• Cash conversion days (“CCD”) for the quarter ended December 31, 2018 were 76 days, up from 60 days in the same quarter last year primarily related to an increase in raw material inventories to maintain appropriate buffer stock levels in the current tight supply environment. CCD is calculated as the sum of days sales outstanding plus contract asset days plus production days supply on hand less accounts payable days.
• $13.3 million was returned to Share Owners during the quarter in the form of common stock repurchases.
• Investments in capital expenditures were $4.3 million and cash payments, net of cash acquired, for the GES acquisition was $43.9 million during the quarter.
• Cash and cash equivalents were $35.9 million and borrowings outstanding on credit facilities were $89.1 million at December 31, 2018.
• Return on invested capital (“ROIC”), calculated for the trailing twelve months, was 8.9% and 9.8% for the twelve months ended December 31, 2018 and 2017, respectively (see reconciliation of non-GAAP financial measures for ROIC calculation).
Net Sales by Vertical Market:
| Three Months Ended | ||||||||||
| December 31, | ||||||||||
| (Amounts in Millions) | 2018 | 2017 | Percent Change | |||||||
| Automotive | $ | 112.4 | $ | 116.4 | (3 | )% | ||||
| Medical | 85.7 | 72.9 | 18 | % | ||||||
| Industrial | 62.2 | 52.0 | 20 | % | ||||||
| Public Safety | 17.9 | 13.8 | 29 | % | ||||||
| Other | 5.9 | 3.1 | 92 | % | ||||||
| Total Net Sales | $ | 284.1 | $ | 258.2 | 10 | % | ||||
Forward-Looking Statements
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 and 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 reflecting excess industry capacities. 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 June 30, 2018.
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 the United States in the statement of income, statement of comprehensive income, balance sheet, statement of cash flows, or statement of equity of the Company. The non-GAAP financial measures contained herein include adjusted operating income, adjusted net income, adjusted diluted EPS, and ROIC. These measures include adjustments in the three and six months ended December 31, 2018 and December 31, 2017 related to provisional tax adjustments resulting from Tax Reform, and for the six months ended December 31, 2018, for proceeds from a lawsuit settlement. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the financial highlights table below. Management believes it is useful for investors to understand how its core operations performed without the effects of the provisional tax adjustments resulting from Tax Reform and proceeds from the lawsuit settlement. Excluding these amounts allows investors to meaningfully trend, analyze, and benchmark the performance of the Company’s core operations. Many of the Company’s internal performance measures that management uses to make certain operating decisions excludes these items to enable meaningful trending of core operating metrics.
| Conference Call / Webcast | ||
| Date: | February 7, 2019 | |
| Time: | 10:00 AM Eastern Time | |
| Dial-In #: | 800-992-4934 (International Calls - 937-502-2251) | |
| Conference ID: | 1679486 | |
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.
About Kimball Electronics, Inc.
WHO WE ARE Kimball Electronics is a leading contract manufacturer of durable electronics serving a variety of industries on a global scale. The customer is the focus of everything we do and our touch is felt throughout daily life via the markets we serve: Automotive, Industrial, Medical, and Public Safety. Recognized for a reputation of excellence, we are committed to a high-performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Our employees know they are part of a company culture that is committed to doing the right thing. We build lasting relationships and global success for customers while enabling employees to share in the Company’s success through personal, professional, and financial growth.
WHAT WE DO Kimball Electronics trades under the symbol “KE” on The NASDAQ Stock Market. Kimball Electronics is a preeminent Electronics Manufacturing Services (“EMS”) provider serving customers around the world. Additionally, Kimball Electronics offers diversified contract manufacturing services (“DCMS”) for non-electronic components, medical disposables, and plastics. GES, a Kimball Electronics Company, specializes in design, production and servicing of automation, test, and inspection equipment for the semiconductor, electronics, and life sciences industries. From our operations in the United States, China, India, Japan, Mexico, Poland, Romania, Thailand, and Vietnam, our teams are proud to provide manufacturing services for a variety of industries globally. Kimball Electronics is headquartered in Jasper, Indiana.
To learn more about Kimball Electronics, visit: www.kimballelectronics.com.
Lasting relationships. Global success.
Financial highlights for the second quarter ended December 31, 2018 are as follows:
