Kimball Electronics Reports Q1 Results; Company Reiterates Guidance for Fiscal 2026
First Quarter 2026 Highlights
- Revenue of $365.6 million, with strong year-over-year sales growth in the medical end-market vertical
- Operating income of $14.5 million, or 4.0% of net sales, adjusted OI of 4.8%, up 140 bps year-over-year
- Net income of $10.1 million, or $0.40 per diluted share, adjusted EPS of $0.49, more than double Q1 fiscal 2025
- Cash from operations of $8.1 million, the seventh consecutive quarter of positive cash generation
- Debt of $138.0 million, down $9.5 million in the quarter, and borrowing capacity of $294.3 million
- Cash Conversion Days of 83, the lowest level in 3 years
- Invested $1.5 million to repurchase 49,000 shares of common stock
Kimball Electronics, Inc. (NASDAQ:KE) today announced financial results for the first quarter ended September 30, 2025.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20251105783128/en/
|
|
|
|
||||
|
Three Months Ended |
||||||
|
September 30, |
||||||
(Amounts in Thousands, except EPS) |
|
2025 |
|
|
|
2024 |
|
Net Sales |
$ |
365,603 |
|
|
$ |
374,256 |
|
Operating Income |
$ |
14,454 |
|
|
$ |
9,115 |
|
Adjusted Operating Income (non-GAAP) |
$ |
17,534 |
|
|
$ |
12,590 |
|
Operating Income % |
|
4.0 |
% |
|
|
2.4 |
% |
Adjusted Operating Income (non-GAAP) % |
|
4.8 |
% |
|
|
3.4 |
% |
Net Income |
$ |
10,086 |
|
|
$ |
3,154 |
|
Adjusted Net Income (non-GAAP) |
$ |
12,250 |
|
|
$ |
5,527 |
|
Diluted EPS |
$ |
0.40 |
|
|
$ |
0.12 |
|
Adjusted Diluted EPS (non-GAAP) |
$ |
0.49 |
|
|
$ |
0.22 |
|
Commenting on today's announcement, Richard D. Phillips, Chief Executive Officer, stated, "I'm pleased with the results for the first quarter and start to the new fiscal year. Sales were in line with expectations, driven by strength in the medical vertical, margins improved year-over-year, cash from operations was positive for the seventh consecutive quarter, and debt at the end of Q1 was the lowest level in over three years. We have ample liquidity to navigate the current operating environment, and plenty of dry powder to opportunistically invest in growth."
Mr. Phillips continued, "I continue to be impressed with our team's progress in positioning the Company for the future. Our solid footing as an EMS provider and our capabilities as a medical CMO are unique in the industry and we look to expand upon them through organic, and possibly inorganic, channels. We remain confident this powerful combination will result in a return to profitable topline growth next year, and we are reiterating our guidance for fiscal 2026."
Net Sales by Vertical Market for Q1 Fiscal 2026:
|
Three Months Ended |
|
|
||||||||||||
|
September 30, |
|
|
||||||||||||
(Amounts in Millions) |
2025 |
|
* |
|
|
2024 (2) |
|
* |
|
Percent Change |
|||||
Automotive |
$ |
164.4 |
|
45 |
% |
|
$ |
181.8 |
|
|
49 |
% |
|
(10 |
)% |
Medical |
|
101.6 |
|
28 |
% |
|
|
89.8 |
|
|
24 |
% |
|
13 |
% |
Industrial excluding AT&M (1) |
|
99.6 |
|
27 |
% |
|
|
100.6 |
|
|
26 |
% |
|
(1 |
)% |
Net Sales excluding AT&M (1) |
$ |
365.6 |
|
100 |
% |
|
$ |
372.2 |
|
|
99 |
% |
|
(2 |
)% |
AT&M (1) |
|
— |
|
— |
% |
|
|
2.1 |
|
|
1 |
% |
|
(100 |
)% |
Total Net Sales |
$ |
365.6 |
|
100 |
% |
|
$ |
374.3 |
|
|
100 |
% |
|
(2 |
)% |
| * As a percent of Total Net Sales | |||
(1) |
Sales from our Automation, Test, and Measurement business (AT&M), which was divested effective July 31, 2024, were previously included in the industrial vertical |
||
(2) |
Beginning in the first quarter of fiscal year 2026, sales to customers related to commercial transportation, previously included in the automotive vertical, are now reflected in the industrial vertical; prior periods have been recast to conform to current period presentation |
||
– |
Automotive includes electronic power steering, body controls, advanced driver-assistance systems, and electronic braking systems |
||
– |
Medical includes sleep therapy and respiratory care, image guided therapy, in vitro diagnostics, drug delivery, AED, and patient monitoring |
||
– |
Industrial includes climate controls, automation controls, public safety, IoT and factory automation, efficient energy, off highway equipment, and commercial transportation |
||
Fiscal Year 2026 Guidance
As part of today's announcement, the Company reiterated its guidance for fiscal year 2026 with net sales expected to be in the range of $1,350 - $1,450 million and adjusted operating income of 4.0% - 4.25% of net sales. Capital expenditures are estimated to be $50 - $60 million.
