Kimball Electronics Reports Q3 Results With Double-Digit Sequential Medical Sales Growth; Company Affirms Guidance for Fiscal 2026 With Adjusted Operating Margin Expected at High End of Range

Kimball Electronics Reports Q3 Results With Double-Digit Sequential Medical Sales Growth; Company Affirms Guidance for Fiscal 2026 With Adjusted Operating Margin Expected at High End of Range May 5, 2026 Third Quarter 2026 Highlights Revenue of $352.9 million, a sequential increase of 3.4% compared to Q2 Sales in the medical vertical increased 10.2% versus the prior quarter Operating income of $11.8 million, or 3.3% of net sales, adjusted operating margin of 4.2% Cash from operations of $14.9 million, the ninth consecutive quarter of positive operating cash generation Debt of $163.0 million and borrowing capacity of $276.0 million Cash Conversion Days of 90, an improvement compared to both the prior quarter and Q3 of fiscal 2025 Invested $4.0 million to repurchase 165,000 shares of common stock Company affirms guidance for fiscal 2026 with adjusted operating margin expected at the high end of the range Kimball Electronics, Inc. (Nasdaq: KE) today announced financial results for the third quarter ended March 31, 2026. Three Months Ended Nine Months Ended March 31, March 31, (Amounts in Thousands, except EPS) 2026 2025 2026 2025 Net Sales $ 352,922 $ 374,607 $ 1,059,805 $ 1,106,255 Operating Income $ 11,755 $ 11,716 $ 36,976 $ 29,061 Adjusted Operating Income (non-GAAP) $ 14,781 $ 15,706 $ 47,623 $ 41,629 Operating Income % 3.3 % 3.1 % 3.5 % 2.6 % Adjusted Operating Income (non-GAAP) % 4.2 % 4.2 % 4.5 % 3.8 % Net Income $ 5,719 $ 3,817 $ 19,442 $ 10,403 Adjusted Net Income (non-GAAP) $ 8,033 $ 6,837 $ 27,208 $ 19,718 Diluted EPS $ 0.23 $ 0.15 $ 0.78 $ 0.41 Adjusted Diluted EPS (non-GAAP) $ 0.33 $ 0.27 $ 1.10 $ 0.79 Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer, stated, “Results for the third quarter were in line with expectations. Sales increased sequentially compared to Q2, driven by strong growth in our medical vertical market, margins remained solid, and cash from operations was positive for the ninth consecutive quarter. We expect Q4 to be a good finish to the year and we are affirming our guidance for fiscal 2026 with adjusted operating margin estimated to be at the high end of the range.” Mr. Phillips continued, “As we look forward, the medical CMO continues to be a key part of our strategy and we are making deliberate investments in our capabilities, operating capacity, and commercial focus. When volumes ramp, we expect it to become a meaningful driver of both top line growth and margin expansion. In addition, we continue to focus on inorganic growth as a possible complement to this strategy. We believe this could be a powerful combination for the future of our Company.” Net Sales by Vertical Market for Q3 Fiscal 2026: Three Months Ended Nine Months Ended March 31, March 31, (Amounts in Millions) 2026 * 2025(2) * Percent Change 2026 * 2025(2) * Percent Change Automotive $ 160.5 46 % $ 165.5 44 % (3 )% $ 487.2 46 % $ 533.7 48 % (9 )% Medical 106.1 30 % 115.2 31 % (8 )% 304.0 29 % 288.9 26 % 5 % Industrial excluding AT&M (1) 86.3 24 % 93.9 25 % (8 )% 268.6 25 % 281.6 26 % (5 )% Net Sales excluding AT&M(1) $ 352.9 100 % $ 374.6 100 % (6 )% $ 1,059.8 100 % $ 1,104.2 100 % (4 )% AT&M(1) — — % — — % — % — — % 2.1 — % (100 )% Total Net Sales $ 352.9 100 % $ 374.6 100 % (6 )% $ 1,059.8 100 % $ 1,106.3 100 % (4 )% * As a percent of Total Net Sales (1) Sales from our Automation, Test, and Measurement business (AT&M), which was divested effective July 31, 2024, were previously included in the industrial vertical (2) In the third quarter of fiscal 2025, the Company reported a non-recurring sale of consigned medical inventory totaling $24 million, or 21% of medical sales in that quarter. In addition, beginning in the first quarter of fiscal year 2026, sales to customers related to commercial transportation, previously included in the automotive vertical, are now reflected in the industrial vertical; prior periods have been recast to conform to current period presentation – Automotive includes electronic power steering, body controls, advanced driver-assistance systems, and electronic braking systems – Medical includes sleep therapy and respiratory care, image guided therapy, in