Audit Information
Audit Information | 12 Months Ended |
Jun. 30, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Indianapolis, Indiana |
Document and Entity Information
Document and Entity Information Document - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 | Aug. 15, 2022 | Dec. 31, 2021 | |
Cover [Abstract] | |||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the Annual Meeting of Share Owners to be held on November 11, 2022, are incorporated by reference into Part III. | ||
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | true | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Information | |||
Entity Registrant Name | KIMBALL ELECTRONICS, INC. | ||
Entity Central Index Key | 0001606757 | ||
Entity File Number | 001-36454 | ||
Entity Tax Identification Number | 35-2047713 | ||
Entity Incorporation, State or Country Code | IN | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 522.6 | ||
Entity Addresses [Line Items] | |||
Entity Address, Address Line One | 1205 Kimball Boulevard | ||
Entity Address, City or Town | Jasper | ||
Entity Address, State or Province | IN | ||
Entity Address, Postal Zip Code | 47546 | ||
City Area Code | 812 | ||
Local Phone Number | 634-4000 | ||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Common Stock, no par value | ||
Trading Symbol | KE | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 24,625,797 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 49,851 | $ 106,442 |
Receivables, net of allowances of $139 and $177, respectively | 222,857 | 203,382 |
Contract assets | 64,080 | 45,863 |
Inventories | 395,630 | 200,386 |
Prepaid expenses and other current assets | 28,665 | 27,320 |
Total current assets | 761,083 | 583,393 |
Property and Equipment, net of accumulated depreciation of $271,139 and $264,907, respectively | 206,835 | 163,251 |
Goodwill | 12,011 | 12,011 |
Other Intangible Assets, net of accumulated amortization of $35,437 and $35,813, respectively | 14,707 | 17,008 |
Other Assets | 41,131 | 38,398 |
Total Assets | 1,035,767 | 814,061 |
Current Liabilities: | ||
Current portion of borrowings under credit facilities | 35,580 | 26,214 |
Accounts payable | 308,617 | 216,544 |
Accrued expenses | 64,545 | 58,016 |
Total current liabilities | 408,742 | 300,774 |
Other Liabilities: | ||
Long-term debt under credit facilities, less current portion | 145,000 | 40,000 |
Long-term income taxes payable | 7,812 | 8,854 |
Other long-term liabilities | 20,242 | 22,461 |
Total other liabilities | 173,054 | 71,315 |
Share Owners’ Equity: | ||
Preferred stock-no par value | 0 | 0 |
Common stock-no par value | 0 | 0 |
Additional paid-in capital | 311,090 | 308,123 |
Retained earnings | 240,222 | 208,969 |
Accumulated other comprehensive loss | (19,672) | (4,883) |
Treasury stock, at cost | (77,669) | (70,237) |
Total Share Owners’ Equity | 453,971 | 441,972 |
Total Liabilities and Share Owners’ Equity | $ 1,035,767 | $ 814,061 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
ASSETS | ||
Allowance for Doubtful Accounts, Premiums and Other Receivables | $ 139 | $ 177 |
Property and Equipment Accumulated Depreciation | 271,139 | 264,907 |
Other Intangible Assets Accumulated Amortization | $ 35,437 | $ 35,813 |
Share Owners' Equity | ||
Preferred Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 29,430,000 | 29,430,000 |
Treasury Stock, Shares | 4,804,000 | 4,473,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net Sales | $ 1,349,535 | $ 1,291,807 | $ 1,200,550 |
Cost of Sales | 1,244,933 | 1,173,772 | 1,116,709 |
Gross Profit | 104,602 | 118,035 | 83,841 |
Selling and Administrative Expenses | 53,437 | 52,704 | 43,920 |
Other General Income | (1,384) | (372) | 0 |
Goodwill Impairment | 0 | 0 | 7,925 |
Operating Income | 52,549 | 65,703 | 31,996 |
Other Income (Expense): | |||
Interest income | 81 | 102 | 60 |
Interest expense | (2,655) | (2,165) | (4,421) |
Non-operating income | 590 | 7,929 | 2,103 |
Non-operating expense | (6,834) | (1,515) | (4,581) |
Other income (expense), net | (8,818) | 4,351 | (6,839) |
Income Before Taxes on Income | 43,731 | 70,054 | 25,157 |
Provision for Income Taxes | 12,478 | 13,263 | 6,961 |
Net Income | $ 31,253 | $ 56,791 | $ 18,196 |
Earnings Per Share of Common Stock: | |||
Earnings Per Share, Basic | $ 1.24 | $ 2.26 | $ 0.72 |
Earnings Per Share, Diluted | $ 1.24 | $ 2.24 | $ 0.71 |
Average Number of Shares Outstanding: | |||
Average Number of Shares Outstanding, Basic | 25,115 | 25,088 | 25,243 |
Average Number of Shares Outstanding, Diluted | 25,221 | 25,284 | 25,428 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net Income | $ 31,253 | $ 56,791 | $ 18,196 |
Other Comprehensive Income (Loss): | |||
Foreign currency translation adjustments, Pre-tax | (15,126) | 5,671 | (1,046) |
Foreign currency translation adjustments, Tax | 0 | 0 | 0 |
Foreign currency translation adjustments, Net of Tax | (15,126) | 5,671 | (1,046) |
Postemployment actuarial change, Pre-tax | 266 | (718) | 122 |
Postemployment actuarial change, Tax | 39 | 212 | (35) |
Postemployment actuarial change, Net of Tax | 305 | (506) | 87 |
Derivative gain (loss), Pre-tax | 468 | 335 | (2,079) |
Derivative gain (loss), Tax | (171) | (221) | 509 |
Derivative gain (loss), Net of Tax | 297 | 114 | (1,570) |
Reclassification to (earnings) loss: | |||
Derivatives, Reclassification to (earnings) loss, Pre-tax | (279) | 814 | (64) |
Derivatives, Reclassification to (earnings) loss, Tax | 206 | (101) | (22) |
Derivatives, Reclassification to (earnings) loss, Net of Tax | (73) | 713 | (86) |
Amortization of actuarial change, Pre-tax | (253) | (428) | (406) |
Amortization of actuarial change, Tax | 61 | 104 | 98 |
Amortization of actuarial change, Net of Tax | (192) | (324) | (308) |
Other comprehensive income (loss), Pre-tax | (14,924) | 5,674 | (3,473) |
Other comprehensive income (loss), Tax | 135 | (6) | 550 |
Other comprehensive income (loss), Net of Tax | (14,789) | 5,668 | (2,923) |
Total Comprehensive Income | $ 16,464 | $ 62,459 | $ 15,273 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities: | |||
Net Income | $ 31,253 | $ 56,791 | $ 18,196 |
Adjustments to reconcile net income to net cash (used for) provided by operating activities: | |||
Depreciation and amortization | 29,411 | 34,020 | 30,872 |
Loss on sales of assets | 90 | 66 | 69 |
Deferred income taxes | 772 | (6,305) | (450) |
Goodwill Impairment | 0 | 0 | 7,925 |
Stock-based compensation | 6,224 | 3,907 | 4,039 |
Net working capital adjustment on acquisition | 0 | 0 | 3,785 |
Other, net | 1,914 | 1,207 | 518 |
Change in operating assets and liabilities: | |||
Receivables | (26,483) | (28,391) | 41,928 |
Contract assets | (18,217) | 24,487 | (18,421) |
Inventories | (203,168) | 18,589 | (15,053) |
Prepaid expenses and other assets | (5,086) | (1,729) | (1,519) |
Accounts payable | 96,776 | 14,599 | 3,622 |
Accrued expenses and taxes payable | 3,336 | 12,854 | (2,703) |
Net cash (used for) provided by operating activities | (83,178) | 130,095 | 72,808 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (73,957) | (38,382) | (38,364) |
Proceeds from sales of assets | 456 | 513 | 158 |
Purchases of capitalized software | (757) | (970) | (385) |
Other, net | (540) | 43 | 109 |
Net cash used for investing activities | (74,798) | (38,796) | (38,482) |
Cash Flows From Financing Activities: | |||
Proceeds from credit facilities | 100,000 | 0 | 0 |
Payments on credit facilities | 0 | (46,500) | 0 |
Additional net change in revolving credit facilities | 14,936 | (5,768) | (8,083) |
Settlements on previous year acquisition | 0 | 2,957 | 0 |
Repurchases of common stock | (8,952) | (2,996) | (8,794) |
Payments related to tax withholding for stock-based compensation | (1,591) | (771) | (1,012) |
Debt issuance costs | (652) | 0 | (45) |
Net cash provided by (used for) financing activities | 103,741 | (53,078) | (17,934) |
Effect of Exchange Rate Change on Cash and Cash Equivalents | (2,356) | 3,231 | (678) |
Net (Decrease) Increase in Cash and Cash Equivalents | (56,591) | 41,452 | 15,714 |
Cash and Cash Equivalents at Beginning of Year | 106,442 | 64,990 | 49,276 |
Cash and Cash Equivalents at End of Year | 49,851 | 106,442 | 64,990 |
Cash paid during the year for: | |||
Income taxes | 14,329 | 13,358 | 9,096 |
Interest expense | 2,328 | 2,531 | 4,934 |
Non-cash investing activity: | |||
Unpaid purchases of property and equipment at the end of the year | $ 4,538 | $ 3,667 | $ 4,764 |
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, 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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 56,791 | 56,791 | |||
Other comprehensive income (loss), Net of Tax | 5,668 | 5,668 | |||
Issuance of non-restricted stock | 66 | 19 | 47 | ||
Compensation expense related to stock compensation plan | 3,850 | 3,850 | |||
Performance Share Issuance | (772) | (2,524) | 1,752 | ||
Deferred Share Issuance | 0 | (30) | 30 | ||
Treasury Stock, Value, Acquired, Cost Method | (2,996) | (2,996) | |||
Share Owner's Equity at Jun. 30, 2021 | 441,972 | 308,123 | 208,969 | (4,883) | (70,237) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 31,253 | 31,253 | |||
Other comprehensive income (loss), Net of Tax | (14,789) | (14,789) | |||
Issuance of non-restricted stock | 143 | 73 | 70 | ||
Compensation expense related to stock compensation plan | 6,092 | 6,092 | |||
Performance Share Issuance | (1,560) | (3,126) | 1,566 | ||
Restricted Share Units Issuance | (18) | (40) | 22 | ||
Deferred Share Issuance | 0 | (32) | 32 | ||
Treasury Stock, Value, Acquired, Cost Method | (9,122) | (9,122) | |||
Share Owner's Equity at Jun. 30, 2022 | $ 453,971 | $ 311,090 | $ 240,222 | $ (19,672) | $ (77,669) |
Consolidated Statements of Sh_2
Consolidated Statements of Share Owners' Equity Parentheticals - shares | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Deferred Share Issuance, Shares | 3,000 | 3,000 | 3,000 |
Stock Issued During Period, Shares, Issued for Services | 6,000 | 4,000 | 4,000 |
Performance Share Issuance, Shares | 143,000 | 156,000 | 184,000 |
Treasury Stock, Shares, Acquired | 485,000 | 193,000 | 623,000 |
Restricted Share Units Issuance, Shares | 2,000 |
Note 1. Business Description an
Note 1. Business Description and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2022 | |
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 deliver a package of value that begins with our core competency of producing durable electronics and has expanded into diversified contract manufacturing services for non-electronic components, medical disposables, precision molded plastics, and production automation, test, and inspection equipment. Our design and manufacturing expertise coupled with robust processes and procedures help us ensure that we deliver the highest levels of quality, reliability, and service throughout the entire life cycle of our customers’ products. We deliver award-winning service across our highly integrated global footprint, which is enabled by our largely common operating system, procedures, and standardization. We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service. 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. Certain amounts for the years ended June 30, 2021 and 2020 have been reclassified to conform to current period presentation in the Consolidated Statements of Cash Flow within the Cash Flows from Operating Activities section. Deferred tax valuation allowance is now included with Deferred income taxes while the other deferred charges have been reclassified to Other, net. 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 impact of the COVID-19 pandemic on our business. These estimates may change as new events occur and more information is obtained. Change in Estimates: The Company reviews the estimated useful lives of its fixed assets on an ongoing basis. In evaluating useful lives, the Company considers how long assets will remain functionally efficient and effective, given levels of technology, competitive factors, and the economic environment. If the assessment indicates that the assets will continue to be used for a shorter or longer period than previously anticipated, the useful life of the assets is revised, resulting in a change in estimate. Changes in estimates are accounted for on a prospective basis by depreciating the assets’ current carrying values over their revised remaining useful lives. The review performed by the Company in the current year indicated that Surface Mount Technology production equipment had actual lives that were longer than previously estimated. As a result of these findings, the Company changed its estimates of useful lives on these assets to 10 years, from lives of 5 or 7 years. The change was effective and accounted for prospectively beginning on November 1, 2021. The effects of this change in useful life estimate for the fiscal year ended June 30, 2022 were a decrease in depreciation expense of $6.3 million, an increase in net income of $4.9 million, and an increase to basic and diluted earnings per share by $0.19. 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, 2022, 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 devices, 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 across all our operating segments. 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. Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, 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 which contains minimum quantity thresholds to cover our capital costs, and we may 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 anticipated margins to estimate the corresponding amount of revenue to recognize. Costs used as a basis for estimating anticipated margins include material, direct and indirect labor, and appropriate applied overheads. Anticipated margins are determined based on historical or quoted customer pricing. 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. 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. Trade Accounts Receivable: The Company’s trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. Our policy for estimating the allowance for credit losses on trade accounts 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 estimate expected credit losses. Management believes that historical loss information generally provides a basis for its assessment of expected credit losses. Trade accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Adjustments to the allowance for credit losses are recorded in Selling and Administrative Expenses on our Consolidated Statements of Income. 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 utilize factoring arrangements with third-party financial institutions for certain of our accounts receivables 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 2022, 2021, and 2020, we sold, without recourse, $303.4 million, $306.3 million, and $280.7 million of accounts receivable, respectively. Factoring fees were $1.6 million, $1.2 million, and $1.9 million during fiscal years 2022, 2021, and 2020, respectively, and were included in Selling and Administrative Expenses 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. We did not hold any drafts at June 30, 2022, and the drafts totaled less than $0.1 million at June 30, 2021. These drafts were 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 2022, 2021, and 2020 were less than $0.1 million, $1.8 million, and $6.8 million, respectively. See Note 6 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements for more information on banker’s acceptance drafts. Inventories: Inventories are stated at the lower of cost 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 and depreciated over the estimated useful life of the assets using the straight-line method. Generally, maintenance and repairs are expensed as incurred. 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 2022, 2021, and 2020. 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. 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 5 - Goodwill and Other Intangible Assets of Notes to Consolidated Financial Statements for more information on our goodwill. 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 other intangible assets during fiscal years 2022, 2021, or 2020. Leases: 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 2023 to 2057. Operating lease costs and cash payments for operating leases are immaterial to the Consolidated Statements of Income and our Consolidated Statements of Cash Flows. Lease right-of-use assets and lease liabilities each totaled $3.1 million and $1.6 million at June 30, 2022 and June 30, 2021, respectively. Lease right-of-use assets are included in Other Assets and lease liabilities are included in Accrued expenses and Other long-term liabilities on the Consolidated Balance Sheets. The future undiscounted operating lease payments as of June 30, 2022 were $1.0 million, $0.9 million, $0.6 million, $0.5 million, and $0.1 million for the five years ended June 30, 2027, and $0.2 million thereafter. Research and Development: The costs of research and development are expensed as incurred. Research and development costs were approximately, in millions, $23.7, $20.9, and $16.9 in fiscal years 2022, 2021, and 2020, 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 15% of the workforce is covered under self-insured medical and short-term disability plans. At June 30, 2022 and 2021, accrued liabilities for self-insurance exposure were $1.4 million and $1.1 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. See Note 10 - Income Taxes of Notes to Consolidated Financial Statements for more information on income taxes. Concentrations of Credit Risk: We have business and credit risks associated with our customers. 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 2022 2021 2020 2022 2021 Nexteer Automotive 17% 17% 14% 22% 24% Philips 15% 15% 16% * * ZF * * * * 11% * 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 6 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. Other General Income: Other General Income in fiscal years 2022 and 2021 consisted of $1.4 million and $0.4 million, respectively, resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. These lawsuits alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components. The fiscal year 2021 amount was partially offset by lawsuit settlement accruals and payments. We recorded no Other General Income during fiscal year 2020. 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 loss in fiscal year 2022 included $4.2 million in net losses from foreign currency rate movements and related derivative gain or loss. Non-operating income in fiscal year 2021 included $4.8 million in net gains from foreign currency rate movements and related derivative gain or loss. Non-operating expense in fiscal year 2020 included a $3.8 million 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. For transactions and balances denominated in currencies other than functional currencies, we use forward purchases to manage exposure to the variability of cash flows and foreign exchange contracts to hedge intercompany balances and other balance sheet positions. 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 Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. Stock-Based Compensation: As described in Note 9 - Stock Compensation Plans of Notes to Consolidated Financial Statements, the Company maintains 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 2022: 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. We adopted this standard effective July 1, 2021, the beginning of our first quarter of fiscal year 2022, and the adoption did not have a material effect on our Consolidated Financial Statements. |
Note 2. Revenue from Contracts
Note 2. Revenue from Contracts with Customers (Notes) | 12 Months Ended |
Jun. 30, 2022 | |
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 devices, 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 2022, 2021, and 2020: Year Ended (Amounts in Millions) 2022 2021 2020 Vertical Markets: Automotive $ 582.2 $ 551.5 $ 457.4 Medical 391.7 384.8 397.8 Industrial 308.1 293.7 271.0 Public Safety 50.1 48.1 56.2 Other 17.4 13.7 18.2 Total net sales $ 1,349.5 $ 1,291.8 $ 1,200.6 For fiscal years 2022, 2021, and 2020, approximately 95%, 89%, and 78% 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 for which we have an enforceable right to payment for performance completed to date. The remaining sales revenues were recognized at a point in time when the customer obtained control of the products. 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 $64.1 million and $45.9 million as of June 30, 2022 and 2021, respectively. In limited circumstances, the Company may receive payments from customers in advance of the satisfaction of performance obligations primarily for material price variances, 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 $22.5 million and $7.6 million as of June 30, 2022 and 2021, respectively. Our performance obligations are short term in nature and therefore our contract liabilities are all expected to be settled within twelve months. |
Note 3. Inventories
Note 3. Inventories | 12 Months Ended |
Jun. 30, 2022 | |
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) 2022 2021 Finished products $ 525 $ 769 Work-in-process 4,911 5,149 Raw materials 390,194 194,468 Total inventory $ 395,630 $ 200,386 |
Note 4. Property and Equipment
Note 4. Property and Equipment | 12 Months Ended |
Jun. 30, 2022 | |
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) 2022 2021 Land and land use rights $ 14,560 $ 14,978 Buildings and improvements 112,485 84,096 Machinery and equipment 332,292 309,731 Construction-in-progress 18,637 19,353 Total $ 477,974 $ 428,158 Less: Accumulated depreciation (271,139) (264,907) Property and equipment, net $ 206,835 $ 163,251 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, $26.0 for fiscal year 2022, $30.7 for fiscal year 2021, and $27.7 for fiscal year 2020. |
Note 5. Goodwill and Other Inta
Note 5. Goodwill and Other Intangible Assets (Notes) | 12 Months Ended |
Jun. 30, 2022 | |
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, 2020 Goodwill $ 32,762 Accumulated impairment (20,751) Goodwill, net 12,011 Balance as of June 30, 2021 Goodwill 32,762 Accumulated impairment (20,751) Goodwill, net 12,011 Balance as of June 30, 2022 Goodwill 32,762 Accumulated impairment (20,751) Goodwill, net $ 12,011 During fiscal years 2022 and 2021, no goodwill impairment was recognized. During fiscal year 2020, $7.9 million of goodwill impairment was recognized at the GES reporting unit. The impact to net income also included a $1.0 million reduction in income tax expense associated with the deferred tax asset established for the deductible portion of the impaired goodwill. The balance of goodwill at the GES reporting unit was $5.8 million at both June 30, 2022 and 2021. A summary of other intangible assets subject to amortization is as follows: June 30, 2022 June 30, 2021 (Amounts in Thousands) Cost Accumulated Net Value Cost Accumulated Net Value Capitalized Software $ 29,891 $ (26,209) $ 3,682 $ 32,774 $ (28,751) $ 4,023 Customer Relationships 8,618 (3,024) 5,594 8,618 (2,520) 6,098 Technology 5,060 (3,805) 1,255 5,060 (2,790) 2,270 Trade Name 6,575 (2,399) 4,176 6,369 (1,752) 4,617 Other Intangible Assets $ 50,144 $ (35,437) $ 14,707 $ 52,821 $ (35,813) $ 17,008 During fiscal years 2022, 2021, and 2020, amortization expense of other intangible assets was, in millions, $3.4, $3.3, and $3.2, respectively. Amortization expense in future periods is expected to be, in millions, $3.3, $2.4, $1.8, $1.5, and $1.4 in the five years ending June 30, 2027, and $4.3 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. |
Note 6. Commitments and Conting
Note 6. Commitments and Contingent Liabilities | 12 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingent Liabilities Guarantees: As of June 30, 2022 and 2021, 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, 2022 and 2021. 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, 2022 and 2021 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. We did not have any drafts transferred and outstanding at June 30, 2022, and the drafts transferred and outstanding at June 30, 2021 totaled $0.1 million. No transferee has exercised their recourse rights against us. For additional information on banker’s acceptance drafts, see Note 1 – Business Description and Summary of Significant Accounting Policies of Notes to 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. Product warranty liability is recorded in Accrued expenses and Other long-term liabilities on the Consolidated Balance Sheets. Changes in the product warranty liability during fiscal years 2022, 2021, and 2020 were as follows: (Amounts in Thousands) 2022 2021 2020 Product Warranty Liability at the beginning of the year $ 610 $ 647 $ 958 Additions to warranty accrual (including changes in estimates) (49) 21 (271) Settlements made (in cash or in kind) (32) (58) (40) Product Warranty Liability at the end of the year $ 529 $ 610 $ 647 |
Note 7. Credit Facilities
Note 7. Credit Facilities | 12 Months Ended |
Jun. 30, 2022 | |
Long-Term Debt and Credit Facilities [Abstract] | |
Debt Disclosure | Credit Facilities Credit facilities consisted of the following: Available Borrowing Capacity at Borrowings Outstanding at Borrowings Outstanding at (Amounts in Millions, in U.S Dollar Equivalents) June 30, 2022 June 30, 2022 June 30, 2021 Primary credit facility (1) $ 128.2 $ 171.4 $ 62.7 Thailand overdraft credit facility (2) 0.1 — — Netherlands revolving credit facility (3) 0.4 9.2 3.5 Total credit facilities $ 128.7 180.6 66.2 Less: current portion (35.6) (26.2) Long-term debt under credit facilities, less current portion (4) $ 145.0 $ 40.0 (1) The Company maintained a U.S. primary credit facility which was scheduled to mature on July 23, 2023. On May 4, 2022, the Company entered into an amended and restated credit agreement (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, and the primary credit facility is now scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 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. The Company incurred $0.6 million of debt issuance costs associated with the amended and restated credit agreement. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2022, 2021, and 2020. The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 10.0 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 credit facility. Types of borrowings available on the primary credit 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 options: • any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; • any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 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. Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board; b. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or c. 1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility); plus the Revolving Commitment ABR spread which can range from 0.0 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 provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and, • an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to be less than 3.5 to 1.0. The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2022 and 2021. (2) 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, 2022 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. (3) 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 $9.6 million at June 30, 2022 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 is scheduled to mature in July 2023. (4) 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 May 4, 2027. The weighted-average interest rate on borrowings outstanding under the credit facilities at June 30, 2022 and June 30, 2021 were 2.7% and 2.0%, respectively. Capitalized interest expense was immaterial during fiscal years 2022, 2021, and 2020. Subsequent to June 30, 2022, the Company expanded the borrowing capacity of the Thailand credit facility to $10 million and entered into a foreign credit facility for its EMS operation in China which allows for borrowings up to $7.5 million. |
