8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)   May 5, 2022

KIMBALL ELECTRONICS, INC.

________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)

Indiana	001-36454	35-2047713
(State or other jurisdiction of	(Commission File	(IRS Employer Identification No.)
incorporation)	Number)

1205 Kimball Boulevard, Jasper, Indiana	47546
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code   (812) 634-4000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	KE	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On May 5, 2022, the Company issued an earnings release for the third quarter ended March 31, 2022.  The earnings release is attached as Exhibit 99.1 and supplementary information provided for the Company’s earnings conference call is attached as Exhibit 99.2.

The information in Item 2.02 of this Form 8-K, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as shall otherwise be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit
Number	Description
99.1	Earnings Release dated May 5, 2022
99.2	Supplementary Information
104	Cover Page Interactive Data File (formatted in Inline XBRL)

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KIMBALL ELECTRONICS, INC.
By:	/s/ Jana T. Croom
	JANA T. CROOM Vice President, Chief Financial Officer

Date: May 5, 2022

3

EX-99.1

Exhibit 99.1

KIMBALL ELECTRONICS REPORTS Q3 RESULTS WITH RECORD SALES AND STRONG OPERATING MARGIN; COMPANY EXPECTS A STRONG PACE TO CARRY THROUGH THE FOURTH QUARTER

•Net sales in the third quarter of fiscal 2022 totaled $368.1 million, an all-time quarterly high and up 19% year-over-year.

•Operating income of $20.3 million or 5.5% of net sales, an 80 basis point improvement compared to the third quarter of fiscal 2021.

•Net income of $13.6 million, or $0.54 per diluted share, a 30% improvement compared to $10.5 million, or $0.41 per diluted share in Q3 last year.

JASPER, Ind., May 5, 2022 (BUSINESS WIRE) -- Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the third quarter ended March 31, 2022. 

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
(Amounts in Thousands, except EPS)	2022			2021			2022			2021
Net Sales	$	368,057		$	310,329		$	976,038		$	962,682
Operating Income	$	20,277		$	14,638		$	31,971		$	48,624
Adjusted Operating Income (non-GAAP) (1)	$	19,558		$	14,426		$	30,183		$	49,432
Operating Income %	5.5		%	4.7		%	3.3		%	5.1		%
Adjusted Operating Income (non-GAAP) %	5.3		%	4.6		%	3.1		%	5.1		%
Net Income	$	13,638		$	10,472		$	21,315		$	42,345
Adjusted Net Income (non-GAAP) (1)	$	13,638		$	9,933		$	20,265		$	41,680
Diluted EPS	$	0.54		$	0.41		$	0.84		$	1.67
Adjusted Diluted EPS (non-GAAP) (1)	$	0.54		$	0.39		$	0.80		$	1.65

(1) A reconciliation of GAAP and non-GAAP financial measures is included below.

Donald D. Charron, Chairman and Chief Executive Officer, stated, “I am very pleased with the results in Q3. Sales exceeded our all-time high in a quarter by 10%, operating margin was 5.5% of net sales, which is significantly better than the first half of the fiscal year and 80 basis points higher than a year ago, and diluted EPS increased by more than 30% year-over-year. With our backlog of open orders at record levels, and manufacturing facilities running at higher utilization and expanding capacity, we are ideally positioned to maintain strength and momentum in this bifurcated year, and we expect a strong pace to carry through the fourth quarter. I continue to be extremely impressed with our team, and how we’ve managed the global supply chain issues stemming from the pandemic and component parts shortages.”

Mr. Charron continued, “The challenges in Q3, however, were compounded by the devastation in Ukraine. We have Ukrainian associates in our U.S. and European operations, and facilities located in nearby Poland and Romania. Our number one priority has been the health and safety of our associates, and supporting their families directly affected by the conflict. We are also closely monitoring the impact of China’s zero tolerance policy related to COVID-19. Several cities experienced shutdowns recently due to a rise in COVID cases. If shutdowns continue to occur in major cities across China, there may be temporary disruptions in both the supply chain and demand as our customers balance manufacturing delays. We’ve updated our guidance for net sales to reflect the uncertainty from these developments; however, we are reiterating our guidance for operating income margin for fiscal year 2022.”

