KE

Kimball Electronics, Inc. KE ended fiscal 2026 on a soft note, with fourth-quarter earnings falling sharply year over year and missing expectations. Revenues also declined from the prior-year period, reflecting continued weakness in some of the company’s key end markets.However, the headline numbers apparently fail to reflect the inherent growth potential. Improving cash flow, a healthier balance sheet, strong momentum in Medical and expectations for a return to organic growth in fiscal 2027 suggest that Kimball’s underlying business is moving in the right direction. Let us dig a little deeper into the underlying factors. Kimball reported an adjusted loss of 1 cent per share for the fiscal fourth quarter against earnings of 34 cents in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of earnings of 40 cents.Quarterly revenues of $371.6 million declined 2.3% year over year. Automotive revenues fell 3%, while Industrial sales decreased 5%. Medical revenues, however, increased 1% and remained the strongest-performing end market. Adjusted operating income declined to $18.1 million from $19.6 million a year ago, while the adjusted operating margin contracted 30 basis points to 4.9%.However, revenues increased 5% sequentially, with all three end markets improving from the fiscal third quarter. Management also noted that adjusted operating income exceeded its internal expectations. This suggests that operating trends may be stabilizing even though year-over-year comparisons remain challenging. Kimball has declined 18.7% in the past year against the industry’s growth of 53.2%. It has lagged peers like KLA Corporation KLAC and Garmin Ltd. GRMN. While GRMN has gained 18%, KLAC soared 101.3% over this period. One-Year KE Stock Price Performance Image Source: Zacks Investment Research Kimball’s growing exposure to the Medical market remains one of the biggest positives in its investment story. Medical revenues totaled $412.8 million in fiscal 2026 and represented 29% of total sales, up from 27% in fiscal 2025. Management expects Medical to account for more than one-third of revenues in fiscal 2027.The recently completed acquisition of Helvoet Polymer Technologies should accelerate this shift. Helvoet expands Kimball’s capabilities in precision molding and manufacturing for applications such as diagnostics, microfluidics and drug delivery. The business is expected to contribute approximately $60 million in fiscal 2027 revenues and be accretive to adjusted earnings. The acquisition also broadens Kimball’s medical manufacturing footprint across Europe and India while creating potential cross-selling opportunities with existing customers.At the same time, the company continues to invest in its new medical manufacturing facility in Indianapolis. Initial production is expected toward the end of calendar 2026. These should strengthen Kimball’s positioning in the high-growth Medical market and reduce its dependence on Automotive over time. Management’s fiscal 2027 guidance provides another reason for optimism. Kimball expects revenues between $1.535 billion and $1.56 billion, implying growth of 7-9% from fiscal 2026. Organic revenues are projected to increase 3-5%.Medical organic sales are expected to grow at a high-single-digit to low-double-digit rate, while Industrial revenues should increase roughly in line with overall organic growth. Automotive revenues, however, are expected to remain almost flat.Nevertheless, the overall outlook indicates that Kimball could return to sustainable top-line growth after a difficult fiscal 2026. Kimball’s improving financial position strengthens the bullish argument. Cash generated from operations totaled $42.4 million in the fiscal fourth quarter, marking the company’s 10th consecutive quarter of positive operating cash flow. Cash conversion days improved to 82, the best level in 17 quarters.Kimball ended June with $88.9 million in cash, while debt declined to $116.6 million, its lowest level in more than four years. The Helvoet acquisition will increase leverage somewhat, but the significant balance sheet improvement in fiscal 2026 gave management more flexibility to fund strategic growth investments. Kimball entered fiscal 2027 with considerable momentum. Strong medical market revenue provides a secular growth avenue, while inorganic growth is likely to gain steam.The upbeat fiscal outlook adds further visibility to the growth story. Investors seeking exposure to the rapidly expanding electronics ecosystem may consider betting on KE for long-term upside. KE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kimball Electronics, Inc. (KE) : Free Stock Analysis Report Garmin Ltd. (GRMN) : Free Stock Analysis Report KLA Corporation (KLAC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the electrical systems industry, including Kimball Solutions (NASDAQ:KE) and its peers. Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products. The 13 electrical systems stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 0.6% below. While some electrical systems stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.1% since the latest earnings results. Founded in 1961, Kimball Solutions (NASDAQ:KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets. Kimball Solutions reported revenues of $371.6 million, down 2.3% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates and full-year revenue guidance meeting analysts’ expectations. The market seems disappointed with the results as the stock is down 2% since reporting and currently trades at $24.69. Read our full report on Kimball Solutions here, it’s free. Protecting the things that power our world, Atkore (NYSE:ATKR) designs and manufactures electrical safety products. Atkore reported revenues of $794.8 million, up 8.1% year on year, outperforming analysts’ expectations by 4.7%. The business had an incredible quarter with a solid beat of analysts’ EBITDA and EPS estimates. The market seems happy with the results as the stock is up 28.4% since reporting. It currently trades at $93.68. Is now the time to buy Atkore? Access our full analysis of the earnings results here, it’s free. Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE:POWL) has grown from a small Houston manufacturer to a global provider of electrical systems. Powell reported revenues of $311.7 million, up 8.9% year on year, falling short of analysts’ expectations by 1.6%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates. As expected, the stock is down 11.1% since the results and currently trades at $195.40. Read our full analysis of Powell’s results here. One of the pioneers of smart lights, Acuity (NYSE:AYI) designs and manufactures light fixtures and building management systems used in various industries. Acuity Brands reported revenues of $1.20 billion, up 1.6% year on year. This result topped analysts’ expectations by 1.2%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA and EPS estimates. The stock is up 18.5% since reporting and currently trades at $341.86. Read our full, actionable report on Acuity Brands here, it’s free. Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances. Whirlpool reported revenues of $3.52 billion, down 6.8% year on year. This print lagged analysts’ expectations by 1.2%. Aside from that, it was a mixed quarter as it also logged full-year EPS guidance exceeding analysts’ expectations but a significant miss of analysts’ EPS estimates. Whirlpool had the slowest revenue growth of the whole group. The stock is up 1.4% since reporting and currently trades at $39.75. Read our full, actionable report on Whirlpool here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 10 a.m. ET Vice President, Investor Relations, Strategic Development and Treasurer - Andrew Regrut Chief Executive Officer - Richard Phillips Chief Financial Officer - Jana Croom Operator: Good morning, ladies and gentlemen, and welcome to Kimball Electronics Fourth Quarter Fiscal 2026 Earnings Conference Call. My name is Sherry, and I will be the facilitator for today's call. [Operator Instructions] Today's call, August 13, 2026, is being recorded. A replay of the call will be available on the Investor Relations page of Kimball Electronics website. At this time, I would like to turn the call over to Andy Regrut, Vice President, Investor Relations, Strategic Development and Treasurer. Mr. Regrut, you may begin. Andrew Regrut: Thank you, and good morning, everyone. Welcome to our fourth quarter conference call. With me here today is Ric Phillips, our Chief Executive Officer; and Jana Croom, Chief Financial Officer. We issued a press release yesterday afternoon with our results for the fourth quarter and full fiscal year ended June 30, 2026. To accompany today's call, a presentation has been posted to the Investor Relations page on our company website. Before we get started, I'd like to remind you that we will be making forward-looking statements that involve risk and uncertainty and are subject to our safe harbor provisions as stated in our press release and SEC filings, and that actual results can differ materially from the forward-looking statements. Our commentary today will be focused on adjusted non-GAAP results. Reconciliations of GAAP to non-GAAP amounts are available in our press release. This morning, Ric will start the call with a few opening comments. Jana will review the financial results for the quarter and guidance for fiscal 2027, and Ric will complete our prepared remarks before taking your questions. I'll now turn the call over to Ric. Richard Phillips: Thank you, Andy, and good morning, everyone. I'm proud of our results in the fourth quarter and very good finish to fiscal 2026. Sales in Q4 were in line with expectations. Adjusted operating income was better than estimates, and we generated strong cash from operations, which was used to pay down debt to its lowest level in over 4 years. Our balance sheet continued to strengthen, and we are actively leveraging it to make strategic investments in growth in the medical CDMO space, such as the build-out of our new medical facility in Indianapolis and the acquisition of Helvoet Polymer Technologies. Our guidance for fiscal 2027 is highlighted by organic sales growth and the accretive impact from Helvoet. We are expecting medical to continue to outpace the other 2 verticals and represent more than 1/3 of total company sales in the fiscal year, which is in line with our objective to balance the portfolio across the markets we serve. Turning now to the fourth quarter. Net sales for the company were $372 million, a 2% decline compared to Q4 last year, but a 5% sequential increase with all 3 vertical markets posting gains over Q3. Geographically, sales in the fourth quarter were more evenly distributed around the world versus prior periods, with approximately 40% in North America and 30% in both Asia and Europe. Once again, this quarter, our Medical business was the headliner, growing both year-over-year and sequentially and completing a fiscal year where the growth occurred in all 4 quarters and the total exceeded 10% versus a normalized fiscal '25 when adjusting for the consigned inventory sale last year. In Q4, Medical sales were $109 million, a 1% increase compared to the same period a year ago and 29% of the total company. Approximately 30% of these sales occurred in both Asia and Europe with the same year-over-year increases in each region. North America was down mid-single digits, which is below our run rate for most of the fiscal year. This apparent slowdown in the growth trajectory is more of a function of the comparison from a year ago than production this year. In the fourth quarter of fiscal '25, we were supporting our customers with inventory builds for facility closures and transfers of work, both were onetime events. From a product category perspective, the growth was driven by demand for surgical devices, in vitro diagnostics, patient monitoring and drug delivery. Next is Automotive, with net sales in Q4 of $170 million, down 3% compared to the same period last year and 46% of the total. Our business in the fourth quarter was roughly divided 1/3, 1/3 and 1/3 between North America, Asia and Europe, with Poland and Romania reporting mid-single-digit increases as a result of new steering and braking programs. China was up low single digits and North America was down, driven largely by lower EV demand, offsetting these increases. Steering programs continue to be the largest concentration of work, accounting for approximately 70% of total Automotive sales for us. For the full year, our automotive business was down 7% year-over-year, so successive 3% declines in the back half of fiscal '26 suggest a stabilizing trend in this vertical. Finally, sales in Industrial totaled $93 million, a 5% decrease compared to Q4 last year and 25% of the total company. Once again, this quarter, our industrial business was heavily concentrated in North America, where the majority of the decline occurred from lower demand for HVAC systems. This was partially offset by higher sales of smart meters in Europe, which continued to recover from prior year declines. I'll now turn the call over to Jana for more detail on our financial results and guidance for fiscal 2027. Jana? Jana Croom: Thank you, and good morning, everyone. As Ric highlighted, net sales in the fourth quarter were $371.6 million, a 2% decrease year-over-year. Foreign exchange had a 1% favorable impact on consolidated sales in Q4. The gross margin rate in the fourth quarter was 8.9%, a 90 basis point improvement compared to 8% in Q4 of fiscal 2025, with the increase resulting from favorable mix, partially offset by incremental costs associated with the ramp-up of our medical CDMO facility in Indianapolis. Adjusted selling and administrative expenses in the fourth quarter were $14.8 million, a $4 million increase year-over-year with higher expense from investments for future growth initiatives, including personnel costs and IT infrastructure. When measured as a percentage of sales, the rate was 4% this year compared to 2.8% in the same period last year. Adjusted operating income in Q4 was $18.1 million or 4.9% of net sales, which compares to last year's adjusted result of $19.6 million or 5.2% of net sales. Other income and expense was expense of $2.6 million compared to $3.8 million of expense last year. Once again, this quarter, interest expense drove the decrease, down nearly 30% year-over-year as a result of a combination of lower average debt levels and lower borrowing rates. The effective tax rate in Q4 was 67.8% compared to 48.3% last year, with this year's rate adversely impacted by the resolution of 2 long-standing dividend withholding matters with tax authorities at international locations. We ended the fiscal year with an effective tax rate of 47.5%, and we're expecting the rate in fiscal '27 to be in the low 30s. Net income in the fourth quarter was $8.5 million or $0.35 per diluted share. The adjusted result was skewed by the tax rate with Q4 posting a loss of $163,000 or a minus $0.01 per diluted share. Turning now to the balance sheet. Cash and cash equivalents at June 30, 2026, were $88.9 million. Cash generated by operating activities in the quarter was a robust $42.4 million, our 10th consecutive quarter of positive cash. Cash conversion days were 82, an 8-day improvement compared to last quarter and 3 days better than the fourth quarter of fiscal '25. This is our best CCD in 17 quarters with all components posting good results, with DSO accounting for the most significant improvement versus prior periods. Inventory ended the quarter at $271.9 million, down slightly, that is $1.4 million compared to Q3 and $1.6 million lower than a year ago. Capital expenditures in Q4 were $8.5 million, much of the spend once again this quarter on leasehold improvements in the new facility in Indianapolis, plus investments to support new programs in Europe. For the full year, we invested $51.7 million in CapEx, which was in line with our estimates. Borrowings at June 30, 2026, were $116.6 million, representing our lowest level in over 4 years and a decrease of $46.4 million from the third quarter and down $30.9 million or 21% from a year ago. Short-term liquidity available represented as cash and cash equivalents