Item 9A. Controls and Procedures
Item 9A - Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Kimball Electronics maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon their evaluation of those controls and procedures performed, the Chief Executive Officer and Chief Financial Officer of the Company concluded that its disclosure controls and procedures were effective as of June 30, 2022.
(b) Management’s report on internal control over financial reporting.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted pursuant thereto, the Company included a report of management’s assessment of the effectiveness of its internal control over financial reporting as part of this report. The effectiveness of the Company’s internal control over financial reporting as of June 30, 2022 has been audited by the Company’s independent registered public accounting firm. Management’s report and the independent registered public accounting firm’s attestation report are included in the Company’s Consolidated Financial Statements under the caption entitled “Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm” and are incorporated herein by reference.
(c) Changes in internal control over financial reporting.
There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B - Other Information
None.
Item 9C - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
65
PART III
Item 10 - Directors, Executive Officers and Corporate Governance
Directors
The information required by this item with respect to Directors is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the captions “Election of Directors” and “Corporate Governance at Kimball Electronics.”
Committees
The information required by this item with respect to the Audit Committee and its financial expert and with respect to the Compensation and Governance Committee’s responsibility for establishing procedures by which Share Owners may recommend nominees to the Board of Directors is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Corporate Governance at Kimball Electronics.”
Information about Our Executive Officers
The information required by this item with respect to Executive Officers of the Registrant is included at the end of Part I of this Annual Report on Form 10-K and is incorporated herein by reference. Additional information about our Executive Officers also appears in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Corporate Governance at Kimball Electronics.”
Compliance with Section 16(a) of the Exchange Act
The information required by this item with respect to compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Delinquent Section 16(a) Reports.”
Code of Ethics
Kimball Electronics has a code of ethics that applies to all of its employees, including the Chief Executive Officer, the Chief Financial Officer, and the Corporate Controller (functioning as Principal Accounting Officer). The code of ethics is posted on the Company’s website at http://investors.kimballelectronics.com under Governance Documents. The Company’s website and the information contained therein, or incorporated therein, are not intended to be incorporated into this Annual Report on Form 10-K. It is our intention to disclose any amendments to the code of ethics on this website. In addition, any waivers of the code of ethics for directors or executive officers of the Company will be disclosed in a Current Report on Form 8-K.
Item 11 - Executive Compensation
The information required by this item is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the captions “Corporate Governance at Kimball Electronics,” “Compensation Discussion and Analysis,” “Report of the Compensation and Governance Committee,” “Compensation Related Risk Assessment,” and “Executive Compensation.”
Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Share Owner Matters
Security Ownership
The information required by this item is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Share Ownership Information.”
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by this item is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Equity Compensation Plans Information.”
66
Item 13 - Certain Relationships and Related Transactions, and Director Independence
Relationships and Related Transactions
The information required by this item is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Review and Approval of Transactions with Related Persons.”
Director Independence
The information required by this item is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the caption “Corporate Governance at Kimball Electronics.”
Item 14 - Principal Accounting Fees and Services
The information required by this item is incorporated by reference to the material contained in the Company’s Proxy Statement for its annual meeting of Share Owners to be held November 11, 2022 under the captions “Selection of Independent Registered Public Accounting Firm” and “Appendix A — Approval Process for Services Performed by the Independent Registered Public Accounting Firm.”
67
PART IV
Item 15 - Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this report:
(1) Financial Statements:
The following consolidated financial statements of the Company are found in Item 8 and incorporated herein.
