MARKET WIRE NEWS

Kimball Electronics Reports Q2 Results; With Strong Sales Growth in the Medical Vertical; Company Raises Its Guidance for Fiscal 2026

MWN-AI** Summary

Kimball Electronics, Inc. (Nasdaq: KE) announced its financial results for the second quarter of fiscal 2026, reporting revenue of $341.3 million. This figure reflects a 5% decrease compared to the same period in fiscal 2025. Notably, the medical vertical demonstrated robust growth, with a 15% increase year-over-year, contributing to the company’s overall sales. Operating income rose from $8.2 million to $10.8 million, translating to 3.2% of net sales, while adjusted operating income improved to 4.5%, a notable increase of 80 basis points from the previous year.

The company's cash from operations reached $6.9 million, marking its eighth consecutive quarter of positive cash generation, bolstered by improved Cash Conversion Days, which saw a 16-day reduction to 91 days. The adjusted net income for the quarter was $6.9 million, providing a diluted earnings per share of $0.15.

Reflecting on the performance, CEO Richard D. Phillips expressed satisfaction with the results and highlighted the company’s strategic direction as a medical Contract Manufacturing Organization (CMO). He indicated that the medical sector's growth is outperforming other verticals and described efforts to rebalance their market portfolio. This includes the recent rebranding to Kimball Solutions and the inauguration of a new medical manufacturing facility in Indianapolis.

In light of the strong performance, Kimball Electronics raised its fiscal 2026 guidance, now projecting net sales between $1.4 billion and $1.46 billion, compared to the earlier range of $1.35 billion to $1.45 billion. Adjusted operating income is also expected to improve, now estimated between 4.2% and 4.5%. The positive outlook is supported by the company's strategic investments and operational improvements.

MWN-AI** Analysis

Kimball Electronics, Inc. recently reported its Q2 fiscal 2026 results, showcasing a unique performance landscape. Despite an overall revenue decline of 5% year-over-year, the medical vertical reported an impressive 15% increase in sales. This is significant, as the medical sector is anticipated to outperform other business segments, solidifying Kimball's focus on expanding its capabilities in this high-demand area.

With operating income improving both on a reported basis (3.2% vs. 2.3% year-over-year) and adjusted (4.5% vs. 3.7% year-over-year), Kimball demonstrates robust operational efficiency. The positive cash flow from operations for the eighth consecutive quarter underscores its solid financial foundation. Furthermore, the recent share repurchase of 149,000 shares indicates management's confidence in the company's ongoing performance and its perceived value in the market.

Notably, Kimball has raised its guidance for net sales in fiscal 2026 to a range of $1.4-$1.46 billion, signaling a proactive approach amidst current economic uncertainties. The predicted adjusted operating income margin has also increased, highlighting management’s commitment to sustaining profitability.

Investors should consider the long-term potential of Kimball Electronics, particularly within the medical sector. The company’s strategic pivot, evident from the rebranding efforts and the opening of the new medical facility in Indianapolis, positions it favorably in a growing market.

For those looking at investment opportunities, Kimball Electronics may present a compelling case, especially with its strengthened guidance and expanding capabilities. However, as with all investments, potential investors should remain mindful of industry competition and broader economic conditions that could impact performance. Monitoring quarterly results closely will be crucial to gauge sustained growth and operational efficiency.

**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.

Source: Business Wire

Second Quarter 2026 Highlights

  • Revenue of $341.3 million, a 5% decrease compared to Q2 of fiscal 2025
  • Sales in the medical vertical increased 15% year-over-year
  • Operating income of $10.8 million, or 3.2% of net sales
  • Adjusted operating income of 4.5%, up 80 bps year-over-year
  • Cash from operations of $6.9 million, the eighth consecutive quarter of positive operating cash generation
  • Debt of $154.2 million and borrowing capacity of $285.1 million
  • Cash Conversion Days of 91, a 16-day improvement compared to the same period last year
  • Invested $4.3 million to repurchase 149,000 shares of common stock
  • Company increases guidance for fiscal 2026 sales and adjusted operating income

Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the second quarter ended December 31, 2025.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260204163117/en/

Three Months Ended

Six Months Ended

December 31,

December 31,

(Amounts in Thousands, except EPS)

2025

2024

2025

2024

Net Sales

$

341,280

$

357,392

$

706,883

$

731,648

Operating Income

$

10,767

$

8,230

$

25,221

$

17,345

Adjusted Operating Income (non-GAAP)

