contracts are generally offset by gains in operating costs in the income statement when the underlying hedged transaction is recognized in earnings. Because gains or losses on foreign exchange contracts fluctuate partially based on currency spot rates, the future effect on earnings of the cash flow hedges alone is not determinable, but in conjunction with the underlying hedged transactions, the result is expected to be a decline in currency risk. The maximum length of time we had hedged our exposure to the variability in future cash flows was 12 months as of both June 30, 2020 and June 30, 2019 . See Note 13 - Fair Value of Notes to Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 19 - Accumulated Other Comprehensive Income (Loss) of Notes to Consolidated Financial Statements for the amount and changes in derivative gains and losses deferred in Accumulated Other Comprehensive Income (Loss). Information on the location and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Income are presented below. Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 517 $ 1,136 Accrued expenses $ 2,054 $ 278 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets 224 696 Accrued expenses 80 21 Total derivatives $ 741 $ 1,832 $ 2,134 $ 299 The Effect of Derivative Instruments on Other Comprehensive Income (Loss) June 30 (Amounts in Thousands) 2020 2019 2018 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives: Foreign exchange contracts $ (2,079 ) $ 3,337 $ (2,669 ) The Effect of Derivative Instruments on Consolidated Statements of Income (Amounts in Thousands) Year Ended June 30 Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2020 2019 2018 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: Foreign exchange contracts Cost of Sales $ 64 $ 1,061 $ (1,648 ) Foreign exchange contracts Non-operating income (expense) — 5 (20 ) Total $ 64 $ 1,066 $ (1,668 ) Derivatives Not Designated as Hedging Instruments Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives: Foreign exchange contracts Non-operating income (expense) $ 1,558 $ 2,766 $ 796 Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ 1,622 $ 3,832 $ (872 ) |
Note 15. Investments
Note 15. Investments | 12 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure | Investments Supplemental Employee Retirement Plan 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. We recognize SERP investment assets on the balance sheet at current fair value. A SERP liability of the same amount is recorded on the balance sheet representing an obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. The change in net unrealized holding gains for the fiscal years ended June 30, 2020 , 2019 , and 2018 was, in thousands, $385 , $35 , and $552 , respectively. SERP asset and liability balances applicable to Kimball Electronics participants were as follows: June 30 (Amounts in Thousands) 2020 2019 SERP investments - current asset $ 1,972 $ 1,728 SERP investments - other long-term asset 8,505 7,540 Total SERP investments $ 10,477 $ 9,268 SERP obligation - current liability $ 1,972 $ 1,728 SERP obligation - other long-term liability 8,505 7,540 Total SERP obligation $ 10,477 $ 9,268 |
Note 16. Accrued Expenses
Note 16. Accrued Expenses | 12 Months Ended |
Jun. 30, 2020 | |
Accrued Expenses [Abstract] | |
Accrued Liabilities Disclosure | Accrued Expenses Accrued expenses consisted of: June 30 (Amounts in Thousands) 2020 2019 Taxes $ 5,135 $ 5,760 Compensation 16,839 19,046 Customer advance payments 7,145 6,345 Retirement plan 2,337 1,959 Insurance 1,618 1,675 Other expenses 9,190 8,411 Total accrued expenses $ 42,264 $ 43,196 |
Note 17. Geographic Information
Note 17. Geographic Information | 12 Months Ended |
Jun. 30, 2020 | |
Geographic Information [Abstract] | |
Segment Reporting Disclosure | Geographic Information The following geographic area data includes net sales based on the country location of the Company’s business unit providing the manufacturing or other service and long-lived assets based on physical location. Long-lived assets include property and equipment and capitalized software. At or For the Year Ended June 30 (Amounts in Thousands) 2020 2019 2018 Net Sales: United States $ 346,376 $ 321,805 $ 224,834 Mexico 232,135 282,400 256,537 Poland 244,107 251,635 282,847 China 159,746 146,332 177,930 Thailand 124,415 113,276 87,513 Other Foreign 93,771 66,396 42,400 Total net sales $ 1,200,550 $ 1,181,844 $ 1,072,061 Long-Lived Assets: United States $ 48,190 $ 43,887 $ 39,465 Mexico 36,548 31,238 30,733 Poland 32,670 29,736 33,629 Romania 17,707 19,546 19,394 China 10,405 12,138 14,546 Other Foreign 13,210 11,975 3,773 Total long-lived assets $ 158,730 $ 148,520 $ 141,540 |
Note 18. Earnings Per Share
Note 18. Earnings Per Share | 12 Months Ended |
Jun. 30, 2020 | |
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: (Amounts in thousands, except per share data) Year Ended June 30 2020 2019 2018 Basic and Diluted Earnings Per Share: Net Income $ 18,196 $ 31,558 $ 16,752 Less: Net Income allocated to participating securities 24 32 9 Net Income allocated to common Share Owners $ 18,172 $ 31,526 $ 16,743 Basic weighted average common shares outstanding 25,243 25,857 26,745 Dilutive effect of average outstanding performance shares 165 200 255 Dilutive effect of average outstanding deferred stock units 20 25 7 Dilutive weighted average shares outstanding 25,428 26,082 27,007 Earnings Per Share of Common Stock: Basic $ 0.72 $ 1.22 $ 0.63 Diluted $ 0.71 $ 1.21 $ 0.62 |
Note 19. Accumulated Other Comp
Note 19. Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Jun. 30, 2020 | |
Comprehensive Income [Abstract] | |
Comprehensive Income (Loss) Note | Accumulated Other Comprehensive Income (Loss) The changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: (Amounts in Thousands) Foreign Currency Translation Adjustments Derivative Gain (Loss) Postemployment Benefits Net Actuarial Gain (Loss) Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2018 $ (4,357 ) $ (3,379 ) $ 837 $ (6,899 ) Other comprehensive income (loss) before reclassifications (2,491 ) 2,638 339 486 Reclassification to (earnings) loss — (857 ) (358 ) (1,215 ) Net current-period other comprehensive income (loss) $ (2,491 ) $ 1,781 $ (19 ) $ (729 ) Balance at June 30, 2019 $ (6,848 ) $ (1,598 ) $ 818 $ (7,628 ) Other comprehensive income (loss) before reclassifications (1,046 ) (1,570 ) 87 (2,529 ) Reclassification to (earnings) loss — (86 ) (308 ) (394 ) Net current-period other comprehensive income (loss) (1,046 ) (1,656 ) (221 ) (2,923 ) Balance at June 30, 2020 $ (7,894 ) $ (3,254 ) $ 597 $ (10,551 ) The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income (Loss) Year Ended June 30 Affected Line Item in the (Amounts in Thousands) 2020 2019 Consolidated Statements of Income Derivative Gain (Loss) (1) $ 64 $ 1,061 Cost of Sales — 5 Non-operating income (expense), net 22 (209 ) Benefit (Provision) for Income Taxes $ 86 $ 857 Net of Tax Postemployment Benefits: Amortization of Actuarial Gain (Loss) (2) $ 406 $ 472 Non-operating income (98 ) (114 ) Benefit (Provision) for Income Taxes $ 308 $ 358 Net of Tax Total Reclassifications for the Period $ 394 $ 1,215 Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 9 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 20. Leases (Notes)
Note 20. Leases (Notes) | 12 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases of Lessee Disclosure | Leases The Company determines if a contract is or contains a lease at inception. The Company leases certain office, manufacturing, and warehouse facilities under operating leases, in addition to land on which certain office and manufacturing facilities reside. These operating leases expire from fiscal year 2020 to 2057 . The Company has a minimal number of finance leases with an immaterial impact on its Consolidated Financial Statements. Operating lease costs in fiscal year 2020 were $1.2 million , including short-term and variable lease costs. Cash payments for operating leases included in the measurement of lease liabilities in fiscal year 2020 were $0.8 million , which is included in Cash Flows from Operating Activities in the Consolidated Statement of Cash Flows. The lease assets and liabilities, which exclude leases with terms of 12 months or less, as of June 30, 2020 , were as follows: (Amounts in Thousands) Operating lease right-of-use assets (included in Other Assets) $ 2,025 Operating lease liability, current (included in Accrued expenses) $ 817 Operating lease liability, noncurrent (included in Other long-term liabilities) $ 1,208 Weighted average remaining lease term in years - operating leases 4.7 Weighted average discount rate - operating leases 3.3 % Future lease payments as of June 30, 2020 are as follows: (Amounts in Thousands) 2021 $ 832 2022 655 2023 95 2024 95 2025 95 Thereafter 380 Total undiscounted lease payments $ 2,152 Less: imputed interest 127 Total lease liabilities $ 2,025 As reported under the previous lease accounting standard, the total rental expense amounted to $1.1 million and $0.7 million in fiscal years 2019 and 2018, respectively, and the aggregate future minimum rental payments on our operating leases, as of June 30, 2019, were, in millions, $0.8 , $0.7 , $0.6 , $0.1 , and $0.1 for the five years ending June 30, 2024, respectively, and $0.5 million thereafter. As of June 30, 2019, capital leases were immaterial. |
Note 21. Quarterly Financial In
Note 21. Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2020 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Quarterly Financial Information | Quarterly Financial Information (Unaudited) Three Months Ended (Amounts in Thousands, Except for Per Share Data) September 30 December 31 March 31 June 30 Fiscal Year 2020: Net Sales $ 313,385 $ 307,084 $ 293,925 $ 286,156 Gross Profit 22,193 20,511 20,212 20,925 Goodwill Impairment — — — 7,925 Operating Income 11,115 8,684 10,588 1,609 Net Income (Loss) 6,598 6,612 6,259 (1,273 ) Basic Earnings (Loss) Per Share $ 0.26 $ 0.26 $ 0.25 $ (0.05 ) Diluted Earnings (Loss) Per Share $ 0.26 $ 0.26 $ 0.25 $ (0.05 ) Fiscal Year 2019: Net Sales $ 265,620 $ 284,149 $ 313,454 $ 318,621 Gross Profit 18,186 20,444 26,554 23,222 Operating Income 7,032 10,212 14,497 10,319 Net Income 5,069 7,115 11,849 7,525 Basic Earnings Per Share $ 0.19 $ 0.27 $ 0.46 $ 0.30 Diluted Earnings Per Share $ 0.19 $ 0.27 $ 0.46 $ 0.29 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | Valuation and Qualifying Accounts Description Balance at Beginning of Year Additions (Reductions) to Expense Adjustments to Other Accounts Write-offs and Recoveries Balance at End of Year (Amounts in Thousands) Year Ended June 30, 2020 Valuation Allowances: Receivables $ 270 $ 265 $ (5 ) $ (7 ) $ 523 Deferred Tax Asset $ 658 $ 979 $ — $ — $ 1,637 Year Ended June 30, 2019 Valuation Allowances: Receivables $ 482 $ 184 $ 14 $ (410 ) $ 270 Deferred Tax Asset $ 638 $ 20 $ — $ — $ 658 Year Ended June 30, 2018 Valuation Allowances: Receivables $ 284 $ 259 $ (51 ) $ (10 ) $ 482 Deferred Tax Asset $ — $ 638 $ — $ — $ 638 |
Note 1. Business Description _2
Note 1. Business Description and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The Consolidated Financial Statements include the accounts of all domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts included in the Consolidated Financial Statements and related note disclosures. While efforts are made to assure estimates used are reasonably accurate based on management’s knowledge of current events, actual results could differ from those estimates. |
Segment Reporting | Segment Information: Kimball Electronics has business units located in the United States, China, Mexico, Poland, Romania, and Thailand, and each of these business units qualify as operating segments. In addition, GES has operations located in the United States, China, India, Japan, and Vietnam. The GES operations qualify as a single operating segment with its group results regularly reviewed by our chief operating decision maker, which is our Chief Executive Officer. Our operating segments meet the aggregation criteria under the current accounting guidance for segment reporting. As of June 30, 2020 , all of our operating segments provide contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including medical disposables, precision molded plastics, and automation, test, and inspection equipment primarily in automotive, medical, industrial, and public safety applications, to the specifications and designs of our customers. The nature of the products, the production process, the type of customers, and the methods used to distribute the products have similar characteristics. Each of our operating segments service customers in multiple markets, and many of our customers’ programs are manufactured and serviced by multiple operating segments. We leverage global processes such as component procurement and customer pricing that provide commonality and consistency among the various regions in which we operate. All of our operating segments have similar long-term economic characteristics, and as such, have been aggregated into one reportable segment. |