Third Quarter Fiscal 2022 Overview

•Net sales increased 19% compared to the third quarter of fiscal year 2021. Foreign currency had a 2% unfavorable impact on net sales in the quarter compared to the same period a year ago.

•Cash flow used for operating activities of $28.2 million during the third quarter of fiscal 2022, driven by an increase in accounts receivable as a result of the strong sales in the quarter.

•Cash conversion days (“CCD”) for the quarter ended March 31, 2022 were 83 days, up from 66 days in the third quarter of fiscal year 2021, driven by an increase in inventory. CCD is calculated as the sum of days sales outstanding plus contract asset days plus production days supply on hand less accounts payable days.

•Investments in capital expenditures were $22.3 million during the quarter.

•Returned $4.9 million to Share Owners during the quarter in the form of common stock repurchases.

•Cash and cash equivalents of $35.6 million and borrowings outstanding on credit facilities of $137.1 million at March 31, 2022, including $95.0 million classified as long term.

Net Sales by Vertical Market for Q3 Fiscal 2022:

	Three Months Ended
	March 31,
(Amounts in Millions)	2022		*		2021		*		Percent Change
Automotive	$	161.5	44	%	$	139.6	45	%	16	%
Medical	102.9		28	%	85.4		28	%	20	%
Industrial	84.4		23	%	69.2		22	%	22	%
Public Safety	13.8		4	%	13.5		4	%	2	%
Other	5.5		1	%	2.6		1	%	115	%
Total Net Sales	$	368.1			$	310.3			19	%
*As a percent of Total Net Sales
–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, optical inspection, and smart metering
–Public Safety includes thermal imaging, first responder electronics, and security

Fiscal Year 2022 Guidance

The company is updating its guidance for fiscal year 2022 with net sales estimated to be in the range of $1.345 - $1.365 billion, a 4% - 6% increase year-over-year. The company’s previous guidance for net sales was approximately $1.4 billion. The company is reiterating its guidance for operating income margin, which is expected to be in the range of 3.75% - 4.25%, and capital expenditures, which are expected to be in the range of $70 - $80 million.

Mr. Charron continued, “We are very pleased with how the company is positioned. Q3 results were excellent. While supply chain disruptions from the pandemic continue to normalize and improve, the recent wave of lockdowns in China add a level of unpredictability that did not exist a few months ago. We expect the fourth quarter to be robust with net sales in the range of $370 to $390 million, and operating margin once again above 5%. Our record level of open orders, and recent facility expansions, support our growth objectives as we look toward the $2 billion annual revenue milestone. Finally, our hearts and thoughts are with all people both inside and outside the Kimball Electronics family impacted by the tragic turn of events in Ukraine.”

Forward-Looking Statements

Certain statements contained within this release are considered forward-looking, including our fiscal year 2022 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 including the COVID-19 pandemic, availability or cost of raw materials and components, 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, 2021.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include 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 multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in the United States, China, India, Japan, Mexico, Poland, Romania, Thailand, and Vietnam, 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 personal and organizational commitment to 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.

Conference Call / Webcast
Date:	May 6, 2022
Time:	10:00 AM Eastern Time
Live Webcast:	investors.kimballelectronics.com/events-and-presentations/events
Dial-In #:	844-200-6205 (other locations - 929-526-1599)
Conference ID:	250193

For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com.

Lasting relationships. Global success.

