Slide 1: Third Quarter Fiscal 2025 Results
Third Quarter Fiscal 2025 Results Quarter Ended March 31, 2025 Supplementary Information to the May 7, 2025, Earnings Conference Call & Webcast Lasting relationships. Global success. Kimball Electronics
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained within this supplementary information, including our fiscal year 2025 guidance, and any statements made during our earnings conference call today may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. The state
Slide 3: Today’s speakers
Today’s speakers • Opening comments • Financial results for the quarter • Guidance for fiscal 2025 • Closing comments Ric Phillips CEO • Q&A Jana Croom CFO Lasting relationships. Global success. Kimball Electronics | 3
Slide 4: Proud of the results for the third quarter…
Proud of the results for the third quarter… • Team’s ability to navigate an environment of uncertainty, while focusing on what is controllable • Sales in Q3 in line with expectations and increased sequentially • Margins improved • Cash generated from operating activities • Paydown of debt continued
Slide 5: As part of today’s release…
As part of today’s release… • Reiterating guidance for fiscal 2025 with expectation that sales and operating income will be at the high-end of the range • Announcing the addition of a new manufacturing facility in Indianapolis focused on the medical industry • Another step of repositioning the Compa
Slide 6: In our Company’s history…
In our Company’s history… • EMS generates high levels of cash when operating conditions are at historic “norms” • Cash will be used to grow the medical CMO through organic – and potentially inorganic - channels • Margin profile on Higher Level Assemblies and Finished Medical Devices could be accreti
Slide 7: Net sales in the third quarter totaled $375 million
Net sales in the third quarter totaled $375 million • Represents a 12% decrease year-over-year • When excluding AT&M, the decrease was 10% • From an end-market perspective • Sales in Medical increased • The other two verticals were down in the quarter * Percentage decrease compared to Q3 of fiscal 2
Slide 8: Medical with net sales in Q3 of $115 million
Medical with net sales in Q3 of $115 million • Up 2% compared to the same period last year • 31% of total company sales • Increase driven by a non-recurring, consigned, inventory sale to our largest medical customer • Transaction associated with the FDA recall • Estimate the Q3 impact on the medical
Slide 9: New, larger, medically-focused manufacturing facility
New, larger, medically-focused manufacturing facility • Reflects commitment to the CMO • Leased facility representing 300,000 square feet • Capabilities extend beyond electronics and printed circuit board assemblies • Include operations such as precision injected molded plastics, complete device ass
Slide 10: Automotive net sales were $173 million
Automotive net sales were $173 million • 14% decrease compared to the third quarter last year • 46% of total company sales • Automotive business heavily concentrated in North America and China • For the 3rd consecutive quarter, results in China were strong • Sales in Europe increased as new braking
Slide 11: Industrial net sales of $86 million
Industrial net sales of $86 million • Down 15% year-over-year, when excluding AT&M • 23% of total company sales • Decrease occurred in all regions with the largest decline in Europe, followed by Asia, and a modest decrease in North America • Declines in Smart Metering programs • Reductions in climat
Slide 12: Net sales in the third quarter were $374.6 million
Net sales in the third quarter were $374.6 million • Represents a 12% decrease year- over-year • When excluding AT&M, the decrease was 10% • Foreign exchange had a 1% unfavorable impact on sales in the quarter • On a sequential basis, sales increased 5% compared to Q2 • $24 million in sales driven b
Slide 13: Gross margin rate in Q3 was 7.2%
Gross margin rate in Q3 was 7.2% • 70 bps decline compared to the third quarter of fiscal 2024 • Nearly half the decrease driven by the consigned inventory sale • Balance of the decline coming from lower absorption • On a sequential basis, the gross margin rate increased • Impact of restructuring La
Slide 14: Adjusted selling & administrative expense (%)
Adjusted selling & administrative expense (%)(1)(2) • Third quarter totaled $11.2 million • $3.6 million – or 24% - reduction compared to the $14.8 million reported in Q3 last year • Decrease primarily resulting from the absence of AT&M and cost reduction efforts • 3.0% when measured as percent of s
Slide 15: Adjusted operating income
Adjusted operating income (1)(2) • $15.7 million, or 4.2% of net sales • Last year’s adjusted result of $18.7 million, or 4.4% of net sales (1) Adjusted Operating Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results in the supplementary information. (2) Beginning in Q1’25, Adju
Slide 16: Other income and expense
Other income and expense • In the third quarter, other income and expense was expense of $4.6 million • Last year was expense of $6.3 million • Reduction driven by lower interest expense – down 50% year-over-year Lasting relationships. Global success. Kimball Electronics | 16
