On August 14, 2024, Kimball Electronics Inc (KE, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year ended June 30, 2024. Kimball Electronics Inc is a contract electronic manufacturing services company engaged in producing durable electronics for the automotive, medical, industrial, and public safety end markets. The company derives a majority of its revenue from the United States.
Performance Overview
Kimball Electronics Inc (KE, Financial) reported net sales of $430.2 million for Q4 2024, a 13% decline from $496.1 million in Q4 2023. The company's operating income for the quarter was $19.6 million, or 4.6% of net sales, compared to $31.4 million, or 6.3% of net sales, in the same period last year. Adjusted operating income stood at $20.9 million, or 4.9% of net sales.
For the fiscal year 2024, net sales totaled $1.714 billion, down 6% from $1.823 billion in fiscal year 2023. Operating income for the year was $49.3 million, or 2.9% of net sales, compared to $87.7 million, or 4.8% of net sales, in the previous year. Adjusted operating income was $74.3 million, or 4.3% of net sales.
Financial Achievements and Challenges
Despite the challenging market conditions, Kimball Electronics Inc (KE, Financial) achieved several financial milestones. The company generated $48.5 million in cash flow from operating activities during Q4, driven by inventory reductions. For the fiscal year, cash flow from operating activities was $73 million, and inventory reductions amounted to $112 million, or 25% year-over-year.
However, the company faced significant challenges, including a decline in net sales across its key vertical markets. Automotive sales decreased by 7% in Q4 and 2% for the fiscal year. Medical sales dropped by 17% in Q4 and 15% for the fiscal year. Industrial sales fell by 19% in Q4 and 3% for the fiscal year.
Income Statement Highlights
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Sales | $430.2M | $496.1M | $1.714B | $1.823B |
| Operating Income | $19.6M | $31.4M | $49.3M | $87.7M |
| Adjusted Operating Income | $20.9M | $31.4M | $74.3M | $87.7M |
| Net Income | $7.5M | $19.2M | $20.5M | $55.8M |
| Diluted EPS | $0.30 | $0.76 | $0.81 | $2.22 |
| Adjusted Diluted EPS | $0.33 | $0.76 | $1.42 | $2.23 |
Commentary and Future Outlook
"Q4 was another quarter focused on ‘controlling what we can control’. The operating environment for the EMS industry remains challenged and many contract manufacturing organizations, Kimball included, have adjusted expectations on continued weakness in end market demand," said Richard D. Phillips, Chief Executive Officer.
Looking ahead, Kimball Electronics Inc (KE, Financial) has provided guidance for fiscal year 2025, expecting net sales in the range of $1.440 billion to $1.540 billion, an 8% to 14% decline year-over-year when excluding net sales from the divested Automation, Test and Measurement business. Adjusted operating income is projected to be between 4.0% and 4.5% of net sales, with capital expenditures of $40 million to $50 million.
"Fiscal 2024 was hard fought with a challenging operating environment combined with divesting the AT&M business, which was not a small undertaking for our Company. Looking to fiscal 2025, we expect macro headwinds to persist," commented Jana T. Croom, Chief Financial Officer.
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Kimball Electronics Inc for further details.
