Slide 1: Fourth Quarter and Full Year Fiscal 2022 Results
Fourth Quarter and Full Year Fiscal 2022 Results Quarter Ended June 30, 2022 Supplementary Information to the August 5, 2022, 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 2023 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 Jana Andy Charron Croom Regrut CHA I R MA N A N D CHI E F F I N A NCI AL OF F I CE R V I C E P R ESID ENT, CHI E F E X ECUTI VE OF F I CE R I N V ESTOR R E L ATIONS 3
Slide 4: Very pleased with Q4 and full year fiscal 2022 results
Kimball Electronics (Nasdaq: KE) Very pleased with Q4 and full year fiscal 2022 results… • For the second consecutive quarter, net sales reached an all-time high for the company… • Operating income margin exceeded 5% • These results were in-line with the guidance we provided in May • Highest level o
Slide 5: Fiscal 2022 was very much the bifurcated year we expected
Kimball Electronics (Nasdaq: KE) In total, fiscal 2022 was very much the bifurcated year we expected • Strong second half driving annual revenue to record levels • The world continues to experience unprecedented events and circumstances • The lockdowns associated with China’s zero-tolerance policy o
Slide 6: Embracing the ever-changing landscape with commitment and resolve
Kimball Electronics (Nasdaq: KE) Our company is embracing the ever-changing landscape with commitment and resolve • Engaging in customer collaboration at levels even higher than our award-winning norm • Strong customer partnerships have produced several business wins, along with expansions of existi
Slide 7: Net sales in the fourth quarter totaled $373 million
Kimball Electronics (Nasdaq: KE) Net sales in the fourth quarter totaled $373 million, a 13% increase compared to Q4 last year Net Sales $373 $329 +13% Q4 ‘21 Q4 ‘22 FX unfavorably impacted sales by 3% in Q4 All 4 vertical markets reported increases in the quarter 7
Slide 8: Automotive net sales were $152 million, up 7%
41% Kimball Electronics (Nasdaq: KE) OF Q4 REVENUE Net sales in the Automotive vertical market were $152 million, a 7% increase compared to Q4 last year • Fiscal 2022 was a record year for Automotive: Automotive • Net sales topping $580 million $152 $142 • Representing a 6% increase compared to FY21
Slide 9: Medical sales were $114 million, up 34%
30% Kimball Electronics (Nasdaq: KE) OF Q4 REVENUE Sales in Medical were $114 million, a 34% increase compared to Q4 last year • Fiscal 2022 was a year of recovery for Medical: Medical • Net sales topping $392 million $114 • Representing a 2% increase compared to FY21 $85 • Applications supporting:
Slide 10: Industrial sales totaled $88 million, up 2%
24% Kimball Electronics (Nasdaq: KE) OF Q4 REVENUE Sales in the Industrial vertical market totaled $88 million, a 2% increase compared to Q4 last year Industrial • Fiscal 2022 for Industrial: $87 $88 • Net sales exceeded $300 million • Representing a 5% increase compared to FY21 +2% • Products for c
Slide 11: Public Safety sales were $14 million, up 33%
4% Kimball Electronics (Nasdaq: KE) OF Q4 REVENUE Sales in the Public Safety vertical market were $14 million, a 33% increase compared to Q4 last year • Fiscal 2022 for Public Safety: Public Safety • Net sales totaled $50 million +33% • Representing a 4% increase compared to FY21 $11 $14 • Growth dr
Slide 12: Summary
Kimball Electronics (Nasdaq: KE) Summary • Another excellent quarter of record-setting top line growth • Operating margin in excess of 5% • Net sales adversely affected by strengthening US dollar • Foreign exchange also unfavorably impacted earnings • Estimate $0.12 per diluted share in non-operatin
Slide 13: Net sales were $373 million, an all-time quarterly high
Kimball Electronics (Nasdaq: KE) Net sales were $373 million, an all-time quarterly high +13% from Q4'21 Overview Net Sales Trend • Sales were 1.5% higher than the previous record • Very encouraging trend 13
Slide 14: Gross margin rate of 9.2%
Kimball Electronics (Nasdaq: KE) Gross margin rate of 9.2%, a 50 bps decrease compared to the same period last year Drivers of GM% Gross Margin Trend • Very strong result while facing several headwinds • Low absorption in our facility in China, which was most directly impacted by the lockdowns for t
Slide 15: Adjusted Selling & Administrative Expense
Kimball Electronics (Nasdaq: KE) Adjusted Selling & Administrative Expense (1) • Adjusted selling and administrative expenses were $14.8 million • Increase from Q4 last year driven by: • Higher salary and related payroll costs • Stock-based compensation • When measured as a percent of sales, adjuste
Slide 16: Adjusted Operating Income
Kimball Electronics (Nasdaq: KE) Adjusted Operating Income (1) (1) Adjusted Operating Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. 16
Slide 17: Other income & expense
Kimball Electronics (Nasdaq: KE) Other income & expense • Expense of $5.3 million in the fourth quarter • Compares to income of $0.4 million in Q4 of fiscal 2021 • Change resulting from: • Higher interest expense this year due to record levels of inventory • Foreign exchange impact • Strengthening o
Slide 18: Effective tax rate in Q4 was ~35.1%
