KE earnings analysis
What we found in KE's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Kimball Electronics delivered materially better fiscal 2026 profitability despite a 4% revenue decline, with operating margin rising to 4.6% and diluted EPS reaching $1.13. Growth was concentrated in medical, while automotive and industrial sales declined, and the earnings improvement benefited from restructuring savings, lower interest expense, and a $15.0 million Tampa asset-sale gain. The strategic pivot toward integrated medical/CDMO capabilities is strengthened by the $103.0 million Helvoet acquisition, but execution, customer concentration, and tariff risks remain significant. Numeric fiscal 2027 guidance is not included in the 10-K.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Expanding EMS Into Medical CDMO
- Kimball is repositioning from a traditional EMS provider toward an integrated EMS/CDMO manufacturing-solutions company. The July 1, 2026 Helvoet acquisition expanded precision molded plastics, complex tooling, and medical device component capabilities, while the company’s proposed new name, Kimball Solutions, reflects the broader portfolio.
- Margins Improved Despite Lower Sales
- Fiscal 2026 revenue declined 4% to $1.431 billion, but gross margin improved to 8.2% from 7.0% and operating margin increased to 4.6% from 3.1%. Management attributed the improvement to European volume leverage, global restructuring, the Tampa closure, and favorable foreign exchange.
- Earnings Rebounded
- Net income increased to $28.0 million from $17.0 million, and diluted EPS rose to $1.13 from $0.68. The fiscal 2026 result included a $15.0 million gain on the sale of the Tampa facility, while interest expense declined to $8.5 million from $14.7 million.
- Medical Offset Automotive Weakness
- Medical was the only end-market vertical to grow, increasing 4% to $412.8 million, supported by a step-up with the largest medical customer and new program wins. Automotive declined 7% to $656.9 million and industrial declined 5% to $361.7 million.
- Continued Capacity Investment and Buybacks
- The company invested $51.7 million in capital expenditures, primarily for the new Indianapolis medical facility, new business awards, and facility improvements. It also repurchased $11.9 million of stock during fiscal 2026 and had $24.4 million remaining under the repurchase authorization at June 30, 2026.
- Profitability Improved Amid Revenue Decline
- The three-year financial trend shows revenue falling from $1.715 billion in fiscal 2024 to $1.487 billion in fiscal 2025 and $1.431 billion in fiscal 2026, while diluted EPS moved from $0.81 to $0.68 to $1.13. Operating cash flow was $73.2 million, $183.9 million, and $72.3 million, respectively, with fiscal 2025 benefiting from working-capital releases and fiscal 2026 using $19.9 million for inventory.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Helvoet Integration and Leverage
- Helvoet was the company’s largest acquisition to date and closed for approximately $103.0 million, funded with cash and existing credit lines. The initial purchase price allocation was not complete when the financial statements were issued, and management expects fiscal 2027 integration costs, purchase-accounting adjustments, and potential synergies; failure to integrate operations, systems, employees, and customers could materially affect results.
- High Customer Concentration
- Customer concentration remains material: Nexteer Automotive, Philips, and ZF together represented approximately 40% of fiscal 2026 net sales, while Nexteer alone represented 18%. Customers generally do not commit to firm production schedules for more than one quarter, increasing exposure to automotive program losses, cancellations, and volume reductions.
- Expanding AI and Privacy Exposure
- The filing highlights newly evolving AI-related operational, intellectual-property, cybersecurity, privacy, and regulatory risks as the company expands AI use across engineering, manufacturing optimization, predictive maintenance, quality analytics, supply-chain forecasting, and administrative functions. Kimball operates in 8 countries and identifies requirements including the EU Artificial Intelligence Act and Colorado Artificial Intelligence Act; noncompliance could result in penalties, litigation, or reputational harm.
- Tariff and Trade-Policy Volatility
- Tariffs implemented under U.S. trade authorities increased supply-chain costs during fiscal 2026. The company generally recovered a significant portion through pass-through and repricing mechanisms and stated unrecovered amounts were not expected to be material, but future tariff changes, restrictions, or retaliation could still raise costs or reduce customer demand.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.13
- Gross margin
- 8.2%
- Operating margin
- 4.6%
- Segment
- Automotive: $656.9 million, down 7% year over year
- Segment
- Medical: $412.8 million, up 4% year over year
- Segment
- Industrial: $361.7 million, down 5% year over year
- Segment
- Single reportable segment: Business Unit Operations
What they said about what is next.
The 10-K provides no numeric fiscal 2027 revenue or EPS guidance. It identifies expected fiscal 2027 trends including Helvoet integration, Indianapolis medical CDMO start-up costs, tariff uncertainty, automotive demand pressure, and medical growth; annual numeric outlook was provided in the separate Q4 earnings release/call.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 6, 2026
- Kimball Electronics experienced a revenue decline of 6% year-over-year in Q3 2026, totaling $352.9 million, falling short of expectations. EPS for the quarter came in at $0.23, a 53% increase from the prior year. The…
- 10-Q · February 5, 2026
- Kimball Electronics reported Q2 2026 results showing a year-over-year revenue decline of 5% to $341.3 million, despite a positive EPS of $0.15, marking a 7% increase. The company noted strong growth in its medical…
- 10-Q · November 6, 2025
- Kimball Electronics reported strong first-quarter results for fiscal year 2026, with a notable 233% year-over-year increase in diluted EPS to $0.40 and a gross profit margin improvement to 7.9%. While overall revenues…
- 10-K · August 22, 2025
- Kimball Electronics demonstrated robust operational performance in FY2025 despite declining revenues, reporting a 13% decrease in net sales to $1.487 billion, primarily due to the loss of key automotive programs and…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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