vitro diagnostics, drug delivery, AED, and patient monitoring – Industrial includes climate controls, automation controls, public safety, IoT and factory automation, efficient energy, off highway equipment, and commercial transportation Fiscal Year 2026 Guidance As part of today’s announcement, the Company affirmed its guidance for fiscal year 2026. Net sales in the range of $1,400 - $1,460 millionAdjusted operating income is estimated to be 4.2% - 4.5% of net sales, with results expected at the high end of the rangeCapital expenditures of $50 - $60 million Conference Call / Webcast Date: Wednesday, May 6, 2026 Time: 10:00 AM Eastern Time Live Webcast: investors.kimballelectronics.com/events-and-presentations/events Dial-in #: 877-407-8293 (or 201-689-8349) For those unable to participate in the live webcast, the call will be archived at investors.kimballelectronics.com. Forward-Looking Statements Certain statements contained within this release are considered forward-looking, including our 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 and conflicts such as war, global health emergencies, availability or cost of raw materials and components, tariffs and other trade barriers, 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, 2025. Non-GAAP Financial Measures This press release contains non-GAAP financial measures. The non-GAAP financial measures contained herein include constant currency growth, net sales excluding Automation, Test & Measurement, adjusted selling and administrative expenses, 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 global, multifaceted manufacturer offering Electronics Manufacturing Services (EMS) and Contract Manufacturing Organization (CMO) solutions to customers around the world. From our operations in the United States, China, Mexico, Poland, Romania, and Thailand, 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 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. Lasting relationships. Global success. Condensed Consolidated Statements of Income (Unaudited) Three Months Ended (Amounts in Thousands, except Per Share Data) March 31, 2026 March 31, 2025 Net Sales $ 352,922 100.0 % $ 374,607 100.0 % Cost of Sales 325,107 92.1 % 347,711 92.8 % Gross Profit 27,815 7.9 % 26,896 7.2 % Selling and Administrative Expenses 15,214 4.4 % 13,154 3.6 % Restructuring Expense 850 0.2 % 2,026 0.5 % Asset Impairment (4 ) — % — — % Operating Income 11,755 3.3 % 11,716 3.1 % Interest Income 203 0.1 % 100 — % Interest Expense (2,072 ) (0.6 )% (2,936 ) (0.8 )% Non-Operating Income (Expense), net (1,099 ) (0.3 )% (1,726 ) (0.4 )% Other Income (Expense), net (2,968 ) (0.8 )% (4,562 ) (1.2 )% Income Before Taxes on Income 8,787 2.5 % 7,154 1.9 % Provision (Benefit) for Income Taxes 3,068 0.9 % 3,337 0.9 % Net Income $ 5,719 1.6 % $ 3,817 1.0 % Earnings Per Share of Common Stock: Basic $ 0.23 $ 0.15 Diluted $ 0.23 $ 0.15 Average Number of Shares Outstanding: Basic 24,469 24,728 Diluted 24,648 24,872 (Unaudited) Nine Months Ended (Amounts in Thousands, except Per Share Data) March 31, 2026 March 31, 2025 Net Sales $ 1,059,805 100.0 % $ 1,106,255 100.0 % Cost of Sales 975,286 92.0 % 1,032,332 93.3 % Gross Profit 84,519 8.0 % 73,923 6.7 % Selling and Administrative Expenses 43,166 4.1 % 37,107 3.4 % Restructuring Expense 4,083 0.4 % 9,019 0.8 % Asset Impairment (Gain on Disposal) 294 — % (1,264 ) (0.1 )% Operating Income 36,976 3.5 % 29,061 2.6 % Interest Income 717 0.1 % 575 0.1 % Interest Expense (6,520 ) (0.6 )% (11,969 ) (1.1 )% Non-Operating Income (Expense), net (4,403 ) (0.5 )% (4,155 ) (0.4 )% Other Income (Expense), net (10,206 ) (1.0 )% (15,549 ) (1.4 )% Income Before Taxes on Income 26,770 2.5 % 13,512 1.2 % Provision (Benefit) for Income Taxes 7,328 0.7 % 3,109 0.3 % Net Income $ 19,442 1.8 % $ 10,403 0.9 % Earnings Per Share of Common Stock: Basic $ 0.79 $ 0.42 Diluted $ 0.78 $ 0.41 Average Number of Shares Outstanding: Basic 24,559 24,859 Diluted 24,822 25,047 Condensed Consolidated Statements of Cash Flows Nine Months Ended (Unaudited) March 31, (Amounts in Thousands) 2026 2025 Net Cash Flow provided by Operating Activities $ 29,837 $ 105,870 Net Cash Flow used for Investing Activities (38,090 ) (5,160 ) Net Cash Flow provided by (used for) Financing Activities 2,455 (126,615 ) Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash 540 