Note 8. Employee Benefit Plans
Note 8. Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2022 | |
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. Beginning January 1, 2022, the Company matches 50% of eligible employee contributions up to 6%. The Company also provides a discretionary employer contribution 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, $4.2, $1.9, and $2.4 for fiscal years 2022, 2021, and 2020, respectively. 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. See Note 14 - Investments of Notes to Consolidated Financial Statements for further information regarding SERP. 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. |
Note 9. Stock Compensation Plan
Note 9. Stock Compensation Plans | 12 Months Ended |
Jun. 30, 2022 | |
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 2022, 2021, and 2020 was $6.2 million, $3.9 million, and $4.0 million, respectively. These costs are included in Selling and Administrative Expenses. Performance Shares: The Company awards performance shares to officers and other key employees. The annual performance share awards are approved by the Compensation and Governance Committee of the Board. Beginning with awards granted in fiscal year 2022 that will vest in fiscal year 2025, awards cliff vest at the third anniversary of the award date. To avoid a gap in the vesting of awards due to the transition from grants that vested annually in three equal installments to ones that vest after three years, two smaller bridge awards were also granted for fiscal year 2022 and fiscal year 2022-2023 performance periods. The bridge award for the fiscal year 2022 performance period cliff vests at the first anniversary of the grant. The bridge award for the fiscal year 2022-2023 performance period cliff vests at the second anniversary of the grant. The award for the fiscal year 2022-2024 performance period, and future performance share awards, cliff vest at the third anniversary of the grant. Under these awards, a number of shares will be issued to each participant based upon a combination of a profitability attainment component, based on the Company’s operating income plan, and a growth attainment component, based on the Company’s growth in sales revenue, comparing its three-year compounded annual growth rate (“CAGR”) with the Electronics Manufacturing Services Industry’s three-year CAGR. The number of shares issued will be less than the targeted shares issuable if the Company does not reach 100% of one or both of the above-mentioned performance metrics, and could be zero if the Company does not reach the required minimum thresholds of either metric. The number of shares issued will exceed the number of targeted shares issuable (up to a maximum of 125%) if the Company exceeds 100% of one or both of the above-mentioned incentive metrics. 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 2022 is presented below: Number Weighted Average Performance shares outstanding at July 1, 2021 434,899 $ 14.71 Granted 296,662 $ 23.26 Vested (214,099) $ 15.48 Forfeited (24,071) $ 14.51 Performance shares outstanding at June 30, 2022 493,391 $ 19.52 As of June 30, 2022, there was approximately $6.0 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 performance periods ending August 2022 through August 2024, with a weighted average vesting period of 1.2 years. The fair value of performance shares is based on the stock price at the date of grant. During fiscal years 2022, 2021, and 2020, respectively, 214,099, 239,194, and 253,483 performance shares vested at a fair value of $3.3 million, $4.1 million, and $3.9 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 outstanding 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 key employees and non-employee 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 2022, 2021, and 2020, respectively, the Company granted a total of 6,777, 4,235, and 4,258 unrestricted shares at an average grant date fair value of $23.10, $15.35, and $16.99 for a total fair value of $0.2 million, $0.1 million, and $0.1 million. Unrestricted shares are 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 that are awarded to key employees are expensed immediately. Restricted Share Units: Restricted share units (“RSUs”) may be granted to employees as consideration for services rendered. RSUs are participating securities and upon vesting, the outstanding number of RSUs are converted to shares of common stock. RSUs are expensed over the contractual vesting period as earned. If the employment of a holder of an RSU terminates before the RSU has vested for any reason other than death, retirement, or total permanent disability, the RSU will be forfeited. During fiscal year 2021, the Company granted 3,322 RSUs to new key employees at an average grant date fair value of $19.63 for a total fair value of $0.1 million, and these RSUs vested in fiscal year 2022 as the contractual life of the RSUs were one year or less. No RSUs were granted during fiscal years 2022 and 2020. 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 2022, 2021, and 2020, respectively, 34,480, 37,132, and 32,950 deferred share units were granted to non-employee members of the Board at an average grant date fair value of $24.87, $15.35, and $17.30 for a total fair value of $0.9 million, $0.6 million, and $0.6 million. During fiscal year 2022, 2,753 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 $17.55. |
Note 10. Income Taxes
Note 10. Income Taxes | 12 Months Ended |
Jun. 30, 2022 | |
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, making broad and complex changes to the U.S. tax code, for which complete guidance may have not yet been issued. Tax Reform required a one-time transition tax on certain unremitted earnings of foreign subsidiaries that is payable over an eight-year period. As of June 30, 2022 and 2021, the remaining provision recorded for the one-time deemed repatriation tax were $8.9 million and $9.8 million respectively, payable through fiscal year 2026, with the long-term portion recorded in Long-term income taxes payable on the Consolidated Balance Sheets. As of June 30, 2022 and 2021, $1.0 million and $0.9 million of the remaining deemed repatriation tax is short term and is recorded in Accrued expenses on the Consolidated Balance Sheet. 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, 2022 and 2021, were as follows: (Amounts in Thousands) 2022 2021 Deferred Tax Assets: Receivables $ 46 $ 95 Inventory 2,379 1,726 Employee benefits 197 282 Deferred compensation 7,141 8,732 Other current liabilities — 1,115 Tax credit carryforwards 5,904 3,388 Goodwill 977 1,328 Net operating loss carryforward 2,664 2,037 Net foreign currency losses 477 — Miscellaneous 6,957 5,496 Valuation Allowance (3,536) (1,802) Total asset $ 23,206 $ 22,397 Deferred Tax Liabilities: Other intangible assets $ 1,055 $ 1,210 Property and equipment 2,050 869 Net foreign currency gains — 2 Miscellaneous 1,353 659 Total liability $ 4,458 $ 2,740 Net Deferred Income Taxes $ 18,748 $ 19,657 Income tax benefits associated with the net operating loss carryforwards expire from fiscal year 2023 to 2042. Income tax benefits associated with tax credit carryforwards primarily expire from fiscal year 2025 to 2031. A valuation allowance was provided as of June 30, 2022 and 2021 for deferred tax assets related to certain state credits of $3.5 million and $1.8 million, 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) 2022 2021 2020 United States $ 1,542 $ 10,439 $ (6,117) Foreign 42,189 59,615 31,274 Total income before taxes on income $ 43,731 $ 70,054 $ 25,157 The aggregate unremitted earnings of the Company’s foreign subsidiaries were approximately $353 million as of June 30, 2022. 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, and our current plans do not demonstrate a need to repatriate these funds to our U.S. operations. However, if such funds were repatriated, a portion of the funds remitted may be subject to applicable non-U.S. income and withholding taxes. The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2022 2021 2020 Current Taxes: Federal $ 169 $ 3,921 $ (1,666) Foreign 11,086 14,664 8,479 State 179 769 (29) Total payable $ 11,434 $ 19,354 $ 6,784 Deferred Taxes: Federal $ (1,009) $ (2,459) $ 99 Foreign 922 (2,598) 237 State (603) (1,199) (1,138) Valuation allowance 1,734 165 979 Total deferred $ 1,044 $ (6,091) $ 177 Total provision for income taxes $ 12,478 $ 13,263 $ 6,961 A reconciliation of the statutory U.S. income tax rate to the Company’s effective income tax rate follows: Year Ended June 30 2022 2021 2020 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 9,184 21.0 % $ 14,711 21.0 % $ 5,283 21.0 % State income taxes, net of federal income tax benefit (699) (1.6) (374) (0.5) (1,128) (4.5) Foreign tax rate differential 1,669 3.8 1,320 1.9 714 2.8 Impact of foreign exchange rates on foreign income taxes 1,693 3.9 (1,111) (1.6) 867 3.4 Non-deductible goodwill impairment — — — — 388 1.5 Valuation allowance 1,734 4.0 165 0.2 979 3.9 Research credit (1,094) (2.5) (996) (1.4) (1,056) (4.2) Global intangible low tax income 165 0.4 181 0.3 607 2.4 Non-deductible compensation 489 1.1 10 — 10 — Other - net (663) (1.6) (643) (1.0) 297 1.4 Total provision for income taxes $ 12,478 28.5 % $ 13,263 18.9 % $ 6,961 27.7 % Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2022, 2021, and 2020 were as follows: (Amounts in Thousands) 2022 2021 2020 Beginning balance - July 1 $ 1,012 $ 954 $ 904 Tax positions related to prior fiscal years: Additions 85 142 116 Reductions — — — Tax positions related to current fiscal year: Additions — — — Reductions — — — Settlements — (8) — Lapses in statute of limitations (695) (76) (66) Ending balance - June 30 $ 402 $ 1,012 $ 954 Portion that, if recognized, would reduce tax expense and effective tax rate $ 363 $ 323 $ 262 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 June 30, 2022, 2021, and 2020 was $0.6 million, $1.2 million, and $1.6 million. Expenses related to interest and penalties in fiscal years 2022, 2021, and 2020 were not material. 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 2018. We are subject to income tax examinations by various, state, local, and foreign jurisdiction tax authorities for years after June 30, 2016. |
Note 11. Share Owners' Equity
Note 11. Share Owners' Equity | 12 Months Ended |
Jun. 30, 2022 | |
Common Stock [Abstract] | |
Stockholders' Equity Note Disclosure | Share Owners’ EquityOn 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, November 8, 2018, and November 10, 2020, 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 $100 million. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Plan may be suspended or discontinued at any time.During fiscal year 2022, the Company repurchased $9.1 million of common stock under the Plan at an average price of $18.82 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 $88.8 million of common stock under that Plan at an average cost of $15.27 per share. |
Note 12. Fair Value
Note 12. Fair Value | 12 Months Ended |
Jun. 30, 2022 | |
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 2022. 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, 2022 and 2021, 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, 2022 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,541 $ — $ 1,541 Derivatives: foreign exchange contracts — 1,872 1,872 Trading securities: mutual funds held in nonqualified SERP 10,364 — 10,364 Total assets at fair value $ 11,905 $ 1,872 $ 13,777 Liabilities Derivatives: foreign exchange contracts $ — $ 3,522 $ 3,522 Total liabilities at fair value $ — $ 3,522 $ 3,522 June 30, 2021 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,540 $ — $ 1,540 Derivatives: foreign exchange contracts — 1,468 1,468 Trading securities: mutual funds held in nonqualified SERP 12,644 — 12,644 Total assets at fair value $ 14,184 $ 1,468 $ 15,652 Liabilities Derivatives: foreign exchange contracts $ — $ 1,702 $ 1,702 Total liabilities at fair value $ — $ 1,702 $ 1,702 We had no Level 3 assets or liabilities as of June 30, 2022 and 2021, or any activity in Level 3 assets or liabilities during fiscal years 2022, 2021, and 2020. 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 14 - Investments of Notes to Consolidated Financial Statements for further information regarding the SERP. Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk Borrowings under credit facilities 2 Market - Based on observable market rates, taking into account Kimball Electronics’ non-performance risk The carrying 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 13. Derivative Instruments