plus the unused portion of our credit facilities totaled $411.3 million at the end of the fourth quarter. As a reminder, the acquisition of Helvoet occurred on July 1, the beginning of fiscal '27. So the financing activities on that transaction are not reflected in the June 30 balances. We invested $2.1 million in Q4 to repurchase 83,000 shares. Since October 2015, under our Board-authorized share repurchase program, a total of $115.6 million has been returned to our share owners by purchasing 7.1 million shares of common stock. In May, our Board of Directors unanimously increased the share repurchase program by $20 million. We now have $24.4 million available on the program. As we expected, fiscal 2026 was a year of transition, and I am impressed with our team's resilience and ability to deliver results in a challenging environment. We ended the fiscal year with net sales totaling $1.431 billion, with Medical up over 10% after normalizing last year for the consigned inventory sale. Adjusted operating income was $65.7 million or 4.6% of net sales. Cash generated from operating activities was $72.3 million, and we invested $11.9 million to repurchase 447,000 shares of common stock. As a CFO who takes great pride in the condition of our balance sheet, we exited the fiscal year in a position of strength with plenty of dry powder in the form of borrowing capacity and available cash to strategically invest. As Ric highlighted, our guidance for fiscal 2027 projects a return to growth, and we will be leveraging our balance sheet to support those efforts. Net sales in fiscal '27 are expected to be in the range of $1.535 billion to $1.56 billion, a 7% to 9% increase compared to fiscal 2026 with organic sales growth of 3% to 5% and revenue from Helvoet of $60 million. From a vertical market perspective, organic growth in Medical is expected in the high single to low double-digit range, Industrial in line with the company average and Automotive will likely be flattish for the year. Revenue should be fairly evenly distributed over the fiscal year. Adjusted operating income is estimated to be 4.4% to 4.7% of net sales and capital expenditures are expected to be in the range of $50 million to $60 million. For FY '27, the dilutive impact of the ramp of our new facility in Indianapolis is roughly offset by the accretive benefit from our acquisition of Helvoet. We expect this combination of assets to drive significant revenue synergies as we execute our CDMO strategy over time. This outlook reflects the efforts and contributions from all areas of the company, and I am grateful for the collaboration and our return to profitable growth. I'll now turn the call back over to Ric. Richard Phillips: Thanks, Jana. Before we open the lines for questions, I'd like to share a few thoughts in closing. We are thrilled to see our base business stabilize and a return to organic sales growth, which, as Jana highlighted, will be led by our medical vertical. As I noted in my opening comments, our guidance implies medical will approach 35% of the total company in fiscal '27. And Helvoet, the newest member of the Kimball family, is an important contributor. Since the deal announcement in early July, the integration efforts have gone very well with our #1 priority focused on unlocking top line synergies. Customer interest around the acquisition has been strong with many customers wanting more information about Helvoet operations in Tilburg and Pune as well as new requests to tour our facility in Indianapolis, which we welcome as the team there continues to make good progress moving out of the existing campus. Production equipment is now being installed in the new facility and the qualification of certain manufacturing processes is expected to start in the fall. If all goes according to plan, early production will commence at the end of this calendar year, and the move will be completed in the next 18 months. The addition of Helvoet has given us reason to reconsider how we talk about our Medical business, in particular, the co-development work that both organizations do. You may have noticed that we're now incorporating the letter D in our reference to the Medical CDMO business. This is reflective of our go-to-market strategy as a full-service provider in Kimball Solutions and will be used going forward. Looking ahead, we continue to evaluate strategic opportunities that could accelerate the expansion of this business, including the lift and shift of active [indiscernible] adds to this strategy with expertise in precision manufacturing and automation, exposure to highly attractive medical end markets, a presence or expanded presence in a new geography and a well-run operation with an excellent management team. We believe this strategy will be powerful in driving value creation. Our strategic journey continues to build and so does my excitement for the future of the company. Operator, we would now like to open the lines for questions. Operator: [Operator Instructions] Our first question is from Brett Fishbin with KeyBanc Capital Markets. Brett Fishbin: Just wanted to start off by asking if you could provide a little bit more color on what you saw in the Medical segment this quarter, particularly in Asia and Europe, which seemed a little bit stronger. And then it sounded like North America, the biggest impact was comps, but if there's anything else to call out in that geography as well. Richard Phillips: So I think with that adjustment, Brett, and thanks for joining the call. Good to have you. It really was a continuation of the trend that we've been seeing throughout the year. As you know, Helvoet will now be included in the results, and of course, it wasn't at all in the prior year with the July 1 close. But we saw a pretty consistent double-digit increase over the course of each of the quarters. And again, with that adjustment that you mentioned, Q4 looked pretty similar. Jana Croom: Yes. So to give you some technical color. In Q4 of '25, we had 2 onetime builds for customers. One was related to a transfer of work and one was related to a facility closure where they needed to build up inventory in support of that. And so if you adjust for those things, a normalized quarter-v-quarter FY '26, FY '25 is closer to 10%. Brett Fishbin: All right. Great. And then maybe just following up on that. It sounds like a key part of the return to positive organic growth in FY '27 is continued performance in the Medical segment with high single-digit to low double-digit organic growth expected. I was hoping you could just walk through kind of the key drivers and components of that level of growth expected in Medical, particularly how much you think could come from the early ramp of the new facility in Indy or if there's any other incremental contributors compared to FY '26? Richard Phillips: Sure. And Brett, we're really pleased as we look across the product categories within medical and look at our expectations for the coming year, we see growth in most categories, respiratory care, surgical devices, in vitro diagnostics, imaging, drug delivery. So we're really pleased to see that. I think the Indy impact is definitely going to take time. As you heard on the call, if all goes according to plan, we'll begin to see production by the end of the calendar year, but that's going to start with production that is currently taking place in our -- the facility in Indianapolis that we're going to close. So that would be transfer rather than incremental growth. What I'd say is -- and we can talk more about this, we're really encouraged. And obviously, this acquisition just closed, as you know, July 1. But the opportunities that we're talking about in terms of synergies are multiple. Helvoet was looking for U.S. footprint anyway, independent of the transaction because of demand from their customers for U.S. footprint for what they do, which they'll now have. We have customers that want footprint in Europe and India that we didn't necessarily have specifically for those technologies. And we're working together to collaborate on scaled larger programs that bring forth the capabilities of both