Financial highlights for the third quarter and year-to-date period ended March 31, 2022 are as follows:

Condensed Consolidated Statements of Income
(Unaudited)	Three Months Ended
(Amounts in Thousands, except Per Share Data)	March 31, 2022				March 31, 2021
Net Sales	$	368,057	100.0	%	$	310,329	100.0	%
Cost of Sales	334,113		90.8	%	284,323		91.6	%
Gross Profit	33,944		9.2	%	26,006		8.4	%
Selling and Administrative Expenses	13,667		3.7	%	11,744		3.8	%
Other General Expense (Income)	—		—	%	(376)		(0.1)	%
Operating Income	20,277		5.5	%	14,638		4.7	%
Other Income (Expense), net	(2,103)		(0.6)	%	(641)		(0.2)	%
Income Before Taxes on Income	18,174		4.9	%	13,997		4.5	%
Provision for Income Taxes	4,536		1.2	%	3,525		1.1	%
Net Income	$	13,638	3.7	%	$	10,472	3.4	%
Earnings Per Share of Common Stock:
Basic	$	0.54			$	0.42
Diluted	$	0.54			$	0.41
Average Number of Shares Outstanding:
Basic	25,175				25,049
Diluted	25,272				25,217

(Unaudited)	Nine Months Ended
(Amounts in Thousands, except Per Share Data)	March 31, 2022				March 31, 2021
Net Sales	$	976,038	100.0	%	$	962,682	100.0	%
Cost of Sales	905,657		92.8	%	876,428		91.0	%
Gross Profit	70,381		7.2	%	86,254		9.0	%
Selling and Administrative Expenses	39,794		4.0	%	38,347		4.0	%
Other General Expense (Income)	(1,384)		(0.1)	%	(717)		(0.1)	%
Operating Income	31,971		3.3	%	48,624		5.1	%
Other Income (Expense), net	(3,561)		(0.4)	%	3,905		0.4	%
Income Before Taxes on Income	28,410		2.9	%	52,529		5.5	%
Provision for Income Taxes	7,095		0.7	%	10,184		1.1	%
Net Income	$	21,315	2.2	%	$	42,345	4.4	%
Earnings Per Share of Common Stock:
Basic	$	0.84			$	1.68
Diluted	$	0.84			$	1.67
Average Number of Shares Outstanding:
Basic	25,192				25,101
Diluted	25,291				25,288

Condensed Consolidated Statements of Cash Flows	Nine Months Ended
(Unaudited)	March 31,
(Amounts in Thousands)	2022		2021
Net Cash Flow (used for) provided by Operating Activities	$	(84,665)	$	103,755
Net Cash Flow used for Investing Activities	(50,023)		(22,972)
Net Cash Flow provided by (used for) Financing Activities	64,856		(58,729)
Effect of Exchange Rate Change on Cash and Cash Equivalents	(1,007)		2,607
Net (Decrease) Increase in Cash and Cash Equivalents	(70,839)		24,661
Cash and Cash Equivalents at Beginning of Period	106,442		64,990
Cash and Cash Equivalents at End of Period	$	35,603	$	89,651

	(Unaudited)
Condensed Consolidated Balance Sheets	March 31, 2022		June 30, 2021
(Amounts in Thousands)
ASSETS
Cash and cash equivalents	$	35,603	$	106,442
Receivables, net	224,216		203,382
Contract assets	63,761		45,863
Inventories	338,375		200,386
Prepaid expenses and other current assets	31,302		27,320
Property and Equipment, net	191,370		163,251
Goodwill	12,011		12,011
Other Intangible Assets, net	15,117		17,008
Other Assets	41,665		38,398
Total Assets	$	953,420	$	814,061
LIABILITIES AND SHARE OWNERS’ EQUITY
Current portion of borrowings under credit facilities	$	42,096	$	26,214
Accounts payable	275,799		216,544
Accrued expenses	58,733		58,016
Long-term debt under credit facilities, less current portion	95,000		40,000
Long-term income taxes payable	7,812		8,854
Other	20,246		22,461
Share Owners’ Equity	453,734		441,972
Total Liabilities and Share Owners’ Equity	$	953,420	$	814,061

Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Amounts in Thousands, except Per Share Data)
	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2022		2021		2022			2021
Operating Income, as reported	$	20,277	$	14,638	$	31,971		$	48,624
SERP	(719)		164		(404)			1,525
Legal Recovery	—		(376)		(1,384)			(717)
Adjusted Operating Income	$	19,558	$	14,426	$	30,183		$	49,432
Net Income, as reported	$	13,638	$	10,472	$	21,315		$	42,345
Adjustments After Measurement Period on GES Acquisition	—		(254)		—			(121)
Legal Recovery, After-Tax	—		(285)		(1,050)			(544)
Adjusted Net Income	$	13,638	$	9,933	$	20,265		$	41,680
Diluted Earnings per Share, as reported	$	0.54	$	0.41	$	0.84		$	1.67
Adjustments After Measurement Period on GES Acquisition	—		(0.01)		—			—
Legal Recovery	—		(0.01)		(0.04)			(0.02)
Adjusted Diluted Earnings per Share	$	0.54	$	0.39	$	0.80		$	1.65
					Twelve Months Ended
					March 31,
					2022			2021
Operating Income					$	49,050		$	50,233
Goodwill Impairment					—			7,925
SERP					144			2,807
Legal Recovery					(1,039)			(717)
Adjusted Operating Income (non-GAAP)					$	48,155		$	60,248
Tax Effect					10,774			11,786
After-tax Adjusted Operating Income					$	37,381		$	48,462
Average Invested Capital (1)					$	453,479		$	423,545
ROIC					8.2		%	11.4		%

(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.

EX-99.2

Third Quarter Fiscal 2022 Results Quarter Ended March 31, 2022 Supplementary Information to the May 6, 2022 Earnings Conference Call & Webcast Exhibit 99.2

Kimball Electronics (Nasdaq: KE) Safe Harbor Statement Certain statements contained within this supplementary information, including our fiscal year 2022 guidance, and any statements made during our earnings conference call today may be considered forward-looking 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 including the COVID-19 pandemic, availability or cost of raw materials and components, foreign exchange 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 Kimball Electronics, Inc. (the “Company”) are contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021, our earnings release, and other filings with the Securities and Exchange Commission (the “SEC”). This supplementary information contains non-GAAP financial measures. The non-GAAP financial measures contained herein include Adjusted Selling & Administrative Expenses, Adjusted Operating Income, Adjusted Net Income, Adjusted Diluted Earnings Per Share, and Return on Invested Capital (“ROIC”). Management believes these measures are useful and allow investors to meaningfully trend, analyze, and benchmark the performance of the Company’s core operations. Many of the Company’s internal performance measures that management uses to make certain operating decisions use these and other non-GAAP measures to enable meaningful trending of core operating metrics. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included on the Reconciliation of Non-GAAP Results slide, which is the final slide of this supplementary information. 2

Kimball Electronics (Nasdaq: KE) Today’s speakers 3 Andy Regrut VI CE P RESI DENT, I NVESTOR RELATI ONS Jana Croom CH I EF FI NANCI AL O FFI CER Don Charron CH AI RM AN AND CH I EF EX ECUTIVE O FFI CER

Kimball Electronics (Nasdaq: KE) Q3 results were incredibly strong… 4 • Sales exceeded our all-time high in a quarter by 10% • Operating margin was 5.5% of net sales • Significantly better than the first half of the fiscal year • 80 bps higher than a year ago • Diluted EPS increased more than 30% • Backlog of open orders at record levels • Manufacturing facilities running at higher utilization and adding capacity • Ideally positioned to maintain strength and momentum in this bifurcated year • Expect strong pace to carry through fourth quarter and into fiscal 2023 and beyond

Kimball Electronics (Nasdaq: KE) The challenges in Q3 compounded by the devastation in Ukraine 5 • We have Ukrainian associates in our U.S. and European operations • Facilities in nearby Poland and Romania • Our number one priority has been the health and safety of our associates • Supporting their families directly affected by the conflict • Many of these individuals are actively involved in refugee support efforts • The company has made monetary donations as well • Our hearts and thoughts are with all people impacted by this tragic turn of events

