Slide 1: Investor Presentation May 2016
?Investor Presentation May 2016 Exhibit 99.1
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Certain statements contained within this presentation may be considered forward-looking under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties including, but not limited to, our ability to fully realize the expected benefits of t
Slide 3: Table of Contents
? TABLE OF CONTENTS Kimball Electronics Snapshot Why Invest in Kimball Electronics Strategic Plan Acquisition Strategy Financial Results
Slide 4: Snapshot
Headquartered in Jasper, Indiana with manufacturing locations in the U.S., Mexico, Poland, China, Thailand and Romania Differentiated package of value and well established in a growing niche of the Electronic Manufacturing Services (EMS) market A leading global EMS provider for high-quality, high-re
Slide 5: Why Invest in Kimball Electronics
Solid foundation for growth Poised to win market share Disciplined execution Committed to building long term shareholder value KIMBALL ELECTRONICS Why Invest in Kimball Electronics
Slide 6: Solid Foundation for Growth
WHY INVEST IN KIMBALL ELECTRONICS Solid Foundation for Growth 6 KIMBALL ELECTRONICS • Steady revenue sources from customers that have products with long life cycles. • Excellent service and customer scorecard performance. • Long standing relationships with well established customers. • Rock solid ba
Slide 7: Poised to Win Market Share
WHY INVEST IN KIMBALL ELECTRONICS Poised to Win Market Share 7 KIMBALL ELECTRONICS • As a more focused alternative • With a tightly integrated global footprint and CRM model designed for global support • With the right resources and capabilities that are aligned with the needs and preferences of our
Slide 8: Disciplined Execution
WHY INVEST IN KIMBALL ELECTRONICS Disciplined Execution 8 KIMBALL ELECTRONICS • Completed spin-off ahead of schedule and below budget. • Delivered solid results over the first six quarters as a standalone public company. • Remained focused on growth and margin improvement. Q2 15 Q3 15 Q4 15 Q1 16 Q2
Slide 9: Committed to Building Long Term Shareholder Value
WHY INVEST IN KIMBALL ELECTRONICS Committed to Building Long Term Shareholder Value 9 KIMBALL ELECTRONICS • Incentive based compensation based on return on invested capital (ROIC). • Disciplined approach to capital deployment and cash cycle management. • Committed to strong cash flow from operations
Slide 10: Strategic Plan
KIMBALL ELECTRONICS Strategic Plan COMMUNICATION & COLLABORATION PEOPLE & SYSTEMS OPERATIONAL EXCELLENCE GROWTH & DIVERSIFICATION 10 KIMBALL ELECTRONICS
Slide 11: Kimball Electronics
a |, . <> Kimball Electronics
Slide 12: Worldwide EMS Industry Revenue Forecast
COMPELLING INDUSTRY DYNAMICS: Worldwide EMS Industry Revenue Forecast 2014-2018 CAGR EMS Sector 5% ODM Sector 3% Source: IDC EMS: Electronic Manufacturing Services–contract manufacturers who provide outsourcing services ODM: Original Design Manufacturing–provide design services, support and products
Slide 13: Sector Opportunities
COMPELLING INDUSTRY DYNAMICS: Sector Opportunities AUTOMOTIVE EMS sector forecasted to grow at a 8.5% CAGR from 2014 – 2018 driven by expansion of electronic dashes and advanced driver assistance systems (“ADAS”) as well as demand in emerging markets. 8.5% CAGR GROWTH 13 KIMBALL ELECTRONICS MEDICAL
Slide 14: Establishing a More Balanced Portfolio
DIVERSIFIED AND ATTRACTIVE END MARKETS Establishing a More Balanced Portfolio 14 KIMBALL ELECTRONICS AUTOMOTIVE 37% • Electronic Power Steering • Anti-lock Brakes • Occupant Safety • Telematics • Thermal Imaging • Fire Detection • Defense • Security PUBLIC SAFETY 7% MEDICAL 30% • Sleep Therapy and R
Slide 15: Automotive Market
Our Automotive market team manufactures assemblies for power steering controls that boost performance, improve driver safety and will one day help make autonomous driving a common feature in automobiles. DIVERSIFIED AND ATTRACTIVE END MARKETS Automotive Market 15 KIMBALL ELECTRONICS 5 Facilities Wor
