Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Aug. 27, 2018 | Dec. 29, 2017 | |
Document Information | |||
Entity Registrant Name | KIMBALL INTERNATIONAL INC | ||
Entity Central Index Key | 55,772 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float - Class B | $ 676,100,000 | ||
Class A Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 263,991 | ||
Class B Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 36,898,278 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 52,663 | $ 62,882 |
Short-term investments | 34,607 | 35,683 |
Receivables, net of allowances of $1,317 and $1,626, respectively | 60,984 | 53,909 |
Inventories | 39,509 | 38,062 |
Prepaid expenses and other current assets | 18,523 | 8,050 |
Assets held for sale | 281 | 4,223 |
Total current assets | 206,567 | 202,809 |
Property and Equipment, net of accumulated depreciation of $180,059 and $182,803, respectively | 84,487 | 80,069 |
Goodwill | 8,824 | 0 |
Other Intangible Assets, net of accumulated amortization of $36,757 and $35,148, respectively | 12,607 | 2,932 |
Deferred Tax Assets | 4,916 | 14,487 |
Other Assets | 12,767 | 13,450 |
Total Assets | 330,168 | 313,747 |
Current Liabilities: | ||
Current maturities of long-term debt | 23 | 27 |
Accounts payable | 48,214 | 44,730 |
Customer deposits | 21,253 | 20,516 |
Sale-leaseback financing obligation | 0 | 3,752 |
Dividends payable | 2,662 | 2,296 |
Accrued expenses | 49,294 | 49,018 |
Total current liabilities | 121,446 | 120,339 |
Other Liabilities: | ||
Long-term debt, less current maturities | 161 | 184 |
Other | 15,537 | 17,020 |
Total other liabilities | 15,698 | 17,204 |
Common stock-par value $0.05 per share: | ||
Additional paid-in capital | 1,881 | 2,971 |
Retained earnings | 249,945 | 230,763 |
Accumulated other comprehensive income | 1,816 | 1,115 |
Less: Treasury stock, at cost, 5,901,000 shares and 5,726,000 shares, respectively | (62,769) | (60,796) |
Total Shareowners’ Equity | 193,024 | 176,204 |
Total Liabilities and Shareowners’ Equity | 330,168 | 313,747 |
Class A Common Stock | ||
Common stock-par value $0.05 per share: | ||
Common Stock | 13 | 14 |
Class B Common Stock | ||
Common stock-par value $0.05 per share: | ||
Common Stock | $ 2,138 | $ 2,137 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
ASSETS | ||
Accounts and Notes Receivable Allowances | $ 1,317 | $ 1,626 |
Property and Equipment Accumulated Depreciation | 180,059 | 182,803 |
Intangible Assets Accumulated Amortization | $ 36,757 | $ 35,148 |
Class A Common Stock | ||
Share Owners' Equity | ||
Common Stock, Par or Stated Value Per Share | $ 0.05 | $ 0.05 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 264,000 | 280,000 |
Class B Common Stock | ||
Share Owners' Equity | ||
Common Stock, Par or Stated Value Per Share | $ 0.05 | $ 0.05 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 42,761,000 | 42,744,000 |
Treasury Stock, Shares | 5,901,000 | 5,726,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net Sales | $ 685,600 | $ 669,934 | $ 635,102 |
Cost of Sales | 464,154 | 446,629 | 431,298 |
Gross Profit | 221,446 | 223,305 | 203,804 |
Selling and Administrative Expenses | 170,383 | 168,474 | 162,979 |
Restructuring (Gain) Expense | 0 | (1,832) | 7,328 |
Operating Income | 51,063 | 56,663 | 33,497 |
Other Income (Expense): | |||
Interest income | 1,057 | 536 | 275 |
Interest expense | (221) | (37) | (22) |
Non-operating income | 953 | 1,276 | 79 |
Non-operating expense | (527) | (420) | (439) |
Other income (expense), net | 1,262 | 1,355 | (107) |
Income Before Taxes on Income | 52,325 | 58,018 | 33,390 |
Provision for Income Taxes | 17,886 | 20,512 | 12,234 |
Net Income | $ 34,439 | $ 37,506 | $ 21,156 |
Earnings Per Share of Common Stock: | |||
Basic Earnings Per Share | $ 0.92 | $ 1 | $ 0.56 |
Diluted Earnings Per Share | $ 0.92 | $ 0.99 | $ 0.56 |
Class A and B Common Stock: | |||
Average Number of Shares Outstanding - Basic | 37,314 | 37,334 | 37,462 |
Average Number of Shares Outstanding - Diluted | 37,494 | 37,833 | 37,852 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income | $ 34,439 | $ 37,506 | $ 21,156 |
Other comprehensive income (loss): | |||
Available-for-sale securities, Pre-tax | (11) | (34) | 0 |
Available-for-sale securities, Tax | 3 | 13 | 0 |
Available-for-sale securities, Net of Tax | (8) | (21) | 0 |
Postemployment severance actuarial change, Pre-tax | 895 | 186 | 576 |
Postemployment severance actuarial change, Tax | (296) | (72) | (225) |
Postemployment severance actuarial change, Net of Tax | 599 | 114 | 351 |
Derivative gain (loss), Pre-tax | (10) | 0 | 0 |
Derivative gain (loss), Tax | 3 | 0 | 0 |
Derivative gain (loss), Net of tax | (7) | 0 | 0 |
Reclassification to (earnings) loss: | |||
Available-for-sale securities, Pre-tax | 4 | 0 | 0 |
Available-for-sale securities, Tax | (1) | 0 | 0 |
Available-for-sale securities, Net of Tax | 3 | 0 | 0 |
Amortization of actuarial change, Pre-tax | (260) | (473) | (441) |
Amortization of actuarial change, Tax | 84 | 184 | 172 |
Amortization of actuarial change, Net of Tax | (176) | (289) | (269) |
Other comprehensive income (loss), Pre-tax | 618 | (321) | 135 |
Other comprehensive income (loss), Tax | (207) | 125 | (53) |
Other comprehensive income (loss), Net of Tax | 411 | (196) | 82 |
Total comprehensive income | $ 34,850 | $ 37,310 | $ 21,238 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows From Operating Activities: | |||
Net income | $ 34,439 | $ 37,506 | $ 21,156 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 15,470 | 15,553 | 14,996 |
(Gain) Loss on sales of assets | (2,050) | (3,148) | 181 |
Restructuring and asset impairment charges | 0 | 241 | 153 |
Deferred income tax and other deferred charges | 9,082 | (1,580) | 2,523 |
Stock-based compensation | 4,179 | 6,303 | 5,558 |
Other, net | 984 | (125) | 201 |
Change in operating assets and liabilities: | |||
Receivables | (5,682) | (3,550) | 4,874 |
Inventories | 8 | 2,876 | (3,304) |
Prepaid expenses and other current assets | (6,741) | 2,694 | 459 |
Accounts payable | 3,062 | 1,998 | 2,874 |
Customer deposits | (2,347) | 1,891 | 7 |
Accrued expenses | (3,538) | 4,185 | (326) |
Net cash provided by operating activities | 46,866 | 64,844 | 49,352 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (21,575) | (11,751) | (15,028) |
Proceeds from sales of assets | 5,817 | 13,200 | 290 |
Cash paid for acquisition | (18,201) | 0 | 0 |
Purchases of capitalized software | (724) | (982) | (1,138) |
Purchases of available-for-sale securities | (42,497) | (42,059) | 0 |
Maturities of available-for-sale securities | 42,839 | 5,941 | 0 |
Other, net | (875) | (525) | (1,007) |
Net cash used for investing activities | (35,216) | (36,176) | (16,883) |
Cash Flows From Financing Activities: | |||
Net change in capital leases and long-term debt | (27) | (30) | (27) |
Proceeds from sale-leaseback financing obligation | 0 | 3,752 | 0 |
Dividends paid to Shareowners | (10,084) | (8,783) | (8,078) |
Repurchases of Common Stock | (8,936) | (6,665) | (9,665) |
Repurchase of employee shares for tax withholding | (2,822) | (1,636) | (1,784) |
Net cash used for financing activities | (21,869) | (13,362) | (19,554) |
Net (Decrease) Increase in Cash and Cash Equivalents | (10,219) | 15,306 | 12,915 |
Cash and Cash Equivalents at Beginning of Year | 62,882 | 47,576 | 34,661 |
Cash and Cash Equivalents at End of Year | $ 52,663 | $ 62,882 | $ 47,576 |
Consolidated Statements of Shar
Consolidated Statements of Share Owners' Equity - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Class A Common StockCommon Stock | Class B Common StockCommon Stock |
Share Owner's Equity at Jun. 30, 2015 | $ 141,505 | $ 3,445 | $ 194,372 | $ 1,229 | $ (59,692) | $ 19 | $ 2,132 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adjustment of Kimball Electronics, Inc. distribution | (4) | (4) | |||||
Net income | 21,156 | 21,156 | |||||
Other comprehensive income (loss), Net of Tax | 82 | 82 | |||||
Issuance of non-restricted stock (44,000 shares in 2016, 49,000 shares in 2017, 39,000 shares in 2018) | (108) | (1,058) | 950 | ||||
Conversion of Class A to Class B common stock (94,000 shares in 2016, 11,000 shares in 2017, 16,000 shares in 2018) | 0 | (5) | 5 | ||||
Compensation expense related to stock incentive plans | 5,558 | 5,558 | |||||
Performance share issuance (235,000 shares in 2016, 192,000 shares in 2017, 226,000 shares in 2018) | (1,153) | (3,445) | (2,132) | 4,424 | |||
Restricted share units issuance (56,000 shares in 2016, 61,000 shares in 2017, 58,000 shares in 2018) | (194) | (1,583) | 1,389 | ||||
Repurchase of Common Stock (736,000 shares in 2016, 516,000 shares in 2017, 536,000 shares in 2018) | (8,686) | (8,686) | |||||
Dividends declared ($0.22 per share in 2016, $0.24 per share in 2017, $0.28 per share in 2018) | (8,288) | (8,288) | |||||
Share Owner's Equity at Jun. 30, 2016 | 149,868 | 2,917 | 205,104 | 1,311 | (61,615) | 14 | 2,137 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 37,506 | 37,506 | |||||
Other comprehensive income (loss), Net of Tax | (196) | (196) | |||||
Issuance of non-restricted stock (44,000 shares in 2016, 49,000 shares in 2017, 39,000 shares in 2018) | (1) | (1,205) | 1,204 | ||||
Conversion of Class A to Class B common stock (94,000 shares in 2016, 11,000 shares in 2017, 16,000 shares in 2018) | 0 | 0 | 0 | ||||
Compensation expense related to stock incentive plans | 6,303 | 6,303 | |||||
Performance share issuance (235,000 shares in 2016, 192,000 shares in 2017, 226,000 shares in 2018) | (1,168) | (3,096) | (2,823) | 4,751 | |||
Restricted share units issuance (56,000 shares in 2016, 61,000 shares in 2017, 58,000 shares in 2018) | (419) | (1,948) | 1,529 | ||||
Repurchase of Common Stock (736,000 shares in 2016, 516,000 shares in 2017, 536,000 shares in 2018) | (6,665) | (6,665) | |||||
Dividends declared ($0.22 per share in 2016, $0.24 per share in 2017, $0.28 per share in 2018) | (9,024) | (9,024) | |||||
Share Owner's Equity at Jun. 30, 2017 | 176,204 | 2,971 | 230,763 | 1,115 | (60,796) | 14 | 2,137 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 34,439 | 34,439 | |||||
Other comprehensive income (loss), Net of Tax | 411 | 411 | |||||
Issuance of non-restricted stock (44,000 shares in 2016, 49,000 shares in 2017, 39,000 shares in 2018) | 0 | (624) | 624 | ||||
Conversion of Class A to Class B common stock (94,000 shares in 2016, 11,000 shares in 2017, 16,000 shares in 2018) | 0 | (1) | 1 | ||||
Compensation expense related to stock incentive plans | 4,179 | 4,179 | |||||
Performance share issuance (235,000 shares in 2016, 192,000 shares in 2017, 226,000 shares in 2018) | (2,102) | (2,261) | (4,463) | 4,622 | |||
Restricted share units issuance (56,000 shares in 2016, 61,000 shares in 2017, 58,000 shares in 2018) | (341) | (1,101) | 760 | ||||
Relative total shareholder return performance units issuance (38,000 shares in 2018) | (326) | (1,283) | 957 | ||||
Reclassification of change in enacted income tax rate to retained earnings | 0 | (290) | 290 | ||||
Repurchase of Common Stock (736,000 shares in 2016, 516,000 shares in 2017, 536,000 shares in 2018) | (8,936) | (8,936) | |||||
Dividends declared ($0.22 per share in 2016, $0.24 per share in 2017, $0.28 per share in 2018) | (10,504) | (10,504) | |||||
Share Owner's Equity at Jun. 30, 2018 | $ 193,024 | $ 1,881 | $ 249,945 | $ 1,816 | $ (62,769) | $ 13 | $ 2,138 |
Consolidated Statements of Sha8
Consolidated Statements of Share Owners' Equity Parentheticals - $ / shares | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Issuance of non-restricted stock, Shares | 39,000 | 49,000 | 44,000 |
Conversion of Class A to Class B common stock | 16,000 | 11,000 | 94,000 |
Performance Share Issuance, Shares | 226,000 | 192,000 | 235,000 |
Restricted Share Units Issuance, Shares | 58,000 | 61,000 | 56,000 |
Treasury Stock, Shares, Acquired | 536,000 | 516,000 | 736,000 |
Vesting of relative total shareholder return performance units, Shares | 38,000 | 0 | 0 |
Common Stock, Dividends, Per Share, Declared | $ 0.28 | $ 0.24 | $ 0.22 |
Note 1. Summary of Significant
Note 1. Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation: The consolidated financial statements include the accounts of all subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation. Operating Segments: We sell a portfolio of furniture products and services under three brands: Kimball, National, and Kimball Hospitality. We consider each of the three brands to be operating segments which aggregate into one reportable segment. The brands operate within six market verticals, selling to similar types of customers. Our products and services are similar in nature and utilize similar production and distribution processes. Our three brands share similar long-term economic characteristics. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts included in the consolidated financial statements and related note disclosures. While efforts are made to assure estimates used are reasonably accurate based on management’s knowledge of current events, actual results could differ from those estimates. Revenue Recognition: We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract. Title and risk of loss are transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. Shipping and handling fees billed to customers are recorded as sales while the related shipping and handling costs are included in cost of goods sold. We recognize sales net of applicable sales tax. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time of the sale, resulting in a reduction of revenue. Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist of bank accounts, money market funds, and commercial paper. Bank accounts are stated at cost, which approximates fair value, and money market funds and commercial paper are stated at fair value. Short-Term Investments: Short-term investments consist primarily of municipal bonds, certificates of deposit purchased in the secondary market, and U.S. Treasury and federal agency securities. Municipal bonds include general obligation bonds and revenue bonds, some of which are pre-refunded. U.S. Treasury securities represent Treasury Bills and Notes of the U.S. government. Federal agency securities represent debt securities of a U.S. government sponsored agency, some of which are callable. Our investment policy dictates that municipal bonds, U.S. Treasury and federal agency securities must be investment grade quality. Our secondary market certificates of deposit are classified as investment securities, being purchased in the secondary market through a broker and available to be sold in the secondary market. All certificates of deposit are FDIC insured. All investments have maturities exceeding three months and are classified as available-for-sale securities which are recorded at fair value. Unrealized losses on available-for-sale securities are recognized in earnings when there is intent to sell or it is likely to be required to sell before recovery of the loss, or when the available-for-sale securities have incurred a credit loss. Otherwise, unrealized gains and losses are recorded net of the tax-related effect as a component of Shareowners’ Equity. Notes Receivable and Trade Accounts Receivable: Our notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. Customary terms require payment within 30 days , with terms beyond 30 days being considered extended. Inventories: Inventories are stated at the lower of cost or market value. Cost includes material, labor, and applicable manufacturing overhead. Costs associated with underutilization of capacity are expensed as incurred. The last-in, first-out (“LIFO”) method was used for approximately 92% and 94% of consolidated inventories at June 30, 2018 and June 30, 2017 , respectively. The remaining inventories were valued using the first-in, first-out (“FIFO”) method and average cost method. Inventories are adjusted for excess and obsolete inventory. Evaluation of excess inventory includes such factors as anticipated usage, inventory turnover, inventory levels, and product demand levels. Factors considered when evaluating obsolescence include the age of on-hand inventory and reduction in value due to damage, use as showroom samples, design changes, or cessation of product lines. Property, Equipment, and Depreciation: Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful life of the assets using the straight-line method for financial reporting purposes. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease. Major maintenance activities and improvements are capitalized; other maintenance, repairs, and minor renewals are expensed. Depreciation and expenses for maintenance, repairs and minor renewals are included in both the Cost of Sales line and the Selling and Administrative Expense line of the Consolidated Statements of Income. Impairment of Long-Lived Assets: We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. Goodwill and Other Intangible Assets: Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount. We also have the option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test. We compare the carrying value of the reporting unit to the reporting unit’s fair value to identify impairment. If the fair value of the reporting unit is less than the carrying value, goodwill is written down to its fair value. Goodwill is assigned to and the fair value is tested at the reporting unit level. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting unit considers current market conditions existing at the assessment date. During fiscal year 2018 no goodwill impairment was recognized. During fiscal year 2018, we recorded $8.8 million and $10.7 million , respectively, in goodwill and other intangible assets from the acquisition of D’style, Inc. See Note 2 - Acquisition to Consolidated Financial Statements for more information on this acquisition. Other Intangible Assets reported on the Consolidated Balance Sheets consist of capitalized software, product rights, customer relationships, trade names, and non-compete agreements. Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. A summary of intangible assets subject to amortization is as follows: June 30, 2018 June 30, 2017 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 38,482 $ 35,922 $ 2,560 $ 37,918 $ 34,986 $ 2,932 Product Rights 162 162 — 162 162 — Customer Relationships 7,050 422 6,628 — — — Trade Names 3,570 238 3,332 — — — Non-Compete Agreements 100 13 87 — — — Other Intangible Assets $ 49,364 $ 36,757 $ 12,607 $ 38,080 $ 35,148 $ 2,932 During fiscal years 2018 , 2017 , and 2016 , amortization expense of other intangible assets was, in thousands, $1,769 , $1,071 , and $786 , respectively. Amortization expense in future periods is expected to be, in thousands, $1,909 , $1,955 , $1,572 , $1,252 , and $1,029 in the five years ending June 30, 2023 , and $4,890 thereafter. The estimated useful life of internal-use software ranges from 2 to 10 years . The amortization period for customer relationship intangible assets is 20 years . The estimated useful life of trade names is 10 years . The estimated useful life of non-compete agreements is 5 years . Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. Trade names, non-compete agreements, and product rights to produce and sell certain products are amortized on a straight-line basis over their estimated useful lives. Capitalized customer relationships are amortized on estimated attrition rate of customers. We have no intangible assets with indefinite useful lives which are not subject to amortization. Research and Development: The costs of research and development are expensed as incurred. Research and development costs were approximately, in millions, $7 , $7 , and $6 in fiscal years 2018 , 2017 , and 2016 , respectively. Advertising: Advertising costs are expensed as incurred. Advertising costs, included in selling and administrative expenses were, in millions, $5.8 , $4.3 , and $4.0 , in fiscal years 2018 , 2017 , and 2016 , respectively. Insurance and Self-insurance: We are self-insured for certain employee health benefits including medical, short-term disability, and dental. Our self-insured reserves are estimated based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. We carry medical coverage for our eligible workforce not covered by self-insured plans. Insurance benefits are not provided to retired employees. We also participate, along with other companies, in a group captive insurance company (“Captive”). The Captive insures losses related to workman's compensation, motor vehicle liability, product liability, and general liability. The Captive reinsures catastrophic losses for all participants, including Kimball International, in excess of predetermined amounts. We pay premiums to the Captive which accumulate as a prepaid deposit estimated for losses related to the above coverage. We also maintain a reserve for outstanding unpaid workers’ compensation claims, including an estimate of incurred but not reported claims. Additionally, we purchase insurance coverage for property insurance, director and officer liability insurance, umbrella coverage, and other risks. Income Taxes: Deferred income taxes are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The deferred taxes are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment. We classify all deferred tax assets and liabilities as noncurrent in our consolidated balance sheets. We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in the Provision for Income Taxes line of the Consolidated Statements of Income. Concentrations of Credit Risk: Certain business and credit risks are inherent in our business. Additionally, we currently have notes receivable from independent dealership financing and other miscellaneous notes receivable which are included on the Receivables and Other Assets lines of the Consolidated Balance Sheets. At June 30, 2018 and 2017 , $0.8 million and $0.6 million , respectively, were outstanding under the notes receivable. The credit risk associated with receivables is disclosed in Note 19 - Credit Quality and Allowance for Credit Losses of Notes Receivable of Notes to Consolidated Financial Statements. Off-Balance Sheet Risk: Our off-balance sheet arrangements are limited to standby letters of credit, a performance bond, and operating leases entered into in the normal course of business as described in Note 5 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. Non-operating Income and Expense: Non-operating income and expense include the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements, bank charges, investment gain or loss, non-production rent income, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses. Foreign Currency Translation: Our foreign operations use the U.S. Dollar as their functional currency. Foreign currency assets and liabilities are remeasured into functional currencies at end-of-period exchange rates, except for nonmonetary assets and equity, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the weighted average exchange rate during the fiscal year, except for expenses related to nonmonetary assets, which are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement are reported in the Non-operating income or expense line item on the Consolidated Statements of Income. Derivative Instruments and Hedging Activities: Derivative financial instruments are recognized on the balance sheet as assets and liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction, and if it is, the type of hedge transaction. Hedge accounting is utilized when a derivative is expected to be highly effective upon execution and continues to be highly effective over the duration of the hedge transaction. Hedge accounting permits gains and losses on derivative instruments to be deferred in accumulated other comprehensive income and subsequently included in earnings in the periods in which earnings are affected by the hedged item, or when the derivative is determined to be ineffective. We use derivatives primarily for forward purchases of foreign currency to manage exposure to the variability of cash flows, primarily related to the foreign exchange rate risks inherent in forecasted transactions denominated in foreign currency. We hold a total investment of $2.0 million in a privately-held company, including $1.5 million in stock warrants purchased during fiscal year 2017. The investment in stock warrants is accounted for as a derivative instrument and is included in the Other Assets line of the Consolidated Balance Sheets. See Note 11 - Derivative Instruments of Notes to Consolidated Financial Statements for more information on derivative instruments and hedging activities. Stock-Based Compensation: As described in Note 8 - Stock Compensation Plans of Notes to Consolidated Financial Statements, we maintain a stock-based compensation plan which allows for the issuance of stock unit awards, restricted stock awards, stock options, stock appreciation rights, and other stock-based awards. each of which may include performance-based conditions, to certain employees, non-employee directors, consultants, and advisors. We recognize the cost resulting from share-based payment transactions using a fair-value-based method. The estimated fair value of outstanding performance shares and restricted share units is based on the stock price at the date of the grant. For performance shares, the price is reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding performance share awards. The estimated fair value of outstanding relative total shareholder return performance units (“RTSR”) is based on the grant date fair value of RTSR awards using a Monte Carlo simulation which includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. Stock-based compensation expense is recognized for the portion of the awards that are ultimately expected to vest. Forfeitures are accounted for as they occur. Recently Adopted Accounting Pronouncements: In February 2018, the Financial Accounting Standards Board (“FASB”) issued guidance that allows the reclassification of the income tax effects resulting from the Tax Cuts and Jobs Act (“Tax Act”) from accumulated other comprehensive income to retained earnings. Under the Tax Act, deferred taxes were adjusted to reflect the reduction of the federal income tax rate to the newly enacted federal income tax rate which left the tax effects on items within accumulated other comprehensive income stranded at historical tax rates. This guidance requires qualitative disclosure of the accounting policy for releasing income tax effects from accumulated other comprehensive income and if the reclassification election is made, the impacts of the change on the consolidated financial statements. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the Tax Act changes are recognized. We early adopted the guidance in our fourth quarter of fiscal year 2018 and reclassified the entire tax effect out of accumulated other comprehensive income and into retained earnings in the amount of $0.3 million . Our policy for releasing disproportionate income tax effects from accumulated other comprehensive income utilizes the aggregate approach. In August 2017, the FASB issued guidance on accounting for derivatives and hedging activities. The objective of this guidance is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted. We early adopted the guidance in our fourth quarter of fiscal year 2018 and the guidance did not have a material effect on our consolidated financial statements. In January 2017, the FASB issued guidance on simplifying the test for goodwill impairment by eliminating the requirement to estimate the implied fair value of a reporting unit from the goodwill impairment test. Under the guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance is effective prospectively for our first quarter of fiscal year 2021 financial statements with early adoption permitted. In conjunction with our acquisition of D’style, Inc. we early adopted the guidance in our second quarter of fiscal year 2018, and the guidance did not have a material effect on our consolidated financial statements. In January 2017, the FASB issued guidance which revises the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted and the amendments can be applied to transactions occurring before the guidance was issued as long as the applicable financial statements have not been issued. In conjunction with our acquisition of D’style, Inc., we early adopted the guidance in our second quarter of fiscal year 2018 and the guidance did not have a material effect on our consolidated financial statements. In August 2016, the FASB issued guidance that clarifies and provides specific guidance on eight cash flow classification issues that are not addressed by current GAAP. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows, including how to classify contingent consideration payments made after a business combination, which will impact the presentation of future earn-out payments for our acquisition of D’style, Inc. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted. We early adopted the guidance in our second quarter of fiscal year 2018 and the guidance did not have a material effect on our consolidated financial statements. In July 2015, the FASB issued guidance on simplifying the measurement of inventory which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Inventory within the scope of this update is required to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The guidance does not impact inventory measured on a last-in, first-out (“LIFO”) basis. The guidance was adopted prospectively in our first quarter of fiscal year 2018 and did not have a material effect on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted: In June 2018, the FASB issued guidance to improve the accounting for and to reduce the cost and complexity of share-based payments to nonemployees for goods and services. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted but may not be adopted earlier than the adoption of the new revenue standard. We expect to adopt the standard at the beginning of our fiscal year 2019, and it will be applied to awards that have not been settled by the date of adoption. We do not expect the adoption to have a material effect on our consolidated financial statements. In May 2017, the FASB issued guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted and will be applied prospectively to awards modified on or after the adoption date. We do not expect the adoption to have a material effect on our consolidated financial statements. In March 2017, the FASB issued guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date. This guidance does not require an accounting change for securities held at a discount. This guidance is to be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted. We have not yet determined the effect of this guidance on our consolidated financial statements. In March 2017, the FASB issued guidance that requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic benefit cost in operating expenses, which will impact the presentation of our postemployment benefit plan. Employers are required to present all other components of net benefit cost separate from the service costs and disclose the line item in which the components of net benefit cost other than the service cost are included. Retrospective application of the change in the statement of income presentation is required. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted. We do not expect the adoption to have a material effect on our consolidated financial statements. In February 2017, the FASB issued guidance that clarifies the scope of guidance on nonfinancial asset derecognition as well as the accounting for partial sales of nonfinancial assets. This new guidance is meant to clarify the scope of the original guidance that was issued in connection with the guidance relating to the recognition of revenue from contracts with customers, as defined below, which addresses recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted, and we are required to adopt concurrent with the adoption of the guidance on recognition of revenue from contracts with customers. We are reviewing the impact of this rule but have not yet determined the effect of this guidance on our consolidated financial statements. In November 2016, the FASB issued guidance which requires an entity to include in their cash and cash equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted and is required to be applied using a retrospective transition method to each prior reporting period. We do not expect the adoption to have a material effect on our consolidated financial statements. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. Under the guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The guidance is also intended to reduce the complexity by decreasing the number of credit impairment models that entities use to account for debt instruments. The guidance is effective for our first quarter of fiscal year 2021 with early adoption in our fiscal year 2020 permitted. We have not yet determined the effect of this guidance on our consolidated financial statements. In February 2016, the FASB issued guidance that revises the accounting for leases. The guidance is intended to improve financial reporting of leasing transactions by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Leases will continue to be classified as either operating or finance leases, with the classification affecting the pattern of expense recognition in the statement of income. The guidance will also require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. In January 2018, the FASB issued additional guidance for land easements which permits entities to forgo the evaluation of existing land easement arrangements to determine if they contain a lease. New land easement arrangements, or modifications to existing arrangements, after the adoption of the lease standard will be evaluated to determine if they meet the definition of a lease. In July 2018, the FASB amended the new standard to clarify certain aspects of the guidance, and they also issued another new standard in July 2018 that allows the option to apply the transition provisions at the adoption date instead of at the earliest comparative period in the consolidated financial statements. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted and is required to be applied either using a modified retrospective approach to each prior reporting period or initial application as of the beginning of the period of adoption. We are currently evaluating the impact of this guidance but have not yet determined the effect on our consolidated financial statements. In January 2016, the FASB issued guidance which is intended to improve the recognition and measurement of financial instruments. The guidance revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective prospectively for our first quarter of fiscal year 2019 financial statements with early adoption allowed on certain provisions. We do not expect the adoption to have a material effect on our consolidated financial statements. In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to |
Note 2. Acquisition (Notes)
Note 2. Acquisition (Notes) | 12 Months Ended |
Jun. 30, 2018 | |
Acquisition [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Acquisition During the second quarter of fiscal year 2018, we acquired certain assets of D’style, Inc. (“D’style”), headquartered in Chula Vista, California. This acquisition expanded our reach into hospitality public space areas and added an attractive product portfolio of solutions for the residential market through the acquired Allan Copley Designs brand. These offerings enable us to take advantage of the trend where hospitality, residential and commercial designs are merging. As part of this acquisition, we also acquired all of the capital stock of Diseños de Estilo S.A. de C.V. headquartered in Tijuana, Mexico, another member of the D’style group which manufactures exclusively for D’style, strengthening our North American manufacturing footprint and serving as a distribution channel to the Mexico and Latin America hospitality markets. The cash paid for the acquisition totaled $18.2 million . An earn-out of up to $2.2 million may be paid, which is contingent based upon fiscal year 2018 and 2019 D’style, Inc. operating income compared to a predetermined target for each fiscal year. As of June 30, 2018, the fair value of the earn-out was $1.1 million . A summary of the preliminary purchase price allocation is as follows: Purchase Price Allocation (Amounts in Thousands) Assets: Receivables $ 1,467 Inventories 1,455 Prepaid expenses and other current assets 1,120 Net property and equipment 184 Goodwill 8,824 Other intangible assets 10,720 Deferred tax assets 302 $ 24,072 Liabilities: Accounts payable $ 774 Customer deposits 3,084 Accrued expenses 333 $ 4,191 $ 19,881 Consideration (Amounts in Thousands) Cash $ 18,201 Contingent earn-out — fair value at acquisition date 1,680 Fair value of total consideration $ 19,881 As of the acquisition date the fair value of the earn-out was $1.7 million . At June 30, 2018 , the fair value of the contingent earn-out liability was adjusted to $1.1 million , resulting in a $0.6 million pre-tax gain, recognized as a $0.8 million pre-tax gain included in Selling and Administrative Expenses, offset in part by $0.2 million of Interest Expense attributable to an adjustment of the contingent earn-out liability that will be based upon fiscal year 2018 and 2019 D’style, Inc. operating income compared to a predetermined target for each fiscal year. The operating results of this acquisition are included in our consolidated financial statements beginning on November 6, 2017. For the year ended June 30, 2018 , net sales and net income related to D’style were $13.0 million and $0.8 million , respectively. Direct costs of the acquisition for the year ended June 30, 2018 , of approximately $0.8 million , were expensed as incurred and were included on the Selling and Administrative Expenses line of our Consolidated Statements of Income. Goodwill is primarily attributable to the anticipated revenue and supply chain synergies expected from the operations of the combined company. An immaterial amount of goodwill is not deductible for tax purposes, while the tax deductible portion is deductible over 15 years . See Note 1 - Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements for more information on goodwill and other intangible assets. The following summarizes our goodwill activity for fiscal year 2018: Goodwill (Amounts in Thousands) Goodwill - June 30, 2017 $ — Goodwill - at acquisition date 8,559 Working capital adjustments 265 Goodwill - June 30, 2018 $ 8,824 The purchase price allocation is provisional pending final valuations and purchase accounting adjustments, which were not final as of June 30, 2018. We utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation process. |
Note 3. Inventories
Note 3. Inventories | 12 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
Inventory Disclosure | Inventories Inventories are stated at the lower of cost or market value. Inventories are valued using the last-in, first-out (“LIFO”) method for approximately 92% and 94% of consolidated inventories at June 30, 2018 and June 30, 2017 , respectively. The remaining inventories are valued using the first-in, first-out (“FIFO”) method and average cost method. Had the FIFO method been used for all inventories, income would have been $1.1 million higher in fiscal year 2018 , $0.4 million higher in fiscal year 2017 , and $1.0 million lower in fiscal year 2016 . Certain inventory quantity reductions caused liquidations of LIFO inventory values, which increased income by an immaterial amount in 2018, 2017 and 2016. Inventory components at June 30, 2018 were as follows: (Amounts in Thousands) 2018 2017 Finished products $ 23,756 $ 24,537 Work-in-process 1,378 1,346 Raw materials 29,158 25,368 Total FIFO inventory $ 54,292 $ 51,251 LIFO reserve, net (14,783 ) (13,189 ) Total inventory $ 39,509 $ 38,062 |
Note 4. Property and Equipment
Note 4. Property and Equipment | 12 Months Ended |
Jun. 30, 2018 | |
Property and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Property and Equipment Major classes of property and equipment at June 30 consist of the following: (Amounts in Thousands) 2018 2017 Land $ 2,219 $ 2,431 Buildings and improvements 105,372 109,374 Machinery and equipment 152,653 147,407 Construction-in-progress 4,302 3,660 Total $ 264,546 $ 262,872 Less: Accumulated depreciation (180,059 ) (182,803 ) Property and equipment, net $ 84,487 $ 80,069 The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 5 to 40 Machinery and equipment 2 to 20 Leasehold improvements Lesser of Useful Life or Term of Lease Depreciation and amortization of property and equipment, including asset write-downs associated with restructuring plans, totaled, in millions, $13.7 for fiscal year 2018 , $14.7 for fiscal year 2017 , and $14.3 for fiscal year 2016 . At June 30, 2018 , excess land located in Jasper, Indiana totaling $0.3 million was classified as held for sale. At June 30, 2017 , our fleet of over-the-road tractors and trailers and a small parcel of land located in Jasper, Indiana totaling $4.2 million were classified as held for sale. During fiscal year 2018, we sold all of our over-the-road tractors and trailers and the small parcel of land and recognized a pre-tax gain of $0.4 million as the $4.8 million selling price exceeded the book value net of selling costs. At June 30, 2016, assets totaling $9.2 million were classified as held for sale for a facility and land located in Post Falls, Idaho. During fiscal year 2017, we sold our Post Falls, Idaho facility and land and recognized a pre-tax gain of $2.1 million as the $12.0 million selling price exceeded the book value of the facility and land net of selling costs. The gain was recorded on the Restructuring (Gain) Expense line of the Consolidated Statements of Income. We also sold excess land for proceeds of $1.4 million and recognized pre-tax gains of $1.2 million which is recorded on the Selling and Administrative Expenses line of the Consolidated Statements of Income. In addition, during fiscal year 2017 we recognized impairment of $0.2 million as the carrying value of our fleet of over-the-road tractors and trailers exceeded the market value less selling costs. During fiscal year 2017, we also sold a facility in Indiana which housed an education center for dealer and employee training, a research and development center, and a product showroom for proceeds of $3.8 million . In order to allow for transition of those functions to our primary campus also located in Jasper, Indiana, we leased back a portion of the facility until December 31, 2017 at a favorable rate. The below-market terms of the leaseback are considered a form of continuing involvement that precludes sale treatment therefore we deferred the recognition of the sale until fiscal year 2018 when we recorded the pre-tax gain of $1.7 million on the sale. |
Note 5. Commitments and Conting
Note 5. Commitments and Contingent Liabilities | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingent Liabilities Leases: Operating leases for certain offices, showrooms, manufacturing facilities, land, and equipment, which expire from fiscal year 2019 to 2027 , contain provisions under which minimum annual lease payments are, in millions, $4.0 , $3.6 , $3.3 , $3.1 , and $2.6 for the five years ending June 30, 2023 , respectively, and aggregate $5.9 million from fiscal year 2024 to the expiration of the leases in fiscal year 2027 . We are obligated under certain real estate leases to maintain the properties and pay real estate taxes. Certain leases include renewal options and escalation clauses. Total rental expense amounted to, in millions, $5.8 , $6.0 , and $6.7 in fiscal years 2018 , 2017 , and 2016 , respectively, including certain leases requiring contingent lease payments based primarily on warehouse space utilized, which amounted to expense of, in millions, $1.2 , $1.5 , and $2.4 in fiscal years 2018 , 2017 , and 2016 , respectively. As of June 30, 2017, capitalized leases were not material and matured during fiscal year 2018. During the latter portion of our fiscal year 2017, we sold a facility in Indiana which housed the education center for dealer and employee training, a research and development center, and a product showroom for proceeds of $3.8 million . We were leasing a portion of the facility back to facilitate the short-term transition of those functions to other existing Indiana locations. The sale of the facility did not qualify for sale-leaseback accounting during fiscal year 2017, and thus the $1.7 million pre-tax gain on the sale was not recognized in selling and administrative expenses until fiscal year 2018. Guarantees: Standby letters of credit were issued to lessors and insurance institutions and can only be drawn upon in the event of our failure to pay our obligations to a beneficiary. We had a maximum financial exposure from unused standby letters of credit totaling $1.4 million as of June 30, 2018 and $1.2 million as of June 30, 2017 . We are periodically required to provide performance bonds in order to conduct business with certain customers. The bonds are required to provide assurances to customers that the products and services they have purchased will be installed and/or provided properly and without damage to their facilities. We are ultimately liable for claims that may occur against the performance bonds. We had a maximum financial exposure from performance bonds totaling $0.5 million as of June 30, 2018 and $ 0.4 million as of June 30, 2017 . We are not aware of circumstances that would require us to perform under these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of June 30, 2018 and 2017 with respect to the standby letters of credit or performance bonds. We also enter into commercial letters of credit to facilitate payments to vendors and from customers. Product Warranties: We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. Changes in the product warranty accrual during fiscal years 2018 , 2017 , and 2016 were as follows: (Amounts in Thousands) 2018 2017 2016 Product Warranty Liability at the beginning of the year $ 1,992 $ 2,351 $ 2,264 Additions to warranty accrual (including changes in estimates) 1,307 562 1,165 Settlements made (in cash or in kind) (1,005 ) (921 ) (1,078 ) Product Warranty Liability at the end of the year $ 2,294 $ 1,992 $ 2,351 Other Contingency: The U.S. government, as well as state and local governments, can typically terminate or modify their contracts with us either at their discretion or if we default by failing to perform under the terms of the applicable contract, which could expose us to liability. The failure to comply with regulatory and contractual requirements could subject us to investigations, fines, or other penalties, and violations of certain regulatory and contractual requirements could also result in us being suspended or debarred from future government contracting. In March 2016, in connection with a renewal of one of our contracts, we became aware of noncompliance and inaccuracies in our General Services Administration (“GSA”) subcontractor reporting. Accordingly, we retained outside legal counsel to assist in conducting an internal review of our reporting practices, and we self-reported the matter and the results of the internal review to the GSA. We have promptly responded to inquiries from the GSA since our initial reporting, have met with government officials as requested on two occasions, and intend to cooperate fully with any further inquiries or investigations. While we are not able to reasonably estimate the future financial impact, if any, of the possible sanctions at this time, any of them could, if imposed, have a material adverse impact on our business, future financial position, results of operations, or cash flows. The timing of the government’s review and determination of any outcome of these matters is uncertain and, therefore, it is unclear as to when and to what extent, if any, our previously issued earnings guidance might be impacted. We have incurred, and may incur additional, legal and related costs in connection with our internal review and the government’s response to this matter. During fiscal year 2018, sales related to our GSA contracts were approximately 7.5% of our consolidated sales, with one contract accounting for approximately 5.3% of our consolidated sales and the other contract accounting for approximately 2.2% of our consolidated sales. |
Note 6. Long-Term Debt and Cred
Note 6. Long-Term Debt and Credit Facilities | 12 Months Ended |
Jun. 30, 2018 | |
Long-Term Debt and Credit Facility [Abstract] | |
Debt Disclosure | Long-Term Debt and Credit Facilities Long-term debt, less current maturities as of June 30, 2018 and 2017 , was, in thousands, $161 and $184 , respectively, and current maturities of long-term debt were, in thousands, $23 and $27 , respectively. Long-term debt consists of a long-term note payable, which has an interest rate of 9.25% and matures in 2025 . As of June 30, 2017, long-term debt also included capitalized leases, which matured during fiscal year 2018. Aggregate maturities of long-term debt for the next five years are, in thousands, $23 , $25 , $27 , $30 , and $33 , respectively, and aggregate $46 thereafter. We maintain a $30 million credit facility with a maturity date of October 31, 2019 that allows for both issuances of letters of credit and cash borrowings. This facility provides an option to increase the amount available for borrowing to $55 million at our request, subject to the consent of the participating banks. At June 30, 2018 and 2017 , we had no borrowings outstanding under the credit facility. At June 30, 2018 , we had $1.4 million in letters of credit outstanding, which reduced our borrowing capacity on the credit facility to $28.6 million . The revolving loans under the Credit Agreement may consist of, at our election, advances in U.S. dollars or advances in any other currency that is agreed to by the lenders. The proceeds of the revolving loans are to be used for general corporate purposes, including acquisitions. A portion of the credit facility, not to exceed $10 million of the principal amount, will be available for the issuance of letters of credit. The commitment fee is payable on the unused portion of the credit facility which was immaterial to our operating results for fiscal years 2018 and 2017 . The commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by our ratio of consolidated total indebtedness to adjusted consolidated EBITDA. The interest rate is dependent on the type of borrowings and will be one of the following two options: • The adjusted London Interbank Offered Rate (“Adjusted LIBO Rate” as defined in the Credit Agreement) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period, plus the Eurocurrency Loans margin which can range from 125.0 to 175.0 basis points based on our ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or • The Alternate Base Rate, which is defined as the highest of the fluctuating rate per annum equal to the higher of a. JP Morgan’s prime rate; b. 1% per annum above the Adjusted LIBO rate; or c. 0.5% per annum above the Federal funds rate; plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on our ratio of consolidated total indebtedness to adjusted consolidated EBITDA. Our financial covenants under the Credit Agreement require: • An adjusted leverage ratio of (a) consolidated total indebtedness minus unencumbered U.S. cash on hand in the U.S. in excess of $15,000,000 to (b) consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0 , and • A fixed charge coverage ratio of (a) the sum of (i) consolidated EBITDA, minus (ii) 50% of depreciation expense, minus (iii) taxes paid, minus (iv) dividends and distributions paid, to (b) the sum of (i) scheduled principal payments on indebtedness due and/or paid, plus (ii) interest expense, calculated on a consolidated basis in accordance with GAAP, determined as of the end of each of its fiscal quarters for the trailing four fiscal quarters then ending, to not be less than 1.10 to 1.00 . Interest expense incurred on borrowings were, in thousands, $70 , $37 , and $22 , in fiscal years 2018 , 2017 , and 2016 , respectively. |
