Kimball Electronics Reports Q2 Results; With Strong Sales Growth in the Medical Vertical; Company Raises Its Guidance for Fiscal 2026
Second Quarter 2026 Highlights
-
Revenue of
$341.3 million , a 5% decrease compared to Q2 of fiscal 2025 - Sales in the medical vertical increased 15% year-over-year
-
Operating income of
$10.8 million , or 3.2% of net sales - Adjusted operating income of 4.5%, up 80 bps year-over-year
-
Cash from operations of
$6.9 million , the eighth consecutive quarter of positive operating cash generation -
Debt of
$154.2 million and borrowing capacity of$285.1 million - Cash Conversion Days of 91, a 16-day improvement compared to the same period last year
-
Invested
$4.3 million to repurchase 149,000 shares of common stock - Company increases guidance for fiscal 2026 sales and adjusted operating income
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260204163117/en/
|
|
|
|
|
|
|
|
|||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
(Amounts in Thousands, except EPS) |
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
|
$ |
341,280 |
|
|
$ |
357,392 |
|
|
$ |
706,883 |
|
|
$ |
731,648 |
|
|
Operating Income |
$ |
10,767 |
|
|
$ |
8,230 |
|
|
$ |
25,221 |
|
|
$ |
17,345 |
|
|
Adjusted Operating Income (non-GAAP) |
$ |
15,308 |
|
|
$ |
13,333 |
|
|
$ |
32,842 |
|
|
$ |
25,923 |
|
|
Operating Income % |
|
3.2 |
% |
|
|
2.3 |
% |
|
|
3.6 |
% |
|
|
2.4 |
% |
|
Adjusted Operating Income (non-GAAP) % |
|
4.5 |
% |
|
|
3.7 |
% |
|
|
4.6 |
% |
|
|
3.5 |
% |
|
Net Income |
$ |
3,637 |
|
|
$ |
3,432 |
|
|
$ |
13,723 |
|
|
$ |
6,586 |
|
|
Adjusted Net Income (non-GAAP) |
$ |
6,925 |
|
|
$ |
7,354 |
|
|
$ |
19,175 |
|
|
$ |
12,881 |
|
|
Diluted EPS |
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.55 |
|
|
$ |
0.26 |
|
|
Adjusted Diluted EPS (non-GAAP) |
$ |
0.28 |
|
|
$ |
0.29 |
|
|
$ |
0.77 |
|
|
$ |
0.51 |
|
Commenting on today’s announcement,
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
(Amounts in Millions) |
|
2025 |
|
* |
|
|
2024 (2) |
|
|
* |
|
Percent
|
|
|
2025 |
|
* |
|
|
2024 (2) |
|
|
* |
|
Percent
|
|
||||||
|
Automotive |
$ |
162.3 |
|
48 |
% |
|
$ |
186.3 |
|
|
52 |
% |
|
(13 |
)% |
|
$ |
326.7 |
|
46 |
% |
|
$ |
368.0 |
|
|
50 |
% |
|
(11 |
)% |
|
|
Medical |
|
96.3 |
|
28 |
% |
|
|
84.0 |
|
|
23 |
% |
|
15 |
% |
|
|
197.9 |
|
28 |
% |
|
|
173.8 |
|
|
24 |
% |
|
14 |
% |
|
|
Industrial excluding AT&M (1) |
|
82.7 |
|
24 |
% |
|
|
87.1 |
|
|
25 |
% |
|
(5 |
)% |
|
|
182.3 |
|
26 |
% |
|
|
187.7 |
|
|
26 |
% |
|
(3 |
)% |
|
|
|
$ |
341.3 |
|
100 |
% |
|
$ |
357.4 |
|
|
100 |
% |
|
(5 |
)% |
|
$ |
706.9 |
|
100 |
% |
|
$ |
729.5 |
|
|
100 |
% |
|
(3 |
)% |
|
|
AT&M (1) |
|
— |
|
— |
% |
|
|
— |
|
|
— |
% |
|
— |
% |
|
|
— |
|
— |
% |
|
|
2.1 |
|
|
— |
% |
|
(100 |
)% |
|
|
Total |
$ |
341.3 |
|
100 |
% |
|
$ |
357.4 |
|
|
100 |
% |
|
(5 |
)% |
|
$ |
706.9 |
|
100 |
% |
|
$ |
731.6 |
|
|
100 |
% |
|
(3 |
)% |
|
|
* |
As a percent of Total |
||||||||||||
|
(1) |
Sales from our Automation, Test, and Measurement business (AT&M), which was divested effective |
||||||||||||
|
(2) |
Beginning in the first quarter of fiscal year 2026, sales to customers related to commercial transportation, previously included in the automotive vertical, are now reflected in the industrial vertical; prior periods have been recast to conform to current period presentation |