Revenue Recognition | Revenue Recognition: We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments (“New Revenue Guidance”). Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical disposables, precision molded plastics, and automation, test, and inspection equipment built to customer’s specifications. Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle. Typically, our customer agreements do not commit the customer to purchase our services until a purchase order is provided, which is generally short term in nature. Customer purchase orders primarily have a single performance obligation. Generally, the prices stated in the customer purchase orders are agreed upon prices for the manufactured product and do not vary over the term of the order, and therefore, the majority of our contracts do not contain variable consideration. In limited circumstances, we may enter into a contract where we offer our customer a rebate for specific volume thresholds or other incentives; in these cases, the rebates or incentives are accounted for as variable consideration. The majority of our revenue is recognized over time as manufacturing services are performed as we manufacture a product to customer specifications with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining revenue for manufacturing services is recognized when the customer obtains control of the product, typically either upon shipment or delivery of the product dependent on the terms of the contract, and the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset. We generally recognize revenue over time using costs based input methods, in which judgment is required to evaluate assumptions including the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize. Estimated costs include material, direct and indirect labor, and appropriate applied overheads. Costs based input methods are considered a faithful depiction of our efforts and progress toward satisfying our performance obligations for manufacturing services and for which we believe we are entitled to payment for performance completed to date. The cumulative effect of revisions to estimates related to net contract revenues or costs are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. We have elected to account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated services and products. Accordingly, we record customer payments of shipping and handling costs as a component of net sales and classify such costs as a component of cost of sales. We recognize sales net of applicable sales or value add taxes. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time revenue is recognized, resulting in a reduction of net revenue. Direct incremental costs to obtain and fulfill a contract are capitalized as a contract asset only if they are material, expected to be recovered, and are not accounted for in accordance with other guidance. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred. On July 1, 2018, we adopted the New Revenue Guidance for all contracts using the modified retrospective transition method. Prior to fiscal year 2019, we recognized revenue when persuasive evidence of an arrangement existed, delivery occurred, the sales price was fixed or determinable, and collectability was reasonably assured. Delivery was not considered to have occurred until the title and the risk of loss passed to the customer according to the terms of the contract. Title and risk of loss were considered transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist of bank accounts and money market funds. Bank accounts are stated at cost, which approximates fair value, and money market funds are stated at fair value. |
Notes Receivable and Trade Accounts Receivable | Notes Receivable and Trade Accounts Receivable: The Company’s notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Management believes that historical loss information generally provides a basis for its assessment of expected credit losses. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. In the ordinary course of business, customers periodically negotiate extended payment terms on trade accounts receivable. Customary terms require payment within 30 to 45 days , with any terms beyond 45 days being considered extended payment terms. We may utilize accounts receivable factoring arrangements with third-party financial institutions in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. |
Banker's Acceptance Drafts | One of our China operations, in limited circumstances, may receive banker’s acceptance drafts from customers as payment on account. The banker’s acceptance drafts are non-interest bearing and primarily mature within six months from the origination date. The Company has the ability to sell the drafts at a discount or transfer the drafts in settlement of current accounts payable prior to the scheduled maturity date. |
Inventories | Inventories: Inventories are stated at the lower of cost and net realizable value. Cost includes material, labor, and applicable manufacturing overhead. Costs associated with underutilization of capacity are expensed as incurred. Inventories are valued using the first-in, first-out (“FIFO”) method. Inventories are adjusted for excess and obsolete inventory. Evaluation of excess inventory includes such factors as anticipated usage, inventory turnover, inventory levels, and product demand levels. Factors considered when evaluating obsolescence include the age of on-hand inventory and reduction in value due to damage, design changes, or cessation of product lines. |
Property, Equipment, and Depreciation | Property, Equipment, and Depreciation: Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful life of the assets using the straight-line method for financial reporting purposes. Major maintenance activities and improvements are capitalized; other maintenance and repairs are expensed. Depreciation and expenses for maintenance and repairs are included in both Cost of Sales and Selling and Administrative Expense on the Consolidated Statements of Income. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. |
Goodwill | Goodwill: Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, goodwill is assessed or tested at the reporting unit level. If the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down to its estimated fair value. See section entitled “New Accounting Standards” below for more information on the adoption of accounting guidance for simplifying the test for goodwill impairment. To test for goodwill impairment, we use a combination of the Income Approach and the Market Approach. The discounted cash flow method (Income Approach) uses forecasted information based on management’s strategic plans and projections. Discount rates are developed using a weighted average cost of capital (“WACC”) methodology. The WACC represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors. In the Market Approach, fair value is determined using transactional evidence for similar publicly traded equity. |
Other Intangible Assets | Other Intangible Assets: Other Intangible Assets reported on the Consolidated Balance Sheets consist of capitalized software, customer relationships, technology, and trade name. Intangible assets are reviewed for impairment, and their remaining useful lives evaluated for revision, when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and could include internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. |
Research and Development | Research and Development: The costs of research and development are expensed as incurred. |
Insurance and Self-insurance | Insurance and Self-insurance: We are self-insured up to certain limits for general liability, workers’ compensation, and certain domestic employee health benefits including medical, short-term disability, and dental, with the related liabilities included in the accompanying financial statements. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. Approximately 20% of the workforce is covered under self-insured medical and short-term disability plans. At June 30, 2020 and 2019 , accrued liabilities for self-insurance exposure were $1.6 million and $1.7 million , respectively. The remainder of our workforce not covered by self-insured plans have medical and disability coverage through either our external plans or government plans. Insurance benefits are not provided to retired employees. |
Income Taxes | Income Taxes: Deferred income tax assets and liabilities, recorded in Other Assets and Other long-term liabilities, respectively, in the Consolidated Balance Sheets, are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment. |
Income Tax Uncertainties | We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in Provision for Income Taxes on the Consolidated Statements of Income. |
Concentration of Credit Risk | Concentrations of Credit Risk: We have business and credit risks associated with our customers concentrated in the automotive, medical, industrial, and public safety industries. The Company monitors credit quality and associated risks of receivables on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. |
Off-Balance-Sheet Risk | Off-Balance Sheet Risk: Off-balance sheet arrangements are limited to banker’s acceptance drafts transferred with recourse provisions at one of the Company’s China operations and standby letters of credit entered into in the normal course of business as described in Note 7 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. |
Other General Income | Other General Income: Other General Income in fiscal year 2019 consisted of $0.3 million resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. We recorded no Other General Income during fiscal years 2020 and 2018. |
Non-operating Income and Expense | Non-operating Income and Expense: Non-operating income and expense include the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on supplemental employee retirement plan (“SERP”) investments, government subsidies, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in Selling and Administrative Expense. Non-operating expense in fiscal year 2020 included a $3.8 million final net working capital adjustment recorded after the end of the measurement period of the GES acquisition that was determined through the dispute resolution procedure provided for under the terms of the asset purchase agreement. |
Foreign Currency Translation | Foreign Currency Translation: The Company predominantly uses the U.S. dollar and Euro as its functional currencies. Foreign currency assets and liabilities are remeasured into functional currencies at end-of-period exchange rates, except for nonmonetary assets and equity, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the weighted average exchange rate during the fiscal year, except for expenses related to nonmonetary assets, which are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement are reported in Non-operating income or expense on the Consolidated Statements of Income. For business units whose functional currency is other than the U.S. dollar, the translation of functional currency statements to U.S. dollar statements uses end-of-period exchange rates for assets and liabilities, weighted average exchange rates for revenue and expenses, and historical rates for equity. The resulting currency translation adjustment is recorded in Accumulated Other Comprehensive Income (Loss), as a component of Share Owners’ Equity |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities: Derivative financial instruments are recognized on the balance sheet as assets and liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in earnings or Accumulated Other Comprehensive Income (Loss), depending on whether a derivative is designated and effective as part of a hedge transaction, and if it is, the type of hedge transaction. Hedge accounting is utilized when a derivative is expected to be highly effective upon execution and continues to be highly effective over the duration of the hedge transaction. Hedge accounting permits gains and losses on derivative instruments to be deferred in Accumulated Other Comprehensive Income (Loss) and subsequently included in earnings in the periods in which earnings are affected by the hedged item, or when the derivative is determined to be ineffective. We use derivatives primarily for forward purchases of foreign currency to manage exposure to the variability of cash flows, primarily related to the foreign exchange rate risks inherent in forecasted transactions denominated in foreign currency. Cash receipts and cash payments related to derivative instruments are recorded in the same category as the cash flows from the items being hedged on the Consolidated Statements of Cash Flows. See section entitled “New Accounting Standards” below for information on the adoption of new derivative guidance and Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. |
Stock-Based Compensation | Stock-Based Compensation: As described in Note 10 - Stock Compensation Plans of Notes to Consolidated Financial Statements, the Company maintains the 2014 Stock Option and Incentive Plan, which allows for the issuance of incentive stock options, stock appreciation rights, restricted shares, unrestricted shares, restricted share units, or performance shares and performance units for grant to officers and other key employees, and to members of the Board of Directors who are not employees. The Company also maintains the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan (the “Deferral Plan”), which allows Non-Employee Directors to elect to defer all, or a portion of, their retainer fees in stock. We recognize the cost resulting from share-based payment transactions using a fair-value-based method. The estimated fair value of outstanding performance shares is based on the stock price at the date of the grant. Stock-based compensation expense is recognized for the portion of the award for which performance targets have been established and is expected to vest. The Company has elected to account for forfeitures by reversing the compensation costs at the time a forfeiture occurs. |
