EX-99.1 2 exhibit9918k06302025q410k.htm KIMBALL ELECTRONICS, INC. EXHIBIT 99.1 Document

Exhibit 99.1
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KIMBALL ELECTRONICS REPORTS Q4 RESULTS WITH SOLID FINISH TO THE FISCAL YEAR;
COMPANY PROVIDES GUIDANCE FOR FISCAL 2026

JASPER, Ind., August 13, 2025 -- (BUSINESS WIRE) -- Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the fourth quarter and fiscal year ended June 30, 2025.
“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.

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.”


Richard D. Phillips
Chief Executive Officer
  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 and cash equivalents of $88.8 million and borrowing capacity of $291.7 million
•Cash Conversion Days of 85, the lowest result in three years
•Invested $3.0 million to repurchase 162,000 shares of common stock    


Net Sales By Vertical Market For The Fourth Quarter Of Fiscal 2025
Sales in the medical vertical market increased 5% compared to the fourth quarter of fiscal 2024, while sales in automotive decreased 13% and industrial, excluding Automation, Test and Measurement, decreased 12%.
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*Percentage of net sales. AT&M excluded from all amounts, percentages, and periods.
**Percentage changes compared to Q4 of fiscal 2024.

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



“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

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Conference Call / Webcast

Thursday, August 14, 2025

Live Webcast:
investors.kimballelectronics.com/events-and-presentations/events


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.
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Contact:
Andrew D. Regrut
Treasurer and Investor Relations Officer
812.827.4151
Investor.Relations@kimballelectronics.com



Financial highlights for the fourth quarter and fiscal year ended June 30, 2025 are as follows:
Three Months Ended
Fiscal Year Ended
June 30,June 30,
(Amounts in Thousands, except EPS)2025202420252024
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.

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
Change
2025
*
2024
*Percent Change
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



Condensed Consolidated Statements of Income
(Unaudited)Three Months Ended
(Amounts in Thousands, except Per Share Data)June 30, 2025June 30, 2024
Net Sales$380,472 100.0%$430,158 100.0%
Cost of Sales349,991 92.0%393,420 91.5%
Gross Profit30,481 8.0%36,738 8.5%
Selling and Administrative Expenses13,163 3.5%15,890 3.6%
Restructuring Expense1,971 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 Income196 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 Income12,717 3.3%13,465 3.1%
Provision for Income Taxes6,136 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:
     Basic24,552 25,064 
     Diluted24,840 25,246 
(Unaudited)Fiscal Year Ended
(Amounts in Thousands, except Per Share Data)June 30, 2025June 30, 2024
Net Sales$1,486,727 100.0%$1,714,510 100.0%
Cost of Sales1,382,323 93.0%1,574,253 91.8%
Gross Profit104,404 7.0%140,257 8.2%
Selling and Administrative Expenses50,270 3.4%66,626 4.0%
Other General Expense (Income)— —%(892)(0.1)%
Restructuring Expense10,990 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 Income45,535 3.1%49,277 2.9%
Interest Income771 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 Income26,229 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:
     Basic24,782 25,079 
     Diluted25,017 25,278 


Condensed Consolidated Statements of Cash FlowsFiscal Year Ended
(Unaudited)June 30,
(Amounts in Thousands)20252024
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 Cash2,325 (755)
Net Increase in Cash, Cash Equivalents, and Restricted Cash
10,688 34,915 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period78,779 43,864 
Cash, Cash Equivalents, and Restricted Cash at End of Period$89,467 $78,779 


(Unaudited)
Condensed Consolidated Balance SheetsJune 30,
2025		June 30,
2024
(Amounts in Thousands)
ASSETS
    Cash and cash equivalents$88,781 $77,965 
    Receivables, net222,623 282,336 
    Contract assets71,812 76,320 
    Inventories 273,500 338,116 
    Prepaid expenses and other current assets36,027 44,682 
    Assets held for sale6,861 27,587 
    Property and Equipment, net264,804 269,659 
    Goodwill6,191 6,191 
    Other Intangible Assets, net2,427 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 payable218,805 213,551 
    Advances from customers 35,867 30,151 
    Accrued expenses46,489 63,189 
    Liabilities held for sale— 8,594 
    Long-term debt, less current portion129,650 235,000 
    Long-term income taxes payable— 3,255 
    Other long-term liabilities59,217 53,881 
    Share Owners’ Equity569,884 540,461 
        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,
202520252024
Depreciation and Amortization$9.6 $9.2 $9.5 
Cash Conversion Days (CCD) (1)
85 99 100 
Open Orders (2)
$702 $642 $714 
(1)Cash Conversion Days (“CCD”) are calculated as the sum of Days Sales Outstanding plus Contract Asset Days plus Production Days Supply on Hand less Accounts Payable Days and less Advances from Customers Days. CCD, or a similar metric, is used in our industry and by our management to measure the efficiency of managing working capital.
(2)Open Orders are the aggregate sales price of production pursuant to unfulfilled customer orders.
Select Financial Results of Automation, Test and Measurement
(Unaudited)
(Amounts in Millions)
Three Months EndedFiscal Year Ended
June 30,June 30,
2025202420252024
Net Sales$— $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 EndedFiscal Year Ended
June 30,June 30,
2025202420252024
Net Sales Growth (vs. same period in prior year)(12)%(13)%(13)%(6)%
Foreign Currency Exchange Impact1%—%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 Expense1,991 1,750 6,519 7,185 
SERP 329 96 614 680 
Legal Settlements (Recovery)— — — (892)
Restructuring Expense1,971 764 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-Tax1,510 1,327 4,944 5,449 
Legal Settlements (Recovery), After-Tax— — — (676)
Restructuring Expense, After-Tax1,474 580 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 Expense0.06 0.05 0.19 0.22 
Legal Settlements (Recovery)— — — (0.03)
Restructuring Expense0.06 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,
20252024
Operating Income$45,535 $49,277 
Goodwill Impairment— 5,820 
SERP614 680 
Restructuring Expense10,990 2,386 
Asset Impairment (Gain on Disposal)(2,391)17,040 
Legal Settlements (Recovery)— (892)
Stock Compensation Expense6,519 7,185 
Adjusted Operating Income (non-GAAP)$61,267 $81,496 
Tax Effect24,508 17,297 
After-tax Adjusted Operating Income$36,759 $64,199 
Average Invested Capital (1)
$693,144 $782,093 
ROIC5.3%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.