Kimball Electronics (Nasdaq: KE) The effective tax rate in Q4 was ~35.1% compared to 17.6% in Q4 last year • Increase resulting from foreign exchange remeasurement • Non-deductible executive compensation expense associated with Section 162(m) • Q4 last year benefited from a reversal of a state tax v
Slide 19: 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. 19
Slide 20: Balance Sheet
Kimball Electronics (Nasdaq: KE) Balance Sheet • Cash and cash equivalents were $49.9 million at June 30, 2022 • Cash flow provided by operating activities was $1.5 million in the fourth quarter of fiscal 2022 • For the full year, cash used from operating activities was $83 million • Cash conversion
Slide 21: Share repurchases
Kimball Electronics (Nasdaq: KE) Share repurchases • During the fourth quarter, we invested $4.2 million to repurchase 225,000 shares, at an average share price of $18.77 • Since October 2015, under our Board authorized share repurchase program: • A total of $88.8 million returned to Share Owners by
Slide 22: In summary, fiscal 2022 was a good year
Kimball Electronics (Nasdaq: KE) In summary, fiscal 2022 was a good year… • Record results on the top line • Strong funnel of new business increasing our backlog of open orders • Executed a capital deployment strategy: • Investing in future growth with expansions at multiple facilities • Returning c
Slide 23: Guidance for fiscal year 2023
Kimball Electronics (Nasdaq: KE) Guidance for fiscal year 2023 Net sales estimated to be in the range of $1.6 - $1.7 Net sales range billion, a 19% - 26% increase compared to fiscal 2022 $1.6 - $1.7 billion Increase compared to fiscal 2022 Operating income margin of 4.6% - 5.2% 19% - 26% in net sale
Slide 24: Closing comments
Kimball Electronics (Nasdaq: KE) Closing comments • Proud of our accomplishments in fiscal 2022 • The company is ideally positioned for growth in fiscal 2023 • Facility expansion in Mexico is complete • Construction completed on budget and on time • Doubles capacity • Recently broke ground on facili
Slide 25: Promising growth opportunities in Automotive
Kimball Electronics (Nasdaq: KE) Promising growth opportunities in Automotive… • “Electric-fication” of vehicles • Electronic content being added at an increasing rate • Advanced technologies and expanded operating systems that require stringent production standards, and compliance with industry-reg
Slide 26: Industry megatrends in Medical suggest excellent growth opportunities
Kimball Electronics (Nasdaq: KE) Industry megatrends in Medical suggest excellent opportunities for growth • Aging population • Accessibility & affordability to healthcare increases • Trends toward smaller device sizes, with higher levels of precision and accuracy • Connected drug delivery systems •
Slide 27: Industrial also has an excellent set-up for growth
Kimball Electronics (Nasdaq: KE) Industrial also has an excellent set-up for growth • Green & Clean: • Consumer trends are raising awareness on consumption of natural resources • Objective of increasing conservation of water, gas, and electricity • Synergistic opportunity to combine Public Safety in
Slide 28: Each vertical market is critical toward achieving our goals
Kimball Electronics (Nasdaq: KE) Each vertical market is critical toward achieving our goals • Double-digit top line growth in our guidance for fiscal 2023 • Longer term target of $2 billion in annual revenue • At the center of our success if our team • Special thanks to Kimball family – worldwide –
Slide 29: Q&A
Q&A
Slide 30: Appendix
Appendix ee
Slide 31: Reconciliation of Non-GAAP Results
Kimball Electronics (Nasdaq: KE) Reconciliation of Non-GAAP Results (Unaudited, Amounts in Thousands, Except Per Share Data) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Selling & Administrative Expenses, as reported $ 13,117 $ 13,486 $ 11,744 $ 14,357 $ 12,204 $ 13,923 $ 13,667 $ 13,643 Less: SE
Slide 32: Net Sales by Vertical Market
Kimball Electronics (Nasdaq: KE) Net Sales by Vertical Market 32
Slide 33: Net Sales Automotive Vertical Market
Kimball Electronics (Nasdaq: KE) Net Sales Automotive Vertical Market +7% from Q4'21 33
Slide 34: Net Sales Medical Vertical Market
Kimball Electronics (Nasdaq: KE) Net Sales Medical Vertical Market +34% from Q4'21 34
Slide 35: Net Sales Industrial Vertical Market
Kimball Electronics (Nasdaq: KE) Net Sales Industrial Vertical Market +2% from Q4'21 35
Slide 36: Net Sales Public Safety Vertical Market
Kimball Electronics (Nasdaq: KE) Net Sales Public Safety Vertical Market +33% from Q4'21 36
Slide 37: Return on Invested Capital
Kimball Electronics (Nasdaq: KE) Return on Invested Capital (1) (2) (1) We define ROIC as after-tax adjusted operating income for the trailing twelve months divided by average invested capital for the last five quarters. (2) ROIC is a Non-GAAP measure - refer to Reconciliation of Non-GAAP Results on
Slide 38: Operating Cash Flow
Kimball Electronics (Nasdaq: KE) Operating Cash Flow 38
Slide 39: Capital Expenditures and Depreciation & Amortization
Kimball Electronics (Nasdaq: KE) Capital Expenditures and Depreciation & Amortization (1) (1) Capital Expenditures include purchases of capitalized software. 39