Kimball Electronics Reports Q1 Results and Confirms Guidance for Fiscal Year 2025, Company Continues to Sharpen Its Strategic Focus With Closure of Its Manufacturing Facility in Tampa, FL
Kimball Electronics (KE) reported Q1 fiscal 2025 results with net sales of $374.3 million, down 15% year-over-year. Operating income was $9.1 million (2.4% of net sales), with adjusted operating income at 3.4%. The company generated $45.5 million in operating cash flow and reduced borrowings to a 2-year low. As part of strategic restructuring, KE completed the divestiture of its Automation, Test, and Measurement business and announced the closure of its Tampa, FL facility. The company confirmed its FY2025 guidance, projecting net sales of $1.44-1.54 billion and adjusted operating income of 4.0-4.5% of net sales.
Kimball Electronics (KE) ha riportato i risultati del primo trimestre dell'anno fiscale 2025, con vendite nette pari a 374,3 milioni di dollari, in diminuzione del 15% rispetto all'anno precedente. Il reddito operativo è stato di 9,1 milioni di dollari (2,4% delle vendite nette), con un reddito operativo rettificato al 3,4%. L'azienda ha generato 45,5 milioni di dollari di flusso di cassa operativo e ha ridotto i prestiti ai minimi storici degli ultimi due anni. Come parte della ristrutturazione strategica, KE ha completato la cessione della sua attività di Automazione, Test e Misurazione e ha annunciato la chiusura del suo stabilimento di Tampa, in Florida. L'azienda ha confermato le sue previsioni per l'anno fiscale 2025, prevedendo vendite nette tra 1,44 e 1,54 miliardi di dollari e un reddito operativo rettificato tra il 4,0% e il 4,5% delle vendite nette.
Kimball Electronics (KE) informó los resultados del primer trimestre del año fiscal 2025, con ventas netas de 374,3 millones de dólares, una disminución del 15% en comparación con el año anterior. El ingreso operativo fue de 9,1 millones de dólares (2,4% de las ventas netas), con un ingreso operativo ajustado del 3,4%. La compañía generó 45,5 millones de dólares en flujo de caja operativo y redujo los préstamos a un mínimo de dos años. Como parte de una reestructuración estratégica, KE completó la venta de su negocio de Automatización, Pruebas y Medición y anunció el cierre de su instalación en Tampa, Florida. La compañía confirmó su guía para el año fiscal 2025, proyectando ventas netas de 1,44 a 1,54 mil millones de dólares y un ingreso operativo ajustado del 4,0 al 4,5% de las ventas netas.
김벌 일렉트로닉스 (KE)가 2025 회계연도 1분기 실적을 발표했습니다. 순매출은 3억 7430만 달러로 전년 대비 15% 감소했습니다. 운영 소득은 910만 달러 (순매출의 2.4%)였으며, 조정 운영 소득은 3.4%입니다. 회사는 4550만 달러의 운영 현금 흐름을 창출하고 차입금을 2년 만의 최저로 줄였습니다. 전략적 구조조정의 일환으로 KE는 자동화, 테스트 및 측정 사업부의 매각을 완료하고 플로리다주 탬파의 시설 폐쇄를 발표했습니다. 회사는 2025 회계연도에 대한 가이던스를 확정하고 순매출을 14억 4천만 ~ 15억 4천만 달러, 조정 운영 소득을 순매출의 4.0~4.5%로 예상했습니다.
Kimball Electronics (KE) a publié ses résultats du premier trimestre de l'exercice 2025, avec des ventes nettes de 374,3 millions de dollars, en baisse de 15 % par rapport à l'année précédente. Le résultat d'exploitation s'est établi à 9,1 millions de dollars (2,4 % des ventes nettes), avec un résultat d'exploitation ajusté à 3,4 %. L'entreprise a généré un flux de trésorerie d'exploitation de 45,5 millions de dollars et a réduit ses emprunts à un niveau bas de deux ans. Dans le cadre d'une restructuration stratégique, KE a terminé la cession de son activité d'Automatisation, Tests et Mesures et a annoncé la fermeture de son site à Tampa, en Floride. L'entreprise a confirmé ses prévisions pour l'exercice 2025, projetant des ventes nettes de 1,44 à 1,54 milliard de dollars et un résultat d'exploitation ajusté de 4,0 à 4,5 % des ventes nettes.
