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Kimball Electronics, Inc., a leading global electronic manufacturing services provider of high-quality, durable electronic products, today announced financial results for its third quarter of fiscal year 2016 which ended March31, 2016.
Donald D. Charron , Chairman and Chief Executive Officer, stated, “We continued to see firmer demand throughout our fiscal third quarter as three of our four end market verticals were up sequentially over the second quarter. Automotive was particularly strong led by double-digit year over year growth in China and stronger demand in Europe. Sales in our medical vertical were up 10% year over year as we successfully completed the launch of a critical next generation product for one of our largest customers. We continue to make good progress on the launches of a number of new business awards with both existing and new customers, and we are still expecting sales from these launches this fiscal year. Our new business opportunities pipeline remains healthy, and we continue to work diligently to achieve our medium range goal of $1 billion in annual net sales by fiscal year 2018.”
Mr. Charron continued, “As we have stated previously, over the last few quarters, and continuing in this quarter, our operating margin is under pressure due to incremental costs related to the Romania greenfield start-up and capital deployments for new customer programs in advance of revenue. Margin improvement through cost control and productivity improvements continues to be a high focus area for us as we remain committed to our 4% operating income goal.”
Third Quarter Fiscal Year 2016 Overview:
- Net sales increased 4% compared to the third quarter of fiscal year 2015.
- A discrete foreign income tax benefit of $1.8 million was recognized during the quarter as a result of a favorable tax ruling related to the capitalization of the Company’s Romania subsidiary.
- Incremental costs associated with the start-up of the Romania facility, excluding the above tax benefit, reduced net income by $0.4 million for the quarter.
- Spin-off expenses of $0.3 million were incurred in the prior year third quarter. No spin-off expenses were incurred in the current year third quarter.
- Cash flow from operating activities was $11.7 million during the quarter.
- Investments in capital expenditures were $8.6 million during the quarter.
- $4.4 million was returned to Share Owners during the quarter in the form of common stock repurchases associated with the $20 million stock repurchase program announced in October 2015.
- Cash and cash equivalents were $59.8 million and borrowings outstanding on credit facilities were $3.0 million at March31, 2016.
- Days sales outstanding, calculated as the average of monthly trade accounts and notes receivable divided by one day’s average net sales, was 59.5 days for the three months ended March31, 2016 compared to 58.9 days for the three months ended March31, 2015.
- Production days supply on hand, defined as the average of the monthly gross inventory divided by an average day’s cost of sales, was 59.6 days for the current year third quarter compared to 60.0 days for the same period last year.
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.