$

15,308

$

13,333

$

32,842

$

25,923

Operating Income %

3.2

%

2.3

%

3.6

%

2.4

%

Adjusted Operating Income (non-GAAP) %

4.5

%

3.7

%

4.6

%

3.5

%

Net Income

$

3,637

$

3,432

$

13,723

$

6,586

Adjusted Net Income (non-GAAP)

$

6,925

$

7,354

$

19,175

$

12,881

Diluted EPS

$

0.15

$

0.14

$

0.55

$

0.26

Adjusted Diluted EPS (non-GAAP)

$

0.28

$

0.29

$

0.77

$

0.51

Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “I’m pleased with the results for the second quarter and our updated guidance for fiscal 2026. Sales in Q2 were in line with expectations, highlighted by another quarter of strong double-digit year-over-year growth in the medical vertical, margins improved compared to the same period last year, and cash from operations was positive for the eighth consecutive quarter.”

Mr. Phillips continued, “Our focus as a medical CMO continues to gain momentum as we leverage our unique capabilities in the industry. We expect top-line growth in medical to outpace our other two verticals as we balance our portfolio across the markets we serve. Our recent announcement to rebrand as Kimball Solutions, and the grand opening of the new medical manufacturing facility in Indianapolis, reflects this strategy and our expanded offering of capabilities and services.”

Net Sales by Vertical Market for Q2 Fiscal 2026:

Three Months Ended

Six Months Ended

December 31,

December 31,

(Amounts in Millions)

2025

*

2024 (2)

*

Percent
Change

2025

*

2024 (2)

*

Percent
Change

Automotive

$

162.3

48

%

$

186.3

52

%

(13

)%

$

326.7

46

%

$

368.0

50

%

(11

)%

Medical

96.3

28

%

84.0

23

%

15

%

197.9

28

%

173.8

24

%

14

%

Industrial excluding AT&M (1)

82.7

24

%

87.1

25

%

(5

)%

182.3

26

%

187.7

26

%

(3

)%

Net Sales excluding AT&M (1)

$

341.3

100

%

$

357.4

100

%

(5

)%

$

706.9

100

%

$

729.5

100

%

(3

)%

AT&M (1)

%

%

%

%

2.1

%

(100

)%

Total Net Sales

$

341.3

100

%

$

357.4

100

%

(5

)%

$

706.9

100

%

$

731.6

100

%

(3

)%

*

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 increased its guidance for net sales and adjusted operating income in fiscal year 2026:

  • Net sales are now expected to be in the range of $1,400 - $1,460 million, compared to the previous guidance of $1,350 - $1,450 million
  • Adjusted operating income is estimated to be 4.2% - 4.5% of net sales versus the prior estimate of 4.0% - 4.25%
  • The guidance for capital expenditures did not change with a range of $50 - $60 million

Conference Call / Webcast

Date: Thursday, February 5, 2026

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, 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.

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended

(Amounts in Thousands, except Per Share Data)

December 31, 2025

December 31, 2024

Net Sales

$

341,280

100.0

%

$

357,392

100.0

%

Cost of Sales

313,412

91.8

%

333,965

93.4

%

Gross Profit

27,868

8.2

%

23,427

6.6

%

Selling and Administrative Expenses

14,862

4.4

%

10,526

3.0

%

Restructuring Expense

1,817

0.5

%

4,671

1.3

%

Asset Impairment

422

0.1

%

%

Operating Income

10,767

3.2

%

8,230

2.3

%

Interest Income

375

0.1

%

253

0.1

%

Interest Expense

(2,095

)

(0.6

)%

(4,241

)

(1.2

)%

Non-Operating Income (Expense), net

(2,063

)

(0.7

)%

(768

)

(0.2

)%

Other Income (Expense), net

(3,783

)

(1.2

)%

(4,756

)

(1.3

)%

Income Before Taxes on Income

6,984

2.0

%

3,474

1.0

%

Provision (Benefit) for Income Taxes

3,347

0.9

%

42

%

Net Income

$

3,637

1.1

%

$

3,432

1.0

%

Earnings Per Share of Common Stock:

Basic

$

0.15

$

0.14

Diluted

$

0.15

$

0.14

Average Number of Shares Outstanding:

Basic

24,606

24,870

Diluted

24,823

24,968

(Unaudited)

Six Months Ended

(Amounts in Thousands, except Per Share Data)

