KE - Kimball Electronics Reports Q4 Results With Solid Finish to the Fiscal Year; Company Provides Guidance for Fiscal 2026
Fourth Quarter 2025 Highlights
- Net sales totaled $380.5 million, a 2% sequential increase compared to Q3
- Operating income of $16.5 million, or 4.3% of net sales
- Adjusted operating income of $19.6 million, or 5.2% of net sales
- Inventory of $273.5 million, a reduction of $23.1 million in the quarter
- Cash generated from operating activities of $78.1 million, the sixth consecutive quarter of positive cash flow
- Borrowings on credit facilities of $147.5 million, a $31.3 million decrease from Q3
- Cash Conversion Days of 85, the lowest result in three years
Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the fourth quarter and fiscal year ended June 30, 2025.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250813325066/en/
Three Months Ended |
Fiscal Year Ended |
June 30, |
June 30, |
(Amounts in Thousands, except EPS) |
2025 |
2024 |
2025 |
2024 |
Net Sales |
$ |
380,472 |
$ |
430,158 |
$ |
1,486,727 |
$ |
1,714,510 |
Operating Income |
$ |
16,474 |
$ |
19,608 |
$ |
45,535 |
$ |
49,277 |
Adjusted Operating Income (non-GAAP) (1) |
$ |
19,638 |
$ |
22,694 |
$ |
61,267 |
$ |
81,496 |
Operating Income % |
4.3 |
% |
4.6 |
% |
3.1 |
% |
2.9 |
% |
Adjusted Operating Income (non-GAAP) % |
5.2 |
% |
5.3 |
% |
4.1 |
% |
4.8 |
% |
Net Income |
$ |
6,581 |
$ |
7,543 |
$ |
16,984 |
$ |
20,511 |
Adjusted Net Income (non-GAAP) (1) |
$ |
8,438 |
$ |
9,688 |
$ |
28,156 |
$ |
41,295 |
Diluted EPS |
$ |
0.26 |
$ |
0.30 |
$ |
0.68 |
$ |
0.81 |
Adjusted Diluted EPS (non-GAAP) (1) |
$ |
0.34 |
$ |
0.38 |
$ |
1.12 |
$ |
1.64 |
(1) |
Beginning in the first quarter of fiscal year 2025, adjusted results exclude stock compensation expense. Prior reported periods have been revised accordingly. A reconciliation of GAAP and non-GAAP financial measures is included below. |
Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “I’m encouraged by the results for the fourth quarter and solid finish to the fiscal year. Q4 came in better than expected, as sales increased sequentially, margins improved, and working capital management drove our sixth consecutive quarter of positive cash flow which was used to pay down debt. Our balance sheet is now in a position of competitive strength with ample liquidity to weather an unpredictable environment, while providing dry powder for opportunistic investments.”
Mr. Phillips continued, “In total, fiscal 2025 was a year of ‘controlling what we could control’. I’m proud of our team as we made significant progress positioning the Company for a return to profitable growth with a record number of wins for future business, adjusting the cost structure and aligning the portfolio to demand trends, and intensifying our focus as a medical CMO. We expect fiscal 2026 to be another step forward in the journey which will unfold over time.”
The Company ended the fourth quarter of fiscal 2025 with cash and cash equivalents of $88.8 million and borrowing capacity of $291.7 million. The Company invested $3.0 million to repurchase 162,000 shares of common stock.
Fiscal Year 2025 Highlights
- Net sales totaled $1,486.7 million, the third highest annual revenue total for the Company
- Operating income of $45.5 million, or 3.1% of net sales; adjusted operating income of $61.3 million, or 4.1% of net sales
- Inventory reduced $64.6 million, or 19%, in the fiscal year
- Debt paid down by $147.3 million, or 50%, year-over-year; the lowest level of debt in 3 years
- Cash generated from operating activities of $183.9 million, a record result for annual cash flow
- Invested $12.0 million to repurchase 653,000 shares of common stock
Net Sales by Vertical Market for Q4 and Full Year Fiscal 2025:
Three Months Ended |
Fiscal Year Ended |
June 30, |
June 30, |
(Amounts in Millions) |
2025 |
* |
2024 |
* |
Percent |
2025 |
* |
2024 |
* |
Percent |
Automotive |
$ |
183.7 |
48 |
% |
$ |
211.7 |
49 |
% |
(13 |
)% |
$ |
737.9 |
49 |
% |
$ |
826.4 |
48 |
% |
(11 |
)% |
Medical |
107.2 |
28 |
% |
102.2 |
24 |
% |
5 |
% |
396.2 |
27 |
% |
425.7 |
25 |
% |
(7 |
)% |
Industrial excluding AT&M (1) |
89.6 |
24 |
% |
101.5 |
24 |
% |
(12 |
)% |
350.5 |
24 |
% |
416.7 |
24 |
% |
(16 |
)% |
Net Sales excluding AT&M (1) |
$ |
380.5 |
100 |
% |
$ |
415.4 |
97 |
% |
(8 |
)% |
$ |
1,484.6 |
100 |
% |
$ |
1,668.8 |
97 |
% |
(11 |
)% |
AT&M (1) |
— |
— |
% |
14.8 |
3 |
% |
(100 |
)% |
2.1 |
— |
% |
45.7 |
3 |
% |
(95 |
)% |
Total Net Sales |
$ |
380.5 |
100 |
% |
$ |
430.2 |
100 |
% |
(12 |
)% |
$ |
1,486.7 |
100 |
% |
$ |
1,714.5 |
100 |
% |
(13 |
)% |
* |
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 |
? |
Automotive includes electronic power steering, body controls, automated driver assist 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, and public safety |
“Fiscal 2026 will be a year of transition. We expect modest top line growth in our medical and industrial businesses, but it will be offset by a decline in automotive, with a full year impact from the loss of the braking program in Reynosa. Margins are estimated to be in line with FY25, but it’s important to note that when top line growth returns, enhancements to our cost structure should support margin improvement. Capital expenditures will be heavily weighted toward our new facility in Indianapolis, with the balance supporting growth, automation, and maintenance.”
