Kimball Electronics, Inc.

Previous wording

We are a global, multifaceted manufacturing solutions provider. We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. Our core competency is producing durable electronics. We further offer contract manufacturing organization (“CMO”) solutions which include operations such as precision molded plastics, complete device assembly, and cold chain management, which support the production of medical disposables and selected drug delivery devices such as auto-injectors. Our manufacturing services, including engineering and supply chain support, utilize common production and support capabilities globally. We are well recognized by our customers and the industry for our excellent quality, reliability, and innovative service. CIRCUITS ASSEMBLY, a leading brand and technical publication for electronics manufacturers worldwide, has recognized us for the past 13 consecutive years for rankings in Highest Overall Customer Ratings in their Service Excellence Awards. Most recently, we were recognized by our customers for highest ratings in service excellence in seven categories: dependability/timely delivery, manufacturing quality, responsiveness, technology, value for the price, flexibility, and overall satisfaction.

Current wording

We are a global, multifaceted manufacturing solutions provider. We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. We further produce higher level and final assemblies and offer contract manufacturing organization (“CMO”) solutions which include the production of medical disposables and drug delivery devices, from precision molded plastics and cold chain management to drug integration. Our manufacturing services, including engineering and supply chain support, utilize common production and support capabilities globally. We are well recognized by our customers and the industry for our excellent quality, reliability, and innovative service. We have participated in the CIRCUITS ASSEMBLY Service Excellence Awards for the past twelve consecutive years, winning awards for excellence each year of participation and recently receiving top honors in all seven award categories. CIRCUITS ASSEMBLY is a leading brand and technical publication for electronics manufacturers worldwide.

Previous wording

The Worldwide Manufacturing Services Market - 2024 Edition, a comprehensive study on the worldwide EMS market published by New Venture Research (“NVR”), provided worldwide forecast trends through 2028. NVR projects the worldwide assembly market for electronics products to grow at a compound annual growth rate (“CAGR”) of 4.6% over the next five years, with the EMS industry projected to grow at a CAGR of 4.6%.

Current wording

The Worldwide Manufacturing Services Market - 2025 Edition, a comprehensive study on the worldwide EMS market published by New Venture Research (“NVR”), provided worldwide forecast trends through 2029. NVR projects the worldwide assembly market for electronics products to grow at a compound annual growth rate (“CAGR”) of 6.3% over the next five years.

Previous wording

Net sales in the third quarter of the current fiscal year decreased 12% compared to the prior fiscal year third quarter, most significantly in our automotive and industrial end market verticals. The decrease in sales to customers in the automotive markets were largely driven by the loss of a major automotive program that was unrelated to Kimball. The increase in sales to customers in the medical markets were favorably impacted by $24M in non-recurring consignment inventory sales to a customer for completed programs. The decrease in sales to customers in the industrial market were related to the sale of GES and declines in smart metering and public safety.

Current wording

Net sales in the first quarter of the current fiscal year decreased 2% compared to the prior fiscal year first quarter, most significantly in our automotive end market vertical.

Previous wording

We completed the divestiture of our GES business on July 31, 2024 and undertook restructuring efforts beginning in fiscal year 2024 to align our cost structure with reduced end-market demand levels. In addition, on November 4, 2024, the Company announced that its Board of Directors has approved a plan to cease operations at our Tampa facility, expected to be completed by the end of the fiscal year. The decision was another important step towards sharpening our strategic focus, while leveraging our global footprint and streamlining the operating structure. Production activities on existing customer programs will be transferred out of Tampa, with the majority of the work going to our plants in North America, primarily our newly expanded facility in Mexico and Jasper.

Current wording

In fiscal year 2025, the Company announced that its Board of Directors had approved a plan to cease operations at our Tampa facility, which was completed by the end of the fiscal year 2025. The decision was another important step towards sharpening our strategic focus, while leveraging our global footprint and streamlining the operating structure. Production activities on existing customer programs were transferred out of Tampa, with the majority of the work going to our plants in North America, primarily our newly expanded facility in Mexico and Jasper. As we continue to monitor the progression of tariffs and the geopolitical economic environment, additional restructuring efforts may be necessary. We continue to work with our customers to optimize our global footprint.

