0001606757false00016067572024-05-072024-05-07

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)   May 7, 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 May 7, 2024, the Company issued an earnings release for the third quarter ended March 31, 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 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: May 7, 2024

3

Exhibit 99.1
KIMBALL ELECTRONICS REPORTS Q3 RESULTS; COMPANY ANNOUNCES RENEWED STRATEGIC FOCUS, INCLUDING EXPECTED DIVESTITURE OF THE AUTOMATION, TEST & MEASUREMENT BUSINESS


JASPER, Ind., May 7, 2024 -- (BUSINESS WIRE) -- Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the third quarter of fiscal 2024 with net sales totaling $425.0 million and a net loss of $6.1 million, or $0.24 per share. This result includes the impairment of the Automation, Test & Measurement business, which the Company expects to divest, along with restructuring expense, partially offset by the recovery of a legal settlement. A detailed reconciliation is provided later in this release.

•Excluding these items, adjusted net income in the third quarter of fiscal 2024 totaled $8.4 million, or $0.34 per diluted share, and adjusted operating income equaled $17.0 million, or 4.0% of net sales.
•Cash flow from operating activities in the quarter was $42.6 million driven by inventory reductions.
•Company sharpens strategic focus on EMS operations and aligns cost structure to short-term demand trends.
•Guidance for adjusted operating income in fiscal 2024 reiterated, while the estimate for net sales was updated, in response to the challenging operating environment, and capital expenditures strategically reduced.
•Resumption of share repurchases approved by the Board of Directors.
Three Months EndedNine Months Ended
March 31,March 31,
(Amounts in Thousands, except EPS)2024202320242023
Net Sales$425,036 $484,703 $1,284,352 $1,327,288 
Operating Income$(6,431)$25,220 $29,669 $56,280 
Adjusted Operating Income (non-GAAP) (1)
$16,960 $25,573 $53,367 $56,738 
Operating Income %(1.5)%5.2 %2.3 %4.2 %
Adjusted Operating Income (non-GAAP) % 4.0 %5.3 %4.2 %4.3 %
Net Income (Loss)
$(6,076)$16,400 $12,968 $36,629 
Adjusted Net Income (non-GAAP) (1)
$8,441 $16,400 $27,485 $36,908 
Diluted EPS$(0.24)$0.65 $0.51 $1.46 
Adjusted Diluted EPS (non-GAAP) (1)
$0.34 $0.65 $1.09 $1.47 
(1) A reconciliation of GAAP and non-GAAP financial measures is included below.

Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “As we anticipated, the operating environment has remained challenged for the EMS industry, and our sales in the third quarter declined as expected. During this period of end market softness, we have focused on ‘controlling what we can control,’ proactively aligning our cost structure with short-term demand trends, maintaining competitiveness with stable operating margins, and focusing on working capital improvements.”

Mr. Phillips continued, “We’re taking meaningful steps to sharpen our strategic focus and further position the Company for profitable growth, and stronger performance moving forward. With the expected divestiture of the Automation, Test & Measurement business, our team can increase focus and support on our core EMS operations. While we suspect the macro headwinds will persist in fiscal 2025, we’re continuing to make investments in long-term growth opportunities supported by a robust funnel for new business in the next 18-24 months, while deploying a capital allocation strategy that balances growth, lasting customer relationships, and returning cash to Share Owners with opportunistic share repurchases.”


The Company ended the third quarter of fiscal 2024 with cash and cash equivalents of $65.2 million and borrowings outstanding on credit facilities of $319.6 million, including $235.0 million classified as long term, and $117.4 million of borrowing capacity available. Capital expenditures were $13.4 million in Q3.


Net Sales by Vertical Market for Q3 Fiscal 2024:
Three Months EndedNine Months Ended
March 31,March 31,
(Amounts in Millions)2024*2023*Percent Change2024*2023*Percent Change
Automotive (1)
$202.0 47 %$221.9 46 %(9)%$614.7 48 %$615.3 46 %— %
Medical (1)
113.0 27 %135.5 28 %(17)%323.5 25 %377.1 29 %(14)%
Industrial (1)
110.0 26 %127.3 26 %(14)%346.2 27 %334.9 25 %3 %
    Total Net Sales$425.0 $484.7 (12)%$1,284.4 $1,327.3 (3)%
*As a percent of Total Net Sales
(1) Beginning in fiscal year 2024, miscellaneous sales previously reported in Other are now reported in the respective three end market verticals; all prior periods have been recast to conform to current period presentation
–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, optical inspection, and public safety

Guidance for Fiscal Year 2024
The Company reiterated its guidance for adjusted operating income in fiscal year 2024 of 4.2% to 4.6% of net sales. In response to the current economic environment, net sales are now expected to decline 4% to 6%, compared to the previous estimate of a 2% to 4% decrease. Capital expenditures are estimated to be in the range of $55 to $60 million, compared to the previous guidance of $70 to $80 million.



