Q1 fiscal 2027
Filed Nov 4, 2026Kimball Electronics reports Q1 results highlighted by the return to top-line growth and reiterates fiscal 2027 guidance with sales expected at the high end of the range.
Net sales returned to growth, led by Medical and the Helvoet acquisition, and the company reiterated fiscal 2027 guidance. However, GAAP operating income, net income, diluted EPS, and adjusted operating income all declined from the prior-year quarter, while operating cash flow was negative.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $390.8M | 5% | 7% |
| Organic sales growthnon-GAAP | 3% | – | – |
| Gross profitGAAP | $30.87M | – | – |
| Gross profit marginGAAP | 7.9% | – | – |
| Selling and administrative expensesGAAP | $18.05M | – | – |
| Adjusted selling and administrative expensesnon-GAAP | $13.88M | – | – |
| Restructuring expenseGAAP | $445K | – | – |
| Operating incomeGAAP | $12.37M | – | – |
| Operating income marginGAAP | 3.2% | – | – |
| Adjusted operating incomenon-GAAP | $16.99M | – | – |
| Adjusted operating income marginnon-GAAP | 4.3% | – | – |
| Adjusted EBITDAnon-GAAP | $27.56M | – | – |
| Income before taxes on incomeGAAP | $7.80M | – | – |
| Provision for income taxesGAAP | $5.16M | – | – |
| Net incomeGAAP | $2.64M | – | – |
| Adjusted net incomenon-GAAP | $6.12M | – | – |
| Diluted earnings per shareGAAP | $0.11 | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $0.25 | – | – |
| Net cash flow used for operating activitiesGAAP | −$19.32M | – | – |
| Net cash flow used for investing activitiesGAAP | −$109.7M | – | – |
| Net cash flow provided by financing activitiesGAAP | $114.0M | – | – |
| Cash and cash equivalentsGAAP | $72.76M | – | – |
| Total debtother | $235.7M | – | – |
| Cash Conversion Daysother | 82 | – | – |
| Open Ordersother | $690M | – | – |
| Helvoet net salesother | $12.4M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AutomotiveSales increased 4% compared to the first quarter of fiscal 2026. | $170.5M | – | 4% |
| MedicalSales increased 14%, including 9% organic sales growth; the company cited continued strength in Medical and contribution from Helvoet Polymer Technologies. | $115.7M | – | 14% |
| IndustrialSales increased 5% compared to the first quarter of fiscal 2026. | $104.6M | – | 5% |
fiscal 2027 outlook
- Revenue$1,535 - $1,560 million, expected at the high end of the range
- NoteAdjusted operating income of 4.4% - 4.7% of net sales
- NoteCapital expenditures of $50 - $60 million
Capital returns
- Invested $3.1 million to repurchase 127,000 shares of common stock.
What drove it
- Net sales increased 7% year over year and 5% sequentially.
- Year-over-year organic sales growth was 3%, driven by increases in all verticals.
- Medical sales increased 14%, with 9% organic sales growth.
- The company stated that top-line growth benefited from organic sales growth and the contribution from Helvoet Polymer Technologies.
- Helvoet net sales were $12.4 million for the three months ended September 30, 2026.
Concerns
- GAAP operating income declined to $12,374 thousand from $14,454 thousand, and operating income margin declined to 3.2% from 4.0%.
- Adjusted operating income declined to $16,990 thousand from $17,534 thousand, and adjusted operating income margin declined to 4.3% from 4.8%.
- Net income declined to $2,642 thousand from $10,086 thousand, while diluted EPS declined to $0.11 from $0.40.
- Selling and administrative expenses increased to $18,055 thousand from $13,090 thousand.
- Interest expense increased to $(3,519) thousand from $(2,353) thousand.
- Operating cash flow was $(19,324) thousand, compared with $8,065 thousand in the prior-year quarter.
What to watch
- Whether Medical vertical growth and Helvoet integration continue to support sales at the high end of the $1,535 - $1,560 million fiscal 2027 range.
- Progress toward the guided adjusted operating income range of 4.4% - 4.7% of net sales versus first-quarter adjusted operating income margin of 4.3%.
