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Kimball Electronics, Inc. announced financial results for its fourth quarter and fiscal year ended June 30, 2021.
Donald D. Charron, Chairman and Chief Executive Officer, stated, “We are very pleased with our operating results for the fourth quarter and the strong finish to a record setting fiscal year 2021. Our team remains laser-focused on fulfilling commitments made to our customers as we work through the ongoing challenges caused by the pandemic and the global parts shortage. Despite the headwinds, we delivered strong top line growth, excellent margin expansion, and impressive earnings growth with adjusted Q4 EPS increasing 71% over the same period last year. I could not be more proud of our team and how we’re creating quality for life.”
Charron continued, “We are well positioned to carry the momentum from 2021 into fiscal year 2022. As a result of the ongoing semiconductor shortage, a portion of our shippable backlog continues to shift out ahead of us which will likely result in two very different halves for us in the fiscal year. Our full year guidance contemplates this as we expect material supply to steadily catch up with customer demand throughout the first half of fiscal year 2022, thus enabling us to ship the majority of the surplus backlog in the second half of fiscal year 2022. We expect that catching up on the backlog combined with strong organic growth from new and existing programs will provide significant year-over-year growth for us in fiscal year 2022.”
Fourth Quarter Fiscal Year 2021 Overview:
Consolidated net sales increased 15% compared to the fourth quarter of fiscal year 2020, with strength in the Automotive and Industrial vertical markets. Foreign currency had a favorable 3% impact on net sales in the current quarter compared to the same period a year ago.
Operating activities provided cash of $26.3 million during the fourth quarter, which compares to cash provided by operating activities of $21.5 million in the fourth quarter of fiscal year 2020.
Cash conversion days (“CCD”) for the quarter ended June 30, 2021 were 64, down from 66 days in the third quarter of fiscal year 2021 and 81 days in the quarter ended June 30, 2020. 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 $15.9 million in the fourth quarter.
Fiscal Year 2021 Overview:
- Net sales increased 8% in fiscal year 2021, with strength in the Automotive and Industrial vertical markets. Foreign currency had a favorable 3% impact on net sales compared to fiscal year 2020.
- Operating income of 5.1% of net sales. Adjusted non-GAAP operating income of 5.2% of net sales, a 180 bps improvement over fiscal year 2020.
- Net income of $56.8 million, or $2.24 per diluted share.
- Adjusted non-GAAP net income of $56.4 million, or $2.23 per diluted share, more than double fiscal 2020.
- Cash flow from operating activities of $130.1 million.
- Return on invested capital (“ROIC”) of 13.1% compared to 7.1% in fiscal 2020. ROIC is a non-GAAP financial measure, see reconciliation of non-GAAP financial measures.
- Investments in capital expenditures of $39 million.
Jana T. Croom, Vice President, Chief Financial Officer stated, “Fiscal 2021 was a record year for our company with many financial metrics including net sales, margin rates, earnings, cash flow from operating activities, and return on invested capital reaching all-time highs. Our team has demonstrated remarkable resilience throughout these unprecedented times.”
Fiscal Year 2022 Guidance:
- Net sales in the range of $1.4 - $1.5 billion, an 8% to 16% increase year-over-year
- Operating income in the range of 4.5% - 5.0% of net sales
- Capital expenditures of $60 - $70 million in support of our Thailand and Mexico expansions