Document_and_Entity_Informatio
Document and Entity Information Document | 9 Months Ended | |
Mar. 31, 2015 | Apr. 23, 2015 | |
Document Information | ||
Entity Registrant Name | KIMBALL INTERNATIONAL INC | |
Entity Central Index Key | 55772 | |
Current Fiscal Year End Date | -24 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE | |
Class A Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 832,492 | |
Class B Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 37,724,877 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $49,968 | $136,624 |
Receivables, net of allowances of $2,256 and $2,345, respectively | 44,692 | 175,695 |
Inventories | 34,675 | 140,475 |
Prepaid expenses and other current assets | 33,384 | 46,998 |
Assets held for sale | 0 | 0 |
Total current assets | 162,719 | 499,792 |
Property and Equipment, net of accumulated depreciation of $200,279 and $358,493, respectively | 91,249 | 188,833 |
Goodwill | 0 | 2,564 |
Other Intangible Assets, net of accumulated amortization of $36,204 and $61,912, respectively | 2,647 | 4,191 |
Other Assets | 15,387 | 26,766 |
Total Assets | 272,002 | 722,146 |
Current Liabilities: | ||
Current maturities of long-term debt | 27 | 25 |
Accounts payable | 55,650 | 174,436 |
Dividends payable | 1,947 | 1,883 |
Accrued expenses | 49,740 | 77,256 |
Total current liabilities | 107,364 | 253,600 |
Other Liabilities: | ||
Long-term debt, less current maturities | 244 | 268 |
Other | 18,191 | 26,745 |
Total other liabilities | 18,435 | 27,013 |
Common stock-par value $0.05 per share: | ||
Additional paid-in capital | 2,990 | 6,269 |
Retained earnings | 191,900 | 487,040 |
Accumulated other comprehensive income | 1,193 | 2,440 |
Less: Treasury stock, at cost: | ||
Total Share Owners' Equity | 146,203 | 441,533 |
Total Liabilities and Share Owners' Equity | 272,002 | 722,146 |
Class A Common Stock | ||
Common stock-par value $0.05 per share: | ||
Common Stock | 42 | 560 |
Less: Treasury stock, at cost: | ||
Treasury Stock | 0 | -42,198 |
Class B Common Stock | ||
Common stock-par value $0.05 per share: | ||
Common Stock | 2,109 | 1,591 |
Less: Treasury stock, at cost: | ||
Treasury Stock | ($52,031) | ($14,169) |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets Parentheticals (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
ASSETS | ||
Accounts and Notes Receivable Allowances | $2,256 | $2,345 |
Property and Equipment Accumulated Depreciation | 200,279 | 358,493 |
Other Intangible Assets Accumulated Amortization | $36,204 | $61,912 |
Class A Common Stock | ||
Share Owners' Equity | ||
Common Stock, Par Value Per Share | $0.05 | $0.05 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 853,000 | 11,212,000 |
Treasury Stock, Shares | 0 | 3,505,000 |
Class B Common Stock | ||
Share Owners' Equity | ||
Common Stock, Par Value Per Share | $0.05 | $0.05 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 42,172,000 | 31,813,000 |
Treasury Stock, Shares | 4,467,000 | 1,082,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Average Number of Shares Outstanding: | ||||
Average Number of Shares Outstanding, Basic | 38,747 | 38,437 | 38,773 | 38,394 |
Average Number of Shares Outstanding, Diluted | 39,115 | 38,437 | 39,102 | 38,838 |
Statement [Line Items] | ||||
Net Sales | $145,943 | $125,108 | $441,807 | $405,959 |
Cost of Sales | 101,936 | 88,491 | 304,021 | 281,290 |
Gross Profit | 44,007 | 36,617 | 137,786 | 124,669 |
Selling and Administrative Expenses | 38,508 | 37,692 | 125,435 | 122,606 |
Restructuring Expense | 388 | 0 | 3,723 | 0 |
Operating Income (Loss) | 5,111 | -1,075 | 8,628 | 2,063 |
Other Income (Expense): | ||||
Interest income | 61 | 36 | 151 | 144 |
Interest expense | -6 | -6 | -18 | -19 |
Non-operating income, net | 290 | 9 | 140 | 1,566 |
Other income, net | 345 | 39 | 273 | 1,691 |
Income (Loss) from Continuing Operations Before Taxes on Income | 5,456 | -1,036 | 8,901 | 3,754 |
Provision (Benefit) for Income Taxes | 574 | -999 | 2,503 | 694 |
Income (Loss) from Continuing Operations | 4,882 | -37 | 6,398 | 3,060 |
Income from Discontinued Operations, Net of Tax | 0 | 7,245 | 9,157 | 22,553 |
Net Income | $4,882 | $7,208 | $15,555 | $25,613 |
Class A Common Stock | ||||
Basic Earnings Per Share: | ||||
Income (Loss) from Continuing Operations, Per Basic Share | $0.12 | ($0.01) | $0.14 | $0.07 |
Earnings (Loss) Per Share, Basic | $0.12 | $0.18 | $0.38 | $0.65 |
Diluted Earnings Per Share: | ||||
Income (Loss) from Continuing Operations, Per Diluted Share | $0.12 | ($0.01) | $0.14 | $0.07 |
Earnings (Loss) Per Share, Diluted | $0.12 | $0.18 | $0.37 | $0.65 |
Dividends Per Share of Common Stock: | ||||
Dividends Per Share of Common Stock, Declared | $0.05 | $0.05 | $0.14 | $0.14 |
Class B Common Stock | ||||
Basic Earnings Per Share: | ||||
Income (Loss) from Continuing Operations, Per Basic Share | $0.13 | $0 | $0.17 | $0.08 |
Earnings (Loss) Per Share, Basic | $0.13 | $0.19 | $0.40 | $0.67 |
Diluted Earnings Per Share: | ||||
Income (Loss) from Continuing Operations, Per Diluted Share | $0.13 | $0 | $0.17 | $0.08 |
Earnings (Loss) Per Share, Diluted | $0.13 | $0.19 | $0.40 | $0.66 |
Dividends Per Share of Common Stock: | ||||
Dividends Per Share of Common Stock, Declared | $0.05 | $0.05 | $0.15 | $0.15 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Net income | $4,882 | $7,208 | $15,555 | $25,613 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, Pre-tax | 0 | 54 | -6,070 | 4,937 |
Foreign currency translation adjustments, Tax | 0 | -33 | 0 | -304 |
Foreign currency translation adjustments, Net of Tax | 0 | 21 | -6,070 | 4,633 |
Postemployment severance actuarial change, Pre-tax | 45 | 451 | 698 | 573 |
Postemployment severance actuarial change, Tax | -17 | -180 | -277 | -229 |
Postemployment severance actuarial change, Net of Tax | 28 | 271 | 421 | 344 |
Derivative gain (loss), Pre-tax | 0 | 362 | 2,513 | -536 |
Derivative gain (loss), Tax | 0 | -94 | -416 | 70 |
Derivative gain (loss), Net of Tax | 0 | 268 | 2,097 | -466 |
Reclassification to (earnings) loss: | ||||
Derivatives, Reclassification to (earnings) loss, Pre-tax | 0 | 468 | -1,484 | 1,085 |
Derivatives, Reclassification to (earnings) loss, Tax | 0 | -104 | 291 | -211 |
Derivatives, Reclassification to (earnings) loss, Net of Tax | 0 | 364 | -1,193 | 874 |
Amortization of prior service cost, Pre-tax | 41 | 71 | 177 | 214 |
Amortization of prior service cost, Tax | -16 | -28 | -70 | -85 |
Amortization of prior service cost, Net of Tax | 25 | 43 | 107 | 129 |
Amortization of actuarial change, Pre-tax | -69 | 80 | -146 | 274 |
Amortization of actuarial change, Tax | 27 | -33 | 58 | -110 |
Amortization of actuarial change, Net of Tax | -42 | 47 | -88 | 164 |
Other comprehensive income (loss), Pre-tax | 17 | 1,486 | -4,312 | 6,547 |
Other comprehensive income (loss), Tax | -6 | -472 | -414 | -869 |
Other comprehensive income (loss), Net of Tax | 11 | 1,014 | -4,726 | 5,678 |
Total comprehensive income (loss) | 4,893 | 8,222 | 10,829 | 31,291 |
Foreign Exchange Contract | ||||
Other comprehensive income (loss): | ||||
Derivative gain (loss), Pre-tax | $0 | $362 | $2,513 | ($536) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows From Operating Activities: | ||
Net income | $15,555 | $25,613 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 16,527 | 23,588 |
Loss on sales of assets | 916 | 344 |
Restructuring and asset impairment charges | 930 | 1,509 |
Deferred income tax and other deferred charges | -1,434 | -7,780 |
Stock-based compensation | 5,217 | 5,071 |
Excess tax benefits from stock-based compensation | -1,157 | -43 |
Other, net | 1,220 | 404 |
Change in operating assets and liabilities: | ||
Receivables | -4,292 | 6,553 |
Inventories | -18,969 | -7,925 |
Prepaid expenses and other current assets | -6,122 | -337 |
Accounts payable | 8,449 | 5,780 |
Accrued expenses | -4,819 | 12,073 |
Net cash provided by operating activities | 12,021 | 64,850 |
Cash Flows From Investing Activities: | ||
Capital expenditures | -24,095 | -24,848 |
Proceeds from sales of assets | 2,302 | 1,724 |
Purchases of capitalized software | -1,178 | -501 |
Other, net | -176 | 813 |
Net cash used for investing activities | -23,147 | -22,812 |
Cash Flows From Financing Activities: | ||
Transfer of cash and cash equivalents to Kimball Electronics, Inc. | -63,006 | 0 |
Change in capital leases and long-term debt | -22 | -21 |
Dividends paid to Share Owners | -5,729 | -5,625 |
Repurchases of Common Stock | -2,828 | 0 |
Excess tax benefits from stock-based compensation | 1,157 | 43 |
Repurchase of employee shares for tax withholding | -3,842 | -1,953 |
Net cash used for financing activities | -74,270 | -7,556 |
Effect of Exchange Rate Change on Cash and Cash Equivalents | -1,260 | 264 |
Net (Decrease) Increase in Cash and Cash Equivalents | -86,656 | 34,746 |
Cash and Cash Equivalents at Beginning of Period | 136,624 | 103,600 |
Cash and Cash Equivalents at End of Period | 49,968 | 138,346 |
Cash paid during the period for: | ||
Income taxes | 11,908 | 12,189 |
Interest expense | $30 | $28 |
Note_1_Basis_of_Presentation
Note 1. Basis of Presentation | 9 Months Ended |
Mar. 31, 2015 | |
Basis of Presentation [Abstract] | |
Business Description and Basis of Presentation | Basis of Presentation |
The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K. |
Note_2_SpinOff_Transaction
Note 2. Spin-Off Transaction | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure | Spin-Off Transaction | |||||||||||||||
On October 31, 2014 (“Distribution Date”), we completed the spin-off of our Electronic Manufacturing Services (“EMS”) segment by distributing the related shares of Kimball Electronics, Inc. (“Kimball Electronics”), on a pro rata basis, to the Company's Share Owners of record as of October 22, 2014 (“the Record Date”). On the Distribution Date, each of the Company's Share Owners received three shares of Kimball Electronics for every four shares of the Company held by such Share Owner on the Record Date. After the Distribution Date, the Company does not beneficially own any Kimball Electronics shares and Kimball Electronics is an independent publicly traded company. Kimball International, Inc. trades on the NASDAQ under the ticker symbol “KBAL” and Kimball Electronics, Inc. trades on the NASDAQ under the ticker symbol “KE”. | ||||||||||||||||
The following is a summary of the assets and liabilities distributed to Kimball Electronics on the Distribution Date or shortly thereafter: | ||||||||||||||||
(Amounts in Millions) | ||||||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 63 | ||||||||||||||
Receivables | 133 | |||||||||||||||
Inventories | 124 | |||||||||||||||
Prepaid expenses and other current assets | 19 | |||||||||||||||
Net property and equipment | 98 | |||||||||||||||
Goodwill | 3 | |||||||||||||||
Net other intangible assets | 1 | |||||||||||||||
Other long-term assets | 15 | |||||||||||||||
$ | 456 | |||||||||||||||
Liabilities: | ||||||||||||||||
Accounts payable | $ | 125 | ||||||||||||||
Accrued expenses | 22 | |||||||||||||||
Other long-term liabilities | 9 | |||||||||||||||
$ | 156 | |||||||||||||||
Net Assets Distributed to Kimball Electronics, Inc. | $ | 300 | ||||||||||||||
The Company distributed $63 million of cash to Kimball Electronics, including the cash held by its foreign facilities, as Kimball Electronics began operation as an independent company. The cash distribution occurred in several installments immediately preceding the Distribution Date or shortly thereafter. In addition, $3.5 million of accumulated other comprehensive losses, net of tax, related to foreign translation, derivatives, and the postemployment benefit plan was transferred to Kimball Electronics. | ||||||||||||||||
The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. Summarized financial results of discontinued operations through the October 31, 2014 spin-off date, were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
31-Mar | 31-Mar | |||||||||||||||
(Amounts in Thousands, Except Per Share Data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net Sales | $ | — | $ | 185,680 | $ | 275,551 | $ | 542,580 | ||||||||
Income Before Taxes on Income | — | 9,559 | 13,098 | 28,926 | ||||||||||||
Provision for Income Taxes | — | 2,314 | 3,941 | 6,373 | ||||||||||||
Income from Discontinued Operations, Net of Tax | $ | — | $ | 7,245 | $ | 9,157 | $ | 22,553 | ||||||||
Income From Discontinued Operations per Class B Diluted Share | $ | — | $ | 0.19 | $ | 0.23 | $ | 0.58 | ||||||||
In connection with the spin-off of Kimball Electronics, the Company and Kimball Electronics entered into several agreements covering administrative and tax matters to provide or obtain services on a transitional basis, as needed, for varying periods after the spin-off. The administrative agreements cover various services such as information technology, human resources, taxation, and finance. The Company expects all services to be substantially complete within one year after the spin-off. The Company has retained all liabilities for U.S. federal, state, and local income taxes on income prior to the spin-off, as well as certain non-income taxes attributable to Kimball Electronics’ business. Kimball Electronics generally will be liable for all other taxes attributable to its business. In connection with the spin-off, the Company has adjusted its employee stock compensation awards and separated its retirement and post-employment benefit plans. | ||||||||||||||||