Previous wording

We continue to maintain a strong balance sheet, which included a current ratio of 2.1, a debt-to-equity ratio of 0.3, and Share Owners’ equity of $548 million at March 31, 2025. Refer to the Future Liquidity section of Liquidity and Capital Resources below for further discussion of our liquidity.

Current wording

We continue to maintain a strong balance sheet, which included a current ratio of 2.2, a debt-to-equity ratio of 0.2, and Share Owners’ equity of $577 million at September 30, 2025. Refer to the Future Liquidity section of Liquidity and Capital Resources below for further discussion of our liquidity.

Previous wording

Third quarter fiscal year 2025 consolidated net sales decreased 12% compared to the third quarter of fiscal year 2024, and the year-to-date fiscal year 2025 consolidated net sales also decreased 14% compared to the year-to-date period of fiscal year 2024. Foreign currency fluctuations had an unfavorable 1% impact on net sales in the current quarter compared to the third quarter of fiscal year 2024, and the impact was less than 1% in the current year-to-date period compared to the year-to-date period of fiscal year 2024. The non-recurring consignment sale discussed below had a favorable impact on consolidated net sales of 6% and 2% in the current year third quarter and year-to-date period, respectively. By end market vertical, our market verticals fluctuated as follows:

Current wording

First quarter fiscal year 2026 consolidated net sales decreased 2% compared to the first quarter of fiscal year 2025. Foreign currency fluctuations had a favorable 1% impact on net sales in the current quarter compared to the first quarter of fiscal year 2025.

Previous wording

Sales to Nexteer Automotive, Philips, ZF, and HL Mando accounted for the following portions of our net sales:

Current wording

Sales to Nexteer Automotive, Philips, and ZF accounted for the following portions of our net sales:

Previous wording

Selling and administrative expenses decreased both as a percent of net sales and in absolute dollars in the third quarter of fiscal year 2025 when compared to the third quarter of fiscal year 2024 as well as in the first nine months of the fiscal year, driven by cost reduction efforts, the classification of factoring fees, and the benefit from lower allowance for credit losses. Selling and administrative expenses for the first nine months of fiscal year 2025 also experienced lower profit-sharing bonus expense and stock compensation expense driven by the decline in financial results.

Current wording

Selling and administrative expenses decreased moderately both as a percent of net sales and in absolute dollars in the first quarter of fiscal year 2026 when compared to the first quarter of fiscal year 2025. In the first quarter of fiscal year 2026, following a customer termination of a program, an agreement was reached for the customer to compensate us for incurred costs, resulting in recognition of a $2.0 million recovery recorded in selling and administrative expenses. This was partially offset by increased profit-sharing bonus expense driven by improved performance.

Previous wording

In the three and nine months ended March 31, 2025, we recorded pre-tax restructuring expense of $2.0 million and $9.0 million, respectively, for employee-related costs as we undertook restructuring efforts to align our cost structure with reduced end market demand levels and incurred costs related to the Tampa closure in the second quarter. In the three and nine months ended March 31, 2024, we recorded pre-tax restructuring expense of $1.6 million for employee-related costs for cost structure alignment.

Current wording

In the three months ended September 30, 2025, we recorded pre-tax restructuring expense of $1.4 million for employee-related costs as we undertook restructuring efforts to align our cost structure with reduced end market demand levels and incurred costs related to the Tampa closure. In the three months ended September 30, 2024, we recorded pre-tax restructuring expense of $2.3 million for employee-related costs for cost structure alignment.

Previous wording

Interest expense has decreased in the three and nine months ended March 31, 2025 compared to the three and nine months ended March 31, 2024 due to lower borrowings on credit facilities and lower interest rates. Foreign currency/derivative gains (losses) result from net foreign currency exchange rate movements during the periods. The revaluation to fair value of the SERP investments recorded in Other Income (Expense) is offset by the revaluation of the SERP liability recorded in Selling and Administrative Expenses, and thus there is no effect on net income. Prior to fiscal year 2025, factoring fees were recorded in Selling and Administrative Expenses on our Condensed Consolidated Statements of Income.