Jana T. Croom
Chief Financial Officer
Fiscal Year 2026 Guidance
- Net sales of $1,350 - $1,450 million, a 2% to 9% decrease compared to fiscal 2025
- Adjusted operating income of 4.0% - 4.25% of net sales, compared to 4.1% of net sales in fiscal 2025
- Capital expenditures of $50 - $60 million
Conference Call / Webcast |
Date: |
August 14, 2025 |
Time: |
10:00 AM Eastern Time |
Live Webcast: |
investors.kimballelectronics.com/events-and-presentations/events |
Dial-In #: |
877-407-8293 (or 201-689-8349) |
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, 2024.
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 fourth quarter and fiscal year ended June 30, 2025 are as follows:
| Condensed Consolidated Statements of Income |
(Unaudited) |
Three Months Ended |
(Amounts in Thousands, except Per Share Data) |
June 30, 2025 |
June 30, 2024 |
Net Sales |
$ |
380,472 |
100.0 |
% |
$ |
430,158 |
100.0 |
% |
Cost of Sales |
349,991 |
92.0 |
% |
393,420 |
91.5 |
% |
Gross Profit |
30,481 |
8.0 |
% |
36,738 |
8.5 |
% |
Selling and Administrative Expenses |
13,163 |
3.5 |
% |
15,890 |
3.6 |
% |
Restructuring Expense |
1,971 |
0.5 |
% |
764 |
0.2 |
% |
Asset Impairment (Gain on Disposal) |
(1,127 |
) |
(0.3 |
)% |
476 |
0.1 |
% |
Operating Income |
16,474 |
4.3 |
% |
19,608 |
4.6 |
% |
Interest Income |
196 |
0.1 |
% |
155 |
— |
% |
Interest Expense |
(2,776 |
) |
(0.7 |
)% |
(5,380 |
) |
(1.3 |
)% |
Non-Operating Income (Expense), net |
(1,177 |
) |
(0.4 |
)% |
(918 |
) |
(0.2 |
)% |
Other Income (Expense), net |
(3,757 |
) |
(1.0 |
)% |
(6,143 |
) |
(1.5 |
)% |
Income Before Taxes on Income |
12,717 |
3.3 |
% |
13,465 |
3.1 |
% |
Provision for Income Taxes |
6,136 |
1.6 |
% |
5,922 |
1.3 |
% |
Net Income |
$ |
6,581 |
1.7 |
% |
$ |
7,543 |
1.8 |
% |
Earnings Per Share of Common Stock: |
Basic |
$ |
0.27 |
$ |
0.30 |
Diluted |
$ |
0.26 |
$ |
0.30 |
Average Number of Shares Outstanding: |
Basic |
24,552 |
25,064 |
Diluted |
24,840 |
25,246 |
(Unaudited) |
Fiscal Year Ended |
(Amounts in Thousands, except Per Share Data) |
June 30, 2025 |
June 30, 2024 |
Net Sales |
$ |
1,486,727 |
100.0 |
% |
$ |
1,714,510 |
100.0 |
% |
Cost of Sales |
1,382,323 |
93.0 |
% |
1,574,253 |
91.8 |
% |
Gross Profit |
104,404 |
7.0 |
% |
140,257 |
8.2 |
% |
Selling and Administrative Expenses |
50,270 |
3.4 |
% |
66,626 |
4.0 |
% |
Other General Expense (Income) |
— |
— |
% |
(892 |
) |
(0.1 |
)% |
Restructuring Expense |
10,990 |
0.7 |
% |
2,386 |
0.1 |
% |
Goodwill Impairment |
— |
— |
% |
5,820 |
0.3 |
% |
Asset Impairment (Gain on Disposal) |
(2,391 |
) |
(0.2 |
)% |
17,040 |
1.0 |
% |
Operating Income |
45,535 |
3.1 |
% |
49,277 |
2.9 |
% |
Interest Income |
771 |
0.1 |
% |
638 |
— |
% |
Interest Expense |
(14,745 |
) |
(1.0 |
)% |
(22,839 |
) |
(1.3 |
)% |
Non-Operating Income (Expense), net |
(5,332 |
) |
(0.4 |
)% |
(1,877 |
) |
— |
% |
Other Income (Expense), net |
(19,306 |
) |
(1.3 |
)% |
(24,078 |
) |
(1.4 |
)% |
Income Before Taxes on Income |
26,229 |
1.8 |
% |
25,199 |
1.5 |
% |
Provision for Income Taxes |
9,245 |