December 31, 2025

December 31, 2024

Net Sales

$

706,883

100.0

%

$

731,648

100.0

%

Cost of Sales

650,179

92.0

%

684,621

93.6

%

Gross Profit

56,704

8.0

%

47,027

6.4

%

Selling and Administrative Expenses

27,952

3.9

%

23,953

3.2

%

Restructuring Expense

3,233

0.5

%

6,993

1.0

%

Asset Impairment (Gain on Disposal)

298

%

(1,264

)

(0.2

)%

Operating Income

25,221

3.6

%

17,345

2.4

%

Interest Income

514

0.1

%

475

0.1

%

Interest Expense

(4,448

)

(0.6

)%

(9,033

)

(1.2

)%

Non-Operating Income (Expense), net

(3,304

)

(0.6

)%

(2,429

)

(0.4

)%

Other Income (Expense), net

(7,238

)

(1.1

)%

(10,987

)

(1.5

)%

Income Before Taxes on Income

17,983

2.5

%

6,358

0.9

%

Provision (Benefit) for Income Taxes

4,260

0.6

%

(228

)

%

Net Income

$

13,723

1.9

%

$

6,586

0.9

%

Earnings Per Share of Common Stock:

Basic

$

0.56

$

0.26

Diluted

$

0.55

$

0.26

Average Number of Shares Outstanding:

Basic

24,603

24,924

Diluted

24,878

25,098

Condensed Consolidated Statements of Cash Flows

Six Months Ended

(Unaudited)

December 31,

(Amounts in Thousands)

2025

2024

Net Cash Flow provided by Operating Activities

$

14,943

$

74,932

Net Cash Flow used for Investing Activities

(24,368

)

(1,214

)

Net Cash Flow used for Financing Activities

(2,142

)

(97,255

)

Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash

623

(722

)

Net Decrease in Cash, Cash Equivalents, and Restricted Cash

(10,944

)

(24,259

)

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

89,467

78,779

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

78,523

$

54,520

(Unaudited)

Condensed Consolidated Balance Sheets

December 31,
2025

June 30,
2025

(Amounts in Thousands)

ASSETS

Cash and cash equivalents

$

77,853

$

88,781

Receivables, net

213,994

222,623

Contract assets

79,521

71,812

Inventories

281,699

273,500

Prepaid expenses and other current assets

32,214

36,027

Assets held for sale

6,610

6,861

Property and Equipment, net

276,433

264,804

Goodwill

6,191

6,191

Other Intangible Assets, net

2,182

2,427

Other Assets, net

106,774

104,286

Total Assets

$

1,083,471

$

1,077,312

LIABILITIES AND SHARE OWNERS EQUITY

Current portion of long-term debt

$

24,112

$

17,400

Accounts payable

218,830

218,805

Advances from customers

28,439

35,867

Accrued expenses

41,995

46,489

Long-term debt, less current portion

129,700

129,650

Other long-term liabilities

61,233

59,217

Share Owners’ Equity

579,162

569,884

Total Liabilities and Share Owners’ Equity

$

1,083,471

$

1,077,312

Other Financial Metrics

(Unaudited)

(Amounts in Millions, except CCD)

At or For the

Three Months Ended

December 31,

September 30,

December 31,

2025

2025

2024

Depreciation and Amortization

$

9.3

$

9.1

$

9.1

Cash Conversion Days (CCD) (1)

91

83

107

Open Orders (2)

$

557

$

593

$

564

(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

Six Months Ended

December 31,

December 31,

2025

2024

2025

2024

Net Sales

$

$

$

$

2.1

Operating Income (Loss) (1)

$

(0.4

)

$

$

(0.4

)

$

0.8

(1)

Amounts include gain (loss) on sale adjustments following the close of the sale on July 31, 2024: ($0.4 million) in the three and six months ended December 31, 2025 and $1.3 million for the six months ended December 31, 2024.

Reconciliation of Non-GAAP Financial Measures

(Unaudited, Amounts in Thousands, except Per Share Data)

Three Months Ended

Six Months Ended

December 31,

December 31,

2025

2024

2025

2024

Net Sales Growth (vs. same period in prior year)

(5

)%

(15

)%

(3

)%

(15

)%

Foreign Currency Exchange Impact

2

%

%

2

%

%

Constant Currency Growth

(7

)%

(15

)%

(5

)%

(15

)%

Selling and Administrative Expenses, as reported

$

14,862

$

10,526

$

27,952

$

23,953

Stock Compensation Expense

(2,217

)

(501

)

(3,780

)

(2,573

)

SERP

(85

)

69

(310

)