||||||||||||
|
- |
Automotive includes electronic power steering, body controls, advanced driver-assistance systems, and electronic braking systems |
||||||||||||
|
- |
Medical includes sleep therapy and respiratory care, image guided therapy, in vitro diagnostics, drug delivery, AED, and patient monitoring |
||||||||||||
|
- |
Industrial includes climate controls, automation controls, public safety, IoT and factory automation, efficient energy, off highway equipment, and commercial transportation |
||||||||||||
Fiscal Year 2026 Guidance
As part of today’s announcement, the Company increased its guidance for net sales and adjusted operating income in fiscal year 2026:
-
Net sales are now expected to be in the range of
$1,400 -$1,460 million , compared to the previous guidance of$1,350 -$1,450 million - Adjusted operating income is estimated to be 4.2% - 4.5% of net sales versus the prior estimate of 4.0% - 4.25%
-
The guidance for capital expenditures did not change with a range of
$50 -$60 million
|
Conference Call / Webcast |
|
Date:
Time:
Live Webcast: investors.kimballelectronics.com/events-and-presentations/events
Dial-in #: 877-407-8293 (or 201-689-8349)
For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com. |
Forward-Looking Statements
Certain statements contained within this release are considered forward-looking, including our guidance, under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “expect,” “should,” “goal,” “predict,” “will,” “future,” “optimistic,” “confident,” and “believe.” Undue reliance should not be placed on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. These forward-looking statements are subject to risks and uncertainties including, without limitation, global economic conditions, geopolitical environment and conflicts such as the war in
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include constant currency growth, net sales excluding Automation, Test & Measurement, adjusted selling and administrative expenses, adjusted operating income, adjusted net income, adjusted diluted EPS, and ROIC. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the Reconciliation of Non-GAAP Financial Measures section below. Management believes these measures are useful and allow investors to meaningfully trend, analyze, and benchmark the performance of the company’s core operations. The company’s non-GAAP financial measures are not necessarily comparable to non-GAAP information used by other companies.
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|
Condensed Consolidated Statements of Income |
|
|
|
|
|
|
|||||||
|
(Unaudited) |
Three Months Ended |
||||||||||||
|
(Amounts in Thousands, except Per Share Data) |
|
|
|
||||||||||
|
|
$ |
341,280 |
|
|
100.0 |
% |
|
$ |
357,392 |
|
|
100.0 |
% |
|
Cost of Sales |
|
313,412 |
|
|
91.8 |
% |
|
|
333,965 |
|
|
93.4 |
% |
|
Gross Profit |
|
27,868 |
|
|
8.2 |
% |
|
|
23,427 |
|
|
6.6 |
% |
|
Selling and Administrative Expenses |
|
14,862 |
|
|
4.4 |
% |
|
|
10,526 |
|
|
3.0 |
% |
|
Restructuring Expense |
|
1,817 |
|
|
0.5 |
% |
|
|
4,671 |
|
|
1.3 |
% |
|
Asset Impairment |