0.7 |
% |
4,688 |
0.3 |
% |
Net Income |
$ |
16,984 |
1.1 |
% |
$ |
20,511 |
1.2 |
% |
Earnings Per Share of Common Stock: |
Basic |
$ |
0.68 |
$ |
0.82 |
Diluted |
$ |
0.68 |
$ |
0.81 |
Average Number of Shares Outstanding: |
Basic |
24,782 |
25,079 |
Diluted |
25,017 |
25,278 |
| Condensed Consolidated Statements of Cash Flows |
Fiscal Year Ended |
(Unaudited) |
June 30, |
(Amounts in Thousands) |
2025 |
2024 |
Net Cash Flow provided by Operating Activities |
$ |
183,937 |
$ |
73,217 |
Net Cash Flow used for Investing Activities |
(14,700 |
) |
(46,521 |
) |
Net Cash Flow (used for) provided by Financing Activities |
(160,874 |
) |
8,974 |
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash |
2,325 |
(755 |
) |
Net Increase in Cash, Cash Equivalents, and Restricted Cash |
10,688 |
34,915 |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
78,779 |
43,864 |
Cash, Cash Equivalents, and Restricted Cash at End of Period |
$ |
89,467 |
$ |
78,779 |
(Unaudited) |
Condensed Consolidated Balance Sheets |
June 30, |
June 30, |
(Amounts in Thousands) |
ASSETS |
Cash and cash equivalents |
$ |
88,781 |
$ |
77,965 |
Receivables, net |
222,623 |
282,336 |
Contract assets |
71,812 |
76,320 |
Inventories |
273,500 |
338,116 |
Prepaid expenses and other current assets |
36,027 |
44,682 |
Assets held for sale |
6,861 |
27,587 |
Property and Equipment, net |
264,804 |
269,659 |
Goodwill |
6,191 |
6,191 |
Other Intangible Assets, net |
2,427 |
2,994 |
Other Assets, net |
104,286 |
82,069 |
Total Assets |
$ |
1,077,312 |
$ |
1,207,919 |
LIABILITIES AND SHARE OWNERS ’ EQUITY |
Current portion of long-term debt |
$ |
17,400 |
$ |
59,837 |
Accounts payable |
218,805 |
213,551 |
Advances from customers |
35,867 |
30,151 |
Accrued expenses |
46,489 |
63,189 |
Liabilities held for sale |
— |
8,594 |
Long-term debt, less current portion |
129,650 |
235,000 |
Long-term income taxes payable |
— |
3,255 |
Other long-term liabilities |
59,217 |
53,881 |
Share Owners’ Equity |
569,884 |
540,461 |
Total Liabilities and Share Owners’ Equity |
$ |
1,077,312 |
$ |
1,207,919 |
| Other Financial Metrics |
(Unaudited) |
(Amounts in Millions, except CCD) |
At or For the |
Three Months Ended |
June 30, |
March 31, |
June 30, |
2025 |
2025 |
2024 |
Depreciation and Amortization |
$ |
9.6 |
$ |
9.2 |
$ |
9.5 |
Cash Conversion Days (CCD) (1) |
85 |
99 |
100 |
Open Orders (2) |
$ |
702 |
$ |
642 |
$ |
714 |
(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. |
Select Financial Results of Automation, Test and Measurement |
(Unaudited) |
(Amounts in Millions) |
Three Months Ended |
Fiscal Year Ended |
June 30, |
June 30, |
2025 |
2024 |
2025 |
2024 |
Net Sales |
$ |
— |
$ |
14.8 |
$ |
2.1 |
$ |
45.7 |
Operating Income (Loss) (1) |
$ |
1.1 |
$ |
2.0 |
$ |
2.0 |
$ |
(22.2 |
) |
(1) |
Includes gain on sale of $1.1 million for the three months ended June 30, 2025 and $2.4 million for fiscal year 2025 following the close of the sale on July 31, 2024. Includes goodwill impairment of $5.8 million and asset impairment of $17.0 million for the year ended June 30, 2024. Each period also includes allocated corporate overhead expenses. |
