Group 1 - Kimball Electronics, Inc. will hold its Annual Meeting of Share Owners on November 14, 2025, at 10:00 a.m. (EST) [1] - The meeting will take place in-person at the Kimball Electronics Indianapolis office [1] - The focus of the meeting will be on voting results for formal business and proxy proposals [1] Group 2 - Share Owners as of the September 15, 2025 record date are eligible to vote electronically [1]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1][2] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Kimball Electronics (KE) Analysis - Kimball Electronics (KE) has shown a four-week price change of 8.5%, indicating growing investor interest [4] - Over the past 12 weeks, KE's stock has gained 58.7%, with a beta of 1.28, suggesting it moves 28% more than the market [5] - KE has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] - The stock has received a Zacks Rank 1 (Strong Buy) due to upward trends in earnings estimate revisions, which attract more investors [7] - KE is currently trading at a Price-to-Sales ratio of 0.51, suggesting it is undervalued at 51 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides KE, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in the identification of potential winning stocks [9]

Company Overview - Kimball Electronics (KE) shares increased by 5.8% to $33.13 in the last trading session, with a notable trading volume, and have gained 14.2% over the past four weeks [1] - The company is experiencing improved margins, consistent positive cash flow, a strategic focus on the Medical CMO segment, and enhanced capacity utilization [1] Earnings Expectations - Kimball Electronics is projected to report quarterly earnings of $0.27 per share, reflecting a year-over-year increase of 22.7% [2] - Expected revenues for the upcoming quarter are $352 million, which is a decrease of 6% compared to the same quarter last year [2] Stock Performance and Trends - The consensus EPS estimate for Kimball Electronics has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 1 (Strong Buy), suggesting strong market confidence [3] Industry Comparison - Kimball Electronics is part of the Zacks Electronics - Miscellaneous Products industry, where another company, One Stop Systems, Inc. (OSS), has also shown positive performance with a 3% increase to $6.79 and a 26.7% return over the past month [3] - One Stop Systems has an unchanged consensus EPS estimate of $0.01, representing a year-over-year change of 103.3%, and holds a Zacks Rank of 2 (Buy) [4]

Summary of Kimball Electronics (KE) 2025 Conference Call Company Overview - **Company Name**: Kimball Electronics (KE) - **Industry**: Global electronics manufacturing and contract manufacturing - **Headquarters**: Jasper, Indiana - **Fiscal Year 2025 Revenue**: Approximately $5 billion - **Employees**: 5,700 worldwide - **Public Trading**: NASDAQ traded, publicly listed for 11 years as a spinout of Kimball International [5][2] Core Business and Strategy - **Business Focus**: Kimball Electronics operates in three distinct verticals: automotive, medical, and industrial, avoiding non-commodity products like computers and consumer electronics [3][4] - **Customer Relationships**: Over 70% of customers have been with the company for more than ten years, enhancing business stability [4] - **Competitive Advantages**: Strong balance sheet with $374 million in liquidity, global consistency through a single SAP system, and Lean Six Sigma practices across facilities [7][8][9] Market Position and Growth Opportunities - **Market Ranking**: Ranked sixth in automotive, seventh in medical, and twenty-second in industrial sectors [19] - **Megatrends**: Focus on the electronification of vehicles and the growing demand for medical devices due to an aging population and better healthcare access [21][23] - **New Product Introduction (NPI)**: Provides end-to-end solutions from design to aftermarket support, positioning as a contract manufacturing partner [13][14] Financial Performance - **Fiscal Year 2025 Highlights**: - Cash generated from operating activities reached nearly $185 million, a record for the company [29] - Revenue growth of 35% in FY 2023 followed by declines in the subsequent two years [31] - Inventory reduced by nearly 20% year-over-year [29] - **Guidance for Fiscal Year 2026**: - Expected net sales between $1.35 billion and $1.45 billion, a decrease of approximately 5% compared to FY 2025 [35] - Adjusted operating income margin expected to remain in line with the prior year [35] Capital Allocation and Investments - **Capital Expenditures**: Planned investments of $50 to $60 million primarily for a new facility in Indianapolis focused on the CMO and medical space [36][41] - **Share Repurchase Strategy**: Active in repurchasing shares to support share price and lower EPS [16] Challenges and Risk Management - **Loss of Programs**: Experienced a loss of two significant programs worth $200 million due to external factors, impacting revenue [30][31] - **Employee Reduction**: Reduced global workforce by 2,000 employees in response to softening demand [32] Future Outlook - **Strategic Focus**: Emphasis on expanding the medical CMO segment, leveraging existing customer relationships, and enhancing manufacturing capabilities [48][49] - **Market Positioning**: Aiming to differentiate from traditional EMS players by focusing on the CMO market, which presents significant growth opportunities [48][49] Additional Insights - **Global Footprint**: Facilities located in North America, Asia, and Europe, with a focus on maintaining high standards of regulatory compliance [10][15] - **Innovation in Automotive**: Significant involvement in steering technologies, including steer-by-wire and advanced driver-assistance systems [25][27] This summary encapsulates the key points discussed during the Kimball Electronics conference call, highlighting the company's strategic direction, financial performance, and market positioning.