On October 30, 2014, holders of a sufficient number of shares of Class A common stock converted such shares into Class B common stock such that the number of outstanding shares of Class A common stock is, after such conversions, less than 15% of the total number of issued and outstanding shares of both Class A common stock and Class B common stock. Pursuant to the Company’s Amended and Restated Articles of Incorporation if at any time the number of shares of Class A common stock issued and outstanding is less than 15% of the total number of issued and outstanding shares of both Class A common stock and Class B common stock, then all of the rights, preferences, limitations and restrictions relating to Class B common stock shall become the same as the rights, preferences, limitations and restrictions of Class A common stock, without any further action of or by its Share Owners, and all distinctions between Class A common stock and Class B common stock shall be eliminated so that all shares of Class B common stock are equal to shares of Class A common stock with respect to all matters, including without limitation, dividend payments and voting rights. The elimination of such distinctions, which occurred on October 30, 2014, is referred to as the “stock unification.” As a result of the stock unification, Class A common stock and Class B common stock now vote as a single class (except as otherwise required by applicable law) on all matters submitted to a vote of the Company’s Share Owners. |
Note_3_Recent_Accounting_Prono
Note 3. Recent Accounting Pronouncements and Supplemental Information | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Recent Accounting Pronouncements and Supplemental Information [Abstract] | ||||||||||||||||
Recent Accounting Pronouncements and Supplemental Information | Recent Accounting Pronouncements: | |||||||||||||||
In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance on customer’s accounting for cloud computing fees and provided criteria for customers in a cloud computing arrangement to use to determine whether the arrangement includes a license of software. The guidance clarifies that a software license included in a cloud computing arrangement should be accounted for consistent with the acquisition of other software licenses, whereas a cloud computing arrangement that does not include a software license should be accounted for as a service contract. The guidance is effective for our first quarter of fiscal year 2017 financial statements, and allows for the use of either a prospective or retrospective transition method. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements. | ||||||||||||||||
In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements. We do not expect the adoption to have a material effect on our consolidated financial statements. | ||||||||||||||||
In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In April 2015, the FASB proposed a deferral of the effective date for this new revenue standard by one year, which would make the guidance effective for our first quarter fiscal year 2019 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements. | ||||||||||||||||
In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity's operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance is effective prospectively for disposals or components of our business classified as held for sale during the first quarter of fiscal year 2016. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. | ||||||||||||||||
In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance became effective prospectively for our first quarter fiscal year 2015 financial statements. The adoption did not have a material effect on our consolidated financial statements. | ||||||||||||||||
Notes Receivable and Trade Accounts Receivable: | ||||||||||||||||
Notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. | ||||||||||||||||
Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. | ||||||||||||||||
Income Taxes: | ||||||||||||||||
In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur. | ||||||||||||||||
Our 10.5% effective tax rate for the third quarter of fiscal year 2015 was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments. The third quarter fiscal year 2014 effective tax rate of 96.4% was favorably impacted by tax adjustments of $0.4 million on a pre-tax loss. | ||||||||||||||||
Our effective tax rate for the first nine months of fiscal year 2015 of 28.1% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments, which were partially offset by a $0.4 million adjustment to deferred taxes as our combined state tax rate is lower post spin-off. Our effective tax rate for the first nine months of fiscal year 2014 of 18.5% was favorably impacted by both a $0.7 million decrease in a deferred tax asset valuation allowance and a $0.4 million tax accrual adjustment. | ||||||||||||||||
Non-operating Income, net: | ||||||||||||||||
The non-operating income, net line item includes the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements and related derivative gain or loss, investment gain or loss, non-production rent income, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses. | ||||||||||||||||
Components of the Non-operating income, net line, from continuing operations were: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31 | March 31 | |||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Foreign Currency/Derivative Gain (Loss) | $ | 2 | $ | (40 | ) | $ | (40 | ) | $ | (56 | ) | |||||
Gain on Supplemental Employee Retirement Plan Investments | 353 | 187 | 519 | 2,041 | ||||||||||||
Other | (65 | ) | (138 | ) | (339 | ) | (419 | ) | ||||||||
Non-operating income, net | $ | 290 | $ | 9 | $ | 140 | $ | 1,566 | ||||||||
Note_4_Inventories
Note 4. Inventories | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventories [Abstract] | ||||||||
Inventory Disclosure | Inventories | |||||||
Inventory components were as follows: | ||||||||
(Amounts in Thousands) | March 31, 2015 | June 30, | ||||||
2014 | ||||||||
Finished products | $ | 26,208 | $ | 37,373 | ||||
Work-in-process | 1,955 | 13,808 | ||||||
Raw materials | 20,907 | 103,083 | ||||||
Total FIFO inventory | 49,070 | 154,264 | ||||||
LIFO reserve | (14,395 | ) | (13,789 | ) | ||||
Total inventory | $ | 34,675 | $ | 140,475 | ||||
For interim reporting, LIFO inventories are computed based on quantities as of the end of the quarter and interim changes in price levels. Changes in quantities and price levels are reflected in the interim financial statements in the period in which they occur, except in cases where LIFO inventory liquidations are expected to be reinstated by fiscal year end. The earnings impact of LIFO inventory liquidations during the three and nine-month periods ended March 31, 2015 and 2014 was immaterial. The reduction in FIFO inventory from June 30, 2014 to March 31, 2015 was due primarily to the spin-off of Kimball Electronics, Inc. from Kimball International, Inc. on October 31, 2014. |
Note_5_Accumulated_Other_Compr
Note 5. Accumulated Other Comprehensive Income (Loss) | 9 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||||||
Accumulated Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||
During the three months ended March 31, 2015 and 2014, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Postemployment Benefits | |||||||||||||||||||
(Amounts in Thousands) | Foreign Currency Translation Adjustments | Derivative Gain (Loss) | Prior Service Costs | Net Actuarial Gain (Loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at December 31, 2014 | $ | — | $ | — | $ | (30 | ) | $ | 1,212 | $ | 1,182 | |||||||||
Other comprehensive income (loss) before reclassifications | — | — | — | 28 | 28 | |||||||||||||||
Reclassification to (earnings) loss | — | — | 25 | (42 | ) | (17 | ) | |||||||||||||
Net current-period other comprehensive income (loss) | — | — | 25 | (14 | ) | 11 | ||||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | (5 | ) | $ | 1,198 | $ | 1,193 | |||||||||
Balance at December 31, 2013 | $ | 5,467 | $ | (4,583 | ) | $ | (206 | ) | $ | 509 | $ | 1,187 | ||||||||
Other comprehensive income (loss) before reclassifications | 21 | 268 | — | 271 | 560 | |||||||||||||||
Reclassification to (earnings) loss | — | 364 | 43 | 47 | 454 | |||||||||||||||
Net current-period other comprehensive income (loss) | 21 | 632 | 43 | 318 | 1,014 | |||||||||||||||
Balance at March 31, 2014 | $ | 5,488 | $ | (3,951 | ) | $ | (163 | ) | $ | 827 | $ | 2,201 | ||||||||
During the nine months ended March 31, 2015 and 2014, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Postemployment Benefits | |||||||||||||||||||
(Amounts in Thousands) | Foreign Currency Translation Adjustments | Derivative Gain (Loss) | Prior Service Costs | Net Actuarial Gain (Loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at June 30, 2014 | $ | 4,909 | $ | (3,411 | ) | $ | (120 | ) | $ | 1,062 | $ | 2,440 | ||||||||
Other comprehensive income (loss) before reclassifications | (6,070 | ) | 2,097 | — | 421 | (3,552 | ) | |||||||||||||
Reclassification to (earnings) loss | — | (1,193 | ) | 107 | (88 | ) | (1,174 | ) | ||||||||||||
Distribution of Kimball Electronics, Inc. | 1,161 | 2,507 | 8 | (197 | ) | 3,479 | ||||||||||||||
Net current-period other comprehensive income (loss) | (4,909 | ) | 3,411 | 115 | 136 | (1,247 | ) | |||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | (5 | ) | $ | 1,198 | $ | 1,193 | |||||||||
Balance at June 30, 2013 | $ | 855 | $ | (4,359 | ) | $ | (292 | ) | $ | 319 | $ | (3,477 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 4,633 | (466 | ) | — | 344 | 4,511 | ||||||||||||||
Reclassification to (earnings) loss | — | 874 | 129 | 164 | 1,167 | |||||||||||||||
Net current-period other comprehensive income (loss) | 4,633 | 408 | 129 | 508 | 5,678 | |||||||||||||||
Balance at March 31, 2014 | $ | 5,488 | $ | (3,951 | ) | $ | (163 | ) | $ | 827 | $ | 2,201 | ||||||||
The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income: | ||||||||||||||||||||
Reclassifications from Accumulated Other Comprehensive Income (Loss) | Three Months Ended | Nine Months Ended | Affected Line Item in the Condensed Consolidated Statements of Income | |||||||||||||||||
March 31, | March 31, | |||||||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Derivative Gain (Loss) (1) | $ | — | $ | (364 | ) | $ | 1,193 | $ | (874 | ) | Income from Discontinued Operations, Net of Tax | |||||||||
Postemployment Benefits: | ||||||||||||||||||||
Amortization of Prior Service Costs (2) | $ | (26 | ) | $ | (35 | ) | $ | (106 | ) | $ | (119 | ) | Cost of Sales | |||||||
(15 | ) | (26 | ) | (58 | ) | (64 | ) | Selling and Administrative Expenses | ||||||||||||
16 | 23 | 65 | 72 | Provision (Benefit) for Income Taxes | ||||||||||||||||
(25 | ) | (38 | ) | (99 | ) | (111 | ) | Income (Loss) from Continuing Operations | ||||||||||||
$ | — | $ | (5 | ) | $ | (8 | ) | $ | (18 | ) | Income from Discontinued Operations, Net of Tax | |||||||||
Amortization of Actuarial Gain (Loss) (2) | $ | 38 | $ | (44 | ) | $ | 68 | $ | (154 | ) | Cost of Sales | |||||||||
31 | (25 | ) | 65 | (74 | ) | Selling and Administrative Expenses | ||||||||||||||
(27 | ) | 27 | (52 | ) | 90 | Provision (Benefit) for Income Taxes | ||||||||||||||
42 | (42 | ) | 81 | (138 | ) | Income (Loss) from Continuing Operations | ||||||||||||||
$ | — | $ | (5 | ) | $ | 7 | $ | (26 | ) | Income from Discontinued Operations, Net of Tax | ||||||||||
Total Reclassifications for the Period | $ | 17 | $ | (80 | ) | $ | (18 | ) | $ | (249 | ) | Income (Loss) from Continuing Operations | ||||||||
— | (374 | ) | 1,192 | (918 | ) | Income from Discontinued Operations, Net of Tax | ||||||||||||||
$ | 17 | $ | (454 | ) | $ | 1,174 | $ | (1,167 | ) | Net Income | ||||||||||
Amounts in parentheses indicate reductions to income. | ||||||||||||||||||||
(1) See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments. | ||||||||||||||||||||
(2) See Note 12 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans. |
Note_6_Commitments_and_Conting
Note 6. Commitments and Contingent Liabilities | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Commitments and Contingent Liabilities [Abstract] | ||||||||
Commitments and Contingencies Disclosure | Commitments and Contingent Liabilities | |||||||
Standby letters of credit are issued to third-party suppliers, lessors, and insurance institutions and can only be drawn upon in the event of Kimball's failure to pay its obligations to a beneficiary. As of March 31, 2015, we had a maximum financial exposure from unused standby letters of credit totaling $1.0 million. We are not aware of circumstances that would require us to perform under any of these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of March 31, 2015 with respect to the standby letters of credit. Kimball also enters into commercial letters of credit to facilitate payments to vendors and from customers. | ||||||||
We have a contractual commitment with one supplier in the normal course of business that requires us to purchase a minimum amount of components, which could potentially result in a future obligation. The minimum purchase commitment for calendar year 2015 is 0.2 million Euro (approximately $0.2 million at March 31, 2015 exchange rates). We expect our purchases to exceed the minimum amount, and therefore no additional liability has been recorded as of March 31, 2015. | ||||||||
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 in cases where specific warranty issues become known. | ||||||||
Changes in the product warranty accrual for the nine months ended March 31, 2015 and 2014 were as follows: | ||||||||
Nine Months Ended | ||||||||
March 31 | ||||||||
(Amounts in Thousands) | 2015 | 2014 | ||||||
Product Warranty Liability at the beginning of the period | $ | 3,221 | $ | 2,384 | ||||
Additions to warranty accrual (including changes in estimates) | 625 | 2,356 | ||||||
Settlements made (in cash or in kind) | (564 | ) | (1,346 | ) | ||||
Distribution of Kimball Electronics, Inc. | (910 | ) | — | |||||
Product Warranty Liability at the end of the period | $ | 2,372 | $ | 3,394 | ||||
Note_7_Restructuring_Expense
Note 7. Restructuring Expense | 9 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Restructuring Expense [Abstract] | ||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure | Restructuring Expense | |||||||||||||||||||||||||||
