Kimball Electronics (KE) Q4 2026 earnings summary

Executive summary

• Q4 sales were $372 million, down 2% year-over-year but up 5% sequentially, with all verticals posting gains over Q3.

• Adjusted operating income exceeded estimates; strong cash from operations enabled debt reduction to the lowest level in over four years.

• Medical segment led growth, now representing 29% of Q4 sales and expected to surpass one-third of total sales in FY 2027.

• Strategic investments included the new Indianapolis medical facility and the Helvoet Polymer Technologies acquisition.

Financial highlights

• Q4 net sales: $371.6 million, down 2% year-over-year; FX provided a 1% tailwind.

• Gross margin improved to 8.9% from 8% last year; adjusted operating income was $18.1 million (4.9% of sales).

• Q4 EBITDA was $28.2 million, with a margin of 7.6%.

• Net income for Q4 was $8.5 million ($0.35 per diluted share); adjusted net income was $8.0 million.

• Cash from operations in Q4 was $42.4 million; cash conversion days improved to 82, best in 17 quarters.

Outlook and guidance

• FY 2027 net sales expected at $1.535–$1.56 billion, up 7–9% year-over-year; organic growth 3–5%, Helvoet to contribute $60 million.

• Medical vertical projected to grow high single to low double digits; industrial in line with company average; automotive flattish.

• Adjusted operating income margin guided at 4.4–4.7%; CapEx expected at $50–$60 million.

• Revenue expected to be evenly distributed across quarters.

• Effective tax rate expected to normalize to low 30% range in FY27.