Slide 1: Second Quarter Fiscal 2026 Results
Second Quarter Fiscal 2026 Results Quarter Ended December 31, 2025 Supplementary Information to the February 5, 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
Today’s speakers • Opening comments • Financial results for the quarter • Guidance for fiscal 2026 • Closing comments Ric Phillips CEO • Q&A Jana Croom CFO Lasting relationships. Global success. Kimball Electronics | 3
Slide 4: Pleased with the results for the second quarter and updated guidance for fiscal 2026
Pleased with the results for the second quarter and updated guidance for fiscal 2026 • Sales in Q2 were in line with expectations • Highlighted by another quarter of strong double-digit, year-over- year, growth in the medical vertical • Margins improved compared to the same period last year • Cash f
Slide 5: Focus as a medical CMO continues to gain momentum
Focus as a medical CMO continues to gain momentum • Leverage our unique capabilities in the industry • Expect top-line growth in medical to outpace our other two verticals • Balance our portfolio across the markets we serve • Rebrand as Kimball Solutions • Grand opening of the new medical manufactur
Slide 6: Net sales for the Company were $341 million
Net sales for the Company were $341 million • A decline of 5% compared to Q2 last year • From an end market perspective: • Strong results in Medical • Offset by declines in Automotive and Industrial * Percentage decrease compared to Q2 of fiscal 2025 Lasting relationships. Global success. Kimball El
Slide 7: Sales in Medical were $96 million
Sales in Medical were $96 million • Up 15% compared to the same period last year • 28% of total company sales • 4th consecutive quarter of year-over-year revenue growth • ~½ of our medical business is in North America ** • Other ½ roughly split between Asia & Europe • Increase in Q2 was driven by gr
Slide 8: Medical vertical is compelling opportunity…
Medical vertical is compelling opportunity… • Diversify our top line • Leverage our core strengths as a trusted partner in complex and highly regulated industry • Megatrends expected to fuel growth: • Aging population • Increasing access & affordability to healthcare • Smaller medical devices requir
Slide 9: Our strategy…
Our strategy… • Align with new – and existing – blue chip customers in need of manufacturing capacity for products with long life cycles and high degrees of visibility • Great example is our new facility in Indianapolis • Celebrating the grand opening with a ribbon-cutting ceremony • Showcase our st
Slide 10: To compliment our organic growth…
To compliment our organic growth… • Actively pursuing targeted, disciplined, “tuck-in” acquisitions that could: • Bring new customers • Increase exposure to faster-growing end-markets • Expand our geographic reach • Add manufacturing capabilities including opportunities for vertical integration • To
Slide 11: Automotive sales of $162 million
Automotive sales of $162 million • Down 13% compared to the 2nd quarter of last year • 48% of total company sales • Decline driven by lower sales in North America • Result of the braking program transferred out of Reynosa in mid fiscal 2025 ** • Recent pressure in the US related to tariffs • Combine
Slide 12: Supported automotive market since the mid-80's
Supported automotive market since the mid-80’s • Very good business for us – generating strong cash flow when production volumes are at or above planned levels • Electronic steering and braking applications continue to be “sweet spot” • Advances such as steer by wire and brake by wire – or electroni
Slide 13: Sales in Industrial totaled $83 million
Sales in Industrial totaled $83 million • 5% decrease compared to Q2 last year • 24% of total company sales • Industrial business heavily concentrated in North America • Majority of the decline occurred with lower demand for HVAC systems ** • Partially offset by higher sales in Europe • Rebound of t
Slide 14: Net sales in the second quarter were $341.3 million
Net sales in the second quarter were $341.3 million • 5% decrease year-over-year • Foreign exchange had a 2% favorable impact • On a sequential basis, sales were down ~6% compared to Q1 • Decline primarily occurring in the Industrial vertical, driven by reduced sales in the North America climate con
Slide 15: Gross margin rate in the second quarter was 8.2%
Gross margin rate in the second quarter was 8.2% • 160 bps improvement compared to 6.6% in the same period of fiscal 2025 • Improvement driven by • Favorable mix • The closure of our Tampa facility • Favorable FX rates • Global restructuring efforts Lasting relationships. Global success. Kimball Ele
Slide 16: Adjusted selling & administrative expense (%)
Adjusted selling & administrative expense (%)(1) • Second quarter totaled $12.6 million • $2.5 million increase year-over-year • When measured as percent of sales the rate was 3.7% this year compared to 2.9% last year • Expense will be higher in FY26 as we make strategic investments in business tran
Slide 17: Adjusted operating income