Current wording

Interest expense has decreased in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due to lower borrowings on credit facilities and lower interest rates. Foreign currency/derivative gains (losses) result from net foreign currency exchange rate movements during the periods. The revaluation to fair value of the SERP investments recorded in Other Income (Expense) is offset by the revaluation of the SERP liability recorded in Selling and Administrative Expenses, and thus there is no effect on net income.

Previous wording

Our provision (benefit) for income taxes for the nine months ended March 31, 2025 and March 31, 2024 was $3.1 million, or 23.0% of income before taxes on income, and $(1.2) million, or (10.5)% of income before taxes on income, respectively. The tax benefit in the nine months ended March 31, 2024 was lower than normal primarily due to the sale of GES in that year.

Current wording

Our provision (benefit) for income taxes for the three months ended September 30, 2025 and September 30, 2024 was $0.9 million, or 8.3% of income before taxes on income, and $(0.3) million, or (9.4)% of income before taxes on income, respectively. The low tax rate in the three months ended September 30, 2025 was driven by the new U.S. tax legislation resulting in a partial release of the valuation allowance against the business interest limitation deferred tax asset. The tax benefit in the three months ended September 30, 2024 was the result of an interest recovery on a prior period tax audit.

Previous wording

Open orders were down 23% as of March 31, 2025 compared to March 31, 2024. The decrease in open orders from March 31, 2024 is primarily driven by reduced orders due to cancellation of a major automotive program, other automotive customer demand reductions, and industrial customer demand reductions. Open orders at a point in time may not be indicative of future sales trends due to the contract nature of our business. Our open orders depend on the lead times from our customers, which have reduced since March 31, 2024 when parts were more constrained, which also contributed to the decline in open orders.

Current wording

Open orders were flat as of September 30, 2025 compared to September 30, 2024. Open orders at a point in time may not be indicative of future sales trends due to the contract nature of our business.

Previous wording

Working capital at March 31, 2025 was $376.3 million compared to working capital of $471.7 million at June 30, 2024. The current ratio was 2.1 at March 31, 2025 and 2.3 June 30, 2024. The debt-to-equity ratio was 0.3 at March 31, 2025 and 0.5 at June 30, 2024. Our short-term liquidity available, represented as cash and cash equivalents plus the unused amount of our credit facilities, some of which are uncommitted, totaled $304.6 million at March 31, 2025 and $220.1 million at June 30, 2024.

Current wording

Working capital at September 30, 2025 was $378.5 million compared to working capital of $381.0 million at June 30, 2025. The current ratio was 2.2 at September 30, 2025 and 2.2 at June 30, 2025. The debt-to-equity ratio was 0.2 at September 30, 2025 and 0.3 at June 30, 2025. Our short-term liquidity available, represented as cash and cash equivalents plus the unused amount of our credit facilities, some of which are uncommitted, totaled $370.0 million at September 30, 2025 and $373.5 million at June 30, 2025.

Previous wording

We define Days Sales Outstanding as the average of monthly trade accounts and notes receivable divided by an average day’s net sales, Contract Asset Days as the average monthly contract assets divided by an average day’s net sales, Production Days Supply on Hand as the average of monthly gross inventory divided by an average day’s cost of sales, Accounts Payable Days as the average of monthly accounts payable divided by an average day’s cost of sales, and Advances from Customers Days as the average of monthly customer deposits divided by an average day’s cost of sales. Over the past several quarters, we have supported our customers through strategic inventory builds to mitigate parts shortages, which adversely impacted our PDSOH and CCD metrics. We have experienced customers push out deliveries and sales declines, which have negatively impacted our cash conversion days and working capital. We expect our CCD metrics to improve as we align our working capital with the lower sales levels.

Current wording

We define Days Sales Outstanding as the average of monthly trade accounts and notes receivable divided by an average day’s net sales, Contract Asset Days as the average monthly contract assets divided by an average day’s net sales, Production Days Supply on Hand as the average of monthly gross inventory divided by an average day’s cost of sales, Accounts Payable Days as the average of monthly accounts payable divided by an average day’s cost of sales, and Advances from Customers Days as the average of monthly customer deposits divided by an average day’s cost of sales. Over the past several quarters, we have improved our CCD metrics by better aligning our working capital with the lower sales levels.

Previous wording

The following table reflects the major categories of cash flows for the first nine months of fiscal years 2025 and 2024.

Current wording

The following table reflects the major categories of cash flows for the first three months of fiscal years 2026 and 2025.

Previous wording

Net cash provided by operating activities for the first nine months of fiscal year 2025 was driven by net income adjusted for non-cash items and changes in operating assets and liabilities. Net cash provided by operating activities for the first nine months of the prior year was driven by net income adjusted for non-cash items, partially offset by changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities for the first three months of fiscal year 2026 was driven by net income adjusted for non-cash items, partially offset by changes in operating assets and liabilities. Net cash provided by operating activities for the first three months of the prior year was driven by net income adjusted for non-cash items and changes in operating assets and liabilities.

Previous wording

Net income adjusted for non-cash items provided cash of $40.0 million in the first nine months of fiscal year 2025, while changes in operating assets and liabilities provided $65.9 million of cash in the first nine months of fiscal year 2025, largely due to a decrease of accounts receivable, which provided cash of $32.5 million, and a decrease of inventory, which provided cash of $39.9 million. Partially offsetting cash provided by accounts receivable and inventory was a decrease in accrued expenses and taxes payable, which used cash of $19.7 million primarily driven by timing of profit-sharing incentive bonus and income tax payments.

Current wording

Net income adjusted for non-cash items generated cash of $16.8 million in the first three months of fiscal year 2025, while changes in operating assets and liabilities provided $28.7 million of cash in the first three months of fiscal year 2025, largely due to a decrease of accounts receivable, which provided cash of $20.1 million primarily resulting from decreased sales volumes compared to the three months ended June 30, 2024, and an increase in advances from customers, which provided cash of $8.7 million. Partially offsetting cash provided by accounts receivable and advances from customers was a decrease in accrued expenses and taxes payable, which used cash of $22.5 million primarily driven by timing of profit-sharing incentive bonus and income tax payments.

Previous wording

Net cash used for investing activities in the first nine months of fiscal year 2024 included $37.9 million cash used for capital investments. The capital investments were primarily to support new business awards, facility expansions, and replacement of older machinery and equipment.

Current wording

Net cash used by investing activities of $6.2 million in the first three months of fiscal year 2026 was largely due to capital investments of $10.6 million. The capital investments were primarily for the new medical facility in Indianapolis as well as to support new business awards and replacement of older machinery and equipment.

Previous wording

Net cash used by investing activities of $5.2 million in the first nine months of fiscal year 2025 was largely due to capital investments of $24.0 million primarily to support new business awards and replacement of older machinery and equipment, partially offset by the $18.5 million of proceeds from the sale of GES. See Note 3 - Sale of GES of Notes to Consolidated Financial Statements for more information on the divestiture of GES.

Current wording

Net cash provided by investing activities of $5.2 million in the first three months of fiscal year 2025 was largely due to the $18.5 million of proceeds from the sale of GES, partially offset by capital investments of $13.5 million primarily to support new business awards and replacement of older machinery and equipment. See Note 3 - Sale of GES of Notes to Consolidated Financial Statements for more information on the divestiture of GES.

Previous wording

For the first nine months of fiscal year 2025, net cash used for financing activities of $126.6 million resulted largely from net payments on our credit facilities of $116.1 million. For the first nine months of fiscal year 2024, net cash provided by financing activities of $36.6 million resulted largely from net borrowings on our credit facilities of $38.2 million primarily for working capital purposes and capital expenditures.

Current wording

For the first three months of fiscal year 2026, net cash used for financing activities of $14.0 million resulted largely from net payments on our credit facilities of $9.6 million. For the first three months of fiscal year 2025, net cash used for financing activities of $53.0 million resulted largely from net payments on our credit facilities of $49.1 million.