Management’s Report on Internal Control Over Financial Reporting
35
Report of Independent Registered Public Accounting Firm (PCAOB No. 34)
36
Consolidated Balance Sheets as of June 30, 2022 and 2021
39
Consolidated Statements of Income for Each of the Three Years in the Period Ended June 30, 2022
40
Consolidated Statements of Comprehensive Income for Each of the Three Years in the Period Ended June 30, 2022
41
Consolidated Statements of Cash Flows for Each of the Three Years in the Period Ended June 30, 2022
42
Consolidated Statements of Share Owners’ Equity for Each of the Three Years in the Period Ended June 30, 2022
43
Notes to Consolidated Financial Statements
44
(2) Financial Statement Schedules:
II. Valuation and Qualifying Accounts for Each of the Three Years in the Period Ended June 30, 2022
73
Schedules other than those listed above are omitted because they are either not required or not applicable, or the required information is presented in the Consolidated Financial Statements.
(3) Exhibits
See the Index of Exhibits which immediately precedes the Signatures page in this Annual Report on Form 10-K for a list of the exhibits filed or incorporated herein as a part of this report.
Item 16 - Form 10-K Summary
None.
68
KIMBALL ELECTRONICS, INC.
INDEX OF EXHIBITS
Incorporated by Reference
Exhibit No. Description Form Period Ending Exhibit Filing Date
2.1 Separation and Distribution Agreement by and between Kimball International, Inc. and Kimball Electronics, Inc.
8-K 2.1 11/3/2014
2.2 (c)(d)
Asset Purchase Agreement by and among Kimball Electronics Indiana, Inc., as Buyer; GES Holdings, Inc., Global Equipment Services and Manufacturing Inc., GES Infotek Pvt. Ltd., GES Japan KK, Global Equipment Services and Manufacturing (Suzhou) Co., Ltd., and Suzhou Global Equipment Services and Trading Co., Ltd., as Sellers; and GES Holdings, Inc., as the Sellers’ Representative, dated as of May 11, 2018
10-K 6/30/2018 2.2 8/28/2018
2.3 Amendment Number One to Asset Purchase Agreement by and among Kimball Electronics Indiana, Inc., as Buyer; GES Holdings, Inc., Global Equipment Services and Manufacturing Inc., GES Infotek Pvt. Ltd., GES Japan KK, Global Equipment Services and Manufacturing (Suzhou) Co., Ltd., and Suzhou Global Equipment Services and Trading Co., Ltd., as Sellers; and GES Holdings, Inc., as the Sellers’ Representative, dated as of July 12, 2018
10-Q 12/31/2018 2.1 2/7/2019
2.4 (c)
Amendment Number Two to Asset Purchase Agreement by and among Kimball Electronics Indiana, Inc., as Buyer; GES Holdings, Inc., Global Equipment Services and Manufacturing Inc., GES Infotek Pvt. Ltd., GES Japan KK, Global Equipment Services and Manufacturing (Suzhou) Co., Ltd., and Suzhou Global Equipment Services and Trading Co., Ltd., as Sellers; and GES Holdings, Inc., as the Sellers’ Representative, dated as of September 14, 2018
10-Q 12/31/2018 2.2 2/7/2019
3.1 Amended and Restated Articles of Incorporation of the Company
8-K 3.1 2/18/2021
3.2 Amended and Restated By-Laws of the Company
8-K 3.2 2/18/2021
4.1 Description of the Company’s Registered Securities
Filed Herewith
10.1 (a)
2014 Stock Option and Incentive Plan
S-8 4.3 10/30/2014
10.2 Tax Matters Agreement by and among Kimball International, Inc. and Kimball Electronics, Inc.
8-K 10.1 11/3/2014
10.3 (a)
Description of the Kimball Electronics, Inc. Profit Sharing Incentive Bonus Plan
Filed Herewith
10.4 (a)
Kimball Electronics, Inc. Supplemental Employee Retirement Plan (“SERP”)
10 10.8 9/4/2014
10.5 (a)
Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan
8-K 10.1 10/25/2016
10.6 (a)
Form of Fee Deferral Election Agreement under the Kimball Electronics, Inc. Non-Employee Directors Stock Compensation Deferral Plan
8-K 10.2 10/25/2016
10.7 Amended and Restated Credit Agreement , dated as of May 4, 2022, among Kimball Electronics, Inc., the lenders party thereto, and JPMorgan Chase Bank, N .A. , as Administrative Agent and Bank of America, N.A., as Documentation Agent
10-Q 3/31/2022 10.1 5/6/2022
10.8 (a)
Kimball Electronics, Inc. Executive Severance and Change in Control Plan
8-K 10.2 7/6/2021
10.9 (a)
Form of Stock Award Notice for Performance Shares
Filed Herewith
10.10 (a)
Form of Stock Award Notice for Restricted Shares
Filed Herewith
69
Incorporated by Reference
Exhibit No. Description Form Period Ending Exhibit Filing Date
21 Subsidiaries of the Registrant
Filed Herewith
23 Consent of Independent Registered Public Accounting Firm
Filed Herewith
24 Power of Attorney
Filed Herewith
31.1 Certification filed by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed Herewith
31.2 Certification filed by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed Herewith
32.1 (b)
Certification furnished by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished Herewith
32.2 (b)
Certification furnished by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished Herewith
101.INS Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document Filed Herewith
101.SCH Inline XBRL Taxonomy Extension Schema Document Filed Herewith
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed Herewith
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed Herewith
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed Herewith
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed Herewith
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) Filed Herewith
(a) Constitutes management contract or compensatory arrangement.
(b) In accordance with Item 601(b)(32)(ii) of Regulation S-K, the certifications furnished in Exhibit 32.1 and 32.2 will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
(c) Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant will supplementally furnish any of the omitted schedules or exhibits to the Securities and Exchange Commission upon request.
(d) Confidential treatment has been requested and granted as to certain portions of this Exhibit.
70
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
KIMBALL ELECTRONICS, INC.
By: /s/ JANA T. CROOM
Jana T. Croom
Chief Financial Officer
August 30, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
/s/ DONALD D. CHARRON
Donald D. Charron
Chairman of the Board,
Chief Executive Officer
August 30, 2022
/s/ JANA T. CROOM
Jana T. Croom
Chief Financial Officer
August 30, 2022
/s/ ADAM M. BAUMANN
Adam M. Baumann
Corporate Controller,
(functioning as Principal Accounting Officer)
August 30, 2022
71
Signature Signature
GREGORY J. LAMPERT * COLLEEN C. REPPLIER *
Gregory J. Lampert Colleen C. Repplier
Director Director
ROBERT J. PHILLIPPY * GREGORY A. THAXTON *
Robert J. Phillippy Gregory A. Thaxton
Director Director
HOLLY A. VAN DEURSEN * MICHELE A. M. HOLCOMB, PhD *
Holly A. Van Deursen Michele A. M. Holcomb, PhD
Director Director
* The undersigned does hereby sign this document on my behalf pursuant to powers of attorney duly executed and filed with the Securities and Exchange Commission, all in the capacities as indicated:
Date
August 30, 2022 /s/ DONALD D. CHARRON
Donald D. Charron
As Attorney-In-Fact
72
KIMBALL ELECTRONICS, INC.
Schedule II. - Valuation and Qualifying Accounts
Description Balance at
Beginning
of Year Additions (Reductions)
to Expense Adjustments to Other
Accounts Write-offs and
Recoveries Balance at
End of
Year
(Amounts in Thousands)
Year Ended June 30, 2022
Valuation Allowances:
Receivables $ 177 $ ( 53 ) $ 22 $ ( 7 ) $ 139
Deferred Tax Asset $ 1,802 $ 1,734 $ — $ — $ 3,536
Year Ended June 30, 2021
Valuation Allowances:
Receivables $ 523 $ ( 163 ) $ ( 9 ) $ ( 174 ) $ 177
Deferred Tax Asset $ 1,637 $ 165 $ — $ — $ 1,802
Year Ended June 30, 2020
Valuation Allowances:
Receivables $ 270 $ 265 $ ( 5 ) $ ( 7 ) $ 523
Deferred Tax Asset $ 658 $ 979 $ — $ — $ 1,637
73