 Net sales in the fourth quarter were 286 million, down 10 year-over-year Fourth quarter net loss of 1.3 million, which includes a non-cash after-tax goodwill impairment charge of 6.9 million and after-tax non-operating charge of 2.9 million related to the finalization of the net working capital adjustment after the measurement period for the GES acquisition Adjusted net income non-GAAP of 8.5 million Loss per share of 0.05 and adjusted diluted earnings per share non-GAAP of 0.34 for the quarter Strong cash flows provided by operating activities of 21.5 million during the fourth quarterJASPER, Ind., Aug. 18, 2020 GLOBE NEWSWIRE -- Kimball Electronics, Inc. NASDAQ: KE today announced financial results for its fourth quarter and fiscal year ended June 30, 2020. Three Months Ended Fiscal Year Ended June 30, June 30, Amounts in Thousands, except EPS2020 2019 2020 2019 Net Sales286,156 318,621 1,200,550 1,181,844 Operating Income1,609 10,319 31,996 42,060 Adjusted Operating Income non-GAAP 19,534 10,104 39,921 41,753 Operating Income 0.6 3.2 2.7 3.6 Adjusted Operating Income non-GAAP 3.3 3.2 3.3 3.5 Net Income Loss1,273 7,525 18,196 31,558 Adjusted Net Income non-GAAP 18,545 7,362 28,014 31,074 Diluted EPS0.05 0.29 0.71 1.21 Adjusted Diluted EPS non-GAAP 10.34 0.29 1.10 1.19 1 A reconciliation of GAAP and non-GAAP financial measures is included below.Donald D. Charron, Chairman and Chief Executive Officer, stated, We are pleased with the operating results we delivered in the fourth quarter of fiscal year 2020 despite the global interruptions and challenges caused by the COVID-19 pandemic. The health and safety of our employees remains our number one priority, and we continue to make every effort to keep our facilities safe, utilizing protection shields, face masks, body temperature scanning, social distancing, and proper hygiene. Of our 6,400 employees around the world, approximately 1 have tested positive for the virus and in each positive test case, our responses followed our procedures for communication to our employees, contact tracing, self-quarantining, testing, and sanitization of the affected work areas. Because of the disciplined response and extraordinary effort of our people around the world, we were able to perform our mission as an essential business and support the significant increases from our medical customers for their respiratory care and patient monitoring products.Mr. Charron continued, In the fourth quarter of fiscal year 2020, sales in our medical vertical increased 23 compared to the fourth quarter of fiscal year 2019 and were up 42 sequentially. We expect the momentum in our medical vertical to continue during the first half of fiscal year 2021. I feel honored and privileged that our Company can play such an important role to help in the recovery of people infected by the virus.Mr. Charron went on to say, The sales decline in our automotive vertical was disappointing, but was not surprising, given the extensive automotive plant shutdowns across North America and Europe during the months of April and May. While the automotive industry restart has been slower than expected, we are encouraged to see our June-ending run rates start to approach pre-COVID-19 levels. Lastly, while changes to anticipated revenues for our GES reporting unit resulted in an impairment charge in the quarter, we remain optimistic about the long-term opportunities for GES and continue to make progress on our integration and diversification plans. During the quarter, GES realized its strongest net sales and operating performance since the acquisition in October 2018.Fourth Quarter Fiscal Year 2020 Overview: Consolidated net sales decreased 10 compared to the fourth quarter of fiscal year 2019. Foreign currency headwinds had an unfavorable 1 impact on net sales in the current quarter. Non-cash goodwill impairment charge of 7.9 million, 6.9 million net of tax, was recognized in the quarter for the GES reporting unit as a result of a reduction in future anticipated revenues. This impairment charge is an adjustment that does not affect the Companys cash position, cash flow from operations, or debt covenants and is excluded for the non-GAAP measures. Adjusted net income non-GAAP in the current year fourth quarter also excludes expense of 3.8 million, 2.9 million net of tax, recorded in Non-operating expense for the final net working capital adjustment after the measurement period related to the GES acquisition. Operating activities provided cash of 21.5 million during the quarter, which compares to cash provided by operating activities of 12.2 million in the fourth quarter of fiscal year 2019. Cash conversion days CCD for the quarter ended June 30, 2020 were 81 days, flat sequentially with the third quarter of fiscal year 2020 and up from 77 days for the prior year quarter ended June 30, 2019. 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 11.0 million during the quarter. Cash and cash equivalents were 65.0 million and borrowings outstanding on credit facilities were 118.1 million at June 30, 2020, including 91.5 million classified as long term.Net Sales by Vertical Market: Three Months Ended June 30, Amounts in Millions2020 2019 Percent Change Automotive73.7 128.7 43 Medical123.7 100.5 23 Industrial74.3 68.3 9 Public Safety12.0 16.1 26 Other2.5 5.0 51 Total Net Sales286.2 318.6 10 Fiscal Year 2020 Overview: Net sales increased 2 in fiscal year 2020, setting a new annual record of 1.2 billion. Cash flow provided by operating activities for fiscal year 2020 was 72.8 million, a new annual record. Investments in capital expenditures were 38.7 million during fiscal year 2020. Return on invested capital ROIC was 6.9 and 8.7 for fiscal years 2020 and 2019, respectively ROIC is a non-GAAP financial measure, see reconciliation of non-GAAP financial measures for ROIC calculation.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, ramp up of new operations, global economic conditions, geopolitical environment, global health emergencies including the COVID-19 pandemic, 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, the ability of the supply chain to react successfully to the significant increase in demand for certain medical components, 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 June 30, 2019 and other filings with the Securities and Exchange Commission the SEC.Non-GAAP Financial Measures This press release contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a companys 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 share owners 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 for the three months and fiscal year ended June 30, 2020 related to goodwill impairment and a final net working capital adjustment expense after the measurement period on the GES acquisition, for the three months and fiscal year ended June 30, 2019 related to proceeds from a class action lawsuit settlement, and for the fiscal year ended June 30, 2019 related to adjustments to the provision for income taxes resulting from the U.S. Tax Cuts and Jobs Act Tax Reform. 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 goodwill impairment, expense of the final net working capital adjustment, proceeds from the lawsuit settlement, and tax adjustments resulting from Tax Reform. Excluding these amounts allows investors to meaningfully trend, analyze, and benchmark the performance of the Companys core operations.Conference Call Webcast Date: August 19, 2020 Time: 10:00 AM Eastern Time Live Webcast: investors.kimballelectronics.comevents-and-presentations Dial-In : 800-992-4934 International Calls - 937-502-2251 Conference ID: 5677104 For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com.About Kimball Electronics, Inc.Kimball Electronics is a multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. 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. 