ke-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36454


KIMBALL ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)

Indiana

35-2047713

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

1205 Kimball Boulevard, Jasper, Indiana

47546

(Address of principal executive offices)

(Zip Code)

(812) 634-4000



Registrant’s telephone number, including area code
Not Applicable
Former name, former address and former fiscal year, if changed since last report


Securities registered pursuant to Section 12(b) of the Act:
Title of each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	KE	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Emerging growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares outstanding of the Registrant’s common stock as of October 23, 2025 was 24,338,363 shares.

KIMBALL ELECTRONICS, INC.

FORM 10-Q

INDEX


		Page No.

PART I FINANCIAL INFORMATION

	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets - September 30, 2025 (Unaudited) and June 30, 2025	3
	Condensed Consolidated Statements of Income (Unaudited) - Three Months Ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended September 30, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended September 30, 2025 and 2024	6
	Condensed Consolidated Statements of Share Owners’ Equity (Unaudited) - Three Months Ended September 30, 2025 and 2024	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4. Controls and Procedures	30

PART II OTHER INFORMATION

	Item 1. Legal Proceedings	31
	Item 1A. Risk Factors	31
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
	Item 5. Other Information	31
	Item 6. Exhibits	32

SIGNATURES		33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except for Share Data)


	(Unaudited)
	September 30, 2025		June 30, 2025
ASSETS
Current Assets:
Cash and cash equivalents	$	75,696	$	88,781
Receivables, net of allowances of $125 and $102, respectively	226,012		222,623
Contract assets	75,199		71,812
Inventories	272,725		273,500
Prepaid expenses and other current assets	34,341		36,027
Assets held for sale	6,579		6,861
Total current assets	690,552		699,604
Property and Equipment, net of accumulated depreciation of $338,843 and $334,465, respectively	273,937		264,804
Goodwill	6,191		6,191
Other Intangible Assets, net of accumulated amortization of $27,790 and $28,227, respectively	2,305		2,427
Other Assets, net	104,931		104,286
Total Assets	$	1,077,916	$	1,077,312

LIABILITIES AND SHARE OWNERS’ EQUITY
Current Liabilities:

Current portion of long-term debt	$	6,600	$	17,400
Accounts payable	234,567		218,805
Advances from customers	27,058		35,867

Accrued expenses	43,795		46,489

Total current liabilities	312,020		318,561
Other Liabilities:
Long-term debt, less current portion	130,925		129,650

Other long-term liabilities	57,832		59,217
Total other liabilities	188,757		188,867

Share Owners’ Equity:
Preferred stock-no par value
Shares authorized: 15,000,000 Shares issued: None	—		—
Common stock-no par value
Shares authorized: 150,000,000 Shares issued: 29,430,000 Shares outstanding: 24,338,000 and 24,218,500, respectively	—		—
Additional paid-in capital	319,437		323,309
Retained earnings	343,634		333,548
Accumulated other comprehensive loss	1,455		1,063
Treasury stock, at cost:
Shares: 5,092,000 and 5,211,500, respectively	(87,387)		(88,036)
Total Share Owners’ Equity	577,139		569,884
Total Liabilities and Share Owners’ Equity	$	1,077,916	$	1,077,312

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except for Per Share Data)



	Three Months Ended
	September 30
(Unaudited)	2025		2024
Net Sales	$	365,603	$	374,256
Cost of Sales	336,767		350,656
Gross Profit	28,836		23,600
Selling and Administrative Expenses	13,090		13,427

Restructuring Expense	1,416		2,322

Gain on Disposal	(124)		(1,264)
Operating Income	14,454		9,115
Other Income (Expense):
Interest income	139		222
Interest expense	(2,353)		(4,792)
Non-operating income (expense), net	(1,241)		(1,661)
Other income (expense), net	(3,455)		(6,231)
Income Before Taxes on Income	10,999		2,884
Provision (Benefit) for Income Taxes	913		(270)
Net Income	$	10,086	$	3,154

Earnings Per Share of Common Stock:
Basic	$	0.41	$	0.13
Diluted	$	0.40	$	0.12





Average Number of Shares Outstanding:
Basic	24,600		24,979
Diluted	24,909		25,235

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in Thousands)