We recognized pre-tax restructuring expense related to continuing operations of $0.4 million and $3.7 million in the three and nine months ended March 31, 2015, respectively, and recognized no restructuring expense related to continuing operations in the three and nine months ended March 31, 2014. We utilize available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on the Company's Condensed Consolidated Statements of Income. | ||||||||||||||||||||||||||||
For more information related to restructuring activities that are included in the discontinued operations line item on the Company's Condensed Consolidated Statements of Income, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. | ||||||||||||||||||||||||||||
Capacity Utilization Restructuring Plan: | ||||||||||||||||||||||||||||
In November 2014, we announced a capacity utilization restructuring plan which includes the consolidation of our metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana, and the reduction of our Company plane fleet from two jets to one. | ||||||||||||||||||||||||||||
Key factors in the decision to consolidate the Post Falls operation into the Indiana facilities include the improvement of customer delivery, supply chain dynamics, and transportation costs. The transfer of work involves the start-up of metal fabrication capabilities in a Company-owned facility, along with the transfer of certain assembly operations into two additional company-owned facilities, all located in southern Indiana. The manufacturing capacity realignment will be carefully managed to mitigate customer disruptions. The consolidation activities began immediately after the announcement in November 2014, and we are actively marketing for sale the Post Falls, Idaho facility. Incremental capital for equipment purchases to transfer this operation to Indiana is approximately $5 million, exclusive of the capital reduction that is estimated to occur upon the sale of the Post Falls facility. No changes in operating income are anticipated until the later quarters of the transfer of work. When fully implemented by September 2016, we anticipate pre-tax savings of approximately $5 million per year thereafter. | ||||||||||||||||||||||||||||
The reduction of our plane fleet from two jets to one reduces our cost structure while aligning the plane fleet size with our needs following the spin-off of Kimball Electronics on October 31, 2014. Previously, one of our jets was used primarily for the successful strategy of transporting customers to visit our showrooms and manufacturing locations, while the remaining jet was used primarily for management travel. The plane used primarily for management travel was sold in the third quarter of fiscal year 2015. The sale of the plane resulted in a $0.2 million pre-tax gain in the third quarter of fiscal year 2015 which partially offset the impairment charge of $1.1 million recorded in the second quarter of fiscal year 2015. As a result of the aircraft fleet reduction, we expect to realize annual pre-tax savings of $0.8 million. In regards to the remaining jet, we believe that our location in rural Jasper, Indiana and the location of our manufacturing locations in small towns away from major metropolitan areas necessitates the need for the remaining jet to efficiently transport customers. | ||||||||||||||||||||||||||||
We currently estimate that the pre-tax restructuring charges will be approximately $9.9 million, with $3.7 million recorded in the nine months ended March 31, 2015 and the remainder expected to be incurred over the remaining anticipated transition period. The restructuring charges are expected to consist of approximately $5.6 million of transition, training, and other employee costs, $3.1 million of plant closure and other exit costs, and $1.2 million of non-cash asset impairment. Approximately 88% of the total cost estimate is expected to be cash expense. | ||||||||||||||||||||||||||||
Summary of Restructuring Plan: | ||||||||||||||||||||||||||||
Accrued | Nine Months Ended March 31, 2015 | Total Charges | Total Expected | |||||||||||||||||||||||||
June 30, | Incurred Since Plan Announcement | Plan Costs | ||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | Amounts | Amounts | Amounts Utilized/ | Accrued | |||||||||||||||||||||||
Charged Cash | Charged | Cash Paid | March 31, | |||||||||||||||||||||||||
Non-cash | 2015 (1) | |||||||||||||||||||||||||||
Capacity Realignment and Post Falls, Idaho Exit | ||||||||||||||||||||||||||||
Transition and Other Employee Costs | $ | — | $ | 2,006 | $ | — | $ | 2,006 | $ | 2,006 | $ | 5,432 | ||||||||||||||||
Asset Write-downs | — | — | 108 | (108 | ) | — | 108 | 334 | ||||||||||||||||||||
Plant Closure and Other Exit Costs | — | 563 | — | (563 | ) | — | 563 | 3,113 | ||||||||||||||||||||
Total | $ | — | $ | 2,569 | $ | 108 | $ | (671 | ) | $ | 2,006 | $ | 2,677 | $ | 8,879 | |||||||||||||
Plane Fleet Reduction | ||||||||||||||||||||||||||||
Transition and Other Employee Costs | $ | — | $ | 224 | $ | — | $ | (224 | ) | $ | — | $ | 224 | $ | 224 | |||||||||||||
Asset Write-downs | — | — | 822 | (822 | ) | — | 822 | 822 | ||||||||||||||||||||
Total | $ | — | $ | 224 | $ | 822 | $ | (1,046 | ) | $ | — | $ | 1,046 | $ | 1,046 | |||||||||||||
Total Restructuring Plan | $ | — | $ | 2,793 | $ | 930 | $ | (1,717 | ) | $ | 2,006 | $ | 3,723 | $ | 9,925 | |||||||||||||
-1 | The accrued restructuring balance at March 31, 2015 includes $0.5 million recorded in current liabilities and $1.5 million recorded in other long-term liabilities. |
Note_8_Assets_Held_for_Sale
Note 8. Assets Held for Sale | 9 Months Ended |
Mar. 31, 2015 | |
Assets Held for Sale [Abstract] | |
Disclosure of Long Lived Assets Held-for-sale | Assets Held for Sale |
At March 31, 2015, no assets were classified as held for sale. An aircraft which had been used primarily for management travel totaling $1.3 million was classified as held for sale during the second quarter of fiscal year 2015, and was subsequently sold during the third quarter of fiscal year 2015. We recognized a pre-tax gain of $0.2 million related to the sale of the aircraft during the third quarter of fiscal year 2015 which partially offsets the pre-tax impairment charge recorded in the second quarter of fiscal year 2015 of $1.1 million, due to the book value of the aircraft exceeding current fair market value estimates less selling costs. The impairment and gain are both recorded on the Restructuring Expense line of the Condensed Consolidated Statements of Income. | |
At June 30, 2014, no assets were classified as held for sale. |
Note_9_Fair_Value
Note 9. Fair Value | 9 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Fair Value [Abstract] | ||||||||||||
Fair Value Disclosures | Fair Value | |||||||||||
Kimball categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows: | ||||||||||||
• | Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. | |||||||||||
• | Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. | |||||||||||
• | Level 3: Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability. | |||||||||||
Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the nine months ended March 31, 2015. There were also no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. | ||||||||||||
Financial Instruments Recognized at Fair Value: | ||||||||||||
The following methods and assumptions were used to measure fair value: | ||||||||||||
Financial Instrument | Level | Valuation Technique/Inputs Used | ||||||||||
Cash Equivalents | 1 | Market - Quoted market prices | ||||||||||
Derivative Assets: Foreign exchange contracts | 2 | Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk. | ||||||||||
Trading securities: Mutual funds in nonqualified 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's non-performance risk. | ||||||||||
Recurring Fair Value Measurements: | ||||||||||||
As of March 31, 2015 and June 30, 2014, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows: | ||||||||||||
March 31, 2015 | ||||||||||||
(Amounts in Thousands) | Level 1 | Level 2 | Total | |||||||||
Assets | ||||||||||||
Cash equivalents | $ | 23,407 | $ | — | $ | 23,407 | ||||||
Derivatives: Foreign exchange contracts | — | — | — | |||||||||
Trading Securities: Mutual funds in nonqualified SERP | 18,709 | — | 18,709 | |||||||||
Total assets at fair value | $ | 42,116 | $ | — | $ | 42,116 | ||||||
Liabilities | ||||||||||||
Derivatives: Foreign exchange contracts | $ | — | $ | — | $ | — | ||||||
Total liabilities at fair value | $ | — | $ | — | $ | — | ||||||
June 30, 2014 | ||||||||||||
(Amounts in Thousands) | Level 1 | Level 2 | Total | |||||||||
Assets | ||||||||||||
Cash equivalents | $ | 103,845 | $ | — | $ | 103,845 | ||||||
Derivatives: Foreign exchange contracts | — | 800 | 800 | |||||||||
Trading Securities: Mutual funds in nonqualified SERP | 23,106 | — | 23,106 | |||||||||
Total assets at fair value | $ | 126,951 | $ | 800 | $ | 127,751 | ||||||
Liabilities | ||||||||||||
Derivatives: Foreign exchange contracts | $ | — | $ | 699 | $ | 699 | ||||||
Total liabilities at fair value | $ | — | $ | 699 | $ | 699 | ||||||
The reduction in balances from June 30, 2014 to March 31, 2015 was due to the spin-off of the EMS segment on October 31, 2014. We had no purchases or sales of Level 3 assets during the three and nine months ended March 31, 2015. | ||||||||||||
The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, a bond fund, and a money market fund. The SERP investment assets are offset by a SERP liability which represents Kimball's obligation to distribute SERP funds to participants. See Note 11 - Investments of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP. | ||||||||||||
Non-Recurring Fair Value Measurements: | ||||||||||||
Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. | ||||||||||||
Non-recurring fair value adjustment | Level | Valuation Technique/Inputs Used | ||||||||||
Impairment of long-lived assets (property and equipment) | 2 | Market - Quoted market prices for similar assets sold, adjusted for features specific to the asset | ||||||||||
During the three months ended March 31, 2015, we recognized a pre-tax gain of $0.2 million related to the sale of an aircraft which had been used primarily for management travel. During the nine months ended March 31, 2015, we classified the aircraft as held for sale and accordingly recognized a pre-tax impairment charge of $1.1 million due to the book value of the aircraft exceeding current fair market value estimates less selling costs which was partially offset by the gain recognized upon sale of $0.2 million. During the three months ended March 31, 2014, we had no fair value adjustments applicable to items that are subject to non-recurring fair value measurement after the initial measurement date. During the nine months ended March 31, 2014, we classified another aircraft as held for sale and sold the aircraft, recognizing a pre-tax impairment of $1.2 million due to a significant downward shift in the market for private aviation aircraft. | ||||||||||||
Financial Instruments Not Carried At Fair Value: | ||||||||||||
Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include 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 the customer's non-performance risk | ||||||||||
Long-term debt (carried at amortized cost) | 3 | Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball's non-performance risk | ||||||||||
The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk. |
Note_10_Derivative_Instruments
Note 10. Derivative Instruments | 9 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Derivative Instruments [Abstract] | ||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure | Derivative Instruments | |||||||||||||||||||
Foreign Exchange Contracts: | ||||||||||||||||||||
Our former EMS segment, classified as discontinued operations, operated internationally and was therefore exposed to foreign currency exchange rate fluctuations in the normal course of business. The primary means of managing this exposure was to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques did not fully offset currency risk, derivative instruments were used 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 included the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure was committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments were only utilized for risk management purposes and were not used for speculative or trading purposes. | ||||||||||||||||||||
Forward contracts designated as cash flow hedges were used to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Foreign exchange contracts were also used to hedge against foreign currency exchange rate risks related to intercompany balances denominated in currencies other than the functional currencies. In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may have ceased to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, either a derivative contract in the opposite position of the undesignated hedge may have been purchased or the hedge may have been retained until it matured if the hedge had continued to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities. | ||||||||||||||||||||
As of March 31, 2015, after the spin-off of the EMS segment, we held no derivative instruments. As of June 30, 2014, the fair value of outstanding derivative instruments was recognized on the balance sheet as a derivative asset or liability. When derivatives were settled with the counterparty, the derivative asset or liability was relieved and cash flow was impacted for the net settlement. For derivative instruments that met the criteria of hedging instruments under FASB guidance, the effective portions of the gain or loss on the derivative instrument were initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners' Equity, and were subsequently reclassified into earnings in the period or periods during which the hedged transaction was recognized in earnings. The gain or loss associated with derivative instruments that were not designated as hedging instruments or that ceased to meet the criteria for hedging under FASB guidance was recognized in earnings. | ||||||||||||||||||||
