Slide 1: Third Quarter Fiscal 2026 Results
Third Quarter Fiscal 2026 Results Quarter Ended March 31, 2026 Supplementary Information to the May 6, 2026, Earnings Conference Call & Webcast Lasting relationships. Global success. Kimball Electronics Confidential
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained within this supplementary information, including our fiscal year 2026 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 and Agenda
Today’s Speakers Agenda • Opening comments • Financial results for the quarter • Guidance for fiscal 2026 • Closing comments Ric Phillips Jana Croom • Q&A CEO CFO Lasting relationships. Global success. Kimball Electronics | 3
Slide 4: Results For The Third Quarter Were In-line With Expectations
Results For The Third Quarter Were In-line With Expectations • Sales increased sequentially when compared with Q2 • Driven by strong growth in our medical market • Margins remain solid • Cash from operations was positive for the ninth consecutive quarter • Expecting Q4 to be a good finish to the yea
Slide 5: Medical CMO Continues to be Key Part of Our Strategy
Medical CMO Continues to be Key Part of Our Strategy • Deliberate investments in our capabilities, operating capacity and commercial focus • When volumes ramp, we expect it to become a meaningful driver to both top line growth and margin expansion • Focus on inorganic growth as a possible complement
Slide 6: $353M Net Sales
Industrial 24% Medical 30% $353M Net Sales Automotive 46% • Increase of +3.4% compared to the prior quarter • Medical vertical up +10% • 6% decline compared to Q3 last year • All three market verticals were down • Q3 FY25 included $24M of non-recurring inventory sale in the medical market • Normaliz
Slide 7: $106M Medical Net Sales
Medical $106M Net Sales • 30% of our company, reaching nearly one third of our total portfolio • An important Milestone in our strategic objective to balance the verticals with a higher concentration of medical business • North America represented just under half of sales, with Asia and Europe split
Slide 8: Medical Remains a Compelling Opportunity to Diversify Our Top Line
Medical Remains a Compelling Opportunity to Diversify Our Top Line and Leverage Our Core Strengths • Strategic focus on supporting new and existing blue-chip customers in need of manufacturing capacity, keeping pace with the overall market growth with our state-of- the-art manufacturing facility in
Slide 9: $161M Automotive Net Sales
Automotive $161M Net Sales • Decline primarily in Asia and North America, partially offset by growth in Europe • Ramping new programs in steering and braking systems in Europe, up +20% in this quarter; we expect this strength to continue ** for the balance of ‘26 • Carefully monitoring electronic st
Slide 10: Industrial Net Sales $86M
Industrial Net Sales $86M • Lower demand for HVAC systems, mainly in North America • Decline in off highway equipment and green energy • Partially offset by higher sales in: • Public safety • Rebound of the smart metering business in ** Europe • May be impacted near-term by a protracted war in the M
Slide 11: Net Sales in the Third Quarter were $352.9 million
Net Sales in the Third Quarter were $352.9 million • (6%) decrease year-over-year • Foreign exchange +3% favorable impact • On a sequential basis, sales increased +3.4% • Driven by growth in the Medical vertical Lasting relationships. Global success. Kimball Electronics | 11
Slide 12: Gross Margin in the Third Quarter was 7.9%
Gross Margin in the Third Quarter was 7.9% • +70 bps improvement compared to 7.2% in Q3 fiscal year 2025 • Increase resulting from favorable mix • Offset by: • The ramp up of the medical CMO • A somewhat easier comparison as the inventory sales we experienced in Q3 of FY25 had very little margin • W
Slide 13: Adjusted Selling & Administrative Expense
Adjusted Selling & Administrative Expense(1) • Second quarter $13 million • +$1.8 million increase year-over-year • When measured as percent of sales the rate was 3.7% this year compared to 3.0% last year • Higher FY26 expense as we make strategic investments for the future • Business transformation
Slide 14: Adjusted Operating Income in the Third Quarter of 4.2%
Adjusted Operating Income in the Third Quarter of 4.2%(1) • $14.8 million, or 4.2% of net sales • Compares to last year’s adjusted result of $15.7 million, or 4.2% of net sales (1) Adjusted Operating Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results in the supplementary info
Slide 15: Other Income / Expense
Other Income / Expense • Expense of $3.0 million, compared to $4.6M of expense last year • Interest expense drove the decrease, down nearly 30% year-over-year Lasting relationships. Global success. Kimball Electronics | 15
Slide 16: Effective Tax Rate
Effective Tax Rate • 34.9%, compared to 46.6% last year • Q3 of last year was driven by the limitation of the tax deductibility of our interest expense • Cannot exceed a certain percentage of domestic EBIT • For the full year of fiscal 2026, we continue to expect an effective tax rate of approx. 30%