New Accounting Standards | New Accounting Standards: Adopted in Fiscal Year 2020: In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on leases with subsequent amendments to this new guidance in January 2018, July 2018, and December 2018. The new guidance requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by those leases and requires additional qualitative and quantitative disclosures. Under previous guidance, only capital leases were recognized on the balance sheet. We adopted this standard on July 1, 2019, the beginning of our first quarter of fiscal year 2020, under the modified retrospective method. As allowed by the July 2018 amendment, the Company has not recast the comparative periods. We elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusions about lease identification, classification, and initial direct costs. We also elected the short-term lease recognition exemption, permitting us not to recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. Lease assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our estimated incremental borrowing rate, unless the implicit rate is readily determinable. The estimated incremental borrowing rate is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The adoption resulted in the recognition of $2.6 million of right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheet, primarily for our real estate operating leases, on the adoption date. The adoption did not have a material effect on our results of operations or cash flows. There was no cumulative-effect adjustment to equity. See Note 20 - Leases of Notes to Consolidated Financial Statements for more information on leases. In August 2017, the FASB issued guidance on Derivatives and Hedging. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The Company adopted this during the first quarter of fiscal year 2020 with an immaterial effect on our Consolidated Financial Statements. In January 2017, the FASB issued guidance for Intangibles - Goodwill and Other, which simplifies the goodwill impairment test by eliminating the requirement to compare the implied fair value of goodwill with its carrying amount as part of step two of the goodwill impairment test. An entity should perform its goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount, recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption allowed and should be applied on a prospective basis. The Company elected to early adopt this guidance beginning in the fourth quarter of fiscal year 2020, and applied to its fourth quarter goodwill impairment tests discussed in Note 6 - Goodwill and Other Intangible Assets . Not Yet Adopted: In June 2016, the FASB issued guidance on the Measurement of Credit Losses on Financial Instruments, which replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We will adopt this standard effective July 1, 2020, and the adoption will not have a material effect on our consolidated financial statements. In August 2018, the FASB issued guidance on Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This new guidance amends the accounting for implementation, setup, and other upfront costs incurred in a cloud computing hosting arrangement. The amendment aligns the requirement for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendment also requires companies to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, including options to extend the agreement that is in control of the customer. The guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The guidance is to be adopted either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We plan to adopt prospectively effective July 1, 2020, and the adoption of this standard will not have a material effect on our consolidated financial statements. In December 2019, the FASB issued guidance on Simplifying the Accounting for Income Taxes, intended to simplify various aspects related to the accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. |
Short-term Leases [Policy Text Block] | We also elected the short-term lease recognition exemption, permitting us not to recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. |
Lessee, Leases [Policy Text Block] | Lease assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our estimated incremental borrowing rate, unless the implicit rate is readily determinable. The estimated incremental borrowing rate is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. |
Note 2. Acquisitions Policies (
Note 2. Acquisitions Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Business Acquisition [Line Items] | |
Intangible Assets, Finite-Lived, Policy | The estimated useful life of internal-use software ranges from 3 to 10 years . The amortization period for the customer relationships, technology, and trade name intangible assets is 15 years , 5 years, and 10 years, respectively |
GES | |
Business Acquisition [Line Items] | |
Intangible Assets, Finite-Lived, Policy | Other Intangible Assets include the estimated fair values for finite-lived intangible assets acquired and are listed in the table below along with their estimated useful lives which are being amortized on a straight-line basis. |
Note 3. Revenue from Contract_2
Note 3. Revenue from Contracts with Customers (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contracts with Customers [Abstract] | |
Revenue Recognition, Deferred Revenue | In limited circumstances, the Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for tooling or other miscellaneous services or costs. These advance payments are recognized as contract liabilities until the performance obligations are completed and are included in Accrued expenses on the Consolidated Balance Sheets, |
Note 6. Goodwill and Other In_2
Note 6. Goodwill and Other Intangible Assets Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Other Intangible Assets [Abstract] | |
Intangible Assets, Finite-Lived, Policy | The estimated useful life of internal-use software ranges from 3 to 10 years . The amortization period for the customer relationships, technology, and trade name intangible assets is 15 years , 5 years, and 10 years, respectively |
Note 7. Commitments and Conti_2
Note 7. Commitments and Contingent Liabilities (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingent Liabilities [Abstract] | |
Product Warranties | The Company provides only assurance-type warranties for a limited time period, which cover workmanship and assures the product complies with specifications provided by or agreed upon with the customer. We maintain a provision for limited warranty repair or replacement of products manufactured and sold, which has been established in specific manufacturing contract agreements. We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. |
Note 8. Credit Facilities (Poli
Note 8. Credit Facilities (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt and Credit Facilities [Abstract] | |
Debt, Policy | The amount of Long-term debt under credit facilities, less current maturities reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on July 27, 2023. |
Note 9. Employee Benefit Plans
Note 9. Employee Benefit Plans (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Defined Benefit Plan Disclosure | |
Postemployment Benefit Plans | Actuarial (gain) loss is recorded in Accumulated Other Comprehensive (Income) Loss and amortized into net period benefit cost on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plans. |
Note 13. Fair Value (Policies)
Note 13. Fair Value (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
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. There were no changes in the inputs or valuation techniques used to measure fair values during fiscal year 2020 . Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents 1 Market - Quoted market prices Derivative Assets: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk Trading securities: Mutual funds held in SERP 1 Market - Quoted market prices Derivative Liabilities: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball Electronics’ non-performance risk |
Fair Value of Financial Instruments Not Carried at Fair Value | Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk Borrowings under credit facilities 2 Market - Based on observable market rates, taking into account Kimball Electronics’ non-performance risk The carrying values of our cash deposit accounts, trade accounts receivable, and trade accounts payable approximate fair value due to their relatively short maturity and immaterial non-performance risk. |
Note 14. Derivative Instrumen_2
Note 14. Derivative Instruments (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments [Abstract] | |
Derivatives, Hedge Discontinuances, Anticipated Transactions | In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may cease to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, we may either purchase a derivative contract in the opposite position of the undesignated hedge or may retain the hedge until it matures if the hedge continues to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities. |
Derivatives, Reporting of Derivative Activity | The fair value of outstanding derivative instruments is recognized on the balance sheet as a derivative asset or liability. When derivatives are settled with the counterparty, the derivative asset or liability is relieved and cash flow is impacted for the net settlement. For derivative instruments that meet the criteria of hedging instruments under FASB guidance, the effective portions of the gain or loss on the derivative instrument are initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners’ Equity, and are subsequently reclassified into earnings in the period or periods during which the hedged transaction is recognized in earnings. The 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 reported immediately in Non-operating income or expense on the Consolidated Statements of Income. |
Note 15. Investments (Policies)
Note 15. Investments (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
Investment | The Company SERP utilizes a rabbi trust, and therefore, assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. We recognize SERP investment assets on the balance sheet at current fair value. A SERP liability of the same amount is recorded on the balance sheet representing an obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. |
Note 1. Business Description _3
Note 1. Business Description and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | A summary of significant customers’ net sales and trade receivables as a percentage of consolidated net sales and consolidated trade receivables is as follows: Net Sales Trade Receivables Year Ended June 30 As of June 30 2020 2019 2018 2020 2019 Philips 16% 14% 13% * * ZF * 12% 15% * 14% Nexteer Automotive 14% 12% 13% 17% 16% Regal Beloit Corporation * * * * 10% * amount is less than 10% of total |
Note 2. Acquisitions (Tables)
Note 2. Acquisitions (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Acquisitions [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final purchase price allocation to assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess allocated to goodwill. Measurement period adjustments during the first quarter of fiscal year 2020 included a reduction of $2.0 million to Property and Equipment as a result of additional information obtained related to the valuation of certain equipment as of the acquisition date and a $0.2 million reduction in Other long-term liabilities to adjust deferred tax liabilities on the equipment. These measurement period adjustments to the purchase price allocation in the first quarter of fiscal year 2020 increased Goodwill by $1.8 million . For tax purposes, $8.9 million of the goodwill in the following table is expected to be deductible. See Note 1 – Business Description and Summary of Significant Accounting Policies and Note 6 - Goodwill and Other Intangible Assets of Notes to Consolidated Financial Statements for information on subsequent testing and measurement of Goodwill. (Amounts in Thousands) October 1, 2018 Cash $ 2,257 Receivables 15,656 Inventories 6,454 Prepaid expenses and other current assets 1,424 Property and Equipment 7,037 Other Intangible Assets 19,259 Other Assets 498 Goodwill 13,745 Total assets acquired $ 66,330 Borrowings under Credit Facilities $ 12,843 Accounts payable 4,113 Accrued expenses 1,340 Other long-term liabilities 5,653 Total liabilities assumed $ 23,949 Net assets acquired $ 42,381 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Other Intangible Assets include the estimated fair values for finite-lived intangible assets acquired and are listed in the table below along with their estimated useful lives which are being amortized on a straight-line basis. (Amounts in Thousands) Estimated Fair Value Estimated useful life (years) Software $ 379 3 to 7 Technology 5,060 5 Trade name 6,369 10 Customer relationships 7,451 15 Total other intangible assets $ 19,259 |
Note 3. Revenue from Contract_3
Note 3. Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contracts with Customers [Abstract] | |
Disaggregation of Revenue | The following table disaggregates our revenue by end market vertical for fiscal years 2020 and 2019 : Year Ended (Amounts in Millions) 2020 2019 Vertical Markets: Automotive $ 457.4 $ 474.3 Medical 397.8 367.5 Industrial 271.0 255.9 Public Safety 56.2 66.2 Other 18.2 17.9 Total net sales $ 1,200.6 $ 1,181.8 |
Note 4. Inventories (Tables)
Note 4. Inventories (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Inventories [Abstract] | |
Schedule of Inventory, Current | Inventory components were as follows at June 30: (Amounts in Thousands) 2020 2019 Finished products $ 4,529 $ 2,708 Work-in-process 3,577 4,119 Raw materials 210,937 197,013 Total inventory $ 219,043 $ 203,840 |
Note 5. Property and Equipment
Note 5. Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Property and Equipment [Abstract] | |
Components of Property and Equipment | Major classes of property and equipment consist of the following at June 30: (Amounts in Thousands) 2020 2019 Land and land use rights $ 11,792 $ 11,836 Buildings and improvements 80,606 78,508 Machinery and equipment 278,858 255,978 Construction-in-progress 19,646 14,262 Total $ 390,902 $ 360,584 Less: Accumulated depreciation (236,373 ) (216,955 ) Property and equipment, net $ 154,529 $ 143,629 |