Note 7. Employee Benefit Plans
Note 7. Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2018 | |
Employee Benefit Plans [Abstract] | |
Pension and Postemployment Benefits | Employee Benefit Plans Retirement Plans: We have a trusteed defined contribution retirement plan in effect for substantially all domestic employees meeting the eligibility requirements. Employer contributions to the trusteed plan have a five-year vesting schedule and are held for the sole benefit of participants. We also maintain a supplemental employee retirement plan (“SERP”) for executive employees which enables them to defer cash compensation on a pre-tax basis in excess of IRS limitations. The SERP is structured as a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. The discretionary employer contribution for domestic employees is determined annually by the Compensation and Governance Committee of the Board of Directors. Total expense related to employer contributions to the domestic retirement plans was, in millions, $5.9 , $6.4 , and $4.3 for fiscal years 2018 , 2017 , and 2016 , respectively. Employees of certain foreign subsidiaries are covered by local pension or retirement plans. The expense related to employer contributions to these foreign plans for fiscal years 2018 , 2017 , and 2016 was not material. Severance Plans: Our domestic employees participate in severance plans which provide severance benefits to eligible employees meeting the plans’ qualifications, primarily for involuntary termination without cause. There are no statutory requirements for us to contribute to the plans, nor do employees contribute to the plans. The plans hold no assets. Benefits are paid using available cash on hand when eligible employees meet plan qualifications for payment. Benefits are based upon an employee’s years of service and accumulate up to certain limits specified in the plans and include both salary and an allowance for medical benefits. The components and changes in the Benefit Obligation, Accumulated Other Comprehensive Income (Loss), and Net Periodic Benefit Cost are as follows: June 30 (Amounts in Thousands) 2018 2017 Changes and Components of Benefit Obligation: Benefit obligation at beginning of year $ 3,083 $ 2,815 Service cost 521 482 Interest cost 85 65 Actuarial (gain) loss for the period (895 ) (186 ) Benefits paid (75 ) (93 ) Benefit obligation at end of year $ 2,719 $ 3,083 Balance in current liabilities $ 494 $ 561 Balance in noncurrent liabilities 2,225 2,522 Total benefit obligation recognized in the Consolidated Balance Sheets $ 2,719 $ 3,083 June 30 (Amounts in Thousands) 2018 2017 Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): Accumulated Other Comprehensive Income (Loss) at beginning of year $ 1,859 $ 2,146 Net change in unrecognized actuarial gain (loss) 635 (287 ) Accumulated Other Comprehensive Income (Loss) at end of year $ 2,494 $ 1,859 (Amounts in Thousands) Year Ended June 30 Components of Net Periodic Benefit Cost (before tax): 2018 2017 2016 Service cost $ 521 $ 482 $ 490 Interest cost 85 65 74 Amortization of actuarial (gain) loss (260 ) (473 ) (441 ) Net periodic benefit cost — Total cost $ 346 $ 74 $ 123 The benefit cost in the above table includes only normal recurring levels of severance activity, as estimated using an actuarial method. Unusual or non-recurring severance actions are not estimable using actuarial methods and are expensed in accordance with other applicable U.S. GAAP. The actuarial gain is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. The estimated actuarial net gain for the severance plans that will be amortized from accumulated other comprehensive income into earnings over the next fiscal year is, pre-tax in thousands, $381 . Assumptions used to determine fiscal year end benefit obligations are as follows: 2018 2017 Discount Rate 3.4% 2.8% Rate of Compensation Increase 3.0% 3.0% Weighted average assumptions used to determine fiscal year net periodic benefit costs are as follows: 2018 2017 2016 Discount Rate 3.0% 2.4% 2.7% Rate of Compensation Increase 3.0% 3.0% 3.0% |
Note 8. Stock Compensation Plan
Note 8. Stock Compensation Plans | 12 Months Ended |
Jun. 30, 2018 | |
Stock Compensation Plans [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments | Stock Compensation Plans On October 31, 2017, the shareowners approved the 2017 Stock Incentive Plan (“the 2017 Plan”) which allows for the issuance of stock awards, restricted stock awards, stock options, stock appreciation rights, and other stock-based awards, each of which may include performance-based conditions, to certain employees, non-employee directors, consultants, and advisors. The 2017 Plan authorizes the issuance of 1,000,000 shares of our Class B Common Stock, plus approximately 1.2 million unused shares from the former Amended and Restated 2003 Stock Option and Incentive Plan (“the 2003 Plan”). Stock-based compensation expense was $4.2 million , $6.3 million , and $5.6 million in fiscal years 2018 , 2017 and 2016 , respectively. The total income tax benefit for stock compensation arrangements was $2.1 million , $2.9 million , and $2.2 million in fiscal years 2018 , 2017 and 2016 , respectively. Included in the income tax benefit for fiscal years 2018 and 2017 , respectively, was a $0.7 million and $0.5 million reduction in taxes for excess tax benefits from the vesting of stock awards. We generally use treasury shares for issuance of shares. Performance Shares: We award performance shares to officers and other key employees. Under these awards, a number of shares will be issued to each participant based upon the attainment of the applicable performance conditions as applied to a total potential share award made and approved by the Compensation and Governance Committee. Currently outstanding are long-term performance share awards with a contractual life of five years . We also award annual performance share awards with a contractual life of one year. The performance conditions for both types of performance share awards are based on annual performance measurement periods. Annual performance shares vest at the end of the fiscal year. Long-term performance shares vest when issued as Common Stock shortly after the end of the fiscal year in which each performance measurement period is complete. Therefore, the long-term performance share awards include shares applicable to performance measurement periods in future fiscal years that will be measured at fair value when the performance targets are established in future fiscal years. The long-term performance share award is being phased out and has only one year remaining. If a participant is not employed on the date long-term performance shares are issued or the date annual performance shares are vested, the performance share award is forfeited, except in the case of death, retirement, total permanent disability, or certain other circumstances described in our employment policy. To the extent performance conditions are not fully attained, performance shares are forfeited. A summary of performance share activity during fiscal year 2018 is presented below: Number of Shares (1) Weighted Average Grant Date Fair Value Performance Shares outstanding at July 1, 2017 466,778 $11.23 Granted 121,602 $16.62 Vested (401,833 ) $11.86 Forfeited (82,324 ) $16.61 Performance Shares outstanding at June 30, 2018 104,223 $16.52 (1) The shares granted include the maximum number of shares that may vest under performance share awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. As of June 30, 2018 , there was approximately $0.6 million of unrecognized compensation cost related to performance shares, based on the latest estimated attainment of performance conditions. That cost is expected to be recognized over annual performance periods ending July 2018 through July 2019, with a weighted average vesting period of less than one year . The fair value of performance shares is based on the stock price at the date of grant, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding performance share awards. The weighted average grant date fair value was $16.62 , $11.26 , and $12.12 for performance share awards granted in fiscal years 2018 , 2017 , and 2016 , respectively. During fiscal years 2018 , 2017 , and 2016 , respectively, 401,833 ; 294,086 ; and 352,924 performance shares vested at a fair value of $4.8 million , $3.6 million , and $3.6 million . Annual performance shares that were granted in July 2016 and also in July 2017 vested during fiscal year 2018, as a result of annual performance shares now vesting on June 30 rather than in July. The fair value is equal to the closing price, less the present value of annual dividends, of shares of our Common Stock on the date of the grant. The performance shares vested represent the total number of shares vested prior to the reduction of shares withheld to satisfy tax withholding obligations. The number of shares presented in the above table, the amounts of unrecognized compensation, and the weighted average period include long-term performance shares awarded that are applicable to the fiscal year 2019 performance measurement period and will be measured at fair value when the performance targets are established. Relative Total Shareholder Return Performance Units: We award relative total shareholder return performance units (“RTSR”) to key officers. Under these awards, a participant will earn from 0% to 200% of the target award depending upon how the compound annual growth rate of Kimball International common stock ranks within the peer group at the end of the performance period. RTSRs are vested at the end of the performance period and are issued as common shares shortly after the performance measurement period is complete. The contractual life of the RTSRs is generally three years . If a participant is not employed on the date shares are vested, the RTSR award is forfeited, except in the case of death, retirement, total permanent disability, or certain other circumstances described in our employment policy. To the extent performance conditions are not fully attained, RTSRs are forfeited. A summary of RTSR activity during fiscal year 2018 is presented below: Number of Shares (1) Weighted Average Grant Date Fair Value RTSRs outstanding at July 1, 2017 150,492 $14.49 Granted 52,334 $20.65 Vested (37,535 ) $16.25 Forfeited (34,651 ) $15.10 RTSRs outstanding at June 30, 2018 130,640 $18.94 (1) The shares granted include the maximum number of shares that may vest under RTSR awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. As of June 30, 2018 , there was approximately $1.0 million of unrecognized compensation cost related to RTSRs. That cost is expected to be recognized over the vesting periods ending June 2019 through June 2020, with a weighted average vesting period of approximately one year, five months . The grant date fair value of RTSR awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The weighted average grant date fair value was $20.65 , $13.92 , and $15.10 for RTSR awards granted in fiscal years 2018 , 2017 , and 2016 , respectively. During fiscal years 2018 and 2017 , 37,535 and 57,375 , RTSRs vested at a fair value of $0.6 million and $1.0 million , respectively. The RTSR awards vested represent the total number of shares vested prior to the reduction of shares withheld to satisfy tax withholding obligations. During fiscal year 2016 , no RTSRs vested. On May 7, 2018, Robert F. Schneider informed the Board of Directors of Kimball International of his decision to retire as our Chief Executive Officer (“CEO”) and Chairman of the Board. With the announcement of his plan to retire, the Company and Mr. Schneider entered into an Amendment to Executive’s Terms of Employment (“Amendment”) which modified the terms of his RTSR awards so that a prorated portion of awards vest based on the portion of the applicable performance period that Mr. Schneider works prior to his retirement. The Amendment was determined to be a Type III “Improbable to Probable” modification, as the awards were no longer probable of vesting prior to the Amendment. Because the outstanding RTSR awards were improbable of vesting prior to the modification, the original grant date fair value is no longer used to measure compensation cost for the awards, and the cumulative expense recorded to date was reversed resulting in income of $0.3 million . The fair value of his 83,292 maximum number of RTSR shares that can be earned was re-measured on May 7, 2018, at an aggregate fair value of $1.7 million assuming full vesting of the maximum number of shares (or $1.1 million assuming Mr. Schneider retires on October 31, 2018 and receives a prorated maximum number of shares). We estimated that the vesting conditions of the modified award would be met on his expected retirement date of October 31, 2018, and we are therefore recognizing his share-based compensation expense for the pro rata number of shares over a requisite service period beginning on May 7, 2018 and ending on October 31, 2018. Restricted Share Units: Restricted Share Units (“RSUs”) were granted to officers and key employees. Upon vesting, the outstanding number of RSUs and the value of dividends accumulated over the vesting period are converted to shares of common stock. The contractual life of the RSUs is generally three years , however certain awards have shorter or longer contractual lives in order to transition from other types of compensation or to be used as a long-term retention tool. If the employment of a holder of an RSU terminates before the RSU has vested for any reason other than death, retirement, total permanent disability, or certain other circumstances described in our employment policy, the RSU and accumulated dividends will be forfeited. A summary of RSU activity during fiscal year 2018 is presented below: Number of Shares Weighted Average Grant Date Fair Value RSUs outstanding at July 1, 2017 196,616 $12.00 Granted 106,778 $17.14 Vested (79,315 ) $12.61 Forfeited (22,253 ) $13.04 RSUs outstanding at June 30, 2018 201,826 $15.10 As of June 30, 2018 , there was approximately $2.0 million of unrecognized compensation cost related to nonvested RSU compensation arrangements. That cost is expected to be recognized over vesting periods ending October 2018 through June 2021, with a weighted average vesting period of one year, five months . The fair value of RSU awards is based on the stock price at the date of award. The weighted average grant date fair value was $17.14 , $11.85 , and $12.19 for RSU awards granted in fiscal years 2018 , 2017 , and 2016 , respectively. During fiscal years 2018 , 2017 , 2016 , respectively, 79,315 , 86,116 , and 79,461 RSUs vested at a fair value of $1.0 million , $0.8 million , and $0.7 million . The fair value is equal to the closing price of shares of our Common Stock on the date of the grant. The RSU awards vested represent the total number of shares vested prior to the reduction of shares withheld to satisfy tax withholding obligations. Mr. Schneider’s Amendment, in conjunction with his expected retirement, modified the terms of his existing RSU awards so that a prorated portion of awards vest based on the portion of the applicable period that Mr. Schneider works prior to his retirement. The Amendment was determined to be a Type III “Improbable to Probable” modification, as the awards were no longer probable of vesting prior to the Amendment. Because the outstanding RSU awards were improbable of vesting prior to the modification, the original grant date fair value is no longer used to measure compensation cost for the awards, and the cumulative expense recorded to date was reversed resulting in income of $0.1 million . The fair value of his 38,921 RSU awards was re-measured on May 7, 2018, at an aggregate fair value of $0.7 million assuming full vesting (or $0.4 million assuming Mr. Schneider retires on October 31, 2018 and receives a prorated number of shares). We estimated that the vesting conditions of the modified award would be met on his expected retirement date of October 31, 2018, and we are therefore recognizing his share-based compensation expense for the pro rata number of shares over a requisite service period beginning on May 7, 2018 and ending on October 31, 2018. Unrestricted Share Grants: Unrestricted shares may be granted to employees and non-employee members of the Board of Directors as consideration for service to Kimball International. Unrestricted share grants do not have vesting periods, holding periods, restrictions on sale, or other restrictions. The fair value of unrestricted shares is based on the stock price at the date of the award. During fiscal years 2018 , 2017 , and 2016 , respectively, we granted a total of 38,696 , 48,812 , and 47,471 unrestricted shares of common stock at an average grant date fair value of $18.31 , $14.12 , and $11.21 for a total fair value, in thousands, of $709 , $689 , and $532 . These shares are the total number of shares granted, prior to the reduction of shares withheld to satisfy tax withholding obligations. Unrestricted shares were awarded to key employees and non-employee members of the Board of Directors as compensation for director’s fees and as a result of directors’ elections to receive unrestricted shares in lieu of cash payment. Director’s fees are expensed over the period that directors earn the compensation. |
Note 9. Income Taxes
Note 9. Income Taxes | 12 Months Ended |
Jun. 30, 2018 | |
Income Taxes [Abstract] | |
Income Tax Disclosure | Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act reduced federal corporate income tax rates effective January 1, 2018 and changed numerous other provisions. Because Kimball International has a June 30 fiscal year-end, a lower corporate federal income tax rate was being phased in, resulting in a U.S. federal statutory tax rate of 28.1% for our fiscal year ending June 30, 2018. The statutory federal tax rate will be 21% in subsequent fiscal years. Fiscal year 2018 included approximately $3.3 million in reduced income tax expense to reflect federal taxes on current year taxable income at the lower blended effective tax rate, partially offset by a discrete tax impact of $1.8 million in additional expense as a result of applying the new lower federal income tax rates to our net tax assets. The changes included in the Tax Act are broad and complex, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act. The Securities and Exchange Commission has issued rules that allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. We have finalized recording of the tax impacts of June 30, 2018. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Income tax benefits associated with net operating losses of, in thousands, $2,179 expire from fiscal year 2019 to 2036 . Income tax benefits associated with tax credit carryforwards of, in thousands, $2,168 , expire from fiscal year 2023 to 2027 . Valuation allowances were provided as of June 30, 2018 for deferred tax assets relating to state net operating losses of, in thousands, $534 , and for foreign tax credits of, in thousands, $326 , that we currently believe are more likely than not to remain unrealized in the future. In all periods presented, the change in the valuation allowance is reported as a component of income tax expense. The components of the deferred tax assets and liabilities as of June 30, 2018 and 2017 , were as follows: (Amounts in Thousands) 2018 2017 Deferred Tax Assets: Receivables $ 708 $ 1,152 Inventory 428 819 Employee benefits 161 563 Deferred compensation 4,061 13,254 Other current liabilities 70 446 Warranty reserve 591 775 Tax credit carryforwards 2,168 1,982 Sale-leaseback — 1,507 Restructuring — 31 Goodwill 98 — Net operating loss carryforward 2,179 2,256 Miscellaneous 2,135 2,251 Valuation Allowance (860 ) (643 ) Total asset $ 11,739 $ 24,393 Deferred Tax Liabilities: Property and equipment $ 6,062 $ 9,203 Miscellaneous 761 703 Total liability $ 6,823 $ 9,906 Net Deferred Tax Assets $ 4,916 $ 14,487 The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2018 2017 2016 Currently Payable: Federal $ 6,592 $ 19,780 $ 7,548 State 1,636 2,318 1,184 Total current $ 8,228 $ 22,098 $ 8,732 Deferred Taxes: Federal $ 8,236 $ (1,761 ) $ 3,081 State 1,422 175 421 Total deferred $ 9,658 $ (1,586 ) $ 3,502 Total provision for income taxes $ 17,886 $ 20,512 $ 12,234 A reconciliation of the statutory U.S. income tax rate to Kimball International’s effective income tax rate follows: Year Ended June 30 2018 2017 2016 (Amounts in Thousands) Amount % Amount % Amount % Tax provision computed at U.S. federal statutory rate $ 14,703 28.1 % $ 20,306 35.0 % $ 11,686 35.0 % State income taxes, net of federal income tax benefit 2,198 4.2 1,620 2.8 1,043 3.1 Domestic manufacturing deduction (617 ) (1.2 ) (1,495 ) (2.6 ) (286 ) (0.9 ) Research credit (180 ) (0.3 ) (218 ) (0.4 ) (346 ) (1.0 ) Remeasurement of tax assets and liabilities related to the Tax Act 1,839 3.5 — — — — Other - net (57 ) (0.1 ) 299 0.6 137 0.4 Total provision for income taxes $ 17,886 34.2 % $ 20,512 35.4 % $ 12,234 36.6 % Net cash payments for income taxes were, in thousands, $13,937 , $20,881 , and $7,963 in fiscal years 2018 , 2017 , and 2016 , respectively. Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2018 , 2017 , and 2016 were as follows: (Amounts in Thousands) 2018 2017 2016 Beginning balance - July 1 $ 1,888 $ 2,077 $ 1,920 Tax positions related to prior fiscal years: Additions 222 213 301 Reductions (1,030 ) (581 ) (43 ) Tax positions related to current fiscal year: Additions — 391 — Reductions — — — Settlements — — — Lapses in statute of limitations (91 ) (212 ) (101 ) Ending balance - June 30 $ 989 $ 1,888 $ 2,077 Portion that, if recognized, would reduce tax expense and effective tax rate $ 832 $ 1,377 $ 1,407 We recognize interest and penalties related to unrecognized tax benefits in the Provision for Income Taxes line of the Consolidated Statements of Income. Amounts accrued for interest and penalties were as follows: As of June 30 (Amounts in Thousands) 2018 2017 2016 Accrued Interest and Penalties: Interest $ 70 $ 84 $ 102 Penalties $ 98 $ 102 $ 108 Interest and penalties income (expense) recognized for fiscal years 2018 , 2017 , and 2016 were, in thousands, $11 , $23 , and $(1) , respectively. Kimball International, or one of its wholly-owned subsidiaries, files U.S. federal income tax returns and income tax returns in various state and local jurisdictions. We are no longer subject to any significant U.S. federal tax examinations by tax authorities for years before fiscal year 2015, and to various state and local income tax examinations by tax authorities for years before 2014. We do not expect the change in the amount of unrecognized tax benefits in the next 12 months to have a significant impact on our results of operations or financial position. We had no net tax impact related to the one-time transition tax on the deemed repatriation of undistributed foreign earnings as required by the Tax Act because we utilized available foreign tax credits to offset the transition tax. We consider the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. We have not recorded a deferred tax liability of approximately, in thousands, $191 related to the U.S. federal and state income taxes and foreign withholding taxes on approximately, in thousands, $589 of undistributed earnings of foreign subsidiaries indefinitely invested outside the United States. Should we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will no longer be indefinitely invested outside the United States. |
Note 10. Fair Value
Note 10. Fair Value | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value [Abstract] | |
