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Kimball Electronics Inc., a global electronic manufacturing services (EMS) provider of high-quality, durable electronic products, has announced record net sales of $233 million for the third quarter ended March 31, 2017. Consolidated net sales increased by 9% compared to the third quarter of fiscal year 2016, the fifth consecutive quarterly sales record.
Net income increased to $8.1 million from $7.5 million in the same quarter last year. Included in net income in the prior year quarter was a $1.8 million discrete foreign income tax benefit resulting from a favorable tax ruling related to the capitalization of the company's Romania subsidiary. On the other hand, the ramp-up of the company's Romania facility negatively impacted net income by $0.9 million during the quarter compared with a $0.4 million net impact from incremental start-up costs in the prior year quarter.
"Continued strength in the automotive market in North America and Europe more than offset a decline in China. Double-digit increases in our industrial and public safety end market verticals helped us set a new quarterly sales record for the fifth consecutive quarter. Our new program launch and ramp-up activity remain high as we continue to work diligently to achieve our goal of $1 billion in annual sales in fiscal year 2018," said Donald D. Charron, chairman and chief executive officer. "We continue to face margin pressure and while we still have work to do to achieve our goal of 12.5% ROIC, we are encouraged by our progress in that both our third quarter and year-to-date gross margins and operating margins have improved over the prior year. Margin expansion and capital efficiency will continue to be priorities of focus for us as we work through another year of significant new program launches, the continued ramp-up of our new Romania operation, and the integration of our Medivative and Aircom acquisitions."
Third Quarter Fiscal Year 2017 Overview
- Return on invested capital (ROIC) was 10.7%, which has improved from 8.7% in the prior year (see reconciliation of non-GAAP financial measures for ROIC calculation).
- Cash flow from operating activities was $8.7 million for the quarter.
- Cash conversion days (CCD) for the quarter ended March 31, 2017 were 61 days, which compares to 57 days in the same quarter last year. CCD is calculated as the sum of days sales outstanding plus production days supply on hand less accounts payable days.
- Investments in capital expenditures were $6.3 million during the quarter.
- $3.0 million was returned to Share Owners during the quarter in the form of common stock repurchases.
- Cash and cash equivalents were $40.1 million and borrowings outstanding on credit facilities were $6.5 million at March 31, 2017.
About Kimball Electronics, Inc.
Recognized with a reputation for excellence, Kimball Electronics is committed to a high performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Kimball Electronics employees know they are part of a company culture that builds lasting relationships and global success for customers while enabling employees to share in the Company’s success through personal, professional, and financial growth.
Kimball Electronics trades under the symbol “KE” on The NASDAQ Stock Market. Kimball Electronics is a global contract electronic manufacturing services (“EMS”) company that specializes in durable electronics for the medical, automotive, industrial, and public safety end markets. Kimball Electronics is well recognized by customers and industry trade publications for its excellent quality, reliability, and innovative service. From its manufacturing operations in the United States, China, Mexico, Poland, Romania, and Thailand, Kimball Electronics provides engineering, manufacturing, and supply chain services which utilize common production and support capabilities to a variety of industries globally. Kimball Electronics is headquartered in Jasper, Indiana.
To learn more about Kimball Electronics, click here.