Adjusted operating income (1) • $15.3 million, or 4.5% of net sales • Compares to last year’s adjusted result of $13.3 million, or 3.7% of net sales • Our improved guidance for adjusted operating income reflects the impact of higher sales as well as the S&A investments • New facility in Indianapolis
Slide 18: Other income and expense
Other income and expense • Expense of $3.8 million • Compared to $4.8 million of expense last year • Once again this quarter, interest expense drove the decrease, down 50% year-over-year Lasting relationships. Global success. Kimball Electronics | 18
Slide 19: Effective tax rate
Effective tax rate • 47.9%, compared to 1.2% last year • Higher rate driven by the impact of provision to tax return adjustments and a valuation allowance adjustment associated with the expected sale of the Tampa facility • For the full year of fiscal 2026, we continue to expect an effective tax rat
Slide 20: 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. v Global success. Kimball Electronics | 20
Slide 21: Balance sheet
Balance sheet • Cash and cash equivalents at December 31, 2025, were $77.9 million • Cash generated by operating activities in the quarter was $6.9 million, our eighth consecutive quarter of positive cash flow • Cash conversion days were 91, an 8-day increase compared to last quarter, but 16-day imp
Slide 22: Inventory ended the quarter at $281.7 million
Inventory ended the quarter at $281.7 million • Marginally higher than Q1 • Down $24.5 million - or 8% - from a year ago Lasting relationships. Global success. Kimball Electronics | 22
Slide 23: Capital expenditures were $18.2 million
Capital expenditures were $18.2 million (1) • Much of the spend on leasehold improvements in the new facility in Indianapolis (1) Capital Expenditures include purchases of capitalized software. Lasting relationships. Global success. Kimball Electronics | 23
Slide 24: Borrowings at December 31, 2025, were $154 million
Borrowings at December 31, 2025, were $154 million • Up $16 million from the first quarter • Down $51 million, or ~25%, from a year ago • Short-term liquidity totaled $363 million at the end of the second quarter Lasting relationships. Global success. Kimball Electronics | 24
Slide 25: Share repurchases
Share repurchases • Invested $4.3 million to repurchase 149,000 shares • Since October 2015, under our Board authorized share repurchase program: • A total of $109.5 million returned to Share Owners by repurchasing 6.8 million shares of common stock • $10.5 million remaining on the repurchase progra
Slide 26: Raising our guidance for fiscal 2026
Raising our guidance for fiscal 2026 • Net sales of $1.40 - $1.46 billion • Compares to our previous guidance of $1.35 - $1.45 billion • Adjusted operating income of 4.2% - 4.5% of net sales • Prior estimate was 4.0% - 4.25% • Capital expenditure guidance did not change with a range of $50 - $60 mil
Slide 27: Pleased with our raised outlook for the fiscal year
Pleased with our raised outlook for the fiscal year • Driven by strength in the medical vertical • Continue to monitor FY27, particularly in the North America automotive and industrial verticals • Consumer continues to respond to tariff impacts, changes in US tax subsidies, and economic concerns Las
Slide 28: 2026 is a year of milestones for our Company
2026 is a year of milestones for our Company • Romania celebrating 10-years of operations, China 20-years, and the 65th anniversary for the Enterprise • Celebrating this anniversary – and embracing our future –with a new company name - Kimball Solutions • Rebrand is a strategic move that reflects ou
Slide 29: Rebrand will occur in a phased rollout
Rebrand will occur in a phased rollout • Starting at locations across the global footprint beginning in July of 2026 • Completed when Company officially changes its name a year later • Pending Share Owners’ approval • This change – along with recent investments in Indianapolis – demonstrate our comm
Slide 30: Questions
Questions Lasting relationships. Global success. Kimball Electronics | 30
Slide 31: 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 | 31
Slide 32: Appendix
Appendix Lasting relationships. Global success. Kimball Electronics | 32
Slide 33: Reconciliation of non-GAAP results
Reconciliation of non-GAAP results (Unaudited, Amounts in Thousands, Except Per Share Data) Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Net Sales Growth (vs. same quarter in prior year) (15) % (12) % (12) % (2) % (5) % Foreign Currency Exchange Impact — % (1) % 1 % 1 % 2 % Constant Currency Growth (15) % (11) % (
Slide 34: Reconciliation of non-GAAP results continued…
Reconciliation of non-GAAP results continued…. (Unaudited, Amounts in Thousands, Except Per Share Data) Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Operating Income (GAAP) (TTM) $ 30,522 $ 48,669 $ 45,535 $ 50,874 $ 53,411 Add: Goodwill Impairment (TTM) 5,820 — — — — Add: Asset Impairment (Gain on Disposal) (TTM)
Slide 35: 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 36: 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 | 36
Slide 37: 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