Forward-Looking Statements
Certain statements contained within this release are considered forward-looking, including our fiscal year 2024 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, 2023.

Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include constant currency growth, 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 multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in the United States, China, India, Japan, Mexico, Poland, Romania, Thailand, and Vietnam, 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:May 8, 2024
Time:10:00 AM Eastern Time
Live Webcast:investors.kimballelectronics.com/events-and-presentations/events
Dial-In #:
404-975-4839 (other locations - 833-470-1428)
Conference ID:
889032
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 third quarter and year-to-date period ended March 31, 2024 are as follows:
Condensed Consolidated Statements of Income
(Unaudited)Three Months Ended
(Amounts in Thousands, except Per Share Data)March 31, 2024March 31, 2023
Net Sales$425,036 100.0 %$484,703 100.0 %
Cost of Sales391,492 92.1 %441,731 91.1 %
Gross Profit33,544 7.9 %42,972 8.9 %
Selling and Administrative Expenses16,861 3.9 %17,752 3.7 %
Other General Expense (Income)(892)(0.2)%— — %
Restructuring Expense1,622 0.4 %— — %
Goodwill Impairment5,820 1.4 %— — %
Asset Impairment16,564 3.9 %— — %
Operating Income (Loss)
(6,431)(1.5)%25,220 5.2 %
Interest Income83 — %45 — %
Interest Expense(5,875)(1.4)%(4,822)(1.0)%
Non-Operating Income (Expense), net(530)(0.1)%1,433 0.3 %
Other Income (Expense), net(6,322)(1.5)%(3,344)(0.7)%
Income Before Taxes on Income(12,753)(3.0)%21,876 4.5 %
Provision for Income Taxes(6,677)(1.6)%5,476 1.1 %
Net Income (Loss)
$(6,076)(1.4)%$16,400 3.4 %
Earnings Per Share of Common Stock:
Basic$(0.24)$0.66 
Diluted$(0.24)$0.65 
Average Number of Shares Outstanding:
     Basic25,118 24,898 
     Diluted25,118 25,067 
(Unaudited)Nine Months Ended
(Amounts in Thousands, except Per Share Data)March 31, 2024March 31, 2023
Net Sales$1,284,352 100.0 %$1,327,288 100.0 %
Cost of Sales1,180,833 91.9 %1,220,804 92.0 %
Gross Profit103,519 8.1 %106,484 8.0 %
Selling and Administrative Expenses50,736 4.0 %50,204 3.8 %
Other General Expense (Income)(892)(0.1)%— — %
Restructuring Expense1,622 0.1 %— — %
Goodwill Impairment5,820 0.5 %— — %
Asset Impairment16,564 1.3 %— — %
Operating Income29,669 2.3 %56,280 4.2 %
Interest Income483 — %88 — %
Interest Expense(17,459)(1.4)%(10,790)(0.8)%
Non-Operating Income (Expense), net(959)— %2,659 0.2 %
Other Income (Expense), net(17,935)(1.4)%(8,043)(0.6)%
Income Before Taxes on Income11,734 0.9 %48,237 3.6 %
Provision for Income Taxes(1,234)(0.1)%11,608 0.8 %
Net Income$12,968 1.0 %$36,629 2.8 %
Earnings Per Share of Common Stock:
Basic$0.52 $1.47 
Diluted$0.51 $1.46 
Average Number of Shares Outstanding:
     Basic25,084 24,868 
     Diluted25,263 25,031 


Condensed Consolidated Statements of Cash FlowsNine Months Ended
(Unaudited)March 31,
(Amounts in Thousands)20242023
Net Cash Flow provided by (used for) Operating Activities$24,717 $(57,885)
Net Cash Flow used for Investing Activities(37,702)(66,497)
Net Cash Flow provided by Financing Activities36,571 107,148 
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash(113)(294)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash23,473 (17,528)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period43,864 49,851 
Cash, Cash Equivalents, and Restricted Cash at End of Period$67,337 $32,323 


(Unaudited)
Condensed Consolidated Balance SheetsMarch 31,
2024		June 30,
2023
(Amounts in Thousands)
ASSETS
    Cash and cash equivalents$65,208 $42,955 
    Receivables, net277,894 308,167 
    Contract assets76,073 78,798 
    Inventories 396,199 450,319 
    Prepaid expenses and other current assets43,018 49,188 
    Assets held for sale29,619 — 
    Property and Equipment, net273,823 267,684 
    Goodwill6,191 12,011 
    Other Intangible Assets, net3,197 12,335 
    Other Assets89,606 38,262 
        Total Assets$1,260,828 $1,259,719 
LIABILITIES AND SHARE OWNERS’ EQUITY
    Current portion of borrowings under credit facilities$84,618 $46,454 
    Accounts payable248,174 322,274 
    Advances from customers 36,099 33,905 
    Accrued expenses59,621 72,515 
    Liabilities held for sale9,369 — 
    Long-term debt under credit facilities, less current portion235,000 235,000 
    Long-term income taxes payable3,255 5,859 
    Other long-term liabilities45,631 19,718 
    Share Owners’ Equity539,061 523,994 
        Total Liabilities and Share Owners’ Equity$1,260,828 $1,259,719 



Other Financial Metrics
(Unaudited)
(Amounts in Millions, except CCD)
At or For the
Three Months EndedNine Months Ended
March 31,March 31,
2024202320242023
Depreciation and Amortization$10.5 $8.2 $28.5 $23.8 
Stock-Based Compensation$1.8 $2.0 $5.4 $5.4 
Cash Conversion Days (CCD) (1)
110 92 
Open Orders (2)
$831 $882 
(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 & Measurement
(Unaudited)
(Amounts in Millions)
Three Months EndedNine Months Ended
March 31,March 31,
2024202320242023
Net Sales$8.1 $16.8 $30.9 $40.6 
Operating Income (Loss) (1)
$(25.4)$1.6 $(24.3)$0.1 
(1) Includes goodwill impairment of $5.8 million and asset impairment of $16.6 million for the three and nine months ended March 31, 2024. Also includes allocated corporate overhead expenses.



Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Amounts in Thousands, except Per Share Data)
Three Months EndedNine Months Ended
March 31,March 31,
2024202320242023
Net Sales Growth (vs. same period in prior year)(12)%32 %(3)%36 %
Foreign Currency Exchange Impact— %(2)%— %(4)%
Constant Currency Growth(12)%34 %(3)%40 %
Selling and Administrative Expenses, as reported
$16,861 $17,752 $50,736 $50,204 
SERP
(277)(353)(584)(458)
Adjusted Selling and Administrative Expenses
$16,584 $17,399 $50,152 $49,746 
Operating Income (Loss), as reported
$(6,431)$25,220 $29,669 $56,280 
SERP 277 353 584 458 
Legal Settlements (Recovery)(892)— (892)— 
Restructuring Expense1,622 — 1,622 — 
Goodwill Impairment5,820 — 5,820 — 
Asset Impairment16,564 — 16,564 — 
Adjusted Operating Income$16,960 $25,573 $53,367 $56,738 
Net Income (Loss), as reported
$(6,076)$16,400 $12,968 $36,629 
Adjustments After Measurement Period on GES Acquisition— — — 279 
Legal Settlements (Recovery), After-Tax(676)— (676)— 
Restructuring Expense, After-Tax1,230 — 1,230 — 
Goodwill Impairment, After-Tax4,414 — 4,414 — 
Asset Impairment, After-Tax9,549 — 9,549 — 
Adjusted Net Income$8,441 $16,400 $27,485 $36,908 
Diluted Earnings per Share, as reported$(0.24)$0.65 $0.51 $1.46 
Adjustments After Measurement Period on GES Acquisition— — — 0.01 
Legal Settlements (Recovery)(0.03)— (0.03)— 
Restructuring Expense0.05 — 0.05 — 
Goodwill Impairment0.18 — 0.18 — 
Asset Impairment0.38 — 0.38 — 
Adjusted Diluted Earnings per Share$0.34 $0.65 $1.09 $1.47 
Twelve Months Ended
March 31,
20242023
Operating Income$61,118 $76,858 
Goodwill Impairment5,820 — 
SERP 827 (701)
Legal Recovery(1,104)— 
Restructuring Expense1,622 — 
Asset Impairment16,564 — 
Adjusted Operating Income (non-GAAP)$84,847 $76,157 
Tax Effect19,947 20,375 
After-tax Adjusted Operating Income$64,900 $55,782 
Average Invested Capital (1)
$783,059 $659,911 
ROIC8.3 %8.5 %
(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.

v3.24.1.u1
Cover
May 07, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date May 07, 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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