The following is a summary of the Kimball Electronics, Inc. (KE) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Kimball Electronics reported a Q1 FY 2025 revenue of $374 million, a 15% decrease year-over-year when excluding AT&M.

• Gross margin rate decreased to 6.3%, down 180 basis points from the same quarter last year, primarily due to lower sales absorption.

• Adjusted operating income was $12.6 million, down from $21 million in Q1 FY 2024.

• Net income was adjusted to $5.5 million, or $0.22 per diluted share.

Business Progress:

• Restructured by divesting non-core AT&M business and integrating medical CMO into EMS operations.

• Announced the closure of the Tampa manufacturing facility to streamline operations and improve efficiency.

• Focused on high-value manufacturing in medical devices and automotive, with new programs launching.

• Achieved a $147 million reduction in inventory, enhancing working capital efficiency.

Opportunities:

• Strategic focus on high-level medical device assemblies and new automotive programs presents growth opportunities.

• Continuing restructuring efforts anticipated to bring improved margins and profitability.

Risks:

• Persistent end market softness poses ongoing challenges for demand and revenue.

• Closure of the Tampa facility involves risks related to transferring operations and potential disruptions.

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