Kimball Electronics, Inc.KE

Kimball Electronics, Inc. Leases Disclosure

10-KFiled Aug 22, 20252 min read
Leases
The Company determines if a contract is or contains a lease at inception. The Company leases certain office, manufacturing, and warehouse facilities and equipment under operating leases, in addition to land on which certain office and manufacturing facilities reside. These operating leases expire from fiscal year 2027 to 2056.
Operating lease costs in fiscal years 2025, 2024, and 2023 were $1.5 million, $1.9 million, and $1.7 million, respectively. During fiscal year 2025, the Company executed a lease for a facility to expand our medical CMO footprint with the lease commencing in June 2025, including obtaining $10.6 million operating right-of-use assets in exchange for operating lease liabilities. The initial lease term is ten years and annual base rent of $1.8 million, increasing 3% each year.
The lease assets and liabilities, which exclude leases with terms of 12 months or less, as of June 30, 2025 and 2024, were as follows, amounts as of June 30, 2024 exclude the amounts classified as held for sale:
(Amounts in Thousands)20252024
Operating lease right-of-use assets (included in Other Assets)$11,779 $1,765 
Operating lease liability, current (included in Accrued expenses)$520 $623 
Operating lease liability, noncurrent (included in Other long-term liabilities)$11,386 $1,142 
Weighted average remaining lease term in years - operating leases9.63.8
Weighted average discount rate - operating leases5.9%4.0%
Cash payments for operating leases included in the measurement of lease liabilities in fiscal years 2025, 2024, and 2023 were $0.7 million, $1.4 million, and $1.1 million, respectively, and were included in Cash Flows from Operating Activities in the Consolidated Statements of Cash Flows.
Future lease payments as of June 30, 2025 are as follows:
(Amounts in Thousands)
2026$1,442 
20272,259 
20282,125 
20292,080 
20302,050 
Thereafter12,205 
Total undiscounted lease payments$22,161 
Less: tenant allowance not yet received4,617 
Less: imputed interest5,638 
Present value of lease liabilities
$11,906 

Historical Timeline

Fiscal YearFiled
2025Aug 22, 2025Showing above
2020Aug 27, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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