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Kimball Electronics, Inc. announced financial results for the fourth quarter and fiscal year ended June 30, 2025.
Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “I’m encouraged by the results for the fourth quarter and solid finish to the fiscal year. Q4 came in better than expected, as sales increased sequentially, margins improved, and working capital management drove our sixth consecutive quarter of positive cash flow which was used to pay down debt. Our balance sheet is now in a position of competitive strength with ample liquidity to weather an unpredictable environment, while providing dry powder for opportunistic investments.”
Mr. Phillips continued, “In total, fiscal 2025 was a year of ‘controlling what we could control’. I’m proud of our team as we made significant progress positioning the Company for a return to profitable growth with a record number of wins for future business, adjusting the cost structure and aligning the portfolio to demand trends, and intensifying our focus as a medical CMO. We expect fiscal 2026 to be another step forward in the journey which will unfold over time.”
The Company ended the fourth quarter of fiscal 2025 with cash and cash equivalents of $88.8 million and borrowing capacity of $291.7 million. The Company invested $3.0 million to repurchase 162,000 shares of common stock.
Fiscal Year 2025 Highlights
- Net sales totaled $1,486.7 million, the third highest annual revenue total for the Company
- Operating income of $45.5 million, or 3.1% of net sales; adjusted operating income of $61.3 million, or 4.1% of net sales
- Inventory reduced $64.6 million, or 19%, in the fiscal year
- Debt paid down by $147.3 million, or 50%, year-over-year; the lowest level of debt in 3 years
- Cash generated from operating activities of $183.9 million, a record result for annual cash flow
- Invested $12.0 million to repurchase 653,000 shares of common stock
“Fiscal 2026 will be a year of transition. We expect modest top line growth in our medical and industrial businesses, but it will be offset by a decline in automotive, with a full year impact from the loss of the braking program in Reynosa. Margins are estimated to be in line with FY25, but it’s important to note that when top line growth returns, enhancements to our cost structure should support margin improvement. Capital expenditures will be heavily weighted toward our new facility in Indianapolis, with the balance supporting growth, automation, and maintenance,” said Jana T. Croom Chief Financial Officer.
Fiscal Year 2026 Guidance
- Net sales of $1,350 - $1,450 million, a 2% to 9% decrease compared to fiscal 2025
- Adjusted operating income of 4.0% - 4.25% of net sales, compared to 4.1% of net sales in fiscal 2025
- Capital expenditures of $50 - $60 million