Kimball Electronics (Nasdaq: KE) Poznan facility located in western Poland 6 • Roughly 240 kilometers from Berlin • Employ ~1,000 associates in Poznan • Expansion targeted for completion in early fiscal 2024 • Morale of the team is positive and up-beat, and the business is operating well • Expansion remains on schedule • Continue to monitor and evaluate information including concerns over securing ample natural gas and other resources

Kimball Electronics (Nasdaq: KE) Conflict could cause incremental stress on global supply chains 7 • Russia is a large exporter of commodities including metals and mining output • Relative to car manufacturing: • Major supplier of palladium, platinum, nickel, and aluminum • Palladium and platinum are key raw materials for catalytic convertors • Nickel used in EV batteries • Aluminum and copper needed for vehicle framing and wiring • Recent price increases characterized as “manageable”

Kimball Electronics (Nasdaq: KE) Ukraine also plays an important role in the auto industry 8 • Produces wiring harnesses for cars • Supplier of neon and other noble gasses critical for semiconductor production • Many factories making these components have slowed, or shutdown altogether, in the face of the conflict • Speculation the combined impact from Russia and Ukraine will increase auto part shortages, and adversely affect car manufacturing in Eastern Europe and Germany • We do not directly procure any materials from Russia nor Ukraine, and the financial impact of the conflict on our operations in the quarter was not material.

Kimball Electronics (Nasdaq: KE) Monitoring the ongoing impact of China’s zero tolerance policy related to COVID 9 • Several cities experienced shutdowns recently due to a rise in the number of COVID cases • If shutdowns continue, there may be temporary disruptions in both the supply chain and demand as customers balance manufacturing delays • Concern somewhat offset by record output of semiconductors coming out of the Taiwanese market • We’ve updated our outlook for net sales to reflect the uncertainty from these developments • We are reiterating guidance for operating income margin for fiscal year 2022, although we expect it to come in at the lower end of the range • Anticipate the impact of the lockdowns to be short-term in nature

Kimball Electronics (Nasdaq: KE) Net sales in the third quarter totaled $368 million, a 19% increase compared to Q3 last year, and $50 million higher than Q2 10 All 4 vertical markets reported increases in the quarter Net Sales Q3 ‘21 Q3 ‘22 $310 $368 +19%

Kimball Electronics (Nasdaq: KE) Sales in the Automotive vertical market exceeded $160 million, a 16% increase year-over-year 11 Automotive • All-time high for the Automotive vertical market • Driven by the ramp-up of certain programs including fully electric vehicles • Investments made throughout the pandemic to maintain our highly trained workforce • Strategic inventory builds in the first half of the fiscal year • Allowed us to quickly increase production • Strategic Plan confirmed growth potential from industry megatrends Q3 ‘21 Q3 ‘22 44% O F R E V E N U E $140 $162 +16% • Electronic content • Advanced technologies and operating systems • Adoption of EVs • Autonomous driving • Vehicle connectivity

Kimball Electronics (Nasdaq: KE) Medical Q3 ‘21 Q3 ‘22 12 Sales in Medical were $103 million, a 20% increase compared to Q3 last year 28% O F R E V E N U E • Very good result… suggests the industry is continuing to recover and normalize from the pandemic • Increase driven by launch and ramp-up of new products, some of which are coming online in the quarter following pandemic-related delays • Strategic Plan validated the long-term growth opportunities in Medical from megatrends in the healthcare industry $85 $103 +20% • Aging population • Increasing access & affordability • Decreasing device sizes • Connected drug delivery systems

Kimball Electronics (Nasdaq: KE) • Higher end market demand for climate control products and new customer additions drove the increase • Represent longer-term growth opportunities as consumption and conservation of water, gas, and electricity increases in popularity Industrial Q3 ‘21 Q3 ‘22 13 Sales in the Industrial vertical market totaled $84 million, a 22% increase compared to last year 23% O F R E V E N U E $69 $84 +22%

Kimball Electronics (Nasdaq: KE) Public Safety +2% Q3 ‘21 Q3 ‘22 14 Sales in the Public Safety vertical market were $13.8 million, a 2% increase compared to Q3 2021 • Sales were $13.8 million in Q3 • 2% increase year-over-year • Representing 4% of total company sales O F R E V E N U E 4% $14 $14

Kimball Electronics (Nasdaq: KE) Summary 15 • Excellent results in Q3 • Promising outlook for Q4 • On track for a strong close to the fiscal year

Kimball Electronics (Nasdaq: KE) Net sales increased 19% compared to Q3 2021 16 • Sales were $368 million, a record for our company • Foreign exchange rates had an unfavorable impact of 2% on sales in the quarter Overview Net Sales Trend

Kimball Electronics (Nasdaq: KE) Gross margin rate of 9.2%, an 80 bps increase over the same period last year 17 Drivers of GM% Gross Margin Trend • Improvement driven by lower depreciation and leverage gain that occurs on higher levels of sales • Depreciation impact occurred when we changed the estimated useful lives on SMT production equipment last quarter • Benefits partially offset by higher material costs and increased freight from the component parts shortages

Kimball Electronics (Nasdaq: KE) Adjusted Selling & Administrative Expense (%)(1)(2) 18 (1) Adjusted Selling & Administrative Expense is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. (2) Beginning in Q1’21, Adjusted Selling & Administrative Expense excludes changes in the fair value of our supplemental employee retirement plan (“SERP”) liability. Prior periods have been revised accordingly. • Adjusted selling and administrative expenses were $14.3 million • Increase from Q3 last year driven by: • Higher salary and related payroll costs • Stock-based compensation • When measured as a percent of sales, adjusted selling and administrative expenses were 3.9% • 20 bps improvement compared to Q3 last year

Kimball Electronics (Nasdaq: KE) Adjusted Operating Income (1)(2) 19 (1) Adjusted Operating Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. (2) Beginning in Q1’21, Adjusted Operating Income excludes changes in the fair value of our supplemental employee retirement plan (“SERP”) liability. Prior periods have been revised accordingly.

Kimball Electronics (Nasdaq: KE) Adjusted Net Income and Adjusted Diluted EPS(1) 20 (1) Adjusted Net Income and Adjusted Diluted EPS are Non-GAAP measures – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information.

Kimball Electronics (Nasdaq: KE) Balance Sheet 21 • Cash and cash equivalents were $35.6 million at March 31, 2022 • Cash flow used for operating activities was $28.2 million in the third quarter of fiscal 2022 primarily driven by accounts receivable due to strong sales • Cash conversion days were 83 days, up from 66 days in the third quarter last year • Inventory increased over $157 million compared to Q3 last year • Up $138 million in fiscal 2022 • Capital investments in the third quarter of fiscal 2022 were $22.3 million • Borrowings on our credit facilities at March 31, 2022, were $137 million compared to $60.5 million dollars at March 31, 2021, and $103 million at the end of Q2 • Our short-term liquidity available totaled $78 million at March 31, 2022

Kimball Electronics (Nasdaq: KE) Share repurchases 22 • During the third quarter, we invested $4.9 million to repurchase 259,000 shares, at an average share price of $18.87 • Since October 2015, under our Board authorized share repurchase program: • A total of $84.6 million returned to Share Owners by repurchasing 5.6 million shares of common stock • $15.4 million remaining on program for deployment

Kimball Electronics (Nasdaq: KE) Capital allocation priorities 23 • Invest in organic growth opportunities • 3 facility expansions in 1 ½ years • Capital expenditures to support new programs • Return cash to Share Owners with opportunistic share repurchases • Strategic acquisitions that are appropriately valued

Kimball Electronics (Nasdaq: KE) Expanded credit facility to support capital allocation priorities 24 • On May 4th, we amended our primary credit facility • Capacity increased from $150 million to $300 million • 5-year revolving credit facility gives us the flexibility to meet CapEx and working capital needs to support: • Expansions • New product introductions • Other long-term strategic goals