See Note 9 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and the Condensed Consolidated Statements of Comprehensive Income for the changes in deferred derivative gains and losses. Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below. | ||||||||||||||||||||
Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Fair Value As of | Fair Value As of | |||||||||||||||||||
(Amounts in Thousands) | Balance Sheet Location | March 31, | June 30, | Balance Sheet Location | March 31, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | — | $ | 599 | Accrued expenses | $ | — | $ | 241 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | — | 201 | Accrued expenses | — | 458 | ||||||||||||||
Total derivatives | $ | — | $ | 800 | $ | — | $ | 699 | ||||||||||||
The Effect of Derivative Instruments on Other Comprehensive Income (Loss) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
March 31 | March 31 | |||||||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): | ||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | 362 | $ | 2,513 | $ | (536 | ) | |||||||||||
The Effect of Derivative Instruments on Condensed Consolidated Statements of Income | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
(Amounts in Thousands) | March 31 | March 31 | ||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Gain or (Loss) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): | ||||||||||||||||||||
Foreign exchange contracts | Income from Discontinued Operations, Net of Tax | $ | — | $ | (468 | ) | $ | 1,484 | $ | (1,085 | ) | |||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives: | ||||||||||||||||||||
Foreign exchange contracts | Income from Discontinued Operations, Net of Tax | $ | — | $ | 174 | $ | 740 | $ | (664 | ) | ||||||||||
Stock warrants | Non-operating income, net | — | (13 | ) | — | (5 | ) | |||||||||||||
Total | $ | — | $ | 161 | $ | 740 | $ | (669 | ) | |||||||||||
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | $ | — | $ | (307 | ) | $ | 2,224 | $ | (1,754 | ) | ||||||||||
Note_11_Investments
Note 11. Investments | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Investments [Abstract] | ||||||||
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure | Investments | |||||||
Kimball maintains a self-directed supplemental employee retirement plan (“SERP”) in which executive employees are eligible to participate. The SERP utilizes a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. Kimball recognizes SERP investment assets on the Condensed Consolidated Balance Sheets at current fair value. A SERP liability of the same amount is recorded on the Condensed Consolidated Balance Sheets representing an obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. Net unrealized holding losses recognized in continuing operations for the nine months ended March 31, 2015 and 2014 were, in thousands, $121 and $160, respectively. | ||||||||
SERP asset and liability balances were as follows: | ||||||||
(Amounts in Thousands) | March 31, | June 30, | ||||||
2015 | 2014 | |||||||
SERP investments - current asset | $ | 9,384 | $ | 8,812 | ||||
SERP investments - other long-term asset | 9,325 | 14,294 | ||||||
Total SERP investments | $ | 18,709 | $ | 23,106 | ||||
SERP obligation - current liability | $ | 9,384 | $ | 8,812 | ||||
SERP obligation - other long-term liability | 9,325 | 14,294 | ||||||
Total SERP obligation | $ | 18,709 | $ | 23,106 | ||||
The reduction in SERP investments and obligation from June 30, 2014 to March 31, 2015 was due primarily to the spin-off of Kimball Electronics on October 31, 2014. |
Note_12_Postemployment_Benefit
Note 12. Postemployment Benefits | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Postemployment Benefits [Abstract] | ||||||||||||||||
Postemployment Benefits Disclosure | Postemployment Benefits | |||||||||||||||
Kimball's domestic employees participate in severance plans. These plans cover domestic employees and provide severance benefits to eligible employees meeting the plans' qualifications, primarily involuntary termination without cause. In connection with the spin-off, the Company has transferred the post-employment obligation for EMS employees to Kimball Electronics. | ||||||||||||||||
The components of net periodic postemployment benefit cost applicable to our severance plans were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31 | March 31 | |||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | 131 | $ | 237 | $ | 521 | $ | 720 | ||||||||
Interest cost | 21 | 34 | 77 | 103 | ||||||||||||
Amortization of prior service costs | 41 | 71 | 177 | 214 | ||||||||||||
Amortization of actuarial (income) loss | (69 | ) | 80 | (146 | ) | 274 | ||||||||||
Net periodic benefit cost — Total cost | $ | 124 | $ | 422 | $ | 629 | $ | 1,311 | ||||||||
Less: Discontinued operations | — | 81 | 81 | 265 | ||||||||||||
Net periodic benefit cost — Continuing operations | $ | 124 | $ | 341 | $ | 548 | $ | 1,046 | ||||||||
The benefit cost in the above table includes only normal recurring levels of severance activity, as estimated using an actuarial method. Unusual or non-recurring severance actions are not estimable using actuarial methods and are expensed in accordance with the applicable U.S. GAAP. |
Note_13_Stock_Compensation_Pla
Note 13. Stock Compensation Plan | 9 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Stock Compensation Plan [Abstract] | ||||||||||
Disclosure of Compensation Related Costs, Share-based Payments | Stock Compensation Plan | |||||||||
In connection with the spin-off of the EMS segment the Company entered into the Amendment of Annual and/or Long-Term Performance Share Award Agreement, which adjusted employee performance share awards to preserve the fair value of the awards before and after the spin-off. This modification did not result in additional compensation expense. | ||||||||||
During fiscal year 2015, the following stock compensation was awarded to officers and key employees. All awards were granted under the Amended and Restated 2003 Stock Option and Incentive Plan. For more information on stock compensation awards, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. | ||||||||||
Performance Units (1) | Quarter Awarded | Units | Grant Date Fair Value (4) | |||||||
Relative Total Shareholder Return Awards | 3rd Quarter | 30,198 | $11.48 | |||||||
Unrestricted Shares (2) | Quarter Awarded | Shares | Grant Date Fair Value (4) | |||||||
Unrestricted Shares (Director Compensation) | 1st Quarter | 17,335 | $16.01 | |||||||
Unrestricted Shares | 2nd Quarter | 17,529 | $9.10 | |||||||
Restricted Share Units (3) | Quarter Awarded | Shares | Grant Date Fair Value (4) | |||||||
Restricted Share Units | 2nd Quarter | 159,416 | $9.10 | |||||||
Restricted Share Units | 3rd Quarter | 29,533 | $9.06 - $10.08 | |||||||
(1) Performance units were awarded to key officers under the Company's Relative Total Shareholder Return (“RTSR”) program. Vesting occurs at June 30, 2017. Participants will earn from 0% to 200% of the target award depending upon how the compound annual growth rate of Kimball International common stock ranks within the peer group at the end of the performance period. | ||||||||||
(2) Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director's fees as a result of directors' elections to receive unrestricted shares in lieu of cash payment. Director's fees are expensed over the period that directors earn the compensation. Other unrestricted shares were awarded to key employees as consideration for service to the Company. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions. | ||||||||||
(3) Restricted share units (“RSU”) were awarded to officers and key employees. Vesting occurs at June 30, 2015, June 30, 2016, and June 30, 2017. Upon vesting, the outstanding number of RSUs and the value of dividends accumulated over the vesting period are converted to shares of common stock. | ||||||||||
(4) The grant date fair value of RTSR awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The grant date fair value of the unrestricted shares and restricted share units was based on the stock price at the date of the award. |
Note_14_Variable_Interest_Enti
Note 14. Variable Interest Entities | 9 Months Ended |
Mar. 31, 2015 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities |
Kimball's involvement with a variable interest entity (“VIE”) is limited to a situation in which we are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the VIE's economic performance. Thus, consolidation is not required. | |
Our involvement with the VIE is limited to a note receivable related to the sale of an Indiana facility. The carrying value of the note receivable, net of a $0.5 million allowance, was $0.9 million as of both March 31, 2015 and June 30, 2014. For both periods, the short-term portion of the carrying value was included on the Receivables line and the long-term portion of the carrying value was included on the Other Assets line of our Condensed Consolidated Balance Sheets. | |
We have no obligation to provide additional funding to the VIE, and thus our exposure and risk of loss related to the VIE is limited to the carrying value of the notes receivable. Kimball did not provide additional financial support to the VIE during the quarter ended March 31, 2015. |
Note_15_Credit_Quality_and_All
Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable | 9 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Credit Quality and Allowance for Credit Losses of Notes Receivable [Abstract] | ||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure | Credit Quality and Allowance for Credit Losses of Notes Receivable | |||||||||||||||||||||||
Kimball monitors credit quality and associated risks of notes receivable on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. We hold collateral for the note receivable from the sale of an Indiana facility thereby mitigating the risk of loss. As of March 31, 2015 and June 30, 2014, Kimball had no material past due outstanding notes receivable. | ||||||||||||||||||||||||
As of March 31, 2015 | As of June 30, 2014 | |||||||||||||||||||||||
(Amounts in Thousands) | Unpaid Balance | Related Allowance | Receivable Net of Allowance | Unpaid Balance | Related Allowance | Receivable Net of Allowance | ||||||||||||||||||
Note Receivable from Sale of Indiana Facility | $ | 1,358 | $ | 489 | $ | 869 | $ | 1,392 | $ | 489 | $ | 903 | ||||||||||||
Other Notes Receivable | 452 | 143 | 309 | 223 | 149 | 74 | ||||||||||||||||||
Total | $ | 1,810 | $ | 632 | $ | 1,178 | $ | 1,615 | $ | 638 | $ | 977 | ||||||||||||
Note_16_Credit_Agreement
Note 16. Credit Agreement | 9 Months Ended | |
Mar. 31, 2015 | ||
Credit Agreement [Abstract] | ||
Debt Disclosure | Credit Agreement | |
In connection with the spin-off, on October 31, 2014 Kimball entered into a new credit facility. The new Kimball credit agreement, which replaced its previously existing primary credit facility, has a maturity date of October 31, 2019 and allows for up to $30 million in borrowings, with an option to increase the amount available for borrowing to $55 million at the Company's request, subject to participating banks' consent. The complete credit agreement was filed as Exhibit 10.4 to our Current Report on Form 8-K filed on November 3, 2014. | ||
At March 31, 2015, we had $1.0 million in letters of credit outstanding, which reduced our borrowing capacity on the credit facility. | ||
The revolving loans under the Credit Agreement may consist of, at the Company's election, advances in U.S. dollars or advances in any other currency that is agreed to by the lenders. The proceeds of the revolving loans are to be used for general corporate purposes of the Company including acquisitions. A portion of the credit facility, not to exceed $10 million of the principal amount, will be available for the issuance of letters of credit. A commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA. | ||
The interest rate is dependent on the type of borrowings and will be one of the following two options: | ||
• | The adjusted London Interbank Offered Rate (“Adjusted LIBO Rate” as defined in the Credit Agreement) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period, plus the Eurocurrency Loans margin which can range from 125.0 to 175.0 basis points based on the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or | |
• | The Alternate Base Rate, which is defined as the highest of the fluctuating rate per annum equal to the higher of | |
a. | JPMorgan's prime rate; | |
b. | 1% per annum above the Adjusted LIBO rate; or | |
c. | 1/2% per annum above the Federal funds rate; | |
plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA. | ||
The Company's financial covenants under the Credit Agreement require: | ||
• | An adjusted leverage ratio of (a) consolidated total indebtedness minus unencumbered U.S. cash on hand in the U.S. in excess of $15,000,000 to (b) consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0, and | |
• | A fixed charge coverage ratio of (a) the sum of (i) consolidated EBITDA, minus (ii) 50% of depreciation expense, minus (iii) taxes paid, minus (iv) dividends and distributions paid, to (b) the sum of (i) scheduled principal payments on indebtedness due and/or paid, plus (ii) interest expense, calculated on a consolidated basis in accordance with GAAP, determined as of the end of each of its fiscal quarters for the trailing four fiscal quarters then ending, to not be less than 1.10 to 1.00. |
Note_1_Basis_of_Presentation_P
Note 1. Basis of Presentation (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K. |