Conference Call / Webcast |
Date: Thursday, November 6, 2025
Time: 10:00 AM Eastern Time
Live Webcast: investors.kimballelectronics.com/events-and-presentations/events
Dial-in #: 888-396-8049 (or 416-764-8646)
For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com. |
Forward-Looking Statements
Certain statements contained within this release are considered forward-looking, including our guidance, under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as "expect," "should," "goal," "predict," "will," "future," "optimistic," "confident," and "believe." Undue reliance should not be placed on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. These forward-looking statements are subject to risks and uncertainties including, without limitation, global economic conditions, geopolitical environment and conflicts such as the war in Ukraine, global health emergencies, availability or cost of raw materials and components, tariffs and other trade barriers, foreign exchange rate fluctuations, and our ability to convert new business opportunities into customers and revenue. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the company are contained in its Annual Report on Form 10-K for the year ended June 30, 2025.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include constant currency growth, net sales excluding Automation, Test & Measurement, adjusted selling and administrative expenses, adjusted operating income, adjusted net income, adjusted diluted EPS, and ROIC. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the Reconciliation of Non-GAAP Financial Measures section below. Management believes these measures are useful and allow investors to meaningfully trend, analyze, and benchmark the performance of the company's core operations. The company's non-GAAP financial measures are not necessarily comparable to non-GAAP information used by other companies.
About Kimball Electronics, Inc.
Kimball Electronics is a global, multifaceted manufacturer offering Electronics Manufacturing Services (EMS) and Contract Manufacturing Organization (CMO) solutions to customers around the world. From our operations in the United States, China, Mexico, Poland, Romania, and Thailand, our teams are proud to provide manufacturing services for a variety of industries. Recognized for a reputation of excellence, we are committed to a high-performance culture that values quality, reliability, value, speed, and ethical behavior. Kimball Electronics, Inc. (NASDAQ:KE) is headquartered in Jasper, Indiana.
To learn more about Kimball Electronics, visit www.kimballelectronics.com.
Lasting relationships. Global success.
Financial highlights for the first quarter ended September 30, 2025 are as follows:
Condensed Consolidated Statements of Income |
|||||||||||||
(Unaudited) |
Three Months Ended |
||||||||||||
(Amounts in Thousands, except Per Share Data) |
September 30, 2025 |
|
September 30, 2024 |
||||||||||
Net Sales |
$ |
365,603 |
|
|
100.0 |
% |
|
$ |
374,256 |
|
|
100.0 |
% |
Cost of Sales |
|
336,767 |
|
|
92.1 |
% |
|
|
350,656 |
|
|
93.7 |
% |
Gross Profit |
|
28,836 |
|
|
7.9 |
% |
|
|
23,600 |
|
|
6.3 |
% |
Selling and Administrative Expenses |
|
13,090 |
|
|
3.5 |
% |
|
|
13,427 |
|
|
3.6 |
% |
Restructuring Expense |
|
1,416 |
|
|
0.4 |
% |
|
|
2,322 |
|
|
0.6 |
% |
Gain on Disposal |
|
(124 |
) |
|
— |
% |
|
|
(1,264 |
) |
|
(0.3 |
)% |
Operating Income |
|
14,454 |
|
|
4.0 |
% |
|
|
9,115 |
|
|
2.4 |
% |
Interest Income |
|
139 |
|
|
— |
% |
|
|
222 |
|
|
0.1 |
% |
