Kimball Electronics, Inc. (NASDAQ: KE) has reported its financial results for the fourth quarter and fiscal year ended June 30, 2025. In the fourth quarter of 2025, the company saw net sales totaling $380.5 million, reflecting a 2% sequential increase compared to the previous quarter. Operating income was reported at $16.5 million, representing 4.3% of net sales, while adjusted operating income stood at $19.6 million, or 5.2% of net sales. The company also managed to reduce its inventory by $23.1 million in the quarter and generated $78.1 million in cash from operating activities, marking the sixth consecutive quarter of positive cash flow.
Additionally, Kimball Electronics reported that borrowings on credit facilities decreased by $31.3 million from the previous quarter, leaving the company with cash and cash equivalents of $88.8 million and borrowing capacity of $291.7 million. The company also highlighted that it invested $3.0 million to repurchase 162,000 shares of common stock during this period.
In terms of net sales by vertical market, the medical vertical market saw a 5% increase compared to the fourth quarter of fiscal 2024, while sales in the automotive and industrial sectors (excluding automation, test, and measurement) decreased by 13% and 12% respectively, compared to the same period.
For the fiscal year 2025, the company reported net sales totaling $1,486.7 million, the third highest annual revenue total for the company. Operating income for the fiscal year was $45.5 million, or 3.1% of net sales, while adjusted operating income stood at $61.3 million, or 4.1% of net sales. Kimball Electronics also highlighted a reduction of $64.6 million, or 19%, in inventory over the fiscal year, and a significant decrease in debt, with $147.3 million paid down, representing a 50% reduction year-over-year.
Furthermore, the company reported a record result for annual cash flow, with $183.9 million generated from operating activities. Kimball Electronics also invested $12.0 million to repurchase 653,000 shares of common stock during the fiscal year.
Looking ahead to fiscal year 2026, the company expects modest top-line growth in its medical and industrial businesses, offset by a decline in automotive sales. The company also provided guidance for the fiscal year 2026, with projected net sales of $1,350 * $1,450 million, representing a 2% to 9% decrease compared to fiscal 2025. Additionally, the company anticipates adjusted operating income of 4.0% * 4.25% of net sales, compared to 4.1% of net sales in fiscal 2025, and capital expenditures of $50 * $60 million.
The market has reacted to these announcements by moving the company's shares 0.38% to a price of $20.91. If you want to know more, read the company's complete 8-K report here.