companies. So I wouldn't expect you'll see a big impact in '27 from Indianapolis just because new programs take time to ramp. We may have some good opportunities with lift and shift programs that are already in market that we could move there, but those will take some time as well. So it's really a more broad-based improvement kind of building on the momentum that we saw this year. Brett Fishbin: All right. Super helpful. Last question for me is just on the inorganic contribution. I believe when you announced the deal, I think Helvoet had revenue of around $56 million in calendar year 2025. So it just seems like the outlook for inorganic revenue might be a little bit lower than the normalized growth rate for that asset. So just curious if there's any transition impacts that you're assuming for year 1 or any other near-term headwinds that may be impacting like the speed of growth for Helvoet? Jana Croom: Brett, great question. So there are really 2 impacts. One is actually FX and the FX translation from the INR and the euro on the U.S. dollar. That's going to be an impact for our fiscal year. And -- so not really a transition impact because we've been really, really thoughtful about not interrupting what they've got going on in terms of sales and actually trying to unlock opportunity there in terms of cross-selling opportunities geographically. So it's much more just business as usual and looking for revenue synergies, but there will be some currency impact. But going from $56 million to $60 million-ish, still 8% top line growth in that range feels pretty good. Operator: Our next question is from Mike Crawford with B. Riley Securities. Michael Crawford: Just so we get this into the transcript, what was your EBITDA and EBITDA margin in the fourth quarter? Jana Croom: Mike thanks for the question. Hold on. I should have that here right in front of me. Michael Crawford: Was it $27.2 million and 7.3%, Jana? Jana Croom: It's $28.2 million and yes, 7.6%. And the press release -- we put it in for the first time, specifically for you, Mike, it's in the press release. Michael Crawford: It's hidden in the press release somewhere. Okay. I need to look more closely. So I think, Ric, you said that the drag from Indianapolis ramp in the current fiscal year is going to be offset by Helvoet. I mean -- so does that mean that there's only a $5 million drag from ramp-up in Indianapolis? Jana Croom: So you can't necessarily correlate on a revenue dollar for dollar basis. The drag from Indianapolis is probably closer to $6.5 million, $7 million, all in. Michael Crawford: Okay. And -- is it -- would it be fair to assume that there's really almost no drag in the next fiscal year? Jana Croom: No. So think of it this way. You've got all of the associated depreciation, plant costs, just all the things associated utility expense, et cetera, for a facility that's empty. It's not that there won't be a drag in FY '28. It's that eventually, it will produce enough revenue to overcome the drag. Michael Crawford: Are you saying the 18 -- so the 18 months isn't -- that's from when you actually start production? Jana Croom: So -- and we opened the building in February. We're still -- we're bearing all of the costs associated with that facility, but it's not producing revenue. All the revenue is at the existing campus. It will start producing revenue. It will open for production in the fourth quarter of the calendar year, our second quarter fiscal year. And then we'll be putting business in it and it will start to ramp, and it will be able to cover the incremental cost. Michael Crawford: Okay. So just to clarify, it's 18 months to ramp not from February, but from December? Jana Croom: Roughly, yes. Richard Phillips: For new programs. Jana Croom: For new programs, yes. Michael Crawford: Not lift and shift. Okay. And then... Jana Croom: Not lift and shift. Michael Crawford: Yes. What -- given that your leverage is now 1x-ish EBITDA, do you have -- is there the best capital structure to run a consistent business like this with perhaps more leverage? And if so, then what are your capital allocation priorities or deployment priorities? Jana Croom: Yes. That's a really great question and something we've been burning a lot of calories on. So somewhere between 1.5 and 2x feels good for our business, but you need to keep your balance sheet strong enough when incremental growth opportunities that are inorganic present themselves, you've got the dry powder to act. So you're going to see the cost of the acquisition show up on our balance sheet in Q1. We're going to be actively utilizing our operating cash flow and global cash repatriation options to pay that down so that we can continue to have dry powder should another inorganic opportunity present itself, plus we've got $50 million of organic CapEx needs that we need to deploy. We do plan on continuing our share repurchase program at the rate that it's been at for the past few fiscal years. And so we don't plan on stopping that. We think share repurchase, particularly where our stock price is right now is also a very compelling opportunity. So we plan on doing -- it really is sort of a do-it-all strategy, share repurchase, yes, investment in the organic business, yes, but maintaining the dry powder so that we can take advantage of inorganic opportunities. We could take the leverage ratio actually over 3x debt to EBITDA. I don't -- obviously, that would be short-lived and we would have to work aggressively to pay it down. But for the right inorganic opportunity in the short run, would we be willing to do that, probably. Operator: Our next question is from Derek Soderberg with Cantor Fitzgerald. Derek Soderberg: So it looks like Automotive sales ended up being down this fiscal year and sort of flattish next year. It sounds like European braking growth is sort of offsetting some of the North America stuff. I guess I was wondering if you could just kind of detail your thoughts on that segment sort of turning positive. I know there's individual aspects of the automotive piece by region and braking and steering. I was just wondering if you can maybe comment on when you think that's going to turn positive, kind of the puts and takes between the regions and segments. Just any sort of additional detail on the Automotive segment for us to think about? Richard Phillips: Sure. And Derek, thanks for joining the call. I think we're encouraged to see this stabilizing. The decline is really, as I mentioned earlier on the call, has been driven by low demand for EV programs that we won. It's not programs that we lost. It's just programs that have underperformed in terms of the volumes that we originally anticipated. So we'll see how that continues to evolve with regulations and incentives and so on over time. I don't know how to predict that one. But yes, Europe is strong, and these are fairly new programs that will continue to ramp. So we feel really good about where that's at. China is very competitive. Our business has performed pretty well there over a good period of time. But the local Chinese competitors are tough. So I'd say our relationships remain as strong as they've ever been. We continue to win the next-gen programs, which is really important to us. And so stabilization and an eventual return to growth, market-driven there appears ahead of us, and we're going to stay close to those customers and hopefully see some of that demand come back, which it looks like it is overall. Derek Soderberg: Got it. Appreciate the detail there. And then, Jana, congrats on the cash conversion days, really has been trending in the right direction for some time here. I was wondering if that sort of 82-day conversion days, is that sustainable as you guys sort of see growth accelerate here, both on an organic and inorganic basis? Any additional thoughts there would be great. Jana Croom: Yes. Thank you. 82 days was hard thought. And so it also gives me an opportunity to touch on what we're seeing in the business now, which is we're getting back to an environment where there's some inventory disruption in the supply chain and golden screw type events. Customers