Slide 17: Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income and Adjusted Diluted EPS (1) (1) Adjusted Net Income and Adjusted Diluted EPS are Non-GAAP measures – refer to Reconciliation of Non-GAAP Results in the supplementary information. Lasting relationships. Global success. v Kimball Electronics | 17
Slide 18: Our Balance Sheet Remains Strong
Our Balance Sheet Remains Strong • Cash and cash equivalents at March 31, 2026, were $82.5 million • Cash generated by operating activities in the quarter was $14.9 million, our ninth consecutive quarter of positive cash flow • Cash conversion days were 90, 1-day improvement compared to last quarter
Slide 19: Inventory Ended the Quarter at $273.3 million
Inventory Ended the Quarter at $273.3 million • Reduction of $8.4M compared to Q2, and down $23.3 million - or 8% - from a year ago Lasting relationships. Global success. Kimball Electronics | 19
Slide 20: Capital Expenditures for the Quarter $14.4 million
Capital Expenditures for the Quarter $14.4 million (1) • Spend on leasehold improvements in the new facility in Indianapolis • Balanced by spend to support new programs in Europe • Expecting capex for fiscal year 2026 to be in the guidance range of $50-$60M (1) Capital Expenditures include purchases
Slide 21: Borrowings at March 31, 2026, were $163 million
Borrowings at March 31, 2026, were $163 million • Up $8.8 million from the second quarter • Down $15.8 million, or ~9%, from a year ago • Short-term liquidity totaled $358.5 million at the end of the third quarter • In April, we renewed our $300M revolver • Maintaining strong balance sheet to suppor
Slide 22: Share Repurchases
Share Repurchases • Invested $4.0 million to repurchase 165,000 shares • Since October 2015, under our Board authorized share repurchase program: • A total of $113.5 million returned to Share Owners by repurchasing 7 million shares of common stock • $6.5 million remaining on the repurchase program L
Slide 23: Affirming FY26 Guidance, Expect Adjusted OI Margin at High End
Affirming FY26 Guidance, Expect Adjusted OI Margin Range at the High End of the Range • Expecting a good finish to Q4: FY26 Guidance • Sales $370-$380M Sales $1.40-$1.46B • Adj OI margin 4.4%-4.6% Adj OI Margin 4.2%-4.5% Capital Investments $50-$60M Lasting relationships. Global success. Kimball Ele
Slide 24: Expecting a Good Finish to the Fiscal Year
Expecting a Good Finish to the Fiscal Year • Expecting another sequential increase in sales in Q4 • Medical Vertical continues to outpace the other two verticals • Monitoring impacts of the war in Iran • Higher freight and raw materials costs • Higher energy prices • Consumer sentiment Lasting relat
Slide 25: Looking Ahead
Looking Ahead • Evaluate strategic opportunities, that could accelerate the expansion of our medical CMO business • Strong inorganic growth potential • Established medical manufacturers – outside the US – seeking domestic market entry and scaled US production • Adding complementary capabilities such
Slide 26: Questions
Questions Lasting relationships. Global success. Kimball Electronics | 26
Slide 27: For more information, please contact:
For more information, please contact: Andy Regrut Vice President, Investor Relations, Strategic Development, and Treasurer 812–827–4151 andy.regrut@kimballelectronics.com 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) Q3'25 Q4'25 Q1'26 Q2'26 Q3'26 Net Sales Growth (vs. same quarter in prior year) (12) % (12) % (2) % (5) % (6) % Foreign Currency Exchange Impact (1) % 1 % 1 % 2 % 3 % Constant Currency Growth (11) % (13) % (3
Slide 30: Reconciliation of non-GAAP results continued
Reconciliation of non-GAAP results continued…. (Unaudited, Amounts in Thousands, Except Per Share Data) Q3'25 Q4'25 Q1'26 Q2'26 Q3'26 Operating Income (GAAP) (TTM) $ 48,669 $ 45,535 $ 50,874 $ 53,411 $ 53,450 Add: Asset Impairment (Gain on Disposal) (TTM) (788) (2,391) (1,251) (829) (833) Add: Restr
Slide 31: Net Sales in Automotive
Net Sales in Automotive (1) (1) Beginning in the first quarter of fiscal year 2026, sales to customers related to commercial transportation, previously included in the automotive vertical, are now reflected in the industrial vertical. Prior periods have been recast to conform to current period prese
Slide 32: Net Sales in Medical
Net Sales in Medical (1) (1) Q3’25 includes $24 million of non-recurring consignment inventory sales. Lasting relationships. Global success. Kimball Electronics | 32
Slide 33: Net Sales in Industrial
Net Sales in Industrial (1) (1) Beginning in the first quarter of fiscal year 2026, sales to customers related to commercial transportation, previously included in the automotive vertical, are now reflected in the industrial vertical. Prior periods have been recast to conform to current period prese