Kimball Electronics (Nasdaq: KE) Guidance for fiscal year 2022 Supports facility expansions in Thailand, Mexico, early investments in Poland CapEx $70 - $80 million Reiterating guidance for CapEx guidance of $70 - $80 million $1.345 - $1.365 billion Net sales range 4%- 6% in net sales Operating income expected to be 3.75% - 4.25% of net sales Reiterating guidance for operating income margin of 3.75% - 4.25%, although we expect to be at the lower end of the range Expect to finish the fiscal year at the lower end of the sales range of $1.345 - $1.365 billion, compared to previous guidance of ~$1.4 billion Increase compared to fiscal 2021 25 Net sales in the fourth quarter expected to be in the range of $370 - $390 million Operating income in Q4 is estimated to be in the range of 5.0% - 5.3% of sales Capital expenditures of $20 - $30 million in the fourth quarter of fiscal 2022

Kimball Electronics (Nasdaq: KE) Closing comments 26 • Very pleased with how the company is positioned • Excellent results in Q3 • We expect a strong finish to the fiscal year and the momentum carrying into fiscal 2023, particularly as… • Supply chain disruptions and component parts shortages continue to abate • The crisis in Ukraine reaches a settlement • The recent COVID-19 lockdowns in China subside • The abnormally high levels of inflation in the U.S. slow

Kimball Electronics (Nasdaq: KE) Looking toward the $2 billion revenue milestone 27 • Open order backlog totals $930 million • Record high • Up 43% year-over-year • Driven by component shortages as well as new business wins • New business aligns our facility expansions with our customers’ growth • Strategic Plan identified key areas of focus to achieve this goal with manufacturing capacity being a critical variable • Generate ~$1 million of sales volume / 1,000 sq ft • Recent capacity expansions are meaningful

Kimball Electronics (Nasdaq: KE) Our facility in Thailand 28 • Opened in the year 2000 • Revenue in fiscal 2021 exceeded $100 million • Much of the product produced in Thailand is exported • Heavy focus on the Medical vertical market • Recent expansion doubled the capacity of the facility

Kimball Electronics (Nasdaq: KE) Our facility in Mexico 29 • Revenue in fiscal 2021 exceeded $265 million • Scheduled to have footprint doubled with expansion scheduled for completion this summer • Heavy focus on the Automotive vertical market

Kimball Electronics (Nasdaq: KE) The road to $2 billion is in our sights… 30 • It took our company 57 years to reach $1 billion in sales • Second billion will be achieved in a fraction of that time • Bullish outlook for the company

Kimball Electronics (Nasdaq: KE) Welcome Isabel Wells 31 • Joined Kimball Electronics in April • Chief Information Officer • Over 20 years of global IT experience

Q&A

Appendix

Kimball Electronics (Nasdaq: KE) Net Sales Automotive Vertical Market 34 16% from Q3'21

Kimball Electronics (Nasdaq: KE) Net Sales Medical Vertical Market 35 +20% from Q3'21

Kimball Electronics (Nasdaq: KE) Net Sales Industrial Vertical Market 36 +22% from Q3'21

Kimball Electronics (Nasdaq: KE) Net Sales Public Safety Vertical Market 37 +2% from Q3'21