	Three Months Ended						Three Months Ended
	September 30, 2025						September 30, 2024
(Unaudited)	Pre-tax		Tax		Net of Tax		Pre-tax		Tax		Net of Tax
Net income					$	10,086					$	3,154
Other comprehensive income (loss):
Foreign currency translation adjustments	$	(43)	$	—	$	(43)	$	6,951	$	—	$	6,951

Postemployment actuarial change	(22)		4		(18)		106		(35)		71
Derivative gain (loss)	644		(149)		495		(1,747)		445		(1,302)
Reclassification to (earnings) loss:
Derivatives	(154)		67		(87)		384		(106)		278

Amortization of actuarial change	60		(15)		45		53		(13)		40
Other comprehensive income (loss)	$	485	$	(93)	$	392	$	5,747	$	291	$	6,038
Total comprehensive income					$	10,478					$	9,192

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)



	Three Months Ended
	September 30
(Unaudited)	2025		2024
Cash Flows From Operating Activities:
Net income	$	10,086	$	3,154
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,117		9,195
(Gain) loss on sales of assets	273		(126)

Deferred income taxes	(1,762)		3,146



Gain on Disposal	(124)		(1,264)
Stock-based compensation	1,563		2,072



Other, net	(1,181)		646
Change in operating assets and liabilities:
Receivables	(7,391)		20,091
Contract assets	(3,497)		1,994
Inventories	1,692		5,110
Prepaid expenses and other assets	2,804		13,013
Accounts payable	7,543		2,300
Advances from customers	(10,660)		8,685
Accrued expenses and taxes payable	(398)		(22,542)
Net cash provided by operating activities	8,065		45,474
Cash Flows From Investing Activities:
Capital expenditures	(10,516)		(13,357)
Proceeds from sales of assets	3,922		225

Purchases of capitalized software	(54)		(165)
Net proceeds from disposal	431		18,507
Other, net	15		16
Net cash (used for) provided by investing activities	(6,202)		5,226
Cash Flows From Financing Activities:

Payments on credit facilities	(11,250)		(50,000)
Net change in revolving credit facilities	1,700		900




Repurchases of common stock	(1,195)		(2,917)
Payments related to tax withholding for stock-based compensation	(3,221)		(937)


Net cash used for financing activities	(13,966)		(52,954)
Effect of Exchange Rate Change on Cash and Cash Equivalents	116		1,830
Net Decrease in Cash, Cash Equivalents, and Restricted Cash	(11,987)		(424)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period (1)	89,467		78,779
Cash, Cash Equivalents, and Restricted Cash at End of Period (1)	$	77,480	$	78,355
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes	$	4,934	$	5,269
Interest expense	$	2,285	$	7,179
Non-cash investing activity:
Unpaid purchases of property and equipment at the end of the period	$	12,077	$	855
(1) The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in Prepaid expenses and other current assets on the balance sheet represents funds held by the Company for a foreign subsidiary’s employee savings plan.
(Unaudited)	September 30, 2025		June 30, 2025
Cash and Cash Equivalents	$	75,696	$	88,781
Restricted Cash included in Prepaid expenses and other current assets	$	1,784	$	686
Total Cash, Cash Equivalents, and Restricted Cash at end of period	$	77,480	$	89,467

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHARE OWNERS’ EQUITY

(Amounts in Thousands, Except for Share Data)


	Three Months Ended
			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Share Owners’ Equity
(Unaudited)	Additional Paid-In Capital
Amounts at June 30, 2025	$	323,309	$	333,548	$	1,063	$	(88,036)	$	569,884
Net income			10,086						10,086
Other comprehensive income (loss)					392				392


Compensation expense related to stock compensation plans	1,438								1,438
Performance and restricted share issuance (122,000 and 46,000 shares, respectively)	(5,327)						2,107		(3,220)


Charitable donation of common stock (1,000 shares)	17						13		30
Repurchase of common stock (49,000 shares) (including excise tax)							(1,471)		(1,471)



Amounts at September 30, 2025	$	319,437	$	343,634	$	1,455	$	(87,387)	$	577,139




Amounts at June 30, 2024	$	319,463	$	316,564	$	(17,807)	$	(77,759)	$	540,461
Net income			3,154						3,154
Other comprehensive income (loss)					6,038				6,038


Compensation expense related to stock compensation plans	1,958								1,958
Performance and restricted share issuance (83,000 shares and 22,000 shares, respectively)	(2,246)						1,285		(961)


Repurchase of Common Stock (159,000 shares)							(2,892)		(2,892)
Amounts at September 30, 2024	$	319,175	$	319,718	$	(11,769)	$	(79,366)	$	547,758

See Notes to Condensed Consolidated Financial Statements.

