Financial Data and Key Metrics Changes - Net sales in Q2 totaled $357 million, a 13% decrease year-over-year, with a 15% decrease when excluding AT and M [10][20] - Gross margin rate in Q2 was 6.6%, a decline of 160 basis points compared to the same period last year [21] - Adjusted net income in Q2 was $7.4 million or $0.29 per diluted share, down from $9.8 million or $0.39 per diluted share in Q2 last year [29] Business Line Data and Key Metrics Changes - Automotive net sales were $193 million, a 4% decrease year-over-year, representing 54% of total company sales [11] - Medical net sales were $84 million, a 22% decrease year-over-year, accounting for 23% of total company sales [14] - Industrial net sales were $81 million, down 20% year-over-year, representing 23% of total company sales [18] Market Data and Key Metrics Changes - North America and Europe experienced double-digit declines, while Asia saw an increase in sales [10] - The automotive business in China showed strong results, with record high production rates [11] Company Strategy and Development Direction - The company is strategically repositioning for growth, focusing on divesting non-core assets and increasing emphasis on the medical CMO [9] - Plans include improved facility utilization and the closing of the Tampa plant [9] - The company aims to elevate its prominence as a CMO by expanding manufacturing capabilities and vertical integration [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a sustained period of declining customer demand and revised expectations for the full fiscal year [10] - The company remains optimistic about future growth opportunities, particularly in the medical vertical [17][42] - Management emphasized the importance of controlling costs and maintaining a strong balance sheet to navigate current challenges [33] Other Important Information - Cash and cash equivalents at the end of Q2 were $53.9 million, with a cash flow generated from operating activities of $29.5 million [29][30] - The company has reduced borrowings by nearly 40% compared to a year ago [8] - A share repurchase program has returned $97.7 million to shareholders since October 2015, with $22.3 million remaining [35] Q&A Session Summary Question: How is the company navigating the tariff situation? - Management is evaluating the impact of tariffs and working with customers to find solutions, including potential shifts in production locations [38][39] Question: What is the current inventory situation? - Inventory has been reduced significantly, and management expects a continued positive trend in inventory reduction over the next six to twelve months [51][56] Question: How is the company tracking its bid and proposal pipeline? - The company is working on disclosing more information regarding its bid pipeline and win rates in the coming quarters [60][61] Question: Is the revised guidance driven by a specific vertical? - The revised guidance reflects broad-based softness across all verticals, although the automotive sector is holding steady due to strength in Asia [84][85] Question: What is the utilization rate in the Jasper facility? - The current utilization rate in the Jasper facility is around 65%, with available capacity for additional customers [80][81]

Financial Performance - Net sales for the second quarter of fiscal year 2025 decreased by 15% to $357.4 million compared to $421.2 million in the same quarter of fiscal year 2024[103]. - Gross profit as a percentage of net sales declined to 6.6% in the second quarter of fiscal year 2025 from 8.2% in the same quarter of fiscal year 2024, reflecting lost absorption on lower revenue[104]. - The automotive segment saw a 4% decrease in sales to $192.8 million in the second quarter of fiscal year 2025, while the medical segment experienced a 22% decline to $84.0 million[103]. - The company reported a net income of $3.4 million in the second quarter of fiscal year 2025, down 59% from $8.3 million in the same quarter of fiscal year 2024[103]. Cost Management - Selling and administrative expenses decreased by 41% to $10.5 million in the second quarter of fiscal year 2025 compared to $17.8 million in the same quarter of fiscal year 2024[103]. - Restructuring expenses of $4.7 million were recorded in the second quarter of fiscal year 2025 to align the cost structure with reduced end-market demand levels[106]. - The company has a strong focus on cost control while managing future growth prospects, including investments in capacity expansions[98]. Business Divestitures and Expectations - The company completed the divestiture of its GES business on July 31, 2024, recording a gain on disposal of $1.3 million[107]. - The company expects consolidated net sales to continue to lag through calendar year 2025 due to the loss of a major automotive program and the divestiture of the GES business[97]. - The company expects additional pre-tax restructuring charges between $5 million to $6 million, including $4 million to $5 million for the closure of the Tampa facility[129]. Liquidity and Capital Management - The current ratio stands at 2.3, with a debt-to-equity ratio of 0.4 and shareholders' equity of $537 million as of December 31, 2024[100]. - Working capital at December 31, 2024, was $397.6 million, down from $471.7 million at June 30, 2024, while the current ratio remained stable at 2.3[111]. - As of December 31, 2024, the company maintained unused borrowings under credit facilities totaling $226.4 million, providing sufficient liquidity for working capital needs[127]. - The company has repurchased $97.7 million of common stock under its Repurchase Plan through December 31, 2024, with a total repurchase authorization of up to $120 million[132]. - The company anticipates capital expenditure commitments of approximately $17 million, primarily related to new program wins, and expects available liquidity to fund these expenditures[128]. Cash Flow - Net cash provided by operating activities for the first six months of fiscal year 2025 was $74.9 million, a significant improvement from $(17.9) million in the same period of 2024[115]. - Net cash used for investing activities was $1.2 million in the first six months of fiscal year 2025, primarily due to capital investments of $20.0 million, offset by $18.5 million from the sale of GES[119]. - Net cash used for financing activities was $97.3 million in the first six months of fiscal year 2025, largely due to net payments on credit facilities of $89.8 million[121]. Market Risks - No material changes in exposure to market risks for foreign currency exchange rates and interest rates compared to the fiscal year ended June 30, 2024[140]. - Comprehensive disclosures of quantitative and qualitative market risk available in the Annual Report on Form 10-K for the year ended June 30, 2024[140]. Orders and Demand - Open orders decreased by 33% as of December 31, 2024, primarily due to cancellations in a major automotive program and reduced demand from automotive and medical customers[110]. - The provision for income taxes for the six months ended December 31, 2024, was $(0.2) million, or (3.6)% of income before taxes, compared to $5.4 million, or 22.2% for the same period in 2023[108].