Note_3_Recent_Accounting_Prono1
Note 3. Recent Accounting Pronouncements and Supplemental Information (Policies) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Recent Accounting Pronouncements and Supplemental Information [Abstract] | ||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements: | |||||||||||||||
In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance on customer’s accounting for cloud computing fees and provided criteria for customers in a cloud computing arrangement to use to determine whether the arrangement includes a license of software. The guidance clarifies that a software license included in a cloud computing arrangement should be accounted for consistent with the acquisition of other software licenses, whereas a cloud computing arrangement that does not include a software license should be accounted for as a service contract. The guidance is effective for our first quarter of fiscal year 2017 financial statements, and allows for the use of either a prospective or retrospective transition method. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements. | ||||||||||||||||
In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements. We do not expect the adoption to have a material effect on our consolidated financial statements. | ||||||||||||||||
In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In April 2015, the FASB proposed a deferral of the effective date for this new revenue standard by one year, which would make the guidance effective for our first quarter fiscal year 2019 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements. | ||||||||||||||||
In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity's operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance is effective prospectively for disposals or components of our business classified as held for sale during the first quarter of fiscal year 2016. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements. | ||||||||||||||||
In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance became effective prospectively for our first quarter fiscal year 2015 financial statements. The adoption did not have a material effect on our consolidated financial statements. | ||||||||||||||||
Notes Receivables and Trade Accounts Receivable | Notes Receivable and Trade Accounts Receivable: | |||||||||||||||
Notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. | ||||||||||||||||
Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. | ||||||||||||||||
Income Taxes | Income Taxes: | |||||||||||||||
In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur. | ||||||||||||||||
Our 10.5% effective tax rate for the third quarter of fiscal year 2015 was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments. The third quarter fiscal year 2014 effective tax rate of 96.4% was favorably impacted by tax adjustments of $0.4 million on a pre-tax loss. | ||||||||||||||||
Our effective tax rate for the first nine months of fiscal year 2015 of 28.1% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments, which were partially offset by a $0.4 million adjustment to deferred taxes as our combined state tax rate is lower post spin-off. Our effective tax rate for the first nine months of fiscal year 2014 of 18.5% was favorably impacted by both a $0.7 million decrease in a deferred tax asset valuation allowance and a $0.4 million tax accrual adjustment. | ||||||||||||||||
Non-operating Income and Expense, net | Non-operating Income, net: | |||||||||||||||
The non-operating income, net line item includes the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements and related derivative gain or loss, investment gain or loss, non-production rent income, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses. | ||||||||||||||||
Components of the Non-operating income, net line, from continuing operations were: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31 | March 31 | |||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Foreign Currency/Derivative Gain (Loss) | $ | 2 | $ | (40 | ) | $ | (40 | ) | $ | (56 | ) | |||||
Gain on Supplemental Employee Retirement Plan Investments | 353 | 187 | 519 | 2,041 | ||||||||||||
Other | (65 | ) | (138 | ) | (339 | ) | (419 | ) | ||||||||
Non-operating income, net | $ | 290 | $ | 9 | $ | 140 | $ | 1,566 | ||||||||
Note_4_Inventories_Policies
Note 4. Inventories (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Inventories [Abstract] | |
Inventory | For interim reporting, LIFO inventories are computed based on quantities as of the end of the quarter and interim changes in price levels. Changes in quantities and price levels are reflected in the interim financial statements in the period in which they occur, except in cases where LIFO inventory liquidations are expected to be reinstated by fiscal year end. |
Note_6_Commitments_and_Conting1
Note 6. Commitments and Contingent Liabilities (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingent Liabilities [Abstract] | |
Product Warranties | 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 in cases where specific warranty issues become known. |
Note_7_Restructuring_Expense_R
Note 7. Restructuring Expense Restructuring Expense (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy | We utilize available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on the Company's Condensed Consolidated Statements of Income. |
Note_9_Fair_Value_Policies
Note 9. Fair Value (Policies) | 9 Months Ended | ||||
Mar. 31, 2015 | |||||
Fair Value [Abstract] | |||||
Fair Value | Kimball categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows: | ||||
• | Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. | ||||
• | Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. | ||||
• | Level 3: Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability. | ||||
Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the nine months ended March 31, 2015. There were also no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. | |||||
Financial Instruments Recognized at Fair Value: | |||||
The following methods and assumptions were used to measure fair value: | |||||
Financial Instrument | Level | Valuation Technique/Inputs Used | |||
Cash Equivalents | 1 | Market - Quoted market prices | |||
Derivative Assets: Foreign exchange contracts | 2 | Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk. | |||
Trading securities: Mutual funds in nonqualified 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's non-performance risk. | |||
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy | Non-Recurring Fair Value Measurements: | ||||
Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. | |||||
Non-recurring fair value adjustment | Level | Valuation Technique/Inputs Used | |||
Impairment of long-lived assets (property and equipment) | 2 | Market - Quoted market prices for similar assets sold, adjusted for features specific to the asset | |||
Fair Value of Financial Instruments Not Carried at Fair Value | Financial Instruments Not Carried At Fair Value: | ||||
Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include 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 the customer's non-performance risk | |||
Long-term debt (carried at amortized cost) | 3 | Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball's non-performance risk | |||
The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk. |
Note_10_Derivative_Instruments1
Note 10. Derivative Instruments (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments [Abstract] | |
Derivatives, Hedge Discontinuances | In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may have ceased to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, either a derivative contract in the opposite position of the undesignated hedge may have been purchased or the hedge may have been retained until it matured if the hedge had continued to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities. |
Derivatives, Reporting of Derivative Activity | the fair value of outstanding derivative instruments was recognized on the balance sheet as a derivative asset or liability. When derivatives were settled with the counterparty, the derivative asset or liability was relieved and cash flow was impacted for the net settlement. For derivative instruments that met the criteria of hedging instruments under FASB guidance, the effective portions of the gain or loss on the derivative instrument were initially recorded net of related tax effect in Accumulated Other Comprehensive Income (Loss), a component of Share Owners' Equity, and were subsequently reclassified into earnings in the period or periods during which the hedged transaction was recognized in earnings. The gain or loss associated with derivative instruments that were not designated as hedging instruments or that ceased to meet the criteria for hedging under FASB guidance was recognized in earnings. |
Note_2_SpinOff_Transaction_Tab
Note 2. Spin-Off Transaction (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The following is a summary of the assets and liabilities distributed to Kimball Electronics on the Distribution Date or shortly thereafter: | |||||||||||||||
(Amounts in Millions) | ||||||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 63 | ||||||||||||||
Receivables | 133 | |||||||||||||||
Inventories | 124 | |||||||||||||||
Prepaid expenses and other current assets | 19 | |||||||||||||||
Net property and equipment | 98 | |||||||||||||||
Goodwill | 3 | |||||||||||||||
Net other intangible assets | 1 | |||||||||||||||
Other long-term assets | 15 | |||||||||||||||
$ | 456 | |||||||||||||||
Liabilities: | ||||||||||||||||
Accounts payable | $ | 125 | ||||||||||||||
Accrued expenses | 22 | |||||||||||||||
Other long-term liabilities | 9 | |||||||||||||||
$ | 156 | |||||||||||||||
Net Assets Distributed to Kimball Electronics, Inc. | $ | 300 | ||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. Summarized financial results of discontinued operations through the October 31, 2014 spin-off date, were as follows: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
31-Mar | 31-Mar | |||||||||||||||
(Amounts in Thousands, Except Per Share Data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net Sales | $ | — | $ | 185,680 | $ | 275,551 | $ | 542,580 | ||||||||
Income Before Taxes on Income | — | 9,559 | 13,098 | 28,926 | ||||||||||||
Provision for Income Taxes | — | 2,314 | 3,941 | 6,373 | ||||||||||||
Income from Discontinued Operations, Net of Tax | $ | — | $ | 7,245 | $ | 9,157 | $ | 22,553 | ||||||||
Income From Discontinued Operations per Class B Diluted Share | $ | — | $ | 0.19 | $ | 0.23 | $ | 0.58 | ||||||||
Note_3_Recent_Accounting_Prono2
Note 3. Recent Accounting Pronouncements and Supplemental Information (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Recent Accounting Pronouncements and Supplemental Information [Abstract] | ||||||||||||||||
Components of Non-operating income (expense), net | Components of the Non-operating income, net line, from continuing operations were: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31 | March 31 | |||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Foreign Currency/Derivative Gain (Loss) | $ | 2 | $ | (40 | ) | $ | (40 | ) | $ | (56 | ) | |||||
Gain on Supplemental Employee Retirement Plan Investments | 353 | 187 | 519 | 2,041 | ||||||||||||
Other | (65 | ) | (138 | ) | (339 | ) | (419 | ) | ||||||||
Non-operating income, net | $ | 290 | $ | 9 | $ | 140 | $ | 1,566 | ||||||||
Note_4_Inventories_Tables
Note 4. Inventories (Tables) | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventories [Abstract] | ||||||||
Schedule of Inventory, Current | Inventory components were as follows: | |||||||
(Amounts in Thousands) | March 31, 2015 | June 30, | ||||||
2014 | ||||||||
Finished products | $ | 26,208 | $ | 37,373 | ||||
Work-in-process | 1,955 | 13,808 | ||||||
Raw materials | 20,907 | 103,083 | ||||||
Total FIFO inventory | 49,070 | 154,264 | ||||||
LIFO reserve | (14,395 | ) | (13,789 | ) | ||||
Total inventory | $ | 34,675 | $ | 140,475 | ||||
Note_5_Accumulated_Other_Compr1
Note 5. Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | During the three months ended March 31, 2015 and 2014, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: | |||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Postemployment Benefits | |||||||||||||||||||
(Amounts in Thousands) | Foreign Currency Translation Adjustments | Derivative Gain (Loss) | Prior Service Costs | Net Actuarial Gain (Loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at December 31, 2014 | $ | — | $ | — | $ | (30 | ) | $ | 1,212 | $ | 1,182 | |||||||||
Other comprehensive income (loss) before reclassifications | — | — | — | 28 | 28 | |||||||||||||||
Reclassification to (earnings) loss | — | — | 25 | (42 | ) | (17 | ) | |||||||||||||
Net current-period other comprehensive income (loss) | — | — | 25 | (14 | ) | 11 | ||||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | (5 | ) | $ | 1,198 | $ | 1,193 | |||||||||
Balance at December 31, 2013 | $ | 5,467 | $ | (4,583 | ) | $ | (206 | ) | $ | 509 | $ | 1,187 | ||||||||
Other comprehensive income (loss) before reclassifications | 21 | 268 | — | 271 | 560 | |||||||||||||||
Reclassification to (earnings) loss | — | 364 | 43 | 47 | 454 | |||||||||||||||
Net current-period other comprehensive income (loss) | 21 | 632 | 43 | 318 | 1,014 | |||||||||||||||
Balance at March 31, 2014 | $ | 5,488 | $ | (3,951 | ) | $ | (163 | ) | $ | 827 | $ | 2,201 | ||||||||
During the nine months ended March 31, 2015 and 2014, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows: | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Postemployment Benefits | |||||||||||||||||||
(Amounts in Thousands) | Foreign Currency Translation Adjustments | Derivative Gain (Loss) | Prior Service Costs | Net Actuarial Gain (Loss) | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at June 30, 2014 | $ | 4,909 | $ | (3,411 | ) | $ | (120 | ) | $ | 1,062 | $ | 2,440 | ||||||||