Property, Plant and Equipment | The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 5 to 40 Machinery and equipment 3 to 11 Land use rights 39 Leasehold improvements Lesser of Useful Life or Term of Lease |
Note 6. Goodwill and Other In_3
Note 6. Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Other Intangible Assets [Abstract] | |
Schedule of Goodwill | A summary of goodwill is as follows: (Amounts in Thousands) Balance as of June 30, 2018 Goodwill $ 19,017 Accumulated impairment (12,826 ) Goodwill, net 6,191 Goodwill Acquired 11,913 Balance as of June 30, 2019 Goodwill 30,930 Accumulated impairment (12,826 ) Goodwill, net 18,104 Purchase Accounting Adjustments 1,832 Impairment (7,925 ) Balance as of June 30, 2020 Goodwill 32,762 Accumulated impairment (20,751 ) Goodwill, net $ 12,011 |
Schedule of Other Intangible Assets | A summary of other intangible assets subject to amortization is as follows: June 30, 2020 June 30, 2019 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 32,052 $ 27,851 $ 4,201 $ 32,015 $ 27,124 $ 4,891 Customer Relationships 8,618 2,014 6,604 8,618 1,506 7,112 Technology 5,060 1,777 3,283 5,060 766 4,294 Trade Name 6,369 1,114 5,255 6,369 478 5,891 Other Intangible Assets $ 52,099 $ 32,756 $ 19,343 $ 52,062 $ 29,874 $ 22,188 |
Note 7. Commitments and Conti_3
Note 7. Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingent Liabilities [Abstract] | |
Schedule of Product Warranty Liability | Changes in the product warranty accrual during fiscal years 2020 , 2019 , and 2018 were as follows: (Amounts in Thousands) 2020 2019 2018 Product Warranty Liability at the beginning of the year $ 958 $ 656 $ 593 Additions to warranty accrual (including changes in estimates) (271 ) 361 346 Settlements made (in cash or in kind) (40 ) (59 ) (283 ) Product Warranty Liability at the end of the year $ 647 $ 958 $ 656 |
Note 8. Credit Facilities (Tabl
Note 8. Credit Facilities (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt and Credit Facilities [Abstract] | |
Schedule of Line of Credit Facilities | Credit facilities consisted of the following: Unused Borrowings at Borrowings Outstanding at Borrowings Outstanding at (Amounts in Millions, in U.S Dollar Equivalents) June 30, 2020 June 30, 2020 June 30, 2019 Primary credit facility (1) $ 38.2 $ 111.4 $ 122.8 Secondary credit facility (2) 30.0 — — Thailand overdraft credit facility (3) 0.1 — — Netherlands revolving credit facility (4) 3.6 6.7 3.4 Poland revolving credit facility (5) 5.6 — — Total credit facilities $ 77.5 118.1 126.2 Less: current portion (26.6 ) (34.7 ) Long-term debt under credit facilities, less current portion (6) $ 91.5 $ 91.5 (1) The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature July 27, 2023. The primary credit facility provides for $150 million in borrowings, with an option to increase the amount available for borrowing to $225 million at the Company’s request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company including capital expenditures and acquisitions. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2020 , 2019 , and 2018 . The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary facility. Types of borrowings available on the primary facility include revolving loans, multi-currency term loans, and swingline loans. The interest rate on borrowings is dependent on the type of borrowings and will be one of the following two options: • the London Interbank Offered Rate (“LIBOR”) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined under the primary credit facility, plus the Eurocurrency Loans spread which can range from 125.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or • the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of a. JPMorgan’s prime rate; b. 1% per annum above the Adjusted LIBO Rate (as defined under the primary credit facility); or c. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA. The Company’s financial covenants under the primary credit facility require: • a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, and • a fixed charge coverage ratio, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be less than 1.10 to 1.00. The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2020 and 2019 . (2) During the current fiscal year, the Company established a 364-day multi-currency revolving credit facility (the “secondary credit facility”) among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, National Association, as Administrative Agent, and Bank of America, N.A., as Documentation Agent, which allows for borrowings of up to $30 million and has a maturity date of May 18, 2021. This secondary credit facility is to be used for working capital and general corporate purposes. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 50.0 basis points per annum. The interest rate on borrowings is dependent on the type of borrowings and will be one of the following two options: • the LIBOR in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined under the secondary credit facility, plus the Eurocurrency Loans spread of 2.125% ; or • the ABR, which is defined as the highest of the fluctuating rate per annum equal to the higher of a. JPMorgan’s prime rate; b. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the secondary credit facility); or c. 1% per annum above the Adjusted LIBO Rate (as defined under the secondary credit facility); plus the ABR Loans spread of 1.125% . The Company’s financial covenants under this secondary credit facility are the same as the financial covenants listed above for its primary credit facility. (3) The Company also maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to 2.4 million Thai Baht (approximately $0.1 million at June 30, 2020 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. (4) The Company also maintains an uncommitted revolving credit facility for our Netherlands subsidiary. The Netherlands credit facility allows for borrowings of up to 9.2 million Euro (approximately $10.3 million at June 30, 2020 exchange rates), which borrowings can be made in Euro, U.S. dollars, or other optional currency. The availability of funds under this facility is at the sole discretion of the bank. Proceeds from the facility are to be used for general corporate purposes. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed. The facility matures on June 22, 2021 . (5) The Company also maintains an uncommitted revolving credit facility for our Poland operation, which allows for borrowings up to 5 million Euro (approximately $5.6 million at June 30, 2020 exchange rates) that can be drawn in Euro, U.S. dollars, or Polish Zloty. The availability of funds under this uncommitted facility is at the sole discretion of the bank. Proceeds from the facility are to be used for general working capital purposes. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed. The facility matures on December 20, 2020 . (6) The amount of Long-term debt under credit facilities, less current maturities reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on July 27, 2023. |
Note 10. Stock Compensation P_2
Note 10. Stock Compensation Plans (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Stock Compensation Plans [Abstract] | |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Performance-Based Units, Vested and Expected to Vest | A summary of the Company’s performance share activity during fiscal year 2020 is presented below: Number of Shares Weighted Average Grant Date Fair Value Performance shares outstanding at July 1, 2019 447,260 $ 17.16 Granted 252,878 $ 14.39 Vested (253,483 ) $ 15.47 Forfeited (3,119 ) $ 11.87 Performance shares outstanding at June 30, 2020 443,536 $ 16.58 |
Note 11. Income Taxes (Tables)
Note 11. Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Taxes [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities as of June 30, 2020 and 2019 , were as follows: (Amounts in Thousands) 2020 2019 Deferred Tax Assets: Receivables $ 145 $ 105 Inventory 1,894 1,914 Employee benefits 224 193 Deferred compensation 5,338 6,149 Other current liabilities 265 1,275 Tax credit carryforwards 2,445 1,638 Goodwill 1,608 268 Net operating loss carryforward 2,398 2,339 Net foreign currency losses — 11 Miscellaneous 4,020 2,970 Valuation Allowance (1,637 ) (658 ) Total asset $ 16,700 $ 16,204 Deferred Tax Liabilities: Other intangible assets $ 1,313 $ 1,412 Property and equipment 1,211 1,116 Net foreign currency gains 22 — Miscellaneous 581 477 Total liability $ 3,127 $ 3,005 Net Deferred Income Taxes $ 13,573 $ 13,199 |
Schedule of Income before Income Tax, Domestic and Foreign | The components of income before taxes on income are as follows: Year Ended June 30 (Amounts in Thousands) 2020 2019 2018 United States $ (6,117 ) $ 11,191 $ 5,609 Foreign 31,274 27,294 39,166 Total income before taxes on income $ 25,157 $ 38,485 $ 44,775 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2020 2019 2018 Current Taxes: Federal $ (1,666 ) $ 872 $ 13,132 Foreign 8,479 7,545 11,982 State (29 ) 203 459 Total payable $ 6,784 $ 8,620 $ 25,573 Deferred Taxes: Federal $ 99 $ 67 $ 5,015 Foreign 237 (1,177 ) (2,427 ) State (1,138 ) (603 ) (776 ) Valuation allowance 979 20 638 Total deferred $ 177 $ (1,693 ) $ 2,450 Total provision for income taxes $ 6,961 $ 6,927 $ 28,023 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows: Year Ended June 30 2020 2019 2018 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 5,283 21.0 % $ 8,082 21.0 % $ 12,582 28.1 % State income taxes, net of federal income tax benefit (1,128 ) (4.5 ) (320 ) (0.8 ) (408 ) (0.9 ) Foreign tax rate differential 714 2.8 313 0.8 (1,615 ) (3.6 ) Impact of foreign exchange rates on foreign income taxes 867 3.4 156 0.4 180 0.4 Non-deductible goodwill impairment 388 1.5 — — — — Valuation allowance 979 3.9 20 0.1 638 1.4 Research credit (1,056 ) (4.2 ) (627 ) (1.6 ) (378 ) (0.8 ) Deemed repatriation — — (416 ) (1.1 ) 13,436 30.0 Revaluation of net deferred tax assets — — (10 ) — 4,357 9.7 Global intangible low tax income 607 2.4 — — — — Other - net 307 1.4 (271 ) (0.8 ) (769 ) (1.7 ) Total provision for income taxes $ 6,961 27.7 % $ 6,927 18.0 % $ 28,023 62.6 % |
Summary of Income Tax Contingencies | Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2020 , 2019 , and 2018 were as follows: (Amounts in Thousands) 2020 2019 2018 Beginning balance - July 1 $ 904 $ 160 $ 102 Tax positions related to prior fiscal years: Additions 116 758 78 Reductions — — (20 ) Tax positions related to current fiscal year: Additions — — — Reductions — — — Settlements — — — Lapses in statute of limitations (66 ) (14 ) — Ending balance - June 30 $ 954 $ 904 $ 160 Portion that, if recognized, would reduce tax expense and effective tax rate $ 262 $ 214 $ 137 |
Note 13. Fair Value (Tables)
Note 13. Fair Value (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value [Abstract] | |
Fair Value Measurements, Recurring, Valuation Techniques | The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents 1 Market - Quoted market prices Derivative Assets: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk Trading securities: Mutual funds held in SERP 1 Market - Quoted market prices Derivative Liabilities: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball Electronics’ non-performance risk |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of June 30, 2020 and 2019 , the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows: June 30, 2020 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,140 $ — $ 1,140 Derivatives: foreign exchange contracts — 741 741 Trading securities: mutual funds held in nonqualified SERP 10,477 — 10,477 Total assets at fair value $ 11,617 $ 741 $ 12,358 Liabilities Derivatives: foreign exchange contracts $ — $ 2,134 $ 2,134 Total liabilities at fair value $ — $ 2,134 $ 2,134 June 30, 2019 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,123 $ — $ 1,123 Derivatives: foreign exchange contracts — 1,832 1,832 Trading securities: mutual funds held in nonqualified SERP 9,268 — 9,268 Total assets at fair value $ 10,391 $ 1,832 $ 12,223 Liabilities Derivatives: foreign exchange contracts $ — $ 299 $ 299 Total liabilities at fair value $ — $ 299 $ 299 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk Borrowings under credit facilities 2 Market - Based on observable market rates, taking into account Kimball Electronics’ non-performance risk |
Note 14. Derivative Instrumen_3
Note 14. Derivative Instruments (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 517 $ 1,136 Accrued expenses $ 2,054 $ 278 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets 224 696 Accrued expenses 80 21 Total derivatives $ 741 $ 1,832 $ 2,134 $ 299 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The Effect of Derivative Instruments on Other Comprehensive Income (Loss) June 30 (Amounts in Thousands) 2020 2019 2018 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives: Foreign exchange contracts $ (2,079 ) $ 3,337 $ (2,669 ) The Effect of Derivative Instruments on Consolidated Statements of Income (Amounts in Thousands) Year Ended June 30 Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) 2020 2019 2018 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: Foreign exchange contracts Cost of Sales $ 64 $ 1,061 $ (1,648 ) Foreign exchange contracts Non-operating income (expense) — 5 (20 ) Total $ 64 $ 1,066 $ (1,668 ) Derivatives Not Designated as Hedging Instruments Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives: Foreign exchange contracts Non-operating income (expense) $ 1,558 $ 2,766 $ 796 Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ 1,622 $ 3,832 $ (872 ) |
Note 15. Investments (Tables)
Note 15. Investments (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Investments [Abstract] | |