Slide 16: Medical Market
We produce electronic assemblies which help drive critical, life-saving devices — such as automated external defibrillators — that diagnose and resuscitate patients. DIVERSIFIED AND ATTRACTIVE END MARKETS Medical Market 16 KIMBALL ELECTRONICS 30% • Sleep Therapy and Respiratory Care • Patient Monito
Slide 17: Industrial Market
We manufacture electronic assemblies for HVAC applications that improve energy efficiency while maintaining reliable performance. DIVERSIFIED AND ATTRACTIVE END MARKETS Industrial Market 17 KIMBALL ELECTRONICS 2 MILLION+ high efficiency pump controls manufactured globally in fiscal year 2015 24% • C
Slide 18: Public Safety Market
Our Public Safety team supports our customers’ needs by assembling electronics that are critical to protecting lives, equipment and facilities. DIVERSIFIED AND ATTRACTIVE END MARKETS Public Safety Market 18 KIMBALL ELECTRONICS 1 MILLION+ safety assemblies shipped worldwide in fiscal year 2015 7% • T
Slide 19: End Market Evolution
DIVERSIFIED AND ATTRACTIVE END MARKETS End Market Evolution 19 KIMBALL ELECTRONICS Automotive 82% Medical 5% Industrial 11% Public Safety 2% Automotive 37% Medical 30% Industrial 24% Public Safety 7% Other 2% FY 2004 FY 2015
Slide 20: Blue Chip Customer Base
BLUE CHIP CUSTOMER BASE Reputation Comes from the Company You Keep 20 KIMBALL ELECTRONICS Healthcare Healthcare Medical
Slide 21: Operational Excellence
Kimball Electronics Operational Excellence
Slide 22: Global Manufacturing Footprint
KEMX Reynosa, Mexico KETA Tampa, FL KEJ Jasper, IN KEPS Poznan, Poland KETL Laem Chabang, Thailand KECN Nanjing, China KERO Timisoara, Romania 22 KIMBALL ELECTRONICS 4,300+ Employees Worldwide 1,160,000 sq. ft. Total Facility Square Footage KEIND Indianapolis, IN KIMBALL ELECTRONICS Global Manufactu
Slide 23: Romania
23 KIMBALL ELECTRONICS ? • Announced in early 2015 as our Poland operation started to approach full capacity. • Completed construction of the 66,200 sq. ft. facility in November, 2015. • Implemented ERP system and passed ISO certification audit. • Hosted several existing and new customer audits. • R
Slide 24: Best-in-Class Manufacturing Operations
KIMBALL ELECTRONICS Best-in-Class Manufacturing Operations 24 KIMBALL ELECTRONICS Disciplined quality management system that is certified to global standards and compliant with various regulatory requirements. Common business operating system supported by one ERP system, global processes and procedu
Slide 25: International Quality System Certifications
KIMBALL ELECTRONICS International Quality System Certifications 25 KIMBALL ELECTRONICS ISO 9001 CERTIFIED ISO 13485 CERTIFIED ????????? ISO/TS 16949 CERTIFIED ??????????? ITAR COMPLIANT ????????????????????? FDA REGISTERED ????????? ISO 14001 CERTIFIED ????????????????
Slide 26: People & Systems
= Kimball Electronics t People & Systems ,
Slide 27: People & Systems
? 27 KIMBALL ELECTRONICS KIMBALL ELECTRONICS People & Systems Our guiding principles and company culture are keys to our ability to attract and retain talent and deliver award winning service. Our incentive based compensation philosophy based on the principles of economic value add (ROIC) drives ali
Slide 28: Communication & Collaboration
?Communication & Collaboration
Slide 29: Communication & Collaboration
29 KIMBALL ELECTRONICS ? KIMBALL ELECTRONICS Communication & Collaboration Communicate openly through candid feedback (e.g. scorecards, periodic reviews). Enhance our world through corporate social responsibility leadership. Improve communication, productivity, and collaboration through the implemen
Slide 30: Acquisition Strategy
? KIMBALL ELECTRONICS Acquisition Strategy 30 KIMBALL ELECTRONICS Expand our capabilities and total package of value. 1 PRIMARY FOCUS Expand our global footprint to establish local support for our customers. 2 SECONDARY FOCUS KEY CRITERIA • New capabilities • Alignment with our four end-market strat