Kimball Electronics (KE) Q2 2025 Earnings Call February 05, 2025 10:00 AM ET Company Participants Andy Regrut - Vice President, Investor RelationsRichard Phillips - CEOJana Croom - Chief Financial OfficerSteven Korn - COOMike Crawford - SMD & Head of Discovery GroupJaeson Schmidt - Director of ResearchHendi Susanto - VP & Portfolio Manager Conference Call Participants Derek Soderberg - AnalystAnja Soderstrom - Senior Equity Research Analyst Operator Good morning, ladies and gentlemen. Welcome to the Kimbell ...

Company Performance - Kimball Electronics reported quarterly earnings of $0.29 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, but down from $0.33 per share a year ago, representing an earnings surprise of 20.83% [1] - The company posted revenues of $357.39 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.87%, and down from $421.24 million year-over-year [2] - Over the last four quarters, Kimball Electronics has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - Kimball Electronics shares have declined approximately 6.4% since the beginning of the year, while the S&P 500 has gained 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $369.2 million, and for the current fiscal year, it is $1.06 on revenues of $1.48 billion [7] Industry Outlook - The Zacks Industry Rank for Electronics - Miscellaneous Products is in the top 34% of over 250 Zacks industries, indicating a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8] - The estimate revisions trend for Kimball Electronics is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Financial Performance - Net sales for Q2 Fiscal 2025 totaled $357.4 million, a decrease of 15% compared to $421.2 million in Q2 Fiscal 2024[5] - Operating income was $8.2 million, representing 2.3% of net sales, down from 3.9% in the same quarter last year[5] - Net sales for the three months ended December 31, 2024, were reported at $12.5 million, a decline of 15% compared to the same period in 2023[21] - Adjusted operating income for the six months ended December 31, 2024, was $25,923,000, down from $40,069,000 in the same period of 2023, representing a decrease of approximately 35%[22] - The company reported a net income of $3,432,000 for the three months ended December 31, 2024, compared to $8,290,000 in the same period of 2023, indicating a decline of approximately 59%[22] - The diluted earnings per share for the three months ended December 31, 2024, was $0.14, down from $0.33 in the same period of 2023[22] Cash Flow and Liquidity - Cash generated from operating activities was $29.5 million, marking the fourth consecutive quarter of positive cash flow[5] - Net cash flow provided by operating activities for the six months ended December 31, 2024, was $74,932,000, a significant improvement from a cash outflow of $(17,922,000) in the same period of 2023[18] - Cash conversion days (CCD) improved to 107 days for the three months ended December 31, 2024, compared to 117 days in the same period of 2023[19] Inventory and Assets - Inventory levels decreased by $29 million from Q1 and are down $182 million, or 37%, from peak levels[5] - Total assets decreased to $1,074,436,000 as of December 31, 2024, down from $1,207,919,000 on June 30, 2024, reflecting a reduction of approximately 11%[18] - Open orders decreased to $564 million as of December 31, 2024, down from $836 million in the same period of 2023, primarily due to demand reductions[20] Liabilities and Debt - Borrowings on credit facilities decreased to $205 million, down $90 million, or 30%, from the beginning of the fiscal year[5] - The company’s total liabilities decreased to $536,960,000 as of December 31, 2024, from $667,458,000 on June 30, 2024, reflecting a reduction of approximately 20%[18] Guidance and Forecast - Fiscal year 2025 guidance revised to net sales in the range of $1.40 - $1.44 billion, down from previous guidance of $1.44 - $1.54 billion[8] - Adjusted operating income forecasted at 3.4% - 3.6% of net sales, reduced from the previous guidance of 4.0% - 4.5%[8] - Capital expenditures for Fiscal 2025 are estimated to remain unchanged at $40 - $50 million[8] Market Performance - Sales in the automotive, medical, and industrial vertical markets declined by 4%, 22%, and 20%, respectively[6] Restructuring and Impairment - The company is implementing a restructuring plan, including divestiture of non-core assets and closing the Tampa plant to focus on medical CMO[4] - The company recognized a goodwill impairment of $5,820,000 during the twelve months ended December 31, 2024[23]