Trading Securities (and Certain Trading Assets) | SERP asset and liability balances applicable to Kimball Electronics participants were as follows: June 30 (Amounts in Thousands) 2020 2019 SERP investments - current asset $ 1,972 $ 1,728 SERP investments - other long-term asset 8,505 7,540 Total SERP investments $ 10,477 $ 9,268 SERP obligation - current liability $ 1,972 $ 1,728 SERP obligation - other long-term liability 8,505 7,540 Total SERP obligation $ 10,477 $ 9,268 |
Note 16. Accrued Expenses (Tabl
Note 16. Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of: June 30 (Amounts in Thousands) 2020 2019 Taxes $ 5,135 $ 5,760 Compensation 16,839 19,046 Customer advance payments 7,145 6,345 Retirement plan 2,337 1,959 Insurance 1,618 1,675 Other expenses 9,190 8,411 Total accrued expenses $ 42,264 $ 43,196 |
Note 17. Geographic Informati_2
Note 17. Geographic Information (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Geographic Information [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following geographic area data includes net sales based on the country location of the Company’s business unit providing the manufacturing or other service and long-lived assets based on physical location. Long-lived assets include property and equipment and capitalized software. At or For the Year Ended June 30 (Amounts in Thousands) 2020 2019 2018 Net Sales: United States $ 346,376 $ 321,805 $ 224,834 Mexico 232,135 282,400 256,537 Poland 244,107 251,635 282,847 China 159,746 146,332 177,930 Thailand 124,415 113,276 87,513 Other Foreign 93,771 66,396 42,400 Total net sales $ 1,200,550 $ 1,181,844 $ 1,072,061 Long-Lived Assets: United States $ 48,190 $ 43,887 $ 39,465 Mexico 36,548 31,238 30,733 Poland 32,670 29,736 33,629 Romania 17,707 19,546 19,394 China 10,405 12,138 14,546 Other Foreign 13,210 11,975 3,773 Total long-lived assets $ 158,730 $ 148,520 $ 141,540 |
Note 18. Earnings Per Share (Ta
Note 18. Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
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: (Amounts in thousands, except per share data) Year Ended June 30 2020 2019 2018 Basic and Diluted Earnings Per Share: Net Income $ 18,196 $ 31,558 $ 16,752 Less: Net Income allocated to participating securities 24 32 9 Net Income allocated to common Share Owners $ 18,172 $ 31,526 $ 16,743 Basic weighted average common shares outstanding 25,243 25,857 26,745 Dilutive effect of average outstanding performance shares 165 200 255 Dilutive effect of average outstanding deferred stock units 20 25 7 Dilutive weighted average shares outstanding 25,428 26,082 27,007 Earnings Per Share of Common Stock: Basic $ 0.72 $ 1.22 $ 0.63 Diluted $ 0.71 $ 1.21 $ 0.62 |
Note 19. Accumulated Other Co_2
Note 19. Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: (Amounts in Thousands) Foreign Currency Translation Adjustments Derivative Gain (Loss) Postemployment Benefits Net Actuarial Gain (Loss) Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2018 $ (4,357 ) $ (3,379 ) $ 837 $ (6,899 ) Other comprehensive income (loss) before reclassifications (2,491 ) 2,638 339 486 Reclassification to (earnings) loss — (857 ) (358 ) (1,215 ) Net current-period other comprehensive income (loss) $ (2,491 ) $ 1,781 $ (19 ) $ (729 ) Balance at June 30, 2019 $ (6,848 ) $ (1,598 ) $ 818 $ (7,628 ) Other comprehensive income (loss) before reclassifications (1,046 ) (1,570 ) 87 (2,529 ) Reclassification to (earnings) loss — (86 ) (308 ) (394 ) Net current-period other comprehensive income (loss) (1,046 ) (1,656 ) (221 ) (2,923 ) Balance at June 30, 2020 $ (7,894 ) $ (3,254 ) $ 597 $ (10,551 ) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income (Loss) Year Ended June 30 Affected Line Item in the (Amounts in Thousands) 2020 2019 Consolidated Statements of Income Derivative Gain (Loss) (1) $ 64 $ 1,061 Cost of Sales — 5 Non-operating income (expense), net 22 (209 ) Benefit (Provision) for Income Taxes $ 86 $ 857 Net of Tax Postemployment Benefits: Amortization of Actuarial Gain (Loss) (2) $ 406 $ 472 Non-operating income (98 ) (114 ) Benefit (Provision) for Income Taxes $ 308 $ 358 Net of Tax Total Reclassifications for the Period $ 394 $ 1,215 Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 9 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 20. Leases (Tables)
Note 20. Leases (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Lease, Cost | The lease assets and liabilities, which exclude leases with terms of 12 months or less, as of June 30, 2020 , were as follows: (Amounts in Thousands) Operating lease right-of-use assets (included in Other Assets) $ 2,025 Operating lease liability, current (included in Accrued expenses) $ 817 Operating lease liability, noncurrent (included in Other long-term liabilities) $ 1,208 Weighted average remaining lease term in years - operating leases 4.7 Weighted average discount rate - operating leases 3.3 % |
Lessee, Operating Lease, Liability, Maturity | Future lease payments as of June 30, 2020 are as follows: (Amounts in Thousands) 2021 $ 832 2022 655 2023 95 2024 95 2025 95 Thereafter 380 Total undiscounted lease payments $ 2,152 Less: imputed interest 127 Total lease liabilities $ 2,025 |
Note 21. Quarterly Financial _2
Note 21. Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Schedule of Quarterly Financial Information | Three Months Ended (Amounts in Thousands, Except for Per Share Data) September 30 December 31 March 31 June 30 Fiscal Year 2020: Net Sales $ 313,385 $ 307,084 $ 293,925 $ 286,156 Gross Profit 22,193 20,511 20,212 20,925 Goodwill Impairment — — — 7,925 Operating Income 11,115 8,684 10,588 1,609 Net Income (Loss) 6,598 6,612 6,259 (1,273 ) Basic Earnings (Loss) Per Share $ 0.26 $ 0.26 $ 0.25 $ (0.05 ) Diluted Earnings (Loss) Per Share $ 0.26 $ 0.26 $ 0.25 $ (0.05 ) Fiscal Year 2019: Net Sales $ 265,620 $ 284,149 $ 313,454 $ 318,621 Gross Profit 18,186 20,444 26,554 23,222 Operating Income 7,032 10,212 14,497 10,319 Net Income 5,069 7,115 11,849 7,525 Basic Earnings Per Share $ 0.19 $ 0.27 $ 0.46 $ 0.30 Diluted Earnings Per Share $ 0.19 $ 0.27 $ 0.46 $ 0.29 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts | Valuation and Qualifying Accounts Description Balance at Beginning of Year Additions (Reductions) to Expense Adjustments to Other Accounts Write-offs and Recoveries Balance at End of Year (Amounts in Thousands) Year Ended June 30, 2020 Valuation Allowances: Receivables $ 270 $ 265 $ (5 ) $ (7 ) $ 523 Deferred Tax Asset $ 658 $ 979 $ — $ — $ 1,637 Year Ended June 30, 2019 Valuation Allowances: Receivables $ 482 $ 184 $ 14 $ (410 ) $ 270 Deferred Tax Asset $ 638 $ 20 $ — $ — $ 658 Year Ended June 30, 2018 Valuation Allowances: Receivables $ 284 $ 259 $ (51 ) $ (10 ) $ 482 Deferred Tax Asset $ — $ 638 $ — $ — $ 638 |
Note 1. Business Description _4
Note 1. Business Description and Summary of Significant Accounting Policies - Textuals (Details) - USD ($) | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jul. 01, 2019 | |
Accounts Receivable Sold Without Recourse | $ 280,700,000 | $ 261,200,000 | $ 181,500,000 | |
Accounts Receivable, Extended Payment Terms | 45 days | |||
Factoring Fees | $ 1,900,000 | 1,700,000 | 1,100,000 | |
DueFromBankersAcceptanceDrafts | 7,100,000 | 4,200,000 | ||
SettlementofBankersAcceptanceDrafts | 6,800,000 | 2,700,000 | 5,500,000 | |
Impairment of Intangible Assets, Finite-lived | 0 | 0 | 0 | |
Research and Development Costs | $ 17,000,000 | 15,000,000 | 11,000,000 | |
Self-Insured Workforce Coverage Percent | 20.00% | |||
Self Insurance Reserve, Current | $ 1,600,000 | 1,700,000 | ||
Other General Income | 0 | $ (307,000) | $ 0 | |
Operating Lease, Right-of-Use Asset | 2,025,000 | |||
Operating Lease, Liability | $ 2,025,000 | |||
Minimum | ||||
Accounts Receivable, Customary Payment Terms | 30 days | |||
Maximum | ||||
Accounts Receivable, Customary Payment Terms | 45 days | |||
Accounting Standards Update 2016-02 | ||||
Operating Lease, Right-of-Use Asset | $ 2,600,000 | |||
Operating Lease, Liability | 2,600,000 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 0 | |||
Lease, Practical Expedients, Package [true false] | true |
Note 1. Business Description _5
Note 1. Business Description and Summary of Significant Accounting Policies - Summary of Concentration Risk (Details) - Customer Concentration Risk | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Philips | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.00% | 14.00% | 13.00% |
ZF | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12.00% | 15.00% | |
ZF | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 14.00% | ||
Nexteer Automotive | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 14.00% | 12.00% | 13.00% |
Nexteer Automotive | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17.00% | 16.00% | |
Regal Beloit Corporation | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% |
Note 2. Acquisitions (Details)
Note 2. Acquisitions (Details) - USD ($) | Oct. 01, 2018 | Sep. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Goodwill, Purchase Accounting Adjustments | $ 1,832,000 | ||||
Goodwill | 12,011,000 | $ 18,104,000 | $ 6,191,000 | ||
Finite-lived Intangible Assets Acquired | $ 0 | ||||
GES | |||||
Business Acquisition, Date of Acquisition Agreement | Oct. 1, 2018 | ||||
Business Acquisition, Transaction Costs | $ 2,200,000 | ||||
Business Combination, Acquisition Related Costs | 800,000 | $ 500,000 | $ 900,000 | ||
Business Combination, Consideration Transferred | 42,400,000 | ||||
Net Working Capital Adjustment for Acquisition | 7,600,000 | ||||
Final Net Working Capital Adjustment for Acquisition | 3,800,000 | ||||
Final net working capital adjustment charge on acquisition | 3,800,000 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Property, Plant, and Equipment | $ 2,000,000 | ||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Liabilities | 200,000 | ||||
Goodwill, Purchase Accounting Adjustments | $ 1,800,000 | 1,800,000 | |||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 8,900,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 2,257,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 15,656,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 6,454,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 1,424,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 7,037,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 19,259,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 498,000 | ||||
Goodwill | 13,745,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 66,330,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Long-term Debt | 12,843,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | 4,113,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | 1,340,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | 5,653,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | 23,949,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 42,381,000 | ||||
Business Combination, Tax Liabilities Including Interest and Penalties Assumed, Liabilities | 4,200,000 | ||||
Business Combination, Tax Liabilities Including Interest and Penalties Assumed, Noncurrent Liabilities | 3,900,000 | ||||
Business Combination, Tax Liabilities Including Interest and Penalties Assumed, Current Liabilities | 300,000 | ||||
Business Combination, Indemnification Assets, Amount as of Acquisition Date | 4,200,000 | ||||
Finite-lived Intangible Assets Acquired | 19,259,000 | ||||
Computer Software, Intangible Asset | GES | |||||
Finite-lived Intangible Assets Acquired | 379,000 | ||||
Technology-Based Intangible Assets | GES | |||||
Finite-lived Intangible Assets Acquired | $ 5,060,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | ||||
Trade Names | GES | |||||
Finite-lived Intangible Assets Acquired | $ 6,369,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||||
Customer Relationships | GES | |||||
Finite-lived Intangible Assets Acquired | $ 7,451,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 15 years | ||||
Minimum | Computer Software, Intangible Asset | GES | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||
Maximum | Computer Software, Intangible Asset | GES | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years |
Note 3. Revenue from Contract_4
Note 3. Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | $ 286,156 | $ 293,925 | $ 307,084 | $ 313,385 | $ 318,621 | $ 313,454 | $ 284,149 | $ 265,620 | $ 1,200,550 | $ 1,181,844 | $ 1,072,061 |
Contract Assets | 70,350 | 51,929 | 70,350 | 51,929 | |||||||
Customer advance payments | $ 7,145 | $ 6,345 | $ 7,145 | $ 6,345 | |||||||
Transferred over Time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | 78.00% | 70.00% | |||||||||
Automotive | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | $ 457,400 | $ 474,300 | |||||||||
Medical | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | 397,800 | 367,500 | |||||||||
Industrial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | 271,000 | 255,900 | |||||||||
Public Safety | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | 56,200 | 66,200 | |||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net Sales | $ 18,200 | $ 17,900 |
Note 4. Inventories - Inventory
Note 4. Inventories - Inventory Components (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Inventory, Finished Goods, Net of Reserves | $ 4,529 | $ 2,708 |
Inventory, Work in Process, Net of Reserves | 3,577 | 4,119 |
Inventory, Raw Materials, Net of Reserves | 210,937 | 197,013 |
Total inventory | $ 219,043 | $ 203,840 |
Note 5. Property and Equipmen_2
Note 5. Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Property and Equipment | ||
Total Property and Equipment | $ 390,902 | $ 360,584 |
Less: Accumulated depreciation | (236,373) | (216,955) |
Property and equipment, net | 154,529 | 143,629 |
Land and Land Use Rights | ||
Property and Equipment | ||
Total Property and Equipment | 11,792 | 11,836 |
Building and Building Improvements | ||
Property and Equipment | ||
Total Property and Equipment | 80,606 | 78,508 |
Machinery and Equipment | ||