are wanting us to carry more inventory, the turns of certain things as we're waiting for that one golden screw is flowing. And so I'm anticipating that there is going to be some pressure in working capital generally in FY '27. We've taken that into consideration as we're thinking about the guide for next year and the impact that it's going to have on the balance sheet, and we're managing through it with our -- but we're already seeing the impact. So if it rose a couple of days in FY '27, let me say that differently. We are planning for it to rise a few days in FY '27. Operator: Our next question is from Max Michaelis with Lake Street Capital Markets. Maxwell Michaelis: Just a few questions around the model. I mean 8.9% on the gross margin, really strong quarter. Obviously, that was impacted by a favorable mix. Just curious to know what you're sort of expecting for 2027. I mean should we be looking for gross margins kind of north of that 8% mark just with given the increased focus on the medical side of the business? Jana Croom: Yes. So our S&A is sort of trending in that 4% range again. And so if you consider the midpoint of the guide that we put out being like, call it, 4.5-ish, you would need a gross margin in the range of 8.5% for that math to work. Maxwell Michaelis: That's awesome. And then I think I heard on the call, you're sort of expecting a balanced revenue quarter-by-quarter throughout the remainder of next year. Is that correct? Jana Croom: Yes. And that's important because sometimes it's skewed right. First quarter is really heavy or fourth quarter is really heavy this year, it just so happens that the way that the forecast is shaking out right now, the quarters are going to be pretty even. Operator: [Operator Instructions] Our next question comes from Anja Soderstrom with Sidoti & Company. Unknown Analyst: This is Alex on for Anja. Jana, I know you touched on FX. I know it's a modest tailwind in '26. What euro assumptions, I'm just curious, underpin the 2027 guide now that Helvoet adds euro-denominated revenue? Jana Croom: Yes, $1.14. It's engraved in my brain. Unknown Analyst: Very good. And I know you've touched on some of the Helvoet contributions for the next year. I'm curious with the improved balance sheet and recognizing obviously June 30 figures of pre-Helvoet, how you're thinking about capital allocation priorities on a pro forma basis? And is there a leverage level you're managing towards? Jana Croom: Yes. So somewhere in the 1.5 range feels good. We don't want to be underleveraged. We don't want to be overleveraged. As I said, the key is supporting the organic growth of the business and the needs there, but also having enough dry powder that should an inorganic opportunity pop up that was attractive to us, we could use our balance sheet to take advantage of it. And so it's really walking that line of investing in the base business, which I'll remind everyone is still the overwhelming portion of Kimball and supporting the growth opportunities that we have there, but also dry powder for other tuck-in acquisitions that we were going to be force multipliers for the CDMO strategy. I would also add, though, that we just closed on this acquisition July 1. We need to absorb it, integrate it, get the revenue synergies, the top line synergies out of it. So it's also not likely that we would make another acquisition for -- in this fiscal year. We had said that we would want to be serial acquirers in terms of our opportunity set, but we need to give this one time to work before we start chewing on the next one. Unknown Analyst: Helpful context. And last one from us. I'm curious if there have been any surprises, good or bad, post the Helvoet acquisition, customer retention, integration pace, go-to-market, anything that's tracking differently, good or bad than what you underwrote? Richard Phillips: Great question, right? There's always -- in any acquisition, there's things that you're going to learn. I'd say, on balance, really positive. The customer conversations, they ask some good questions. Are you going to keep the footprint that Helvoet has today, for example? Yes, we are. And I think those all went really well. We anticipate keeping those customers. And I think probably the integration process itself is going as expected, really encouraged. All the leaders are engaged. All the functions are engaged. Facilities are talking to each other. We have a master integration plan that we're on track for. So the process itself feels really good and -- but it's as we expected. I wouldn't see any big changes there. If anything, the top line synergy opportunities, which are very much still taking shape, have been really encouraging. And we're so early when exactly are they going to happen and where exactly will they be located and how big will they be is -- those are the things that we're working on. But the teams across both organizations are talking to every single week at least about a pretty impressive list of potential synergy opportunities, leveraging the combined footprint. And also one of the areas of capital, these aren't huge numbers yet, but there were some things with customers that Helvoet had identified that needed to be funded in order to make that opportunity happen, and we're eager to invest in those and have already identified and started to move forward in those capital processes, which are great returns for us. Jana Croom: And that is contemplated in our CapEx guide. Operator: There are no further questions at this time. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. A replay of the call will be available on the Investor Relations page of Kimball Electronics website or by dialing (877) 660-6853. ID number is 13761725. Please disconnect your lines, and have a wonderful day. Before you buy stock in Kimball Electronics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kimball Electronics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $419,408!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,348,694!* Now, it’s worth noting Stock Advisor’s total average return is 966% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 19, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Kimball Electronics (KE) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Kimball Solutions’ second quarter saw headline declines in revenue and earnings per share. Management attributed the quarter’s performance to strong execution in the Medical vertical, which continued to grow and offset softness in Automotive and Industrial. CEO Richard Phillips specifically pointed to “broad-based improvement” in medical device demand and highlighted the company’s ability to generate strong operating cash flow, which helped reduce debt to its lowest level in over four years. The company also benefited from geographical diversification, with sales more evenly split between North America, Asia, and Europe compared to previous periods. Is now the time to buy KE? Find out in our full research report (it’s free). Revenue: $371.6 million vs analyst estimates of $373.4 million (2.3% year-on-year decline, in line) Adjusted EPS: -$0.01 vs analyst estimates of $0.39 (significant miss) Operating Margin: 4%, down from 5.3% in the same quarter last year Market Capitalization: $591.8 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Brett Fishbin (KeyBanc Capital Markets) asked about the drivers of Medical segment growth in Asia and Europe, and whether North America’s softness was structural or just a tough comparison. CEO Richard Phillips and CFO Jana Croom explained that growth was broad-based and North America’s dip was due to last year’s one-time inventory build. Brett Fishbin (KeyBanc Capital Markets) followed up on the expected contributors to Medical growth in the coming year, specifically regarding the Indianapolis facility’s ramp. Phillips indicated the impact from Indianapolis will be gradual, with most growth coming from existing categories and synergy with Helvoet. Michael Crawford (B. Riley Securities) inquired about EBITDA margin details and the expected financial drag from ramping up the new Indianapolis facility. Croom clarified