Fair Value Disclosures | Fair Value We categorize assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows: • Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. • Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during fiscal years 2018 and 2017 . We hold a total investment of $2.0 million in a privately-held company, consisting of $0.5 million in non-marketable equity securities and $1.5 million in stock warrants. The investment in non-marketable equity securities is classified as a level 3 financial asset and is accounted for using the cost method, as explained in the Financial Instruments Not Carried At Fair Value section below. The investment in stock warrants is also classified as a level 3 financial asset and is accounted for as a derivative instrument valued on a recurring basis, as explained in the Financial Instruments Recognized at Fair Value section below. See Note 12 - Investments of Notes to Consolidated Financial Statements for further information regarding the investment in non-marketable equity securities, and Note 11 - Derivative Instruments of Notes to Consolidated Financial Statements for further information regarding the investment in stock warrants. No other purchases or sales of level 3 assets occurred during the fiscal years ended June 30, 2018 and 2017 . In connection with the acquisition of D’style, we valued long-lived and intangible assets at their estimated fair values at the acquisition date. The fair value estimates for intangible assets were based upon assumptions related to the future cash flows and discount rates utilizing currently available information, and in some cases, valuation results from independent valuation specialists (Level 3 determination of fair value). Subsequent to the acquisition, we determine the fair value of our long-lived and intangible assets on a non-recurring basis in connection with our periodic evaluations of such assets for potential impairment and record impairment charges when such fair value estimates are lower than the carrying values of the assets. As part of the acquisition, contingent earn-out payments up to $2.2 million may be paid based upon fiscal year 2018 and 2019 D’style, Inc. operating income compared to a predetermined target for each fiscal year. As of the November 6, 2017 acquisition date, the fair value of the earn-out liability was $1.7 million . The liability is carried at fair value and is classified in Level 3 of the fair value hierarchy. During fiscal year ended June 30, 2018, the fair value of the contingent earn-out liability was adjusted to $1.1 million , resulting in a $0.6 million pre-tax gain, recognized as $0.8 million pre-tax gain included in Selling and Administrative Expenses, offset in part by $0.2 million of Interest Expense attributable to an adjustment of the contingent earn-out liability that will be based upon fiscal year 2018 and 2019 D’style, Inc. operating income compared to a predetermined target for each fiscal year. Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices. Cash Equivalents: Commercial Paper 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: Secondary market certificates of deposit 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: Municipal bonds 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: U.S. Treasury and federal agencies 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Derivative Assets: Stock warrants 3 Market - The privately-held company is currently in an early stage of start-up. The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Liability: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. Recurring Fair Value Measurements: As of June 30, 2018 and June 30, 2017 , the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market or income approach are categorized as follows: (Amounts in Thousands) June 30, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 24,407 $ — $ — $ 24,407 Cash equivalents: Commercial paper — 25,918 — 25,918 Available-for-sale securities: Secondary market certificates of deposit — 11,850 — 11,850 Available-for-sale securities: Municipal bonds — 16,508 — 16,508 Available-for-sale securities: U.S. Treasury and federal agencies — 6,249 — 6,249 Derivatives: Stock warrants — — 1,500 1,500 Trading Securities: Mutual funds in nonqualified SERP 12,114 — — 12,114 Total assets at fair value $ 36,521 $ 60,525 $ 1,500 $ 98,546 Liabilities Derivatives: Foreign exchange contracts $ — $ 10 $ — $ 10 Contingent earn-out liability — — 1,056 1,056 Total liabilities at fair value $ — $ 10 $ 1,056 $ 1,066 (Amounts in Thousands) June 30, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 30,383 $ — $ — $ 30,383 Cash equivalents: Commercial paper — 29,102 — 29,102 Available-for-sale securities: Secondary market certificates of deposit — 10,336 — 10,336 Available-for-sale securities: Municipal bonds — 22,154 — 22,154 Available-for-sale securities: U.S. Treasury and federal agencies — 3,193 — 3,193 Derivatives: Stock warrants — — 1,500 1,500 Trading Securities: Mutual funds in nonqualified SERP 11,194 — — 11,194 Total assets at fair value $ 41,577 $ 64,785 $ 1,500 $ 107,862 The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, a bond fund, and a money market fund. The SERP investment assets are offset by a SERP liability which represents our obligation to distribute SERP funds to participants. See Note 12 - Investments of Notes to Consolidated Financial Statements for further information regarding the SERP. Non-Recurring Fair Value Measurements: Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Non-recurring fair value adjustment Level Valuation Technique/Inputs Used Impairment of assets held for sale (transportation equipment) 3 Market - Quoted market prices for similar assets sold, adjusted for features specific to the asset During the fourth quarter of fiscal year 2017, we classified our fleet of over-the-road tractors and trailers as held for sale and recognized impairment of $0.2 million as the book value exceeded the $4.2 million fair market value less selling costs. Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment) 3 Cost Method, with impairment recognized using a market-based valuation technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments. Long-term debt (carried at amortized cost) 3 Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball International’s non-performance risk The investment in non-marketable equity securities is accounted for using the cost method because we do not have the ability to exercise significant influence over the operating and financial policies of the investee. On a periodic basis, but no less frequently than quarterly, these investments are assessed for impairment when there are events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss. The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk. |
Note 11. Derivative Instruments
Note 11. Derivative Instruments | 12 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | Derivative Instruments Foreign Exchange Contracts: We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business. As of June 30, 2018 , we had outstanding foreign exchange contracts to hedge currencies against the U.S. dollar in the aggregate notional amount of $0.7 million . The notional amount is an indicator of the volume of derivative activities but is not an indicator of the potential gain or loss on the derivatives. Based on fair values as of June 30, 2018 , we estimate that approximately $10 thousand of pre-tax derivative loss deferred in Accumulated Other Comprehensive Income (Loss) will be reclassified into earnings, along with the earnings effects of related forecasted transactions, within the fiscal year ending June 30, 2019. Losses on foreign exchange contracts are generally offset by gains in operating costs in the income statement when the underlying hedged transaction is recognized in earnings. Because gains or losses on foreign exchange contracts fluctuate partially based on currency spot rates, the future effect on earnings of the cash flow hedges alone is not determinable, but in conjunction with the underlying hedged transactions, the result is expected to be a decline in currency risk. The maximum length of time we had hedged our exposure to the variability in future cash flows was 4 months as of June 30, 2018 . Stock Warrants: We hold a total investment of $2.0 million in a privately-held company, including $1.5 million in stock warrants purchased during fiscal year 2017. The investment in stock warrants is accounted for as a derivative instrument and is included in the Other Assets line of the Consolidated Balance Sheets. The stock warrants are convertible into equity shares of the privately-held company upon achieving certain milestones. The value of the stock warrants will fluctuate primarily in relation to the value of the privately-held company's underlying securities, either providing an appreciation in value or potentially expiring with no value. During the year ended June 30, 2018 , the change in fair value of the stock warrants was not significant. See Note 10 - Fair Value of Notes to Consolidated Financial Statements for more information on the valuation of these securities. Information on the location and amounts of derivative fair values in the Consolidated Balance Sheets are presented below. Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets $ — $ — Accrued expenses $ 10 $ — Derivatives not designated as hedging instruments: Stock warrants Other Assets $ 1,500 $ 1,500 Total derivatives $ 1,500 $ 1,500 $ 10 $ — |
Note 12. Investments
Note 12. Investments | 12 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure | Investments Investment Portfolio: Our investment portfolio consists of municipal bonds, certificates of deposit purchased in the secondary market, and U.S. Treasury and federal agency securities. Municipal bonds include general obligation bonds and revenue bonds, some of which are pre-refunded. U.S. Treasury securities represent Treasury Bills and Notes of the U.S. government. Federal agency securities represent debt securities of a U.S. government sponsored agency, and certain of these securities are callable. Our investment policy dictates that municipal bonds, U.S. Treasury and federal agency securities must be investment grade quality. Our secondary market certificates of deposit are classified as investment securities, being purchased in the secondary market through a broker and available to be sold in the secondary market. All certificates of deposit are FDIC insured. Our investment portfolio is available for use in current operations, therefore investments are recorded within Current Assets in the Consolidated Balance Sheets. The contractual maturities of our investment portfolio were as follows (maturity dates for municipal bonds are based on pre-refunded dates and maturity dates for government agency securities are based on the first available call date, if applicable): June 30, 2018 (Amounts in Thousands) Certificates of Deposit Municipal Bonds U.S. Treasury and Federal Agencies Within one year $ 9,292 $ 14,502 $ 2,196 After one year through two years 2,558 2,006 4,053 Total Fair Value $ 11,850 $ 16,508 $ 6,249 All investments are classified as available-for-sale securities which are recorded at fair value. See Note 10 - Fair Value of Notes to Consolidated Financial Statements for more information on the fair value of available-for-sale securities. The amortized cost basis reflects the original purchase price, with discounts and premiums amortized over the life of the available-for-sale securities. Unrealized losses on available-for-sale securities are recognized in earnings when there is intent to sell or it is likely to be required to sell before recovery of the loss, or when the available-for-sale securities have incurred a credit loss. Otherwise, unrealized gains and losses are recorded net of the tax-related effect as a component of Shareowners’ Equity. June 30, 2018 (Amounts in Thousands) Certificates of Deposit Municipal Bonds U.S. Treasury and Federal Agencies Amortized cost basis $ 11,850 $ 16,532 $ 6,266 Unrealized holding gains — — — Unrealized holding losses — (24 ) (17 ) Fair Value $ 11,850 $ 16,508 $ 6,249 June 30, 2017 (Amounts in Thousands) Certificates of Deposit Municipal Bonds U.S. Treasury and Federal Agencies Amortized cost basis $ 10,334 $ 22,183 $ 3,200 Unrealized holding gains 2 — — Unrealized holding losses — (29 ) (7 ) Fair Value $ 10,336 $ 22,154 $ 3,193 An immaterial amount of investments were in a continuous unrealized loss position for greater than 12 months as of June 30, 2018 . There was an immaterial amount of realized losses as a result of sales during fiscal year 2018 , and there were no realized gains or losses during fiscal year 2017 . Supplemental Employee Retirement Plan Investments: We maintain a self-directed supplemental employee retirement plan (“SERP”) in which executive employees are eligible to participate. The SERP utilizes a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. We recognize SERP investment assets on the Consolidated Balance Sheets at current fair value. A SERP liability of the same amount is recorded on the Consolidated Balance Sheets representing an obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. Net unrealized holding gains (losses) for securities held at June 30, 2018 , 2017 , and 2016 were, in thousands, $585 , $223 , and $(484) , respectively. SERP asset and liability balances were as follows: June 30 (Amounts in Thousands) 2018 2017 SERP investments - current asset $ 3,868 $ 1,259 SERP investments - other long-term asset 8,246 9,935 Total SERP investments $ 12,114 $ 11,194 SERP obligation - current liability $ 3,868 $ 1,259 SERP obligation - other long-term liability 8,246 9,935 Total SERP obligation $ 12,114 $ 11,194 Non-marketable equity securities: We hold a total investment of $2.0 million in a privately-held company, including $0.5 million in non-marketable equity securities purchased during fiscal year 2016. The investment in non-marketable equity securities is included in the Other Assets line of the Consolidated Balance Sheets. See Note 10 - Fair Value of Notes to Consolidated Financial Statements for more information on the valuation of these securities. We do not hold a majority voting interest and are not the variable interest primary beneficiary of the privately-held company, thus consolidation is not required. |
Note 13. Accrued Expenses
Note 13. Accrued Expenses | 12 Months Ended |
Jun. 30, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Liabilities Disclosure | Accrued Expenses Accrued expenses consisted of: June 30 (Amounts in Thousands) 2018 2017 Compensation $ 22,045 $ 22,815 Selling 7,134 6,704 Employer retirement contribution 5,605 6,196 Taxes 3,598 2,568 Insurance 4,210 4,382 Restructuring — 80 Rent 2,997 2,944 Other expenses 3,705 3,329 Total accrued expenses $ 49,294 $ 49,018 |
Note 14. Geographic Information
Note 14. Geographic Information | 12 Months Ended |
Jun. 30, 2018 | |
Geographic Area Information [Abstract] | |
Geographic Information [Text Block] | Geographic Information The following geographic area data includes net sales based on the location where title transfers. Year Ended June 30 (Amounts in Thousands) 2018 2017 2016 Net Sales: United States $ 672,918 $ 658,474 $ 622,096 Foreign 12,682 11,460 13,006 Total Net Sales $ 685,600 $ 669,934 $ 635,102 Substantially all long-lived assets were located in the United States for each of the three fiscal years ended June 30, 2018 . Long-lived assets include property and equipment and other long-term assets such as software. |
Note 15. Earnings Per Share
Note 15. Earnings Per Share | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share are based on the weighted average number of shares outstanding during the period. Diluted earnings per share are based on the weighted average number of shares outstanding plus the assumed issuance of common shares for all potentially dilutive securities. Year Ended June 30 (Amounts in Thousands, Except for Per Share Data) 2018 2017 2016 Net Income $ 34,439 $ 37,506 $ 21,156 Average Shares Outstanding for Basic EPS Calculation 37,314 37,334 37,462 Dilutive Effect of Average Outstanding Compensation Awards 180 499 390 Average Shares Outstanding for Diluted EPS Calculation 37,494 37,833 37,852 Basic Earnings Per Share $ 0.92 $ 1.00 $ 0.56 Diluted Earnings Per Share $ 0.92 $ 0.99 $ 0.56 |
Note 16. Accumulated Other Comp
Note 16. Accumulated Other Comprehensive Income | 12 Months Ended |
Jun. 30, 2018 | |
Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income During fiscal year 2018 and 2017 , the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows: (Amounts in Thousands) Unrealized Investment Gain (Loss) Postemployment Benefits Net Actuarial Gain (Loss) Derivative Gain (Loss) Accumulated Other Comprehensive Income Balance at June 30, 2016 $ — $ 1,311 $ — $ 1,311 Other comprehensive income (loss) before reclassifications (21 ) 114 — 93 Reclassification to (earnings) loss — (289 ) — (289 ) Net current-period other comprehensive income (loss) (21 ) (175 ) — (196 ) Balance at June 30, 2017 $ (21 ) $ 1,136 $ — $ 1,115 Other comprehensive income (loss) before reclassifications (8 ) 599 (7 ) 584 Reclassification to (earnings) loss 3 (176 ) — (173 ) Net current-period other comprehensive income (loss) (5 ) 423 (7 ) 411 Reclassification of change in enacted income tax rate to retained earnings $ (5 ) $ 295 $ — $ 290 Balance at June 30, 2018 $ (31 ) $ 1,854 $ (7 ) $ 1,816 The following reclassifications were made from Accumulated Other Comprehensive Income to the Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income Fiscal Year Ended Affected Line Item in the Consolidated Statements of Income June 30, (Amounts in Thousands) 2018 2017 Realized Investment Gain (Loss) on available-for-sale securities (1) $ (4 ) $ — Non-operating income (expense), net 1 — Benefit (Provision) for Income Taxes $ (3 ) $ — Net Income Postemployment Benefits Amortization of Actuarial Gain (2) $ 168 $ 301 Cost of Sales 92 172 Selling and Administrative Expenses (84 ) (184 ) Benefit (Provision) for Income Taxes $ 176 $ 289 Net Income Total Reclassifications for the Period $ 173 $ 289 Net Income Amounts in parentheses indicate reductions to income. (1) See Note 12 - Investments of Notes to Consolidated Financial Statements for further information on available-for-sale securities. (2) See Note 7 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 17. Restructuring Expense
Note 17. Restructuring Expense | 12 Months Ended |
Jun. 30, 2018 | |
Restructuring Expense [Abstract] | |
Restructuring and Related Activities Disclosure | Restructuring During fiscal year 2018, we recognized no restructuring expense as the restructuring plan was complete. We recognized a pre-tax restructuring gain of $1.8 million in fiscal year 2017 which included a gain on the sale of the Post Falls facility. In fiscal year 2016 , we recognized pre-tax restructuring expense $7.3 million. As of June 30, 2018, we had no remaining restructuring liability as the June 30, 2017 balance of less than $0.1 million was paid during fiscal year 2018. Capacity Utilization Restructuring Plan: In November 2014, we announced a capacity utilization restructuring plan which included the consolidation of our metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana, and the reduction of our Company plane fleet from two jets to one. The transfer of work from our Idaho facility involved the start-up of metal fabrication capabilities in an existing Company-owned facility, along with the transfer of certain assembly operations into two additional existing Company-owned facilities, all located in southern Indiana. All production was transferred out of the Idaho facility as of March 2016, after which work continued during fiscal year 2017 in the Indiana facilities to train employees, ramp up production and eliminate the inefficiencies associated with the start-up of production in these facilities. The improvement of customer delivery, supply chain dynamics, and reduction of transportation costs generated pre-tax annual savings of approximately $5 million beginning in our fiscal year 2017. In addition, during fiscal year 2017, we sold our Post Falls, Idaho facility and land which was classified as held for sale. Therefore, fiscal year 2017 restructuring includes a pre-tax gain of $2.1 million as the $12.0 million selling price net of selling costs exceeded the book value of the facility and land. The restructuring plan is complete with pre-tax restructuring totaling $10.8 million . Excluding the pre-tax gain from the sale of the Idaho facility of $2.1 million , the restructuring expense consisted of $4.9 million of transition, training, and other employee costs, $6.9 million of plant closure and other exit costs, and $1.1 million of non-cash asset impairment. Approximately 91% of the total restructuring expense was cash expense. We utilized available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring is included in the Restructuring (Gain) Expense line item on our Consolidated Statements of Income. |
Note 18. Variable Interest Enti
Note 18. Variable Interest Entities | 12 Months Ended |
Jun. 30, 2018 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities Our involvement with variable interest entities (“VIEs”) is limited to situations in which we are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the VIE’s economic performance. Thus, consolidation is not required. Our involvement with VIEs consists of an investment in a privately-held company consisting of non-marketable equity securities and stock warrants, and notes receivable related to independent dealership financing. The non-marketable equity securities and stock warrants were valued at $0.5 million and $1.5 million , respectively, at both June 30, 2018 and June 30, 2017 and were included in the Other Assets line of the Consolidated Balance Sheets. For more information related to our investment in the privately-held company, see Note 10 - Fair Value of Notes to Consolidated Financial Statements. The carrying value of the notes receivable for independent dealership financing were $0.6 million , net of a $0.1 million allowance, and $0.4 million as of June 30, 2018 and June 30, 2017 , respectively, and were included on the Receivables and Other Assets lines of our Consolidated Balance Sheets. We have no obligation to provide additional funding to the VIEs, and thus our exposure and risk of loss related to the VIEs is limited to the carrying value of the investment and notes receivable. Financial support provided by Kimball International to the VIEs was limited to the items discussed above during the fiscal year ended June 30, 2018 . |
Note 19. Credit Quality and All
Note 19. Credit Quality and Allowance for Credit Losses of Notes Receivable | 12 Months Ended |
Jun. 30, 2018 | |
Credit Quality and Allowance for Credit Losses of Notes Receivable [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure | Credit Quality and Allowance for Credit Losses of Notes Receivable We monitor credit quality and associated risks of notes receivable on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. As of June 30, 2018 and 2017 , we had no material past due outstanding notes receivable. As of June 30, 2018 As of June 30, 2017 (Amounts in Thousands) Unpaid Balance Related Allowance Receivable Net of Allowance Unpaid Balance Related Allowance Receivable Net of Allowance Independent Dealership Financing $ 666 $ 50 $ 616 $ 433 $ — $ 433 Other Notes Receivable 183 183 — 138 126 12 Total $ 849 $ 233 $ 616 $ 571 $ 126 $ 445 |
Note 20. Quarterly Financial In
Note 20. Quarterly Financial Information (Unaudited) | 12 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Quarterly Financial Information | Quarterly Financial Information (Unaudited) Three Months Ended (Amounts in Thousands, Except for Per Share Data) September 30 December 31 March 31 June 30 Fiscal Year 2018: Net Sales $ 169,517 $ 173,674 $ 157,897 $ 184,512 Gross Profit 59,589 53,936 47,755 60,166 Net Income 10,957 7,378 5,850 10,254 Basic Earnings Per Share $ 0.29 $ 0.20 $ 0.16 $ 0.28 Diluted Earnings Per Share $ 0.29 $ 0.20 $ 0.16 $ 0.28 Fiscal Year 2017: Net Sales $ 174,996 $ 169,887 $ 153,068 $ 171,983 Gross Profit 58,687 55,758 51,052 57,808 Restructuring (Gain) Expense (1,832 ) — — — Net Income 10,998 8,717 7,231 10,560 Basic Earnings Per Share $ 0.29 $ 0.23 $ 0.19 $ 0.28 Diluted Earnings Per Share $ 0.29 $ 0.23 $ 0.19 $ 0.28 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | 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, 2018 Valuation Allowances: Short-Term Receivables $ 1,626 $ (25 ) $ 204 $ (488 ) $ 1,317 Long-Term Notes Receivable $ 109 $ (3 ) $ 33 $ — $ 139 Deferred Tax Asset $ 643 $ — $ 326 $ (109 ) $ 860 Year Ended June 30, 2017 Valuation Allowances: Short-Term Receivables $ 2,145 $ (206 ) $ 101 $ (414 ) $ 1,626 Long-Term Notes Receivable $ 118 $ (9 ) $ — $ — $ 109 Deferred Tax Asset $ 687 $ — $ — $ (44 ) $ 643 Year Ended June 30, 2016 Valuation Allowances: Short-Term Receivables $ 1,522 $ 374 $ 310 $ (61 ) $ 2,145 Long-Term Notes Receivable $ 618 $ (11 ) $ (489 ) $ — $ 118 Deferred Tax Asset $ 687 $ — $ — $ — $ 687 A valuation allowance totaling $489 thousand transferred from long-term to short-term during the year ended June 30, 2016 and was a reduction to expense during the year ended June 30, 2017 as the entire receivable was collected. |
Note 1. Summary of Significan30
Note 1. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The consolidated financial statements include the accounts of all subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation. |