Group 1 - Kimball Electronics, Inc. will attend the 2025 Annual Gateway Conference on September 3-4, 2025, in San Francisco, CA, with CFO Jana Croom presenting on September 3 at 8:30 a.m. Pacific Time [1] - A webcast of the presentation will be available on the Company's Investor Relations website, and an archive will be accessible for those unable to attend live [2] - Kimball Electronics executives will be available for one-on-one meetings throughout the conference [2] Group 2 - The Gateway Conference provides a platform for public and private companies to connect with investors, analysts, and partners, celebrating 25 years of fostering industry connections [4] - The event showcases a diverse range of companies across various sectors, including technology, cleantech, consumer, industrials, financial services, and healthcare, allowing investors exclusive access to senior executives from over 100 companies [5] Group 3 - Kimball Electronics is a global manufacturer offering Electronics Manufacturing Services (EMS) and Contract Manufacturing Organization (CMO) solutions, with operations in the United States, China, Mexico, Poland, Romania, and Thailand [7] - The Company is recognized for its commitment to quality, reliability, value, speed, and ethical behavior, maintaining a high-performance culture [7]

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Kimball Electronics is a global EMS/CMO provider for automotive, medical, and industrial markets, emphasizing high-reliability electronics and a global footprint - Kimball Electronics provides electronics manufacturing services (EMS) and contract manufacturing organization (CMO) solutions, including medical disposables and drug delivery devices, for automotive, medical, and industrial end markets[21](index=21&type=chunk)[23](index=23&type=chunk)[249](index=249&type=chunk) - The company operates manufacturing facilities in the United States, China, Mexico, Poland, Romania, and Thailand, with a corporate headquarters in Jasper, Indiana[22](index=22&type=chunk)[38](index=38&type=chunk) Sales by Industry as a Percent of Net Sales (FY2023-FY2025) | Industry | 2025 | 2024 | 2023 | | :--------- | :--- | :--- | :--- | | Automotive | 49% | 48% | 46% | | Medical | 27% | 25% | 28% | | Industrial | 24% | 27% | 26% | | Total | 100% | 100% | 100% | Significant Customer Net Sales as a Percent of Total Net Sales (FY2023-FY2025) | Customer | 2025 | 2024 | 2023 | | :---------------- | :--- | :--- | :--- | | Nexteer Automotive | 19% | 16% | 15% | | Philips | * | * | 14% | | ZF | 11% | 13% | 12% | * amount is less than 10% of total - As of June 30, 2025, Kimball Electronics employed approximately **5,700 people worldwide**, with **1,000 in the United States** and **4,700 in foreign countries**[57](index=57&type=chunk)[59](index=59&type=chunk) - The average workforce tenure is **8 years**, with an enterprise-wide Guiding Principles survey score of **8.13**[57](index=57&type=chunk)[59](index=59&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including customer concentration, supply chain disruptions, international operational challenges, regulatory compliance, and financial market volatility - Key business and operational risks include potential reduction of purchases by or loss of key customers, dependence on efficient manufacturing capacity utilization, and supply chain disruptions leading to increased costs or production interruptions[63](index=63&type=chunk)[67](index=67&type=chunk)[70](index=70&type=chunk) - International operations, which generate a substantial majority of revenues, are vulnerable to global economic and political instability, health emergencies, foreign currency fluctuations, and changes in trade policies and tariffs[76](index=76&type=chunk)[77](index=77&type=chunk) - Regulatory and litigation risks include the failure to protect intellectual property, non-compliance with quality standards (e.g., FDA QSR for medical devices), and increasing compliance costs related to environmental, health, safety, and ESG regulations (e.g., CSRD, ESRS, conflict minerals)[88](index=88&type=chunk)[90](index=90&type=chunk)[93](index=93&type=chunk)[102](index=102&type=chunk) - Financial risks include exposure to customer credit risk, challenges in managing working capital, potential asset impairment, fluctuations in effective tax rates due to geographic earnings mix and tax law changes, foreign currency risk, and interest rate volatility on credit facilities[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) [Item 1B. Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[117](index=117&type=chunk) [Item 1C. Cybersecurity](index=22&type=section&id=Item%201C.