KIMBALL ELECTRONICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Business Description and Summary of Significant Accounting Policies

Business Description:

Kimball Electronics, Inc. (also referred to herein as “Kimball Electronics,” the “Company,” “we,” “us,” or “our”) is a global, multifaceted manufacturing solutions provider. We provide electronics manufacturing services (“EMS”), including engineering and supply chain support, to customers in the automotive, medical, and industrial end markets. We further produce higher level and final assemblies and offer contract manufacturing organization (“CMO”) solutions which include the production of medical disposables and drug delivery devices, from precision molded plastics and cold chain management to drug integration. Our design and manufacturing expertise coupled with robust processes and procedures help us ensure that we deliver the highest levels of quality, reliability, and service throughout the entire life cycle of our customers’ products. We deliver award-winning service across our highly integrated global footprint, which is enabled by our largely common operating system, procedures, and standardization. We are well recognized by customers and industry trade publications for our excellent quality, reliability, and innovative service.

Basis of Presentation:

The Condensed Consolidated Financial Statements presented herein reflect the consolidated financial position as of September 30, 2025 and June 30, 2025, results of operations for the three months ended September 30, 2025 and 2024, cash flows for the three months ended September 30, 2025 and 2024, and share owners’ equity for the three months ended September 30, 2025 and 2024. The financial data presented herein is unaudited and should be read in conjunction with the annual Consolidated Financial Statements as of and for the year ended June 30, 2025 and related notes thereto included in our Annual Report on Form 10-K. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year.

Revenue Recognition:

We recognize revenue in accordance with the standard issued by the Financial Accounting Standards Board (“FASB”), Revenue from Contracts with Customers and all the related amendments. Our revenue from contracts with customers is generated primarily from manufacturing services provided for the production of electronic assemblies, components, medical devices, medical disposables, precision molded plastics built to customers’ specifications. Our customer agreements are generally not for a definitive term but continue for the relevant product’s life cycle. Typically, our customer agreements do not commit the customer to purchase our services until a purchase order or a contractually binding forecast is provided, which are generally short term in nature. Customer purchase orders and contractually binding forecasts primarily have a single performance obligation. Generally, the prices stated in the customer purchase orders or committed to in contractually binding forecasts are agreed upon prices for the manufactured product and do not vary over the term of the order or the contractually binding forecast period, and therefore, the majority of our contracts do not contain variable consideration. In limited circumstances, we may enter into a contract which contains minimum quantity thresholds to cover our capital costs, and we may offer our customer a rebate for specific volume thresholds or other incentives; in these cases, the rebates or incentives are accounted for as variable consideration.

The majority of our revenue is recognized over time as manufacturing services are performed as we manufacture a product to customer specifications with no alternative use and we have an enforceable right to payment for performance completed to date. The remaining revenue for manufacturing services is recognized when the customer obtains control of the product, typically either upon shipment or delivery of the product dependent on the terms of the contract, and the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset. We generally recognize revenue over time using costs based input methods, in which judgment is required to evaluate assumptions including anticipated margins to estimate the corresponding amount of revenue to recognize. Costs used as a basis for estimating anticipated margins include material, direct and indirect labor, and appropriate applied overheads. Anticipated margins are determined based on historical or quoted customer pricing. Costs based input methods are considered a faithful depiction of our efforts and progress toward satisfying our performance obligations for manufacturing services and for which we believe we are entitled to payment for performance completed to date. The cumulative effect of revisions to estimates related to net contract revenues or costs are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.

We have elected to account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to transfer the associated services and products. Accordingly, we record customer payments of shipping and handling costs as a component of net sales and classify such costs as a component of cost of sales. We recognize sales net of applicable sales or value add taxes. Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time revenue is recognized, resulting in a reduction of net revenue.

Direct incremental costs to obtain and fulfill a contract are capitalized as a contract asset only if they are material, expected to be recovered, and are not accounted for in accordance with other guidance. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred.

Trade Accounts Receivable:

The Company’s trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. Our policy for estimating the allowance for credit losses on trade accounts receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market

SEC Form 10-Q filed by Kimball Electronics Inc.