- First quarter net sales were
$313 million, up 18% year-over-year
- Operating income, as a percent of net sales, increased 90 basis points from the prior year first quarter
- Strong cash flow provided by operations of
$39.6 millionduring the quarter
$3.5 millionto Share Owners in stock repurchases during the quarter
|Three Months Ended|
|(Amounts in Thousands, except EPS)||2019||2018|
|Adjusted Operating Income (non-GAAP) (1)||$||11,115||$||6,940|
|Operating Income %||3.5||%||2.6||%|
|Adjusted Net Income (non-GAAP) (1)||$||6,598||$||4,999|
(1) A reconciliation of GAAP and non-GAAP financial measures is included below.
Mr. Charron continued, “We are extremely pleased with the progress we made in expanding our operating margin in the first quarter when comparing both year-over-year and sequentially from the fourth quarter of fiscal year 2019. As new programs ramp up to projected run rates and we continue to drive improvements in the GES operations, we expect to realize additional leverage from our sales growth.”
First Quarter Fiscal Year 2020 Overview:
- Consolidated net sales increased 18% compared to the first quarter of fiscal year 2019. The GES acquisition added 2% to net sales for the quarter while unfavorable foreign currency movements adversely impacted consolidated net sales by approximately 2% compared to the same quarter a year ago.
- Operating activities provided cash of
$39.6 millionduring the quarter, which compares to cash used by operating activities of $10.0 millionin the first quarter of fiscal year 2019.
- Cash conversion days (“CCD”) for the quarter ended September 30, 2019 were 73 days, which declined sequentially from 77 days in the fourth quarter of fiscal year 2019 from improvement in days sales outstanding as a result of increased utilization of accounts receivable factoring arrangements. CCD is calculated as the sum of days sales outstanding plus contract asset days plus production days supply on hand less accounts payable days.
- Investments in capital expenditures were
$11.7 millionduring the quarter. $3.5 millionwas returned to Share Owners during the quarter in the form of common stock repurchases.
- Cash and cash equivalents were
$55.4 millionand borrowings outstanding on credit facilities were $109.6 millionat September 30, 2019, including $91.5 millionclassified as long-term.
- Return on invested capital (“ROIC”), calculated for the trailing twelve months, was 9.0% and 9.3% for the twelve months ended September 30, 2019 and 2018, respectively (see reconciliation of non-GAAP financial measures for ROIC calculation).
Net Sales by Vertical Market:
|Three Months Ended|
|(Amounts in Millions)||2019||2018||Percent
|Total Net Sales||$||313.4||$||265.6||18||%|
Certain statements contained within this release are considered forward-looking under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties including, but not limited to, successful integration of acquisitions, ramp up of new operations, global economic conditions, geopolitical environment, significant volume reductions from key contract customers, loss of key customers or suppliers, financial stability of key customers and suppliers, availability or cost of raw materials, impact related to tariffs and other trade barriers, and increased competitive pricing pressures. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in its Annual Report on Form 10-K for the year ended
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”) in
|Conference Call / Webcast|
|Date:||November 6, 2019|
|Time:||10:00 AM Eastern Time|
|Dial-In #:||800-992-4934 (International Calls - 937-502-2251)|
The live webcast of the conference call can be accessed at investors.kimballelectronics.com. For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com.
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Financial highlights for the first quarter ended September 30, 2019 are as follows:
|Condensed Consolidated Statements of Income|
|(Unaudited)||Three Months Ended|
|(Amounts in Thousands, except Per Share Data)||September 30, 2019||September 30, 2018|
|Cost of Sales||291,192||92.9||%||247,434||93.2||%|
|Selling and Administrative Expenses||11,078||3.6||%||11,246||4.2||%|
|Other General Income||—||—||%||(92||)||—||%|
|Other Income (Expense), net||(2,402||)||(0.7||)%||(554||)||(0.2||)%|
|Income Before Taxes on Income||8,713||2.8||%||6,478||2.4||%|
|Provision for Income Taxes||2,115||0.7||%||1,409||0.5||%|
|Earnings Per Share of Common Stock:|
|Average Number of Shares Outstanding:|
|Condensed Consolidated Statements of Cash Flows||Three Months Ended|
|(Amounts in Thousands)||2019||2018|
|Net Cash Flow provided by (used for) Operating Activities||$||39,619||$||(10,013||)|
|Net Cash Flow used for Investing Activities||(11,725||)||(4,646||)|
|Net Cash Flow (used for) provided by Financing Activities||(20,588||)||43,714|
|Effect of Exchange Rate Change on Cash and Cash Equivalents||(1,231||)||(514||)|
|Net Increase in Cash and Cash Equivalents||6,075||28,541|
|Cash and Cash Equivalents at Beginning of Period||49,276||46,428|
|Cash and Cash Equivalents at End of Period||$||55,351||$||74,969|
|Condensed Consolidated Balance Sheets||September 30,
|(Amounts in Thousands)||2019||2019|
|Cash and cash equivalents||$||55,351||$||49,276|
|Prepaid expenses and other current assets||25,377||24,713|
|Property and Equipment, net||142,895||143,629|
|Other Intangible Assets, net||21,505||22,188|
|LIABILITIES AND SHARE OWNERS’ EQUITY|
|Current portion of borrowings under credit facilities||$||18,067||$||34,713|
|Long-term debt under credit facilities, less current portion||91,500||91,500|
|Long-term income taxes payable||9,765||9,765|
|Share Owners’ Equity||369,253||369,854|
|Total Liabilities and Share Owners’ Equity||$||739,895||$||764,111|
|Reconciliation of Non-GAAP Financial Measures|
|(Amounts in Thousands, except Per Share Data)|
|Operating Income excluding Lawsuit Proceeds|
|Three Months Ended|
|Operating Income, as reported||$||11,115||$||7,032|
|Less: Pre-tax Settlement Proceeds from Lawsuit||—||92|
|Adjusted Operating Income||$||11,115||$||6,940|
|Net Income excluding Lawsuit Proceeds|
|Three Months Ended|
|Net Income, as reported||$||6,598||$||5,069|
|Less: After-tax Settlement Proceeds from Lawsuit||—||70|
|Adjusted Net Income||$||6,598||$||4,999|
|Return on Invested Capital (ROIC)|
|Twelve Months Ended|
|Less: Pre-tax Settlement Proceeds from Lawsuits||$||215||$||92|
|Adjusted Operating Income (non-GAAP)||$||45,928||$||39,455|
|Tax Effect (1)||$||8,920||$||9,152|
|After-Tax Adjusted Operating Income||$||37,008||$||30,303|
|Average Invested Capital (2)||$||411,735||$||326,168|
(1) Accumulated tax effect utilizing the applicable quarterly effective tax rates, excludes tax effect of adjusted items including adjustments related to the U.S. Tax Cuts and Jobs Act.
Source: Kimball Electronics, Inc.