%20Cybersecurity) Kimball Electronics maintains a multi-layered cybersecurity program with Audit Committee oversight, focusing on risk assessment, third-party engagement, and incident response - The company's cybersecurity risk management program is integrated into its broader enterprise risk management, with oversight from the Audit Committee and leadership from the Chief Legal and Administrative Officer[119](index=119&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk) - Key components of the cybersecurity program include a four-phase Enterprise Risk Management (ERM) process, periodic engagement of independent security firms, **ISO 27001:2013 certification**, annual mandatory employee training, and a risk management process for third-party vendors[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[129](index=129&type=chunk) - The Kimball Electronics Support Center (KESC) serves as the central point for cybersecurity incident reporting, monitoring, detection, and response, escalating significant incidents to the Cybersecurity Incident Response Team (CIRT) and potentially the Audit Committee and Board[130](index=130&type=chunk)[131](index=131&type=chunk) - As of the report date, the company does not believe any cybersecurity threats have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[133](index=133&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) Kimball Electronics operates eight global manufacturing facilities, mostly owned, and is expanding its medical CMO footprint with a new leased Indiana facility - The company has **eight manufacturing facilities** (two in Indiana, two in Mexico, one each in China, Poland, Romania, and Thailand) totaling approximately **1,499,000 square feet**, mostly owned[134](index=134&type=chunk) - A new **308,000 square-foot leased manufacturing facility in Indiana** is being added to expand the medical CMO footprint, which will replace the existing Indianapolis facility[134](index=134&type=chunk) - The Tampa facility is currently classified as held for sale[134](index=134&type=chunk) [Item 3. Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) Kimball Electronics and its subsidiaries are not involved in any material pending legal proceedings beyond routine litigation and claims incidental to their business - The company is not a party to any material pending legal proceedings, other than ordinary routine litigation and claims incidental to the business[138](index=138&type=chunk) - The outcome of current routine pending litigation and claims is not expected to have a material adverse impact on the business or financial condition[138](index=138&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Kimball Electronics, Inc - Mine Safety Disclosures are not applicable to the company[139](index=139&type=chunk) [Information about Our Executive Officers](index=25&type=section&id=Information%20about%20Our%20Executive%20Officers) This section details the executive officers of Kimball Electronics, their roles, and business experience as of August 22, 2025 Executive Officers as of August 22, 2025 | Name | Age | Office and Area of Responsibility | | :----------------- | :-- | :------------------------------------------------ | | Richard D. Phillips | 55 | Chief Executive Officer and Director | | Adam M. Baumann | 44 | Chief Accounting Officer | | Jana T. Croom | 48 | Chief Financial Officer | | Jessica L. DeLorenzo | 40 | Chief Human Resources Officer | | Douglas A. Hass | 49 | Chief Legal & Administrative Officer, Secretary | | Steven T. Korn | 61 | Chief Operating Officer | | Kathy R. Thomson | 56 | Chief Commercial Officer | - Executive officers are appointed annually by the Board of Directors[140](index=140&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Share Owner Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Share%20Owner%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Kimball Electronics' common stock trades on Nasdaq, has not paid dividends, and has an authorized stock repurchase plan under which shares were repurchased in FY2025 - The company's common stock trades on the Nasdaq Global Select Market under the symbol **KE**[149](index=149&type=chunk) - Kimball Electronics has not paid dividends on its common stock since inception and currently has no plans to pay dividends in fiscal year 2026[150](index=150&type=chunk) - As of August 7, 2025, there were **24,218,517 shares of common stock outstanding** and approximately **925 share owners of record**[4](index=4&type=chunk)[151](index=151&type=chunk) Issuer Purchases of Equity Securities (Q4 FY2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan | | :--------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------ | :-------------------------------------------------------------------- | | April 1, 2025 - April 30, 2025 | — | $ — | — | $ 19,295,851 | | May 1, 2025 - May 31, 2025 | 69,948 | $ 17.92 | 69,948 | $ 18,042,591 | | June 1, 2025 - June 30, 2025 | 92,531 | $ 18.88 | 92,531 | $ 16,295,868 | | Total | 162,479 | $ 18.46 | 162,479 | | - During fiscal year 2025, the company repurchased **$11.9 million of common stock** under the **$120 million authorized repurchase plan**[154](index=154&type=chunk)[203](index=203&type=chunk) [Item 6. [Reserved]](index=26&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Kimball Electronics experienced a 13% net sales decrease in FY2025 due to market declines, but improved cash conversion and undertook restructuring efforts, expecting a marginal sales decline in FY2026 - Net sales in fiscal year 2025 decreased by **13%** from the prior fiscal year, with declines in automotive (loss of a major program), medical (lower demand from customer overstocking), and industrial markets (GES sale, smart metering, public safety)[162](index=162&type=chunk)[171](index=171&type=chunk) - The company completed the divestiture of its GES business on July 31, 2024, and approved a plan to cease operations at its Tampa facility, transferring production to other North American plants[164](index=164&type=chunk) Key Financial Ratios (June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | | :----------------- | :------------ | :------------ | | Current Ratio | 2.2 | 2.3 | | Debt-to-Equity Ratio | 0.3 | 0.5 | | Share Owners' Equity | $570 million | | Cash Conversion Days (CCD) Trend (Q4 FY2024 - Q4 FY2025) | Metric | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | June 30, 2024 | | :----- | :------------ | :------------- | :----------- | :----------- | :------------ | | DSO | 56 | 58 | 65 | 66 | 58 | | CAD | 18 | 21 | 19 | 18 | 16 | | PDSOH | 84 | 96 | 98 | 100 | 93 | | APD | 55 | 56 | 57 | 56 | 50 | | ACD | 18 | 20 | 18 | 20 | 17 | | CCD | 85 | 99 | 107 | 108 | 100 | - Net cash provided by operating activities significantly increased to **$183.9 million in FY2025** from **$73.2 million in FY2024**, driven by changes in receivables and inventories[185](index=185&type=chunk)[186](index=186&type=chunk) - The company's liquidity position improved significantly with **$88.8 million in cash** and **$284.7 million in unused credit facilities** as of June 30, 2025[197](index=197&type=chunk) [Results of Operations - Fiscal Year 2025 Compared with Fiscal Year 2024](index=29&type=section&id=Results%20of%20Operations%20-%20Fiscal%20Year%202025%20Compared%20with%20Fiscal%20Year%202024) This section details the financial performance comparison between fiscal years 2025 and 2024, highlighting changes in net sales, gross profit, expenses, and tax rates Consolidated Statements of Income Highlights (FY2025 vs. FY2024) | Metric (Amounts in Millions) | 2025 | % of Net Sales (2025) | 2024 | % of Net Sales (2024) | % Change | | :--------------------------- | :-------- | :-------------------- | :-------- | :-------------------- | :------- | | Net Sales | $1,486.7 | | $1,714.5 | | (13)% | | Gross Profit | $104.4 | 7.0% | $140.3 | 8.2% | (26)% | | Selling and Administrative Expenses | $50.3 | 3.4% | $66.7 | 4.0% | (25)% | | Restructuring Expense | $11.0 | 0.7% | $2.4 | 0.1% | 361% | | Operating Income | $45.5 | 3.1% | $49.3 | 2.9% | (8)% | | Net Income | $17.0 | | $20.5 | | (17)% | | Diluted Earnings per Share | $0.68 | | $0.81 | | (16)% | - Gross profit as a percentage of net sales declined in FY2025 (**7.0%**) compared to FY2024 (**8.2%**) due to lost absorption on lower revenue[172](index=172&type=chunk) - Selling and administrative expenses decreased by **25%** in FY2025, both in absolute dollars and as a percentage of net sales, due to cost reduction efforts, the GES divestiture, reclassification of factoring fees, decreased profit-sharing bonus expense, and lower allowance for credit losses[173](index=173&type=chunk) - Restructuring expense increased significantly by **361% to $11.0 million** in FY2025, primarily for employee-related costs to align with reduced demand and costs related to the Tampa facility closure[175](index=175&type=chunk) - The company recorded a gain on disposal of **$2.4 million in FY2025** from the GES divestiture, compared to impairment charges of **$5.8 million** (goodwill) and **$17.0 million** (assets held for sale) in FY2024[176](index=176&type=chunk) - The consolidated effective tax rate for FY2025 was **35.2%**, higher than FY2024's **18.6%**, driven by the limitation on business interest expense deductibility and GILTI income[177](index=177&type=chunk)[178](index=178&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flow, credit facilities, factoring arrangements, and capital expenditure commitments for fiscal years 2025 and 2024 Cash Flow Summary (FY2025 vs. FY2024) | Cash Flow Category (Amounts in Millions) | 2025 | 2024 | | :--------------------------------------- | :------- | :------- | | Net cash provided by operating activities | $183.9 | $73.2 | | Net cash used for investing activities | $(14.7) | $(46.5) | | Net cash (used for) provided by financing activities | $(160.9) | $9.0 | - Operating cash flow in FY2025 was primarily driven by a **$71.8 million change in receivables** (due to lower sales and increased factoring) and a **$74.6 million change in inventories** (working down inflated levels)[186](index=186&type=chunk) - Investing activities in FY2025 included **$33.7 million for capital investments**, partially offset by **$18.5 million in proceeds from the GES sale**[188](index=188&type=chunk) - Financing activities in FY2025 primarily involved net payments of **$147.3 million on credit facilities**[190](index=190&type=chunk) - The company amended its primary credit facility in December 2024, adding a **$100 million term loan** maturing in December 2029, while maintaining a **$300 million revolving facility** maturing in May 2027[191](index=191&type=chunk)[192](index=192&type=chunk) - The company sold **$338.4 million of accounts receivable in FY2025** through factoring arrangements, including a new domestic program that sold **$19.4 million of receivables**[195](index=195&type=chunk)[196](index=196&type=chunk) - Capital expenditure commitments as of June 30, 2025, were approximately **$35 million**, primarily for leasehold improvements and new program wins[198](index=198&type=chunk) - The company expects additional pre-tax restructuring charges of **$0.5 million to $1.0 million** in the first half of fiscal year 2026 related to the Tampa facility closure[199](index=199&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Kimball Electronics manages foreign currency and interest rate risks through hedging and credit facilities, with no material impact expected from hypothetical adverse changes - The company's principal foreign currency exposures include the Euro, Polish zloty, Romanian leu, Chinese renminbi, Thai baht, and Mexican peso[212](index=212&type=chunk) - Derivative financial instruments are used to hedge certain foreign currency exposures, with a hypothetical **10% adverse change** in foreign currency exchange rates not expected to have a material impact on annual profitability[212](index=212&type=chunk) - Interest rate risk primarily relates to the primary credit facility, with rates based on market indices like SOFR[213](index=213&type=chunk) - A hypothetical **10% change in interest rates** is not estimated to have a material impact on annual profitability[213](index=213&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=37&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Kimball Electronics, Inc., including the balance sheets, statements of income, comprehensive income, cash flows, and share owners' equity for the fiscal years ended June 30, 2025, 2024, and 2023. It also includes management's report on internal control over financial reporting and the independent registered public accounting firm's report, along with detailed notes to the financial statements covering significant accounting policies, revenue recognition, asset sales, restructuring, inventories, property, goodwill, intangible assets, commitments, credit facilities, employee benefits, stock compensation, income taxes, share owners' equity, fair value, derivative instruments, accrued expenses, segment reporting, geographic information, earnings per share, accumulated other comprehensive income, and leases - Management concluded that internal control over financial reporting was **effective as of June 30, 2025**[221](index=221&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, issued an **unqualified opinion** on the financial statements and the effectiveness of internal control over financial reporting as of June 30, 2025[225](index=225&type=chunk) - A critical audit matter identified was revenue recognition over time for contracts with customers, due to judgments required in evaluating anticipated margins and the significant number of such contracts[234](index=234&type=chunk) Consolidated Balance Sheet Highlights (June 30, 2025 vs. 2024) | Asset/Liability (Amounts in