UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-36454 KIMBALL ELECTRONICS, INC. (Exact name of registrant as specified in its charter) Indiana 35-2047713 (State or other jurisdiction of ...

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]

Group 1: Earnings Performance - Kimball Electronics reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, and showing a slight increase from $0.33 per share a year ago, resulting in an earnings surprise of +70.00% [1] - The company posted revenues of $380.47 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 13.57%, although this represents a decline from year-ago revenues of $430.16 million [2] Group 2: Stock Performance and Outlook - Kimball Electronics shares have increased by approximately 11.2% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $332.5 million, and for the current fiscal year, it is $1.04 on revenues of $1.35 billion [7] Group 3: Industry Context - The Electronics - Miscellaneous Products industry, to which Kimball Electronics belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [8]

Exhibit 99.1 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 ...

Financial Report Key Information Review - Total revenue for Q2 2023 was RMB 20,204 million, representing a year-over-year increase of 21% [1] - Existing home revenue was RMB 6,050 million, up 49% year-over-year [1] - New home revenue reached RMB 8,404 million, a 42% year-over-year increase [1] - Gross profit was RMB 6,350 million, with a gross profit margin (GPM) of 25.5% [1] - Operating profit was RMB 2,978 million, showing a significant increase of 215.3% [1] - Non-GAAP net profit was RMB 3,561 million, with a net profit margin (NPM) of 21.6% [1] Management's Strategic Focus - The company is enhancing its home decoration business by improving product design and project management capabilities, with project managers achieving a 156% year-over-year increase in average monthly orders [2] - In the rental service sector, the company manages over 500,000 rental properties, focusing on improving default management and renewal rates [2] AI Technology Application - An AI-driven housing search system has been launched in two cities, capturing 40% of homepage traffic [2] - Over 200,000 agents are using tools that allow them to manage more than 2.5 million clients, improving efficiency metrics [2] - An AI property maintenance system has been adopted by 110,000 agents, servicing 400,000 homeowners [2] Market Outlook - The second-hand housing market showed strong recovery in Q1, with a 16% year-over-year increase in transactions, driven by policy effects that lowered purchasing thresholds [3] - In major cities like Beijing and Shanghai, second-hand home prices remained stable or slightly increased [4] - The new home market was stable, with a slight year-over-year decline of 0.4% in sales [4] - The company anticipates a typical seasonal slowdown in Q2, but expects a slight year-over-year increase in second-hand transaction volume [5] - The impact of international trade tensions on the real estate market is being closely monitored, with a focus on maintaining stable homeowner sentiment [5]

Core Viewpoint - The overall performance of Beike's latest earnings report is better than expected, with significant revenue growth, but the persistent issue of increasing revenue without profit remains unresolved [1][12][46]. Group 1: Existing Home Business - The GTV (Gross Transaction Value) of the existing home business increased by 28% year-on-year, outperforming the expected 24% growth, indicating the continued impact of policy benefits [1][15]. - Revenue from the existing home business grew by 20%, but this was lower than the GTV growth, reflecting a decline in the comprehensive commission rate [1][17]. - The comprehensive commission rate for existing homes decreased by 1.4 basis points to 1.18%, attributed to a higher proportion of non-self-operated business and potential commission discounts to stimulate transactions [1][17]. Group 2: New Home Business - The new home business saw a remarkable growth in transaction value, with a year-on-year increase of 53%, significantly exceeding market expectations [2][20]. - However, the revenue growth rate for new homes was lower than expected due to a decline in the comprehensive realization rate, which fell by 20 basis points [2][24]. - The new home business's revenue increased by 64% year-on-year, but the growth rate showed a deceleration compared to the previous quarter [2][24]. Group 3: Secondary Business Lines - The secondary business lines, including home decoration, rental, and home services, generated total revenue of 8.38 billion, a year-on-year increase of 39%, surpassing expectations [3][27]. - The rental business experienced a significant growth of 94% year-on-year, indicating a strong market position despite a generally weak rental market [3][29]. - The home decoration business, while improving, still underperformed expectations with a revenue growth of 22% [3][29]. Group 4: Profitability Issues - Despite revenue growth, the adjusted net profit remained nearly flat year-on-year, highlighting the ongoing issue of revenue growth not translating into profit [4][6][34]. - The overall gross profit margin decreased to 20.7%, down 2.3 percentage points from the previous quarter, primarily due to rising commission costs and a higher proportion of low-margin rental business [5][37]. - The operating profit margin fell from 3.2% to 2.5%, reflecting the challenges in maintaining profitability amidst rising costs [5][43]. Group 5: Market Outlook - The performance of Beike is significantly influenced by macroeconomic conditions in the real estate market, making future predictions challenging [12][13]. - Long-term prospects for Beike remain positive due to its dominant market position and execution capabilities, despite short-term volatility [12][13]. - Current valuation corresponds to an adjusted net profit multiple of approximately 16-17x PE, with potential for higher multiples if profit growth resumes [12][13].

PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Condensed Consolidated Financial Statements for the quarter ended March 31, 2025, detailing financial position, performance, and cash flows Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($ in thousands) | June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 707,303 | 847,006 | | **Total Assets** | 1,074,555 | 1,207,919 | | **Total Current Liabilities** | 330,957 | 375,322 | | **Total Liabilities** | 526,440 | 667,458 | | **Total Share Owners' Equity** | 548,115 | 540,461 | Condensed Consolidated Statements of Income Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2025 ($ in thousands) | Three Months Ended Mar 31, 2024 ($ in thousands) | Nine Months Ended Mar 31, 2025 ($ in thousands) | Nine Months Ended Mar 31, 2024 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $374,607 | $425,036 | $1,106,255 | $1,284,352 | | **Gross Profit** | $26,896 | $33,544 | $73,923 | $103,519 | | **Operating Income (Loss)** | $11,716 | $(6,431) | $29,061 | $29,669 | | **Net Income (Loss)** | $3,817 | $(6,076) | $10,403 | $12,968 | | **Diluted EPS** | $0.15 | $(0.24) | $0.41 | $0.51 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Category | Nine Months Ended Mar 31, 2025 ($ in thousands) | Nine Months Ended Mar 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 105,870 | 24,717 | | **Net cash used for investing activities** | (5,160) | (37,702) | | **Net cash (used for) provided by financing activities** | (126,615) | 36,571 | | **Net (Decrease) Increase in Cash** | (25,892) | 23,473 | [Note 2. Revenue from Contracts with Customers](index=13&type=section&id=Note%202.%20Revenue%20from%20Contracts%20with%20Customers) Revenue is disaggregated by end market vertical, showing declines in Automotive and Industrial sectors, with most revenue recognized over time Revenue by End Market Vertical (in millions) | Vertical Markets | Three Months Ended Mar 31, 2025 (in millions) | Three Months Ended Mar 31, 2024 (in millions) | Nine Months Ended Mar 31, 2025 (in millions) | Nine Months Ended Mar 31, 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Automotive | $173.1 | $202.0 | $554.3 | $614.7 | | Medical | $115.2 | $113.0 | $288.9 | $323.5 | | Industrial | $86.3 | $110.0 | $263.1 | $346.2 | | **Total net sales** | **$374.6** | **$425.0** | **$1,106.3** | **$1,284.4** | - For the nine months ended March 31, 2025, approximately **98%** of net sales were recognized over time as manufacturing services were performed, consistent with **96%** in the prior year period[43](index=43&type=chunk) [Note 3. Sale of GES](index=13&type=section&id=Note%203.%20Sale%20of%20GES) The company completed the sale of its GES business on July 31, 2024, generating cash proceeds and a pre-tax gain in Q1 FY2025 - The sale of GES was completed on July 31, 2024, for cash proceeds of **$18.5 million**, resulting in a pre-tax gain of **$1.3 million** in Q1 FY2025[46](index=46&type=chunk) [Note 4. Restructuring Activities](index=14&type=section&id=Note%204.%20Restructuring%20Activities) The company recorded restructuring expenses for workforce resizing and the Tampa facility closure to align costs with reduced demand - In the nine months ended March 31, 2025, the company recorded restructuring expenses of **$5.3 million** to align costs with demand and **$3.7 million** related to the Tampa facility closure plan[48](index=48&type=chunk)[49](index=49&type=chunk) - Total expected exit costs for the Tampa Closure Plan are estimated to be between **$6.5 million** and **$8.5 million**, primarily for employee termination benefits and logistical costs[49](index=49&type=chunk) [Note 8. Credit Facilities](index=16&type=section&id=Note%208.%20Credit%20Facilities) Total borrowings under credit facilities significantly reduced to **$178.8 million** by March 31, 2025, following an amendment to add a term loan and terminate a secondary facility Credit Facilities Summary (in millions) | Facility | Available Borrowing Capacity (Mar 31, 2025, in millions) | Borrowings Outstanding (Mar 31, 2025, in millions) | Borrowings Outstanding (Jun 30, 2024, in millions) | | :--- | :--- | :--- | :--- | | Primary credit facility, revolving | $219.6 | $80.0 | $285.5 | | Primary credit facility, term | $1.2 | $98.8 | $— | | **Total credit facilities** | **$253.2** | **$178.8** | **$294.8** | - On December 20, 2024, the company amended its primary credit agreement, adding a **$100 million** term loan facility and terminating its secondary **$100 million** revolving credit facility[56](index=56&type=chunk)[60](index=60&type=chunk) [Note 14. Share Owners' Equity](index=23&type=section&id=Note%2014.