Note 13. Derivative Instruments | 12 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [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. Non-designated foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances and other balance sheet positions denominated in currencies other than the functional currencies. As of June 30, 2022, we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $41.7 million and to hedge currencies against the Euro in the aggregate notional amount of 54.8 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 Consolidated Balance Sheets as a derivative asset or liability and presented within Prepaid expenses and other current assets and Accrued expenses, respectively. 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, 2022, we estimate that approximately $0.5 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, 2023. 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, 2022 and June 30, 2021. See Note 12 - Fair Value of Notes to Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and Note 18 - Accumulated Other Comprehensive Income (Loss) of Notes to Consolidated Financial Statements for the amount and changes in derivative gains and losses deferred in Accumulated Other Comprehensive Income (Loss). Information on the location and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Income are presented below. Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 1,189 $ 1,158 Accrued expenses $ 1,486 $ 1,549 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets 683 310 Accrued expenses 2,036 153 Total derivatives $ 1,872 $ 1,468 $ 3,522 $ 1,702 The Effect of Derivative Instruments on Other Comprehensive Income (Loss) June 30 (Amounts in Thousands) 2022 2021 2020 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives: Foreign exchange contracts $ 468 $ 335 $ (2,079) 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) 2022 2021 2020 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: Foreign exchange contracts Cost of Sales $ 279 $ (814) $ 64 Total $ 279 $ (814) $ 64 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) $ (1,201) $ (1,415) $ 1,558 Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ (922) $ (2,229) $ 1,622 |
Note 14. Investments
Note 14. Investments | 12 Months Ended |
Jun. 30, 2022 | |
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 executives 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 on our Consolidated Statements of Income. 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, 2022, 2021, and 2020 was $(2.2) million, $1.5 million, and less than $0.4 million, respectively. SERP asset and liability balances applicable to Kimball Electronics participants were as follows: June 30 (Amounts in Thousands) 2022 2021 SERP investments - current asset $ 2,605 $ 3,095 SERP investments - other long-term asset 7,759 9,549 Total SERP investments $ 10,364 $ 12,644 SERP obligation - current liability $ 2,605 $ 3,095 SERP obligation - other long-term liability 7,759 9,549 Total SERP obligation $ 10,364 $ 12,644 |
Note 15. Accrued Expenses
Note 15. Accrued Expenses | 12 Months Ended |
Jun. 30, 2022 | |
Accrued Expenses [Abstract] | |
Accrued Liabilities Disclosure | Accrued Expenses Accrued expenses consisted of: June 30 (Amounts in Thousands) 2022 2021 Taxes $ 8,962 $ 11,012 Compensation 19,324 28,744 Customer advance payments 22,484 7,580 Retirement plan 3,135 2,094 Insurance 1,361 1,126 Other expenses 9,279 7,460 Total accrued expenses $ 64,545 $ 58,016 |
Note 16. Geographic Information
Note 16. Geographic Information | 12 Months Ended |
Jun. 30, 2022 | |
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. Year Ended June 30 (Amounts in Thousands) 2022 2021 2020 Net Sales: United States $ 337,815 $ 359,839 $ 346,376 Mexico 316,884 265,476 232,135 Poland 234,057 268,129 244,107 China 204,851 180,405 159,746 Thailand 152,287 100,478 124,415 Other Foreign 103,641 117,480 93,771 Total net sales $ 1,349,535 $ 1,291,807 $ 1,200,550 June 30 (Amounts in Thousands) 2022 2021 Long-Lived Assets: Mexico $ 78,178 $ 43,792 United States 47,353 47,499 Poland 25,924 31,412 Thailand 21,694 8,639 China 19,531 15,228 Other Foreign 17,837 20,704 Total long-lived assets $ 210,517 $ 167,274 |
Note 17. Earnings Per Share
Note 17. Earnings Per Share | 12 Months Ended |
Jun. 30, 2022 | |
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 2022 2021 2020 Basic and Diluted Earnings Per Share: Net Income $ 31,253 $ 56,791 $ 18,196 Less: Net Income allocated to participating securities 45 84 24 Net Income allocated to common Share Owners $ 31,208 $ 56,707 $ 18,172 Basic weighted average common shares outstanding 25,115 25,088 25,243 Dilutive effect of average outstanding stock compensation awards 106 196 185 Dilutive weighted average shares outstanding 25,221 25,284 25,428 Earnings Per Share of Common Stock: Basic $ 1.24 $ 2.26 $ 0.72 Diluted $ 1.24 $ 2.24 $ 0.71 |
Note 18. Accumulated Other Comp
Note 18. Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Jun. 30, 2022 | |
Equity [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 Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2020 $ (7,894) $ (3,254) $ 597 $ (10,551) Other comprehensive income (loss) before reclassifications 5,671 114 (506) 5,279 Reclassification to (earnings) loss — 713 (324) 389 Net current-period other comprehensive income (loss) $ 5,671 $ 827 $ (830) $ 5,668 Balance at June 30, 2021 $ (2,223) $ (2,427) $ (233) $ (4,883) Other comprehensive income (loss) before reclassifications (15,126) 297 305 (14,524) Reclassification to (earnings) loss — (73) (192) (265) Net current-period other comprehensive income (loss) (15,126) 224 113 (14,789) Balance at June 30, 2022 $ (17,349) $ (2,203) $ (120) $ (19,672) 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) 2022 2021 Consolidated Statements of Income Derivative Gain (Loss) (1) $ 279 $ (814) Cost of Sales (206) 101 Benefit (Provision) for Income Taxes $ 73 $ (713) Net of Tax Postemployment Benefits: Amortization of Actuarial Gain (Loss) (2) $ 253 $ 428 Non-operating income (61) (104) Benefit (Provision) for Income Taxes $ 192 $ 324 Net of Tax Total Reclassifications for the Period $ 265 $ (389) Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 8 - Employee Benefit Plans |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | Valuation and Qualifying Accounts Description Balance at Additions (Reductions) Adjustments to Other Write-offs and Balance at (Amounts in Thousands) Year Ended June 30, 2022 Valuation Allowances: Receivables $ 177 $ (53) $ 22 $ (7) $ 139 Deferred Tax Asset $ 1,802 $ 1,734 $ — $ — $ 3,536 Year Ended June 30, 2021 Valuation Allowances: Receivables $ 523 $ (163) $ (9) $ (174) $ 177 Deferred Tax Asset $ 1,637 $ 165 $ — $ — $ 1,802 Year Ended June 30, 2020 Valuation Allowances: Receivables $ 270 $ 265 $ (5) $ (7) $ 523 Deferred Tax Asset $ 658 $ 979 $ — $ — $ 1,637 |
Note 1. Business Description _2
Note 1. Business Description and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: |
Use of Estimates | Use of 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. |
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. Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, 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 which contains minimum quantity thresholds to cover our capital costs, and we may 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 anticipated margins to estimate the corresponding amount of revenue to recognize. Costs used as a basis for estimating anticipated margins include material, direct and indirect labor, and appropriate applied overheads. Anticipated margins are determined based on historical or quoted customer pricing. 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. |
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 | Trade Accounts Receivable: The Company’s trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. Our policy for estimating the allowance for credit losses on trade accounts receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these |
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 and depreciated over the estimated useful life of the assets using the straight-line method. Generally, maintenance and repairs are expensed as incurred. 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. 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. |
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. |
Leases | Leases: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 2023 to 2057. Operating lease costs and cash payments for operating leases are immaterial to the Consolidated Statements of Income and our Consolidated Statements of Cash Flows. Lease right-of-use assets and lease liabilities each totaled $3.1 million and $1.6 million at June 30, 2022 and June 30, 2021, respectively. Lease right-of-use assets are included in Other Assets and lease liabilities are included in Accrued expenses and Other long-term liabilities on the Consolidated Balance Sheets. |
Research and Development | Research and Development: |
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 15% of the workforce is covered under self-insured medical and short-term disability plans. At June 30, 2022 and 2021, accrued liabilities for self-insurance exposure were $1.4 million and $1.1 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. See Note 10 - Income Taxes of Notes to Consolidated Financial Statements for more information on income taxes. |
Concentration of Credit Risk | Concentrations of Credit Risk: |
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 6 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. |
Other General Income | Other General Income: Other General Income in fiscal years 2022 and 2021 consisted of $1.4 million and $0.4 million, respectively, resulting from payments received related to class action lawsuits in which Kimball Electronics was a class member. These lawsuits alleged that certain suppliers to the EMS industry conspired over a number of years to raise and fix the prices of electronic components, resulting in overcharges to purchasers of those components. The fiscal year 2021 amount was partially offset by lawsuit settlement accruals and payments. We recorded no Other General Income during fiscal year 2020. |
Non-operating Income and Expense | Non-operating Income and Expense: |
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 |
Derivatives, Reporting of Derivative Activity | 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. For transactions and balances denominated in currencies other than functional currencies, we use forward purchases to manage exposure to the variability of cash flows and foreign exchange contracts to hedge intercompany balances and other balance sheet positions. 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 Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. |
Stock-Based Compensation | Stock-Based Compensation: As described in Note 9 - Stock Compensation Plans |
New Accounting Standards | New Accounting Standards: Adopted in Fiscal Year 2022: 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. We adopted this standard effective July 1, 2021, the beginning of our first quarter of fiscal year 2022, and the adoption did not have a material effect on our Consolidated Financial Statements. |
Note 2. Revenue from Contract_2
Note 2. Revenue from Contracts with Customers (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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 material price variances, 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 5. Goodwill and Other In_2
Note 5. Goodwill and Other Intangible Assets Policies (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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 6. Commitments and Conti_2
Note 6. Commitments and Contingent Liabilities (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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. Product warranty liability is recorded in Accrued expenses and Other long-term liabilities on the Consolidated Balance Sheets. |
Note 7. Credit Facilities (Poli
Note 7. Credit Facilities (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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 May 4, 2027. |
Note 8. Employee Benefit Plans
Note 8. Employee Benefit Plans (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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 12. Fair Value (Policies)
Note 12. Fair Value (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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 2022. 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 13. Derivative Instrumen_2
Note 13. Derivative Instruments (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Our primary means of managing this exposure is to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques do not fully offset currency risk, we use derivative instruments with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes. We use forward contracts designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Non-designated foreign exchange contracts are also used to hedge against foreign currency exchange rate risks related to intercompany balances and other balance sheet positions denominated in currencies other than the functional currencies. As of June 30, 2022, we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $41.7 million and to hedge currencies against the Euro in the aggregate notional amount of 54.8 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 Consolidated Balance Sheets as a derivative asset or liability and presented within Prepaid expenses and other current assets and Accrued expenses, respectively. 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 14. Investments (Policies)
Note 14. Investments (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
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 on our Consolidated Statements of Income. 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, 2022 | |
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 2022 2021 2020 2022 2021 Nexteer Automotive 17% 17% 14% 22% 24% Philips 15% 15% 16% * * ZF * * * * 11% * amount is less than 10% of total |
Note 2. Revenue from Contract_3
Note 2. Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Revenue from Contracts with Customers [Abstract] | |
Disaggregation of Revenue | The following table disaggregates our revenue by end market vertical for fiscal years 2022, 2021, and 2020: Year Ended (Amounts in Millions) 2022 2021 2020 Vertical Markets: Automotive $ 582.2 $ 551.5 $ 457.4 Medical 391.7 384.8 397.8 Industrial 308.1 293.7 271.0 Public Safety 50.1 48.1 56.2 Other 17.4 13.7 18.2 Total net sales $ 1,349.5 $ 1,291.8 $ 1,200.6 |
Note 3. Inventories (Tables)
Note 3. Inventories (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Inventories [Abstract] | |
Schedule of Inventory, Current | Inventory components were as follows at June 30: (Amounts in Thousands) 2022 2021 Finished products $ 525 $ 769 Work-in-process 4,911 5,149 Raw materials 390,194 194,468 Total inventory $ 395,630 $ 200,386 |
Note 4. Property and Equipment
Note 4. Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
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) 2022 2021 Land and land use rights $ 14,560 $ 14,978 Buildings and improvements 112,485 84,096 Machinery and equipment 332,292 309,731 Construction-in-progress 18,637 19,353 Total $ 477,974 $ 428,158 Less: Accumulated depreciation (271,139) (264,907) Property and equipment, net $ 206,835 $ 163,251 |
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 5. Goodwill and Other In_3
Note 5. Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Goodwill and Other Intangible Assets [Abstract] | |
Schedule of Goodwill | A summary of goodwill is as follows: (Amounts in Thousands) Balance as of June 30, 2020 Goodwill $ 32,762 Accumulated impairment (20,751) Goodwill, net 12,011 Balance as of June 30, 2021 Goodwill 32,762 Accumulated impairment (20,751) Goodwill, net 12,011 Balance as of June 30, 2022 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, 2022 June 30, 2021 (Amounts in Thousands) Cost Accumulated Net Value Cost Accumulated Net Value Capitalized Software $ 29,891 $ (26,209) $ 3,682 $ 32,774 $ (28,751) $ 4,023 Customer Relationships 8,618 (3,024) 5,594 8,618 (2,520) 6,098 Technology 5,060 (3,805) 1,255 5,060 (2,790) 2,270 Trade Name 6,575 (2,399) 4,176 6,369 (1,752) 4,617 Other Intangible Assets $ 50,144 $ (35,437) $ 14,707 $ 52,821 $ (35,813) $ 17,008 |
Note 6. Commitments and Conti_3
Note 6. Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingent Liabilities [Abstract] | |
Schedule of Product Warranty Liability | Changes in the product warranty liability during fiscal years 2022, 2021, and 2020 were as follows: (Amounts in Thousands) 2022 2021 2020 Product Warranty Liability at the beginning of the year $ 610 $ 647 $ 958 Additions to warranty accrual (including changes in estimates) (49) 21 (271) Settlements made (in cash or in kind) (32) (58) (40) Product Warranty Liability at the end of the year $ 529 $ 610 $ 647 |
Note 7. Credit Facilities (Tabl
Note 7. Credit Facilities (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Long-Term Debt and Credit Facilities [Abstract] | |
Schedule of Line of Credit Facilities | Credit facilities consisted of the following: Available Borrowing Capacity at Borrowings Outstanding at Borrowings Outstanding at (Amounts in Millions, in U.S Dollar Equivalents) June 30, 2022 June 30, 2022 June 30, 2021 Primary credit facility (1) $ 128.2 $ 171.4 $ 62.7 Thailand overdraft credit facility (2) 0.1 — — Netherlands revolving credit facility (3) 0.4 9.2 3.5 Total credit facilities $ 128.7 180.6 66.2 Less: current portion (35.6) (26.2) Long-term debt under credit facilities, less current portion (4) $ 145.0 $ 40.0 (1) The Company maintained a U.S. primary credit facility which was scheduled to mature on July 23, 2023. On May 4, 2022, the Company entered into an amended and restated credit agreement (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, and the primary credit facility is now scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 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. The Company incurred $0.6 million of debt issuance costs associated with the amended and restated credit agreement. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2022, 2021, and 2020. The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 10.0 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 credit facility. Types of borrowings available on the primary credit 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 options: • any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; • any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 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. Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board; b. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or c. 1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility); plus the Revolving Commitment ABR spread which can range from 0.0 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 provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and, • an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to be less than 3.5 to 1.0. The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2022 and 2021. (2) 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, 2022 exchange rates). This credit facility can be terminated at any time by either the Company or the bank by giving prior written notice of at least 15 days to the other party. Interest on borrowing under this facility is charged at a rate of interest determined by the bank in accordance with relevant laws and regulations for charging interest on an overdraft facility. (3) 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 $9.6 million at June 30, 2022 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 is scheduled to mature in July 2023. (4) 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 May 4, 2027. |
Note 9. Stock Compensation Pl_2
Note 9. Stock Compensation Plans (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
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 2022 is presented below: Number Weighted Average Performance shares outstanding at July 1, 2021 434,899 $ 14.71 Granted 296,662 $ 23.26 Vested (214,099) $ 15.48 Forfeited (24,071) $ 14.51 Performance shares outstanding at June 30, 2022 493,391 $ 19.52 |
Note 10. Income Taxes (Tables)
Note 10. Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Income Taxes [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities as of June 30, 2022 and 2021, were as follows: (Amounts in Thousands) 2022 2021 Deferred Tax Assets: Receivables $ 46 $ 95 Inventory 2,379 1,726 Employee benefits 197 282 Deferred compensation 7,141 8,732 Other current liabilities — 1,115 Tax credit carryforwards 5,904 3,388 Goodwill 977 1,328 Net operating loss carryforward 2,664 2,037 Net foreign currency losses 477 — Miscellaneous 6,957 5,496 Valuation Allowance (3,536) (1,802) Total asset $ 23,206 $ 22,397 Deferred Tax Liabilities: Other intangible assets $ 1,055 $ 1,210 Property and equipment 2,050 869 Net foreign currency gains — 2 Miscellaneous 1,353 659 Total liability $ 4,458 $ 2,740 Net Deferred Income Taxes $ 18,748 $ 19,657 |
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) 2022 2021 2020 United States $ 1,542 $ 10,439 $ (6,117) Foreign 42,189 59,615 31,274 Total income before taxes on income $ 43,731 $ 70,054 $ 25,157 |
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) 2022 2021 2020 Current Taxes: Federal $ 169 $ 3,921 $ (1,666) Foreign 11,086 14,664 8,479 State 179 769 (29) Total payable $ 11,434 $ 19,354 $ 6,784 Deferred Taxes: Federal $ (1,009) $ (2,459) $ 99 Foreign 922 (2,598) 237 State (603) (1,199) (1,138) Valuation allowance 1,734 165 979 Total deferred $ 1,044 $ (6,091) $ 177 Total provision for income taxes $ 12,478 $ 13,263 $ 6,961 |
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 2022 2021 2020 (Amounts in Thousands) Amount % Amount % Amount % Tax computed at U.S. federal statutory rate $ 9,184 21.0 % $ 14,711 21.0 % $ 5,283 21.0 % State income taxes, net of federal income tax benefit (699) (1.6) (374) (0.5) (1,128) (4.5) Foreign tax rate differential 1,669 3.8 1,320 1.9 714 2.8 Impact of foreign exchange rates on foreign income taxes 1,693 3.9 (1,111) (1.6) 867 3.4 Non-deductible goodwill impairment — — — — 388 1.5 Valuation allowance 1,734 4.0 165 0.2 979 3.9 Research credit (1,094) (2.5) (996) (1.4) (1,056) (4.2) Global intangible low tax income 165 0.4 181 0.3 607 2.4 Non-deductible compensation 489 1.1 10 — 10 — Other - net (663) (1.6) (643) (1.0) 297 1.4 Total provision for income taxes $ 12,478 28.5 % $ 13,263 18.9 % $ 6,961 27.7 % |
Summary of Income Tax Contingencies | Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2022, 2021, and 2020 were as follows: (Amounts in Thousands) 2022 2021 2020 Beginning balance - July 1 $ 1,012 $ 954 $ 904 Tax positions related to prior fiscal years: Additions 85 142 116 Reductions — — — Tax positions related to current fiscal year: Additions — — — Reductions — — — Settlements — (8) — Lapses in statute of limitations (695) (76) (66) Ending balance - June 30 $ 402 $ 1,012 $ 954 Portion that, if recognized, would reduce tax expense and effective tax rate $ 363 $ 323 $ 262 |
Note 12. Fair Value (Tables)
Note 12. Fair Value (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
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, 2022 and 2021, 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, 2022 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,541 $ — $ 1,541 Derivatives: foreign exchange contracts — 1,872 1,872 Trading securities: mutual funds held in nonqualified SERP 10,364 — 10,364 Total assets at fair value $ 11,905 $ 1,872 $ 13,777 Liabilities Derivatives: foreign exchange contracts $ — $ 3,522 $ 3,522 Total liabilities at fair value $ — $ 3,522 $ 3,522 June 30, 2021 (Amounts in Thousands) Level 1 Level 2 Total Assets Cash equivalents $ 1,540 $ — $ 1,540 Derivatives: foreign exchange contracts — 1,468 1,468 Trading securities: mutual funds held in nonqualified SERP 12,644 — 12,644 Total assets at fair value $ 14,184 $ 1,468 $ 15,652 Liabilities Derivatives: foreign exchange contracts $ — $ 1,702 $ 1,702 Total liabilities at fair value $ — $ 1,702 $ 1,702 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account non-performance risk Borrowings under credit facilities 2 Market - Based on observable market rates, taking into account Kimball Electronics’ non-performance risk |
Note 13. Derivative Instrumen_3
Note 13. Derivative Instruments (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 1,189 $ 1,158 Accrued expenses $ 1,486 $ 1,549 Derivatives Not Designated as Hedging Instruments: Foreign exchange contracts Prepaid expenses and other current assets 683 310 Accrued expenses 2,036 153 Total derivatives $ 1,872 $ 1,468 $ 3,522 $ 1,702 |
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) 2022 2021 2020 Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives: Foreign exchange contracts $ 468 $ 335 $ (2,079) 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) 2022 2021 2020 Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income: Foreign exchange contracts Cost of Sales $ 279 $ (814) $ 64 Total $ 279 $ (814) $ 64 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) $ (1,201) $ (1,415) $ 1,558 Total Derivative Pre-Tax Gain (Loss) Recognized in Income $ (922) $ (2,229) $ 1,622 |
Note 14. Investments (Tables)
Note 14. Investments (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
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) 2022 2021 SERP investments - current asset $ 2,605 $ 3,095 SERP investments - other long-term asset 7,759 9,549 Total SERP investments $ 10,364 $ 12,644 SERP obligation - current liability $ 2,605 $ 3,095 SERP obligation - other long-term liability 7,759 9,549 Total SERP obligation $ 10,364 $ 12,644 |
Note 15. Accrued Expenses (Tabl