Slide 31: Medivative Acquisition
? KIMBALL ELECTRONICS Medivative Acquisition 31 KIMBALL ELECTRONICS Medivative Technologies is an Indianapolis-based contract manufacturing company that provides design, manufacturing, and supply chain services to a variety of medical and bioscience customers. • Closed on May 2, 2016. • Acquisition
Slide 32: Medivative Acquisition Capabilities
KIMBALL ELECTRONICS Medivative Acquisition 32 KIMBALL ELECTRONICS ? Adds strategic capabilities and experience in: Mechanical Design • Precision Plastics • Combination Devices Complex System Assembly • Instruments Adds strategic relationships with a number of well-known medical and bioscience custom
Slide 33: Kimball Electronics Financial Overview
?Kimball Electronics Financial Overview
Slide 34: Financial Overview: Net Sales
34 KIMBALL ELECTRONICS ? FINANCIAL OVERVIEW Net Sales $190 $195 $200 $205 $210 $215 $220 Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16 $199 $204 $208 $207 $201 $200 $207 $214 +4% from Q3’15 IN MILLIONS (Unaudited)
Slide 35: Net Sales Mix by Vertical Market
35 KIMBALL ELECTRONICS ? FINANCIAL OVERVIEW Net Sales Mix by Vertical Market ???? ???? ???? ???? ???? ???? ???? ???? 28% 30% 30% 29% 29% 29% 29% 31% ???? ???? ???? ???? ???? ???? ???? ???? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Aut
Slide 36: Gross Margin %
36 KIMBALL ELECTRONICS ? FINANCIAL OVERVIEW Gross Margin % (Unaudited) 9.1% 8.8% 8.6% 9.2% 8.8% 7.6% 7.8% 7.6% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16 % OF SALES
Slide 37: Selling & Administrative Expense (%)
37 KIMBALL ELECTRONICS ? FINANCIAL OVERVIEW Selling & Administrative Expense (%) (Excludes spin-off costs*) 4.5% 4.5% 3.8% 3.8% 4.3% 4.1% 4.5% 4.3% 3.4% 3.6% 3.8% 4.0% 4.2% 4.4% 4.6% Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16 % OF SALES *Spin-off costs excluded by quarter were Q4’14 - $
Slide 38: Adjusted Operating Income
? Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16 Adj Op Income % of Net Sales IN MILLIONS % OF SALES (Unaudited) $9.2 $8.8 $10.0 $11.1 $9.1 $7.1 $6.9 $7.1 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 4.6% 4.3% 4.8% 5.4% 4.5% 3.5% 3.3% 3.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 38 KIMBALL ELECTRONICS F
Slide 39: Adjusted Net Income
? Note: Q3’16 includes a $1.8 million discrete foreign tax benefit related to the capitalization of our Romania subsidiary; Adjusted Net Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide. IN MILLIONS Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16
Slide 40: Adjusted EBITDA
? $13.4 $13.0 $15.0 $15.0 $13.7 $11.2 $11.2 $11.9 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 40 KIMBALL ELECTRONICS FINANCIAL OVERVIEW Adjusted EBITDA (Unaudited) (Excludes spin-off costs) Note: Adjusted EBITDA is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final sl
Slide 41: Operating Cash Flow
? $6.4 -$4.5 $8.0 $7.7 $16.8 -$0.5 $16.8 $11.7 -$10.0 -$5.0 $0.0 $5.0 $10.0 $15.0 $20.0 41 KIMBALL ELECTRONICS FINANCIAL OVERVIEW Operating Cash Flow (Unaudited) IN MILLIONS Q4 ‘14 Q1 ‘15 Q2 ‘15 Q3 ‘15 Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16
Slide 42: Capital Expenditures and Depreciation & Amortization
? 42 FINANCIAL OVERVIEW Capital Expenditures and Depreciation & Amortization (Unaudited) KIMBALL ELECTRONICS IN MILLIONS $6.9 $7.9 $9.0 $6.1 $13.9 $11.3 ????? $8.6 $3.0 $5.0 $7.0 $9.0 $11.0 $13.0 $15.0 $4.6 $4.8 $5.0 $4.8 $5.0 $4.9 $4.9 $4.6 Depr & Amort Note: Capital Expenditures include purchases
Slide 43: Reconciliation of Non-GAAP Results
? 43 KIMBALL ELECTRONICS FINANCIAL OVERVIEW Reconciliation of Non-GAAP Results (Unaudited) Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Operating Income, as Reported $ 7,721 $ 7,787 $ 8,697 $ 10,821 $ 9,050 $ 6,921 $ 6,933 $ 7,078 Add: Spin-off Expenses 1,431 964 1,285 321 24 137 0 0 Adjusted Ope