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.

•Net sales totaled $1,486.7 million, the third highest annual revenue total for the Company

•Operating income of $45.5 million, or 3.1% of net sales; adjusted operating income of $61.3 million, or 4.1% of net sales

•Inventory reduced $64.6 million, or 19%, in the fiscal year

•Debt paid down by $147.3 million, or 50%, year-over-year; the lowest level of debt in 3 years

•Cash generated from operating activities of $183.9 million, a record result for annual cash flow

•Invested $12.0 million to repurchase 653,000 shares of common stock

			“Fiscal 2026 will be a year of transition. We expect modest top line growth in our medical and industrial businesses, but it will be offset by a decline in automotive, with a full year impact from the loss of the braking program in Reynosa. Margins are estimated to be in line with FY25, but it’s important to note that when top line growth returns, enhancements to our cost structure should support margin improvement. Capital expenditures will be heavily weighted toward our new facility in Indianapolis, with the balance supporting growth, automation, and maintenance.” Jana T. Croom Chief Financial Officer

•Net sales of $1,350 - $1,450 million, a 2% to 9% decrease compared to fiscal 2025

•Adjusted operating income of 4.0% - 4.25% of net sales, compared to 4.1% of net sales in
fiscal 2025

•Capital expenditures of $50 - $60 million

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 Ukraine, global health emergencies, availability or cost of raw materials and components, tariffs and other trade barriers, foreign exchange rate fluctuations, and our ability to convert new business opportunities into customers and revenue. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the company are contained in its Annual Report on Form 10-K for the year ended June 30, 2024.

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.

Kimball Electronics is a global, multifaceted manufacturer offering Electronics Manufacturing Services (EMS) and Contract Manufacturing Organization (CMO) solutions to customers around the world. From our operations in the United States, China, Mexico, Poland, Romania, and Thailand, our teams are proud to provide manufacturing services for a variety of industries. Recognized for a reputation of excellence, we are committed to a high-performance culture that values quality, reliability, value, speed, and ethical behavior. Kimball Electronics, Inc. (Nasdaq: KE) is headquartered in Jasper, Indiana.

To learn more about Kimball Electronics, visit www.kimballelectronics.com.

Financial highlights for the fourth quarter and fiscal year ended June 30, 2025 are as follows:

(1)Beginning in the first quarter of fiscal year 2025, adjusted results exclude stock compensation expense. Prior reported periods have been revised accordingly. A reconciliation of GAAP and non-GAAP financial measures is included below.

Net Sales by Vertical Market for Q4 and Full Year Fiscal 2025:

(Unaudited)			Fiscal Year Ended
(Amounts in Thousands, except Per Share Data)			June 30, 2025												June 30, 2024
Net Sales			$	1,486,727					100.0		%				$	1,714,510					100.0		%
Cost of Sales			1,382,323						93.0		%				1,574,253						91.8		%
Gross Profit			104,404						7.0		%				140,257						8.2		%
Selling and Administrative Expenses			50,270						3.4		%				66,626						4.0		%
Other General Expense (Income)			—						—		%				(892)						(0.1)		%
Restructuring Expense			10,990						0.7		%				2,386						0.1		%
Goodwill Impairment			—						—		%				5,820						0.3		%
Asset Impairment (Gain on Disposal)			(2,391)						(0.2)		%				17,040						1.0		%
Operating Income			45,535						3.1		%				49,277						2.9		%
Interest Income			771						0.1		%				638						—		%
Interest Expense			(14,745)						(1.0)		%				(22,839)						(1.3)		%
Non-Operating Income (Expense), net			(5,332)						(0.4)		%				(1,877)						—		%
Other Income (Expense), net			(19,306)						(1.3)		%				(24,078)						(1.4)		%
Income Before Taxes on Income			26,229						1.8		%				25,199						1.5		%
Provision for Income Taxes			9,245						0.7		%				4,688						0.3		%
Net Income			$	16,984					1.1		%				$	20,511					1.2		%
Earnings Per Share of Common Stock:
Basic			$	0.68											$	0.82
Diluted			$	0.68											$	0.81
Average Number of Shares Outstanding:
Basic			24,782												25,079
Diluted			25,017												25,278

(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.

(1)Includes gain on sale of $1.1 million for the three months ended June 30, 2025 and $2.4 million for fiscal year 2025 following the close of the sale on July 31, 2024. Includes goodwill impairment of $5.8 million and asset impairment of $17.0 million for the year ended June 30, 2024. Each period also includes allocated corporate overhead expenses.

(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.