Kimball Electronics (KE) hat die Ergebnisse für das erste Quartal des Geschäftsjahres 2025 bekannt gegeben, mit einem Nettoumsatz von 374,3 Millionen Dollar, was einem Rückgang von 15% im Vergleich zum Vorjahr entspricht. Das operative Ergebnis betrug 9,1 Millionen Dollar (2,4% des Nettoumsatzes), während das bereinigte operative Ergebnis bei 3,4% lag. Das Unternehmen erwirtschaftete 45,5 Millionen Dollar an operativem Cashflow und reduzierte die Kredite auf den niedrigsten Stand seit zwei Jahren. Im Rahmen einer strategischen Neustrukturierung hat KE die Abspaltung seiner Abteilung für Automatisierung, Test und Messung abgeschlossen und die Schließung seines Standorts in Tampa, Florida, angekündigt. Das Unternehmen bestätigte seine Prognose für das Geschäftsjahr 2025 und erwartet einen Nettoumsatz zwischen 1,44 und 1,54 Milliarden Dollar sowie ein bereinigtes operatives Ergebnis von 4,0 bis 4,5% des Nettoumsatzes.
- Strong operating cash flow of $45.5 million
- Debt levels reduced to 2-year low
- Strategic restructuring through facility consolidation expected to improve competitive positioning
- Maintained full-year guidance despite market challenges
- Net sales declined 15% year-over-year to $374.3 million
- Operating income dropped to $9.1 million from $19.5 million YoY
- Adjusted diluted EPS decreased to $0.22 from $0.48 YoY
- All vertical markets showed double-digit revenue declines
Insights
The Q1 FY2025 results reveal concerning trends with
The company's debt reduction to a 2-year low through
The strategic decision to close the Tampa facility and redistribute production to Mexico and Jasper facilities represents a significant operational restructuring. This move aligns with industry trends of optimizing manufacturing footprints and leveraging lower-cost regions. The consolidation should improve capacity utilization and reduce overhead costs, though implementation costs and potential customer disruption risks need careful management.
The
First Quarter Fiscal 2025 Highlights
-
Net sales totaled
$374.3 million -
Operating income of
$9.1 million 2.4% of net sales, adjusted operating income of3.4% -
Cash generated by operating activities of
$45.5 million -
Company continues to sharpen its strategic focus by completing the divestiture of the Automation, Test, and Measurement business and announcing the closure of its manufacturing facility in
Tampa, FL
|
Three Months Ended |
||||||
|
September 30, |
||||||
(Amounts in Thousands, except EPS) |
|
2024 |
|
|
|
2023 |
|
Net Sales |
$ |
374,256 |
|
|
$ |
438,081 |
|
Operating Income |
$ |
9,115 |
|
|
$ |
19,490 |
|
Adjusted Operating Income (non-GAAP) (1) |
$ |
12,590 |
|
|
$ |
21,006 |
|
Operating Income % |
|
2.4 |
% |
|
|
4.4 |
% |
Adjusted Operating Income (non-GAAP) % |
|
3.4 |
% |
|
|
4.8 |
% |
Net Income |
$ |
3,154 |
|
|
$ |
10,754 |
|
Adjusted Net Income (non-GAAP) (1) |
$ |
5,527 |
|
|
$ |
12,038 |
|
Diluted EPS |
$ |
0.12 |
|
|
$ |
0.43 |
|
Adjusted Diluted EPS (non-GAAP) (1) |
$ |
0.22 |
|
|
$ |
0.48 |
|
(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. |
Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “Q1 represents another chapter of ‘controlling what we can control’ while navigating the challenging operating environment stemming from sustained end market weakness. Our results for the quarter were in line with expectations, considering the difficult comparisons from a record-setting Q1 last year. We continue to adjust costs, improve working capital management, and generate positive cash flow used to pay down debt. We made meaningful progress in the quarter with debt levels at a 2-year low, a result of the cash generated from operating activities and the proceeds from the disposition of the Automation, Test, and Measurement business, with its divestiture closing in July.”
