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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)   November 4, 2024
keilogoonelinecolorcmyk2revi.jpg
KIMBALL ELECTRONICS, INC.
________________________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
   
Indiana001-3645435-2047713
(State or other jurisdiction of(Commission File(IRS Employer Identification No.)
incorporation)Number) 
   
1205 Kimball Boulevard, Jasper, Indiana
 47546
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code   (812) 634-4000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading SymbolName of each exchange on which registered
Common Stock, no par valueKEThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02 Results of Operations and Financial Condition
On November 4, 2024, the Company issued an earnings release for the first quarter ended September 30, 2024. The earnings release is attached as Exhibit 99.1.
The information in Item 2.02 of this Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as shall otherwise be expressly set forth by specific reference in such filing.
Item 2.05 Costs Associated with Exit or Disposal Activities
On November 4, 2024, the Company announced that its Board of Directors has approved a plan to cease operations of our Tampa facility by the end of the fiscal year. The decision was another important step towards sharpening our strategic focus, while leveraging the capacity in our global footprint and streamlining our operating structure. Production activities on existing customer programs will be transferred out of Tampa, with the majority of the work going to our plants in Mexico and Jasper. We are expected to incur approximately $8 million to $11 million in total exit costs, including most significantly $6 million to $7 million in employee termination benefits and $2 million to $3 million in logistical costs to transfer and validate programs at our other facilities. We expect these costs to be predominantly cash expenditures. Once the transfers are complete and operations have ceased, we expect to sell the building and land in Tampa.
Forward-Looking Statements
Certain statements contained within this document are considered forward-looking under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “allow,” “expects,” “future,” “may,” “might,” “should,” “will,” and similar expressions. These forward-looking statements are subject to risks and uncertainties including, but not limited to, global economic conditions, geopolitical environment and conflicts, global health emergencies, availability or cost of raw materials and components, foreign exchange 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 Kimball Electronics are contained in our Annual Report on Form 10-K for the year ended June 30, 2024.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit 
NumberDescription
99.1
104Cover Page Interactive Data File (formatted in Inline XBRL)

2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
 KIMBALL ELECTRONICS, INC.
  
By:/s/ Jana T. Croom
 JANA T. CROOM
Chief Financial Officer
Date: November 4, 2024

3

Exhibit 99.1
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

First Quarter Fiscal 2025 Highlights
•Net sales totaled $374.3 million
•Operating income of $9.1 million, or 2.4% of net sales, adjusted operating income of 3.4%
•Cash generated by operating activities of $45.5 million, borrowings on credit facilities reduced to 2-year low
•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

JASPER, Ind., November 4, 2024 -- (BUSINESS WIRE) -- Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the first quarter ended September 30, 2024.
Three Months Ended
September 30,
(Amounts in Thousands, except EPS)20242023
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 Tampa, with the majority of the work going to the newly expanded facility in Mexico and Jasper. Operations in Tampa are expected to cease by the end of the fiscal year, and we anticipate the facility closing in Q1 of fiscal 2026. We are grateful to the employees in Tampa and their accomplishments while part of Kimball, including supplying ventilators to those in need during the pandemic. This decision is based on the preferences of our customers, our outlook for US manufacturing, and an objective to improve the Company’s competitive positioning in the market, strengthen the balance sheet, increase liquidity, and improve financial flexibility. We are confirming our guidance for the full fiscal year and look forward to the future.”


The Company ended the first quarter of fiscal 2025 with cash and cash equivalents of $76.6 million and borrowings outstanding on credit facilities of $245.9 million, including $200.0 million classified as long term. As of September 30, 2024, the Company had $186.8 million of borrowing capacity available. Cash generated from operating activities in the first quarter totaled $45.5 million and capital expenditures were $13.5 million, and the Company invested $2.9 million to repurchase 160,000 shares of common stock.


Net Sales by Vertical Market for Q1 Fiscal 2025:
Three Months Ended
September 30,
(Amounts in Millions)2024*2023*Percent Change
Automotive
$188.4 50 %$212.5 49 %(11)%
Medical
89.8 24 %102.4 23 %(12)%
Industrial excluding AT&M (1)
94.0 25 %112.9 26 %(17)%
Net Sales excluding AT&M (1)
$372.2 99 %$427.8 98 %(13)%
AT&M (1)
2.1 1 %10.3 2 %(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 $1.440 - $1.540 billion, an 8% to 14% 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 Ukraine, global health emergencies, availability or cost of raw materials and components, 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.

