Kimball Electronics Reports Q2 Results; With Strong Sales Growth in the Medical Vertical; Company Raises Its Guidance for Fiscal 2026

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Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the second quarter ended December 31, 2025.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260204163117/en/

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

December 31,

 

December 31,

(Amounts in Thousands, except EPS)

 

2025

 

 

 

2024

 

 

 

2025

 

 

 

2024

 

Net Sales

$

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, Richard D. Phillips, Chief Executive Officer, stated, “I’m pleased with the results for the second quarter and our updated guidance for fiscal 2026. Sales in Q2 were in line with expectations, highlighted by another quarter of strong double-digit year-over-year growth in the medical vertical, margins improved compared to the same period last year, and cash from operations was positive for the eighth consecutive quarter.”

Mr. Phillips continued, “Our focus as a medical CMO continues to gain momentum as we leverage our unique capabilities in the industry. We expect top-line growth in medical to outpace our other two verticals as we balance our portfolio across the markets we serve. Our recent announcement to rebrand as Kimball Solutions, and the grand opening of the new medical manufacturing facility in Indianapolis, reflects this strategy and our expanded offering of capabilities and services.”

Net Sales by Vertical Market for Q2 Fiscal 2026:

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

December 31,

 

 

 

December 31,

 

 

(Amounts in Millions)

 

2025

 

*

 

 

2024 (2)

 

 

*

 

Percent
Change

 

 

2025

 

*

 

 

2024 (2)

 

 

*

 

Percent
Change

 

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

)%

 

Net Sales excluding AT&M (1)

$

341.3

 

100

%

 

$

357.4

 

 

100

%

 

(5

)%

 

$

706.9

 

100

%

 

$

729.5

 

 

100

%

 

(3

)%

 

AT&M (1)

 

 

%

 

 

 

 

%

 

%

 

 

 

%

 

 

2.1

 

 

%

 

(100

)%

 

Total Net Sales

$

341.3

 

100

%

 

$

357.4

 

 

100

%

 

(5

)%

 

$

706.9

 

100

%

 

$

731.6

 

 

100

%

 

(3

)%

 

*

As a percent of Total Net Sales

(1)

Sales from our Automation, Test, and Measurement business (AT&M), which was divested effective July 31, 2024, were previously included in the industrial vertical

(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: Thursday, February 5, 2026

 

Time: 10:00 AM Eastern 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 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, 2025.

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.

About Kimball Electronics, Inc.

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.

Lasting relationships. Global success.

Condensed Consolidated Statements of Income

 

 

 

 

 

 

(Unaudited)

Three Months Ended

(Amounts in Thousands, except Per Share Data)

December 31, 2025

 

December 31, 2024

Net Sales

$

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)

December 31, 2025

 

December 31, 2024

Net Sales

$

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)

December 31,

(Amounts in Thousands)

 

2025

 

 

 

2024

 

Net Cash Flow provided by Operating Activities

$

14,943

 

 

$

74,932

 

Net Cash Flow used for Investing Activities

 

(24,368

)

 

 

(1,214

)

Net Cash Flow used for Financing Activities

 

(2,142

)

 

 

(97,255

)

Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash

 

623

 

 

 

(722

)

Net Decrease in Cash, Cash Equivalents, and Restricted Cash

 

(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

December 31,
2025

 

June 30,
2025

(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

Goodwill

 

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

 

December 31,

 

September 30,

 

December 31,

 

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

 

December 31,

 

December 31,

 

 

2025

 

 

 

2024

 

 

2025

 

 

 

2024

Net Sales

$

 

 

$

 

$

 

 

$

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 July 31, 2024: ($0.4 million) in the three and six months ended December 31, 2025 and $1.3 million for the six months ended December 31, 2024.

Reconciliation of Non-GAAP Financial Measures

(Unaudited, Amounts in Thousands, except Per Share Data)

 

Three Months Ended

 

Six Months Ended

 

December 31,

 

December 31,

 

 

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

 

 

 

 

 

December 31,

 

 

 

 

 

 

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

 

 

 

 

 

Average Invested Capital (1)

$

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.

 

Recapiti

Andrew D. Regrut
Vice President, Investor Relations, Strategic Development, and Treasurer
812.827.4151
Investor.Relations@kimballelectronics.com