Kimball Electronics Earnings Call Transcript Disclosure
Kimball Electronics Reveals Financial Outlook for Fiscal 2026
In a recent conference call, Kimball Electronics, a leading provider of electronics manufacturing services, unveiled its financial outlook for the upcoming fiscal year.
The company expects a decline in net sales for fiscal 2026, with projected figures between $1.35 billion and $1.45 billion. This represents a 2% to 9% decrease from the fiscal 2025 levels, which stood at approximately $1.49 billion.
The decline in net sales is mainly due to ongoing revenue pressures, including the loss of a major automotive program. However, the shift to medical manufacturing is emphasized as a structural pivot toward higher-value, less commoditized business.
The call, which took place on Thursday, Aug. 14, 2025 at 10 a.m. ET, was led by Ric Phillips, Chief Executive Officer, and Jana Croom, Chief Financial Officer.
In terms of operating income, Kimball Electronics anticipates an adjusted operating income margin in the range of 4.0% to 4.25% of net sales. This is a slight decrease from the 4.1% margin achieved in fiscal 2025.
Capital expenditures are guided to approximately $50 million to $60 million for fiscal 2026. The initial $30 million of this outlay is planned for the new medical facility in Indianapolis, as part of their medical contract manufacturing expansion.
The new facility, spanning 300,000 square feet, is expected to have potential revenue capacity 'well in excess of half a billion'. Kimball Electronics is committed to pursuing this expansion and plans to continue generating positive cash flow, which they will deploy toward growing the medical CMO.
In the fourth quarter of fiscal 2025, Kimball Electronics reported net sales of $380.5 million, a 12% year-over-year decrease. The automotive segment accounted for $184 million of these sales, a 13% decline year over year. However, sequential revenue for Q4 fiscal 2025 increased by 2%.
Borrowings were $147.5 million as of Q4 fiscal 2025, down $31.3 million from the prior quarter and down $147.3 million or 50% from the beginning of the fiscal year. Short-term liquidity stood at $380.5 million at the end of Q4, representing a significant improvement in financial health.
The effective tax rate (GAAP) was 48.3% in Q4 fiscal 2025 and is guided to the low-30% range for fiscal 2026. The fiscal 2026 effective tax rate (GAAP) is projected in the low-30% range.
Kimball Electronics also announced that they have a sole source contract for final assembly with a large medical customer, with no second supplier. This is part of their strategy to focus on growth with blue-chip customers in the medical CMO space, with a focus on building a scalable platform and taking on more complex programs that align with their strengths.
The company is also committed to pursuing inorganic options in the drug delivery space to augment their capabilities where it makes strategic sense.
[1] - Source for financial information and context: Seeking Alpha - Kimball Electronics Q4 2025 Earnings Call Transcript [2] - Source for financial information and context: Yahoo Finance - Kimball Electronics Inc. (KBLB) Q4 2025 Earnings Call Transcript [3] - Source for financial information and context: GlobeNewswire - Kimball Electronics Reports Fourth Quarter and Full Year 2025 Results
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