Mr. Phillips continued, “As part of sharpening our strategic focus, we’re also announcing a plan to leverage the capacity in our global footprint and further streamline the operating structure. Production activities on existing customer programs will be transferred out of
The Company ended the first quarter of fiscal 2025 with cash and cash equivalents of
Net Sales by Vertical Market for Q1 Fiscal 2025:
|
Three Months Ended |
|
|
||||||||
|
September 30, |
|
|
||||||||
(Amounts in Millions) |
2024 |
|
* |
|
2023 |
|
* |
|
Percent Change |
||
Automotive |
$ |
188.4 |
|
|
|
$ |
212.5 |
|
|
|
(11)% |
Medical |
|
89.8 |
|
|
|
|
102.4 |
|
|
|
(12)% |
Industrial excluding AT&M (1) |
|
94.0 |
|
|
|
|
112.9 |
|
|
|
(17)% |
Net Sales excluding AT&M (1) |
$ |
372.2 |
|
|
|
$ |
427.8 |
|
|
|
(13)% |
AT&M (1) |
|
2.1 |
|
|
|
|
10.3 |
|
|
|
(80)% |
Total Net Sales |
$ |
374.3 |
|
|
|
$ |
438.1 |
|
|
|
(15)% |
|
|
|
|
|
|
|
|
|
|
||
* 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 |
|||||||||||
– Automotive includes electronic power steering, body controls, automated driver assist 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, and public safety |
|||||||||||
Company guidance for fiscal year 2025:
-
Net sales in the range of
$1.44 0$1.54 0 billion8% to14% decline year-over-year when excluding net sales from Automation, Test, and Measurement -
Adjusted operating income of
4.0% -4.5% of net sales(a) -
Capital expenditures of
$40 $50 million
(a) |
Fiscal year 2025 guidance reflects a change in our adjusted operating income calculation beginning in fiscal year 2025, which excludes stock compensation expense. This change better aligns our presentation with others in our industry. A reconciliation of GAAP and non-GAAP financial measures is included below. |
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.
About Kimball Electronics, Inc.
Kimball Electronics is a global, multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in
To learn more about Kimball Electronics, visit www.kimballelectronics.com.
Conference Call / Webcast |
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|
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Date: |
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November 5, 2024 |
Time: |
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10:00 AM Eastern Time |
Live Webcast: |
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investors.kimballelectronics.com/events-and-presentations/events |
Dial-In #: |
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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.
Lasting relationships. Global success.
Financial highlights for the first quarter ended September 30, 2024 are as follows:
Condensed Consolidated Statements of Income |
|||||||||||||
(Unaudited) |
Three Months Ended |
||||||||||||
(Amounts in Thousands, except Per Share Data) |
September 30, 2024 |
|
September 30, 2023 |
||||||||||
Net Sales |
$ |
374,256 |
|
|
100.0 |
% |
|
$ |
438,081 |
|
|
100.0 |
% |
Cost of Sales |
|
350,656 |
|
|
93.7 |
% |
|
|
402,539 |
|
|
91.9 |
% |
Gross Profit |
|
23,600 |
|
|
6.3 |
% |
|
|
35,542 |
|
|
8.1 |
% |
Selling and Administrative Expenses |
|
13,427 |
|
|
3.6 |
% |
|
|
16,052 |
|
|
3.7 |
% |
Restructuring Expense |
|
2,322 |
|
|
0.6 |
% |
|
|
— |
|
|
— |
% |
Gain on Disposal |
|
(1,264 |
) |
|
(0.3 |
)% |
|
|
— |
|
|
— |
% |
Operating Income |
|
9,115 |
|
|
2.4 |
% |
|
|
