Kimball Electronics, Inc. Reports First Quarter Fiscal 2022 Results; Reiterates Guidance for Fiscal Year 2022, Driven by Strong Second Half

• Net sales in the first quarter of fiscal 2022 totaled $292.7 million.
• Net income of $2.6 million, or $0.10 per diluted share.
• Adjusted non-GAAP net income of $1.5 million, or $0.06 per diluted share.

Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the first quarter ended September 30, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211103006226/en/

Donald D. Charron, Chairman and Chief Executive Officer, stated, “I am proud of our people, our company, and the results for Q1, considering the difficult operating environment caused by issues in the global supply chain. Component shortages, which are impacting companies worldwide, continue to make it challenging to keep pace with strong market demand. We were disappointed by the lack of improvement in the overall situation in the September ending quarter, when we were actually expecting some level of recovery. Conditions deteriorated in the period due to COVID related restrictions in Malaysia, and the worsening of the backlog in U.S. west coast ports.”

Mr. Charron continued, “While these supply chain challenges had a more significant impact on absorption than anticipated, we are committed to retaining our experienced and talented workforce around the world as we see these disruptions as a short-term issue. As supply constraints ease, we are well positioned to ramp production on our record backlog and support our strong funnel of new product introductions. We are reiterating our guidance for fiscal 2022, although the bifurcation between the first and second halves will be more pronounced.”

First Quarter Fiscal Year 2022 Overview

• Net sales decreased 12% compared to the first quarter of fiscal year 2021. Foreign currency had a favorable impact of 1% on net sales in the quarter compared to the same period a year ago.
• Cash flow used for operating activities of $8.2 million during the first quarter of fiscal 2022.
• Cash conversion days (“CCD”) for the quarter ended September 30, 2021 were 73 days, down from 76 days in the first quarter of fiscal year 2021. CCD is calculated as the sum of days sales outstanding plus contract asset days plus production days supply on hand less accounts payable days.
• Investments in capital expenditures were $12.7 million during the quarter.
• Cash and cash equivalents were $89.3 million and borrowings outstanding on credit facilities were $72.6 million at September 30, 2021, including $40.0 million classified as long term.

Fiscal Year 2022 Guidance

As part of today’s announcement, the Company is reiterating its guidance for fiscal year 2022.

• Net sales in the range of $1.4 - $1.5 billion, an 8% to 16% increase year-over-year.
• Operating income in the range of 4.5% - 5.0% of net sales.
• Capital expenditures of $60 - $70 million in support of the expansions of the facilities in Thailand and Mexico.

Net Sales by Vertical Market for Q1 Fiscal 2022:

Forward-Looking Statements

Certain statements contained within this release are considered forward-looking, including our fiscal year 2022 guidance, under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “expect,” “should,” “goal,” “predict,” “will,” “future,” “optimistic,” “confident,” and “believe.” Undue reliance should not be placed on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. These forward-looking statements are subject to risks and uncertainties including, without limitation, global economic conditions, geopolitical environment, global health emergencies including the COVID-19 pandemic, availability or cost of raw materials and components, foreign exchange rate fluctuations, and our ability to convert new business opportunities into customers and revenue. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in its Annual Report on Form 10-K for the year ended June 30, 2021.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include adjusted operating income, adjusted net income, adjusted diluted EPS, and ROIC. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the Reconciliation of Non-GAAP Financial Measures section below. Management believes these measures are useful and allow investors to meaningfully trend, analyze, and benchmark the performance of the Company’s core operations. The Company’s non-GAAP financial measures are not necessarily comparable to non-GAAP information used by other companies.

About Kimball Electronics, Inc.

Kimball Electronics is a multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in the United States, China, India, Japan, Mexico, Poland, Romania, Thailand, and Vietnam, our teams are proud to provide manufacturing services for a variety of industries. Recognized for a reputation of excellence, we are committed to a high-performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Kimball Electronics, Inc. (Nasdaq: KE) is headquartered in Jasper, Indiana.

To learn more about Kimball Electronics, visit: www.kimballelectronics.com.

For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com.

Lasting relationships. Global success.

Financial highlights for the first quarter ended September 30, 2021 are as follows:

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103006226/en/