Kimball Electronics, Inc.KE
Kimball Electronics, Inc. Debt Disclosure
Credit Facilities
Credit facilities consisted of the following:
| Available Borrowing Capacity at | Borrowings Outstanding at | Borrowings Outstanding at | |||||||||||||||
| (Amounts in Millions, in U.S. Dollar Equivalents) | June 30, 2025 | June 30, 2025 | June 30, 2024 | ||||||||||||||
Primary credit facility, revolving (1) | $ | 249.6 | $ | 50.0 | $ | 285.5 | |||||||||||
Primary credit facility, term (1) | 2.5 | 97.5 | — | ||||||||||||||
Secondary credit facility (2) | — | — | — | ||||||||||||||
Thailand overdraft credit facility (3,4) | 10.1 | — | — | ||||||||||||||
China revolving credit facility (3,5) | — | — | — | ||||||||||||||
Netherlands revolving credit facility (3,6) | 10.8 | — | 9.3 | ||||||||||||||
Poland revolving credit facility (3,7) | 11.7 | — | — | ||||||||||||||
Vietnam credit facility (3,8) | — | — | — | ||||||||||||||
| Total credit facilities | $ | 284.7 | 147.5 | 294.8 | |||||||||||||
| Unamortized deferred debt financing fees | $ | (0.4) | $ | — | |||||||||||||
| Total long-term debt | $ | 147.1 | $ | 294.8 | |||||||||||||
| Less: current portion | (17.4) | (59.8) | |||||||||||||||
Long-term debt under credit facilities, less current portion (9) | $ | 129.7 | $ | 235.0 | |||||||||||||
(1)The Company maintained a U.S. primary credit facility which was scheduled to mature on May 4, 2027 that provided for $300 million in borrowings, and the Company had utilized this facility for revolving borrowings. On December 20, 2024, the Company entered into an amended and restated credit agreement (the “restated primary credit facility”) among the Company, the lenders party thereto, and JPMorgan Chase Bank, N. A., as Administrative Agent, and Bank of America, N.A., as Documentation Agent. The restated primary credit facility adds a term loan borrowing facility that provides for term loan borrowings (“term borrowings”) of $100 million repayable in scheduled quarterly installments, scheduled to mature December 20, 2029. The terms for the revolving borrowings remain largely unchanged with a maturity date of May 4, 2027 and continue to provide for $300 million in borrowings, with an option to increase the amount available for borrowing to $450 million upon request, subject to the consent of each lender participating in such increase.
This facility is maintained for working capital and general corporate purposes of the Company, and pursuant to the restated primary credit facility, the Company is permitted to use the proceeds to refinance existing indebtedness. A commitment fee is payable on the unused portion of the credit facility at a rate that ranges from 10.0 to 25.0 basis points per annum as determined by the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA, as defined in the
restated primary credit facility. Types of borrowings available on the restated primary credit facility include term loans, revolving loans, multi-currency term loans, and swingline loans.
At June 30, 2025, all outstanding borrowings under the primary credit facility were Term Benchmark borrowings denominated in U.S. dollars.
The interest rate on borrowings is dependent on the class, type and currencies of borrowings and will be one of the following options:
•any Term Benchmark borrowing denominated in U.S. Dollars will utilize the Secured Overnight Financing Rate (“SOFR”) for one, three, or six-month tenors as elected, which is a rate per annum equal to the secured overnight financing rate for such business day published by the SOFR Administrator, the Federal Reserve Bank of New York, on the immediately succeeding business day, plus ten hundredths percent (0.10%), plus the Revolving Commitment Term Benchmark spread or Term Loan Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA;
•any Term Benchmark borrowing denominated in Euros will utilize the Euro Interbank Offered Rate (“EURIBOR”) in effect two target days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period as defined in the agreement, plus the Revolving Commitment Term Benchmark spread or Term Loan Term Benchmark spread which can range from 100.0 to 175.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or
•the Alternate Base Rate (“ABR”), which is defined as the highest of the fluctuating rate per annum equal to the higher of:
a.Prime Rate in the U.S. last quoted by the Wall Street Journal, and if this is ceased to be quoted, the highest bank prime loan rate or similar loan rate quoted by the Federal Reserve Board;
b.1/2 of 1% per annum above the Federal Reserve Bank of New York (NYFRB) Rate (as defined under the restated primary credit facility); or
c.1% per annum above the Adjusted SOFR Rate (as defined under the restated primary credit facility);
plus the Revolving Commitment ABR spread which can range from 0.0 to 75.0 basis points based on the Company’s ratio of consolidated total indebtedness to adjusted consolidated EBITDA. Under the restated primary credit facility, the ABR Spread and Benchmark Spread for term borrowings are the same as for revolving borrowings.