(276

)

Adjusted Selling and Administrative Expenses

$

12,560

$

10,094

$

23,862

$

21,104

Operating Income, as reported

$

10,767

$

8,230

$

25,221

$

17,345

Stock Compensation Expense

2,217

501

3,780

2,573

SERP

85

(69

)

310

276

Restructuring Expense

1,817

4,671

3,233

6,993

Asset Impairment (Gain on Disposal)

422

298

(1,264

)

Adjusted Operating Income

$

15,308

$

13,333

$

32,842

$

25,923

Net Income, as reported

$

3,637

$

3,432

$

13,723

$

6,586

Stock Compensation Expense, After-Tax

1,681

380

2,866

1,951

Restructuring Expense, After-Tax

1,287

3,542

2,360

5,303

Asset Impairment (Gain on Disposal), After-Tax

320

226

(959

)

Adjusted Net Income

$

6,925

$

7,354

$

19,175

$

12,881

Diluted Earnings per Share, as reported

$

0.15

$

0.14

$

0.55

$

0.26

Stock Compensation Expense

0.07

0.01

0.12

0.07

Restructuring Expense

0.05

0.14

0.09

0.21

Asset Impairment (Gain on Disposal)

0.01

0.01

(0.03

)

Adjusted Diluted Earnings per Share

$

0.28

$

0.29

$

0.77

$

0.51

Twelve Months Ended

December 31,

2025

2024

Operating Income, as reported

$

53,411

$

30,522

Goodwill Impairment

5,820

SERP

648

649

Restructuring Expense

7,230

9,379

Asset Impairment (Gain on Disposal)

(829

)

15,776

Legal Settlements (Recovery)

(892

)

Stock Compensation Expense

7,726

6,096

Adjusted Operating Income

$

68,186

$

67,350

Tax Effect

23,836

17,019

After-tax Adjusted Operating Income

$

44,350

$

50,331

Average Invested Capital (1)

$

657,074

$

756,966

ROIC

6.7

%

6.6

%

(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/20260204163117/en/

Andrew D. Regrut
Vice President, Investor Relations, Strategic Development, and Treasurer
812.827.4151
Investor.Relations@kimballelectronics.com

FAQ**

How is Kimball Electronics Inc. (Nasdaq: KE) planning to leverage the 15% year-over-year growth in sales within the medical vertical to offset the overall revenue decline observed in Q2 fiscal 2026?

Kimball Electronics Inc. plans to harness the robust 15% year-over-year growth in its medical vertical by strategically increasing investments and resources in this sector to counterbalance the overall revenue decline experienced in Q2 fiscal 2026.

Can you elaborate on how Kimball Electronics Inc. (KE) intends to utilize the $285.1 million borrowing capacity to strengthen its operational strategies moving forward?

Kimball Electronics Inc. plans to leverage the $285.1 million borrowing capacity to enhance operational strategies by investing in advanced manufacturing technologies, expanding production capabilities, and bolstering working capital to support growth and innovation initiatives.

Given the forecasted increase in net sales to $1.4 billion - $1.46 billion for fiscal 2026, what specific initiatives is Kimball Electronics Inc. (KE) implementing to maintain this growth trajectory amidst fluctuating economic conditions?

Kimball Electronics Inc. (KE) is focusing on expanding its product offerings, enhancing operational efficiencies, investing in technology and automation, pursuing strategic partnerships, and diversifying its customer base to sustain growth amidst fluctuating economic conditions.

How will Kimball Electronics Inc. (Nasdaq: KE) address the challenges presented by the global economic environment and raw material costs to achieve the adjusted operating income target of 4.2% - 4.5% in fiscal year 2026?

Kimball Electronics Inc. plans to enhance operational efficiency, optimize supply chain management, and implement cost-control measures to mitigate the impact of global economic challenges and rising raw material costs, aiming for an adjusted operating income of 4.2% - 4.5% in fiscal year 2026.

**MWN-AI FAQ is based on asking OpenAI questions about Kimball Electronics Inc. (NASDAQ: KE).

Kimball Electronics Inc.

NASDAQ: KE

KE Trading

5.83% G/L:

$23.145 Last:

37,255 Volume:

$22.79 Open:

mwn-ir Ad 300

KE Latest News

KE Stock Data

$604,869,067
23,536,138
0.34%
66
N/A
Industrial Goods
Industrials
US
Jasper

Subscribe to Our Newsletter

Link Market Wire News to Your X Account

Download The Market Wire News App