|
422 |
|
|
0.1 |
% |
|
|
— |
|
|
— |
% |
|
Operating Income |
|
10,767 |
|
|
3.2 |
% |
|
|
8,230 |
|
|
2.3 |
% |
|
Interest Income |
|
375 |
|
|
0.1 |
% |
|
|
253 |
|
|
0.1 |
% |
|
Interest Expense |
|
(2,095 |
) |
|
(0.6 |
)% |
|
|
(4,241 |
) |
|
(1.2 |
)% |
|
Non-Operating Income (Expense), net |
|
(2,063 |
) |
|
(0.7 |
)% |
|
|
(768 |
) |
|
(0.2 |
)% |
|
Other Income (Expense), net |
|
(3,783 |
) |
|
(1.2 |
)% |
|
|
(4,756 |
) |
|
(1.3 |
)% |
|
Income Before Taxes on Income |
|
6,984 |
|
|
2.0 |
% |
|
|
3,474 |
|
|
1.0 |
% |
|
Provision (Benefit) for Income Taxes |
|
3,347 |
|
|
0.9 |
% |
|
|
42 |
|
|
— |
% |
|
Net Income |
$ |
3,637 |
|
|
1.1 |
% |
|
$ |
3,432 |
|
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
Earnings Per Share of Common Stock: |
|
|
|
|
|
|
|
||||||
|
Basic |
$ |
0.15 |
|
|
|
|
$ |
0.14 |
|
|
|
||
|
Diluted |
$ |
0.15 |
|
|
|
|
$ |
0.14 |
|
|
|
||
|
Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
||||||
|
Basic |
|
24,606 |
|
|
|
|
|
24,870 |
|
|
|
||
|
Diluted |
|
24,823 |
|
|
|
|
|
24,968 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
(Unaudited) |
Six Months Ended |
||||||||||||
|
(Amounts in Thousands, except Per Share Data) |
|
|
|
||||||||||
|
|
$ |
706,883 |
|
|
100.0 |
% |
|
$ |
731,648 |
|
|
100.0 |
% |
|
Cost of Sales |
|
650,179 |
|
|
92.0 |
% |
|
|
684,621 |
|
|
93.6 |
% |
|
Gross Profit |
|
56,704 |
|
|
8.0 |
% |
|
|
47,027 |
|
|
6.4 |
% |
|
Selling and Administrative Expenses |
|
27,952 |
|
|
3.9 |
% |
|
|
23,953 |
|
|
3.2 |
% |
|
Restructuring Expense |
|
3,233 |
|
|
0.5 |
% |
|
|
6,993 |
|
|
1.0 |
% |
|
Asset Impairment (Gain on Disposal) |
|
298 |
|
|
— |
% |
|
|
(1,264 |
) |
|
(0.2 |
)% |
|
Operating Income |
|
25,221 |
|
|
3.6 |
% |
|
|
17,345 |
|
|
2.4 |
% |
|
Interest Income |
|
514 |
|
|
0.1 |
% |
|
|
475 |
|
|
0.1 |
% |
|
Interest Expense |
|
(4,448 |
) |
|
(0.6 |
)% |
|
|
(9,033 |
) |
|
(1.2 |
)% |
|
Non-Operating Income (Expense), net |
|
(3,304 |
) |
|
(0.6 |
)% |
|
|
(2,429 |
) |
|
(0.4 |
)% |
|
Other Income (Expense), net |
|
(7,238 |
) |
|
(1.1 |
)% |
|
|
(10,987 |
) |
|
(1.5 |
)% |
|
Income Before Taxes on Income |
|
17,983 |
|
|
2.5 |
% |
|
|
6,358 |
|
|
0.9 |
% |
|
Provision (Benefit) for Income Taxes |
|
4,260 |
|
|
0.6 |
% |
|
|
(228 |
) |
|
— |
% |
|
Net Income |
$ |
13,723 |
|
|
1.9 |
% |
|
$ |
6,586 |
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
||||||
|
Earnings Per Share of Common Stock: |
|
|
|
|
|
|
|
||||||
|
Basic |
$ |
0.56 |
|
|
|
|
$ |
0.26 |
|
|
|
||
|
Diluted |
$ |
0.55 |
|
|
|
|
$ |
0.26 |
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
|
Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
||||||
|
Basic |
|
24,603 |
|
|
|
|
|
24,924 |
|
|
|
||
|
Diluted |
|
24,878 |
|
|
|
|
|
25,098 |
|
|
|
||
| Condensed Consolidated Statements of Cash Flows |
Six Months Ended |
||||||
|
(Unaudited) |
|
||||||
|
(Amounts in Thousands) |
|
2025 |
|
|
|
2024 |
|
|
|
$ |
14,943 |
|
|
$ |
74,932 |
|
|
|
|
(24,368 |
) |
|
|
(1,214 |
) |
|
|
|
(2,142 |
) |
|
|
(97,255 |
) |
|
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash |
|
623 |
|
|
|
(722 |
) |
|
|
|
(10,944 |
) |
|
|
(24,259 |
) |
|
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
|
89,467 |
|
|
|
78,779 |
|
|