Other comprehensive income (loss) before reclassifications | (6,070 | ) | 2,097 | — | 421 | (3,552 | ) | |||||||||||||
Reclassification to (earnings) loss | — | (1,193 | ) | 107 | (88 | ) | (1,174 | ) | ||||||||||||
Distribution of Kimball Electronics, Inc. | 1,161 | 2,507 | 8 | (197 | ) | 3,479 | ||||||||||||||
Net current-period other comprehensive income (loss) | (4,909 | ) | 3,411 | 115 | 136 | (1,247 | ) | |||||||||||||
Balance at March 31, 2015 | $ | — | $ | — | $ | (5 | ) | $ | 1,198 | $ | 1,193 | |||||||||
Balance at June 30, 2013 | $ | 855 | $ | (4,359 | ) | $ | (292 | ) | $ | 319 | $ | (3,477 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 4,633 | (466 | ) | — | 344 | 4,511 | ||||||||||||||
Reclassification to (earnings) loss | — | 874 | 129 | 164 | 1,167 | |||||||||||||||
Net current-period other comprehensive income (loss) | 4,633 | 408 | 129 | 508 | 5,678 | |||||||||||||||
Balance at March 31, 2014 | $ | 5,488 | $ | (3,951 | ) | $ | (163 | ) | $ | 827 | $ | 2,201 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income (Loss) | The following reclassifications were made from Accumulated Other Comprehensive Income (Loss) to the Condensed Consolidated Statements of Income: | |||||||||||||||||||
Reclassifications from Accumulated Other Comprehensive Income (Loss) | Three Months Ended | Nine Months Ended | Affected Line Item in the Condensed Consolidated Statements of Income | |||||||||||||||||
March 31, | March 31, | |||||||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Derivative Gain (Loss) (1) | $ | — | $ | (364 | ) | $ | 1,193 | $ | (874 | ) | Income from Discontinued Operations, Net of Tax | |||||||||
Postemployment Benefits: | ||||||||||||||||||||
Amortization of Prior Service Costs (2) | $ | (26 | ) | $ | (35 | ) | $ | (106 | ) | $ | (119 | ) | Cost of Sales | |||||||
(15 | ) | (26 | ) | (58 | ) | (64 | ) | Selling and Administrative Expenses | ||||||||||||
16 | 23 | 65 | 72 | Provision (Benefit) for Income Taxes | ||||||||||||||||
(25 | ) | (38 | ) | (99 | ) | (111 | ) | Income (Loss) from Continuing Operations | ||||||||||||
$ | — | $ | (5 | ) | $ | (8 | ) | $ | (18 | ) | Income from Discontinued Operations, Net of Tax | |||||||||
Amortization of Actuarial Gain (Loss) (2) | $ | 38 | $ | (44 | ) | $ | 68 | $ | (154 | ) | Cost of Sales | |||||||||
31 | (25 | ) | 65 | (74 | ) | Selling and Administrative Expenses | ||||||||||||||
(27 | ) | 27 | (52 | ) | 90 | Provision (Benefit) for Income Taxes | ||||||||||||||
42 | (42 | ) | 81 | (138 | ) | Income (Loss) from Continuing Operations | ||||||||||||||
$ | — | $ | (5 | ) | $ | 7 | $ | (26 | ) | Income from Discontinued Operations, Net of Tax | ||||||||||
Total Reclassifications for the Period | $ | 17 | $ | (80 | ) | $ | (18 | ) | $ | (249 | ) | Income (Loss) from Continuing Operations | ||||||||
— | (374 | ) | 1,192 | (918 | ) | Income from Discontinued Operations, Net of Tax | ||||||||||||||
$ | 17 | $ | (454 | ) | $ | 1,174 | $ | (1,167 | ) | Net Income | ||||||||||
Amounts in parentheses indicate reductions to income. | ||||||||||||||||||||
(1) See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments. | ||||||||||||||||||||
(2) See Note 12 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans. |
Note_6_Commitments_and_Conting2
Note 6. Commitments and Contingent Liabilities (Tables) | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Commitments and Contingent Liabilities [Abstract] | ||||||||
Schedule of Product Warranty Liability | Changes in the product warranty accrual for the nine months ended March 31, 2015 and 2014 were as follows: | |||||||
Nine Months Ended | ||||||||
March 31 | ||||||||
(Amounts in Thousands) | 2015 | 2014 | ||||||
Product Warranty Liability at the beginning of the period | $ | 3,221 | $ | 2,384 | ||||
Additions to warranty accrual (including changes in estimates) | 625 | 2,356 | ||||||
Settlements made (in cash or in kind) | (564 | ) | (1,346 | ) | ||||
Distribution of Kimball Electronics, Inc. | (910 | ) | — | |||||
Product Warranty Liability at the end of the period | $ | 2,372 | $ | 3,394 | ||||
Note_7_Restructuring_Expense_T
Note 7. Restructuring Expense (Tables) | 9 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Restructuring Expense [Abstract] | ||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | ||||||||||||||||||||||||||||
Summary of Restructuring Plan: | ||||||||||||||||||||||||||||
Accrued | Nine Months Ended March 31, 2015 | Total Charges | Total Expected | |||||||||||||||||||||||||
June 30, | Incurred Since Plan Announcement | Plan Costs | ||||||||||||||||||||||||||
(Amounts in Thousands) | 2014 | Amounts | Amounts | Amounts Utilized/ | Accrued | |||||||||||||||||||||||
Charged Cash | Charged | Cash Paid | March 31, | |||||||||||||||||||||||||
Non-cash | 2015 (1) | |||||||||||||||||||||||||||
Capacity Realignment and Post Falls, Idaho Exit | ||||||||||||||||||||||||||||
Transition and Other Employee Costs | $ | — | $ | 2,006 | $ | — | $ | 2,006 | $ | 2,006 | $ | 5,432 | ||||||||||||||||
Asset Write-downs | — | — | 108 | (108 | ) | — | 108 | 334 | ||||||||||||||||||||
Plant Closure and Other Exit Costs | — | 563 | — | (563 | ) | — | 563 | 3,113 | ||||||||||||||||||||
Total | $ | — | $ | 2,569 | $ | 108 | $ | (671 | ) | $ | 2,006 | $ | 2,677 | $ | 8,879 | |||||||||||||
Plane Fleet Reduction | ||||||||||||||||||||||||||||
Transition and Other Employee Costs | $ | — | $ | 224 | $ | — | $ | (224 | ) | $ | — | $ | 224 | $ | 224 | |||||||||||||
Asset Write-downs | — | — | 822 | (822 | ) | — | 822 | 822 | ||||||||||||||||||||
Total | $ | — | $ | 224 | $ | 822 | $ | (1,046 | ) | $ | — | $ | 1,046 | $ | 1,046 | |||||||||||||
Total Restructuring Plan | $ | — | $ | 2,793 | $ | 930 | $ | (1,717 | ) | $ | 2,006 | $ | 3,723 | $ | 9,925 | |||||||||||||
-1 | The accrued restructuring balance at March 31, 2015 includes $0.5 million recorded in current liabilities and $1.5 million recorded in other long-term liabilities. |
Note_9_Fair_Value_Tables
Note 9. Fair Value (Tables) | 9 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Fair Value [Abstract] | ||||||||||||
Fair Value Measurements, Recurring, Valuation Techniques | The following methods and assumptions were used to measure fair value: | |||||||||||
Financial Instrument | Level | Valuation Technique/Inputs Used | ||||||||||
Cash Equivalents | 1 | Market - Quoted market prices | ||||||||||
Derivative Assets: Foreign exchange contracts | 2 | Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk. | ||||||||||
Trading securities: Mutual funds in nonqualified 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's non-performance risk. | ||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of March 31, 2015 and June 30, 2014, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows: | |||||||||||
March 31, 2015 | ||||||||||||
(Amounts in Thousands) | Level 1 | Level 2 | Total | |||||||||
Assets | ||||||||||||
Cash equivalents | $ | 23,407 | $ | — | $ | 23,407 | ||||||
Derivatives: Foreign exchange contracts | — | — | — | |||||||||
Trading Securities: Mutual funds in nonqualified SERP | 18,709 | — | 18,709 | |||||||||
Total assets at fair value | $ | 42,116 | $ | — | $ | 42,116 | ||||||
Liabilities | ||||||||||||
Derivatives: Foreign exchange contracts | $ | — | $ | — | $ | — | ||||||
Total liabilities at fair value | $ | — | $ | — | $ | — | ||||||
June 30, 2014 | ||||||||||||
(Amounts in Thousands) | Level 1 | Level 2 | Total | |||||||||
Assets | ||||||||||||
Cash equivalents | $ | 103,845 | $ | — | $ | 103,845 | ||||||
Derivatives: Foreign exchange contracts | — | 800 | 800 | |||||||||
Trading Securities: Mutual funds in nonqualified SERP | 23,106 | — | 23,106 | |||||||||
Total assets at fair value | $ | 126,951 | $ | 800 | $ | 127,751 | ||||||
Liabilities | ||||||||||||
Derivatives: Foreign exchange contracts | $ | — | $ | 699 | $ | 699 | ||||||
Total liabilities at fair value | $ | — | $ | 699 | $ | 699 | ||||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | ||||||||||||
Non-recurring fair value adjustment | Level | Valuation Technique/Inputs Used | ||||||||||
Impairment of long-lived assets (property and equipment) | 2 | Market - Quoted market prices for similar assets sold, adjusted for features specific to the asset | ||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | Financial instruments that are not reflected in the Condensed 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 the customer's non-performance risk | ||||||||||
Long-term debt (carried at amortized cost) | 3 | Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball's non-performance risk |
Note_10_Derivative_Instruments2
Note 10. Derivative Instruments (Tables) | 9 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Derivative Instruments [Abstract] | ||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Fair Value As of | Fair Value As of | |||||||||||||||||||
(Amounts in Thousands) | Balance Sheet Location | March 31, | June 30, | Balance Sheet Location | March 31, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | — | $ | 599 | Accrued expenses | $ | — | $ | 241 | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | — | 201 | Accrued expenses | — | 458 | ||||||||||||||
Total derivatives | $ | — | $ | 800 | $ | — | $ | 699 | ||||||||||||
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The Effect of Derivative Instruments on Other Comprehensive Income (Loss) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
March 31 | March 31 | |||||||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion): | ||||||||||||||||||||
Foreign exchange contracts | $ | — | $ | 362 | $ | 2,513 | $ | (536 | ) | |||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The Effect of Derivative Instruments on Condensed Consolidated Statements of Income | |||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
(Amounts in Thousands) | March 31 | March 31 | ||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Gain or (Loss) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion): | ||||||||||||||||||||
Foreign exchange contracts | Income from Discontinued Operations, Net of Tax | $ | — | $ | (468 | ) | $ | 1,484 | $ | (1,085 | ) | |||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives: | ||||||||||||||||||||
Foreign exchange contracts | Income from Discontinued Operations, Net of Tax | $ | — | $ | 174 | $ | 740 | $ | (664 | ) | ||||||||||
Stock warrants | Non-operating income, net | — | (13 | ) | — | (5 | ) | |||||||||||||
Total | $ | — | $ | 161 | $ | 740 | $ | (669 | ) | |||||||||||
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | $ | — | $ | (307 | ) | $ | 2,224 | $ | (1,754 | ) | ||||||||||
Note_11_Investments_Tables
Note 11. Investments (Tables) | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Investments [Abstract] | ||||||||
Trading Securities (and Certain Trading Assets) | SERP asset and liability balances were as follows: | |||||||
(Amounts in Thousands) | March 31, | June 30, | ||||||
2015 | 2014 | |||||||
SERP investments - current asset | $ | 9,384 | $ | 8,812 | ||||
SERP investments - other long-term asset | 9,325 | 14,294 | ||||||
Total SERP investments | $ | 18,709 | $ | 23,106 | ||||
SERP obligation - current liability | $ | 9,384 | $ | 8,812 | ||||
SERP obligation - other long-term liability | 9,325 | 14,294 | ||||||
Total SERP obligation | $ | 18,709 | $ | 23,106 | ||||
Note_12_Postemployment_Benefit1
Note 12. Postemployment Benefits (Tables) | 9 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Postemployment Benefits [Abstract] | ||||||||||||||||
Schedule of Changes in Projected Benefit Obligations | The components of net periodic postemployment benefit cost applicable to our severance plans were as follows: | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31 | March 31 | |||||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Service cost | $ | 131 | $ | 237 | $ | 521 | $ | 720 | ||||||||
Interest cost | 21 | 34 | 77 | 103 | ||||||||||||
Amortization of prior service costs | 41 | 71 | 177 | 214 | ||||||||||||
Amortization of actuarial (income) loss | (69 | ) | 80 | (146 | ) | 274 | ||||||||||
Net periodic benefit cost — Total cost | $ | 124 | $ | 422 | $ | 629 | $ | 1,311 | ||||||||
Less: Discontinued operations | — | 81 | 81 | 265 | ||||||||||||
Net periodic benefit cost — Continuing operations | $ | 124 | $ | 341 | $ | 548 | $ | 1,046 | ||||||||
Note_13_Stock_Compensation_Pla1
Note 13. Stock Compensation Plan (Tables) | 9 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Stock Compensation Plan [Abstract] | ||||||||||
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Grants in Period | ||||||||||
Performance Units (1) | Quarter Awarded | Units | Grant Date Fair Value (4) | |||||||
Relative Total Shareholder Return Awards | 3rd Quarter | 30,198 | $11.48 | |||||||
Unrestricted Shares (2) | Quarter Awarded | Shares | Grant Date Fair Value (4) | |||||||
Unrestricted Shares (Director Compensation) | 1st Quarter | 17,335 | $16.01 | |||||||
Unrestricted Shares | 2nd Quarter | 17,529 | $9.10 | |||||||
Restricted Share Units (3) | Quarter Awarded | Shares | Grant Date Fair Value (4) | |||||||
Restricted Share Units | 2nd Quarter | 159,416 | $9.10 | |||||||
Restricted Share Units | 3rd Quarter | 29,533 | $9.06 - $10.08 | |||||||
(1) Performance units were awarded to key officers under the Company's Relative Total Shareholder Return (“RTSR”) program. Vesting occurs at June 30, 2017. Participants will earn from 0% to 200% of the target award depending upon how the compound annual growth rate of Kimball International common stock ranks within the peer group at the end of the performance period. | ||||||||||