Financial Performance - Net sales for the first quarter of fiscal year 2025 decreased by 15% to $374.3 million compared to $438.1 million in the same quarter of fiscal year 2024[83] - Gross profit declined by 34% to $23.6 million, representing 6.3% of net sales, down from 8.1% in the prior year[88] - The automotive market sales decreased by 11% to $188.4 million, while medical and industrial markets saw declines of 12% and 22%, respectively[89] - Open orders decreased by 35% to $594 million compared to $907 million a year earlier, primarily due to reduced orders from automotive and medical customers[95] - The company anticipates continued softness in demand and a decrease in consolidated net sales due to the loss of a major automotive program[83] Divestitures and Gains - The company completed the divestiture of its GES business on July 31, 2024, recording a gain on disposal of $1.3 million in the first quarter of fiscal year 2025[92] Working Capital and Debt Management - Working capital at September 30, 2024 was $439.0 million, down from $471.7 million at June 30, 2024, with a current ratio of 2.3[96] - The debt-to-equity ratio improved to 0.4 at September 30, 2024, compared to 0.5 at June 30, 2024[96] - As of September 30, 2024, the company had $186.8 million in unused borrowings under its credit facilities[111] Cash Flow and Financing Activities - Net cash provided by operating activities for the first three months of fiscal year 2025 was $45.5 million, compared to $12.8 million for the same period in 2023[101] - Net cash used for financing activities in the first three months of fiscal year 2025 was $53.0 million, largely from net payments on credit facilities[107] - The company sold $87.3 million of accounts receivable without recourse in the three months ended September 30, 2024, compared to $103.0 million in the same period of 2023[110] Restructuring and Future Outlook - The company expects to incur between $10.0 million and $14.0 million in pre-tax restructuring charges, including $8.0 million to $11.0 million for the closure of the Tampa facility[113] - The company anticipates that cash generated from operations and available funds will be sufficient to meet working capital needs for at least the next 12 months[111] Capital Expenditures and Investments - Capital expenditure commitments were approximately $13 million as of September 30, 2024, primarily related to new program wins[112] - Net cash provided by investing activities was $5.2 million in the first three months of fiscal year 2025, driven by proceeds from the sale of GES[106] - The company has repurchased $94.7 million of common stock under its Repurchase Plan through September 30, 2024[113] Industry Outlook - The EMS industry is projected to grow at a compound annual growth rate (CAGR) of 4.6% through 2028 according to New Venture Research[80] - The company is focusing on cost control while managing future growth prospects, including investments in capacity expansions[84] Working Capital Management - Cash conversion days (CCD) increased to 108 days in September 2024 from 103 days in September 2023, primarily due to changes in working capital management[99]

Group 1 - Kimball Electronics reported quarterly earnings of $0.22 per share, matching the Zacks Consensus Estimate, but down from $0.43 per share a year ago [1] - The company posted revenues of $374.26 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.65% and down from $438.08 million year-over-year [2] - Kimball Electronics shares have declined approximately 32.7% since the beginning of the year, contrasting with the S&P 500's gain of 20.1% [3] Group 2 - The earnings outlook for Kimball Electronics is mixed, with the current consensus EPS estimate for the coming quarter at $0.29 on revenues of $372.7 million, and $1.17 on $1.52 billion in revenues for the current fiscal year [7] - The Zacks Industry Rank for Electronics - Miscellaneous Products is in the top 26% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Company Overview - Kimball Electronics, Inc. is a global provider of electronics and diversified contract manufacturing services, operating 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, fostering a high-performance culture [7] Conference Participation - Kimball Electronics will attend the 2024 Annual Gateway Conference on September 4-5, 2024, at the Four Seasons Hotel in San Francisco, CA [1] - Jana Croom, the Chief Financial Officer, is scheduled to present on September 5, 2024, at 9:00 a.m. Pacific Time [1] Webcast and Meetings - A webcast of the presentation will be available on the company's Investor Relations website, with an archive accessible for those unable to attend live [2] - Executives from Kimball Electronics will be available for one-on-one meetings throughout the conference [2] Gateway Conference Details - The Gateway Conference connects leading growth-stage companies with prospective investors, analysts, and partners, celebrating 25 years of fostering impactful industry connections [4] - The event showcases a diverse array of companies across various sectors, including technology, cleantech, consumer, industrials, financial services, and healthcare [5]

600 new employees will be based in Asia and the U.S., with offices in Vietnam, China, India, Japan and Silicon Valley. MONTREAL, Aug. 1, 2024 /PRNewswire/ -- Averna, a leading global test & quality solutions provider, announced the acquisition of Global Equipment Services, Inc. (GES), a division of Kimball Electronics, Inc. (Nasdaq: KE) specialized in automation, test and measurement solutions for industries such as consumer electronics, semiconductor and medical devices. Averna Expands its Asian and North ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Indiana 35-2047713 (State or other jurisdiction of (I.R.S. Employer Identification No.) 1205 Kimball Boulevard, Jasper, Indiana 47546 (Address of principal executive offices) (Zip Code) (81 ...