Cash, Cash Equivalents, and Restricted Cash at End of Period |
$ |
78,523 |
|
|
$ |
54,520 |
|
|
(Unaudited) |
|
|
|||||
|
Condensed Consolidated Balance Sheets |
|
|
|
||||
|
(Amounts in Thousands) |
|||||||
|
ASSETS |
|
|
|
||||
|
Cash and cash equivalents |
$ |
77,853 |
|
$ |
88,781 |
||
|
Receivables, net |
|
213,994 |
|
|
222,623 |
||
|
Contract assets |
|
79,521 |
|
|
71,812 |
||
|
Inventories |
|
281,699 |
|
|
273,500 |
||
|
Prepaid expenses and other current assets |
|
32,214 |
|
|
36,027 |
||
|
Assets held for sale |
|
6,610 |
|
|
6,861 |
||
|
Property and Equipment, net |
|
276,433 |
|
|
264,804 |
||
|
|
|
6,191 |
|
|
6,191 |
||
|
Other Intangible Assets, net |
|
2,182 |
|
|
2,427 |
||
|
Other Assets, net |
|
106,774 |
|
|
104,286 |
||
|
Total Assets |
$ |
1,083,471 |
|
$ |
1,077,312 |
||
|
|
|
|
|
||||
|
LIABILITIES AND SHARE OWNERS’ EQUITY |
|
|
|
||||
|
Current portion of long-term debt |
$ |
24,112 |
|
$ |
17,400 |
||
|
Accounts payable |
|
218,830 |
|
|
218,805 |
||
|
Advances from customers |
|
28,439 |
|
|
35,867 |
||
|
Accrued expenses |
|
41,995 |
|
|
46,489 |
||
|
Long-term debt, less current portion |
|
129,700 |
|
|
129,650 |
||
|
Other long-term liabilities |
|
61,233 |
|
|
59,217 |
||
|
Share Owners’ Equity |
|
579,162 |
|
|
569,884 |
||
|
Total Liabilities and Share Owners’ Equity |
$ |
1,083,471 |
|
$ |
1,077,312 |
||
|
Other Financial Metrics |
|
|
|
|
||||
|
(Unaudited) |
|
|
|
|
|
|||
|
(Amounts in Millions, except CCD) |
||||||||
|
|
At or For the |
|||||||
|
|
Three Months Ended |
|||||||
|
|
|
|
|
|
|
|||
|
|
2025 |
|
2025 |
|
2024 |
|||
|
Depreciation and Amortization |
$ |
9.3 |
|
$ |
9.1 |
|
$ |
9.1 |
|
Cash Conversion Days (CCD) (1) |
|
91 |
|
|
83 |
|
|
107 |
|
Open Orders (2) |
$ |
557 |
|
$ |
593 |
|
$ |
564 |
|
(1) |
Cash Conversion Days (“CCD”) are calculated as the sum of Days Sales Outstanding plus Contract Asset Days plus Production Days Supply on Hand less Accounts Payable Days and less Advances from Customers Days. CCD, or a similar metric, is used in our industry and by our management to measure the efficiency of managing working capital. |
|
(2) |
Open Orders are the aggregate sales price of production pursuant to unfulfilled customer orders. |
| Select Financial Results of Automation, Test and Measurement | |||||||||||||
|
(Unaudited) |
|
|
|
|
|
|
|
||||||
|
(Amounts in Millions) |
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
|
||||||||||
|
|
|
2025 |
|
|
|
2024 |
|
|
2025 |
|
|
|
2024 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
2.1 |
|
Operating Income (Loss) (1) |
$ |
(0.4 |
) |
|
$ |
— |
|
$ |
(0.4 |
) |
|
$ |
0.8 |
|
(1) |
Amounts include gain (loss) on sale adjustments following the close of the sale on |
|
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||
|
(Unaudited, Amounts in Thousands, except Per Share Data) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
|
Net Sales Growth (vs. same period in prior year) |
|
(5 |
)% |
|
|
(15 |
)% |
|
|
(3 |
)% |
|
|
(15 |
)% |
|
Foreign Currency Exchange Impact |
|
2 |
% |
|
|
— |
% |
|
|
2 |
% |
|
|
— |
% |
|
Constant Currency Growth |
|
(7 |
)% |
|
|
(15 |
)% |
|
|
(5 |
)% |
|
|
(15 |
)% |
|
|
|
|
|
|
|
|
|
||||||||
|
Selling and Administrative Expenses, as reported |