The Company’s financial covenants under the amended primary credit facility require:
•a ratio of consolidated total indebtedness minus unencumbered U.S. cash on hand in the United States in excess of $15 million to adjusted 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, provided, however, that for each fiscal quarter end during the four quarter period following a material permitted acquisition, as defined in the Credit Agreement, the Company will not permit this financial covenant to be greater than 3.5 to 1.0 for each such fiscal quarter end, and,
•an interest coverage ratio, defined as that ratio of consolidated EBITDA for such period to cash interest expense for such period, for any period of four consecutive fiscal quarters, to not be less than 3.5 to 1.0.
The Company had $0.4 million in letters of credit contingently committed against the primary credit facility at both June 30, 2025 and June 30, 2024.
(2)Concurrently on December 20, 2024 with its entry into the restated primary credit facility, the Company terminated its 364-day multi-currency revolving credit facility agreement (the “secondary credit facility”), which was entered into on January 5, 2024 and originally scheduled to mature on January 3, 2025. The secondary credit facility allowed for borrowings up to $100.0 million, and the Company had no borrowings on the secondary credit facility at June 30, 2024.
(3)The Company also maintains foreign credit facilities for working capital and general corporate purposes at specific foreign locations rather than utilizing funding from intercompany sources. These foreign credit facilities can be canceled at any time by either the bank or us and generally include renewal clauses. Interest on borrowing under these facilities is charged at a rate as defined under the respective foreign credit facility.
(4)The Company maintains a foreign credit facility for its operation in Thailand which allows for borrowings of up to $10.1 million.
(5)The Company no longer maintains the foreign credit facility for its operation in China .
(6)The Company maintains an uncommitted revolving credit facility for our Netherlands subsidiary. The Netherlands credit facility allows for borrowings of up to 9.2 million Euro (approximately $10.8 million at June 30, 2025 exchange rates), which borrowings can be made in Euro, U.S. dollars, or other optional currency. Interest on borrowing under this facility is charged at a rate of interest dependent on the denomination of the currency borrowed.
(7)The Company maintains a foreign credit facility for its operation in Poland which allows for borrowings up to 10.0 million Euro (approximately $11.7 million at June 30, 2025 exchange rates).
(8)As a result of the GES divestiture that occurred on July 31, 2024, the Company no longer has the Vietnam credit facility, which allowed for borrowings up to $5.0 million.
(9)The amount of Long-term debt under credit facilities, less current maturities reflects the borrowings on the primary credit facility that the Company intends, and has the ability, to refinance for a period longer than twelve months. The revolving borrowings on the primary credit facility matures on May 4, 2027.
As of June 30, 2025, the contractual maturities of the term borrowings on the primary credit facility were as follows:
| (Amounts in Millions) | Contractual Maturities | ||||
| Fiscal year: | |||||
| 2026 | $ | 5.00 | |||
| 2027 | 6.25 | ||||
| 2028 | 7.50 | ||||
| 2029 | 8.75 | ||||
| Thereafter | 70.00 | ||||
| Total | $ | 97.50 | |||
The weighted-average interest rate on borrowings outstanding under the credit facilities at June 30, 2025 and June 30, 2024 were 5.9% and 6.8%, respectively. Capitalized interest expense was immaterial during fiscal years 2025, 2024, and 2023.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.