- Working-capital efficiency after Cash Conversion Days remained at 82 and receivables, contract assets, and inventories increased from June 30, 2026.
- Operating cash flow and capital expenditures relative to fiscal 2027 capital-expenditure guidance of $50 - $60 million.
- Open Orders following the increase to $690 million.
Balance sheet and cash flow
- Cash and cash equivalents were $72,763 thousand at September 30, 2026, compared with $88,925 thousand at June 30, 2026.
- Current portion of long-term debt was $39,700 thousand and long-term debt, less current portion, was $195,650 thousand at September 30, 2026.
- Borrowing capacity was $198.0 million.
- Net cash flow used for operating activities was $(19,324) thousand, compared with $8,065 thousand provided by operating activities in the prior-year quarter.
- Net cash flow used for investing activities was $(109,728) thousand.
- Net cash flow provided by financing activities was $114,026 thousand.
- Cash Conversion Days were 82, equaling the multiyear low from last quarter.
- Open Orders were $690 million at September 30, 2026, compared with $643 million at June 30, 2026 and $593 million at September 30, 2025.
Analysis
Kimball Electronics returned to top-line growth in Q1 fiscal 2027, reporting net sales of $390,803 thousand versus $365,603 thousand in the prior-year quarter. The company reported 3% organic sales growth, with acquisition impact of 3% and foreign currency exchange impact of 1%. Management also said sales increased 5% sequentially. Open Orders increased to $690 million from $643 million at June 30, 2026 and $593 million at September 30, 2025.
All three verticals grew from the prior-year quarter. Medical was the largest growth contributor, with sales of $115.7 million, up 14%, and 9% organic sales growth. Automotive sales were $170.5 million, up 4%, while Industrial sales were $104.6 million, up 5%. The release attributed the top-line result to organic growth and the contribution from Helvoet Polymer Technologies, which recorded net sales of $12.4 million for the quarter.
Profitability declined despite the revenue growth. GAAP operating income was $12,374 thousand, compared with $14,454 thousand, and operating income margin was 3.2%, compared with 4.0%. Adjusted operating income was $16,990 thousand versus $17,534 thousand, with adjusted operating income margin declining to 4.3% from 4.8%. Selling and administrative expenses were $18,055 thousand compared with $13,090 thousand, while the reconciliation identifies acquisition costs of $1,976 thousand and acquisition amortization of $532 thousand. Net income was $2,642 thousand versus $10,086 thousand, and diluted EPS was $0.11 versus $0.40.
Cash flow and balance-sheet movements reflect significant investment activity during the quarter. Net cash flow used for operating activities was $(19,324) thousand, net cash flow used for investing activities was $(109,728) thousand, and financing activities provided $114,026 thousand. Cash and cash equivalents were $72,763 thousand, total debt was $235.7 million, and borrowing capacity was $198.0 million. Cash Conversion Days held at 82, matching the prior quarter and improving from 83 in the prior-year quarter. The company also invested $3.1 million to repurchase 127,000 shares.
The company reiterated fiscal 2027 guidance, with net sales expected at the high end of the $1,535 - $1,560 million range, adjusted operating income of 4.4% - 4.7% of net sales, and capital expenditures of $50 - $60 million. The first-quarter adjusted operating income margin of 4.3% sits below the guided annual range, making the trajectory of margins, acquisition integration costs, Medical growth, and cash generation key reported items for the balance of fiscal 2027.
Management, verbatim
I’m encouraged by our first quarter results and solid start to fiscal 2027. Sales increased both sequentially and year-over-year, margins were healthy, and cash conversion days were once again at a multiyear low.
Richard D. Phillips, Chief Executive Officer
Fiscal 2027 marks an important milestone in our journey and we are reiterating our guidance for the year with sales expected at the high end of the range, driven by continued strength in Medical.
Richard D. Phillips, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; comparison of actual results with prior guidance is unavailable.
- Free cash flow was not reported.
- Dividend amount and dividend activity were not reported.
- Fiscal 2027 gross-margin guidance was not reported.
- Fiscal 2027 operating-expense guidance was not reported.
- Fiscal 2027 tax-rate guidance was not reported.
- A reported effective income-tax rate was not provided.
- Prior-quarter values were not reported for most income-statement metrics.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.