Slide 17: Effective tax rate
Effective tax rate • In the third quarter, the effective tax rate was 46.6%, compare to 52.4% in Q3 of fiscal 2024 • Q3 rate this year driven by the limitation of tax deductibility of interest expense which cannot exceed a certain percentage of domestic EBIT • Withholding taxes on global cash repatr
Slide 18: Adjusted net income and adjusted diluted EPS
Adjusted net income and adjusted diluted EPS (1)(2) (1) Adjusted Net Income and Adjusted Diluted EPS are Non-GAAP measures – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. (2) Beginning in Q1’25, Adjusted Net Income and Adjusted Diluted EPS exclude
Slide 19: Balance sheet
Balance sheet • Cash and cash equivalents at March 31, 2025, were $51.4 million • Cash flow from operating activities in the quarter was $30.9 million, our fifth consecutive quarter of positive cash flow • Cash conversion days were 99 days, compared to 110 days in Q3 of FY2024, and 107 days last qua
Slide 20: Inventory ended the quarter at $296.6 million
Inventory ended the quarter at $296.6 million • Represents a $9.6 million reduction compared to Q2 • ~$100 million, or 25%, lower than a year ago • Consigned inventory sale did not contribute to the reduction • Inventory was consigned to KE and required movement into our possession with an immediate
Slide 21: Capital expenditures were $4.0 million
Capital expenditures were $4.0 million (1) • Capex will likely be at the low end of the guidance range (1) Capital Expenditures include purchases of capitalized software. Lasting relationships. Global success. Kimball Electronics | 21
Slide 22: Debt
Debt • Borrowings at March 31, 2025, were $178.8 million • $26.2 million reduction from the second quarter • Down $116 million, or 40%, from the beginning of the fiscal year • Short-term liquidity available totaled $304.6 million at the end of the third quarter Lasting relationships. Global success.
Slide 23: Share repurchases
Share repurchases • Invested $3 million to repurchase 175,000 shares • Since October 2015, under our Board authorized share repurchase program: • A total of $100.7 million returned to Share Owners by repurchasing 6.5 million shares of common stock • $19.3 million remaining on the repurchase program
Slide 24: Reiterating guidance for fiscal year 2025
Reiterating guidance for fiscal year 2025 • Net sales expected to be in the range of $1.4 to $1.44 billion • Adjusted operating income of 3.4% to 3.6% of net sales • Capital expenditures of $40 to $50 million • Expect to be at the high-end of the ranges for sales and adjusted operating income • Cont
Slide 25: Current tariff environment filled with uncertainty and unpredictability
Current tariff environment filled with uncertainty and unpredictability • Continue to monitor the situation to understand potential impacts – and possible solutions – for both the short, and longer, term • Options could include: • Changing final delivery locations • Shifting production to different
Slide 26: Uncertainty makes timing of a recovery to core EMS business increasingly more difficult to predict
Uncertainty makes timing of a recovery to core EMS business increasingly more difficult to predict • Recent steps we’ve taken to reposition the Company: • Divested the non-core AT&M business • In the process of closing our Tampa facility to streamline our network • Made major workforce and other cos
Slide 27: Questions
Questions Lasting relationships. Global success. Kimball Electronics | 27
Slide 28: Appendix
Appendix Lasting relationships. Global success. Kimball Electronics | 28
Slide 29: Reconciliation of non-GAAP results
Reconciliation of non-GAAP results (Unaudited, Amounts in Thousands, Except Per Share Data) Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Net Sales Growth (vs. same quarter in prior year) 33 % 8 % (4) % (12) % (13) % (15) % (15) % (12) % Foreign Currency Exchange Impact — % 1 % 1 % — % — % — % — %
Slide 30: Reconciliation of non-GAAP results continued….
Reconciliation of non-GAAP results continued…. (Unaudited, Amounts in Thousands, Except Per Share Data) Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Operating Income (GAAP) (TTM) $ 87,729 $ 93,648 $ 92,769 $ 61,118 $ 49,277 $ 38,902 $ 30,522 $ 48,669 Add: Goodwill Impairment (TTM) — — — 5,820 5,8
Slide 31: Net Sales in Automotive
Net Sales in Automotive (1) (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 Lasting relationships. Global success. Kimball E
Slide 32: Net Sales in Medical
Net Sales in Medical (1) (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. Q3’25 includes $24 million of non-recurring consig
Slide 33: Net Sales in Industrial
Net Sales in Industrial (1) (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 Lasting relationships. Global success. Kimball E
Slide 34: For more information, please contact:
For more information, please contact: Andy Regrut Treasurer and Investor Relations Officer 812.827.4151 andy.regrut@kimballelectronics.com Lasting relationships. Global success. Kimball Electronics | 34