Previous wording

The Company maintains a U.S. primary credit facility (the “primary credit facility”) scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in revolving borrowings, with an option to increase the amount available for borrowing to $450 million at the Company’s request, subject to the consent of each lender participating in such increase. On December 20, 2024, the Company entered into an amended and restated credit agreement which resulted in the addition of a term loan borrowing, allowing for term loan borrowings of $100 million repayable in scheduled quarterly installments, and is scheduled to mature on December 20, 2029. This facility is maintained for working capital and general corporate purposes of the Company. The Company terminated its 364-day multi-currency revolving credit facility (the “secondary credit facility”), which previously allowed for borrowings up to $100 million and had a maturity date of January 3, 2025. We were in compliance with the financial covenants of the primary credit facility during the period ended March 31, 2025.

Current wording

The Company maintains a U.S. primary credit facility (the “primary credit facility”) scheduled to mature May 4, 2027. The primary credit facility provides for $300 million in revolving borrowings, with an option to increase the amount available for borrowing to $450 million at the Company’s request, subject to the consent of each lender participating in such increase. On December 20, 2024, the Company entered into an amended and restated credit agreement which resulted in the addition of a term loan borrowing, allowing for term loan borrowings of $100 million repayable in scheduled quarterly installments, and is scheduled to mature on December 20, 2029. This facility is maintained for working capital and general corporate purposes of the Company. We were in compliance with the financial covenants of the primary credit facility during the period ended September 30, 2025.

Previous wording

We also maintain 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. As of March 31, 2025, we maintained foreign credit facilities at our Thailand operation, our China operation, our Netherlands subsidiary, and our Poland operation.

Current wording

We also maintain 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. As of September 30, 2025, we maintained foreign credit facilities at our Thailand operation, our Netherlands subsidiary, and our Poland operation.

Previous wording

We participate in our customers’ supply chain financing arrangements in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. In the nine months ended March 31, 2025 and 2024, we sold, without recourse, $236.2 million and $317.0 million of accounts receivable, respectively. See Note 1 - Business Description and Summary of Significant Accounting Policies of Notes to Condensed Consolidated Financial Statements for more information regarding the factoring arrangements.

Current wording

We participate in our customers’ supply chain financing arrangements in order to extend terms for the customer without negatively impacting our cash flow. These arrangements in all cases do not contain recourse provisions which would obligate us in the event of our customers’ failure to pay. Receivables are considered sold when they are transferred beyond the reach of Kimball Electronics and its creditors, the purchaser has the right to pledge or exchange the receivables, and we have surrendered control over the transferred receivables. In the three months ended September 30, 2025 and 2024, we sold, without recourse, $71.2 million and $87.3 million of accounts receivable, respectively.

Previous wording

We expect to continue to prudently invest in capital expenditures, including for capacity expansions and potential acquisitions, that would help us continue our growth as a multifaceted manufacturing solutions company. At March 31, 2025, our capital expenditure commitments were approximately $17 million, consisting primarily of capital related to new program wins. We anticipate our available liquidity will be sufficient to fund these capital expenditures. In March 2025, we executed a lease for a facility in Indiana to expand our medical CMO footprint, but the term for the lease has not yet commenced. The new lease is expected to commence in the fourth quarter of the current fiscal year, with an initial lease term of ten years and annual base rent of $1.8 million, increasing 3% each year.

Current wording

We expect to continue to prudently invest in capital expenditures, including for capacity expansions and potential acquisitions, that would help us continue our growth as a multifaceted manufacturing solutions company. At September 30, 2025, our capital expenditure commitments were approximately $29.0 million, consisting primarily of leasehold improvements on our new medical facility and capital related to new program wins. We anticipate our available liquidity will be sufficient to fund these capital expenditures.

Previous wording

We expect to continue our restructuring efforts, including the closure of our Tampa facility. We expect these restructuring efforts to be predominantly cash expenditures to be incurred over the remainder of fiscal year 2025. We estimate additional pre-tax restructuring charges between $3 million to $4.5 million. Once Tampa’s operations have ceased, we expect to sell the building and land, with the proceeds from the sale anticipated to exceed the exit costs.

Current wording

Now that Tampa’s operations have ceased, we expect to sell the building and land, with the proceeds from the sale anticipated to exceed the combined amount of the total expected restructuring costs and the carrying value of the Assets Held for Sale.

