Kimball Electronics Reports Q4 Results; Company Provides Guidance for Fiscal 2025
Fourth Quarter Fiscal 2024 Highlights
- Net sales totaled $430.2 million
- Operating income of $19.6 million, or 4.6% of net sales
- Adjusted operating income of $20.9 million, or 4.9% of net sales
- Cash flow generated from operating activities of $48.5 million, driven by inventory reductions
JASPER, Ind.–(BUSINESS WIRE)– Kimball Electronics, Inc. (Nasdaq: KE) announced financial results for the fourth quarter and fiscal year ended June 30, 2024.
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Three Months Ended |
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Fiscal Year Ended |
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June 30, |
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June 30, |
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(Amounts in Thousands, except EPS) |
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2024 |
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2023 |
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2024 |
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2023 |
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Net Sales |
$ |
430,158 |
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$ |
496,141 |
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$ |
1,714,510 |
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$ |
1,823,429 |
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Operating Income (1) |
$ |
19,608 |
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$ |
31,449 |
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$ |
49,277 |
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$ |
87,729 |
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Adjusted Operating Income (non-GAAP) (2) |
$ |
20,944 |
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$ |
31,480 |
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$ |
74,311 |
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$ |
88,218 |
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Operating Income % |
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4.6 |
% |
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6.3 |
% |
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2.9 |
% |
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4.8 |
% |
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Adjusted Operating Income (non-GAAP) % |
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4.9 |
% |
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6.3 |
% |
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4.3 |
% |
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4.8 |
% |
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Net Income (1) |
$ |
7,543 |
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$ |
19,202 |
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$ |
20,511 |
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$ |
55,831 |
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Adjusted Net Income (non-GAAP) (2) |
$ |
8,361 |
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$ |
19,041 |
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$ |
35,846 |
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$ |
55,949 |
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Diluted EPS (1) |
$ |
0.30 |
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$ |
0.76 |
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$ |
0.81 |
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$ |
2.22 |
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Adjusted Diluted EPS (non-GAAP) (2) |
$ |
0.33 |
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$ |
0.76 |
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$ |
1.42 |
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$ |
2.23 |
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(1) |
Results (GAAP) in the June 30, 2024 three months and fiscal year periods include asset and goodwill impairment related to the divestiture of the Automation, Test and Measurement business. |
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(2) |
A reconciliation of GAAP and non-GAAP financial measures is included below. |
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Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “Q4 was another quarter focused on ‘controlling what we can control’. The operating environment for the EMS industry remains challenged and many contract manufacturing organizations, Kimball included, have adjusted expectations on continued weakness in end market demand. In the verticals we serve, the pull back has been more significant than originally anticipated, and we continue to appropriately adjust our cost structure to maintain competitiveness with stable operating margins, improve working capital management with lower inventory levels, and generate positive cash flow.”
Mr. Phillips continued, “Earlier this month, we announced the completion of the divestiture of the Automation, Test and Measurement business. Closure on the sale represents a significant milestone for our Company, and another important step toward sharpening our strategic focus and returning to profitable growth and stronger performance. Proceeds from the sale, combined with actions taken to navigate the current environment, have strengthened our balance sheet with increased liquidity and financial flexibility. In addition, recent new program wins, which will start to impact fiscal 2026, make us excited for the future.”
The Company ended the fourth quarter of fiscal 2024 with cash and cash equivalents of $78.0 million and borrowings outstanding on credit facilities of $294.8 million, including $235.0 million classified as long term, and $142.1 million of borrowing capacity available. Capital expenditures were $9.1 million in the fourth quarter, and the Company invested $3 million to repurchase 136,000 shares of common stock.
Fiscal Year 2024 Highlights:
- Net sales totaled $1,714.5 million, the second highest year in the history of the Company
- Adjusted operating income of $74.3 million, or 4.3% of net sales
- Inventory reductions of $112 million, or 25%, year-over-year
- Cash flow generated from operating activities of $73 million
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Net Sales by Vertical Market for Q4 and Full Year Fiscal 2024: |
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Three Months Ended |
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Fiscal Year Ended |
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June 30, |
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June 30, |
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(Amounts in Millions) |
2024 |
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* |
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2023 |
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* |
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Percent Change |
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2024 |
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* |
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2023 |
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* |
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Percent Change |
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Automotive (1) |
$ |
211.7 |
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49 |
% |
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$ |
228.5 |
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46 |
% |
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(7 |
)% |
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$ |
826.4 |
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48 |
% |
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$ |
843.8 |
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46 |
% |
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(2 |
)% |
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Medical (1) |
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102.2 |
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24 |
% |
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123.6 |
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25 |
% |
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(17 |
)% |
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425.7 |
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25 |
% |
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500.7 |
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28 |
% |
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(15 |
)% |
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Industrial (1) |
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116.3 |
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27 |
% |
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144.0 |
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29 |
% |
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(19 |
)% |
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462.4 |
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27 |
% |
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478.9 |
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26 |
% |
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(3 |
)% |
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Total Net Sales |
$ |
430.2 |
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$ |
496.1 |
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(13 |
)% |
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$ |
1,714.5 |
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$ |
1,823.4 |
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(6 |
)% |
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* As a percent of Total Net Sales |
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(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 |
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– Automotive includes electronic power steering, body controls, automated driver assist systems, and electronic braking systems |
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– Medical includes sleep therapy and respiratory care, image guided therapy, in vitro diagnostics, drug delivery, AED, and patient monitoring |
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– Industrial includes climate controls, automation controls, optical inspection, and public safety |
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Jana T. Croom, Chief Financial Officer, commented, “Fiscal 2024 was hard fought with a challenging operating environment combined with divesting the AT&M business, which was not a small undertaking for our Company. I would like to thank the entire Kimball team for their efforts involved in closing the transaction and ensuring a smooth transition. Looking to fiscal 2025, we expect macro headwinds to persist. We will balance these pressures with cost controls, a capital allocation strategy focused on longer-term growth, lasting customer relationships, and opportunistic share repurchases.”
Fiscal Year 2025 Guidance
- 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. (a)
- Adjusted operating income of 4.0% – 4.5% of net sales. (b)
- Capital expenditures of $40 – $50 million.
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(a) |
A reconciliation of net sales excluding Automation, Test and Measurement is included in the Non-GAAP Reconciliations section. |
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(b) |
Fiscal year 2025 guidance reflects a change in our adjusted operating income calculation beginning in fiscal year 2025, which will exclude stock compensation expense, currently included in adjusted operating income. This change better aligns our presentation with others in our industry. Fiscal year 2024, under this new calculation, by comparison, would have been 4.8%. A reconciliation of GAAP and non-GAAP financial measures is included below. |
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