19,490 |
|
|
4.4 |
% |
Interest Income |
|
222 |
|
|
0.1 |
% |
|
|
299 |
|
|
0.1 |
% |
Interest Expense |
|
(4,792 |
) |
|
(1.3 |
)% |
|
|
(5,447 |
) |
|
(1.2 |
)% |
Non-Operating Income (Expense), net |
|
(1,661 |
) |
|
(0.4 |
)% |
|
|
(1,131 |
) |
|
(0.3 |
)% |
Other Income (Expense), net |
|
(6,231 |
) |
|
(1.6 |
)% |
|
|
(6,279 |
) |
|
(1.4 |
)% |
Income Before Taxes on Income |
|
2,884 |
|
|
0.8 |
% |
|
|
13,211 |
|
|
3.0 |
% |
Provision for Income Taxes |
|
(270 |
) |
|
— |
% |
|
|
2,457 |
|
|
0.5 |
% |
Net Income |
$ |
3,154 |
|
|
0.8 |
% |
|
$ |
10,754 |
|
|
2.5 |
% |
|
|
|
|
|
|
|
|
||||||
Earnings Per Share of Common Stock: |
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.13 |
|
|
|
|
$ |
0.43 |
|
|
|
||
Diluted |
$ |
0.12 |
|
|
|
|
$ |
0.43 |
|
|
|
||
Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
||||||
Basic |
|
24,979 |
|
|
|
|
|
25,041 |
|
|
|
||
Diluted |
|
25,235 |
|
|
|
|
|
25,238 |
|
|
|
||
Condensed Consolidated Statements of Cash Flows |
Three Months Ended |
||||||
(Unaudited) |
September 30, |
||||||
(Amounts in Thousands) |
|
2024 |
|
|
|
2023 |
|
Net Cash Flow provided by Operating Activities |
$ |
45,474 |
|
|
$ |
12,801 |
|
Net Cash Flow provided by (used for) Investing Activities |
|
5,226 |
|
|
|
(11,302 |
) |
Net Cash Flow (used for) provided by Financing Activities |
|
(52,954 |
) |
|
|
13,985 |
|
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash |
|
1,830 |
|
|
|
(549 |
) |
Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash |
|
(424 |
) |
|
|
14,935 |
|
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period |
|
78,779 |
|
|
|
43,864 |
|
Cash, Cash Equivalents, and Restricted Cash at End of Period |
$ |
78,355 |
|
|
$ |
58,799 |
|
|
(Unaudited) |
|
|
||||
Condensed Consolidated Balance Sheets |
September 30,
|
|
June 30,
|
||||
(Amounts in Thousands) |
|||||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
76,564 |
|
|
$ |
77,965 |
|
Receivables, net |
|
264,036 |
|
|
|
282,336 |
|
Contract assets |
|
74,326 |
|
|
|
76,320 |
|
Inventories |
|
335,272 |
|
|
|
338,116 |
|
Prepaid expenses and other current assets |
|
32,496 |
|
|
|
44,682 |
|
Assets held for sale |
|
— |
|
|
|
27,587 |
|
Property and Equipment, net |
|
275,674 |
|
|
|
269,659 |
|
Goodwill |
|
6,191 |
|
|
|
6,191 |
|
Other Intangible Assets, net |
|
2,880 |
|
|
|
2,994 |
|
Other Assets, net |
|
81,617 |
|
|
|
82,069 |
|
Total Assets |
$ |
1,149,056 |
|
|
$ |
1,207,919 |
|
|
|
|
|
||||
LIABILITIES AND SHARE OWNERS’ EQUITY |
|
|
|
||||
Current portion of borrowings under credit facilities |
$ |
45,915 |
|
|
$ |
59,837 |
|
Accounts payable |
|
216,704 |
|
|
|
213,551 |
|
Advances from customers |
|
35,616 |
|
|
|
30,151 |
|
Accrued expenses |
|
45,492 |
|
|
|
63,189 |
|
Liabilities held for sale |
|
— |
|
|
|
8,594 |
|
Long-term debt under credit facilities, less current portion |
|
200,000 |
|
|
|
235,000 |
|
Long-term income taxes payable |
|
— |
|
|
|
3,255 |
|
Other long-term liabilities |
|
57,571 |
|
|
|
53,881 |
|
Share Owners’ Equity |
|
547,758 |
|
|
|
540,461 |
|
Total Liabilities and Share Owners’ Equity |
$ |
1,149,056 |
|
$ |
1,207,919 |
||
Other Financial Metrics |
|||||||||||
(Unaudited) |
|||||||||||
(Amounts in Millions, except CCD) |
|||||||||||
|
At or For the |
||||||||||
|
Three Months Ended |
||||||||||
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
2024 |
|
2024 |
|
2023 |
||||||
Depreciation and Amortization |