Thousands) | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Cash and cash equivalents | $88,781 | $77,965 | | Receivables, net | $222,623 | $282,336 | | Inventories | $273,500 | $338,116 | | Total current assets | $699,604 | $847,006 | | Total Assets | $1,077,312 | $1,207,919 | | Current portion of long-term debt | $17,400 | $59,837 | | Accounts payable | $218,805 | $213,551 | | Total current liabilities | $318,561 | $375,322 | | Long-term debt under credit facilities | $129,650 | $235,000 | | Total Share Owners' Equity | $569,884 | $540,461 | Consolidated Statements of Income (FY2025, FY2024, FY2023) | Metric (Amounts in Thousands) | 2025 | 2024 | 2023 | | :---------------------------- | :---------- | :---------- | :---------- | | Net Sales | $1,486,727 | $1,714,510 | $1,823,429 | | Gross Profit | $104,404 | $140,257 | $156,165 | | Operating Income | $45,535 | $49,277 | $87,729 | | Net Income | $16,984 | $20,511 | $55,831 | | Diluted Earnings per Share | $0.68 | $0.81 | $2.22 | Consolidated Statements of Cash Flows (FY2025, FY2024, FY2023) | Cash Flow Category (Amounts in Thousands) | 2025 | 2024 | 2023 | | :---------------------------------------- | :--------- | :--------- | :---------- | | Net cash provided by operating activities | $183,937 | $73,217 | $(13,804) | | Net cash used for investing activities | $(14,700) | $(46,521) | $(90,467) | | Net cash (used for) provided by financing activities | $(160,874) | $8,974 | $99,179 | | Net Increase (Decrease) in Cash | $10,688 | $34,915 | $(5,987) | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=73&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Kimball Electronics reported no changes in or disagreements with its accountants on accounting and financial disclosure matters - There were no changes in and disagreements with accountants on accounting and financial disclosure[373](index=373&type=chunk) [Item 9A. Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures) The Chief Executive Officer and Chief Financial Officer concluded that Kimball Electronics' disclosure controls and procedures were effective as of June 30, 2025. Management's report on the effectiveness of internal control over financial reporting, audited by the independent registered public accounting firm, is incorporated by reference, and no material changes in internal control over financial reporting occurred during the quarter - The CEO and CFO concluded that disclosure controls and procedures were **effective as of June 30, 2025**[373](index=373&type=chunk) - Management's assessment of the effectiveness of internal control over financial reporting was **effective as of June 30, 2025**, and was audited by the independent registered public accounting firm[221](index=221&type=chunk)[373](index=373&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[373](index=373&type=chunk) [Item 9B. Other Information](index=73&type=section&id=Item%209B.%20Other%20Information) During the three months ended June 30, 2025, no officers or directors adopted or terminated any Rule 10b5-1 trading arrangements - No officers or directors adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[374](index=374&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=73&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to Kimball Electronics, Inc - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[374](index=374&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, corporate governance, and committees (including the Audit Committee and Nominating and ESG Committee) is incorporated by reference from the definitive Proxy Statement to be filed for the Annual Meeting of Share Owners. The company maintains a Code of Conduct and insider trading policies, available on its website - Information on Directors, Executive Officers, and Corporate Governance is incorporated by reference from the definitive Proxy Statement[376](index=376&type=chunk)[378](index=378&type=chunk) - The company has a Code of Conduct applicable to all employees, including executive officers, and insider trading policies, both available on its website[380](index=380&type=chunk)[381](index=381&type=chunk) [Item 11. Executive Compensation](index=74&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive Proxy Statement to be filed for the Annual Meeting of Share Owners - Information on Executive Compensation is incorporated by reference from the definitive Proxy Statement[382](index=382&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Share Owner Matters](index=75&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Share%20Owner%20Matters) Information concerning security ownership of certain beneficial owners and