Property and Equipment | ||
Total Property and Equipment | 278,858 | 255,978 |
Construction in Progress | ||
Property and Equipment | ||
Total Property and Equipment | $ 19,646 | $ 14,262 |
Note 5. Property and Equipmen_3
Note 5. Property and Equipment - Asset Lives (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Leasehold Improvements, Range of Lives | Lesser of Useful Life or Term of Lease |
Building and Building Improvements | Minimum | |
Property, Plant and Equipment, Useful Life | 5 years |
Building and Building Improvements | Maximum | |
Property, Plant and Equipment, Useful Life | 40 years |
Machinery and Equipment | Minimum | |
Property, Plant and Equipment, Useful Life | 3 years |
Machinery and Equipment | Maximum | |
Property, Plant and Equipment, Useful Life | 11 years |
Land Use Rights | |
Property, Plant and Equipment, Useful Life | 39 years |
Note 5. Property and Equipmen_4
Note 5. Property and Equipment - Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Depreciation of property and equipment | $ 27.7 | $ 26.3 | $ 25.5 |
Note 6. Goodwill and Other In_4
Note 6. Goodwill and Other Intangible Assets Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Oct. 01, 2018 | |
Goodwill | ||||||||
Goodwill, Gross | $ 32,762 | $ 32,762 | $ 30,930 | $ 19,017 | ||||
Accumulated impairment | (20,751) | (20,751) | (12,826) | (12,826) | ||||
Goodwill | 12,011 | 12,011 | 18,104 | 6,191 | ||||
Goodwill, Acquired During Period | 11,913 | |||||||
Goodwill, Purchase Accounting Adjustments | 1,832 | |||||||
Goodwill Impairment | 7,925 | $ 0 | $ 0 | $ 0 | 7,925 | 0 | $ 0 | |
GES | ||||||||
Goodwill | ||||||||
Goodwill Impairment | 7,900 | |||||||
Reduction in Income Tax Expense from Goodwill Impairment | $ 1,000 | |||||||
Goodwill, Impaired, Facts and Circumstances Leading to Impairment | Subsequent to our annual test date, we identified an indicator of impairment related to future anticipated revenues, which triggered an additional impairment test as of June 30, 2020 | |||||||
Goodwill, Impaired, Method for Fair Value Determination | For the GES impairment test, we used an independent, third-party valuation specialist to assist in the determination of fair value for the GES reporting unit. We used a combination of the Income Approach, using a discounted cash flow model, and the Market Approach, based on projected fiscal year 2021 results. | |||||||
Weight of Income Approach Used in Goodwill Impairment Testing | 50.00% | |||||||
Weight of Market Approach Used in Goodwill Impairment Testing | 50.00% | |||||||
WACC Used in Goodwill Impairment Testing | 20.00% | |||||||
Impact from 100 Basis Point Change in WACC in Goodwill Impairment Testing | $ 1,700 | |||||||
Terminal Growth Rate in Goodwill Impairment Testing | 3.00% | |||||||
Minimum | GES | ||||||||
Goodwill | ||||||||
Forecasted Revenue Growth Rates Fiscal Years 2021 to 2023 in Goodwill Impairment Testing | 20.00% | |||||||
Forecasted Revenue Growth Rates after Fiscal Year 2023 in Goodwill Impairment Testing | 3.00% | |||||||
Maximum | GES | ||||||||
Goodwill | ||||||||
Forecasted Revenue Growth Rates Fiscal Years 2021 to 2023 in Goodwill Impairment Testing | 50.00% | |||||||
Forecasted Revenue Growth Rates after Fiscal Year 2023 in Goodwill Impairment Testing | 12.00% | |||||||
GES | ||||||||
Goodwill | ||||||||
Goodwill | $ 13,745 | |||||||
Goodwill, Acquired During Period | $ 11,900 | |||||||
Goodwill, Purchase Accounting Adjustments | $ 1,800 | $ 1,800 |
Note 6. Goodwill and Other In_5
Note 6. Goodwill and Other Intangible Assets Finite-Lived Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 52,099,000 | $ 52,062,000 | |
Other Intangible Assets, Accumulated Amortization | 32,756,000 | 29,874,000 | |
Other Intangible Assets, Net Value | 19,343,000 | 22,188,000 | |
Other Intangible Assets, Amortization Expense | 3,200,000 | 2,600,000 | $ 900,000 |
Other Intangible Assets, Future Amortization Expense, Year One | 3,100,000 | ||
Other Intangible Assets, Future Amortization Expense, Year Two | 3,000,000 | ||
Other Intangible Assets, Future Amortization Expense, Year Three | 2,900,000 | ||
Other Intangible Assets, Future Amortization Expense, Year Four | 2,100,000 | ||
Other Intangible Assets, Future Amortization Expense, Year Five | 1,600,000 | ||
Other Intangible Assets, Future Amortization Expense, after Year Five | 6,600,000 | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 0 | ||
Finite-lived Intangible Assets Acquired | 0 | ||
Computer Software, Intangible Asset | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | 32,052,000 | 32,015,000 | |
Other Intangible Assets, Accumulated Amortization | 27,851,000 | 27,124,000 | |
Other Intangible Assets, Net Value | $ 4,201,000 | 4,891,000 | |
Computer Software, Intangible Asset | Minimum | |||
Other Intangible Assets | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||
Computer Software, Intangible Asset | Maximum | |||
Other Intangible Assets | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||
Customer Relationships | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 8,618,000 | 8,618,000 | |
Other Intangible Assets, Accumulated Amortization | 2,014,000 | 1,506,000 | |
Other Intangible Assets, Net Value | $ 6,604,000 | 7,112,000 | |
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Technology-Based Intangible Assets | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 5,060,000 | 5,060,000 | |
Other Intangible Assets, Accumulated Amortization | 1,777,000 | 766,000 | |
Other Intangible Assets, Net Value | $ 3,283,000 | 4,294,000 | |
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Trade Names | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 6,369,000 | 6,369,000 | |
Other Intangible Assets, Accumulated Amortization | 1,114,000 | 478,000 | |
Other Intangible Assets, Net Value | $ 5,255,000 | $ 5,891,000 | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Note 7. Commitments and Conti_4
Note 7. Commitments and Contingent Liabilities - Guarantees Textuals (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Contingent Liabilities | ||
Other Commitment | $ 400,000 | $ 900,000 |
Guarantee Obligations | ||
Contingent Liabilities | ||
Loss Contingency Accrual, at Carrying Value | 0 | 0 |
Financial Standby Letter of Credit | ||
Contingent Liabilities | ||
Unused standby letters of credit | 400,000 | 400,000 |
Loss Contingency Accrual, at Carrying Value | $ 0 | $ 0 |
Note 7. Commitments and Conti_5
Note 7. Commitments and Contingent Liabilities - Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Product Warranty Liability at the beginning of the year | $ 958 | $ 656 | $ 593 |
Additions to warranty accrual (including changes in estimates) | (271) | 361 | 346 |
Settlements made (in cash or in kind) | (40) | (59) | (283) |
Product Warranty Liability at the end of the year | $ 647 | $ 958 | $ 656 |
Note 8. Credit Facilities - Tex
Note 8. Credit Facilities - Textuals (Details) $ in Thousands, € in Millions, ฿ in Millions | 12 Months Ended | ||||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2020EUR (€) | Jun. 30, 2020USD ($) | Jun. 30, 2020THB (฿) | ||
Credit Facility, Availability to Borrow | $ 77,500 | ||||||
Long-term Line of Credit | $ 126,200 | 118,100 | |||||
Current portion of borrowings under credit facilities | 34,713 | 26,638 | |||||
Long-term debt under credit facilities, less current portion | $ 91,500 | $ 91,500 | |||||
Debt, Weighted Average Interest Rate | 4.50% | 2.50% | 2.50% | 2.50% | |||
Interest Paid on Borrowings | $ 4,900 | $ 3,000 | $ 400 | ||||
Financial Standby Letter of Credit | |||||||
Unused standby letters of credit | 400 | $ 400 | |||||
Primary Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | 150,000 | ||||||
Credit Facility, Availability to Borrow | [1] | 38,200 | |||||
Long-term Line of Credit | [1] | 122,800 | 111,400 | ||||
Long-term debt under credit facilities, less current portion | [2] | 91,500 | 91,500 | ||||
Secondary Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | 30,000 | ||||||
Credit Facility, Availability to Borrow | [3] | 30,000 | |||||
Current portion of borrowings under credit facilities | [3] | 0 | 0 | ||||
Thailand Overdraft Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | 100 | ฿ 2.4 | |||||
Credit Facility, Availability to Borrow | [4] | 100 | |||||
Current portion of borrowings under credit facilities | [4] | 0 | 0 | ||||
Netherlands Revolving Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | € 9.2 | 10,300 | |||||
Credit Facility, Availability to Borrow | [5] | 3,600 | |||||
Current portion of borrowings under credit facilities | [5] | 3,400 | 6,700 | ||||
Poland Revolving Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | € 5 | 5,600 | |||||
Credit Facility, Availability to Borrow | [6] | 5,600 | |||||
Current portion of borrowings under credit facilities | [6] | $ 0 | $ 0 | ||||
[1] | The Company maintains a U.S. primary credit facility (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent, and Bank of America, N.A., as Documentation Agent, scheduled to mature July 27, 2023. The primary credit facility provides for $150 million in borrowings, with an option to increase the amount available for borrowing to $225 million at the Company’s request, subject to the consent of each lender participating in such increase. This facility is maintained for working capital and general corporate purposes of the Company including capital expenditures and acquisitions. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2020, 2019, and 2018. The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the primary facility. Types of borrowings available on the primary facility include revolving loans, multi-currency term loans, and swingline loans. The interest rate on borrowings is dependent on the type of borrowings and will be one of the following two options:•the London Interbank Offered Rate (“LIBOR”) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined under the primary credit facility, plus the Eurocurrency Loans spread which can range from 125.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or •the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher ofa.JPMorgan’s prime rate;b.1% per annum above the Adjusted LIBO Rate (as defined under the primary credit facility); orc.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility);plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA.The Company’s financial covenants under the primary credit facility require:•a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, and•a fixed charge coverage ratio, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be less than 1.10 to 1.00. The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2020 and 2019. | ||||||
[2] | The amount of Long-term debt under credit facilities, less current maturities reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The primary credit facility matures on July 27, 2023. | ||||||
[3] | During the current fiscal year, the Company established a 364-day multi-currency revolving credit facility (the “secondary credit facility”) among the Company, as borrower, certain subsidiaries of the Company as guarantors, the lenders party thereto, JPMorgan Chase Bank, National Association, as Administrative Agent, and Bank of America, N.A., as Documentation Agent, which allows for borrowings of up to $30 million and has a maturity date of May 18, 2021. This secondary credit facility is to be used for working capital and general corporate purposes. A commitment fee on the unused portion of principal amount of this secondary credit facility is payable at 50.0 basis points per annum. The interest rate on borrowings is dependent on the type of borrowings and will be one of the following two options:•the LIBOR in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined under the secondary credit facility, plus the Eurocurrency Loans spread of 2.125%; or •the ABR, which is defined as the highest of the fluctuating rate per annum equal to the higher ofa.JPMorgan’s prime rate;b.1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the secondary credit facility); orc.1% per annum above the Adjusted LIBO Rate (as defined under the secondary credit facility);plus the ABR Loans spread of 1.125%.The Company’s financial covenants under this secondary credit facility are the same as the financial covenants listed above for its primary credit facility. | ||||||
[4] | The Company also maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to 2.4 million Thai Baht (approximately $0.1 million at June 30, 2020 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. | ||||||
[5] | The Company also maintains an uncommitted revolving credit facility for our Netherlands subsidiary. The Netherlands credit facility allows for borrowings of up to 9.2 million Euro (approximately $10.3 million at June 30, 2020 exchange rates), which borrowings can be made in Euro, U.S. dollars, or other optional currency. The availability of funds under this facility is at the sole discretion of the bank. Proceeds from the facility are to be used for general corporate purposes. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed. The facility matures on June 22, 2021. | ||||||
[6] | The Company also maintains an uncommitted revolving credit facility for our Poland operation, which allows for borrowings up to 5 million Euro (approximately $5.6 million at June 30, 2020 exchange rates) that can be drawn in Euro, U.S. dollars, or Polish Zloty. The availability of funds under this uncommitted facility is at the sole discretion of the bank. Proceeds from the facility are to be used for general working capital purposes. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed. The facility matures on December 20, 2020. |
Note 8. Credit Facilities - Pri
Note 8. Credit Facilities - Primary and Secondary Credit Facility Textuals (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Primary Credit Facility | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 150 |