Previous wording

At March 31, 2025, our foreign operations held cash totaling $47.4 million. Most of our accumulated unremitted foreign earnings have been invested in active non-U.S. business operations. The Company continually evaluates its global cash needs. If such funds were repatriated or we determined that all or a portion of such foreign earnings are no longer permanently reinvested, we may be subject to applicable non-U.S. income and withholding taxes. Determination of the amount of any potential future unrecognized deferred tax liability on such unremitted earnings is not practicable and is recorded in the period when any foreign earnings are determined to be no longer permanently reinvested. During fiscal year 2025, the Company changed its indefinite reinvestment assertion for our subsidiary in China, and has recorded a deferred tax liability on their earnings for the applicable withholding taxes. The Company continues to assert permanent reinvestment of foreign earnings in all other foreign jurisdictions as well as for earnings prior to fiscal year 2025 for China.

Current wording

At September 30, 2025, our foreign operations held cash totaling $75.2 million. Most of our accumulated unremitted foreign earnings have been invested in active non-U.S. business operations. The Company continually evaluates its global cash needs. If such funds were repatriated or we determined that all or a portion of such foreign earnings are no longer permanently reinvested, we may be subject to applicable non-U.S. income and withholding taxes. Determination of the amount of any potential future unrecognized deferred tax liability on such unremitted earnings is not practicable and is recorded in the period when any foreign earnings are determined to be no longer permanently reinvested. The Company asserts permanent reinvestment of foreign earnings in all our foreign jurisdictions with the exception of earnings from our China operation beginning in 2025 and thereafter.

Previous wording

The Company’s Repurchase Plan allows the repurchase of up to $120 million of our common stock. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Repurchase Plan has no expiration date but may be suspended or discontinued at any time. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements, and other corporate considerations, as determined by the Company’s management team. The Company expects to finance the purchases with existing liquidity. The Company has repurchased $100.7 million of common stock under the Repurchase Plan through March 31, 2025.

Current wording

The Company’s Repurchase Plan allows the repurchase of up to $120 million of our common stock. Purchases may be made under various programs, including in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions, all in accordance with applicable securities laws and regulations. The Repurchase Plan has no expiration date but may be suspended or discontinued at any time. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements, and other corporate considerations, as determined by the Company’s management team. The Company expects to finance the purchases with existing liquidity. The Company has repurchased $105.2 million of common stock under the Repurchase Plan through September 30, 2025.

Previous wording

During the third quarter of fiscal year 2025, no level 1 or level 2 financial instruments were affected by a lack of market liquidity. For level 1 financial assets, readily available market pricing was used to value the financial instruments. Our foreign currency derivative assets and liabilities, which were classified as level 2, were independently valued using observable market inputs such as forward interest rate yield curves, current spot rates, and time value calculations. To verify the reasonableness of the independently determined fair values, these derivative fair values were compared to fair values calculated by the counterparty banks. Our own credit risk and counterparty credit risk had an immaterial impact on the valuation of the foreign currency derivatives. See Note 9 - Fair Valueof Notes to Condensed Consolidated Financial Statements for additional information.

Current wording

During the first quarter of fiscal year 2026, no level 1 or level 2 financial instruments were affected by a lack of market liquidity. For level 1 financial assets, readily available market pricing was used to value the financial instruments. Our foreign currency derivative assets and liabilities, which were classified as level 2, were independently valued using observable market inputs such as forward interest rate yield curves, current spot rates, and time value calculations. To verify the reasonableness of the independently determined fair values, these derivative fair values were compared to fair values calculated by the counterparty banks. Our own credit risk and counterparty credit risk had an immaterial impact on the valuation of the foreign currency derivatives. See Note 9 - Fair Valueof Notes to Condensed Consolidated Financial Statements for additional information.

Previous wording

There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the year ended June 30, 2024. For further information regarding our critical accounting policies, refer to “Note 1 - Business Description and Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements and “Critical Accounting Policies” in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2024.

Current wording

There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended June 30, 2025. For further information regarding our critical accounting policies, refer to “Note 1 - Business Description and Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements and “Critical Accounting Policies” in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2025.