management, as well as securities authorized for issuance under equity compensation plans, is incorporated by reference from the definitive Proxy Statement - Information on Security Ownership of Certain Beneficial Owners and Management and Securities Authorized for Issuance Under Equity Compensation Plans is incorporated by reference from the definitive Proxy Statement[383](index=383&type=chunk)[384](index=384&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=75&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the definitive Proxy Statement - Information on Certain Relationships and Related Transactions, and Director Independence is incorporated by reference from the definitive Proxy Statement[385](index=385&type=chunk)[386](index=386&type=chunk) [Item 14. Principal Accounting Fees and Services](index=75&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information concerning principal accounting fees and services is incorporated by reference from the definitive Proxy Statement - Information on Principal Accounting Fees and Services is incorporated by reference from the definitive Proxy Statement[387](index=387&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=76&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and supplementary data included in Item 8, along with a schedule of Valuation and Qualifying Accounts. It also provides an index of exhibits filed or incorporated by reference as part of this annual report - The consolidated financial statements and supplementary data are found in Item 8[389](index=389&type=chunk) - Schedule II, Valuation and Qualifying Accounts, is included for each of the three years ended June 30, 2025[390](index=390&type=chunk) - An Index of Exhibits is provided, listing documents filed or incorporated by reference[391](index=391&type=chunk) [Item 16. Form 10-K Summary](index=76&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is provided[392](index=392&type=chunk) [SIGNATURES](index=79&type=section&id=SIGNATURES) The report is duly signed on behalf of Kimball Electronics, Inc. by its Chief Financial Officer, Chief Executive Officer, and Chief Accounting Officer, as well as by the Directors, as of August 22, 2025 - The report is signed by Jana T. Croom (Chief Financial Officer), Richard D. Phillips (Chief Executive Officer and Director), and Adam M. Baumann (Chief Accounting Officer) as of August 22, 2025[399](index=399&type=chunk)[400](index=400&type=chunk)

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Kimball Electronics (KE) Analysis - Kimball Electronics has experienced a significant price increase of 33.2% over the past four weeks, indicating growing investor interest [4] - The stock has gained 47.5% over the past 12 weeks, with a beta of 1.22, suggesting it moves 22% more than the market [5] - KE has a Momentum Score of A, indicating a favorable time to invest based on its momentum characteristics [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to KE earning a Zacks Rank 1 (Strong Buy), which is associated with strong momentum effects [7] - KE is currently trading at a Price-to-Sales ratio of 0.42, suggesting it is undervalued as investors pay only 42 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides KE, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Points - The conference call is regarding Kimball Electronics' Fourth Quarter Fiscal 2025 earnings [1] - The call includes key participants such as the CEO, CFO, and Treasurer [1][2] - A press release detailing the results for the fourth quarter and full fiscal year ended June 30, 2025, was issued prior to the call [3] Financial Results - The commentary during the call will focus on adjusted non-GAAP results [4] - A presentation accompanying the call has been made available on the Investor Relations page of the company's website [3]

Financial Data and Key Metrics Changes - Net sales for Q4 were $381 million, an 8% decline year-over-year when excluding the divested automation test and measurement business [7][12] - Adjusted net income for fiscal 2025 was $8.4 million or $0.34 per diluted share, compared to $9.7 million or $0.38 per diluted share in Q4 last year [15] - Gross margin rate in Q4 was 8%, a 50 basis point decrease from 8.5% in the same period of fiscal 2024 [12] - Adjusted operating income for Q4 was $19.6 million or 5.2% of net sales, compared to $22.7 million or 5.3% of net sales last year [14] - Cash generated by operating activities in the quarter was $78.1 million, marking the sixth consecutive quarter of positive cash flow [16] Business Line Data and Key Metrics Changes - Medical business sales were $107 million, up 