(2) Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director's fees as a result of directors' elections to receive unrestricted shares in lieu of cash payment. Director's fees are expensed over the period that directors earn the compensation. Other unrestricted shares were awarded to key employees as consideration for service to the Company. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions. | ||||||||||
(3) Restricted share units (“RSU”) were awarded to officers and key employees. Vesting occurs at June 30, 2015, June 30, 2016, and June 30, 2017. Upon vesting, the outstanding number of RSUs and the value of dividends accumulated over the vesting period are converted to shares of common stock. | ||||||||||
(4) The grant date fair value of RTSR awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The grant date fair value of the unrestricted shares and restricted share units was based on the stock price at the date of the award. |
Note_15_Credit_Quality_and_All1
Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable (Tables) | 9 Months Ended | |||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||
Credit Quality and Allowance for Credit Losses of Notes Receivable [Abstract] | ||||||||||||||||||||||||
Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent | ||||||||||||||||||||||||
As of March 31, 2015 | As of June 30, 2014 | |||||||||||||||||||||||
(Amounts in Thousands) | Unpaid Balance | Related Allowance | Receivable Net of Allowance | Unpaid Balance | Related Allowance | Receivable Net of Allowance | ||||||||||||||||||
Note Receivable from Sale of Indiana Facility | $ | 1,358 | $ | 489 | $ | 869 | $ | 1,392 | $ | 489 | $ | 903 | ||||||||||||
Other Notes Receivable | 452 | 143 | 309 | 223 | 149 | 74 | ||||||||||||||||||
Total | $ | 1,810 | $ | 632 | $ | 1,178 | $ | 1,615 | $ | 638 | $ | 977 | ||||||||||||
Note_2_SpinOff_Transaction_Dis
Note 2. Spin-Off Transaction - Disposal Group, Balance Sheet (Details) (USD $) | Oct. 31, 2014 |
In Millions, unless otherwise specified | |
ASSETS | |
Cash and cash equivalents | $63 |
Receivables | 133 |
Inventories | 124 |
Prepaid expenses and other current assets | 19 |
Net property and equipment | 98 |
Goodwill | 3 |
Net other intangible assets | 1 |
Other long-term assets | 15 |
Total Assets | 456 |
Liabilities | |
Accounts payable | 125 |
Accrued expenses | 22 |
Other long-term liabilities | 9 |
Total Liabilities | 156 |
Net Assets Distributed to Kimball Electronics, Inc. | $300 |
Note_2_SpinOff_Transaction_Dis1
Note 2. Spin-Off Transaction - Disposal Group, Income Statement (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net Sales | $0 | $185,680 | $275,551 | $542,580 |
Income Before Taxes on Income | 0 | 9,559 | 13,098 | 28,926 |
Provision for Income Taxes | 0 | 2,314 | 3,941 | 6,373 |
Income from Discontinued Operations, Net of Tax | $0 | $7,245 | $9,157 | $22,553 |
Income From Discontinued Operations per Class B Diluted Share | $0 | $0.19 | $0.23 | $0.58 |
Note_2_SpinOff_Transaction_Tex
Note 2. Spin-Off Transaction - Textuals (Details) (USD $) | Oct. 31, 2014 |
In Millions, unless otherwise specified | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash and cash equivalents | $63 |
Accumulated Other Comprehensive Loss, Net of Tax | $3.50 |
Class A Stock, Percent of Total | 15.00% |
Minimum Level of Class A Stock Required For Separate Classes of Stock | 15.00% |
Note_3_Recent_Accounting_Prono3
Note 3. Recent Accounting Pronouncements and Supplemental Information - Textuals (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Effective Income Tax Rate Reconciliation, Percent | 10.50% | 96.40% | 28.10% | 18.50% |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $0.70 | |||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 1.1 | 1.1 | ||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 0.4 | 0.4 | 0.4 | 0.4 |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | ($0.40) |
Note_3_Recent_Accounting_Prono4
Note 3. Recent Accounting Pronouncements and Supplemental Information - Components of Non-operating income (expense), net (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Foreign Currency/Derivative Loss | $2 | ($40) | ($40) | ($56) |
Gain on Supplemental Employee Retirement Plan Investments | 353 | 187 | 519 | 2,041 |
Other | -65 | -138 | -339 | -419 |
Non-operating income (expense), net | $290 | $9 | $140 | $1,566 |
Note_4_Inventories_Inventory_C
Note 4. Inventories - Inventory Components (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Finished products | $26,208 | $37,373 |
Work-in-process | 1,955 | 13,808 |
Raw materials | 20,907 | 103,083 |
Total FIFO inventory | 49,070 | 154,264 |
LIFO reserve | -14,395 | -13,789 |
Total inventory | $34,675 | $140,475 |
Note_5_Accumulated_Other_Compr2
Note 5. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss) | $1,182 | $1,187 | $2,440 | ($3,477) |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 28 | 560 | -3,552 | 4,511 |
Reclassification to (earnings) loss | -17 | 454 | -1,174 | 1,167 |
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income | 3,479 | |||
Net current-period other comprehensive income (loss) | 11 | 1,014 | -1,247 | 5,678 |
Accumulated Other Comprehensive Income (Loss) | 1,193 | 2,201 | 1,193 | 2,201 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss) | 0 | 5,467 | 4,909 | 855 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 21 | -6,070 | 4,633 |
Reclassification to (earnings) loss | 0 | 0 | 0 | 0 |
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income | 1,161 | |||
Net current-period other comprehensive income (loss) | 0 | 21 | -4,909 | 4,633 |
Accumulated Other Comprehensive Income (Loss) | 0 | 5,488 | 0 | 5,488 |
Derivative Gain (Loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss) | 0 | -4,583 | -3,411 | -4,359 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 268 | 2,097 | -466 |
Reclassification to (earnings) loss | 0 | 364 | -1,193 | 874 |
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income | 2,507 | |||
Net current-period other comprehensive income (loss) | 0 | 632 | 3,411 | 408 |
Accumulated Other Comprehensive Income (Loss) | 0 | -3,951 | 0 | -3,951 |
Postemployment Benefits, Prior Service Costs | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss) | -30 | -206 | -120 | -292 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 0 | 0 | 0 |
Reclassification to (earnings) loss | 25 | 43 | 107 | 129 |
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income | 8 | |||
Net current-period other comprehensive income (loss) | 25 | 43 | 115 | 129 |
Accumulated Other Comprehensive Income (Loss) | -5 | -163 | -5 | -163 |
Postemployment Benefits, Net Actuarial Gain (Loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss) | 1,212 | 509 | 1,062 | 319 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 28 | 271 | 421 | 344 |
Reclassification to (earnings) loss | -42 | 47 | -88 | 164 |
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income | -197 | |||
Net current-period other comprehensive income (loss) | -14 | 318 | 136 | 508 |
Accumulated Other Comprehensive Income (Loss) | $1,198 | $827 | $1,198 | $827 |
Note_5_Accumulated_Other_Compr3
Note 5. Accumulated Other Comprehensive Income (Loss) - Reclassifications from Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) | ||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $0 | [1] | ($364) | [1] | $1,193 | [1] | ($874) | [1] |
Amortization of Prior Service Costs | -41 | -71 | -177 | -214 | ||||
Amortization of Actuarial Gain (Loss) | 69 | -80 | 146 | -274 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 17 | -454 | 1,174 | -1,167 | ||||
Cost of Sales | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) | ||||||||
Amortization of Prior Service Costs | -26 | [2] | -35 | [2] | -106 | [2] | -119 | [2] |
Amortization of Actuarial Gain (Loss) | 38 | [2] | -44 | [2] | 68 | [2] | -154 | [2] |
Selling and Administrative Expenses | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) | ||||||||
Amortization of Prior Service Costs | -15 | [2] | -26 | [2] | -58 | [2] | -64 | [2] |
Amortization of Actuarial Gain (Loss) | 31 | [2] | -25 | [2] | 65 | [2] | -74 | [2] |
Benefit (Provision) for Income Taxes | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) | ||||||||
Amortization of Prior Service Costs | 16 | 23 | 65 | 72 | ||||
Amortization of Actuarial Gain (Loss) | -27 | 27 | -52 | 90 | ||||
Income (Loss) from Continuing Operations | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) | ||||||||
Amortization of Prior Service Costs | -25 | -38 | -99 | -111 | ||||
Amortization of Actuarial Gain (Loss) | 42 | -42 | 81 | -138 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 17 | -80 | -18 | -249 | ||||
Income (Loss) from Discontinued Operations | ||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) | ||||||||
Amortization of Prior Service Costs | 0 | -5 | -8 | -18 | ||||
Amortization of Actuarial Gain (Loss) | 0 | -5 | 7 | -26 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $0 | ($374) | $1,192 | ($918) | ||||
[1] | See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments. | |||||||
[2] | See Note 12 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans. |
Note_6_Commitments_and_Conting3
Note 6. Commitments and Contingent Liabilities - Commitments and Contingent Liabilities Textuals (Details) | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 |
USD ($) | EUR (€) | Financial Standby Letter of Credit | Purchase Commitment | |
USD ($) | USD ($) | |||
Guarantor Obligations | ||||
Letters of Credit, Amount | $1,000,000 | |||
Loss Contingency Accrual, at Carrying Value | 0 | 0 | ||
Unrecorded Unconditional Purchase Obligation | $200,000 | € 200,000 |
Note_6_Commitments_and_Conting4
Note 6. Commitments and Contingent Liabilities - Product Warranty (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Product Warranty Liability at the beginning of the period | $3,221 | $2,384 |
Additions to warranty accrual (including changes in estimates) | 625 | 2,356 |
Settlements made (in cash or in kind) | -564 | -1,346 |
Distribution To Kimball Electronics - Warranty Liability | -910 | 0 |
Product Warranty Liability at the end of the period | $2,372 | $3,394 |
Note_7_Restructuring_Expense_T1
Note 7. Restructuring Expense -Textuals (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Restructuring Expense and Other Related Items | |||||
Restructuring Charges | $388,000 | $0 | $3,723,000 | $0 | |
Gain (Loss) on Disposition of Property Plant Equipment | -916,000 | -344,000 | |||
Restructuring and Related Cost, Expected Cost | 9,925,000 | 9,925,000 | |||
Percentage of Restructuring Costs Expected in Cash | 88.00% | ||||
FY 2015 Post Falls Restructuring Plan [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Property, Plant and Equipment, Additions | 5,000,000 | ||||
Anticipated Short Term Pretax Operating Income Savings | 0 | ||||
Anticipated Annual Pre-tax Operating Income Savings | 5,000,000 | ||||
Restructuring and Related Cost, Expected Cost | 8,879,000 | 8,879,000 | |||
FY 2015 Plane Fleet Reduction [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Anticipated Annual Pre-tax Operating Income Savings | 800,000 | ||||
Restructuring and Related Cost, Expected Cost | 1,046,000 | 1,046,000 | |||
Transition and Other Employee Costs | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 5,600,000 | 5,600,000 | |||
Transition and Other Employee Costs | FY 2015 Post Falls Restructuring Plan [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 5,432,000 | 5,432,000 | |||
Transition and Other Employee Costs | FY 2015 Plane Fleet Reduction [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 224,000 | 224,000 | |||
Plant Closure and Other Exit Costs | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 3,100,000 | 3,100,000 | |||
Plant Closure and Other Exit Costs | FY 2015 Post Falls Restructuring Plan [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 3,113,000 | 3,113,000 | |||
Asset Write-Downs | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 1,200,000 | 1,200,000 | |||
Asset Write-Downs | FY 2015 Post Falls Restructuring Plan [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 334,000 | 334,000 | |||
Asset Write-Downs | FY 2015 Plane Fleet Reduction [Domain] | |||||
Restructuring Expense and Other Related Items | |||||
Restructuring and Related Cost, Expected Cost | 822,000 | 822,000 | |||
Property, Plant and Equipment, Other Types | |||||
Restructuring Expense and Other Related Items | |||||
Gain (Loss) on Disposition of Property Plant Equipment | 200,000 | 200,000 | |||
Fair Value, Measurements, Nonrecurring | Property, Plant and Equipment, Other Types | |||||
Restructuring Expense and Other Related Items | |||||
Impairment of Long-Lived Assets to be Disposed of | $1,100,000 | $0 | $1,200,000 | $1,100,000 |
Note_7_Restructuring_Expense_R1
Note 7. Restructuring Expense Restructuring Plan (Details) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Jun. 30, 2014 | |
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | $2,006 | [1] | $0 |
Restructuring and Related Cost, Cost Incurred to Date | 3,723 | ||
Restructuring and Related Cost, Expected Cost | 9,925 | ||
Payments for Restructuring | 2,793 | ||
Restructuring Reserve, Settled without Cash | 930 | ||
Restructuring Reserve, Period Increase (Decrease) | -1,717 | ||
FY 2015 Post Falls Restructuring Plan [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 2,006 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 2,677 | ||
Restructuring and Related Cost, Expected Cost | 8,879 | ||
Payments for Restructuring | 2,569 | ||
Restructuring Reserve, Settled without Cash | 108 | ||
Restructuring Reserve, Period Increase (Decrease) | -671 | ||
FY 2015 Plane Fleet Reduction [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 0 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 1,046 | ||
Restructuring and Related Cost, Expected Cost | 1,046 | ||
Payments for Restructuring | 224 | ||
Restructuring Reserve, Settled without Cash | 822 | ||
Restructuring Reserve, Period Increase (Decrease) | -1,046 | ||
Transition and Other Employee Costs | |||
