Kimball Electronics Reports Q2 Results; Company Updates Guidance for Fiscal 2024

  • Net sales totaled $421.2 million, a 4% decrease compared to the second quarter of fiscal 2023; foreign currency had a 1% favorable impact on net sales year-over-year
  • Operating income of $16.6 million, or 3.9% of net sales, compared to $17.5 million or 4.0% of net sales, in the same period last year
  • Adjusted operating income of $17.1 million, or 4.1% of net sales, compared to $17.8 million, or 4.1% of net sales, in the same period last year
  • Net income of $8.3 million, or $0.33 per diluted share, compared to $10.7 million, or $0.43 per diluted share, in the second quarter of fiscal 2023

Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the second quarter of fiscal 2024.

Three Months Ended

Six Months Ended

December 31,

December 31,

(Amounts in Thousands, except EPS)

2023

2022

2023

2022

Net Sales

$

421,235

$

436,696

$

859,316

$

842,585

Operating Income

$

16,610

$

17,489

$

36,100

$

31,060

Adjusted Operating Income (non-GAAP) (1)

$

17,094

$

17,829

$

36,407

$

31,165

Operating Income %

3.9

%

4.0

%

4.2

%

3.7

%

Adjusted Operating Income (non-GAAP) %

4.1

%

4.1

%

4.2

%

3.7

%

Net Income

$

8,290

$

10,720

$

19,044

$

20,229

Adjusted Net Income (non-GAAP) (1)

$

8,290

$

10,999

$

19,044

$

20,508

Diluted EPS

$

0.33

$

0.43

$

0.75

$

0.81

Adjusted Diluted EPS (non-GAAP) (1)

$

0.33

$

0.44

$

0.75

$

0.82

(1) A reconciliation of GAAP and non-GAAP financial measures is included below.

Richard D. Phillips, Chief Executive Officer, stated, “As we expected, the second quarter of fiscal 2024 was hard fought, with our team navigating a challenging operating environment. Global macro headwinds have persisted, and the consumer is pulling back. The markets we serve are experiencing demand softening, and our customers are changing production schedules and delivery date requirements. Sales in Q2 declined compared to the same period last year, with manufacturing output in the quarter being reduced to meet the lower demand. Margins, on the other hand, remained stable, thanks in part to proactive measures taken to align our cost structure with slowing sales. We expect industry-wide pressures for the remainder of fiscal 2024, and we have updated our guidance for sales and operating income for the full year to reflect these trends.”

Mr. Phillips continued, “Based on what we know today, it seems likely the macro environment will remain challenging for some time. Despite this near-term choppiness, we did not change our guidance for capital expenditures in fiscal 2024 as we continue to invest in long-term growth opportunities. With a strong funnel of new business supported by favorable industry megatrends, we’re deploying a balanced capital allocation strategy focused on organic growth, global expansion, and long-lasting customer relationships.”

The Company ended the second quarter of fiscal 2024 with cash and cash equivalents of $39.9 million and borrowings outstanding on credit facilities of $321.8 million, including $235.0 million classified as long term, and $65.8 million of borrowing capacity available. Cash flow used from operating activities in the second quarter of fiscal 2024 was $30.7 million and capital expenditures were $13.2 million.

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