Financial Performance - Net sales for Q3 fiscal 2025 totaled $374.6 million, a decrease of 12% compared to $425.0 million in Q3 fiscal 2024[4] - Operating income for Q3 was $11.7 million, representing 3.1% of net sales, with adjusted operating income at 4.2%[4] - Net sales for the three months ended March 31, 2025, were $374.6 million, a decrease of 11.8% compared to $425.0 million for the same period in 2024[19] - Gross profit margin decreased to 7.2% for the three months ended March 31, 2025, down from 7.9% in the prior year[19] - Operating income improved to $11.7 million for the three months ended March 31, 2025, compared to an operating loss of $6.4 million in the same period last year[19] - Net income for the three months ended March 31, 2025, was $3.8 million, a significant recovery from a net loss of $6.1 million in the prior year[19] - Net sales growth for the three months ended March 31, 2025, decreased by 12% compared to the same period in the prior year[25] - Adjusted operating income for the nine months ended March 31, 2025, was $41,629, down from $58,802 in the prior year[25] - Adjusted net income for the nine months ended March 31, 2025, was $19,718, compared to $31,607 in the prior year[25] - Operating income for the twelve months ended March 31, 2025, was $48,669, compared to $61,118 in the prior year[25] - Return on invested capital (ROIC) for the twelve months ended March 31, 2025, was 6.1%, down from 9.0% in the prior year[25] Cash Flow and Liquidity - Cash generated from operating activities was $30.9 million, marking the fifth consecutive quarter of positive cash flow[4] - Cash flow from operating activities for the nine months ended March 31, 2025, was $105.9 million, a substantial increase from $24.7 million in the same period of 2024[20] - The company has cash and cash equivalents of $51.4 million and available borrowing capacity of $253.2 million[4] - Borrowings on credit facilities decreased by $26.2 million from Q2, totaling $178.8 million, and down $116 million, or 40%, year-to-date[4] Inventory and Orders - Inventory decreased by $9.6 million from Q2 to $296.6 million[4] - The company reported a decrease in open orders to $642 million as of March 31, 2025, compared to $831 million a year earlier, primarily due to demand reductions[22][23] Expenses and Restructuring - Selling and administrative expenses for the three months ended March 31, 2025, were reported at $13,154, down from $16,861 in the prior year[25] - The company incurred restructuring expenses of $2.0 million for the three months ended March 31, 2025, compared to $1.6 million in the same period of 2024[19] - Restructuring expenses for the twelve months ended March 31, 2025, totaled $9,783, compared to $1,622 in the prior year[25] - Stock compensation expense for the nine months ended March 31, 2025, was $4,528, compared to $5,435 in the prior year[25] Future Outlook - The company expects fiscal 2025 net sales to be in the range of $1.40 billion to $1.44 billion, with adjusted operating income projected at 3.4% to 3.6% of net sales[9] - Capital expenditures for fiscal 2025 are estimated to be at the low-end of the guidance range of $40 million to $50 million[9] - A new manufacturing facility in Indianapolis is being added to support the company's strategy to drive growth in the medical CMO sector[4] Earnings Per Share - Basic earnings per share for the three months ended March 31, 2025, was $0.15, a recovery from a loss of $0.24 per share in the same period last year[19] - Diluted earnings per share, as reported, for the three months ended March 31, 2025, was $0.15, a decrease from $(0.24) in the prior year[25] - Adjusted diluted earnings per share for the nine months ended March 31, 2025, was $0.79, down from $1.25 in the prior year[25] - The current portion of long-term debt decreased to $28.9 million as of March 31, 2025, from $59.8 million in the previous year[21]

Core Viewpoint - Beike's performance in 2024 shows steady growth with a significant increase in platform scale and revenue, despite challenges in the new home market [2][5][10]. Financial Performance - In 2024, Beike's total GTV reached 3.35 trillion RMB, with total revenue of 93.5 billion RMB, representing over 20% growth compared to 2023 [2]. - The number of active real estate stores increased to 49,700, and active agents grew to 445,000, marking a year-on-year growth of 12.1% [3]. - The GTV for existing home transactions rose to 2.25 trillion RMB, an approximate 11% increase, setting a historical high [4]. Business Segments - New home transaction GTV was 900.17 billion RMB, a decline of 3.3%, but revenue increased by 10% [5]. - The renovation and furnishing segment generated 14.8 billion RMB in revenue, growing by 36% due to effective supply chain management [6]. - Rental services managed over 430,000 units, with revenue reaching 14.3 billion RMB, a substantial increase of 135% [7]. Market Trends - The fourth quarter of 2024 showed signs of market recovery, with new home transaction volumes increasing by approximately 15% since September 26, 2024 [8]. - New home GTV on Beike's platform in Q4 2024 saw a year-on-year growth of about 50%, indicating a strong market rebound [9]. - The proportion of existing home GTV increased from 40% in 2023 to 46% in 2024, with a notable increase in transaction volume [10]. Shareholder Returns - In Q4, Beike repurchased 132 million USD worth of shares, totaling 760 million USD for 2024, which is 3.9% of the total shares as of the end of 2023 [11]. - Cumulatively, since September 2022, Beike has repurchased shares worth 1.63 billion USD, representing 8.6% of the total shares before the buyback program [11]. Operational Efficiency - Beike has optimized operational efficiency, reducing the average construction time for home renovation projects by over 10 days compared to the previous year [12]. - The company has enhanced customer satisfaction in rental services through improved after-sales service capabilities [12][13]. Strategic Initiatives - Beike is diversifying its strategic layout and exploring new business models, focusing on customized services to mitigate decision-making risks in home buying [14]. - The company plans to limit heavy asset investments and transition towards a platform-based business model similar to SaaS [16]. Technology Investment - Beike aims to increase AI investments in 2025 to enhance foundational capabilities and accelerate the development of application iterations [17]. - The integration of advanced AI tools has led to a 5% reduction in work time and provided nearly 20% support for strategic planning [19]. Value-Added Services - The company is exploring low-frequency traffic channels and introducing value-added services like home decoration to create additional value for customers [20]. - Plans for 2025 include enhancing product strength and delivery quality while adopting a customer-centric approach [21].