Line of Credit Facility, Maximum Borrowing Capacity Upon Request | $ 225 |
Line of Credit Facility, Above the Adjusted LIBOR Rate to Calculate Alternate Base Rate | 1.00% |
Line of Credit Facility, Above the Federal Funds Rate to Calculate Alternate Base Rate | 0.50% |
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash | $ 15 |
Adjusted Leverage Ratio Covenant | 3 |
Fixed Charge Coverage Ratio Covenant | 1.10 |
Secondary Credit Facility | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 30 |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% |
Line of Credit Facility, Eurocurrency Loans Spread | 0.02125 |
Line of Credit Facility, Above the Adjusted LIBOR Rate to Calculate Alternate Base Rate | 1.00% |
Line of Credit Facility, Above the Federal Funds Rate to Calculate Alternate Base Rate | 0.50% |
Line of Credit Facility, Alternate Base Rate Loans Spread | 0.01125 |
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash | $ 15 |
Adjusted Leverage Ratio Covenant | 3 |
Fixed Charge Coverage Ratio Covenant | 1.10 |
Minimum | Primary Credit Facility | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.20% |
Line of Credit Facility, Eurocurrency Loans Spread | 0.0125 |
Line of Credit Facility, Alternate Base Rate Loans Spread | 0.0025 |
Maximum | Primary Credit Facility | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% |
Line of Credit Facility, Eurocurrency Loans Spread | 0.0175 |
Line of Credit Facility, Alternate Base Rate Loans Spread | 0.0075 |
Note 9. Employee Benefit Plan_2
Note 9. Employee Benefit Plans - Retirement Plans Textuals for Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Domestic Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Cost | $ 2.4 | $ 2.1 | $ 2 |
Note 9. Employee Benefit Plan_3
Note 9. Employee Benefit Plans - Postemployment Plans Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Defined Benefit Plan Disclosure | |||
Assets for Plan Benefits, Defined Benefit Plan | $ 0 | ||
Liability, Defined Benefit Plan | 4,200 | $ 3,400 | |
Liability, Defined Benefit Plan, Noncurrent | 3,600 | 3,100 | |
Liability, Defined Benefit Plan, Current | 600 | 300 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 300 | 800 | $ 300 |
Domestic | |||
Defined Benefit Plan Disclosure | |||
Liability, Defined Benefit Plan | 1,100 | 1,500 | |
Foreign Plan | |||
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Benefit Obligation | $ 3,100 | $ 1,900 |
Note 10. Stock Compensation P_3
Note 10. Stock Compensation Plans - Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Oct. 20, 2016 | Oct. 03, 2014 | |
Stock Compensation Plan, Pre-tax Compensation Cost | $ 4 | $ 5.7 | $ 5.3 | ||
Non-Employee Directors Stock Compensation Deferral Plan | |||||
Stock Compensation Plan, Shares Reserved | 1,000,000 | ||||
Stock Option and Incentive Plan 2014 | |||||
Stock Compensation Plan, Shares Reserved | 4,500,000 |
Note 10. Stock Compensation P_4
Note 10. Stock Compensation Plans - Performance Share Activity (Details) - Performance Shares - Stock Option and Incentive Plan 2014 - $ / shares | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangements | |||
Performance Shares, Shares Outstanding, Beginning of Period | 447,260 | ||
Share-based Compensation Arrangements, Grants in Period | 252,878 | ||
Performance Shares, Shares Vested | (253,483) | (292,175) | (255,757) |
Performance Shares, Shares Forfeited | (3,119) | ||
Performance Shares, Shares Outstanding, End of Period | 443,536 | 447,260 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 17.16 | ||
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | 14.39 | ||
Performance Shares, Weighted Average Grant Date Fair Value of Shares Vested | 15.47 | ||
Performance Shares, Weighted Average Grant Date Fair Value of Shares Forfeited | 11.87 | ||
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, End of Period | $ 16.58 | $ 17.16 |
Note 10. Stock Compensation P_5
Note 10. Stock Compensation Plans - Performance Shares Textuals (Details) - Performance Shares - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock Option and Incentive Plan 2014 | |||
Share-based Compensation Arrangements | |||
Performance Shares, Unrecognized Compensation Cost | $ 4.3 | ||
Performance Shares, Average Vesting Period for Unrecognized Compensation Cost | 10 months | ||
Performance Shares, Shares Vested | 253,483 | 292,175 | 255,757 |
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 3.9 | $ 3.9 | $ 2.9 |
Minimum | |||
Share-based Compensation Arrangements | |||
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 1 year | ||
Maximum | |||
Share-based Compensation Arrangements | |||
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 5 years |
Note 10. Stock Compensation P_6
Note 10. Stock Compensation Plans - Unrestricted Share Grants Textuals (Details) - Unrestricted Shares Director Compensation - Stock Option and Incentive Plan 2014 - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangements, Grants in Period | 4,258 | 4,236 | 7,694 |
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | $ 16.99 | $ 17.69 | $ 20.15 |
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 0.1 | $ 0.1 | $ 0.2 |
Note 10. Stock Compensation P_7
Note 10. Stock Compensation Plans Deferred Share Units (Details) - Non-Employee Directors Stock Compensation Deferral Plan - Deferred Share Units Director Compensation - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangements, Grants in Period | 32,950 | 32,758 | 12,159 |
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | $ 17.30 | $ 17.40 | $ 20.15 |
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 0.6 | $ 0.6 | $ 0.2 |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 2,754 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 17.51 |
Note 11. Income Taxes - Textual
Note 11. Income Taxes - Textuals (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Deferred Tax Liabilities, Intangible Assets | $ 1,313 | $ 1,412 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 21.00% | 21.00% | 28.10% |
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 17,800 | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Net Deferred Tax Assets, Provisional Income Tax Expense (Benefit) | 4,400 | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense (Benefit) | 13,400 | |||
Tax Cuts and Jobs Act of 2017, Transition Tax for Accumulated Foreign Earnings Adjustment, Provisional Income Tax Expense (Benefit) | $ 400 | |||
Long-term income taxes payable | $ 9,765 | 9,765 | ||
Deferred Tax Assets, Valuation Allowance | 1,637 | 658 | ||
Undistributed Earnings of Foreign Subsidiaries | 270,000 | |||
Income Taxes Paid (Refunded), Net | 9,096 | 10,172 | $ 14,724 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 1,600 | $ 1,600 |
Note 11. Income Taxes - Compone
Note 11. Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred Tax Assets: | ||
Deferred Tax Assets, Receivables | $ 145 | $ 105 |
Deferred Tax Assets, Inventory | 1,894 | 1,914 |
Deferred Tax Assets, Employee Benefits | 224 | 193 |
Deferred Tax Assets, Deferred Compensation | 5,338 | 6,149 |
Deferred Tax Assets, Other Current Liabilities | 265 | 1,275 |
Deferred Tax Assets, Tax Credit Carryforwards | 2,445 | 1,638 |
Deferred Tax Assets, Goodwill | 1,608 | 268 |
Deferred Tax Assets, Net Operating Loss Carryforwards | 2,398 | 2,339 |
Deferred Tax Assets, Unrealized Currency Losses | 0 | 11 |
Deferred Tax Assets, Miscellaneous | 4,020 | 2,970 |
Deferred Tax Assets, Valuation Allowance | (1,637) | (658) |
Deferred Tax Assets | 16,700 | 16,204 |
Deferred Tax Liabilities: | ||
Deferred Tax Liabilities, Intangible Assets | 1,313 | 1,412 |
Deferred Tax Liabilities, Property, Plant and Equipment | 1,211 | 1,116 |
Deferred Tax Liabilities, Unrealized Currency Transaction Gains | 22 | 0 |
Deferred Tax Liabilities, Miscellaneous | 581 | 477 |
Deferred Tax Liabilities, Net | 3,127 | 3,005 |
Net Deferred Income Taxes | $ 13,573 | $ 13,199 |
Note 11. Income Taxes - Compo_2
Note 11. Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income (Loss) Before Taxes on Income, United States | $ (6,117) | $ 11,191 | $ 5,609 |
Income (Loss) Before Taxes on Income, Foreign | 31,274 | 27,294 | 39,166 |
Income Before Taxes on Income | $ 25,157 | $ 38,485 | $ 44,775 |
Note 11. Income Taxes - Compo_3
Note 11. Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Current Taxes: | |||
Current Federal Income Tax Expense (Benefit) | $ (1,666) | $ 872 | $ 13,132 |
Current Foreign Income Tax Expense (Benefit) | 8,479 | 7,545 | 11,982 |
Current State Income Tax Expense (Benefit) | (29) | 203 | 459 |
Current Income Tax Expense (Benefit) | 6,784 | 8,620 | 25,573 |
Deferred Taxes: | |||
Deferred Federal Income Tax Expense (Benefit) | 99 | 67 | 5,015 |
Deferred Foreign Income Tax Expense (Benefit) | 237 | (1,177) | (2,427) |
Deferred State Income Tax Expense (Benefit) | (1,138) | (603) | (776) |
Income Tax Expense (Benefit), Valuation Allowance | 979 | 20 | 638 |
Deferred Income Tax Expense (Benefit) | 177 | (1,693) | 2,450 |
Provision for Income Taxes | $ 6,961 | $ 6,927 | $ 28,023 |
Note 11. Income Taxes - Reconci
Note 11. Income Taxes - Reconciliation of Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Reconciliation, Income Tax Expense (Benefit), Tax Computed at U.S. Federal Statutory Rate | $ 5,283 | $ 8,082 | $ 12,582 | |
Effective Income Tax Rate Reconciliation, Tax Computed at U.S. Federal Statutory Rate | 35.00% | 21.00% | 21.00% | 28.10% |
Income Tax Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | $ (1,128) | $ (320) | $ (408) | |
Effective Income Tax Rate Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | (4.50%) | (0.80%) | (0.90%) | |
Income Tax Reconciliation, Foreign Tax Effect | $ 714 | $ 313 | $ (1,615) | |
Effective Income Tax Rate Reconciliation, Foreign Tax Effect | 2.80% | 0.80% | (3.60%) | |
Income Tax Rate Reconciliation, Impact of Foreign Exchange Rates, Amount | $ 867 | $ 156 | $ 180 | |
Effective Income Tax Rate Reconciliation Impact of Foreign Exchange Rates, Foreign, Percent | 3.40% | 0.40% | 0.40% | |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Amount | $ 388 | $ 0 | $ 0 | |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Percent | 1.50% | 0.00% | 0.00% | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 979 | $ 20 | $ 638 | |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 3.90% | 0.10% | 1.40% | |
Income Tax Reconciliation, Research Credit | $ (1,056) | $ (627) | $ (378) | |
Effective Income Tax Rate Reconciliation, Research Credit | (4.20%) | (1.60%) | (0.80%) | |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Transition Tax on Accumulated Foreign Earnings, Amount | $ 0 | $ (416) | $ 13,436 | |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act of 2017, Transition Tax for Accumulated Foreign Earnings Adjustment, Provisional Income Tax Expense (Benefit), Amount | 0 | (0.011) | 0.300 | |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Net Deferred Tax Assets, Provisional Income Tax Expense (Benefit), Amount | $ 0 | $ (10) | $ 4,357 | |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Net Deferred Tax Assets, Provisional Income Tax Expense (Benefit), Percent | 0.00% | 0.00% | 9.70% | |
Effective Income Tax Reconciliation Tax Cuts and Jobs Act 2017 Global Intangible Low-Taxed Income Provisions, Amount | $ 607 | $ 0 | $ 0 | |
Effective Income Tax Reconciliation Tax Cuts and Jobs Act 2017 Global Intangible Low-Taxed Income Provisions, Percent | 2.40% | 0.00% | 0.00% | |
Income Tax Reconciliation, Other-Net | $ 307 | $ (271) | $ (769) | |
Effective Income Tax Rate Reconciliation, Other-Net | 1.40% | (0.80%) | (1.70%) | |
Provision for Income Taxes | $ 6,961 | $ 6,927 | $ 28,023 | |
Effective Income Tax Rate | 27.70% | 18.00% | 62.60% |
Note 11. Income Taxes - Recon_2
Note 11. Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 904 | $ 160 | $ 102 |
Unrecognized Tax Benefits, Additions Resulting from Prior Period Tax Positions | 116 | 758 | 78 |
Unrecognized Tax Benefits, Reductions Resulting from Prior Period Tax Positions | 0 | 0 | (20) |
Unrecognized Tax Benefits, Additions Resulting from Current Period Tax Positions | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Current Period Tax Positions | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Settlements with Taxing Authorities | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | (66) | (14) | 0 |
Unrecognized Tax Benefits, Ending Balance | 954 | 904 | 160 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 262 | $ 214 | $ 137 |
Note 11. Income Taxes - Accrued
Note 11. Income Taxes - Accrued Interest and Penalties Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Jun. 30, 2019 |
Income Tax Contingency | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 1.6 | $ 1.6 |
Note 12. Share Owners' Equity -
Note 12. Share Owners' Equity - Textuals (Details) - USD ($) | 12 Months Ended | 56 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2020 | Nov. 08, 2018 | Aug. 23, 2017 | Sep. 29, 2016 | Oct. 21, 2015 | |
Stock Repurchase Program, Authorized Amount | $ 80,000,000 | $ 80,000,000 | ||||||
Treasury Stock, Value, Acquired, Cost Method | $ 8,794,000 | $ 23,431,000 | $ 9,418,000 | |||||
Treasury Stock Acquired, Average Cost Per Share | $ 14.12 | $ 14.93 | ||||||
Treasury Stock | ||||||||
Treasury Stock, Value, Acquired, Cost Method | $ 8,794,000 | $ 23,431,000 | $ 9,418,000 | $ 76,700,000 | ||||
share repurchase plan 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 | |||||||
Share Repurchase Program November 2018 Extension | ||||||||
Stock Repurchase Program, Authorized Amount | $ 20,000,000 | |||||||
share repurchase program October 2015 | ||||||||
Stock Repurchase Program, Authorized Amount | $ 20,000,000 |
Note 13. Fair Value - Textuals
Note 13. Fair Value - Textuals (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair Value, Purchases and Sales of Level 3 Assets | $ 0 | $ 0 |
