Slide 1: First Quarter Fiscal 2022 Results
First Quarter Fiscal 2022 Results Quarter Ended September 30, 2021 Supplementary Information to November 4, 2021 Earnings Conference Call & Webcast
Slide 2: Safe Harbor Statement
Kimball Electronics (Nasdaq: KE) Safe Harbor Statement Certain statements contained within this supplementary information, including our fiscal year 2022 guidance, and any statements made during our earnings conference call today may be considered forward-looking under the Private Securities Litigat
Slide 3: Today's speakers
Kimball Electronics (Nasdaq: KE) Today’s speakers • Don Charron - Chairman & CEO • Jana Croom - Vice President, CFO • Andy Regrut - Head of Investor Relations 3
Slide 4: Difficult operating environment in Q1 due to global supply chain issues
Kimball Electronics (Nasdaq: KE) Difficult operating environment in Q1 due to global supply chain issues • Component shortages, which are impacting companies worldwide, continue to make it challenging to keep pace with strong market demand • Disappointed by the lack of improvement in the overall sit
Slide 5: Our lost absorption was more significant than original estimates
Kimball Electronics (Nasdaq: KE) Our lost absorption was more significant than original estimates • Committed to retaining our experienced and talented workforce around the world • View these disruptions as a short-term issue • Our funnel of new product introductions remains strong 5
Slide 6: Reiterating guidance for fiscal year 2022
Kimball Electronics (Nasdaq: KE) Reiterating guidance for fiscal year 2022 • Continue to experience a shift in a significant portion of our shippable backlog, as customer demand exceeds parts availability • Well-positioned to ramp production on our record backlog • Preparing to run at maximum capaci
Slide 7: Net sales decreased 12% compared to the same period last year
Kimball Electronics (Nasdaq: KE) Net sales decreased 12% compared to the same period last year Net Sales $332 $293 (12%) Q1 ‘22 Q1 ‘21 The decline occurred in 3 of 4 vertical markets 7
Slide 8: Sales in the Automotive vertical market increased 9%
Kimball Electronics (Nasdaq: KE) Sales in the Automotive vertical market increased 9% Automotive • Automotive was the only vertical market with increasing $129 sales in Q1 $118 • This result could have been much stronger if we had the materials needed to fill these orders +9% • The growth in Q1 resu
Slide 9: Sales in the Medical vertical market decreased 33%
Kimball Electronics (Nasdaq: KE) Sales in the Medical vertical market decreased 33% Medical • Strong last year with our support of respiratory care $127 products needed to combat COVID-19 during the early months of the pandemic $85 • Elective procedures are still below pre-pandemic levels… the recov
Slide 10: Sales in the Industrial vertical market decreased 9%
Kimball Electronics (Nasdaq: KE) Sales in the Industrial vertical market decreased 9% Industrial • The decline resulted from lower sales in climate control and smart metering products $70 $64 • Both largely related to parts shortages (9%) Q1 ‘22 Q1 ‘21 10
Slide 11: Sales in the Public Safety vertical market decreased 16%
Kimball Electronics (Nasdaq: KE) Sales in the Public Safety vertical market decreased 16% Public Safety • Sales were $11.1 million in Q1 (16%) • Decline largely driven by part shortages $11 $13 Q1 ‘22 Q1 ‘21 11
Slide 12: Net sales declined 12% compared to Q1 2021
Kimball Electronics (Nasdaq: KE) Net sales declined 12% compared to Q1 2021 Net Sales Overview Net Sales Trend • Sales were $292.7 million, a 12% decrease compared Q1 last year • Foreign exchange rates favorably impacted sales by 1% 12
Slide 13: Gross margin rate of 5.3%, a 390 bps decline compared to Q1 2021
Kimball Electronics (Nasdaq: KE) Gross margin rate of 5.3%, a 390 bps decline compared to Q1 2021 Drivers of GM% Gross Margin Trend • Challenged by lower volumes related to the continued global parts shortage; impacting our absorption rate • Certain costs have increased this year… including wage inf
Slide 14: Adjusted Selling & Administrative Expense (%)
Kimball Electronics (Nasdaq: KE) Adjusted Selling & Administrative Expense (%) (1)(2) (1) Adjusted Selling & Administrative Expense is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. (2) Beginning in Q1’21, Adjusted Selling & Adm
Slide 15: Adjusted Operating Income
Kimball Electronics (Nasdaq: KE) Adjusted Operating Income (1)(2) (1) Adjusted Operating Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. (2) Beginning in Q1’21, Adjusted Operating Income excludes changes in the fair val
Slide 16: Adjusted Net Income and Adjusted Diluted EPS
Kimball Electronics (Nasdaq: KE) 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 on the final slide of this supplementary information. 16
Slide 17: Balance Sheet
Kimball Electronics (Nasdaq: KE) Balance Sheet • Cash and cash equivalents were $89.3 million at September 30, 2021 • Cash flow used for operating activities was $8.2 million in the first quarter of fiscal 2022 • Cash conversion days were 73 days, representing a 3 day improvement from Q1 2021, howev
Slide 18: Guidance for fiscal year 2022
Kimball Electronics (Nasdaq: KE) Guidance for fiscal year 2022 • Net sales in the range of $1.4 - $1.5 billion, an 8% - 16% increase compared to fiscal 2021 • Operating income expected to be 4.5% - 5.0% of net sales • CapEx of $60 - $70 million 18
Slide 19: Refreshed Investor Relations website
Kimball Electronics (Nasdaq: KE) Refreshed Investor Relations website 19
Slide 20: Closing comments
Kimball Electronics (Nasdaq: KE) Closing comments • The impact of the pandemic, and resulting materials shortages, coupled with global logistics issues and rising costs is presenting a unique set of challenges • Long-term perspective when running the business and view these headwinds as short term i
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix
Slide 23: Reconciliation of Non-GAAP Results
Kimball Electronics (Nasdaq: KE) Reconciliation of Non-GAAP Results (Unaudited, Amounts in Thousands, Except Per Share Data) Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Selling & Administrative Expenses, as reported $ $ 11,827 $ 9,624 11,391 $ $ 13,117 $ 13,486 $ 11,744 14,357 12,204 Less: SERP(