%20Share%20Owners%27%20Equity) The company repurchased **$8.9 million** of common stock at an average price of **$18.10** per share under its **$120 million** repurchase plan - Under its **$120 million** Repurchase Plan, the company repurchased **$8.9 million** of common stock in the nine months ended March 31, 2025[89](index=89&type=chunk)[90](index=90&type=chunk) - The average price paid per share for repurchases during the nine months ended March 31, 2025 was **$18.10**[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **12%** decrease in Q3 FY2025 net sales, driven by automotive and industrial declines, alongside restructuring efforts and a strong balance sheet with a **0.3** debt-to-equity ratio [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Net sales for Q3 FY2025 decreased **12%** to **$374.6 million**, primarily due to declines in automotive and industrial sectors, while gross margin contracted to **7.2%** Net Sales by Vertical Market (in millions) | Vertical | Q3 2025 (in millions) | Q3 2024 (in millions) | % Change | YTD 2025 (in millions) | YTD 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive | $173.1 | $202.0 | (14)% | $554.3 | $614.7 | (10)% | | Medical | $115.2 | $113.0 | 2% | $288.9 | $323.5 | (11)% | | Industrial | $86.3 | $110.0 | (22)% | $263.1 | $346.2 | (24)% | | **Total** | **$374.6** | **$425.0** | **(12)%** | **$1,106.3** | **$1,284.4** | **(14)%** | - Gross profit as a percentage of net sales declined in Q3 FY2025 to **7.2%** from **7.9%** in Q3 FY2024, primarily due to lost absorption on lower revenue and dilution from a non-recurring consignment inventory sale[107](index=107&type=chunk)[109](index=109&type=chunk) - Selling and administrative expenses decreased by **22%** in Q3 FY2025 compared to the prior year, driven by cost reduction efforts, reclassification of factoring fees, and a lower allowance for credit losses[107](index=107&type=chunk)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a solid financial position with **$376.3 million** working capital, a **2.1** current ratio, and improved Cash Conversion Days of **99**, driven by increased operating cash flow Key Liquidity Metrics | Metric | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Working Capital (in millions) | $376.3 | $471.7 | | Current Ratio | 2.1 | 2.3 | | Debt-to-Equity Ratio | 0.3 | 0.5 | Cash Conversion Days (CCD) | Period | March 31, 2025 (Days) | March 31, 2024 (Days) | | :--- | :--- | :--- | | Cash Conversion Days | 99 | 110 | - Net cash provided by operating activities increased to **$105.9 million** for the nine months ended March 31, 2025, compared to **$24.7 million** in the prior-year period, mainly due to a **$32.5 million** decrease in accounts receivable and a **$39.9 million** decrease in inventory[120](index=120&type=chunk)[123](index=123&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in market risk exposure, including foreign currency and interest rates, compared to its prior fiscal year 10-K disclosures - There were no material changes in the company's exposure to market risks for changes in foreign currency exchange rates and interest rates as compared to the fiscal year ended June 30, 2024[147](index=147&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[148](index=148&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2025[148](index=148&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material legal proceedings, with routine litigation not expected to have a material adverse financial impact - The company is not involved in any material legal proceedings; any existing litigation is routine and not expected to have a material adverse impact[150](index=150&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Annual Report on Form 10-K for comprehensive risk factor disclosure, with no new or updated risks presented in this 10-Q - For a comprehensive disclosure of risk factors, the company refers investors to its Annual Report on Form 10-K for the year ended June 30, 2024[151](index=151&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **174,312** shares for **$3.0 million** during Q3 FY2025 under its **$120 million** authorized stock repurchase plan Share Repurchases for the Three Months Ended March 31, 2025 | Period | Total Number of Shares Purchased (Shares) | Average Price Paid per Share ($) | Maximum Dollar Value Remaining Under Plan ($) | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | $22,294,134 | | Feb 2025 | 58,994 | $18.18 | $21,221,626 | | Mar 2025 | 115,318 | $16.70 | $19,295,851 | | **Total** | **174,312** | **$17.20** | **N/A** | [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading plans or other trading arrangements during Q3 FY2025 - During the quarter ended March 31, 2025, no officers or directors adopted or terminated any contract, instruction, or written plan for the purchase or sale of the Company's securities under Rule 10b5-1(c)[155](index=155&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Key exhibits filed include: * 31.1: CEO Certification (Section 302) * 31.2: CFO Certification (Section 302) * 32.1: CEO Certification (Section 906) * 32.2: CFO Certification (Section 906) * 101 & 104: Inline XBRL and Cover Page Interactive Data files[156](index=156&type=chunk)