Reconciliation of Non-GAAP Financial Measures |
(Unaudited, Amounts in Thousands, except Per Share Data) |
Three Months Ended |
Fiscal Year Ended |
June 30, |
June 30, |
2025 |
2024 |
2025 |
2024 |
Net Sales Growth (vs. same period in prior year) |
(12 |
)% |
(13 |
)% |
(13 |
)% |
(6 |
)% |
Foreign Currency Exchange Impact |
1 |
% |
— |
% |
1 |
% |
— |
% |
Constant Currency Growth |
(13 |
)% |
(13 |
)% |
(14 |
)% |
(6 |
)% |
Selling and Administrative Expenses, as reported |
$ |
13,163 |
$ |
15,890 |
$ |
50,270 |
$ |
66,626 |
Stock Compensation Expense |
(1,991 |
) |
(1,750 |
) |
(6,519 |
) |
(7,185 |
) |
SERP |
(329 |
) |
(96 |
) |
(614 |
) |
(680 |
) |
Adjusted Selling and Administrative Expenses |
$ |
10,843 |
$ |
14,044 |
$ |
43,137 |
$ |
58,761 |
Operating Income, as reported |
$ |
16,474 |
$ |
19,608 |
$ |
45,535 |
$ |
49,277 |
Stock Compensation Expense |
1,991 |
1,750 |
6,519 |
7,185 |
SERP |
329 |
96 |
614 |
680 |
Legal Settlements (Recovery) |
— |
— |
— |
(892 |
) |
Restructuring Expense |
1,971 |
764 |
10,990 |
2,386 |
Goodwill Impairment |
— |
— |
— |
5,820 |
Asset Impairment (Gain on Disposal) |
(1,127 |
) |
476 |
(2,391 |
) |
17,040 |
Adjusted Operating Income |
$ |
19,638 |
$ |
22,694 |
$ |
61,267 |
$ |
81,496 |
Net Income, as reported |
$ |
6,581 |
$ |
7,543 |
$ |
16,984 |
$ |
20,511 |
Stock Compensation Expense, After-Tax |
1,510 |
1,327 |
4,944 |
5,449 |
Legal Settlements (Recovery), After-Tax |
— |
— |
— |
(676 |
) |
Restructuring Expense, After-Tax |
1,474 |
580 |
8,314 |
1,810 |
Goodwill Impairment, After-Tax |
— |
— |
— |
4,414 |
Asset Impairment (Gain on Disposal), After-Tax |
(1,127 |
) |
238 |
(2,086 |
) |
9,787 |
Adjusted Net Income |
$ |
8,438 |
$ |
9,688 |
$ |
28,156 |
$ |
41,295 |
Diluted Earnings per Share, as reported |
$ |
0.26 |
$ |
0.30 |
$ |
0.68 |
$ |
0.81 |
Stock Compensation Expense |
0.06 |
0.05 |
0.19 |
0.22 |
Legal Settlements (Recovery) |
— |
— |
— |
(0.03 |
) |
Restructuring Expense |
0.06 |
0.02 |
0.33 |
0.07 |
Goodwill Impairment |
— |
— |
— |
0.18 |
Asset Impairment (Gain on Disposal) |
(0.04 |
) |
0.01 |
(0.08 |
) |
0.39 |
Adjusted Diluted Earnings per Share |
$ |
0.34 |
$ |
0.38 |
$ |
1.12 |
$ |
1.64 |
Fiscal Year Ended |
June 30, |
2025 |
2024 |
Operating Income |
$ |
45,535 |
$ |
49,277 |
Goodwill Impairment |
— |
5,820 |
SERP |
614 |
680 |
Restructuring Expense |
10,990 |
2,386 |
Asset Impairment (Gain on Disposal) |
(2,391 |
) |
17,040 |
Legal Settlements (Recovery) |
— |
(892 |
) |
Stock Compensation Expense |
6,519 |
7,185 |
Adjusted Operating Income (non-GAAP) |
$ |
61,267 |
$ |
81,496 |
Tax Effect |
24,508 |
17,297 |
After-tax Adjusted Operating Income |
$ |
36,759 |
$ |
64,199 |
Average Invested Capital (1) |
$ |
693,144 |
$ |
782,093 |
ROIC |
5.3 |
% |
8.2 |
% |
(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/20250813325066/en/
Andrew D. Regrut
Treasurer and Investor Relations Officer
812.827.4151
Investor.Relations@kimballelectronics.com