Financial Performance - Net sales for the second quarter were $357 million, a 15% year-over-year decrease[11, 12, 22, 23] - Excluding AT&M, the net sales decrease was 13%[12, 23] - Gross margin rate in Q2 was 6.6%, a 160 bps decline compared to Q2 of fiscal year 2024[24, 25] - Adjusted selling & administrative expense was $10.1 million, a 34% reduction compared to $15.4 million in Q2 last year[28] - Borrowings at December 31, 2024, were $205 million, a $41 million reduction from the first quarter and down 30% from the beginning of the fiscal year[47] Segment Performance - Automotive net sales were $193 million, a 4% decrease compared to the second quarter last year, representing 54% of total company sales[14] - Medical net sales were $84 million, down 22% compared to the same period last year, representing 23% of total company sales[15, 16] - Industrial net sales were $81 million, down 20% year-over-year when excluding AT&M, representing 23% of total company sales[20, 21] Guidance and Outlook - Net sales for fiscal year 2025 are now expected to be in the range of $1.4 to $1.44 billion, revised from the previous guidance of $1.44 to $1.54 billion[53] - Adjusted operating income is expected to be 3.4% to 3.6% of net sales, revised from the previous guidance of 4% to 4.5% of net sales[53] - The company's Mexico facility exports approximately 25% to 30% of its production into the U S[55]

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].

Financial Data and Key Metrics Changes - Net sales for Q2 totaled $357 million, a 15% decrease year over year, with a 13% decline when excluding AT and M [8][14] - Adjusted operating income for Q2 was $13.3 million, or 3.7% of net sales, compared to $19.1 million, or 4.5% of net sales, in the previous year [16] - 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 the same quarter last year [17] - Cash flow generated from operating activities was $29.5 million, marking the fourth consecutive quarter of positive cash flow [17][18] - Inventory levels decreased by $149 million, or 33%, year over year, ending the quarter at $306.2 million [18] 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 [9] - Medical net sales were $84 million, a 22% decrease year over year, accounting for 23% of total company sales [10] - Industrial net sales were $81 million, down 20% year over year, also representing 23% of total company sales [12] Market Data and Key Metrics Changes - North America and Europe experienced double-digit declines, while Asia saw an increase in sales [8] - The automotive business in China showed strong performance, with record production rates, contrasting with declining volumes in North America [9] Company Strategy and Development Direction - The company is strategically repositioning for growth, focusing on divesting non-core assets and enhancing facility utilization [6][7] - There is an increased focus on the medical CMO sector, with plans to expand manufacturing capabilities [12][27] - The company is exploring opportunities in emerging medical technologies and high-level assemblies [27] 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 [6][7] - The company is optimistic about future growth but recognizes that necessary changes will take time [7][27] - Management is actively working with customers to navigate the impacts of tariffs and supply chain challenges [22][24] Other Important Information - The company has amended its credit facility, enhancing its capital structure and providing additional liquidity for investments [19][20] - A total of $97.7 million has been returned to shareholders through share repurchases since October 2015, with $22.3 million remaining on the repurchase program [20][21] Q&A Session Summary Question: What is the impact of tariffs on production decisions? - Management indicated that even with a 25% tariff, it remains more cost-effective for most products to be manufactured in Mexico [30] Question: How is inventory reduction trending? - Management noted that inventory is expected to continue decreasing over the next six to twelve months as they manage customer agreements [35] Question: What is the current utilization rate in Jasper? - The utilization rate in Jasper is around 65%, with discussions ongoing about moving additional work from Tampa to Jasper [43] 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 [46] Question: What changes are being made to focus on the medical vertical? - The company has restructured to combine its drug delivery business with the core EMS medical vertical to enhance collaboration and capabilities [54]

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]