Note 15. Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of: June 30 (Amounts in Thousands) 2022 2021 Taxes $ 8,962 $ 11,012 Compensation 19,324 28,744 Customer advance payments 22,484 7,580 Retirement plan 3,135 2,094 Insurance 1,361 1,126 Other expenses 9,279 7,460 Total accrued expenses $ 64,545 $ 58,016 |
Note 16. Geographic Informati_2
Note 16. Geographic Information (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
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. Year Ended June 30 (Amounts in Thousands) 2022 2021 2020 Net Sales: United States $ 337,815 $ 359,839 $ 346,376 Mexico 316,884 265,476 232,135 Poland 234,057 268,129 244,107 China 204,851 180,405 159,746 Thailand 152,287 100,478 124,415 Other Foreign 103,641 117,480 93,771 Total net sales $ 1,349,535 $ 1,291,807 $ 1,200,550 June 30 (Amounts in Thousands) 2022 2021 Long-Lived Assets: Mexico $ 78,178 $ 43,792 United States 47,353 47,499 Poland 25,924 31,412 Thailand 21,694 8,639 China 19,531 15,228 Other Foreign 17,837 20,704 Total long-lived assets $ 210,517 $ 167,274 |
Note 17. Earnings Per Share (Ta
Note 17. Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
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 2022 2021 2020 Basic and Diluted Earnings Per Share: Net Income $ 31,253 $ 56,791 $ 18,196 Less: Net Income allocated to participating securities 45 84 24 Net Income allocated to common Share Owners $ 31,208 $ 56,707 $ 18,172 Basic weighted average common shares outstanding 25,115 25,088 25,243 Dilutive effect of average outstanding stock compensation awards 106 196 185 Dilutive weighted average shares outstanding 25,221 25,284 25,428 Earnings Per Share of Common Stock: Basic $ 1.24 $ 2.26 $ 0.72 Diluted $ 1.24 $ 2.24 $ 0.71 |
Note 18. Accumulated Other Co_2
Note 18. Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Equity [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 Accumulated Other Comprehensive Income (Loss) Balance at June 30, 2020 $ (7,894) $ (3,254) $ 597 $ (10,551) Other comprehensive income (loss) before reclassifications 5,671 114 (506) 5,279 Reclassification to (earnings) loss — 713 (324) 389 Net current-period other comprehensive income (loss) $ 5,671 $ 827 $ (830) $ 5,668 Balance at June 30, 2021 $ (2,223) $ (2,427) $ (233) $ (4,883) Other comprehensive income (loss) before reclassifications (15,126) 297 305 (14,524) Reclassification to (earnings) loss — (73) (192) (265) Net current-period other comprehensive income (loss) (15,126) 224 113 (14,789) Balance at June 30, 2022 $ (17,349) $ (2,203) $ (120) $ (19,672) |
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) 2022 2021 Consolidated Statements of Income Derivative Gain (Loss) (1) $ 279 $ (814) Cost of Sales (206) 101 Benefit (Provision) for Income Taxes $ 73 $ (713) Net of Tax Postemployment Benefits: Amortization of Actuarial Gain (Loss) (2) $ 253 $ 428 Non-operating income (61) (104) Benefit (Provision) for Income Taxes $ 192 $ 324 Net of Tax Total Reclassifications for the Period $ 265 $ (389) Net of Tax Amounts in parentheses indicate reductions to income. (1) See Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. (2) See Note 8 - Employee Benefit Plans |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts | Valuation and Qualifying Accounts Description Balance at Additions (Reductions) Adjustments to Other Write-offs and Balance at (Amounts in Thousands) Year Ended June 30, 2022 Valuation Allowances: Receivables $ 177 $ (53) $ 22 $ (7) $ 139 Deferred Tax Asset $ 1,802 $ 1,734 $ — $ — $ 3,536 Year Ended June 30, 2021 Valuation Allowances: Receivables $ 523 $ (163) $ (9) $ (174) $ 177 Deferred Tax Asset $ 1,637 $ 165 $ — $ — $ 1,802 Year Ended June 30, 2020 Valuation Allowances: Receivables $ 270 $ 265 $ (5) $ (7) $ 523 Deferred Tax Asset $ 658 $ 979 $ — $ — $ 1,637 |
Note 1. Business Description _4
Note 1. Business Description and Summary of Significant Accounting Policies - Textuals (Details) - USD ($) | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounts Receivable Sold Without Recourse | $ 303,400,000 | $ 306,300,000 | $ 280,700,000 | ||
Accounts Receivable, Extended Payment Terms | 45 days | ||||
Factoring Fees | $ 1,600,000 | 1,200,000 | 1,900,000 | ||
DueFromBankersAcceptanceDrafts | $ 0 | 0 | 100,000 | ||
SettlementofBankersAcceptanceDrafts | 100,000 | 1,800,000 | 6,800,000 | ||
Research and Development Costs | $ 23,700,000 | 20,900,000 | 16,900,000 | ||
Self-Insured Workforce Coverage Percent | 15% | 15% | |||
Self Insurance Reserve, Current | $ 1,400,000 | $ 1,400,000 | 1,100,000 | ||
Other General Income | (1,384,000) | (372,000) | 0 | ||
Impairment of Intangible Assets, Finite-lived | 0 | 0 | 0 | ||
Operating Lease, Right-of-Use Asset | 3,100,000 | 3,100,000 | 1,600,000 | ||
Operating Lease, Liability | $ 3,100,000 | $ 3,100,000 | $ 1,600,000 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets | Other Assets | Other Assets | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | Other Liabilities, Current | Other Liabilities, Current | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities | Other long-term liabilities | ||
Final net working capital adjustment on acquisition | 3,800,000 | ||||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 1,000,000 | $ 1,000,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 900,000 | 900,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 600,000 | 600,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 500,000 | 500,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 100,000 | 100,000 | |||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | $ 200,000 | 200,000 | |||
GainLossOnForeignCurrencyRecordedInEarningsNet | (4,200,000) | $ 4,800,000 | |||
Change in Accounting Estimate, Description | Change in Estimates: The Company reviews the estimated useful lives of its fixed assets on an ongoing basis. In evaluating useful lives, the Company considers how long assets will remain functionally efficient and effective, given levels of technology, competitive factors, and the economic environment. If the assessment indicates that the assets will continue to be used for a shorter or longer period than previously anticipated, the useful life of the assets is revised, resulting in a change in estimate. Changes in estimates are accounted for on a prospective basis by depreciating the assets’ current carrying values over their revised remaining useful lives. The review performed by the Company in the current year indicated that Surface Mount Technology production equipment had actual lives that were longer than previously estimated. | ||||
Property, Plant and Equipment, Useful Life | 10 years | ||||
Depreciation and amortization | 29,411,000 | 34,020,000 | 30,872,000 | ||
Net Income (Loss) | $ 31,253,000 | $ 56,791,000 | $ 18,196,000 | ||
Earnings Per Share, Diluted | $ 1.24 | $ 2.24 | $ 0.71 | ||
Service Life | |||||
Depreciation and amortization | $ 6,300,000 | ||||
Net Income (Loss) | $ 4,900,000 | ||||
Earnings Per Share, Diluted | $ 0.19 | ||||
Minimum | |||||
Accounts Receivable, Customary Payment Terms | 30 days | ||||
Minimum | Service Life | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Maximum | |||||
Accounts Receivable, Customary Payment Terms | 45 days | ||||
Maximum | Service Life | |||||
Property, Plant and Equipment, Useful Life | 7 years |
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, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Philips | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 15% | 15% | 16% |
ZF | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11% | ||
Nexteer Automotive | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17% | 17% | 14% |
Nexteer Automotive | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 22% | 24% |
Note 2. Revenue from Contract_4
Note 2. Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 1,349,535 | $ 1,291,807 | $ 1,200,550 |
Contract assets | 64,080 | 45,863 | |
Customer advance payments | $ 22,484 | $ 7,580 | |
Transferred over Time | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 95% | 89% | 78% |
Automotive | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 582,200 | $ 551,500 | $ 457,400 |
Medical | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 391,700 | 384,800 | 397,800 |
Industrial | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 308,100 | 293,700 | 271,000 |
Public Safety | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | 50,100 | 48,100 | 56,200 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Net Sales | $ 17,400 | $ 13,700 | $ 18,200 |
Note 3. Inventories - Inventory
Note 3. Inventories - Inventory Components (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Inventory, Finished Goods, Net of Reserves | $ 525 | $ 769 |
Inventory, Work in Process, Net of Reserves | 4,911 | 5,149 |
Inventory, Raw Materials, Net of Reserves | 390,194 | 194,468 |
Total inventory | $ 395,630 | $ 200,386 |
Note 4. Property and Equipmen_2
Note 4. Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Property and Equipment | ||
Total Property and Equipment | $ 477,974 | $ 428,158 |
Less: Accumulated depreciation | (271,139) | (264,907) |
Property and equipment, net | 206,835 | 163,251 |
Land and Land Use Rights | ||
Property and Equipment | ||
Total Property and Equipment | 14,560 | 14,978 |
Building and Building Improvements | ||
Property and Equipment | ||
Total Property and Equipment | 112,485 | 84,096 |
Machinery and Equipment | ||
Property and Equipment | ||
Total Property and Equipment | 332,292 | 309,731 |
Construction in Progress | ||
Property and Equipment | ||
Total Property and Equipment | $ 18,637 | $ 19,353 |
Note 4. Property and Equipmen_3
Note 4. Property and Equipment - Asset Lives (Details) | 8 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Property, Plant and Equipment, Useful Life | 10 years | |
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 4. Property and Equipmen_4
Note 4. Property and Equipment - Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Depreciation of property and equipment | $ 26 | $ 30.7 | $ 27.7 |
Note 5. Goodwill and Other In_4
Note 5. Goodwill and Other Intangible Assets Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill | |||
Goodwill, Gross | $ 32,762 | $ 32,762 | $ 32,762 |
Accumulated impairment | (20,751) | (20,751) | (20,751) |
Goodwill | 12,011 | 12,011 | 12,011 |
Goodwill Impairment | 0 | 0 | 7,925 |
GES | |||
Goodwill | |||
Goodwill | $ 5,800 | $ 5,800 | |
Goodwill Impairment | 7,900 | ||
Reduction in Income Tax Expense from Goodwill Impairment | $ 1,000 |
Note 5. Goodwill and Other In_5
Note 5. Goodwill and Other Intangible Assets Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 50,144 | $ 52,821 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (35,437) | (35,813) | |
Other Intangible Assets, Net Value | 14,707 | 17,008 | |
Other Intangible Assets, Amortization Expense | 3,400 | 3,300 | $ 3,200 |
Other Intangible Assets, Future Amortization Expense, Year One | 3,300 | ||
Other Intangible Assets, Future Amortization Expense, Year Two | 2,400 | ||
Other Intangible Assets, Future Amortization Expense, Year Three | 1,800 | ||
Other Intangible Assets, Future Amortization Expense, Year Four | 1,500 | ||
Other Intangible Assets, Future Amortization Expense, Year Five | 1,400 | ||
Other Intangible Assets, Future Amortization Expense, after Year Five | 4,300 | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 0 | ||
Computer Software, Intangible Asset | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | 29,891 | 32,774 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (26,209) | (28,751) | |
Other Intangible Assets, Net Value | $ 3,682 | 4,023 | |
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 | 8,618 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,024) | (2,520) | |
Other Intangible Assets, Net Value | $ 5,594 | 6,098 | |
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Technology-Based Intangible Assets | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 5,060 | 5,060 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,805) | (2,790) | |
Other Intangible Assets, Net Value | $ 1,255 | 2,270 | |
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Trade Names | |||
Other Intangible Assets | |||
Other Intangible Assets, Cost | $ 6,575 | 6,369 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (2,399) | (1,752) | |
Other Intangible Assets, Net Value | $ 4,176 | $ 4,617 | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Note 6. Commitments and Conti_4
Note 6. Commitments and Contingent Liabilities - Guarantees Textuals (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Contingent Liabilities | ||
Other Commitment | $ 0 | $ 100,000 |
Guarantee Obligations | ||
Contingent Liabilities | ||
Loss Contingency Accrual, at Carrying Value | 0 | 0 |
Financial Standby Letter of Credit | ||
Contingent Liabilities | ||
Loss Contingency Accrual, at Carrying Value | 0 | 0 |
Unused standby letters of credit | $ 400,000 | $ 400,000 |
Note 6. Commitments and Conti_5
Note 6. Commitments and Contingent Liabilities - Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product Warranty Liability at the beginning of the year | $ 610 | $ 647 | $ 958 |
Additions to warranty accrual (including changes in estimates) | (49) | 21 | (271) |
Settlements made (in cash or in kind) | (32) | (58) | (40) |
Product Warranty Liability at the end of the year | $ 529 | $ 610 | $ 647 |
Note 7. Credit Facilities - Tex