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 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 personal and organizational commitment to 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.
Conference Call / Webcast
Date:November 5, 2024
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.
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, 2024September 30, 2023
Net Sales$374,256 100.0 %$438,081 100.0 %
Cost of Sales350,656 93.7 %402,539 91.9 %
Gross Profit23,600 6.3 %35,542 8.1 %
Selling and Administrative Expenses13,427 3.6 %16,052 3.7 %
Restructuring Expense2,322 0.6 %— — %
Gain on Disposal(1,264)(0.3)%— — %
Operating Income
9,115 2.4 %19,490 4.4 %
Interest Income222 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 Income2,884 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:
     Basic24,979 25,041 
     Diluted25,235 25,238 
Condensed Consolidated Statements of Cash FlowsThree Months Ended
(Unaudited)September 30,
(Amounts in Thousands)20242023
Net Cash Flow provided by Operating Activities$45,474 $12,801 
Net Cash Flow provided by (used for) Investing Activities5,226 (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 Cash1,830 (549)
Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash(424)14,935 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period78,779 43,864 
Cash, Cash Equivalents, and Restricted Cash at End of Period$78,355 $58,799 




(Unaudited)
Condensed Consolidated Balance SheetsSeptember 30,
2024		June 30,
2024
(Amounts in Thousands)
ASSETS
    Cash and cash equivalents$76,564 $77,965 
    Receivables, net264,036 282,336 
    Contract assets74,326 76,320 
    Inventories 335,272 338,116 
    Prepaid expenses and other current assets32,496 44,682 
    Assets held for sale— 27,587 
    Property and Equipment, net275,674 269,659 
    Goodwill6,191 6,191 
    Other Intangible Assets, net2,880 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 payable216,704 213,551 
    Advances from customers 35,616 30,151 
    Accrued expenses45,492 63,189 
    Liabilities held for sale— 8,594 
    Long-term debt under credit facilities, less current portion200,000 235,000 
    Long-term income taxes payable— 3,255 
    Other long-term liabilities57,571 53,881 
    Share Owners’ Equity547,758 540,461 
        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,
202420242023
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,
20242023
Net Sales$2.1 $10.3 
Operating Income (Loss) (1)
$0.8 $(0.2)
(1) Includes gain on sale of $1.3 million following the close of the sale on July 31, 2024 for the three months ended September 30, 2024. Each period also includes allocated corporate overhead expenses.


Reconciliation of Non-GAAP Financial Measures
(Unaudited, Amounts in Thousands, except Per Share Data)
Three Months Ended
September 30,
20242023
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 Expense2,072 1,693 
SERP 345 (177)
Restructuring Expense2,322 — 
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-Tax1,571 1,284 
Restructuring Expense, After-Tax1,761 — 
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 Expense0.06 0.05 
Restructuring Expense0.07 — 
Gain on Disposal(0.03)— 
Adjusted Diluted Earnings per Share$0.22 $0.48 
Twelve Months Ended
September 30,
20242023
Operating Income$38,902 $93,648 
Goodwill Impairment5,820 — 
Stock Compensation Expense7,564 6,975 
SERP 1,202 759 
Legal Recovery(892)(212)
Restructuring Expense4,708 — 
Asset Impairment and Gain on Disposal15,776 — 
Adjusted Operating Income (non-GAAP)$73,080 $101,170 
Tax Effect16,285 24,625 
After-tax Adjusted Operating Income$56,795 $76,545 
Average Invested Capital (1)
$773,016 $738,096 
ROIC7.3 %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.

v3.24.3
Cover
Nov. 04, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Nov. 04, 2024
Entity Registrant Name KIMBALL ELECTRONICS, INC.
Entity Incorporation, State or Country Code IN
Entity File Number 001-36454
Entity Tax Identification Number 35-2047713
Entity Address, Address Line One 1205 Kimball Boulevard
Entity Address, City or Town Jasper
Entity Address, State or Province IN
Entity Address, Postal Zip Code 47546
City Area Code 812
Local Phone Number 634-4000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, no par value
Trading Symbol KE
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001606757
Amendment Flag false
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