$ |
9.2 |
|
|
$ |
9.5 |
|
|
$ |
9.0 |
|
Cash Conversion Days (CCD) (1) |
|
108 |
|
|
|
100 |
|
|
|
103 |
|
Open Orders (2) |
$ |
594 |
|
$ |
714 |
|
$ |
907 |
|||
(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. Our declining open orders are primarily due to the cancellation of a major automotive program and other demand reductions, as well as reduced lead times on customer orders as compared to September 30, 2023, when parts were more constrained. |
Select Financial Results of Automation, Test and Measurement |
|||||||
(Unaudited) |
|||||||
(Amounts in Millions) |
|||||||
|
Three Months Ended |
||||||
|
September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Net Sales |
$ |
2.1 |
|
|
$ |
10.3 |
|
Operating Income (Loss) (1) |
$ |
0.8 |
|
$ |
(0.2 |
) |
|
(1) |
Includes gain on sale of |
Reconciliation of Non-GAAP Financial Measures |
|
|
|
||||
(Unaudited, Amounts in Thousands, except Per Share Data) |
|
|
|
||||
|
Three Months Ended |
||||||
|
September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Net Sales Growth (vs. same period in prior year) |
|
(15 |
)% |
|
|
8 |
% |
Foreign Currency Exchange Impact |
|
— |
% |
|
|
1 |
% |
Constant Currency Growth |
|
(15 |
)% |
|
|
7 |
% |
|
|
|
|
||||
Selling and Administrative Expenses, as reported |
$ |
13,427 |
|
|
$ |
16,052 |
|
Stock Compensation Expense |
|
(2,072 |
) |
|
|
(1,693 |
) |
SERP |
|
(345 |
) |
|
|
177 |
|
Adjusted Selling and Administrative Expenses |
$ |
11,010 |
|
|
$ |
14,536 |
|
|
|
|
|
||||
Operating Income (Loss), as reported |
$ |
9,115 |
|
|
$ |
19,490 |
|
Stock Compensation Expense |
|
2,072 |
|
|
|
1,693 |
|
SERP |
|
345 |
|
|
|
(177 |
) |
Restructuring Expense |
|
2,322 |
|
|
|
— |
|
Gain on Disposal |
|
(1,264 |
) |
|
|
— |
|
Adjusted Operating Income |
$ |
12,590 |
|
|
$ |
21,006 |
|
|
|
|
|
||||
Net Income (Loss), as reported |
$ |
3,154 |
|
|
$ |
10,754 |
|
Stock Compensation Expense, After-Tax |
|
1,571 |
|
|
|
1,284 |
|
Restructuring Expense, After-Tax |
|
1,761 |
|
|
|
— |
|
Gain on Disposal, After-Tax |
|
(959 |
) |
|
|
— |
|
Adjusted Net Income |
$ |
5,527 |
|
|
$ |
12,038 |
|
|
|
|
|
||||
Diluted Earnings per Share, as reported |
$ |
0.12 |
|
|
$ |
0.43 |
|
Stock Compensation Expense |
|
0.06 |
|
|
|
0.05 |
|
Restructuring Expense |
|
0.07 |
|
|
|
— |
|
Gain on Disposal |
|
(0.03 |
) |
|
|
— |
|
Adjusted Diluted Earnings per Share |
$ |
0.22 |
|
|
$ |
0.48 |
|
|
|
|
|
||||
|
Twelve Months Ended |
||||||
|
September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Operating Income |
$ |
38,902 |
|
|
$ |
93,648 |
|
Goodwill Impairment |
|
5,820 |
|
|
|
— |
|
Stock Compensation Expense |
|
7,564 |
|
|
|
6,975 |
|
SERP |
|
1,202 |
|
|
|
759 |
|
Legal Recovery |
|
(892 |
) |
|
|
(212 |
) |
Restructuring Expense |
|
4,708 |
|
|
|
— |
|
Asset Impairment and Gain on Disposal |
|
15,776 |
|
|
|
— |
|
Adjusted Operating Income (non-GAAP) |
$ |
73,080 |
|
|
$ |
101,170 |
|
Tax Effect |
|
16,285 |
|
|
|
24,625 |
|
After-tax Adjusted Operating Income |
$ |
56,795 |
|
|
$ |
76,545 |
|
Average Invested Capital (1) |
$ |
773,016 |
|
|
$ |
738,096 |
|
ROIC |
|
7.3 |
% |
|
|
10.4 |
% |
(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/20241104047813/en/
Andrew D. Regrut
Treasurer and Investor Relations Officer
812.827.4151
Investor.Relations@kimballelectronics.com
Source: Kimball Electronics, Inc.
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