the drag would be $6.5–7 million, with gradual improvement as the facility ramps. Derek Soderberg (Cantor Fitzgerald) probed the outlook for Automotive, asking when the segment might return to growth. Phillips highlighted stabilization, with European and Chinese programs performing well, but noted ongoing EV demand weakness in North America. Maxwell Michaelis (Lake Street Capital Markets) questioned the sustainability of gross margins and whether Medical growth would support margins above 8%. Croom confirmed that a gross margin of approximately 8.5% would be needed to achieve the guided operating margin. Looking forward, our analysts will monitor (1) the pace and scale of Medical segment growth, particularly the integration of Helvoet and early production at the Indianapolis facility; (2) stabilization and potential recovery in Automotive sales, especially in Europe and China; and (3) changes to working capital efficiency as inventory and supply chain dynamics evolve. Effective execution on synergy capture and margin management will be key to tracking Kimball Solutions’ progress. Kimball Solutions currently trades at $24.58, down from $25.19 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 2% year-over-year sales decline to lower EV demand in Automotive and reduced HVAC demand in Industrial, which offset double-digit normalized growth in Medical. The Medical vertical is being repositioned as a 'CDMO' (Contract Development and Manufacturing Organization) to reflect a strategic shift toward full-service, co-development partnerships. Automotive performance is showing signs of stabilization with successive 3% declines in the back half of the year, supported by new steering and braking program ramps in Europe. Geographic sales distribution has become more balanced, with North America at 40% and Asia and Europe each at 30%, reducing reliance on any single regional economy. Gross margin improvement of 90 basis points was driven by favorable product mix, though partially tempered by pre-production costs at the new Indianapolis facility. The company achieved its lowest debt level in over four years, providing the 'dry powder' necessary to fund the Helvoet acquisition and organic medical expansions. Fiscal 2027 guidance projects 7% to 9% total revenue growth, comprising 3% to 5% organic growth and approximately $60 million in inorganic contribution from Helvoet. Medical is expected to reach 35% of total company sales, driven by high single to low double-digit organic growth across respiratory, surgical, and drug delivery categories. The new Indianapolis medical facility is expected to begin early production by the end of the calendar year, with a full transition from the legacy campus completed within 18 months. Management anticipates a 'do-it-all' capital allocation strategy, balancing organic CapEx of $50 million to $60 million with continued share repurchases and debt paydown. Guidance assumes the dilutive impact of the Indianapolis facility ramp will be roughly offset by the accretive earnings benefit from the Helvoet acquisition. The Q4 effective tax rate of 67.8% was abnormally high due to the resolution of two long-standing international dividend withholding matters; rates are expected to normalize to the low 30s in FY27. Supply chain volatility is re-emerging, with management flagging 'golden screw' events and customer requests for higher inventory levels as potential headwinds to working capital. The Indianapolis facility currently acts as a margin drag of approximately $6.5 million to $7 million as it incurs full operating costs without yet generating production revenue. Foreign exchange volatility, particularly involving the Euro and Indian Rupee, is expected to impact the translated value of Helvoet's international revenue. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is broad-based across surgical devices, diagnostics, and drug delivery rather than tied to a single program. The Indianapolis facility will initially focus on 'lift and shift' transfers from the existing campus before ramping up entirely new incremental programs. The acquisition provides Helvoet's customers with a desired U.S. footprint while giving Kimball access to precision manufacturing capabilities in Europe and India. Management identified immediate top-line synergy opportunities where Helvoet had previously lacked the capital to fund specific customer requests. While the company achieved a 17-quarter best in cash conversion days (82 days), management expects this to rise slightly in FY27 due to strategic inventory builds. The increase is a proactive response to supply chain disruptions to ensure component availability for customers. Management views 1.5x to 2.0x net debt to EBITDA as the ideal range, though they would temporarily exceed 3.0x for the right strategic opportunity. The company intends to focus on integrating Helvoet for the remainder of the fiscal year before pursuing further 'serial' acquisitions.

This article first appeared on GuruFocus. Net Sales: $371.6 million in Q4 fiscal 2026, a 2% decrease year-over-year. Gross Margin: 8.9% in Q4, a 90-basis point improvement from 8% in Q4 of fiscal 2025. Adjusted Operating Income: $18.1 million, or 4.9% of net sales, compared to $19.6 million (5.2% of net sales) in the prior year quarter. Net Income: $8.5 million, or $0.35 per diluted share in Q4; adjusted net loss was $163,000, or minus $0.01 per diluted share. Medical Sales: $109 million in Q4, a 1% increase year-over-year, representing 29% of total company sales. Automotive Sales: $170 million in Q4, down 3% year-over-year, representing 46% of total sales. Industrial Sales: $93 million in Q4, a 5% decrease year-over-year, representing 25% of total sales. Cash Flow: $42.4 million generated from operating activities in Q4, the tenth consecutive quarter of positive cash flow. Cash Conversion Days: 82 days, an 8-day improvement sequentially and 3 days better than Q4 of fiscal 2025. Capital Expenditures: $8.5 million in Q4; $51.7 million for the full fiscal year. Borrowings: $116.6 million at June 30, 2026, the lowest level in over four years, down $46.4 million from Q3 and down 21% year-over-year. Full-Year Net Sales: $1.431 billion for fiscal 2026. Full-Year Adjusted Operating Income: $65.7 million, or 4.6% of net sales. Full-Year Cash from Operations: $72.3 million. Fiscal 2027 Guidance: Net sales expected between $1.535 billion and $1.56 billion, a 7% to 9% increase, with adjusted operating income estimated at 4.4% to 4.7% of net sales. Warning! GuruFocus has detected 4 Warning Sign with KE. Is KE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strong cash generation with $42.4 million in Q4 operating cash flow, the tenth consecutive positive quarter, and debt reduced to its lowest level in over four years. Medical segment delivered over 10% growth in fiscal 2026 (normalized), with continued growth expected in fiscal 2027, positioning it to become over one-third of total sales. Gross margin improved 90 basis points year-over-year to 8.9% in Q4, driven by favorable product mix. The acquisition of Helvoet Polymer Technologies is expected to be accretive and provide significant revenue synergies, with integration progressing well and strong customer interest. Fiscal 2027 guidance projects a return to growth with net sales expected to increase 7% to 9%, including 3% to 5% organic growth, and a balanced revenue distribution across quarters. Q4 net sales declined 2% year-over-year, with automotive down 3% and industrial down 5%, reflecting ongoing demand softness in EV and HVAC markets. Adjusted operating income decreased to $18.1 million (4.9% of sales) from $19.6 million (5.2% of sales) in the prior year, due to higher SG&A expenses from growth investments. The effective tax rate in Q4 was adversely impacted to 67.8% due to resolution of international withholding matters, resulting in an adjusted net loss of $0.01 per share. The new medical facility in Indianapolis is incurring incremental costs without revenue, creating a drag on profitability that is expected to persist into fiscal 2027. Working capital is expected to face pressure in