Interest Expense |
|
(2,353 |
) |
|
(0.6 |
)% |
|
|
(4,792 |
) |
|
(1.3 |
)% |
Non-Operating Income (Expense), net |
|
(1,241 |
) |
|
(0.4 |
)% |
|
|
(1,661 |
) |
|
(0.4 |
)% |
Other Income (Expense), net |
|
(3,455 |
) |
|
(1.0 |
)% |
|
|
(6,231 |
) |
|
(1.6 |
)% |
Income Before Taxes on Income |
|
10,999 |
|
|
3.0 |
% |
|
|
2,884 |
|
|
0.8 |
% |
Provision (Benefit) for Income Taxes |
|
913 |
|
|
0.2 |
% |
|
|
(270 |
) |
|
— |
% |
Net Income |
$ |
10,086 |
|
|
2.8 |
% |
|
$ |
3,154 |
|
|
0.8 |
% |
|
|
|
|
|
|
|
|
||||||
Earnings Per Share of Common Stock: |
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.41 |
|
|
|
|
$ |
0.13 |
|
|
|
||
Diluted |
$ |
0.40 |
|
|
|
|
$ |
0.12 |
|
|
|
||
Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
||||||
Basic |
|
24,600 |
|
|
|
|
|
24,979 |
|
|
|
||
Diluted |
|
24,909 |
|
|
|
|
|
25,235 |
|
|
|
||
| Condensed Consolidated Statements of Cash Flows | Three Months Ended |
||||||
(Unaudited) |
September 30, |
||||||
(Amounts in Thousands) |
|
2025 |
|
|
|
2024 |
|
Net Cash Flow provided by Operating Activities |
$ |
8,065 |
|
|
$ |
45,474 |
|
Net Cash Flow (used for) provided by Investing Activities |
|
(6,202 |
) |
|
|
5,226 |
|
Net Cash Flow used for Financing Activities |
|
(13,966 |
) |
|
|
(52,954 |
) |
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash |
|
116 |
|
|
|
1,830 |
|
Net Decrease in Cash, Cash Equivalents, and Restricted Cash |
|
(11,987 |
) |
|
|
(424 |
) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
|
89,467 |
|
|
|
78,779 |
|
Cash, Cash Equivalents, and Restricted Cash at End of Period |
$ |
77,480 |
|
|
$ |
78,355 |
|
(Unaudited) |
|
|
|||
Condensed Consolidated Balance Sheets |
September 30,
|
|
June 30,
|
||
(Amounts in Thousands) |
|||||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
75,696 |
|
$ |
88,781 |
Receivables, net |
|
226,012 |
|
|
222,623 |
Contract assets |
|
75,199 |
|
|
71,812 |
Inventories |
|
272,725 |
|
|
273,500 |
Prepaid expenses and other current assets |
|
34,341 |
|
|
36,027 |
Assets held for sale |
|
6,579 |
|
|
6,861 |
Property and Equipment, net |
|
273,937 |
|
|
264,804 |
Goodwill |
|
6,191 |
|
|
6,191 |
Other Intangible Assets, net |
|
2,305 |
|
|
2,427 |
Other Assets, net |
|
104,931 |
|
|
104,286 |
Total Assets |
$ |
1,077,916 |
|
$ |
1,077,312 |
|
|
|
|
||
LIABILITIES AND SHARE OWNERS' EQUITY |
|
|
|
||
Current portion of long-term debt |
$ |
6,600 |
|
$ |
17,400 |
Accounts payable |
|
234,567 |
|
|
218,805 |
Advances from customers |
|
27,058 |
|
|
35,867 |
Accrued expenses |
|
43,795 |
|
|
46,489 |
Long-term debt, less current portion |
|
130,925 |
|
|
129,650 |
Other long-term liabilities |
|
57,832 |
|
|
59,217 |
Share Owners' Equity |
|
577,139 |
|
|
569,884 |
Total Liabilities and Share Owners' Equity |
$ |
1,077,916 |
|
$ |
1,077,312 |
Other Financial Metrics |
||||||||
(Unaudited) |
||||||||
(Amounts in Millions, except CCD) |
|
|
|
|
||||
|
At or For the |
|||||||
|
Three Months Ended |
|||||||
|
September 30, |
|
June 30, |
|
September 30, |
|||
|
2025 |
|
2025 |
|
2024 |
|||
Depreciation and Amortization |
$ |
9.1 |
|
$ |
9.6 |
|
$ |
9.2 |
Cash Conversion Days (CCD) (1) |
|
83 |
|
|
85 |
|
|
108 |
Open Orders (2) |
$ |
593 |
|
$ |
642 |
|
$ |
594 |
(1) |
Cash Conversion Days ("CCD") are calculated as the sum of Days Sales Outstanding plus Contract Asset Days plus Production Days Supply on Hand less Accounts Payable Days and less Advances from Customers Days. CCD, or a similar metric, is used in our industry and by our management to measure the efficiency of managing working capital. |