5% year-over-year, representing 28% of total company revenue [8][9] - Automotive sales were $184 million, a 13% decrease year-over-year, accounting for 48% of total company sales [10] - Industrial sales were $90 million, down 12% year-over-year, representing 24% of total company sales [11] Market Data and Key Metrics Changes - The medical market is expected to provide opportunities for revenue diversification and leverage core strengths [6] - The automotive sector is facing challenges, particularly with electronic steering systems for EVs [11] - The industrial segment shows early signs of stability, but broad-based declines were noted in North America and Europe [11] Company Strategy and Development Direction - The company is focusing on becoming a medical contract manufacturing organization (CMO) and has opened a new 300,000 square foot facility in Indianapolis [6][10] - The strategy includes pursuing growth with blue-chip customers and enhancing capabilities in drug delivery systems [24][25] - Fiscal 2026 is expected to be a year of transition with projected net sales between $1.35 billion and $1.45 billion, reflecting a 2% to 9% decrease compared to fiscal 2025 [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to generate positive cash flow and invest in growth opportunities [24] - The company anticipates modest growth in medical and industrial businesses, offset by a decline in automotive [21] - Management emphasized the importance of quality and reliability across all verticals, aiming for a five nines reliability standard [23] Other Important Information - The company ended fiscal 2025 with net sales totaling $1.487 billion, the third highest annual revenue in its history [19] - Capital expenditures for fiscal 2025 were $33.7 million, primarily for new product introductions and maintenance needs [18] - The company has $16.3 million remaining on its share repurchase program [19] Q&A Session Summary Question: Timing and revenue capacity of the new facility in Indianapolis - The grand opening is planned for November, with the facility capable of handling hundreds of millions in business depending on program sizes [28][29] Question: Capital allocation focus on Medical CMO and industrial adjacencies - The company is exploring strategic opportunities in industrial while ramping up the medical CMO [30][31] Question: Tariffs and global footprint - The majority of the business is not typically the importer of record, providing some protection against tariffs [32][34] Question: Margin profile change with the large medical customer - There are no material changes to the margin profile; the company is resuming full and final assembly for the customer [39][43] Question: Improvement in cash conversion days - The goal is to reduce cash conversion days to around 75 days through better controls and partnerships [44][46] Question: Margin improvement drivers - Improvements will come from gross margin and capacity utilization as revenue increases [49] Question: Changes in sales organization for the Medical segment - The company is making hires in business development and implementing a comprehensive marketing plan to support CMO efforts [52][53] Question: Automation in the new facility and its effect on margins - Significant automation is expected, which will be accretive to margins over time [55]

Financial Performance - Q4 Fiscal 2025 - Net sales for Q4 were $381 million, a 12% decrease compared to Q4 of fiscal 2024[12, 14] - Excluding AT&M, the net sales decrease was 8%[14, 29] - Gross margin rate in Q4 was 8%, a 50 bps decline compared to Q4 of fiscal 2024[30, 32] - Adjusted selling & administrative expense totaled $10.8 million, a 23% reduction compared to $14 million in Q4 last year[37] - Adjusted operating income was $19.6 million, or 5.2% of net sales[41] Segment Performance - Medical sales were $107 million, up 5% compared to the same period last year, representing 28% of total company revenue[15, 17] - Automotive net sales were $184 million, a 13% decrease compared to Q4 last year, representing 48% of total company sales[19, 22] - Industrial net sales were $90 million, down 12% year-over-year excluding AT&M, representing 24% of total company sales[23, 25] Fiscal Year 2025 Highlights - Net sales totaled $1.487 billion, the 3rd highest annual revenue total in the company's history[58] - Inventory was down nearly 20% year-over-year[58] - Debt was down 50% within the fiscal year[58] Fiscal Year 2026 Guidance - Net sales are projected to be $1.350 - $1.450 billion, a 2% to 9% decrease compared to fiscal 2025[59] - Capital expenditures are expected to be $50 - $60 million[59]