Kimball Electronics (Nasdaq: KE) Reconciliation of Non-GAAP Results 38 (Unaudited, Amounts in Thousands, Except Per Share Data) Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Selling & Administrative Expenses, as reported $ 11,391 $ 13,117 $ 13,486 $ 11,744 $ 14,357 $ 12,204 $ 13,923 $ 13,667 Less: SERP(2) 1,282 550 811 164 548 (87) 402 (719) Adjusted S&A Expense $ 10,109 $ 12,567 $ 12,675 $ 11,580 $ 13,809 $ 12,291 $ 13,521 $ 14,386 Operating Income, as reported $ 1,609 $ 17,807 $ 16,179 $ 14,638 $ 17,079 $ 4,780 $ 6,914 $ 20,277 Add: SERP(2) 1,282 550 811 164 548 (87) 402 (719) Add: Goodwill Impairment 7,925 — — — — — — — Add: Lawsuit Settlements (Recovery) — (341) — (376) 345 (1,384) — — Adjusted Operating Income (2) $ 10,816 $ 18,016 $ 16,990 $ 14,426 $ 17,972 $ 3,309 $ 7,316 $ 19,558 Net Income, as reported $ (1,273) $ 16,811 $ 15,062 $ 10,472 $ 14,446 $ 2,564 $ 5,113 $ 13,638 Add: After-Tax Goodwill Impairment 6,947 — — — — — — — Add: After-Tax Adjustments after Measurement Period of GES Acquisition 2,871 — 133 (254) — — — — Add: Lawsuit Settlements (Recovery) — (259) — (285) 262 (1,050) — — Adjusted Net Income $ 8,545 $ 16,552 $ 15,195 $ 9,933 $ 14,708 $ 1,514 $ 5,113 $ 13,638 Diluted Earnings per Share, as reported $ (0.05) $ 0.66 $ 0.60 $ 0.41 $ 0.57 $ 0.10 $ 0.20 $ 0.54 Add: After-Tax Goodwill Impairment $ 0.28 $ — $ — $ — $ — $ — $ — $ — Add: After-Tax Adjustments after Measurement Period of GES Acquisition $ 0.11 $ — $ — $ (0.01) $ — $ — $ — $ — Add: Lawsuit Settlements (Recovery) $ — $ (0.01) $ — $ (0.01) $ 0.01 $ (0.04) $ — $ — Adjusted Diluted Earnings per Share $ 0.34 $ 0.65 $ 0.60 $ 0.39 $ 0.58 $ 0.06 $ 0.20 $ 0.54 Operating Income (GAAP) (TTM) $ 31,996 $ 38,688 $ 46,183 $ 50,233 $ 65,703 $ 52,676 $ 43,411 $ 49,050 Add: Goodwill Impairment (TTM) 7,925 7,925 7,925 7,925 — — — — Add: SERP (TTM)(2) 848 1,420 1,729 2,807 2,073 1,436 1,027 144 Add: Lawsuit Settlements (Recovery) (TTM) — (341) (341) (717) (372) (1,415) (1,415) (1,039) Adj. Operating Income (non-GAAP) (TTM) (2) $ 40,769 $ 47,692 $ 55,496 $ 60,248 $ 67,404 $ 52,697 $ 43,023 $ 48,155 Tax Effect (TTM) (2) 9,831 9,940 10,859 11,786 12,844 11,017 9,530 10,774 After-Tax Adj. Operating Income (TTM) (2) $ 30,938 $ 37,752 $ 44,637 $ 48,462 $ 54,560 $ 41,680 $ 33,493 $ 37,381 Average Invested Capital (1) $ 437,263 $ 435,465 $ 433,192 $ 423,545 $ 415,999 $ 414,121 $ 424,854 $ 453,479 ROIC (2) 7.1 % 8.7 % 10.3 % 11.4 % 13.1 % 10.1 % 7.9 % 8.2 % (1) Average Invested Capital is computed using the Share Ow ners equity plus current and non-current debt less cash and cash equivalents averaged for the last f ive quarters. (2) Beginning in Q1 FY'21, adjusted selling and administrative expense, adjusted operating income, and ROIC exclude changes in the fair value of our supplemental employee retirement plan (“SERP”) liability. Prior periods have been revised accordingly.

XML

Cover	May 05, 2022
Document Information [Line Items]
Document Type	8-K
Document Period End Date	May 05, 2022
Entity Registrant Name	KIMBALL ELECTRONICS, INC.
Entity Incorporation, State or Country Code	IN
Entity File Number	001-36454
Entity Tax Identification Number	35-2047713
Entity Address, Address Line One	1205 Kimball Boulevard
Entity Address, City or Town	Jasper
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47546
City Area Code	812
Local Phone Number	634-4000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	KE
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001606757
Amendment Flag	false