fiscal 2027 due to supply chain disruptions and customer requests for higher inventory levels, potentially increasing cash conversion days. Q: Can you provide more color on the Medical segment's performance this quarter, particularly in Asia and Europe, and the impact of comps in North America? A: Ric Phillips (CEO) noted the quarter was a continuation of the trend seen throughout the year, with consistent double-digit increases. Jana Croom (CFO) clarified that Q4 of fiscal 2025 included two one-time inventory builds for a customer transfer award and a facility closure. Adjusting for these, the normalized year-over-year growth for Medical in Q4 was closer to 10%. Q: What are the key drivers behind the expected high single-digit to low double-digit organic growth in the Medical segment for fiscal 2027? A: Ric Phillips (CEO) stated that growth is expected across most product categories, including Respiratory Care, Surgical Devices, In Vitro Diagnostics, Imaging, and Drug Delivery. He noted that the new Indianapolis facility will not be a major contributor to incremental growth in fiscal 2027, as initial production will be transfers from the existing campus. The growth is expected to be broad-based, building on the momentum from fiscal 2026. Q: The fiscal 2027 guidance implies inorganic revenue from Helvoet of $60 million, which seems lower than its normalized growth rate. Are there any transition impacts or headwinds assumed? A: Jana Croom (CFO) explained that the primary impact is foreign exchange translation from the Euro and INR to the US Dollar. She emphasized that there is no transition impact, as the company is focused on maintaining business as usual and unlocking cross-selling opportunities. The $60 million figure still represents roughly 8% top-line growth for the asset. Q: Can you clarify the financial drag from the Indianapolis facility ramp-up and how it offsets the Helvoet acquisition? A: Jana Croom (CFO) clarified that the drag from the Indianapolis facility is approximately $6.5 million to $7 million in SG&A costs. She explained that the facility opened in February but is not yet producing revenue. Production is expected to begin in the fourth quarter of the calendar year (Q2 fiscal 2027), and it will take roughly 18 months from that point to ramp new programs to cover the incremental costs. Q: Given the current leverage is around 1x EBITDA, what is the optimal capital structure and what are the capital allocation priorities? A: Jana Croom (CFO) stated that a leverage ratio between 1.5x and 2x feels appropriate for the business. The company plans to use operating cash flow to pay down debt from the Helvoet acquisition to maintain dry powder for future inorganic opportunities. They will continue the share repurchase program and invest in organic CapEx. She noted they could temporarily take leverage over 3x for the right acquisition. Q: Can you provide more detail on the Automotive segment's performance and when it might return to positive growth? A: Ric Phillips (CEO) said the decline is driven by lower demand for EV programs, not lost programs. Europe is strong with new steering and braking programs ramping up. China remains competitive, but the company continues to win next-generation programs. He sees stabilization and an eventual return to growth, driven by the market, but noted it's difficult to predict the timing of EV demand recovery. Q: Is the 82-day cash conversion days (CCD) figure sustainable as growth accelerates? A: Jana Croom (CFO) stated that 82 days was a strong achievement, but the company is already seeing supply chain disruptions ("golden screw" events) and customers requesting higher inventory levels. She anticipates pressure on working capital in fiscal 2027 and is planning for CCD to rise a few days. Q: What are the expectations for gross margin and SG&A in fiscal 2027? A: Jana Croom (CFO) indicated that SG&A is expected to trend around 4% of sales. Based on the midpoint of the operating income guidance of 4.5%, this implies a gross margin in the range of 8.5%. Q: What Euro/USD exchange rate assumption underpins the fiscal 2027 guidance, given Helvoet adds Euro-denominated revenue? A: Jana Croom (CFO) confirmed the guidance is based on a Euro/USD exchange rate assumption of 1.14. Q: Have there been any surprises, good or bad, since the Helvoet acquisition closed on July 1? A: Ric Phillips (CEO) stated that the integration is going as expected, with all leaders and functions engaged. Customer conversations have been positive, and the company has confirmed it will maintain Helvoet's existing footprint. He highlighted that the top-line synergy opportunities have been very encouraging, with teams from both organizations talking weekly about a "pretty impressive list" of potential synergies leveraging the combined footprint. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Kimball Electronics, Inc.? Here are five stocks we like better. Fourth-quarter sales declined 2% year over year to $371.6 million, but rose 5% sequentially as all three operating verticals improved. Gross margin increased to 8.9%, while operating cash flow reached $42.4 million and helped reduce debt to its lowest level in more than four years. Medical growth is expected to offset ongoing automotive and industrial pressure. Medical sales rose 1% year over year, while automotive fell 3% and industrial declined 5%; management expects automotive revenue to be roughly flat in fiscal 2027. Kimball forecast fiscal 2027 sales of $1.535 billion to $1.56 billion, including 3% to 5% organic growth and about $60 million from the Helvoet acquisition. Medical is projected to grow at a high-single-digit to low-double-digit rate and approach 35% of total sales as Helvoet and the Indianapolis CDMO facility ramp up. Top 3 Behind-the-Scenes Electronic Component Companies to Watch Kimball Electronics (NASDAQ:KE) reported fourth-quarter fiscal 2026 sales of $371.6 million, down 2% from a year earlier but up 5% sequentially, as all three of its operating verticals increased from the prior quarter. The company said adjusted operating income of $18.1 million, or 4.9% of sales, exceeded its expectations, while operating cash flow helped reduce debt to its lowest level in more than four years. Chief Executive Officer Ric Phillips said the company ended fiscal 2026 with a stabilizing base business and expects a return to organic sales growth in fiscal 2027. The outlook is expected to be led by medical operations, including the recently completed acquisition of Helvoet Polymer Technologies and continued investment in a medical facility in Indianapolis. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Fourth-quarter gross margin was 8.9%, improving 90 basis points from 8.0% a year earlier. Chief Financial Officer Jana Croom said favorable sales mix supported the improvement, partly offset by costs associated with ramping the Indianapolis medical contract development and manufacturing organization, or CDMO, facility. Adjusted selling and administrative expenses increased by $4 million year over year to $14.8 million, reflecting growth investments including personnel and IT infrastructure. Adjusted operating income declined from $19.6 million, or 5.2% of sales, in the prior-year quarter. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Kimball reported net income of $8.5 million, or $0.35 per diluted share. Its adjusted result was a loss of $163,000, or $0.01 per diluted share, as the quarter’s effective tax rate rose to 67.8%. Croom said the tax rate was adversely affected by the resolution of two longstanding dividend withholding matters involving international tax authorities. The company expects its fiscal 2027 tax rate to be in the low 30% range. Cash generated from operations totaled $42.4 million in the quarter, marking the company’s 10th consecutive quarter of positive operating cash flow. Cash conversion days improved to 82 days, the company’s best result in 17 quarters. However, Croom said the company expects some working-capital pressure in fiscal 2027 as customers seek higher inventory levels amid supply-chain disruptions and “golden screw” component shortages. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Cash and cash equivalents were $88.9 million at June 30, while borrowings totaled $116.6 million, down $46.4 million from the prior quarter and 21% from a year earlier. Short-term liquidity, including available credit capacity, was $411.3 million. The balance sheet figures did not include financing associated with the Helvoet acquisition, which closed July 1. Medical sales were $109 million in the fourth quarter, up 1% year over year and representing 29% of total revenue. Phillips said the reported growth rate was affected by one-time customer inventory builds in the fourth quarter of fiscal 2025 related to a facility closure and transfer of work. After adjusting for those events, Croom said medical growth was closer to 10% year over year. Medical demand was supported by surgical devices, in vitro diagnostics, patient monitoring and drug-delivery products. Phillips said the company expects growth across most medical categories in fiscal 2027, including respiratory care, surgical devices, diagnostics, imaging and drug delivery. Automotive sales were $170 million, down 3% year over year, and accounted for 46% of company sales. Growth in Poland and Romania, driven by new steering and braking programs, as well as low-single-digit growth in China, was offset by lower North American demand tied largely to electric-vehicle programs. Steering programs represented about 70% of automotive revenue. Phillips said automotive sales declined 7% for the full fiscal year, but consecutive 3% declines in the second half suggest stabilization. The company expects automotive revenue to be roughly flat in fiscal 2027. He said demand weakness reflects lower-than-anticipated volumes from EV programs rather than lost business, while European programs continue to ramp. Industrial sales fell 5% to $93 million, primarily due to lower North American HVAC demand. Higher smart-meter sales in Europe partially offset the decline. Kimball forecast fiscal 2027 sales of $1.535 billion to $1.56 billion, representing growth of 7% to 9% from fiscal 2026. The outlook includes organic growth of 3% to 5% and approximately $60 million of revenue from Helvoet. Croom said foreign-exchange translation, particularly involving the euro and Indian rupee, affects the comparison with Helvoet’s prior revenue base. Medical organic growth is projected in the high-single-digit to low-double-digit range. Industrial growth is expected to align with the company average. Automotive revenue is expected to be approximately flat. Adjusted operating income is projected at 4.4% to 4.7% of sales. Capital expenditures are expected to total $50 million to $60 million. Management expects medical to approach 35% of total company sales in fiscal 2027. Phillips said Helvoet expands the company’s medical CDMO capabilities, including co-development work, prompting Kimball to more explicitly use the CDMO designation going forward. The Indianapolis facility is expected to begin qualifying certain manufacturing processes in the fall, with early production planned by the end of calendar 2026. Phillips said initial production will primarily involve transferred work from the existing Indianapolis campus, while new programs will require more time to ramp. Croom said the facility’s operating costs will continue to create a drag until revenue reaches sufficient scale, though Helvoet’s accretive contribution is expected to roughly offset that impact in fiscal 2027. Management said Helvoet integration has progressed as planned, with customer interest focused on the combined company’s facilities in Tilburg, Pune and Indianapolis. Kimball intends to maintain Helvoet’s existing footprint and is prioritizing potential revenue synergies, including cross-selling opportunities and programs that combine the two companies’ capabilities. Croom said the company is targeting leverage of roughly 1.5 times EBITDA over time while retaining capacity for organic capital spending, share repurchases and potential future acquisitions. Kimball repurchased 83,000 shares for $2.1 million in the fourth quarter and had $24.4 million remaining under its authorization at fiscal year-end. Kimball Electronics, Inc is a global electronic manufacturing services (EMS) provider headquartered in Jasper, Tennessee. The company offers end-to-end product design and manufacturing solutions, serving original equipment manufacturers (OEMs) across a range of industries. With a focus on precision electronics and complex assemblies, Kimball Electronics leverages advanced engineering capabilities, quality systems and lean production methods to support customers from product concept through full-scale production. The company's core offerings include printed circuit board assembly (PCBA), system integration, tooling and test fixture development, and aftermarket services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kimball Electronics Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Global electronics contract manufacturer Kimball Solutions (NASDAQ:KE) met Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 2.3% year on year to $371.6 million. The company’s full-year revenue guidance of $1.55 billion at the midpoint came in 1% above analysts’ estimates. Its non-GAAP loss of $0.01 per share was significantly below analysts’ consensus estimates. Is now the time to buy Kimball Solutions? Find out in our full research report. Revenue: $371.6 million vs analyst estimates of $373.4 million (2.3% year-on-year decline, in line) Adjusted EPS: -$0.01 vs analyst estimates of $0.39 (significant miss) Operating Margin: 7.8%, up from 5.3% in the same quarter last year Market Capitalization: $606.8 million Founded in 1961, Kimball Solutions (NASDAQ:KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets. A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Kimball Solutions’s sales grew at a sluggish 2.1% compounded annual growth rate over the last five years. This fell short of our benchmarks and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Kimball Solutions’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 8.6% annually. This quarter, Kimball Solutions reported a rather uninspiring 2.3% year-on-year revenue decline to $371.6 million of revenue, in line with Wall Street’s estimates. Looking ahead, sell-side analysts expect revenue to grow 7.1% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average. WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. Kimball Solutions’s operating margin has risen over the last 12 months and averaged 4.5% over the last five years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports lousy profitability for an industrials business. This result isn’t too surprising given its low gross margin as a starting point. Analyzing the trend in its profitability, Kimball Solutions’s operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. This quarter, Kimball Solutions generated an operating margin profit margin of 7.8%, up 2.5 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions. Sadly for Kimball Solutions, its EPS declined by 13.4% annually over the last five years while its revenue grew by 2.1%. We can see the difference stemmed from higher interest expenses or taxes as the company actually improved its operating margin and repurchased its shares during this time. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Kimball Solutions, its two-year annual EPS declines of 12.7% are similar to its five-year trend. These results were bad no matter how you slice the data. In Q2, Kimball Solutions reported adjusted EPS of negative $0.01, down from $0.34 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Kimball Solutions’s full-year EPS to grow 27.2% from $1.09 to $1.39. It was good to see Kimball Solutions provide full-year revenue guidance that slightly beat analysts’ expectations. On the other hand, its EPS missed and its revenue was in line with Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 7.3% to $23.32 immediately following the results. The latest quarter from Kimball Solutions’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.