Note 7. Credit Facilities - Textuals (Details) $ in Thousands, € in Millions, ฿ in Millions | Aug. 08, 2022 USD ($) | Jul. 28, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 THB (฿) | Jun. 30, 2022 EUR (€) | Jun. 30, 2021 USD ($) | |
Credit Facility, Availability to Borrow | $ 128,700 | ||||||
Long-term Line of Credit | 180,600 | $ 66,200 | |||||
Current portion of borrowings under credit facilities | 35,580 | 26,214 | |||||
Long-term debt under credit facilities, less current portion | $ 145,000 | $ 40,000 | |||||
Debt, Weighted Average Interest Rate | 2.70% | 2.70% | 2.70% | 2% | |||
Financial Standby Letter of Credit | |||||||
Unused standby letters of credit | $ 400 | $ 400 | |||||
Primary Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | 300,000 | ||||||
Credit Facility, Availability to Borrow | [1] | 128,200 | |||||
Long-term Line of Credit | [1] | 171,400 | 62,700 | ||||
Long-term debt under credit facilities, less current portion | [2] | 145,000 | 40,000 | ||||
Thailand Overdraft Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | 100 | ฿ 2.4 | |||||
Credit Facility, Availability to Borrow | [3] | 100 | |||||
Current portion of borrowings under credit facilities | [3] | 0 | 0 | ||||
Thailand Overdraft Credit Facility | Subsequent Event | |||||||
Credit Facility, Maximum Borrowing Capacity | $ 10,000 | ||||||
Netherlands Revolving Credit Facility | |||||||
Credit Facility, Maximum Borrowing Capacity | 9,600 | € 9.2 | |||||
Credit Facility, Availability to Borrow | [4] | 400 | |||||
Current portion of borrowings under credit facilities | [4] | $ 9,200 | $ 3,500 | ||||
China Foreign Credit Facility | Subsequent Event | |||||||
Credit Facility, Maximum Borrowing Capacity | $ 7,500 | ||||||
[1]The Company maintained a U.S. primary credit facility which was scheduled to mature on July 23, 2023. On May 4, 2022, the Company entered into an amended and restated credit agreement (the “primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, and the primary credit facility is now scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 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. The Company incurred $0.6 million of debt issuance costs associated with the amended and restated credit agreement. A commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results in fiscal years 2022, 2021, and 2020. The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 10.0 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 credit facility. Types of borrowings available on the primary credit 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 options: • any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”), which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; • any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread which can range from 100.0 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. Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board; b. 1/2 of 1% per annum above the Federal Funds Effective Rate (as defined under the primary credit facility); or c. 1% per annum above the Adjusted SOFR Rate (as defined under the primary credit facility); plus the Revolving Commitment ABR spread which can range from 0.0 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 provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and, • an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to be less than 3.5 to 1.0. The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2022 and 2021. |
Note 7. Credit Facilities - Pri
Note 7. Credit Facilities - Primary Credit Facility Textuals (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2020 USD ($) | |
Payments of Debt Issuance Costs | $ 652 | $ 0 | $ 45 |
Primary Credit Facility | |||
Line of Credit Facility, Maximum Borrowing Capacity | 300,000 | ||
Line of Credit Facility, Maximum Borrowing Capacity Upon Request | 450,000 | ||
Payments of Debt Issuance Costs | $ 600 | ||
Line of Credit Facility, Above the Adjusted SOFR Rate to Calculate Alternate Base Rate | 1% | ||
Line of Credit Facility, Above the Federal Funds Rate to Calculate Alternate Base Rate | 0.50% | ||
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash | $ 15,000 | ||
Adjusted Leverage Ratio Covenant | 3 | ||
Adjusted Leverage Ratio Covenant Material Acquisition | 3.5 | ||
Interest Coverage Ratio Covenant | 3.5 | ||
Minimum | Primary Credit Facility | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.10% | ||
Line of Credit Facility, Alternate Base Rate Loans Spread | 0 | ||
Line of Credit Facility, Term Benchmark Loans Spread for SOFR | 0.01000 | ||
Line of Credit Facility, Term Benchmark Loans Spread for EURIBOR | 0.01000 | ||
Maximum | Primary Credit Facility | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||
Line of Credit Facility, Alternate Base Rate Loans Spread | 0.00750 | ||
Line of Credit Facility, Term Benchmark Loans Spread for SOFR | 0.01750 | ||
Line of Credit Facility, Term Benchmark Loans Spread for EURIBOR | 0.01750 |
Note 8. Employee Benefit Plan_2
Note 8. Employee Benefit Plans - Retirement Plans Textuals for Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Description | Beginning January 1, 2022, the Company matches 50% of eligible employee contributions up to 6%. The Company also provides a discretionary employer contribution determined annually by the Compensation and Governance Committee of the Company’s Board of Directors. | ||
Domestic Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Cost | $ 4.2 | $ 1.9 | $ 2.4 |
Note 8. Employee Benefit Plan_3
Note 8. Employee Benefit Plans - Postemployment Plans Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Defined Benefit Plan Disclosure | |||
Assets for Plan Benefits, Defined Benefit Plan | $ 0 | ||
Liability, Defined Benefit Plan | 5,400 | $ 5,400 | |
Liability, Defined Benefit Plan, Noncurrent | 4,600 | 4,600 | |
Liability, Defined Benefit Plan, Current | 800 | 800 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 500 | 400 | $ 300 |
Domestic Defined Benefit Plan | |||
Defined Benefit Plan Disclosure | |||
Liability, Defined Benefit Plan | 1,200 | 1,200 | |
Foreign Defined Benefit Plan | |||
Defined Benefit Plan Disclosure | |||
Liability, Defined Benefit Plan | $ 4,200 | $ 4,200 |
Note 9. Stock Compensation Pl_3
Note 9. Stock Compensation Plans - Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Oct. 20, 2016 | Oct. 03, 2014 | |
Stock Compensation Plan, Pre-tax Compensation Cost | $ 6.2 | $ 3.9 | $ 4 | ||
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 9. Stock Compensation Pl_4
Note 9. Stock Compensation Plans - Performance Share Activity (Details) - Performance Shares - Stock Option and Incentive Plan 2014 - $ / shares | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangements | |||
Performance Shares, Shares Outstanding, Beginning of Period | 434,899 | ||
Share-based Compensation Arrangements, Grants in Period | 296,662 | ||
Performance Shares, Shares Vested | (214,099) | (239,194) | (253,483) |
Performance Shares, Shares Forfeited | (24,071) | ||
Performance Shares, Shares Outstanding, End of Period | 493,391 | 434,899 | |
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 14.71 | ||
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | 23.26 | ||
Performance Shares, Weighted Average Grant Date Fair Value of Shares Vested | 15.48 | ||
Performance Shares, Weighted Average Grant Date Fair Value of Shares Forfeited | 14.51 | ||
Performance Shares, Weighted Average Grant Date Fair Value of Shares Outstanding, End of Period | $ 19.52 | $ 14.71 |
Note 9. Stock Compensation Pl_5
Note 9. Stock Compensation Plans - Performance Shares Textuals (Details) - Performance Shares - Stock Option and Incentive Plan 2014 - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangements | |||
Performance Shares, Unrecognized Compensation Cost | $ 6 | ||
Performance Shares, Average Vesting Period for Unrecognized Compensation Cost | 1 year 2 months 12 days | ||
Performance Shares, Shares Vested | 214,099 | 239,194 | 253,483 |
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 3.3 | $ 4.1 | $ 3.9 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100% | ||
Maximum | |||
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 125% | ||
Minimum | |||
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0% |
Note 9. Stock Compensation Pl_6
Note 9. 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, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangements, Grants in Period | 6,777 | 4,235 | 4,258 |
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | $ 23.10 | $ 15.35 | $ 16.99 |
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 0.2 | $ 0.1 | $ 0.1 |
Note 9. Stock Compensation Pl_7
Note 9. Stock Compensation Plans - Restricted Share Units Textuals (Details) - Restricted Stock Units (RSUs) - Stock Option and Incentive Plan 2014 - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangements, Grants in Period | 0 | 3,322 | 0 |
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | $ 19.63 | ||
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 0.1 | ||
Maximum | |||
Share-based Compensation Arrangements | |||
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 1 year |
Note 9. Stock Compensation Pl_8
Note 9. 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, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangements | |||
Share-based Compensation Arrangements, Grants in Period | 34,480 | 37,132 | 32,950 |
Share-based Compensation Arrangements, Grants in Period, Weighted Average Grant Date Fair Value | $ 24.87 | $ 15.35 | $ 17.30 |
Share-based Compensation Arrangements, Vested in Period, Fair Value | $ 0.9 | $ 0.6 | $ 0.6 |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 2,753 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 17.55 |
Note 10. Income Taxes - Textual
Note 10. Income Taxes - Textuals (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Long-term income taxes payable | $ 7,812 | $ 8,854 |
Deferred Tax Assets, Valuation Allowance | 3,536 | 1,802 |
Undistributed Earnings of Foreign Subsidiaries | 353,000 | |
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability | 8,900 | 9,800 |
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability, Current | $ 1,000 | $ 900 |
Note 10. Income Taxes - Compone
Note 10. Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Deferred Tax Assets: | ||
Deferred Tax Assets, Receivables | $ 46 | $ 95 |
Deferred Tax Assets, Inventory | 2,379 | 1,726 |
Deferred Tax Assets, Employee Benefits | 197 | 282 |
Deferred Tax Assets, Deferred Compensation | 7,141 | 8,732 |
Deferred Tax Assets, Other Current Liabilities | 0 | 1,115 |
Deferred Tax Assets, Tax Credit Carryforwards | 5,904 | 3,388 |
Deferred Tax Assets, Goodwill | 977 | 1,328 |
Deferred Tax Assets, Net Operating Loss Carryforwards | 2,664 | 2,037 |
Deferred Tax Assets, Net Foreign Currency Losses | 477 | 0 |
Deferred Tax Assets, Miscellaneous | 6,957 | 5,496 |
Deferred Tax Assets, Valuation Allowance | (3,536) | (1,802) |
Deferred Tax Assets | 23,206 | 22,397 |
Deferred Tax Liabilities: | ||
Deferred Tax Liabilities, Intangible Assets | 1,055 | 1,210 |
Deferred Tax Liabilities, Property, Plant and Equipment | 2,050 | 869 |
Deferred Tax Liabilities, Net Foreign Currency Gains | 0 | 2 |
Deferred Tax Liabilities, Miscellaneous | 1,353 | 659 |
Deferred Tax Liabilities, Net | 4,458 | 2,740 |
Net Deferred Income Taxes | $ 18,748 | $ 19,657 |
Note 10. Income Taxes - Compo_2
Note 10. Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income (Loss) Before Taxes on Income, United States | $ 1,542 | $ 10,439 | $ (6,117) |
Income (Loss) Before Taxes on Income, Foreign | 42,189 | 59,615 | 31,274 |
Total income before taxes on income | $ 43,731 | $ 70,054 | $ 25,157 |
Note 10. Income Taxes - Compo_3
Note 10. Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Current Taxes: | |||
Current Federal Income Tax Expense (Benefit) | $ 169 | $ 3,921 | $ (1,666) |
Current Foreign Income Tax Expense (Benefit) | 11,086 | 14,664 | 8,479 |
Current State Income Tax Expense (Benefit) | 179 | 769 | (29) |
Current Income Tax Expense (Benefit) | 11,434 | 19,354 | 6,784 |
Deferred Taxes: | |||
Deferred Federal Income Tax Expense (Benefit) | (1,009) | (2,459) | 99 |
Deferred Foreign Income Tax Expense (Benefit) | 922 | (2,598) | 237 |
Deferred State Income Tax Expense (Benefit) | (603) | (1,199) | (1,138) |
Income Tax Expense (Benefit), Valuation Allowance | 1,734 | 165 | 979 |
Deferred Income Tax Expense (Benefit) | 1,044 | (6,091) | 177 |
Provision for Income Taxes | $ 12,478 | $ 13,263 | $ 6,961 |
Note 10. Income Taxes - Reconci
Note 10. Income Taxes - Reconciliation of Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Reconciliation, Income Tax Expense (Benefit), Tax Computed at U.S. Federal Statutory Rate | $ 9,184 | $ 14,711 | $ 5,283 |
Effective Income Tax Rate Reconciliation, Tax Computed at U.S. Federal Statutory Rate | 21% | 21% | 21% |
Income Tax Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | $ (699) | $ (374) | $ (1,128) |
Effective Income Tax Rate Reconciliation, State Income Taxes, Net of Federal Income Tax Benefit | (1.60%) | (0.50%) | (4.50%) |
Income Tax Reconciliation, Foreign Tax Effect | $ 1,669 | $ 1,320 | $ 714 |
Effective Income Tax Rate Reconciliation, Foreign Tax Effect | 3.80% | 1.90% | 2.80% |
Income Tax Rate Reconciliation, Impact of Foreign Exchange Rates, Amount | $ 1,693 | $ (1,111) | $ 867 |