Operating Segments | Operating Segments: We sell a portfolio of furniture products and services under three brands: Kimball, National, and Kimball Hospitality. We consider each of the three brands to be operating segments which aggregate into one reportable segment. The brands operate within six market verticals, selling to similar types of customers. Our products and services are similar in nature and utilize similar production and distribution processes. Our three brands share similar long-term economic characteristics. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts included in the consolidated financial statements and related note disclosures. While efforts are made to assure estimates used are reasonably accurate based on management’s knowledge of current events, actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition: We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract. Title and risk of loss are transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. Shipping and handling fees billed to customers are recorded as sales while the related shipping and handling costs are included in cost of goods sold. We recognize sales net of applicable sales tax. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time of the sale, resulting in a reduction of revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash equivalents consist primarily of highly liquid investments with original maturities of three months or less at the time of acquisition. Cash and cash equivalents consist of bank accounts, money market funds, and commercial paper. Bank accounts are stated at cost, which approximates fair value, and money market funds and commercial paper are stated at fair value. |
Short-Term Investments | Short-Term Investments: Short-term investments consist primarily of municipal bonds, certificates of deposit purchased in the secondary market, and U.S. Treasury and federal agency securities. Municipal bonds include general obligation bonds and revenue bonds, some of which are pre-refunded. U.S. Treasury securities represent Treasury Bills and Notes of the U.S. government. Federal agency securities represent debt securities of a U.S. government sponsored agency, some of which are callable. Our investment policy dictates that municipal bonds, U.S. Treasury and federal agency securities must be investment grade quality. Our secondary market certificates of deposit are classified as investment securities, being purchased in the secondary market through a broker and available to be sold in the secondary market. All certificates of deposit are FDIC insured. All investments have maturities exceeding three months and are classified as available-for-sale securities which are recorded at fair value. Unrealized losses on available-for-sale securities are recognized in earnings when there is intent to sell or it is likely to be required to sell before recovery of the loss, or when the available-for-sale securities have incurred a credit loss. Otherwise, unrealized gains and losses are recorded net of the tax-related effect as a component of Shareowners’ Equity. |
Notes Receivable and Trade Accounts Receivable | Notes Receivable and Trade Accounts Receivable: Our notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable. Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. Customary terms require payment within 30 days , with terms beyond 30 days being considered extended. |
Inventories | Inventories: Inventories are stated at the lower of cost or market value. Cost includes material, labor, and applicable manufacturing overhead. Costs associated with underutilization of capacity are expensed as incurred. The last-in, first-out (“LIFO”) method was used for approximately 92% and 94% of consolidated inventories at June 30, 2018 and June 30, 2017 , respectively. The remaining inventories were valued using the first-in, first-out (“FIFO”) method and average cost method. Inventories are adjusted for excess and obsolete inventory. Evaluation of excess inventory includes such factors as anticipated usage, inventory turnover, inventory levels, and product demand levels. Factors considered when evaluating obsolescence include the age of on-hand inventory and reduction in value due to damage, use as showroom samples, design changes, or cessation of product lines. |
Property, Equipment, and Depreciation | Property, Equipment, and Depreciation: Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful life of the assets using the straight-line method for financial reporting purposes. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease. Major maintenance activities and improvements are capitalized; other maintenance, repairs, and minor renewals are expensed. Depreciation and expenses for maintenance, repairs and minor renewals are included in both the Cost of Sales line and the Selling and Administrative Expense line of the Consolidated Statements of Income. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount. We also have the option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test. We compare the carrying value of the reporting unit to the reporting unit’s fair value to identify impairment. If the fair value of the reporting unit is less than the carrying value, goodwill is written down to its fair value. Goodwill is assigned to and the fair value is tested at the reporting unit level. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting unit considers current market conditions existing at the assessment date. |
Impairment or Disposal of Intangible Assets | Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. |
Other Intangible Assets | Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred. Trade names, non-compete agreements, and product rights to produce and sell certain products are amortized on a straight-line basis over their estimated useful lives. Capitalized customer relationships are amortized on estimated attrition rate of customers. We have no intangible assets with indefinite useful lives which are not subject to amortization. |
Research and Development | Research and Development: The costs of research and development are expensed as incurred. |
Advertising | Advertising: Advertising costs are expensed as incurred. |
Insurance and Self-insurance | Insurance and Self-insurance: We are self-insured for certain employee health benefits including medical, short-term disability, and dental. Our self-insured reserves are estimated based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. We carry medical coverage for our eligible workforce not covered by self-insured plans. Insurance benefits are not provided to retired employees. We also participate, along with other companies, in a group captive insurance company (“Captive”). The Captive insures losses related to workman's compensation, motor vehicle liability, product liability, and general liability. The Captive reinsures catastrophic losses for all participants, including Kimball International, in excess of predetermined amounts. We pay premiums to the Captive which accumulate as a prepaid deposit estimated for losses related to the above coverage. We also maintain a reserve for outstanding unpaid workers’ compensation claims, including an estimate of incurred but not reported claims. Additionally, we purchase insurance coverage for property insurance, director and officer liability insurance, umbrella coverage, and other risks. |
Income Taxes | Income Taxes: Deferred income taxes are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The deferred taxes are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment. We classify all deferred tax assets and liabilities as noncurrent in our consolidated balance sheets. |
Income Tax Uncertainties | We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex uncertain tax positions, which may require an extended period of time to resolve. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. We maintain a liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions. As tax positions are effectively settled, the tax liability is adjusted accordingly. We recognize interest and penalties related to unrecognized tax benefits in the Provision for Income Taxes line of the Consolidated Statements of Income. |
Concentrations of Credit Risk | Concentrations of Credit Risk: Certain business and credit risks are inherent in our business. Additionally, we currently have notes receivable from independent dealership financing and other miscellaneous notes receivable which are included on the Receivables and Other Assets lines of the Consolidated Balance Sheets. |
Off-Balance-Sheet Risk | Off-Balance Sheet Risk: Our off-balance sheet arrangements are limited to standby letters of credit, a performance bond, and operating leases entered into in the normal course of business as described in Note 5 - Commitments and Contingent Liabilities of Notes to Consolidated Financial Statements. |
Non-operating Income and Expense | Non-operating Income and Expense: Non-operating income and expense include the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements, bank charges, investment gain or loss, non-production rent income, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses. |
Foreign Currency Translation | Foreign Currency Translation: Our foreign operations use the U.S. Dollar as their functional currency. Foreign currency assets and liabilities are remeasured into functional currencies at end-of-period exchange rates, except for nonmonetary assets and equity, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the weighted average exchange rate during the fiscal year, except for expenses related to nonmonetary assets, which are remeasured at historical exchange rates. Gains and losses from foreign currency remeasurement are reported in the Non-operating income or expense line item on the Consolidated Statements of Income. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities: Derivative financial instruments are recognized on the balance sheet as assets and liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in earnings or accumulated other comprehensive income, depending on whether a derivative is designated and effective as part of a hedge transaction, and if it is, the type of hedge transaction. Hedge accounting is utilized when a derivative is expected to be highly effective upon execution and continues to be highly effective over the duration of the hedge transaction. Hedge accounting permits gains and losses on derivative instruments to be deferred in accumulated other comprehensive income and subsequently included in earnings in the periods in which earnings are affected by the hedged item, or when the derivative is determined to be ineffective. We use derivatives primarily for forward purchases of foreign currency to manage exposure to the variability of cash flows, primarily related to the foreign exchange rate risks inherent in forecasted transactions denominated in foreign currency. |
Stock-Based Compensation | Stock-Based Compensation: As described in Note 8 - Stock Compensation Plans of Notes to Consolidated Financial Statements, we maintain a stock-based compensation plan which allows for the issuance of stock unit awards, restricted stock awards, stock options, stock appreciation rights, and other stock-based awards. each of which may include performance-based conditions, to certain employees, non-employee directors, consultants, and advisors. We recognize the cost resulting from share-based payment transactions using a fair-value-based method. The estimated fair value of outstanding performance shares and restricted share units is based on the stock price at the date of the grant. For performance shares, the price is reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding performance share awards. The estimated fair value of outstanding relative total shareholder return performance units (“RTSR”) is based on the grant date fair value of RTSR awards using a Monte Carlo simulation which includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. Stock-based compensation expense is recognized for the portion of the awards that are ultimately expected to vest. Forfeitures are accounted for as they occur. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In February 2018, the Financial Accounting Standards Board (“FASB”) issued guidance that allows the reclassification of the income tax effects resulting from the Tax Cuts and Jobs Act (“Tax Act”) from accumulated other comprehensive income to retained earnings. Under the Tax Act, deferred taxes were adjusted to reflect the reduction of the federal income tax rate to the newly enacted federal income tax rate which left the tax effects on items within accumulated other comprehensive income stranded at historical tax rates. This guidance requires qualitative disclosure of the accounting policy for releasing income tax effects from accumulated other comprehensive income and if the reclassification election is made, the impacts of the change on the consolidated financial statements. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the Tax Act changes are recognized. We early adopted the guidance in our fourth quarter of fiscal year 2018 and reclassified the entire tax effect out of accumulated other comprehensive income and into retained earnings in the amount of $0.3 million . Our policy for releasing disproportionate income tax effects from accumulated other comprehensive income utilizes the aggregate approach. In August 2017, the FASB issued guidance on accounting for derivatives and hedging activities. The objective of this guidance is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted. We early adopted the guidance in our fourth quarter of fiscal year 2018 and the guidance did not have a material effect on our consolidated financial statements. In January 2017, the FASB issued guidance on simplifying the test for goodwill impairment by eliminating the requirement to estimate the implied fair value of a reporting unit from the goodwill impairment test. Under the guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The guidance is effective prospectively for our first quarter of fiscal year 2021 financial statements with early adoption permitted. In conjunction with our acquisition of D’style, Inc. we early adopted the guidance in our second quarter of fiscal year 2018, and the guidance did not have a material effect on our consolidated financial statements. In January 2017, the FASB issued guidance which revises the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted and the amendments can be applied to transactions occurring before the guidance was issued as long as the applicable financial statements have not been issued. In conjunction with our acquisition of D’style, Inc., we early adopted the guidance in our second quarter of fiscal year 2018 and the guidance did not have a material effect on our consolidated financial statements. In August 2016, the FASB issued guidance that clarifies and provides specific guidance on eight cash flow classification issues that are not addressed by current GAAP. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows, including how to classify contingent consideration payments made after a business combination, which will impact the presentation of future earn-out payments for our acquisition of D’style, Inc. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted. We early adopted the guidance in our second quarter of fiscal year 2018 and the guidance did not have a material effect on our consolidated financial statements. In July 2015, the FASB issued guidance on simplifying the measurement of inventory which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Inventory within the scope of this update is required to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The guidance does not impact inventory measured on a last-in, first-out (“LIFO”) basis. The guidance was adopted prospectively in our first quarter of fiscal year 2018 and did not have a material effect on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted: In June 2018, the FASB issued guidance to improve the accounting for and to reduce the cost and complexity of share-based payments to nonemployees for goods and services. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted but may not be adopted earlier than the adoption of the new revenue standard. We expect to adopt the standard at the beginning of our fiscal year 2019, and it will be applied to awards that have not been settled by the date of adoption. We do not expect the adoption to have a material effect on our consolidated financial statements. In May 2017, the FASB issued guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted and will be applied prospectively to awards modified on or after the adoption date. We do not expect the adoption to have a material effect on our consolidated financial statements. In March 2017, the FASB issued guidance that will shorten the amortization period for certain callable debt securities held at a premium to the earliest call date. This guidance does not require an accounting change for securities held at a discount. This guidance is to be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted. We have not yet determined the effect of this guidance on our consolidated financial statements. In March 2017, the FASB issued guidance that requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic benefit cost in operating expenses, which will impact the presentation of our postemployment benefit plan. Employers are required to present all other components of net benefit cost separate from the service costs and disclose the line item in which the components of net benefit cost other than the service cost are included. Retrospective application of the change in the statement of income presentation is required. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted. We do not expect the adoption to have a material effect on our consolidated financial statements. In February 2017, the FASB issued guidance that clarifies the scope of guidance on nonfinancial asset derecognition as well as the accounting for partial sales of nonfinancial assets. This new guidance is meant to clarify the scope of the original guidance that was issued in connection with the guidance relating to the recognition of revenue from contracts with customers, as defined below, which addresses recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted, and we are required to adopt concurrent with the adoption of the guidance on recognition of revenue from contracts with customers. We are reviewing the impact of this rule but have not yet determined the effect of this guidance on our consolidated financial statements. In November 2016, the FASB issued guidance which requires an entity to include in their cash and cash equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. The guidance is effective for our first quarter of fiscal year 2019 with early adoption permitted and is required to be applied using a retrospective transition method to each prior reporting period. We do not expect the adoption to have a material effect on our consolidated financial statements. In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. Under the guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The guidance is also intended to reduce the complexity by decreasing the number of credit impairment models that entities use to account for debt instruments. The guidance is effective for our first quarter of fiscal year 2021 with early adoption in our fiscal year 2020 permitted. We have not yet determined the effect of this guidance on our consolidated financial statements. In February 2016, the FASB issued guidance that revises the accounting for leases. The guidance is intended to improve financial reporting of leasing transactions by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Leases will continue to be classified as either operating or finance leases, with the classification affecting the pattern of expense recognition in the statement of income. The guidance will also require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. In January 2018, the FASB issued additional guidance for land easements which permits entities to forgo the evaluation of existing land easement arrangements to determine if they contain a lease. New land easement arrangements, or modifications to existing arrangements, after the adoption of the lease standard will be evaluated to determine if they meet the definition of a lease. In July 2018, the FASB amended the new standard to clarify certain aspects of the guidance, and they also issued another new standard in July 2018 that allows the option to apply the transition provisions at the adoption date instead of at the earliest comparative period in the consolidated financial statements. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted and is required to be applied either using a modified retrospective approach to each prior reporting period or initial application as of the beginning of the period of adoption. We are currently evaluating the impact of this guidance but have not yet determined the effect on our consolidated financial statements. In January 2016, the FASB issued guidance which is intended to improve the recognition and measurement of financial instruments. The guidance revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective prospectively for our first quarter of fiscal year 2019 financial statements with early adoption allowed on certain provisions. We do not expect the adoption to have a material effect on our consolidated financial statements. In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB decided to defer the effective date for this new revenue standard by one year, which will make the guidance effective for our first quarter of fiscal year 2019 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. In March 2016, the FASB issued additional guidance which further clarifies assessing whether an entity is a principal or an agent in a revenue transaction, and impacts whether an entity reports revenue on a gross or net basis; in April 2016, the FASB issued additional guidance that addresses identifying performance obligations and implementing licensing guidance; and in May 2016, the FASB issued additional guidance that clarifies collectability, noncash consideration, and other transition issues. The amendments have the same effective date and transition requirements as the new revenue standard. We have completed a preliminary review of the impact of the new revenue standard and expect the primary change to be the reclassification of certain items on the statement of income. For contracts involving products that are sold directly to end customers, currently any fees paid to dealer agents for facilitating the sale and performing certain services are netted against revenue. Under the new standard, fees paid to dealer agents will be recognized as either cost of sales or selling expense. In addition, any commissions or fees paid to third-party purchasing organizations will be recognized as a selling expense rather than being netted against revenue. Although the result of these changes will be increases in net sales, cost of sales, and selling expenses, these changes will have no impact to operating income dollars but will reduce operating income as a percent of net sales. The new standard will also require several less significant changes including classifying the reserve for returns and allowance as a liability rather than a contra-receivable, recognizing a recovery asset for potential product returns, and capitalizing costs to obtain and fulfill sales contracts. The new standard will also require significantly more disclosure than is required under current rules. We continue to evaluate the impact that will result from adoption of the new standard, and we are finalizing changes to our business processes, systems, and internal controls to support recognition and disclosure under the new standard. We expect to adopt the standard at the beginning of our fiscal year 2019 using the full retrospective approach which, upon adoption, will adjust fiscal years 2017 and 2018 to provide comparable financial reporting for these periods. |
Note 5. Commitments and Conti31
Note 5. Commitments and Contingent Liabilities (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingent Liabilities [Abstract] | |
Product Warranties | We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. |
Note 7. Employee Benefit Plans
Note 7. Employee Benefit Plans (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Employee Benefit Plans [Abstract] | |
Postemployment Benefit Plans | The actuarial gain is amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. |
Note 10. Fair Value (Policies)
Note 10. Fair Value (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value [Abstract] | |
Business Combinations Policy [Policy Text Block] | In connection with the acquisition of D’style, we valued long-lived and intangible assets at their estimated fair values at the acquisition date. The fair value estimates for intangible assets were based upon assumptions related to the future cash flows and discount rates utilizing currently available information, and in some cases, valuation results from independent valuation specialists (Level 3 determination of fair value). Subsequent to the acquisition, we determine the fair value of our long-lived and intangible assets on a non-recurring basis in connection with our periodic evaluations of such assets for potential impairment and record impairment charges when such fair value estimates are lower than the carrying values of the assets. |
Fair Value | We categorize assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows: • Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. • Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during fiscal years 2018 and 2017 . |
Fair Value of Financial Instruments Policy Continued | Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices. Cash Equivalents: Commercial Paper 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: Secondary market certificates of deposit 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: Municipal bonds 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: U.S. Treasury and federal agencies 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Derivative Assets: Stock warrants 3 Market - The privately-held company is currently in an early stage of start-up. The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Liability: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. |
Impairment or Disposal of Intangible Assets | Non-Recurring Fair Value Measurements: Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Non-recurring fair value adjustment Level Valuation Technique/Inputs Used Impairment of assets held for sale (transportation equipment) 3 Market - Quoted market prices for similar assets sold, adjusted for features specific to the asset |
Fair Value of Financial Instruments Not Carried at Fair Value | Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment) 3 Cost Method, with impairment recognized using a market-based valuation technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments. Long-term debt (carried at amortized cost) 3 Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball International’s non-performance risk The investment in non-marketable equity securities is accounted for using the cost method because we do not have the ability to exercise significant influence over the operating and financial policies of the investee. On a periodic basis, but no less frequently than quarterly, these investments are assessed for impairment when there are events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss. The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk. |
Note 12. Investments Investment
Note 12. Investments Investment (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Schedule of Investments [Abstract] | |
Investment, Policy | Our investment policy dictates that municipal bonds, U.S. Treasury and federal agency securities must be investment grade quality. |
Note 17. Restructuring Expense
Note 17. Restructuring Expense (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Restructuring Expense [Abstract] | |
Impairment of Long-Lived Assets | We utilized available market prices and management estimates to determine the fair value of impaired fixed assets. |
Note 1. Summary of Significan36
Note 1. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Other Intangible Assets | A summary of intangible assets subject to amortization is as follows: June 30, 2018 June 30, 2017 (Amounts in Thousands) Cost Accumulated Amortization Net Value Cost Accumulated Amortization Net Value Capitalized Software $ 38,482 $ 35,922 $ 2,560 $ 37,918 $ 34,986 $ 2,932 Product Rights 162 162 — 162 162 — Customer Relationships 7,050 422 6,628 — — — Trade Names 3,570 238 3,332 — — — Non-Compete Agreements 100 13 87 — — — Other Intangible Assets $ 49,364 $ 36,757 $ 12,607 $ 38,080 $ 35,148 $ 2,932 |
Note 2. Acquisition (Tables)
Note 2. Acquisition (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | A summary of the preliminary purchase price allocation is as follows: Purchase Price Allocation (Amounts in Thousands) Assets: Receivables $ 1,467 Inventories 1,455 Prepaid expenses and other current assets 1,120 Net property and equipment 184 Goodwill 8,824 Other intangible assets 10,720 Deferred tax assets 302 $ 24,072 Liabilities: Accounts payable $ 774 Customer deposits 3,084 Accrued expenses 333 $ 4,191 $ 19,881 |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | Consideration (Amounts in Thousands) Cash $ 18,201 Contingent earn-out — fair value at acquisition date 1,680 Fair value of total consideration $ 19,881 |
Schedule of Goodwill [Table Text Block] | The following summarizes our goodwill activity for fiscal year 2018: Goodwill (Amounts in Thousands) Goodwill - June 30, 2017 $ — Goodwill - at acquisition date 8,559 Working capital adjustments 265 Goodwill - June 30, 2018 $ 8,824 |
Note 3. Inventories (Tables)
Note 3. Inventories (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
Schedule of Inventory, Current | Inventory components at June 30, 2018 were as follows: (Amounts in Thousands) 2018 2017 Finished products $ 23,756 $ 24,537 Work-in-process 1,378 1,346 Raw materials 29,158 25,368 Total FIFO inventory $ 54,292 $ 51,251 LIFO reserve, net (14,783 ) (13,189 ) Total inventory $ 39,509 $ 38,062 |
Note 4. Property and Equipment
Note 4. Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property and Equipment [Abstract] | |
Components of Property and Equipment | The useful lives used in computing depreciation are based on estimated service lives for classes of property, as follows: Years Buildings and improvements 5 to 40 Machinery and equipment 2 to 20 Leasehold improvements Lesser of Useful Life or Term of Lease |
Property, Plant and Equipment | Major classes of property and equipment at June 30 consist of the following: (Amounts in Thousands) 2018 2017 Land $ 2,219 $ 2,431 Buildings and improvements 105,372 109,374 Machinery and equipment 152,653 147,407 Construction-in-progress 4,302 3,660 Total $ 264,546 $ 262,872 Less: Accumulated depreciation (180,059 ) (182,803 ) Property and equipment, net $ 84,487 $ 80,069 |
Note 5. Commitments and Conti40
Note 5. Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingent Liabilities [Abstract] | |
Schedule of Product Warranty Liability | Changes in the product warranty accrual during fiscal years 2018 , 2017 , and 2016 were as follows: (Amounts in Thousands) 2018 2017 2016 Product Warranty Liability at the beginning of the year $ 1,992 $ 2,351 $ 2,264 Additions to warranty accrual (including changes in estimates) 1,307 562 1,165 Settlements made (in cash or in kind) (1,005 ) (921 ) (1,078 ) Product Warranty Liability at the end of the year $ 2,294 $ 1,992 $ 2,351 |
Note 7. Employee Benefit Plan41
Note 7. Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Employee Benefit Plans [Abstract] | |
Schedule of Changes in Projected Benefit Obligations | June 30 (Amounts in Thousands) 2018 2017 Changes and Components of Benefit Obligation: Benefit obligation at beginning of year $ 3,083 $ 2,815 Service cost 521 482 Interest cost 85 65 Actuarial (gain) loss for the period (895 ) (186 ) Benefits paid (75 ) (93 ) Benefit obligation at end of year $ 2,719 $ 3,083 Balance in current liabilities $ 494 $ 561 Balance in noncurrent liabilities 2,225 2,522 Total benefit obligation recognized in the Consolidated Balance Sheets $ 2,719 $ 3,083 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block] | June 30 (Amounts in Thousands) 2018 2017 Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): Accumulated Other Comprehensive Income (Loss) at beginning of year $ 1,859 $ 2,146 Net change in unrecognized actuarial gain (loss) 635 (287 ) Accumulated Other Comprehensive Income (Loss) at end of year $ 2,494 $ 1,859 |
Schedule of Net Benefit Costs | (Amounts in Thousands) Year Ended June 30 Components of Net Periodic Benefit Cost (before tax): 2018 2017 2016 Service cost $ 521 $ 482 $ 490 Interest cost 85 65 74 Amortization of actuarial (gain) loss (260 ) (473 ) (441 ) Net periodic benefit cost — Total cost $ 346 $ 74 $ 123 |
Severance Plan Assumptions, Year End [Table Text Block] | Assumptions used to determine fiscal year end benefit obligations are as follows: 2018 2017 Discount Rate 3.4% 2.8% Rate of Compensation Increase 3.0% 3.0% |
Severance Plan Assumptions, Weighted Average | Weighted average assumptions used to determine fiscal year net periodic benefit costs are as follows: 2018 2017 2016 Discount Rate 3.0% 2.4% 2.7% Rate of Compensation Increase 3.0% 3.0% 3.0% |
Note 8. Stock Compensation Pl42
Note 8. Stock Compensation Plans (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Stock Compensation Plans [Abstract] | |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Performance-Based Units, Vested and Expected to Vest | A summary of performance share activity during fiscal year 2018 is presented below: Number of Shares (1) Weighted Average Grant Date Fair Value Performance Shares outstanding at July 1, 2017 466,778 $11.23 Granted 121,602 $16.62 Vested (401,833 ) $11.86 Forfeited (82,324 ) $16.61 Performance Shares outstanding at June 30, 2018 104,223 $16.52 (1) The shares granted include the maximum number of shares that may vest under performance share awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Relative Total Shareholder Return Performance Units, Vested and Expected to Vest | A summary of RTSR activity during fiscal year 2018 is presented below: Number of Shares (1) Weighted Average Grant Date Fair Value RTSRs outstanding at July 1, 2017 150,492 $14.49 Granted 52,334 $20.65 Vested (37,535 ) $16.25 Forfeited (34,651 ) $15.10 RTSRs outstanding at June 30, 2018 130,640 $18.94 (1) The shares granted include the maximum number of shares that may vest under RTSR awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of RSU activity during fiscal year 2018 is presented below: Number of Shares Weighted Average Grant Date Fair Value RSUs outstanding at July 1, 2017 196,616 $12.00 Granted 106,778 $17.14 Vested (79,315 ) $12.61 Forfeited (22,253 ) $13.04 RSUs outstanding at June 30, 2018 201,826 $15.10 |
Note 9. Income Taxes (Tables)
Note 9. Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Taxes [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities as of June 30, 2018 and 2017 , were as follows: (Amounts in Thousands) 2018 2017 Deferred Tax Assets: Receivables $ 708 $ 1,152 Inventory 428 819 Employee benefits 161 563 Deferred compensation 4,061 13,254 Other current liabilities 70 446 Warranty reserve 591 775 Tax credit carryforwards 2,168 1,982 Sale-leaseback — 1,507 Restructuring — 31 Goodwill 98 — Net operating loss carryforward 2,179 2,256 Miscellaneous 2,135 2,251 Valuation Allowance (860 ) (643 ) Total asset $ 11,739 $ 24,393 Deferred Tax Liabilities: Property and equipment $ 6,062 $ 9,203 Miscellaneous 761 703 Total liability $ 6,823 $ 9,906 Net Deferred Tax Assets $ 4,916 $ 14,487 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes is composed of the following items: Year Ended June 30 (Amounts in Thousands) 2018 2017 2016 Currently Payable: Federal $ 6,592 $ 19,780 $ 7,548 State 1,636 2,318 1,184 Total current $ 8,228 $ 22,098 $ 8,732 Deferred Taxes: Federal $ 8,236 $ (1,761 ) $ 3,081 State 1,422 175 421 Total deferred $ 9,658 $ (1,586 ) $ 3,502 Total provision for income taxes $ 17,886 $ 20,512 $ 12,234 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory U.S. income tax rate to Kimball International’s effective income tax rate follows: Year Ended June 30 2018 2017 2016 (Amounts in Thousands) Amount % Amount % Amount % Tax provision computed at U.S. federal statutory rate $ 14,703 28.1 % $ 20,306 35.0 % $ 11,686 35.0 % State income taxes, net of federal income tax benefit 2,198 4.2 1,620 2.8 1,043 3.1 Domestic manufacturing deduction (617 ) (1.2 ) (1,495 ) (2.6 ) (286 ) (0.9 ) Research credit (180 ) (0.3 ) (218 ) (0.4 ) (346 ) (1.0 ) Remeasurement of tax assets and liabilities related to the Tax Act 1,839 3.5 — — — — Other - net (57 ) (0.1 ) 299 0.6 137 0.4 Total provision for income taxes $ 17,886 34.2 % $ 20,512 35.4 % $ 12,234 36.6 % |
Summary of Income Tax Contingencies | Changes in the unrecognized tax benefit, excluding accrued interest and penalties, during fiscal years 2018 , 2017 , and 2016 were as follows: (Amounts in Thousands) 2018 2017 2016 Beginning balance - July 1 $ 1,888 $ 2,077 $ 1,920 Tax positions related to prior fiscal years: Additions 222 213 301 Reductions (1,030 ) (581 ) (43 ) Tax positions related to current fiscal year: Additions — 391 — Reductions — — — Settlements — — — Lapses in statute of limitations (91 ) (212 ) (101 ) Ending balance - June 30 $ 989 $ 1,888 $ 2,077 Portion that, if recognized, would reduce tax expense and effective tax rate $ 832 $ 1,377 $ 1,407 |
Accrued Interest and Penalties on Unrecognized Tax Benefits | Amounts accrued for interest and penalties were as follows: As of June 30 (Amounts in Thousands) 2018 2017 2016 Accrued Interest and Penalties: Interest $ 70 $ 84 $ 102 Penalties $ 98 $ 102 $ 108 |
Note 10. Fair Value (Tables)
Note 10. Fair Value (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value [Abstract] | |
Fair Value Measurements, Recurring, Valuation Techniques [Table Text Block] | The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices. Cash Equivalents: Commercial Paper 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: Secondary market certificates of deposit 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: Municipal bonds 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Available-for-sale securities: U.S. Treasury and federal agencies 2 Market - Based on market data which use evaluated pricing models and incorporate available trade, bid, and other market information. Derivative Assets: Stock warrants 3 Market - The privately-held company is currently in an early stage of start-up. The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Liability: Foreign exchange contracts 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of June 30, 2018 and June 30, 2017 , the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market or income approach are categorized as follows: (Amounts in Thousands) June 30, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 24,407 $ — $ — $ 24,407 Cash equivalents: Commercial paper — 25,918 — 25,918 Available-for-sale securities: Secondary market certificates of deposit — 11,850 — 11,850 Available-for-sale securities: Municipal bonds — 16,508 — 16,508 Available-for-sale securities: U.S. Treasury and federal agencies — 6,249 — 6,249 Derivatives: Stock warrants — — 1,500 1,500 Trading Securities: Mutual funds in nonqualified SERP 12,114 — — 12,114 Total assets at fair value $ 36,521 $ 60,525 $ 1,500 $ 98,546 Liabilities Derivatives: Foreign exchange contracts $ — $ 10 $ — $ 10 Contingent earn-out liability — — 1,056 1,056 Total liabilities at fair value $ — $ 10 $ 1,056 $ 1,066 (Amounts in Thousands) June 30, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 30,383 $ — $ — $ 30,383 Cash equivalents: Commercial paper — 29,102 — 29,102 Available-for-sale securities: Secondary market certificates of deposit — 10,336 — 10,336 Available-for-sale securities: Municipal bonds — 22,154 — 22,154 Available-for-sale securities: U.S. Treasury and federal agencies — 3,193 — 3,193 Derivatives: Stock warrants — — 1,500 1,500 Trading Securities: Mutual funds in nonqualified SERP 11,194 — — 11,194 Total assets at fair value $ 41,577 $ 64,785 $ 1,500 $ 107,862 |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] | Non-recurring fair value adjustment Level Valuation Technique/Inputs Used Impairment of assets held for sale (transportation equipment) 3 Market - Quoted market prices for similar assets sold, adjusted for features specific to the asset |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | Financial instruments that are not reflected in the Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment) 3 Cost Method, with impairment recognized using a market-based valuation technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments. Long-term debt (carried at amortized cost) 3 Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball International’s non-performance risk |
Note 11. Derivative Instrumen45
Note 11. Derivative Instruments (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | Fair Values of Derivative Instruments on the Consolidated Balance Sheets Asset Derivatives Liability Derivatives Fair Value As of Fair Value As of (Amounts in Thousands) Balance Sheet Location June 30 June 30 Balance Sheet Location June 30 June 30 Derivatives designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets $ — $ — Accrued expenses $ 10 $ — Derivatives not designated as hedging instruments: Stock warrants Other Assets $ 1,500 $ 1,500 Total derivatives $ 1,500 $ 1,500 $ 10 $ — |
Note 12. Investments (Tables)
Note 12. Investments (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Investments Classified by Contractual Maturity Date | The contractual maturities of our investment portfolio were as follows (maturity dates for municipal bonds are based on pre-refunded dates and maturity dates for government agency securities are based on the first available call date, if applicable): June 30, 2018 (Amounts in Thousands) Certificates of Deposit Municipal Bonds U.S. Treasury and Federal Agencies Within one year $ 9,292 $ 14,502 $ 2,196 After one year through two years 2,558 2,006 4,053 Total Fair Value $ 11,850 $ 16,508 $ 6,249 |
Unrealized Gain (Loss) on Investments | June 30, 2018 (Amounts in Thousands) Certificates of Deposit Municipal Bonds U.S. Treasury and Federal Agencies Amortized cost basis $ 11,850 $ 16,532 $ 6,266 Unrealized holding gains — — — Unrealized holding losses — (24 ) (17 ) Fair Value $ 11,850 $ 16,508 $ 6,249 June 30, 2017 (Amounts in Thousands) Certificates of Deposit Municipal Bonds U.S. Treasury and Federal Agencies Amortized cost basis $ 10,334 $ 22,183 $ 3,200 Unrealized holding gains 2 — — Unrealized holding losses — (29 ) (7 ) Fair Value $ 10,336 $ 22,154 $ 3,193 |
Trading Securities (and Certain Trading Assets) | SERP asset and liability balances were as follows: June 30 (Amounts in Thousands) 2018 2017 SERP investments - current asset $ 3,868 $ 1,259 SERP investments - other long-term asset 8,246 9,935 Total SERP investments $ 12,114 $ 11,194 SERP obligation - current liability $ 3,868 $ 1,259 SERP obligation - other long-term liability 8,246 9,935 Total SERP obligation $ 12,114 $ 11,194 |
Note 13. Accrued Expenses (Tabl
Note 13. Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of: June 30 (Amounts in Thousands) 2018 2017 Compensation $ 22,045 $ 22,815 Selling 7,134 6,704 Employer retirement contribution 5,605 6,196 Taxes 3,598 2,568 Insurance 4,210 4,382 Restructuring — 80 Rent 2,997 2,944 Other expenses 3,705 3,329 Total accrued expenses $ 49,294 $ 49,018 |
Note 14. Geographic Informati48
Note 14. Geographic Information (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Geographic Area Information [Abstract] | |
Schedule of Revenue from External Customers, by Geographical Areas | The following geographic area data includes net sales based on the location where title transfers. Year Ended June 30 (Amounts in Thousands) 2018 2017 2016 Net Sales: United States $ 672,918 $ 658,474 $ 622,096 Foreign 12,682 11,460 13,006 Total Net Sales $ 685,600 $ 669,934 $ 635,102 |
Note 15. Earnings Per Share (Ta
Note 15. Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Year Ended June 30 (Amounts in Thousands, Except for Per Share Data) 2018 2017 2016 Net Income $ 34,439 $ 37,506 $ 21,156 Average Shares Outstanding for Basic EPS Calculation 37,314 37,334 37,462 Dilutive Effect of Average Outstanding Compensation Awards 180 499 390 Average Shares Outstanding for Diluted EPS Calculation 37,494 37,833 37,852 Basic Earnings Per Share $ 0.92 $ 1.00 $ 0.56 Diluted Earnings Per Share $ 0.92 $ 0.99 $ 0.56 |
Note 16. Accumulated Other Co50
Note 16. Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | During fiscal year 2018 and 2017 , the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows: (Amounts in Thousands) Unrealized Investment Gain (Loss) Postemployment Benefits Net Actuarial Gain (Loss) Derivative Gain (Loss) Accumulated Other Comprehensive Income Balance at June 30, 2016 $ — $ 1,311 $ — $ 1,311 Other comprehensive income (loss) before reclassifications (21 ) 114 — 93 Reclassification to (earnings) loss — (289 ) — (289 ) Net current-period other comprehensive income (loss) (21 ) (175 ) — (196 ) Balance at June 30, 2017 $ (21 ) $ 1,136 $ — $ 1,115 Other comprehensive income (loss) before reclassifications (8 ) 599 (7 ) 584 Reclassification to (earnings) loss 3 (176 ) — (173 ) Net current-period other comprehensive income (loss) (5 ) 423 (7 ) 411 Reclassification of change in enacted income tax rate to retained earnings $ (5 ) $ 295 $ — $ 290 Balance at June 30, 2018 $ (31 ) $ 1,854 $ (7 ) $ 1,816 |
Reclassification out of Accumulated Other Comprehensive Income | The following reclassifications were made from Accumulated Other Comprehensive Income to the Consolidated Statements of Income: Reclassifications from Accumulated Other Comprehensive Income Fiscal Year Ended Affected Line Item in the Consolidated Statements of Income June 30, (Amounts in Thousands) 2018 2017 Realized Investment Gain (Loss) on available-for-sale securities (1) $ (4 ) $ — Non-operating income (expense), net 1 — Benefit (Provision) for Income Taxes $ (3 ) $ — Net Income Postemployment Benefits Amortization of Actuarial Gain (2) $ 168 $ 301 Cost of Sales 92 172 Selling and Administrative Expenses (84 ) (184 ) Benefit (Provision) for Income Taxes $ 176 $ 289 Net Income Total Reclassifications for the Period $ 173 $ 289 Net Income Amounts in parentheses indicate reductions to income. (1) See Note 12 - Investments of Notes to Consolidated Financial Statements for further information on available-for-sale securities. (2) See Note 7 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 19. Credit Quality and A51
Note 19. Credit Quality and Allowance for Credit Losses of Notes Receivable (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Credit Quality and Allowance for Credit Losses of Notes Receivable [Abstract] | |
Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent | As of June 30, 2018 As of June 30, 2017 (Amounts in Thousands) Unpaid Balance Related Allowance Receivable Net of Allowance Unpaid Balance Related Allowance Receivable Net of Allowance Independent Dealership Financing $ 666 $ 50 $ 616 $ 433 $ — $ 433 Other Notes Receivable 183 183 — 138 126 12 Total $ 849 $ 233 $ 616 $ 571 $ 126 $ 445 |
Note 20. Quarterly Financial 52
Note 20. Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Information (Unaudited) [Abstract] | |
Schedule of Quarterly Financial Information | Three Months Ended (Amounts in Thousands, Except for Per Share Data) September 30 December 31 March 31 June 30 Fiscal Year 2018: Net Sales $ 169,517 $ 173,674 $ 157,897 $ 184,512 Gross Profit 59,589 53,936 47,755 60,166 Net Income 10,957 7,378 5,850 10,254 Basic Earnings Per Share $ 0.29 $ 0.20 $ 0.16 $ 0.28 Diluted Earnings Per Share $ 0.29 $ 0.20 $ 0.16 $ 0.28 Fiscal Year 2017: Net Sales $ 174,996 $ 169,887 $ 153,068 $ 171,983 Gross Profit 58,687 55,758 51,052 57,808 Restructuring (Gain) Expense (1,832 ) — — — Net Income 10,998 8,717 7,231 10,560 Basic Earnings Per Share $ 0.29 $ 0.23 $ 0.19 $ 0.28 Diluted Earnings Per Share $ 0.29 $ 0.23 $ 0.19 $ 0.28 |
Schedule II Valuation and Qua53
Schedule II Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts | 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, 2018 Valuation Allowances: Short-Term Receivables $ 1,626 $ (25 ) $ 204 $ (488 ) $ 1,317 Long-Term Notes Receivable $ 109 $ (3 ) $ 33 $ — $ 139 Deferred Tax Asset $ 643 $ — $ 326 $ (109 ) $ 860 Year Ended June 30, 2017 Valuation Allowances: Short-Term Receivables $ 2,145 $ (206 ) $ 101 $ (414 ) $ 1,626 Long-Term Notes Receivable $ 118 $ (9 ) $ — $ — $ 109 Deferred Tax Asset $ 687 $ — $ — $ (44 ) $ 643 Year Ended June 30, 2016 Valuation Allowances: Short-Term Receivables $ 1,522 $ 374 $ 310 $ (61 ) $ 2,145 Long-Term Notes Receivable $ 618 $ (11 ) $ (489 ) $ — $ 118 Deferred Tax Asset $ 687 $ — $ — $ — $ 687 A valuation allowance totaling $489 thousand transferred from long-term to short-term during the year ended June 30, 2016 and was a reduction to expense during the year ended June 30, 2017 as the entire receivable was collected. |
Note 1. Summary of Significan54
Note 1. Summary of Significant Accounting Policies - Summary of Other Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Other Intangible Assets | ||
Other Intangible Assets, Cost | $ 49,364 | $ 38,080 |
Intangible Assets, Accumulated Amortization | 36,757 | 35,148 |
Other Intangible Assets, Net Value | 12,607 | 2,932 |
Capitalized Software | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 38,482 | 37,918 |
Intangible Assets, Accumulated Amortization | 35,922 | 34,986 |
Other Intangible Assets, Net Value | 2,560 | 2,932 |
Product Rights | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 162 | 162 |
Intangible Assets, Accumulated Amortization | 162 | 162 |
Other Intangible Assets, Net Value | 0 | 0 |
Customer Relationships | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 7,050 | 0 |
Intangible Assets, Accumulated Amortization | 422 | 0 |
Other Intangible Assets, Net Value | 6,628 | 0 |
Trade Names | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 3,570 | 0 |
Intangible Assets, Accumulated Amortization | 238 | 0 |
Other Intangible Assets, Net Value | 3,332 | 0 |
Noncompete Agreements | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 100 | 0 |
Intangible Assets, Accumulated Amortization | 13 | 0 |
Other Intangible Assets, Net Value | $ 87 | $ 0 |
Note 1. Summary of Significan55
Note 1. Summary of Significant Accounting Policies - Textuals (Details) - USD ($) | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Nov. 06, 2017 | |
Goodwill, Impairment Loss | $ 0 | |||
Goodwill | $ 8,824,000 | $ 0 | $ 8,559,000 | |
Accounts Receivable, Customary Payment Terms | 30 days | |||
Accounts Receivable, Days Beyond Which Terms Are Considered Extended Payment Terms | 30 days | |||
LIFO Inventory as a Percentage of Consolidated Inventory | 92.00% | 94.00% | ||
Other Intangible Assets, Amortization Expense | $ 1,769,000 | $ 1,071,000 | $ 786,000 | |
Other Intangible Assets, Future Amortization Expense, Year One | 1,909,000 | |||
Other Intangible Assets, Future Amortization Expense, Year Two | 1,955,000 | |||
Other Intangible Assets, Future Amortization Expense, Year Three | 1,572,000 | |||
Other Intangible Assets, Future Amortization Expense, Year Four | 1,252,000 | |||
Other Intangible Assets, Future Amortization Expense, Year Five | 1,029,000 | |||
Other Intangible Assets, Future Amortization Expense, after Year Five | 4,890,000 | |||
Indefinite-Lived Intangible Assets | 0 | |||
Research and Development Costs | 7,000,000 | 7,000,000 | 6,000,000 | |
Advertising Costs | 5,800,000 | 4,300,000 | $ 4,000,000 | |
Notes Receivable, Unpaid Balance | 849,000 | 571,000 | ||
Investment Owned, at Cost | 2,000,000 | |||
Derivative Asset, Fair Value, Gross Asset | 1,500,000 | 1,500,000 | ||
Reclassification to (earnings) loss | $ 290,000 | |||
Capitalized Software | Minimum | ||||
Finite-Lived Intangible Asset, Useful Life | 2 years | |||
Capitalized Software | Maximum | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Customer Relationships | ||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||
Trade Names | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Noncompete Agreements | ||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||
Fair Value, Measurements, Recurring | Stock Warrant | ||||
Derivative Asset, Fair Value, Gross Asset | $ 1,500,000 | 1,500,000 | ||
Fair Value, Measurements, Recurring | Not Designated as Hedging Instrument | Other Assets | Stock Warrant | ||||
Derivative Asset, Fair Value, Gross Asset | 1,500,000 | $ 1,500,000 | ||
D'Style | ||||
Goodwill | 8,800,000 | |||
Intangible Assets, Gross (Excluding Goodwill) | 10,700,000 | |||
New Accounting Principles, Early Adoption [Domain] | ||||
Reclassification to (earnings) loss | $ 300,000 |
Note 2. Acquisition Acquisition
Note 2. Acquisition Acquisition Textuals (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Nov. 06, 2017 | |
Payments to Acquire Businesses, Gross | $ 18,200 | |||||||||||
Business Combination, Contingent Consideration, Potential Earn-out | $ 2,200 | 2,200 | $ 2,200 | |||||||||
Contingent earn-out — fair value at acquisition date | 1,100 | 1,100 | $ 1,680 | |||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, pre-tax gain(expense) | 600 | |||||||||||
Net Sales | 184,512 | $ 157,897 | $ 173,674 | $ 169,517 | $ 171,983 | $ 153,068 | $ 169,887 | $ 174,996 | 685,600 | $ 669,934 | $ 635,102 | |
Net Income | $ 10,254 | $ 5,850 | $ 7,378 | $ 10,957 | $ 10,560 | $ 7,231 | $ 8,717 | $ 10,998 | 34,439 | $ 37,506 | $ 21,156 | |
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | 800 | |||||||||||
Selling and Administrative Expenses | ||||||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, pre-tax gain(expense) | 800 | |||||||||||
Interest Expense | ||||||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, pre-tax gain(expense) | (200) | |||||||||||
D'Style | ||||||||||||
Net Sales | 13,000 | |||||||||||
Net Income | $ 800 | |||||||||||
Goodwill tax amortization period | 15 years |
Note 2. Acquisition Schedule of
Note 2. Acquisition Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Nov. 06, 2017 | Jun. 30, 2017 |
ASSETS | |||
Receivables | $ 1,467 | ||
Inventories | 1,455 | ||
Prepaid expenses and other current assets | 1,120 | ||
Net property and equipment | 184 | ||
Goodwill | 8,824 | $ 8,559 | $ 0 |
Other intangible assets | 10,720 | ||
Deferred tax assets | 302 | ||
Acquisition, Assets Acquired | 24,072 | ||
Liabilities [Abstract] | |||
Accounts payable | 774 | ||
Customer deposits | 3,084 | ||
Accrued expenses | 333 | ||
Acquisition, Liabilities Acquired | 4,191 | ||
Total Consideration Paid | $ 19,881 | $ 19,881 |
Note 2. Acquisition Schedule 58
Note 2. Acquisition Schedule of Consideration for Acquisition (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Nov. 06, 2017 | |
Business Acquisition [Line Items] | ||||
Cash | $ 18,201 | $ 0 | $ 0 | |
Contingent earn-out — fair value at acquisition date | 1,100 | $ 1,680 | ||
Fair value of total consideration | $ 19,881 | $ 19,881 |
Note 2. Acquisition Schedule 59
Note 2. Acquisition Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Nov. 06, 2017 | Jun. 30, 2017 | |
Acquisition [Abstract] | |||
Goodwill | $ 8,824 | $ 8,559 | $ 0 |
Working Capital Adjustments | $ 265 |
Note 3. Inventories - Inventory
Note 3. Inventories - Inventory Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Percentage of LIFO Inventory | 92.00% | 94.00% | |
Inventory, LIFO Reserve, Effect on Income (Loss), Net | $ 1.1 | $ 0.4 | $ (1) |
Note 3. Inventories - Invento61
Note 3. Inventories - Inventory Components (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Finished products | $ 23,756 | $ 24,537 |
Work-in-process | 1,378 | 1,346 |
Raw materials | 29,158 | 25,368 |
Total FIFO inventory | 54,292 | 51,251 |
LIFO reserve, net | (14,783) | (13,189) |
Total inventory | $ 39,509 | $ 38,062 |
Note 4. Property and Equipmen62
Note 4. Property and Equipment - Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Property and Equipment | ||
Total Property and Equipment | $ 264,546 | $ 262,872 |
Less: Accumulated depreciation | (180,059) | (182,803) |
Property and equipment, net | 84,487 | 80,069 |
Land | ||
Property and Equipment | ||
Total Property and Equipment | 2,219 | 2,431 |
Building and Building Improvements | ||
Property and Equipment | ||
Total Property and Equipment | 105,372 | 109,374 |
Machinery and Equipment | ||
Property and Equipment | ||
Total Property and Equipment | 152,653 | 147,407 |
Construction in Progress | ||
Property and Equipment | ||
Total Property and Equipment | $ 4,302 | $ 3,660 |
Note 4. Property and Equipmen63
Note 4. Property and Equipment - Asset Lives (Details) | 12 Months Ended |
Jun. 30, 2018 | |
Leasehold improvements | Lesser of Useful Life or Term of Lease |
Building and Building Improvements | Minimum | |
Property, Plant and Equipment, Useful Life | 5 years |
Building and Building Improvements | Maximum | |
Property, Plant and Equipment, Useful Life | 40 years |
Machinery and Equipment | Minimum | |
Property, Plant and Equipment, Useful Life | 2 years |
Machinery and Equipment | Maximum | |
Property, Plant and Equipment, Useful Life | 20 years |
Note 4. Property and Equipmen64
Note 4. Property and Equipment - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Depreciation and amortization of property and equipment | $ 13,700 | $ 14,700 | $ 14,300 |
Assets held for sale | 281 | 4,223 | 9,200 |
Gain (Loss) on Disposition of Property Plant Equipment | 2,050 | 3,148 | (181) |
Proceeds from sales of assets | 5,817 | 13,200 | $ 290 |
Held for Sale over-the-road tractors, trailers, and land | |||
Gain (Loss) on Disposition of Property Plant Equipment | 400 | ||
Proceeds from sales of assets | 4,800 | ||
Post Falls Land and Facility | |||
Gain (Loss) on Disposition of Property Plant Equipment | 2,100 | ||
Proceeds from sales of assets | 12,000 | ||
Land | |||
Proceeds from sales of assets | 1,400 | ||
Property, Plant and Equipment, Other Types | Fair Value, Measurements, Nonrecurring | |||
Impairment of Long-Lived Assets to be Disposed of | 200 | ||
Jasper Ed Ctr, R&D Ctr, Showroom building | |||
Proceeds from Sale of Buildings | 3,800 | ||
Post Falls Land and Facility | |||
Proceeds from Sale of Buildings | 12,000 | ||
Restructuring (Gain) Expense | Post Falls Land and Facility | |||
Gain (Loss) on Disposition of Property Plant Equipment | 2,100 | ||
Selling and Administrative Expenses | Land | |||
Gain (Loss) on Disposition of Property Plant Equipment | $ 1,200 | ||
Selling and Administrative Expenses | Jasper Ed Ctr, R&D Ctr, Showroom building | |||
Gain (Loss) on Disposition of Property Plant Equipment | $ 1,700 |
Note 5. Commitments and Conti65
Note 5. Commitments and Contingent Liabilities - Leases Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Leased Assets | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 4,000 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 3,600 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 3,300 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 3,100 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 2,600 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 5,900 | ||
Rental expenses | 5,800 | $ 6,000 | $ 6,700 |
Contingent lease payments | 1,200 | 1,500 | 2,400 |
Proceeds from sale-leaseback financing obligation | 0 | 3,752 | 0 |
Gain (Loss) on Disposition of Property Plant Equipment | 2,050 | 3,148 | $ (181) |
Jasper Ed Ctr, R&D Ctr, Showroom building | |||
Operating Leased Assets | |||
Proceeds from sale-leaseback financing obligation | $ 3,800 | ||
Selling and Administrative Expenses | Jasper Ed Ctr, R&D Ctr, Showroom building | |||
Operating Leased Assets | |||
Gain (Loss) on Disposition of Property Plant Equipment | $ 1,700 |
Note 5. Commitments and Conti66
Note 5. Commitments and Contingent Liabilities - Guarantees Textuals (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Guarantee Obligations | ||
Contingent Liabilities | ||
Loss Contingency Accrual | $ 0 | $ 0 |
Financial Standby Letter of Credit | ||
Contingent Liabilities | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | 1,400,000 | 1,200,000 |
Loss Contingency Accrual | 0 | 0 |
Performance Guarantee | ||
Contingent Liabilities | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | 500,000 | 400,000 |
Loss Contingency Accrual | $ 0 | $ 0 |
Note 5. Commitments and Conti67
Note 5. Commitments and Contingent Liabilities - Product Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Product Warranty Liability at the beginning of the year | $ 1,992 | $ 2,351 | $ 2,264 |
Additions to warranty accrual (including changes in estimates) | 1,307 | 562 | 1,165 |
Settlements made (in cash or in kind) | (1,005) | (921) | (1,078) |
Product Warranty Liability at the end of the year | $ 2,294 | $ 1,992 | $ 2,351 |
Note 5. Commitments and Conti68
Note 5. Commitments and Contingent Liabilities - Other Contingency Textuals (Details) | 12 Months Ended |
Jun. 30, 2018 | |
Government Contracts Concentration Risk | |
Concentration Risk, Percentage | 7.50% |
GSA Contract A | |
Concentration Risk, Percentage | 5.30% |
GSA Contract B | |
Concentration Risk, Percentage | 2.20% |
Note 6. Long-Term Debt and Cr69
Note 6. Long-Term Debt and Credit Facilities - Textuals (Details) | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Long-term debt, less current maturities | $ 161,000 | $ 184,000 | |
Current maturities of long-term debt | $ 23,000 | 27,000 | |
Interest Rate on Long-Term Debt | 9.25% | ||
Maturities of Long-Term Debt in the Next Twelve Months | $ 23,000 | ||
Maturities of Long-term Debt in Year Two | 25,000 | ||
Maturities of Long-term Debt in Year Three | 27,000 | ||
Maturities of Long-term Debt in Year Four | 30,000 | ||
Maturities of Long-term Debt in Year Five | 33,000 | ||
Aggregate Maturities of Long-term Debt after Year Five | 46,000 | ||
Credit Facility, Maximum Borrowing Capacity | 30,000,000 | ||
Credit Facility, Maximum Borrowing Capacity Upon Request | 55,000,000 | ||
Credit Facility, Borrowings Outstanding | 0 | 0 | |
Credit Facility, Availability to Borrow | 28,600,000 | ||
Line of Credit Facility, Amount Available for Letters of Credit | 10,000,000 | ||
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash | $ 15,000,000 | ||
Adjusted Leverage Ratio Covenant | 3 | ||
Fixed Charge Coverage Ratio Covenant, Percent of Depreciation | 50.00% | ||
Fixed Charge Coverage Ratio Covenant | 1.10 | ||
Interest Paid on Borrowings | $ 70,000 | $ 37,000 | $ 22,000 |
Minimum | |||
Line of Credit Facility, Commitment Fee Basis Points | 20 | ||
Maximum | |||
Line of Credit Facility, Commitment Fee Basis Points | 25 | ||
Financial Standby Letter of Credit | |||
Letters of Credit, Amount | $ 1,400,000 | ||
Eurocurrency Loans Margin | Minimum | |||
Line of Credit Facility, Interest Rate Basis Points | 125 | ||
Eurocurrency Loans Margin | Maximum | |||
Line of Credit Facility, Interest Rate Basis Points | 175 | ||
London Interbank Offered Rate (LIBOR) | Primary Revolving Credit Facility | |||
Interest Rate Charged Over Index Rate | 1.00% | ||
Federal Funds Rate | |||
Interest Rate Charged Over Index Rate | 0.50% | ||
Alternate Base Rate Loans Spread | Minimum | |||
Line of Credit Facility, Interest Rate Basis Points | 25 | ||
Alternate Base Rate Loans Spread | Maximum | |||
Line of Credit Facility, Interest Rate Basis Points | 75 |
Note 7. Employee Benefit Plan70
Note 7. Employee Benefit Plans - Retirement Plans Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Domestic Plans | |||
Employer's contribution to retirement plans | $ 5.9 | $ 6.4 | $ 4.3 |
Note 7. Employee Benefit Plan71
Note 7. Employee Benefit Plans - Severance Plans - Components and Changes of Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Changes and Components of Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 3,083 | $ 2,815 | |
Service cost | 521 | 482 | $ 490 |
Interest cost | 85 | 65 | 74 |
Actuarial (gain) loss for the period | (895) | (186) | |
Benefits paid | (75) | (93) | |
Benefit obligation at end of year | 2,719 | 3,083 | $ 2,815 |
Balance in current liabilities | 494 | 561 | |
Balance in noncurrent liabilities | 2,225 | 2,522 | |
Total benefit obligation recognized in the Consolidated Balance Sheets | $ 2,719 | $ 3,083 |
Note 7. Employee Benefit Plan72
Note 7. Employee Benefit Plans - Severance Plans - Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Changes and Components in Accumulated Other Comprehensive Income (Loss) (before tax): | ||
Accumulated Other Comprehensive Income (Loss) at beginning of year | $ 1,859 | $ 2,146 |
Net change in unrecognized actuarial gain (loss) | 635 | (287) |
Accumulated Other Comprehensive Income (Loss) at end of year | $ 2,494 | $ 1,859 |
Note 7. Employee Benefit Plan73
Note 7. Employee Benefit Plans - Severance Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan Disclosure | |||
Service cost | $ 521 | $ 482 | $ 490 |
Interest cost | 85 | 65 | 74 |
Amortization of actuarial (gain) loss | (260) | (473) | (441) |
Net periodic benefit cost - Total cost | $ 346 | $ 74 | $ 123 |
Note 7. Employee Benefit Plan74
Note 7. Employee Benefit Plans - Severance Plans Textuals (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Defined Benefit Plan Disclosure | |
Assets for Plan Benefits, Defined Benefit Plan | $ 0 |
Estimated actuarial net gain (loss) that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year | $ 381 |
Note 7. Employee Benefit Plan75
Note 7. Employee Benefit Plans - Severance Plan Assumptions, Fiscal Year End (Details) | Jun. 30, 2018 | Jun. 30, 2017 |
Fiscal Year End Assumptions: | ||
Discount Rate | 3.40% | 2.80% |
Rate of Compensation Increase | 3.00% | 3.00% |
Note 7. Employee Benefit Plan76
Note 7. Employee Benefit Plans - Severance Plan Assumptions, Weighted Average (Details) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Weighted Average Fiscal Year Assumptions: | |||
Discount Rate | 3.00% | 2.40% | 2.70% |
Rate of Compensation Increase | 3.00% | 3.00% | 3.00% |
Note 8. Stock Compensation Pl77
Note 8. Stock Compensation Plans - Textuals (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangements | |||
Stock Compensation Plan, Pre-tax Compensation Cost | $ 4.2 | $ 6.3 | $ 5.6 |
Stock Compensation Plan, Income Tax Benefit from Compensation Cost | 2.1 | 2.9 | $ 2.2 |
Excess tax benefits from stock award vesting | $ 0.7 | $ 0.5 | |
2017 Stock Incentive Plan | |||
Share-based Compensation Arrangements | |||
Stock Compensation Plan, Shares Reserved | 1,000,000 | ||
Amended and Restated 2003 Stock Option and Incentive Plan | |||
Share-based Compensation Arrangements | |||
Stock Compensation Plan, Shares Reserved | 1,200,000 |
Note 8. Stock Compensation Pl78
Note 8. Stock Compensation Plans - Performance Share Activity (Details) - Performance Shares - $ / shares | 12 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |||
Share-based Compensation Arrangements | |||||
Shares Outstanding, Beginning of Period | 466,778 | ||||
Shares Granted | [1] | 121,602 | |||
Shares Vested | (401,833) | [1] | (294,086) | (352,924) | |
Shares Forfeited | [1] | (82,324) | |||
Shares Outstanding, End of Period | 104,223 | 466,778 | |||
Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 11.23 | ||||
Weighted Average Grant Date Fair Value of Shares Granted | 16.62 | $ 11.26 | $ 12.12 | ||
Weighted Average Grant Date Fair Value of Shares Vested | 11.86 | ||||
Weighted Average Grant Date Fair Value of Shares Forfeited | 16.61 | ||||
Weighted Average Grant Date Fair Value of Shares Outstanding, End of Period | $ 16.52 | $ 11.23 | |||
[1] | The shares granted include the maximum number of shares that may vest under performance share awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. |
Note 8. Stock Compensation Pl79
Note 8. Stock Compensation Plans - Performance Share Textuals (Details) - Performance Shares - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Share-based Compensation Arrangements | ||||
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 5 years | |||
Unrecognized Compensation Cost | $ 0.6 | |||
Average Vesting Period for Unrecognized Compensation Cost | 1 year | |||
Weighted Average Grant Date Fair Value of Shares Granted | $ 16.62 | $ 11.26 | $ 12.12 | |
Shares Vested | 401,833 | [1] | 294,086 | 352,924 |
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 4.8 | $ 3.6 | $ 3.6 | |
[1] | The shares granted include the maximum number of shares that may vest under performance share awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. |
Note 8. Stock Compensation Pl80
Note 8. Stock Compensation Plans - Relative Total Shareholder Return Performance Unit Activity (Details) - Relative Total Shareholder Return - $ / shares | 12 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares Outstanding, Beginning of Period | 150,492 | ||||
Shares Granted | [1] | 52,334 | |||
Shares Vested | (37,535) | [1] | (57,375) | 0 | |
Shares Forfeited | [1] | (34,651) | |||
Shares Outstanding, End of Period | 130,640 | 150,492 | |||
Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 14.49 | ||||
Weighted Average Grant Date Fair Value of Shares Granted | 20.65 | $ 13.92 | $ 15.10 | ||
Weighted Average Grant Date Fair Value of Shares Vested | 16.25 | ||||
Weighted Average Grant Date Fair Value of Shares Forfeited | 15.10 | ||||
Weighted Average Grant Date Fair Value of Shares Outstanding, End of Period | $ 18.94 | $ 14.49 | |||
[1] | The shares granted include the maximum number of shares that may vest under RTSR awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. |
Note 8. Stock Compensation Pl81
Note 8. Stock Compensation Plans - Relative Total Shareholder Return Performance Unit Textuals (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 4.2 | $ 6.3 | $ 5.6 | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Relative Total Shareholder Return, Earned Percentage | 0.00% | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Relative Total Shareholder Return, Earned Percentage | 200.00% | |||
Relative Total Shareholder Return | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized Compensation Cost | $ 1 | |||
Average Vesting Period for Unrecognized Compensation Cost | 1 year 5 months | |||
Weighted Average Grant Date Fair Value of Shares Granted | $ 20.65 | $ 13.92 | $ 15.10 | |
Shares Vested | 37,535 | [1] | 57,375 | 0 |
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 0.6 | $ 1 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 130,640 | 150,492 | ||
Relative Total Shareholder Return | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 3 years | |||
Chief Executive Officer | Relative Total Shareholder Return | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 1.1 | |||
Allocated Share-based Compensation Expense | (0.3) | |||
Chief Executive Officer | Relative Total Shareholder Return | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 1.7 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 83,292 | |||
[1] | The shares granted include the maximum number of shares that may vest under RTSR awards; however, the actual number of shares which vest is determined based on the satisfaction of performance conditions, and therefore may be significantly lower. The shares vested include the earned number of shares to be issued based on performance conditions, while shares forfeited include shares that will not be issued as a result of not fully attaining the maximum performance conditions. |
Note 8. Stock Compensation Pl82
Note 8. Stock Compensation Plans - Restricted Share Unit Activity (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Outstanding, Beginning of Period | 196,616 | ||
Shares Granted | 106,778 | ||
Shares Vested | (79,315) | (86,116) | (79,461) |
Shares Forfeited | (22,253) | ||
Shares Outstanding, End of Period | 201,826 | 196,616 | |
Weighted Average Grant Date Fair Value of Shares Outstanding, Beginning of Period | $ 12 | ||
Weighted Average Grant Date Fair Value of Shares Granted | 17.14 | $ 11.85 | $ 12.19 |
Weighted Average Grant Date Fair Value of Shares Vested | 12.61 | ||
Weighted Average Grant Date Fair Value of Shares Forfeited | 13.04 | ||
Weighted Average Grant Date Fair Value of Shares Outstanding, End of Period | $ 15.10 | $ 12 |
Note 8. Stock Compensation Pl83
Note 8. Stock Compensation Plans - Restricted Share Unit Textuals (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 4.2 | $ 6.3 | $ 5.6 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized Compensation Cost | $ 2 | ||
Average Vesting Period for Unrecognized Compensation Cost | 1 year 5 months | ||
Weighted Average Grant Date Fair Value of Shares Granted | $ 17.14 | $ 11.85 | $ 12.19 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 79,315 | 86,116 | 79,461 |
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 1 | $ 0.8 | $ 0.7 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 201,826 | 196,616 | |
Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Based Compensation Arrangement By Share Based Payment Award Contractual Life | 3 years | ||
Chief Executive Officer | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 0.4 | ||
Allocated Share-based Compensation Expense | (0.1) | ||
Chief Executive Officer | Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 0.7 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 38,921 |
Note 8. Stock Compensation Pl84
Note 8. Stock Compensation Plans - Unrestricted Share Grants Textuals (Details) - Unrestricted Shares - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangements | |||
Shares Granted | 38,696 | 48,812 | 47,471 |
Weighted Average Grant Date Fair Value of Shares Granted | $ 18.31 | $ 14.12 | $ 11.21 |
Weighted Average Grant Date Fair Value of Shares Vested, Total Fair Value | $ 709 | $ 689 | $ 532 |
Note 9. Income Taxes - Textuals
Note 9. Income Taxes - Textuals (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 28.10% | 35.00% | 35.00% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ (3,300,000) | ||
Remeasurement of tax assets and liabilities related to the Tax Act | 1,839,000 | $ 0 | $ 0 |
Tax benefit associated with net operating losses | 2,179,000 | ||
Tax Credit Carryforwards | 2,168,000 | ||
Valuation Allowance, Operating Loss Carryforwards | 534,000 | ||
Valuation Allowance, Tax Credit Carryforwards, Foreign | 326,000 | ||
Income Taxes net tax paid (refunded) | 13,937,000 | 20,881,000 | 7,963,000 |
Unrecognized Tax Benefits, Interest and Penalties income (expense) | 11,000 | $ 23,000 | $ (1,000) |
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | 0 | ||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 191 | ||
Undistributed Earnings of Foreign Subsidiaries | $ 589 | ||
Statutory Federal Rate applicable in Fiscal Year 2019 | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Note 9. Income Taxes - Componen
Note 9. Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred Tax Assets: | ||
Deferred Tax Assets, Receivables | $ 708 | $ 1,152 |
Deferred Tax Assets, Inventory | 428 | 819 |
Deferred Tax Assets, Employee Benefits | 161 | 563 |
Deferred Tax Assets, Deferred Compensation | 4,061 | 13,254 |
Deferred Tax Assets, Other Current Liabilities | 70 | 446 |
Deferred Tax Assets, Warranty Reserves | 591 | 775 |
Deferred Tax Assets, Tax Credit Carryforwards | 2,168 | 1,982 |
Deferred Tax Assets, Deferred Gain on Sale Leaseback Transaction | 0 | 1,507 |
Deferred Tax Assets, Restructuring | 0 | 31 |
Deferred Tax Assets, Goodwill | 98 | 0 |
Deferred Tax Assets, Net Operating Loss Carryforwards | 2,179 | 2,256 |
Deferred Tax Assets, Miscellaneous | 2,135 | 2,251 |
Deferred Tax Assets, Valuation Allowance | (860) | (643) |
Deferred Tax Assets | 11,739 | 24,393 |
Deferred Tax Liabilities: | ||
Deferred Tax Liabilities, Property and Equipment | 6,062 | 9,203 |
Deferred Tax Liabilities, Miscellaneous | 761 | 703 |
Deferred Tax Liabilities, Net | 6,823 | 9,906 |
Net Deferred Tax Assets | $ 4,916 | $ 14,487 |
Note 9. Income Taxes - Compon87
Note 9. Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Currently Payable: | |||
Current Federal Income Tax Expense (Benefit) | $ 6,592 | $ 19,780 | $ 7,548 |
Current State Income Tax Expense (Benefit) | 1,636 | 2,318 | 1,184 |
Current Income Tax Expense (Benefit) | 8,228 | 22,098 | 8,732 |
Deferred Taxes: | |||
Deferred Federal Income Tax Expense (Benefit) | 8,236 | (1,761) | 3,081 |
Deferred State Income Tax Expense (Benefit) | 1,422 | 175 | 421 |
Deferred Income Tax Expense (Benefit) | 9,658 | (1,586) | 3,502 |
Total provision for income taxes | $ 17,886 | $ 20,512 | $ 12,234 |
Note 9. Income Taxes - Reconcil
Note 9. Income Taxes - Reconciliation of Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Tax provision computed at U.S. federal statutory rate | $ 14,703 | $ 20,306 | $ 11,686 |
Tax provision computed at U.S. federal statutory rate, percent | 28.10% | 35.00% | 35.00% |
State income taxes, net of federal income tax benefit | $ 2,198 | $ 1,620 | $ 1,043 |
State income taxes, net of federal income tax benefit, percent | 4.20% | 2.80% | 3.10% |
Domestic manufacturing deduction | $ (617) | $ (1,495) | $ (286) |
Domestic Manufacturing Deduction, percent | (1.20%) | (2.60%) | (0.90%) |
Research credit | $ (180) | $ (218) | $ (346) |
Research Credit, percent | (0.30%) | (0.40%) | (1.00%) |
Remeasurement of tax assets and liabilities related to the Tax Act | $ 1,839 | $ 0 | $ 0 |
Remeasurement of tax assets and liabilities related to the Tax Act, percent | 3.50% | 0.00% | 0.00% |
Other - net | $ (57) | $ 299 | $ 137 |
Other-Net, percent | (0.10%) | 0.60% | 0.40% |
Total provision for income taxes | $ 17,886 | $ 20,512 | $ 12,234 |
Total provision for income taxes, percent | 34.20% | 35.40% | 36.60% |
Note 9. Income Taxes - Reconc89
Note 9. Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized Tax Benefits, Beginning Balance | $ 1,888 | $ 2,077 | $ 1,920 |
Unrecognized Tax Benefits, Additions Resulting from Prior Period Tax Positions | 222 | 213 | 301 |
Unrecognized Tax Benefits, Reductions Resulting from Prior Period Tax Positions | (1,030) | (581) | (43) |
Unrecognized Tax Benefits, Additions Resulting from Current Period Tax Positions | 0 | 391 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Current Period Tax Positions | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Settlements with Taxing Authorities | 0 | 0 | 0 |
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations | (91) | (212) | (101) |
Unrecognized Tax Benefits, Ending Balance | 989 | 1,888 | 2,077 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 832 | $ 1,377 | $ 1,407 |
Note 9. Income Taxes - Accrued
Note 9. Income Taxes - Accrued Interest and Penalties Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | |||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 70 | $ 84 | $ 102 |
Unrecognized Tax Benefits, Income Tax Penalties Accrued | $ 98 | $ 102 | $ 108 |
Note 10. Fair Value - Textuals
Note 10. Fair Value - Textuals (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Nov. 06, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair Value, Transfers Between Levels, Amount | $ 0 | $ 0 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | 0 | 0 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 0 | |
Investment Owned, at Cost | 2,000,000 | ||
Derivative Asset, Fair Value, Gross Asset | 1,500,000 | 1,500,000 | |
Business Combination, Contingent Consideration, Potential Earn-out | 2,200,000 | $ 2,200,000 | |
Contingent earn-out liability | 1,100,000 | $ 1,680,000 | |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, pre-tax gain(expense) | 600,000 | ||
Assets, Fair Value Disclosure, Nonrecurring | 4,200,000 | ||
Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cost Method Investments | 500,000 | ||
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent earn-out liability | 1,056,000 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent earn-out liability | 1,056,000 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent earn-out liability | 0 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent earn-out liability | 0 | ||
Property, Plant and Equipment, Other Types | Fair Value, Measurements, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of Long-Lived Assets to be Disposed of | 200,000 | ||
Stock Warrant | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | 1,500,000 | 1,500,000 | |
Stock Warrant | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | 1,500,000 | 1,500,000 | |
Stock Warrant | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 | |
Stock Warrant | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 | |
Selling and Administrative Expenses | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, pre-tax gain(expense) | 800,000 | ||
Interest Expense | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, pre-tax gain(expense) | (200,000) | ||
Not Designated as Hedging Instrument | Other Assets | Stock Warrant | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | $ 1,500,000 | $ 1,500,000 |
Note 10. Fair Value - Recurring
Note 10. Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Nov. 06, 2017 | Jun. 30, 2017 |
Recurring Fair Value Measurements: | |||
Derivative: Stock Warrants | $ 1,500 | $ 1,500 | |
Derivatives: Foreign exchange contracts | 10 | 0 | |
Contingent earn-out liability | 1,100 | $ 1,680 | |
Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Total assets at fair value | 98,546 | 107,862 | |
Contingent earn-out liability | 1,056 | ||
Total liabilities at fair value | 1,066 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Total assets at fair value | 36,521 | 41,577 | |
Contingent earn-out liability | 0 | ||
Total liabilities at fair value | 0 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Total assets at fair value | 60,525 | 64,785 | |
Contingent earn-out liability | 0 | ||
Total liabilities at fair value | 10 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Total assets at fair value | 1,500 | 1,500 | |
Contingent earn-out liability | 1,056 | ||
Total liabilities at fair value | 1,056 | ||
Money Market Funds | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 24,407 | 30,383 | |
Money Market Funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 24,407 | 30,383 | |
Money Market Funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 0 | 0 | |
Money Market Funds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 0 | 0 | |
Commercial Paper | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 25,918 | 29,102 | |
Commercial Paper | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 0 | 0 | |
Commercial Paper | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 25,918 | 29,102 | |
Commercial Paper | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Cash equivalents | 0 | 0 | |
Certificates of Deposit | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 11,850 | 10,336 | |
Certificates of Deposit | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 11,850 | 10,336 | |
Certificates of Deposit | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 0 | 0 | |
Certificates of Deposit | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 11,850 | 10,336 | |
Certificates of Deposit | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 0 | 0 | |
US Government Corporations and Agencies Securities | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 6,249 | 3,193 | |
US Government Corporations and Agencies Securities | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 6,249 | 3,193 | |
US Government Corporations and Agencies Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 0 | 0 | |
US Government Corporations and Agencies Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 6,249 | 3,193 | |
US Government Corporations and Agencies Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 0 | 0 | |
Municipal Bonds | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 16,508 | 22,154 | |
Municipal Bonds | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 16,508 | 22,154 | |
Municipal Bonds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 0 | 0 | |
Municipal Bonds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 16,508 | 22,154 | |
Municipal Bonds | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Available-for-sale Securities | 0 | 0 | |
Mutual Fund | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Trading Securities: Mutual funds in nonqualified SERP | 12,114 | 11,194 | |
Mutual Fund | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Trading Securities: Mutual funds in nonqualified SERP | 12,114 | 11,194 | |
Mutual Fund | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Trading Securities: Mutual funds in nonqualified SERP | 0 | 0 | |
Mutual Fund | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Trading Securities: Mutual funds in nonqualified SERP | 0 | 0 | |
Foreign Exchange Contract | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Derivatives: Foreign exchange contracts | 10 | ||
Foreign Exchange Contract | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Derivatives: Foreign exchange contracts | 0 | ||
Foreign Exchange Contract | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Derivatives: Foreign exchange contracts | 10 | ||
Foreign Exchange Contract | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Derivatives: Foreign exchange contracts | 0 | ||
Stock Warrant | Fair Value, Measurements, Recurring | |||
Recurring Fair Value Measurements: | |||
Derivative: Stock Warrants | 1,500 | 1,500 | |
Stock Warrant | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | |||
Recurring Fair Value Measurements: | |||
Derivative: Stock Warrants | 0 | 0 | |
Stock Warrant | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | |||
Recurring Fair Value Measurements: | |||
Derivative: Stock Warrants | 0 | 0 | |
Stock Warrant | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Recurring Fair Value Measurements: | |||
Derivative: Stock Warrants | $ 1,500 | $ 1,500 |
Note 11. Derivative Instrumen93
Note 11. Derivative Instruments - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Derivatives, Fair Value | ||
Investment Owned, at Cost | $ 2,000 | |
Derivative Asset, Fair Value, Gross Asset | 1,500 | $ 1,500 |
Foreign Exchange Contract | ||
Derivatives, Fair Value | ||
Derivative, Notional Amount | 700 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 10 | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 4 months | |
Fair Value, Measurements, Recurring | Stock Warrant | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | $ 1,500 | $ 1,500 |
Note 11. Derivative Instrumen94
Note 11. Derivative Instruments - Fair Value of Derivative Instruments on Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Derivatives, Fair Value | ||
Derivative Liability, Fair Value, Gross Liability | $ 10 | $ 0 |
Derivative Asset, Fair Value, Gross Asset | 1,500 | 1,500 |
Foreign Exchange Contract | Designated as Hedging Instrument | Accrued Expenses | ||
Derivatives, Fair Value | ||
Derivative Liability, Fair Value, Gross Liability | 10 | 0 |
Foreign Exchange Contract | Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign Exchange Contract | ||
Derivatives, Fair Value | ||
Derivative Liability, Fair Value, Gross Liability | 10 | |
Fair Value, Measurements, Recurring | Stock Warrant | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 1,500 | 1,500 |
Fair Value, Measurements, Recurring | Stock Warrant | Not Designated as Hedging Instrument | Other Assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | $ 1,500 | $ 1,500 |
Note 12. Investments - Schedule
Note 12. Investments - Schedule of Contractual Maturities on Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Certificates of Deposit | ||
Schedule of Investments [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Next welve Months, Fair Value | $ 9,292 | |
Available-for-sale Securities, Debt Maturities, Rolling Year Two | 2,558 | |
Available-for-sale Securities | 11,850 | $ 10,336 |
Municipal Bonds | ||
Schedule of Investments [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Next welve Months, Fair Value | 14,502 | |
Available-for-sale Securities, Debt Maturities, Rolling Year Two | 2,006 | |
Available-for-sale Securities | 16,508 | 22,154 |
US Government Corporations and Agencies Securities | ||
Schedule of Investments [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Next welve Months, Fair Value | 2,196 | |
Available-for-sale Securities, Debt Maturities, Rolling Year Two | 4,053 | |
Available-for-sale Securities | $ 6,249 | $ 3,193 |
Note 12. Investments - Unrealiz
Note 12. Investments - Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Certificates of Deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | $ 11,850 | $ 10,334 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 2 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities | 11,850 | 10,336 |
Municipal Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 16,532 | 22,183 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | (24) | (29) |
Available-for-sale Securities | 16,508 | 22,154 |
US Government Corporations and Agencies Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 6,266 | 3,200 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | (17) | (7) |
Available-for-sale Securities | $ 6,249 | $ 3,193 |
Note 12. Investments - Investme
Note 12. Investments - Investment Portfolio Textuals (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2017USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale Securities, Gross Realized Gain (Loss) | $ 0 |
Note 12. Investments - Invest98
Note 12. Investments - Investments-Supplemental Employee Retirement Plan Investments Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Trading Securities, Change in Unrealized Holding Gain (Loss) | $ 585 | $ 223 | $ (484) |
Note 12. Investments - Suppleme
Note 12. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Schedule of Trading Securities and Other Trading Assets | ||
Total SERP investments | $ 12,114 | $ 11,194 |
Total SERP obligation | 12,114 | 11,194 |
Other Long-term Investments | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP investments - current asset | 8,246 | 9,935 |
SERP obligation - other long-term liability | 8,246 | 9,935 |
Short-term Investments | ||
Schedule of Trading Securities and Other Trading Assets | ||
SERP investments - current asset | 3,868 | 1,259 |
SERP obligation - current liability | $ 3,868 | $ 1,259 |
Note 12. Investments - Non-mark
Note 12. Investments - Non-marketable equity securities (Details) $ in Millions | Jun. 30, 2018USD ($) |
Investment Owned, at Cost | $ 2 |
Fair Value, Inputs, Level 3 | |
Cost Method Investments | $ 0.5 |
Note 13. Accrued Expenses - Acc
Note 13. Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Compensation | $ 22,045 | $ 22,815 |
Selling | 7,134 | 6,704 |
Employer retirement contribution | 5,605 | 6,196 |
Taxes | 3,598 | 2,568 |
Insurance | 4,210 | 4,382 |
Restructuring | 0 | 80 |
Accrued Rent | 2,997 | 2,944 |
Other expenses | 3,705 | 3,329 |
Total accrued expenses | $ 49,294 | $ 49,018 |
Note 14. Geographic Informat102
Note 14. Geographic Information - Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | $ 184,512 | $ 157,897 | $ 173,674 | $ 169,517 | $ 171,983 | $ 153,068 | $ 169,887 | $ 174,996 | $ 685,600 | $ 669,934 | $ 635,102 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | 672,918 | 658,474 | 622,096 | ||||||||
Other Foreign | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Net Sales | $ 12,682 | $ 11,460 | $ 13,006 |
Note 15. Earnings Per Share - E
Note 15. Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net Income | $ 10,254 | $ 5,850 | $ 7,378 | $ 10,957 | $ 10,560 | $ 7,231 | $ 8,717 | $ 10,998 | $ 34,439 | $ 37,506 | $ 21,156 |
Average Shares Outstanding for Basic EPS Calculation | 37,314 | 37,334 | 37,462 | ||||||||
Dilutive Effect of Average Outstanding Compensation Awards | 180 | 499 | 390 | ||||||||
Average Shares Outstanding for Diluted EPS Calculation | 37,494 | 37,833 | 37,852 | ||||||||
Basic Earnings Per Share | $ 0.28 | $ 0.16 | $ 0.20 | $ 0.29 | $ 0.28 | $ 0.19 | $ 0.23 | $ 0.29 | $ 0.92 | $ 1 | $ 0.56 |
Diluted Earnings Per Share | $ 0.28 | $ 0.16 | $ 0.20 | $ 0.29 | $ 0.28 | $ 0.19 | $ 0.23 | $ 0.29 | $ 0.92 | $ 0.99 | $ 0.56 |
Note 16. Accumulated Other C104
Note 16. Accumulated Other Comprehensive Income - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Accumulated Other Comprehensive Income at beginning of period | $ 1,115 | $ 1,311 |
Other Comprehensive Income (Loss) before Reclassifications | 584 | 93 |
Reclassification to (earnings) loss | (173) | (289) |
Net current-period other comprehensive income (loss) | 411 | (196) |
Reclassification of change in enacted income tax rate to retained earnings | 290 | |
Accumulated Other Comprehensive Income at end of period | 1,816 | 1,115 |
Unrealized Investment Gain (Loss) | ||
Accumulated Other Comprehensive Income at beginning of period | (21) | 0 |
Other Comprehensive Income (Loss) before Reclassifications | (8) | (21) |
Reclassification to (earnings) loss | 3 | 0 |
Net current-period other comprehensive income (loss) | (5) | (21) |
Reclassification of change in enacted income tax rate to retained earnings | (5) | |
Accumulated Other Comprehensive Income at end of period | (31) | (21) |
Postemployment Benefits, Net Actuarial Gain (Loss) | ||
Accumulated Other Comprehensive Income at beginning of period | 1,136 | 1,311 |
Other Comprehensive Income (Loss) before Reclassifications | 599 | 114 |
Reclassification to (earnings) loss | (176) | (289) |
Net current-period other comprehensive income (loss) | 423 | (175) |
Reclassification of change in enacted income tax rate to retained earnings | 295 | |
Accumulated Other Comprehensive Income at end of period | 1,854 | 1,136 |
Derivative Gain (Loss) | ||
Accumulated Other Comprehensive Income at beginning of period | 0 | 0 |
Other Comprehensive Income (Loss) before Reclassifications | (7) | 0 |
Reclassification to (earnings) loss | 0 | 0 |
Net current-period other comprehensive income (loss) | (7) | 0 |
Reclassification of change in enacted income tax rate to retained earnings | 0 | |
Accumulated Other Comprehensive Income at end of period | $ (7) | $ 0 |
Note 16. Accumulated Other C105
Note 16. Accumulated Other Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | $ 1 | $ 0 | $ 0 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | (4) | 0 | 0 | |
Available-for-sale Securities, Gross Realized Gain (Loss) | (3) | 0 | 0 | |
Postemployment Benefits Amortization of Actuarial Gain | 260 | 473 | $ 441 | |
Reclassification to (earnings) loss | 173 | 289 | ||
Non-operating income (expense), net | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | (4) | |||
Cost of Sales | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Postemployment Benefits Amortization of Actuarial Gain | 168 | 301 | ||
Selling and Administrative Expenses | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Postemployment Benefits Amortization of Actuarial Gain | 92 | 172 | ||
Benefit (Provision) for Income Taxes | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 1 | 0 | ||
Postemployment Benefits Amortization of Actuarial Gain | (84) | (184) | ||
Net Income | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Available-for-sale Securities, Gross Realized Gain (Loss) | [1] | (3) | ||
Postemployment Benefits Amortization of Actuarial Gain | [2] | 176 | 289 | |
Reclassification to (earnings) loss | $ 173 | $ 289 | ||
[1] | See Note 12 - Investments of Notes to Consolidated Financial Statements for further information on available-for-sale securities. | |||
[2] | See Note 7 - Employee Benefit Plans of Notes to Consolidated Financial Statements for further information on postemployment benefit plans. |
Note 17. Restructuring Expen106
Note 17. Restructuring Expense - Textuals (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring Expense and Other Related Items | |||||||
Restructuring (Gain) Expense | $ 0 | $ 0 | $ 0 | $ (1,832) | $ 0 | $ (1,832) | $ 7,328 |
Restructuring Reserve, Current | 80 | 0 | 80 | ||||
Gain (Loss) on Disposition of Property Plant Equipment | $ 2,050 | $ 3,148 | $ (181) | ||||
Percentage of Restructuring Costs Expected in Cash | 91.00% | ||||||
Transition and Other Employee Costs | |||||||
Restructuring Expense and Other Related Items | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 4,900 | $ 4,900 | |||||
Plant Closure and Other Exit Costs | |||||||
Restructuring Expense and Other Related Items | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 6,900 | 6,900 | |||||
Asset Write-Downs | |||||||
Restructuring Expense and Other Related Items | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 1,100 | 1,100 | |||||
FY 2015 Post Falls Restructuring Plan | |||||||
Restructuring Expense and Other Related Items | |||||||
Annual Pre-tax Operating Income Savings | 5,000 | ||||||
Post Falls Land and Facility | |||||||
Restructuring Expense and Other Related Items | |||||||
Gain (Loss) on Disposition of Property Plant Equipment | 2,100 | ||||||
Post Falls Land and Facility | |||||||
Restructuring Expense and Other Related Items | |||||||
Proceeds from Sale of Buildings | 12,000 | ||||||
Restructuring (Gain) Expense | |||||||
Restructuring Expense and Other Related Items | |||||||
Restructuring and Related Cost, Cost Incurred to Date | $ 10,800 | $ 10,800 |
Note 18. Variable Interest E107
Note 18. Variable Interest Entities - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Related Allowance | $ 233 | $ 126 |
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | ||
Variable Interest Entity | ||
Variable Interest Entity, Obligation to Provide Additional Funding, Amount | 0 | |
Independent Dealership Financing | Notes Receivable | ||
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Related Allowance | 50 | 0 |
Receivables and Other Assets | Independent Dealership Financing | Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | Notes Receivable | ||
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets | 600 | 400 |
Variable Interest Entity, Nonconsolidated, Related Allowance | 50 | |
Other Assets | Cost-method Investments | Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | ||
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets | 500 | 500 |
Other Assets | Stock Warrant | Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | ||
Variable Interest Entity | ||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets | $ 1,500 | $ 1,500 |
Note 19. Credit Quality and 108
Note 19. Credit Quality and Allowance for Credit Losses of Notes Receivable - Textuals (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Notes Receivable | ||
Notes Receivable | ||
Notes Receivable, Past Due | $ 0 | $ 0 |
Note 19. Credit Quality and 109
Note 19. Credit Quality and Allowance for Credit Losses of Notes Receivable - Credit Quality and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Notes Receivable | ||
Notes Receivable, Unpaid Balance | $ 849 | $ 571 |
Notes Receivable, Related Allowance | 233 | 126 |
Notes Receivable, Net of Allowance | 616 | 445 |
Notes Receivable | Independent Dealership Financing | ||
Notes Receivable | ||
Notes Receivable, Unpaid Balance | 666 | 433 |
Notes Receivable, Related Allowance | 50 | 0 |
Notes Receivable, Net of Allowance | 616 | 433 |
Notes Receivable | Other Notes Receivable | ||
Notes Receivable | ||
Notes Receivable, Unpaid Balance | 183 | 138 |
Notes Receivable, Related Allowance | 183 | 126 |
Notes Receivable, Net of Allowance | $ 0 | $ 12 |
Note 20. Quarterly Financial110
Note 20. Quarterly Financial Information (Unaudited) - Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net Sales | $ 184,512 | $ 157,897 | $ 173,674 | $ 169,517 | $ 171,983 | $ 153,068 | $ 169,887 | $ 174,996 | $ 685,600 | $ 669,934 | $ 635,102 |
Gross Profit | 60,166 | 47,755 | 53,936 | 59,589 | 57,808 | 51,052 | 55,758 | 58,687 | 221,446 | 223,305 | 203,804 |
Restructuring (Gain) Expense | 0 | 0 | 0 | (1,832) | 0 | (1,832) | 7,328 | ||||
Net Income | $ 10,254 | $ 5,850 | $ 7,378 | $ 10,957 | $ 10,560 | $ 7,231 | $ 8,717 | $ 10,998 | $ 34,439 | $ 37,506 | $ 21,156 |
Basic Earnings Per Share | $ 0.28 | $ 0.16 | $ 0.20 | $ 0.29 | $ 0.28 | $ 0.19 | $ 0.23 | $ 0.29 | $ 0.92 | $ 1 | $ 0.56 |
Diluted Earnings Per Share | $ 0.28 | $ 0.16 | $ 0.20 | $ 0.29 | $ 0.28 | $ 0.19 | $ 0.23 | $ 0.29 | $ 0.92 | $ 0.99 | $ 0.56 |
Schedule II Valuation and Qu111
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Additions (Reductions) to Expense | $ 489 | ||
Valuation Allowances, Adjustments to Other Accounts | $ 489 | ||
Short-Term Receivables | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | $ 1,626 | 2,145 | 1,522 |
Valuation Allowances, Additions (Reductions) to Expense | (25) | (206) | 374 |
Valuation Allowances, Adjustments to Other Accounts | 204 | 101 | 310 |
Valuation Allowances, Write-offs and Recoveries | (488) | (414) | (61) |
Valuation Allowances, Balance at End of Year | 1,317 | 1,626 | 2,145 |
Long-Term Notes Receivable | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | 109 | 118 | 618 |
Valuation Allowances, Additions (Reductions) to Expense | (3) | (9) | (11) |
Valuation Allowances, Adjustments to Other Accounts | 33 | 0 | (489) |
Valuation Allowances, Write-offs and Recoveries | 0 | 0 | 0 |
Valuation Allowances, Balance at End of Year | 139 | 109 | 118 |
Deferred Tax Asset | |||
Movement in Valuation Allowances [Roll Forward] | |||
Valuation Allowances, Balance at Beginning of Year | 643 | 687 | 687 |
Valuation Allowances, Additions (Reductions) to Expense | 0 | 0 | 0 |
Valuation Allowances, Adjustments to Other Accounts | 326 | 0 | 0 |
Valuation Allowances, Write-offs and Recoveries | (109) | (44) | 0 |
Valuation Allowances, Balance at End of Year | $ 860 | $ 643 | $ 687 |
Schedule II Valuation and Qu112
Schedule II Valuation and Qualifying Accounts - Textuals (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Valuation Allowances, Additions (Reductions) to Expense | $ 489 | |
Valuation Allowances, Adjustments to Other Accounts | $ (489) |