13 Net Decrease in Cash, Cash Equivalents, and Restricted Cash (5,258 ) (25,892 ) Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 89,467 78,779 Cash, Cash Equivalents, and Restricted Cash at End of Period $ 84,209 $ 52,887 (Unaudited) Condensed Consolidated Balance Sheets March 31, 2026 June 30, 2025 (Amounts in Thousands) ASSETS Cash and cash equivalents $ 82,462 $ 88,781 Receivables, net 225,983 222,623 Contract assets 75,711 71,812 Inventories 273,251 273,500 Prepaid expenses and other current assets 43,351 36,027 Assets held for sale 6,610 6,861 Property and Equipment, net 274,937 264,804 Goodwill 6,191 6,191 Other Intangible Assets, net 2,039 2,427 Other Assets, net 113,770 104,286 Total Assets $ 1,104,305 $ 1,077,312 LIABILITIES AND SHARE OWNERS’ EQUITY Current portion of long-term debt $ 34,682 $ 17,400 Accounts payable 229,068 218,805 Advances from customers 18,590 35,867 Accrued expenses 53,178 46,489 Long-term debt, less current portion 127,850 129,650 Other long-term liabilities 63,295 59,217 Share Owners’ Equity 577,642 569,884 Total Liabilities and Share Owners’ Equity $ 1,104,305 $ 1,077,312 Other Financial Metrics (Unaudited) (Amounts in Millions, except CCD) At or For the Three Months Ended March 31, December 31, March 31, 2026 2025 2025 Depreciation and Amortization $ 10.3 $ 9.3 $ 9.2 Cash Conversion Days (CCD)(1) 90 91 99 Open Orders(2) $ 602 $ 557 $ 642 (1) Cash Conversion Days (“CCD”) are calculated as the sum of Days Sales Outstanding plus Contract Asset Days plus Production Days Supply on Hand less Accounts Payable Days and less Advances from Customers Days. CCD, or a similar metric, is used in our industry and by our management to measure the efficiency of managing working capital. (2) Open Orders are the aggregate sales price of production pursuant to unfulfilled customer orders. Select Financial Results of Automation, Test and Measurement (Unaudited) (Amounts in Millions) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net Sales $ — $ — $ — $ 2.1 Operating Income (Loss)(1) $ — $ — $ (0.4 ) $ 0.8 (1) Amounts include gain (loss) on sale adjustments following the close of the sale on July 31, 2024: ($0.4 million) in the nine months ended March 31, 2026 and $1.3 million for the nine months ended March 31, 2025. Reconciliation of Non-GAAP Financial Measures (Unaudited, Amounts in Thousands, except Per Share Data) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net Sales Growth (vs. same period in prior year) (6 )% (12 )% (4 )% (14 )% Foreign Currency Exchange Impact 3 % (1 )% 2 % — % Constant Currency Growth (9 )% (11 )% (6 )% (14 )% Selling and Administrative Expenses, as reported $ 15,214 $ 13,154 $ 43,166 $ 37,107 Stock Compensation Expense (2,256 ) (1,955 ) (6,036 ) (4,528 ) SERP 76 (9 ) (234 ) (285 ) Adjusted Selling and Administrative Expenses $ 13,034 $ 11,190 $ 36,896 $ 32,294 Operating Income, as reported $ 11,755 $ 11,716 $ 36,976 $ 29,061 Stock Compensation Expense 2,256 1,955 6,036 4,528 SERP (76 ) 9 234 285 Restructuring Expense 850 2,026 4,083 9,019 Asset Impairment (Gain on Disposal) (4 ) — 294 (1,264 ) Adjusted Operating Income $ 14,781 $ 15,706 $ 47,623 $ 41,629 Net Income, as reported $ 5,719 $ 3,817 $ 19,442 $ 10,403 Stock Compensation Expense, After-Tax 1,711 1,483 4,577 3,434 Restructuring Expense, After-Tax 606 1,537 2,966 6,840 Asset Impairment (Gain on Disposal), After-Tax (3 ) — 223 (959 ) Adjusted Net Income $ 8,033 $ 6,837 $ 27,208 $ 19,718 Diluted Earnings per Share, as reported $ 0.23 $ 0.15 $ 0.78 $ 0.41 Stock Compensation Expense 0.07 0.06 0.19 0.14 Restructuring Expense 0.03 0.06 0.12 0.27 Asset Impairment (Gain on Disposal) — — 0.01 (0.03 ) Adjusted Diluted Earnings per Share $ 0.33 $ 0.27 $ 1.10 $ 0.79 Twelve Months Ended March 31, 2026 2025 Operating Income, as reported $ 53,450 $ 48,669 SERP 563 381 Restructuring Expense 6,054 9,783 Asset Impairment (Gain on Disposal) (833 ) (788 ) Stock Compensation Expense 8,027 6,278 Adjusted Operating Income $ 67,261 $ 64,323 Tax Effect 20,770 20,174 After-tax Adjusted Operating Income $ 46,491 $ 44,149 Average Invested Capital(1) $ 650,994 $ 726,208 ROIC 7.1 % 6.1 % (1) Average invested capital is computed using Share Owners’ equity plus current and non-current debt less cash and cash equivalents averaged for the last five quarters. Source: Kimball Electronics, Inc.