Effective Income Tax Rate Reconciliation Impact of Foreign Exchange Rates, Foreign, Percent | 3.90% | (1.60%) | 3.40% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Amount | $ 0 | $ 0 | $ 388 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Impairment Losses, Percent | 0% | 0% | 1.50% |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 1,734 | $ 165 | $ 979 |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 4% | 0.20% | 3.90% |
Income Tax Reconciliation, Research Credit | $ (1,094) | $ (996) | $ (1,056) |
Effective Income Tax Rate Reconciliation, Research Credit | (2.50%) | (1.40%) | (4.20%) |
Effective Income Tax Reconciliation Tax Cuts and Jobs Act 2017 Global Intangible Low-Taxed Income Provisions, Amount | $ 165 | $ 181 | $ 607 |
Effective Income Tax Reconciliation Tax Cuts and Jobs Act 2017 Global Intangible Low-Taxed Income Provisions, Percent | 0.40% | 0.30% | 2.40% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Other, Amount | $ 489 | $ 10 | $ 10 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Other, Percent | 1.10% | 0% | 0% |
Income Tax Reconciliation, Other-Net | $ (663) | $ (643) | $ 297 |
Effective Income Tax Rate Reconciliation, Other-Net | (1.60%) | (1.00%) | 1.40% |
Provision for Income Taxes | $ 12,478 | $ 13,263 | $ 6,961 |
Effective Income Tax Rate | 28.50% | 18.90% | 27.70% |
Note 10. Income Taxes - Recon_2
Note 10. Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 1,012 | $ 954 | $ 904 |
Unrecognized Tax Benefits, Additions Resulting from Prior Period Tax Positions | 85 | 142 | 116 |
Unrecognized Tax Benefits, Reductions Resulting from Prior Period Tax Positions | 0 | 0 | 0 |
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 | (8) | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | (695) | (76) | (66) |
Unrecognized Tax Benefits, Ending Balance | 402 | 1,012 | 954 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 363 | $ 323 | $ 262 |
Note 10. Income Taxes - Accrued
Note 10. Income Taxes - Accrued Interest and Penalties Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 |
Income Tax Contingency | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0.6 | $ 1.2 | $ 1.6 |
Note 11. Share Owners' Equity -
Note 11. Share Owners' Equity - Textuals (Details) - USD ($) | 12 Months Ended | 80 Months Ended | |||||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2022 | Nov. 10, 2020 | Nov. 08, 2018 | Aug. 23, 2017 | Sep. 29, 2016 | Oct. 21, 2015 | |
Stock Repurchase Program, Authorized Amount | $ 100,000,000 | $ 100,000,000 | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 9,122,000 | $ 2,996,000 | $ 8,794,000 | ||||||
Treasury Stock Acquired, Average Cost Per Share | $ 18.82 | $ 15.27 | |||||||
share repurchase program October 2015 | |||||||||
Stock Repurchase Program, Authorized Amount | $ 20,000,000 | ||||||||
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 November 2020 Extension | |||||||||
Stock Repurchase Program, Authorized Amount | $ 20,000,000 | ||||||||
Treasury Stock | |||||||||
Treasury Stock, Value, Acquired, Cost Method | $ 9,122,000 | $ 2,996,000 | $ 8,794,000 | $ 88,800,000 |
Note 12. Fair Value - Textuals
Note 12. Fair Value - Textuals (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Fair Value, Purchases and Sales of Level 3 Assets | $ 0 | $ 0 | $ 0 |
Fair Value, Purchases and Sales of Level 3 Liabilities | $ 0 | $ 0 | $ 0 |
Note 12. Fair Value - Recurring
Note 12. Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Recurring Fair Value Measurments: | ||
Derivative Asset | $ 1,872 | $ 1,468 |
Debt Securities, Trading, and Equity Securities, FV-NI | 10,364 | 12,644 |
Derivative Liability | 3,522 | 1,702 |
Fair Value, Measurements, Recurring | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 1,541 | 1,540 |
Debt Securities, Trading, and Equity Securities, FV-NI | 10,364 | 12,644 |
Total assets at fair value | 13,777 | 15,652 |
Total liabilities at fair value | 3,522 | 1,702 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 1,872 | 1,468 |
Derivative Liability | 3,522 | 1,702 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Recurring Fair Value Measurments: | ||
Cash equivalents | 1,541 | 1,540 |
Debt Securities, Trading, and Equity Securities, FV-NI | 10,364 | 12,644 |
Total assets at fair value | 11,905 | 14,184 |
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 | 1,872 | 1,468 |
Total liabilities at fair value | 3,522 | 1,702 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract | ||
Recurring Fair Value Measurments: | ||
Derivative Asset | 1,872 | 1,468 |
Derivative Liability | $ 3,522 | $ 1,702 |
Note 13. Derivative Instrumen_4
Note 13. Derivative Instruments - Textuals (Details) € in Millions, $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 | Jun. 30, 2022 EUR (€) | |
Derivatives, Fair Value | |||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Maximum Time to Transfer | 12 months | 12 months | |
Foreign Exchange Contract | |||
Derivatives, Fair Value | |||
Derivative, Notional Amount | $ 41.7 | € 54.8 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ (0.5) |
Note 13. Derivative Instrumen_5
Note 13. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Derivatives, Fair Value | ||
Derivative Asset | $ 1,872 | $ 1,468 |
Derivative Liability | 3,522 | 1,702 |
Foreign Exchange Contract | Fair Value, Measurements, Recurring | ||
Derivatives, Fair Value | ||
Derivative Asset | 1,872 | 1,468 |
Derivative Liability | 3,522 | 1,702 |
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 1,189 | 1,158 |
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | 1,486 | 1,549 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset | 683 | 310 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Liabilities | ||
Derivatives, Fair Value | ||
Derivative Liability | $ 2,036 | $ 153 |
Note 13. Derivative Instrumen_6
Note 13. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative Instruments, Gain (Loss) | |||
Derivative gain (loss), Pre-tax | $ 468 | $ 335 | $ (2,079) |
Foreign Exchange Contract | |||
Derivative Instruments, Gain (Loss) | |||
Derivative gain (loss), Pre-tax | $ 468 | $ 335 | $ (2,079) |
Note 13. Derivative Instrumen_7
Note 13. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative Instruments, Gain (Loss) | |||
Derivative, Reclassification to (earnings) loss, Pre-tax | $ 279 | $ (814) | $ 64 |
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | (922) | (2,229) | 1,622 |
Foreign Exchange Contract | Nonoperating Income (Expense) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | (1,201) | (1,415) | 1,558 |
Cash Flow Hedging | Foreign Exchange Contract | |||
Derivative Instruments, Gain (Loss) | |||
Derivative, Reclassification to (earnings) loss, Pre-tax | 279 | (814) | 64 |
Cash Flow Hedging | Foreign Exchange Contract | Cost of Sales | |||
Derivative Instruments, Gain (Loss) | |||
Derivative, Reclassification to (earnings) loss, Pre-tax | $ 279 | $ (814) | $ 64 |
Note 14. Investments - Investme
Note 14. Investments - Investments-Supplemental Employee Retirement Plan Investments Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Schedule of Trading Securities and Other Trading Assets | |||
Equity Securities, FV-NI, Unrealized Gain (Loss) | $ (2,200) | $ 1,500 | $ 400 |
Note 14. Investments - Suppleme
Note 14. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Schedule of Trading Securities and Other Trading Assets | ||
SERP Investment | $ 10,364 | $ 12,644 |
SERP Obligation | 10,364 | 12,644 |
Prepaid Expenses and Other Current Assets | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Investment | 2,605 | 3,095 |
Other Noncurrent Assets | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Investment | 7,759 | 9,549 |
Other Current Liabilities | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Obligation | 2,605 | 3,095 |
Other Noncurrent Liabilities | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP Obligation | $ 7,759 | $ 9,549 |
Note 15. Accrued Expenses - Acc
Note 15. Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Taxes | $ 8,962 | $ 11,012 |
Compensation | 19,324 | 28,744 |
Customer advance payments | 22,484 | 7,580 |
Retirement plan | 3,135 | 2,094 |
Insurance | 1,361 | 1,126 |
Other expenses | 9,279 | 7,460 |
Total accrued expenses | $ 64,545 | $ 58,016 |
Note 16. Geographic Informati_3
Note 16. Geographic Information - Segments, Geographic Areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | $ 1,349,535 | $ 1,291,807 | $ 1,200,550 |
Long-Lived Assets: | 210,517 | 167,274 | |
United States | |||
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | 337,815 | 359,839 | 346,376 |
Long-Lived Assets: | 47,353 | 47,499 | |
MEXICO | |||
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | 316,884 | 265,476 | 232,135 |
Long-Lived Assets: | 78,178 | 43,792 | |
Poland | |||
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | 234,057 | 268,129 | 244,107 |
Long-Lived Assets: | 25,924 | 31,412 | |
CHINA | |||
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | 204,851 | 180,405 | 159,746 |
Long-Lived Assets: | 19,531 | 15,228 | |
THAILAND | |||
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | 152,287 | 100,478 | 124,415 |
Long-Lived Assets: | 21,694 | 8,639 | |
Other Foreign | |||
Revenues from External Customers and Long-Lived Assets | |||
Net Sales | 103,641 | 117,480 | $ 93,771 |
Long-Lived Assets: | $ 17,837 | $ 20,704 |
Note 17. Earnings Per Share Sta
Note 17. Earnings Per Share Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net Income (Loss) | $ 31,253 | $ 56,791 | $ 18,196 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 45 | 84 | 24 |
Net Income (Loss) Available to Common Stockholders, Basic | $ 31,208 | $ 56,707 | $ 18,172 |
Weighted Average Number of Shares Outstanding, Basic | 25,115 | 25,088 | 25,243 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 106 | 196 | 185 |
Weighted Average Number of Shares Outstanding, Diluted | 25,221 | 25,284 | 25,428 |
Earnings Per Share, Basic | $ 1.24 | $ 2.26 | $ 0.72 |
Earnings Per Share, Diluted | $ 1.24 | $ 2.24 | $ 0.71 |
Note 18. Accumulated Other Co_3
Note 18. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | $ 441,972 | $ 379,365 |
Other comprehensive income (loss) before reclassifications | (14,524) | 5,279 |
Reclassification to (earnings) loss | (265) | 389 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (14,789) | 5,668 |
Share Owner's Equity | 453,971 | 441,972 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (4,883) | (10,551) |
Share Owner's Equity | (19,672) | (4,883) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (2,223) | (7,894) |
Other comprehensive income (loss) before reclassifications | (15,126) | 5,671 |
Reclassification to (earnings) loss | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (15,126) | 5,671 |
Share Owner's Equity | (17,349) | (2,223) |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (2,427) | (3,254) |
Other comprehensive income (loss) before reclassifications | 297 | 114 |
Reclassification to (earnings) loss | (73) | 713 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 224 | 827 |
Share Owner's Equity | (2,203) | (2,427) |
Postemployment Benefits, Net Actuarial Gain | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Share Owner's Equity | (233) | 597 |
Other comprehensive income (loss) before reclassifications | 305 | (506) |
Reclassification to (earnings) loss | (192) | (324) |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 113 | (830) |
Share Owner's Equity | $ (120) | $ (233) |
Note 18. Accumulated Other Co_4
Note 18. Accumulated Other Comprehensive Income (Loss) - Reclassification from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Cost of Sales | $ (1,244,933) | $ (1,173,772) | $ (1,116,709) | |
Other income expense net | (8,818) | 4,351 | (6,839) | |
Benefit (Provision) for Income Taxes | (12,478) | (13,263) | (6,961) | |
Net Income (Loss) | 31,253 | 56,791 | $ 18,196 | |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Net Income (Loss) | 265 | (389) | ||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Foreign Exchange Contract | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Cost of Sales | [1] | 279 | (814) | |
Benefit (Provision) for Income Taxes | [1] | (206) | 101 | |
Net Income (Loss) | [1] | 73 | (713) | |
Reclassification out of Accumulated Other Comprehensive Income | Postemployment Benefits, Amortization of actuarial gain (loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Other income expense net | [2] | 253 | 428 | |
Benefit (Provision) for Income Taxes | [2] | (61) | (104) | |
Net Income (Loss) | [2] | $ 192 | $ 324 | |
[1]See Note 13 - Derivative Instruments of Notes to Consolidated Financial Statements for further information on derivative instruments. |
Schedule II Valuation and Qua_3
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
SEC Schedule, 12-09, Allowance, Credit Loss | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | $ 177 | $ 523 | $ 270 |
Valuation Allowances, Additions to Expense | 265 | ||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Deduction | (53) | (163) | |
Valuation Allowances, Adjustments to Other Accounts | 22 | (9) | (5) |
Valuation Allowances, Write-offs and Recoveries | (7) | (174) | (7) |
Valuation Allowances, Balance at End of Year | 139 | 177 | 523 |
Deferred Tax Asset | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | 1,802 | 1,637 | 658 |
Valuation Allowances, Additions to Expense | 1,734 | 165 | 979 |
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 | $ 3,536 | $ 1,802 | $ 1,637 |