Restructuring Expense and Other Related Items | |||
Restructuring and Related Cost, Expected Cost | 5,600 | ||
Transition and Other Employee Costs | FY 2015 Post Falls Restructuring Plan [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 2,006 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 2,006 | ||
Restructuring and Related Cost, Expected Cost | 5,432 | ||
Payments for Restructuring | 2,006 | ||
Restructuring Reserve, Settled without Cash | 0 | ||
Restructuring Reserve, Period Increase (Decrease) | |||
Transition and Other Employee Costs | FY 2015 Plane Fleet Reduction [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 0 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 224 | ||
Restructuring and Related Cost, Expected Cost | 224 | ||
Payments for Restructuring | 224 | ||
Restructuring Reserve, Settled without Cash | 0 | ||
Restructuring Reserve, Period Increase (Decrease) | -224 | ||
Asset Write-Downs | |||
Restructuring Expense and Other Related Items | |||
Restructuring and Related Cost, Expected Cost | 1,200 | ||
Asset Write-Downs | FY 2015 Post Falls Restructuring Plan [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 0 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 108 | ||
Restructuring and Related Cost, Expected Cost | 334 | ||
Payments for Restructuring | 0 | ||
Restructuring Reserve, Settled without Cash | 108 | ||
Restructuring Reserve, Period Increase (Decrease) | -108 | ||
Asset Write-Downs | FY 2015 Plane Fleet Reduction [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 0 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 822 | ||
Restructuring and Related Cost, Expected Cost | 822 | ||
Payments for Restructuring | 0 | ||
Restructuring Reserve, Settled without Cash | 822 | ||
Restructuring Reserve, Period Increase (Decrease) | -822 | ||
Plant Closure and Other Exit Costs | |||
Restructuring Expense and Other Related Items | |||
Restructuring and Related Cost, Expected Cost | 3,100 | ||
Plant Closure and Other Exit Costs | FY 2015 Post Falls Restructuring Plan [Domain] | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 0 | 0 | |
Restructuring and Related Cost, Cost Incurred to Date | 563 | ||
Restructuring and Related Cost, Expected Cost | 3,113 | ||
Payments for Restructuring | 563 | ||
Restructuring Reserve, Settled without Cash | 0 | ||
Restructuring Reserve, Period Increase (Decrease) | -563 | ||
Other Current Liabilities | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | 500 | ||
Other Noncurrent Liabilities | |||
Restructuring Expense and Other Related Items | |||
Restructuring Reserve | $1,500 | ||
[1] | The accrued restructuring balance at MarchB 31, 2015 includes $0.5 million recorded in current liabilities and $1.5 million recorded in other long-term liabilities. |
Note_8_Assets_Held_for_Sale_Te
Note 8. Assets Held for Sale Textuals (Details) (USD $) | 9 Months Ended | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2014 |
Long Lived Assets Held-for-sale [Line Items] | ||||||
Assets held for sale | $0 | $0 | $1,300 | $0 | ||
Gain (Loss) on Disposition of Property Plant Equipment | -916 | -344 | ||||
Property, Plant and Equipment, Other Types | ||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||
Gain (Loss) on Disposition of Property Plant Equipment | 200 | 200 | ||||
Fair Value, Measurements, Nonrecurring | Property, Plant and Equipment, Other Types | ||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||
Impairment of Long-Lived Assets to be Disposed of | $1,200 | $1,100 | $1,100 | $0 |
Note_9_Fair_Value_Recurring_Fa
Note 9. Fair Value - Recurring Fair Value Measurments (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Recurring Fair Value Measurements: | ||
Derivatives: Foreign exchange contracts-Assets | $0 | $800 |
Trading Securities: Mutual funds in nonqualified SERP | 9,384 | 8,812 |
Derivatives: Foreign exchange contracts-Liabilities | 0 | 699 |
Fair Value, Measurements, Recurring | ||
Recurring Fair Value Measurements: | ||
Cash Equivalents | 23,407 | 103,845 |
Trading Securities: Mutual funds in nonqualified SERP | 18,709 | 23,106 |
Total assets at fair value | 42,116 | 127,751 |
Total liabilities at fair value | 0 | 699 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Recurring Fair Value Measurements: | ||
Derivatives: Foreign exchange contracts-Assets | 0 | 800 |
Derivatives: Foreign exchange contracts-Liabilities | 0 | 699 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Recurring Fair Value Measurements: | ||
Cash Equivalents | 23,407 | 103,845 |
Trading Securities: Mutual funds in nonqualified SERP | 18,709 | 23,106 |
Total assets at fair value | 42,116 | 126,951 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Recurring Fair Value Measurements: | ||
Total assets at fair value | 0 | 800 |
Total liabilities at fair value | 0 | 699 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract | ||
Recurring Fair Value Measurements: | ||
Derivatives: Foreign exchange contracts-Assets | 800 | |
Derivatives: Foreign exchange contracts-Liabilities | $699 |
Note_9_Fair_Value_Textuals_Det
Note 9. Fair Value - Textuals (Details) (USD $) | 9 Months Ended | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||
Gain (Loss) on Disposition of Property Plant Equipment | ($916) | ($344) | |||
Fair Value, Purchases or Sales of Level 3 Assets | 0 | ||||
Fair Value, Transfers Between Levels, Amount | 0 | 0 | |||
Property, Plant and Equipment, Other Types | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||
Gain (Loss) on Disposition of Property Plant Equipment | 200 | 200 | |||
Property, Plant and Equipment, Other Types | Fair Value, Measurements, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||
Impairment of Long-Lived Assets to be Disposed of | $1,200 | $1,100 | $1,100 | $0 |
Note_10_Derivative_Instruments3
Note 10. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheet (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | $0 | $800 |
Derivative Liability | 0 | 699 |
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 599 |
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Expenses | ||
Derivatives, Fair Value | ||
Derivative Liability | 0 | 241 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 201 |
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Expenses | ||
Derivatives, Fair Value | ||
Derivative Liability | $0 | $458 |
Note_10_Derivative_Instruments4
Note 10. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative Instruments, Gain (Loss) | ||||
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion | $0 | $362 | $2,513 | ($536) |
Foreign Exchange Contract | ||||
Derivative Instruments, Gain (Loss) | ||||
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion | $0 | $362 | $2,513 | ($536) |
Note_10_Derivative_Instruments5
Note 10. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | ||||
Derivative Instruments, Gain (Loss) | ||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $0 | [1] | ($364) | [1] | $1,193 | [1] | ($874) | [1] |
Total Derivative Pre-Tax Gain (Loss) Recognized in Income | 0 | -307 | 2,224 | -1,754 | ||||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | 0 | 161 | 740 | -669 | ||||
Foreign Exchange Contract | Income (Loss) from Discontinued Operations | ||||||||
Derivative Instruments, Gain (Loss) | ||||||||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | 0 | 174 | 740 | -664 | ||||
Stock Warrant | Non-Operating Income (Expense) | ||||||||
Derivative Instruments, Gain (Loss) | ||||||||
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income | 0 | -13 | 0 | -5 | ||||
Cash Flow Hedging | Foreign Exchange Contract | Income (Loss) from Discontinued Operations | ||||||||
Derivative Instruments, Gain (Loss) | ||||||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $0 | ($468) | $1,484 | ($1,085) | ||||
[1] | See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments. |
Note_10_Derivative_Instruments6
Note 10. Derivative Instruments - Textuals (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Derivative Instruments [Abstract] | ||
Derivative Asset, Fair Value, Gross Asset | $0 | $800 |
Note_11_Investments_Supplement
Note 11. Investments - Supplemental Employee Retirement Investments Textuals (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Schedule of Trading Securities and Other Trading Assets | ||
Trading Securities, Change in net unrealized holding gains (losses) | ($121) | ($160) |
Note_11_Investments_Supplement1
Note 11. Investments - Supplemental Employee Retirement Plan Investments (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP investments - current asset | $9,384 | $8,812 |
SERP investments - other long-term asset | 9,325 | 14,294 |
Total SERP investments | 18,709 | 23,106 |
SERP obligation - current liability | 9,384 | 8,812 |
SERP obligation - other long-term liability | 9,325 | 14,294 |
Total SERP obligation | $18,709 | $23,106 |
Note_12_Postemployment_Benefit2
Note 12. Postemployment Benefits (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Components of Net Periodic Benefit Cost (before tax): | ||||
Service cost | $131 | $237 | $521 | $720 |
Interest cost | 21 | 34 | 77 | 103 |
Amortization of prior service costs | 41 | 71 | 177 | 214 |
Amortization of actuarial (income) loss | -69 | 80 | -146 | 274 |
Net periodic benefit cost b Total cost | 124 | 422 | 629 | 1,311 |
Discontinued Operations | ||||
Components of Net Periodic Benefit Cost (before tax): | ||||
Net periodic benefit cost b Total cost | 0 | 81 | 81 | 265 |
Continuing Operations | ||||
Components of Net Periodic Benefit Cost (before tax): | ||||
Net periodic benefit cost b Total cost | $124 | $341 | $548 | $1,046 |
Note_13_Stock_Compensation_Pla2
Note 13. Stock Compensation Plan - Stock Compensation Awards (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Relative Total Shareholder Return | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock Compensation, Shares Awarded | 30,198 | ||
Stock Compensation, Grant Date Fair Value | $11.48 | ||
Unrestricted Shares Director Compensation | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock Compensation, Shares Awarded | 17,335 | ||
Stock Compensation, Grant Date Fair Value | $16.01 | ||
Unrestricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock Compensation, Shares Awarded | 17,529 | ||
Stock Compensation, Grant Date Fair Value | $9.10 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock Compensation, Shares Awarded | 29,533 | 159,416 | |
Stock Compensation, Grant Date Fair Value | $9.10 | ||
Minimum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock Compensation, Grant Date Fair Value | $9.06 | ||
Maximum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock Compensation, Grant Date Fair Value | $10.08 |
Note_14_Variable_Interest_Enti1
Note 14. Variable Interest Entities -Textuals (Details) (USD $) | 9 Months Ended | |
Mar. 31, 2015 | Jun. 30, 2014 | |
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Related Allowance | $632,000 | $638,000 |
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | ||
Variable Interest Entity | ||
Variable Interest Entity, Obligation to Provide Additional Funding, Amount | 0 | |
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | Notes Receivable | ||
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets | 900,000 | 900,000 |
Variable Interest Entity, Nonconsolidated, Related Allowance | $500,000 | $500,000 |
Note_15_Credit_Quality_and_All2
Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable - Textuals (Details) (Notes Receivable, USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Notes Receivable | ||
Notes Receivable | ||
Financing Receivable, Recorded Investment, Past Due | $0 | $0 |
Note_15_Credit_Quality_and_All3
Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable - Credit Quality and Allowance for Credit Losses (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Notes Receivable | ||
Notes Receivable, Unpaid Balance | $1,810,000 | $1,615,000 |
Notes Receivable, Related Allowance | 632,000 | 638,000 |
Notes Receivable, Net of Allowance | 1,178,000 | 977,000 |
Notes Receivable | Note Receivable From Sale of Indiana Facility | ||
Notes Receivable | ||
Notes Receivable, Unpaid Balance | 1,358,000 | 1,392,000 |
Notes Receivable, Related Allowance | 489,000 | 489,000 |
Notes Receivable, Net of Allowance | 869,000 | 903,000 |
Notes Receivable | Other Notes Receivable | ||
Notes Receivable | ||
Notes Receivable, Unpaid Balance | 452,000 | 223,000 |
Notes Receivable, Related Allowance | 143,000 | 149,000 |
Notes Receivable, Net of Allowance | $309,000 | $74,000 |
Note_16_Credit_Agreement_Textu
Note 16. Credit Agreement Textuals (Details) (USD $) | 5 Months Ended |
Mar. 31, 2015 | |
Line of Credit Facility, Maximum Borrowing Capacity | 30,000,000 |
Line of Credit Facility, Maximum Borrowing Capacity Upon Request | 55,000,000 |
Line of Credit Facility, Amount Available for Letters of Credit | 10,000,000 |
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash | 15,000,000 |
Adjusted Leverage Ratio Covenant | 3 |
Fixed Charge Coverage Ratio Covenant, Percent of Depreciation | 50.00% |
Fixed Charge Coverage Ratio Covenant | 1.1 |
Financial Standby Letter of Credit | |
Letters of Credit, Amount | 1,000,000 |
Minimum | |
Line of Credit Facility, Commitment Fee Basis Points | 20 |
Maximum | |
Line of Credit Facility, Commitment Fee Basis Points | 25 |
Federal Funds Rate | |
Debt Instrument, Basis Spread on Variable Rate | 0.50% |
Eurocurrency Loans Margin | Minimum | |
Line of Credit Facility, Interest Rate Basis Points | 125 |
Eurocurrency Loans Margin | Maximum | |
Line of Credit Facility, Interest Rate Basis Points | 175 |
London Interbank Offered Rate (LIBOR) | |
Debt Instrument, Basis Spread on Variable Rate | 1.00% |
Alternate Base Rate Loans Spread | Minimum | |
Line of Credit Facility, Interest Rate Basis Points | 25 |
Alternate Base Rate Loans Spread | Maximum | |
Line of Credit Facility, Interest Rate Basis Points | 75 |