|
(2) |
Open Orders are the aggregate sales price of production pursuant to unfulfilled customer orders. The total reported for June 30, 2025 has been revised to $642 million, from the $702 million originally reported, to more accurately reflect the calculation of open order activity impacting all three verticals. |
| Select Financial Results of Automation, Test and Measurement | |||||
(Unaudited) |
|||||
(Amounts in Millions) |
|
|
|||
|
Three Months Ended |
||||
|
September 30, |
||||
|
2025 |
|
2024 |
||
Net Sales |
$ |
— |
|
$ |
2.1 |
Operating Income (Loss) (1) |
$ |
— |
|
$ |
0.8 |
(1) |
Includes gain on sale of $1.3 million following the close of the sale on July 31, 2024 for the three months ended September 30, 2024. |
Reconciliation of Non-GAAP Financial Measures |
|
|
|
||||
(Unaudited, Amounts in Thousands, except Per Share Data) |
|
|
|
||||
|
Three Months Ended |
||||||
|
September 30, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Net Sales Growth (vs. same period in prior year) |
|
(2 |
)% |
|
|
(15 |
)% |
Foreign Currency Exchange Impact |
|
1 |
% |
|
|
— |
% |
Constant Currency Growth |
|
(3 |
)% |
|
|
(15 |
)% |
|
|
|
|
||||
Selling and Administrative Expenses, as reported |
$ |
13,090 |
|
|
$ |
13,427 |
|
Stock Compensation Expense |
|
(1,563 |
) |
|
|
(2,072 |
) |
SERP |
|
(225 |
) |
|
|
(345 |
) |
Adjusted Selling and Administrative Expenses |
$ |
11,302 |
|
|
$ |
11,010 |
|
|
|
|
|
||||
Operating Income, as reported |
$ |
14,454 |
|
|
$ |
9,115 |
|
Stock Compensation Expense |
|
1,563 |
|
|
|
2,072 |
|
SERP |
|
225 |
|
|
|
345 |
|
Restructuring Expense |
|
1,416 |
|
|
|
2,322 |
|
Asset Impairment (Gain on Disposal) |
|
(124 |
) |
|
|
(1,264 |
) |
Adjusted Operating Income |
$ |
17,534 |
|
|
$ |
12,590 |
|
|
|
|
|
||||
Net Income, as reported |
$ |
10,086 |
|
|
$ |
3,154 |
|
Stock Compensation Expense, After-Tax |
|
1,185 |
|
|
|
1,571 |
|
Restructuring Expense, After-Tax |
|
1,073 |
|
|
|
1,761 |
|
Asset Impairment (Gain on Disposal), After-Tax |
|
(94 |
) |
|
|
(959 |
) |
Adjusted Net Income |
$ |
12,250 |
|
|
$ |
5,527 |
|
|
|
|
|
||||
Diluted Earnings per Share, as reported |
$ |
0.40 |
|
|
$ |
0.12 |
|
Stock Compensation Expense |
|
0.05 |
|
|
|
0.06 |
|
Restructuring Expense |
|
0.04 |
|
|
|
0.07 |
|
Asset Impairment (Gain on Disposal) |
|
— |
|
|
|
(0.03 |
) |
Adjusted Diluted Earnings per Share |
$ |
0.49 |
|
|
$ |
0.22 |
|
|
|
|
|
||||
|
Twelve Months Ended |
||||||
|
September 30, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Operating Income |
$ |
50,874 |
|
|
$ |
38,902 |
|
Goodwill Impairment |
|
— |
|
|
|
5,820 |
|
SERP |
|
494 |
|
|
|
1,202 |
|
Restructuring Expense |
|
10,084 |
|
|
|
4,708 |
|
Asset Impairment (Gain on Disposal) |
|
(1,251 |
) |
|
|
15,776 |
|
Legal Settlements (Recovery) |
|
— |
|
|
|
(892 |
) |
Stock Compensation Expense |
|
6,010 |
|
|
|
7,564 |
|
Adjusted Operating Income (non-GAAP) |
$ |
66,211 |
|
|
$ |
73,080 |
|
Tax Effect |
|
23,511 |
|
|
|
16,285 |
|
After-tax Adjusted Operating Income |
$ |
42,700 |
|
|
$ |
56,795 |
|
Average Invested Capital (1) |
$ |
669,471 |
|
|
$ |
773,016 |
|
ROIC |
|
6.4 |
% |
|
|
7.3 |
% |
(1) |
Average invested capital is computed using Share Owners' equity plus current and non-current debt less cash and cash equivalents averaged for the last five quarters. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20251105783128/en/
Andrew D. Regrut
Treasurer and Investor Relations Officer
812.827.4151
[email protected]