Fair Value, Purchases and Sales of Level 3 Liabilities | $ 0 | $ 0 |
Note 13. Fair Value - Recurring
Note 13. Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Recurring Fair Value Measurments: | ||
Derivative Asset | $ 741 | $ 1,832 |
Debt Securities, Trading, and Equity Securities, FV-NI | 10,477 | 9,268 |
Derivative Liability | 2,134 | 299 |
Fair Value, Measurements, Recurring | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 1,140 | 1,123 |
Debt Securities, Trading, and Equity Securities, FV-NI | 10,477 | 9,268 |
Total assets at fair value | 12,358 | 12,223 |
Total liabilities at fair value | 2,134 | 299 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 741 | 1,832 |
Derivative Liability | 2,134 | 299 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 1,140 | 1,123 |
Debt Securities, Trading, and Equity Securities, FV-NI | 10,477 | 9,268 |
Total assets at fair value | 11,617 | 10,391 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 0 | 0 |
Debt Securities, Trading, and Equity Securities, FV-NI | 0 | 0 |
Total assets at fair value | 741 | 1,832 |
Total liabilities at fair value | 2,134 | 299 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 741 | 1,832 |
Derivative Liability | $ 2,134 | $ 299 |
Note 14. Derivative Instrumen_4
Note 14. Derivative Instruments - Textuals (Details) - Foreign Exchange Contract € in Millions, $ in Millions | 12 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019 | Jun. 30, 2020EUR (€) | Jun. 30, 2020USD ($) | |
Derivatives, Fair Value | ||||
Derivative, Notional Amount | € 62.5 | $ 32.3 | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ (1.7) | |||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Maximum Time to Transfer | 12 months | 12 months |
Note 14. Derivative Instrumen_5
Note 14. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Derivatives, Fair Value | ||
Derivative Asset | $ 741 | $ 1,832 |
Derivative Liability | 2,134 | 299 |
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 517 | 1,136 |
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | 2,054 | 278 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 224 | 696 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | $ 80 | $ 21 |
Note 14. Derivative Instrumen_6
Note 14. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign Exchange Contract | |||
Derivative Instruments, Gain (Loss) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | $ (2,079) | $ 3,337 | $ (2,669) |
Note 14. Derivative Instrumen_7
Note 14. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) | |||
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | $ 1,622 | $ 3,832 | $ (872) |
Foreign Exchange Contract | Nonoperating Income (Expense) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | 1,558 | 2,766 | 796 |
Cash Flow Hedging | Foreign Exchange Contract | |||
Derivative Instruments, Gain (Loss) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 64 | 1,066 | (1,668) |
Cash Flow Hedging | Foreign Exchange Contract | Cost of Sales | |||
Derivative Instruments, Gain (Loss) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 64 | 1,061 | (1,648) |
Cash Flow Hedging | Foreign Exchange Contract | Nonoperating Income (Expense) | |||
Derivative Instruments, Gain (Loss) | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | $ 0 | $ 5 | $ (20) |
Note 15. Investments - Investme
Note 15. Investments - Investments-Supplemental Employee Retirement Plan Investments Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Schedule of Trading Securities and Other Trading Assets | |||
Trading Securities, Change in net unrealized holding gains (losses) | $ 385 | $ 35 | $ 552 |
Note 15. Investments - Suppleme
Note 15. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Schedule of Trading Securities and Other Trading Assets | ||
SERP Investment | $ 10,477 | $ 9,268 |
SERP Obligation | 10,477 | 9,268 |
Prepaid Expenses and Other Current Assets | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Investment | 1,972 | 1,728 |
Other Noncurrent Assets | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Investment | 8,505 | 7,540 |
Other Current Liabilities | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Obligation | 1,972 | 1,728 |
Other Noncurrent Liabilities | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Obligation | $ 8,505 | $ 7,540 |
Note 16. Accrued Expenses - Acc
Note 16. Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Taxes | $ 5,135 | $ 5,760 |
Compensation | 16,839 | 19,046 |
Customer advance payments | 7,145 | 6,345 |
Retirement plan | 2,337 | 1,959 |
Insurance | 1,618 | 1,675 |
Other expenses | 9,190 | 8,411 |
Total accrued expenses | $ 42,264 | $ 43,196 |
Note 17. Geographic Informati_3
Note 17. Geographic Information - Segments, Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | $ 286,156 | $ 293,925 | $ 307,084 | $ 313,385 | $ 318,621 | $ 313,454 | $ 284,149 | $ 265,620 | $ 1,200,550 | $ 1,181,844 | $ 1,072,061 |
Long-Lived Assets: | 158,730 | 148,520 | 158,730 | 148,520 | 141,540 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 346,376 | 321,805 | 224,834 | ||||||||
Long-Lived Assets: | 48,190 | 43,887 | 48,190 | 43,887 | 39,465 | ||||||
MEXICO | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 232,135 | 282,400 | 256,537 | ||||||||
Long-Lived Assets: | 36,548 | 31,238 | 36,548 | 31,238 | 30,733 | ||||||
Poland | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 244,107 | 251,635 | 282,847 | ||||||||
Long-Lived Assets: | 32,670 | 29,736 | 32,670 | 29,736 | 33,629 | ||||||
CHINA | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 159,746 | 146,332 | 177,930 | ||||||||
Long-Lived Assets: | 10,405 | 12,138 | 10,405 | 12,138 | 14,546 | ||||||
THAILAND | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 124,415 | 113,276 | 87,513 | ||||||||
ROMANIA | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Long-Lived Assets: | 17,707 | 19,546 | 17,707 | 19,546 | 19,394 | ||||||
Other Foreign | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 93,771 | 66,396 | 42,400 | ||||||||
Long-Lived Assets: | $ 13,210 | $ 11,975 | $ 13,210 | $ 11,975 | $ 3,773 |
Note 18. Earnings Per Share Sta
Note 18. Earnings Per Share Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Income (Loss) | $ (1,273) | $ 6,259 | $ 6,612 | $ 6,598 | $ 7,525 | $ 11,849 | $ 7,115 | $ 5,069 | $ 18,196 | $ 31,558 | $ 16,752 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 24 | 32 | 9 | ||||||||
Net Income (Loss) Available to Common Stockholders, Basic | $ 18,172 | $ 31,526 | $ 16,743 | ||||||||
Weighted Average Number of Shares Outstanding, Basic | 25,243 | 25,857 | 26,745 | ||||||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 165 | 200 | 255 | ||||||||
Incremental Common Shares Attributable to Participating Nonvested Shares with Non-forfeitable Dividend Rights | 20 | 25 | 7 | ||||||||
Weighted Average Number of Shares Outstanding, Diluted | 25,428 | 26,082 | 27,007 | ||||||||
Earnings Per Share, Basic | $ (0.05) | $ 0.25 | $ 0.26 | $ 0.26 | $ 0.30 | $ 0.46 | $ 0.27 | $ 0.19 | $ 0.72 | $ 1.22 | $ 0.63 |
Earnings Per Share, Diluted | $ (0.05) | $ 0.25 | $ 0.26 | $ 0.26 | $ 0.29 | $ 0.46 | $ 0.27 | $ 0.19 | $ 0.71 | $ 1.21 | $ 0.62 |
Note 19. Accumulated Other Co_3
Note 19. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Share Owner's Equity | $ 369,854 | $ 355,527 | $ 342,272 |
Other comprehensive income (loss) before reclassifications | (2,529) | 486 | |
Reclassification to (earnings) loss | (394) | (1,215) | |
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings | 0 | ||
Share Owner's Equity | 379,365 | 369,854 | 355,527 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (2,923) | (729) | |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Share Owner's Equity | (7,628) | (6,899) | (9,084) |
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings | 49 | ||
Share Owner's Equity | (10,551) | (7,628) | (6,899) |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Share Owner's Equity | (6,848) | (4,357) | |
Other comprehensive income (loss) before reclassifications | (1,046) | (2,491) | |
Reclassification to (earnings) loss | 0 | 0 | |
Share Owner's Equity | (7,894) | (6,848) | (4,357) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (1,046) | (2,491) | |
Derivative Gain (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Share Owner's Equity | (1,598) | (3,379) | |
Other comprehensive income (loss) before reclassifications | (1,570) | 2,638 | |
Reclassification to (earnings) loss | (86) | (857) | |
Share Owner's Equity | (3,254) | (1,598) | (3,379) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (1,656) | 1,781 | |
Postemployment Benefits, Net Actuarial Gain | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Share Owner's Equity | 818 | 837 | |
Other comprehensive income (loss) before reclassifications | 87 | 339 | |
Reclassification to (earnings) loss | (308) | (358) | |
Share Owner's Equity | 597 | 818 | $ 837 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ (221) | $ (19) |
Note 19. Accumulated Other Co_4
Note 19. Accumulated Other Comprehensive Income (Loss) - Reclassification from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||||||||||
Cost of Sales | $ (1,116,709) | $ (1,093,438) | $ (986,031) | |||||||||
Selling and Administrative Expenses | (43,920) | (46,653) | (43,992) | |||||||||
Benefit (Provision) for Income Taxes | (6,961) | (6,927) | (28,023) | |||||||||
Net Income (Loss) | $ (1,273) | $ 6,259 | $ 6,612 | $ 6,598 | $ 7,525 | $ 11,849 | $ 7,115 | $ 5,069 | 18,196 | 31,558 | $ 16,752 | |
Reclassification out of Accumulated Other Comprehensive Income | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||||||||||
Net Income (Loss) | 394 | 1,215 | ||||||||||
Reclassification out of Accumulated Other Comprehensive Income | Derivative Gain (Loss) | Foreign Exchange Contract | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||||||||||
Cost of Sales | [1] | 64 | 1,061 | |||||||||
Nonoperating Income (Expense) | [1] | 0 | 5 | |||||||||
Benefit (Provision) for Income Taxes | [1] | 22 | (209) | |||||||||
Net Income (Loss) | [1] | 86 | 857 | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Postemployment Benefits, Amortization of actuarial gain (loss) | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||||||||||
Nonoperating Income (Expense) | [2] | 406 | 472 | |||||||||
Benefit (Provision) for Income Taxes | [2] | (98) | (114) | |||||||||
Net Income (Loss) | [2] | $ 308 | $ 358 | |||||||||
[1] | See Note 14 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. | |||||||||||
[2] | See Note 9 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 20. Leases (Details)
Note 20. Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Lease, Cost | $ 1,200 | ||
Operating Lease, Payments | 800 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position | 2,025 | ||
Operating Lease, Liability, Current, Statement of Financial Position | 817 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position | $ 1,208 | ||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 8 months | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.30% | ||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 832 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 655 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 95 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 95 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 95 | ||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 380 | ||
Lessee, Operating Lease, Liability, Payments, Due | 2,152 | ||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 127 | ||
Operating Lease, Liability | $ 2,025 | ||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 800 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 700 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 600 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 100 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 100 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 500 | ||
Operating Leases, Rent Expense, Net | $ 1,100 | $ 700 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssetsNoncurrent | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent |
Note 21. Quarterly Financial _3
Note 21. Quarterly Financial Information (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net Sales | $ 286,156 | $ 293,925 | $ 307,084 | $ 313,385 | $ 318,621 | $ 313,454 | $ 284,149 | $ 265,620 | $ 1,200,550 | $ 1,181,844 | $ 1,072,061 |
Gross Profit | 20,925 | 20,212 | 20,511 | 22,193 | 23,222 | 26,554 | 20,444 | 18,186 | 83,841 | 88,406 | 86,030 |
Goodwill Impairment | 7,925 | 0 | 0 | 0 | 7,925 | 0 | 0 | ||||
Operating Income (Loss) | 1,609 | 10,588 | 8,684 | 11,115 | 10,319 | 14,497 | 10,212 | 7,032 | 31,996 | 42,060 | 42,038 |
Net Income (Loss) | $ (1,273) | $ 6,259 | $ 6,612 | $ 6,598 | $ 7,525 | $ 11,849 | $ 7,115 | $ 5,069 | $ 18,196 | $ 31,558 | $ 16,752 |
Earnings Per Share, Basic | $ (0.05) | $ 0.25 | $ 0.26 | $ 0.26 | $ 0.30 | $ 0.46 | $ 0.27 | $ 0.19 | $ 0.72 | $ 1.22 | $ 0.63 |
Earnings Per Share, Diluted | $ (0.05) | $ 0.25 | $ 0.26 | $ 0.26 | $ 0.29 | $ 0.46 | $ 0.27 | $ 0.19 | $ 0.71 | $ 1.21 | $ 0.62 |
Schedule II Valuation and Qua_3
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
SEC Schedule, 12-09, Allowance, Credit Loss | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | $ 270 | $ 482 | $ 284 |
Valuation Allowances, Additions to Expense | 265 | 184 | 259 |
Valuation Allowances, Adjustments to Other Accounts | (5) | 14 | (51) |
Valuation Allowances, Write-offs and Recoveries | (7) | (410) | (10) |
Valuation Allowances, Balance at End of Year | 523 | 270 | 482 |
Deferred Tax Asset | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | 658 | 638 | 0 |
Valuation Allowances, Additions to Expense | 979 | 20 | 638 |
Valuation Allowances, Adjustments to Other Accounts | 0 | 0 | 0 |
Valuation Allowances, Write-offs and Recoveries | 0 | 0 | 0 |
Valuation Allowances, Balance at End of Year | $ 1,637 | $ 658 | $ 638 |