$ |
14,862 |
|
|
$ |
10,526 |
|
|
$ |
27,952 |
|
|
$ |
23,953 |
|
|
Stock Compensation Expense |
|
(2,217 |
) |
|
|
(501 |
) |
|
|
(3,780 |
) |
|
|
(2,573 |
) |
|
SERP |
|
(85 |
) |
|
|
69 |
|
|
|
(310 |
) |
|
|
(276 |
) |
|
Adjusted Selling and Administrative Expenses |
$ |
12,560 |
|
|
$ |
10,094 |
|
|
$ |
23,862 |
|
|
$ |
21,104 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income, as reported |
$ |
10,767 |
|
|
$ |
8,230 |
|
|
$ |
25,221 |
|
|
$ |
17,345 |
|
|
Stock Compensation Expense |
|
2,217 |
|
|
|
501 |
|
|
|
3,780 |
|
|
|
2,573 |
|
|
SERP |
|
85 |
|
|
|
(69 |
) |
|
|
310 |
|
|
|
276 |
|
|
Restructuring Expense |
|
1,817 |
|
|
|
4,671 |
|
|
|
3,233 |
|
|
|
6,993 |
|
|
Asset Impairment (Gain on Disposal) |
|
422 |
|
|
|
— |
|
|
|
298 |
|
|
|
(1,264 |
) |
|
Adjusted Operating Income |
$ |
15,308 |
|
|
$ |
13,333 |
|
|
$ |
32,842 |
|
|
$ |
25,923 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income, as reported |
$ |
3,637 |
|
|
$ |
3,432 |
|
|
$ |
13,723 |
|
|
$ |
6,586 |
|
|
Stock Compensation Expense, After-Tax |
|
1,681 |
|
|
|
380 |
|
|
|
2,866 |
|
|
|
1,951 |
|
|
Restructuring Expense, After-Tax |
|
1,287 |
|
|
|
3,542 |
|
|
|
2,360 |
|
|
|
5,303 |
|
|
Asset Impairment (Gain on Disposal), After-Tax |
|
320 |
|
|
|
— |
|
|
|
226 |
|
|
|
(959 |
) |
|
Adjusted Net Income |
$ |
6,925 |
|
|
$ |
7,354 |
|
|
$ |
19,175 |
|
|
$ |
12,881 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted Earnings per Share, as reported |
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.55 |
|
|
$ |
0.26 |
|
|
Stock Compensation Expense |
|
0.07 |
|
|
|
0.01 |
|
|
|
0.12 |
|
|
|
0.07 |
|
|
Restructuring Expense |
|
0.05 |
|
|
|
0.14 |
|
|
|
0.09 |
|
|
|
0.21 |
|
|
Asset Impairment (Gain on Disposal) |
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
(0.03 |
) |
|
Adjusted Diluted Earnings per Share |
$ |
0.28 |
|
|
$ |
0.29 |
|
|
$ |
0.77 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Twelve Months Ended |
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
|
2025 |
|
|
|
2024 |
|
|
|
|
|
||||
|
Operating Income, as reported |
$ |
53,411 |
|
|
$ |
30,522 |
|
|
|
|
|
||||
|
Goodwill Impairment |
|
— |
|
|
|
5,820 |
|
|
|
|
|
||||
|
SERP |
|
648 |
|
|
|
649 |
|
|
|
|
|
||||
|
Restructuring Expense |
|
7,230 |
|
|
|
9,379 |
|
|
|
|
|
||||
|
Asset Impairment (Gain on Disposal) |
|
(829 |
) |
|
|
15,776 |
|
|
|
|
|
||||
|
Legal Settlements (Recovery) |
|
— |
|
|
|
(892 |
) |
|
|
|
|
||||
|
Stock Compensation Expense |
|
7,726 |
|
|
|
6,096 |
|
|
|
|
|
||||
|
Adjusted Operating Income |
$ |
68,186 |
|
|
$ |
67,350 |
|
|
|
|
|
||||
|
Tax Effect |
|
23,836 |
|
|
|
17,019 |
|
|
|
|
|
||||
|
After-tax Adjusted Operating Income |
$ |
44,350 |
|
|
$ |
50,331 |
|
|
|
|
|
||||
|
|
$ |
657,074 |
|
|
$ |
756,966 |
|
|
|
|
|
||||
|
ROIC |
|
6.7 |
% |
|
|
6.6 |
% |
|
|
|
|
||||
|
(1) |
Average invested capital is computed using Share Owners’ equity plus current and non-current debt less cash and cash equivalents averaged for the last five quarters. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260204163117/en/
Vice President, Investor Relations, Strategic Development, and Treasurer
812.827.4151
Investor.Relations@kimballelectronics.com
Source:
