On this page of StockholderLetter.com we present the latest annual shareholder letter from Kimball Electronics, Inc. — ticker symbol KE. Reading current and past KE letters to shareholders can bring important insights into the investment thesis.

 •  9/25/2025 Letter Continued (Full PDF)
 •  9/28/2023 KE Stockholder Letter
 •  9/26/2024 KE Stockholder Letter
 •  More "Electronic Equipment & Products" Category Stockholder Letters
 •  KE Benford's Law Stock Score = 86

KE Shareholder/Stockholder Letter Transcript:

2025 ANNUAL REPORT
BUILDING
TOMORROW,
TOGETHER

Who We Are
FINANCIAL HIGHLIGHTS
Kimball Electronics was founded in 1961 and incorporated in 1998. We deliver a package of value that includes
durable, high-reliability electronics, higher level and    nal assemblies, and contract manufacturing organization
(   CMO   ) solutions. Our CMO solutions support the production of medical disposables and drug delivery devices, from
precision molded plastics and cold chain management to drug integration. Customers and industry trade publications
regularly award us for our design and manufacturing expertise that, coupled with robust processes and procedures,
help us ensure that we deliver the highest levels of quality, reliability, and innovative service throughout the entire
lifecycle of our customers    products. Our Customer Relationship Management (   CRM   ) model is key to providing our
customers convenient access to our highly integrated global footprint, enabled by our largely standardized operating
system and procedures.
We offer our services globally on a contract basis, and we manufacture products to our customers    speci   cations. Our services primarily include:
    Production and testing of printed
circuit board assemblies (PCBAs);
    Product design and process
validation and quali   cation;
    Drug delivery devices and solutions
with and without electronics;
    High-level and    nal assembly of
medical, automotive, and industrial
products;
    Industrialization and automation of
manufacturing processes;
    Class 7 and 8 clean room assembly,
cold chain and product sterilization
management;
    Design services and support,
including innovative Design for
Excellence solutions;
    Supply chain services and support;
    Rapid prototyping and new product
introduction support;
    Reliability testing (testing of products
under a series of extreme
environmental conditions);
    Aftermarket services;
    Production and assembly of medical
devices, medical disposables
including packaging, and other
non-electronic products;
Fiscal Year Ended June 30,
2025
2024
Net Sales
$ 1,486,727
$ 1,714,510
Operating Income, as reported (GAAP)


(Amounts in thousands, except per share data)
Stock Compensation Expense
6,519
SERP
Legal Settlements (Recovery)
Restructuring Expense
Goodwill Impairment
Asset Impairment (Gain on Disposal)
49,277
7,185
614
680

(892)
10,990
2,386

5,820
(2,391)

61,267

81,496
    Design engineering and production
of precision molded plastics; and
Net Income, as reported (GAAP)

16,984

20,511
    Complete product lifecycle
management.
Stock Compensation Expense, After-Tax
Medical
27%*
4,944
5,449

(676)
8,314
1,810

4,414
(2,086)
9,787
Industrial
24%*
Automotive (-11)**
Legal Settlements (Recovery), After-Tax
Restructuring Expense, After-Tax
Asset Impairment (Gain on Disposal), After-Tax
Our global footprint supports
our customers    specialized
manufacturing needs.
Whether the requirement is
in-region support for an end
market, access to a lower cost
market, or proximity to a
customer team, Kimball
Electronics has a solution.
Automotive
49%*
17,040
Adjusted Operating Income (non-GAAP)
Goodwill Impairment, After-Tax
OUR GLOBAL
PRESENCE
45,535
DIVERSIFIED
PORTFOLIO OF END
MARKETS AND
MARKET SERVICES
Adjusted Net Income (non-GAAP)

28,156

41,295
Diluted Earnings per Share, as reported (GAAP)

0.68

0.81
Stock Compensation Expense
0.19
0.22
Legal Settlements (Recovery)

(0.03)
Restructuring Expense
Goo
Goodwill
Impairment
s
Im
Asset
Impairment
(Gain on Disposal)
0.33
0.07

0.18
(0.08)
0.39
    Electronic Power Steering
    Body Controls
    Advanced DriverAssistance Systems
    Electronic Braking
Systems
Medical (-7%)**
    Sleep Therapy and
Respiratory Care
    Image Guided Therapy
    In Vitro Diagnostics
    Drug Delivery
    AED
    Patient Monitoring
Industrial (-24%)**
stt Diluted Earnings per Share (non-GAAP)
Adjusted

Return on Invested Capital(1)
North America
Europe
Asia
Jasper, Indiana
(Manufacturing and
World Headquarters)
Indianapolis, Indiana
Reynosa, Mexico
Poznan, Poland
Timisoara, Romania
Amsterdam, Netherlands
Nanjing, China
Laem Chabang, Thailand
Cash Flow from Operations
Capital Expenditures
(2)
Share Owners    Equity
1.12

5.3%
1.64
8.2%

183,937

73,217

33,675

47,040

569,884

540,461
(1)
Return on Invested Capital is a Non-GAAP measure     refer to Reconciliation of Non-GAAP Results on the Company website.
(2)
Capital Expenditures include purchases of capitalized software.
    Climate Controls
    Automation Controls
    Public Safety
    IoT & Factory Automation
    Efficient Energy
    Off Highway/Commercial
Equipment
*Percentage of net sales
**Percentage change
compared to fiscal
year 2024
Building Tomorrow, Together
1

Our focus of Building Tomorrow, Together is more than just
a theme. It   s our strategic philosophy. It re   ects how we
create long-term value by aligning innovation, operational
excellence, and purpose with the needs of our customers,
employees, and Share Owners.   
Richard D. Phillips
Chief Executive Of   cer
TTo
oO
Our
ur Share
Share O
Owners
wn
ner
As I completed my second full year as CEO of Kimball Electronics, I once again re   ected on
the privilege I feel to be writing to you today. Our Company has a rich history of excellence,
a genuine focus on long-term relationships, and Guiding Principles which have stood the
test of time    in   uencing actions and behaviors as we live them each and every day. What
I know is that our corporate culture manifests in performance. Although the past two years
have been challenging, the focus, rigor, and discipline of the entire Company has never
been stronger. It is truly humbling to be in a position of leadership for an organization
with such a distinguished pedigree.
   Controlling What We Could Control   
FY25 was a year with a challenging operating environment
resulting from prolonged demand softness in the markets we
serve, unprecedented geopolitical uncertainty, and the impact
of the loss of two major programs that were not a result of our
actions, but were re   ected in operations. Yet despite these
headwinds, our team demonstrated remarkable resilience
and perseverance, we strengthened our company culture,
and delivered record-setting results in areas where we were
   controlling what we could control   :

2
FY25 was the third highest annual revenue total in our 60+
year history, with over 75% coming from customers that we
have worked with for a decade, or more.

We recorded a record number of wins for future business.

Our quality ratings were at a 15-year high.

For the eleventh consecutive year, we achieved the Highest
Overall Customer Ratings from CIRCUITS ASSEMBLY in the
seven categories of dependability and timely delivery,
Kimball Electronics
manufacturing quality, responsiveness, technology, value
for the price,    exibility, and overall satisfaction.

We generated an all-time best in cash from operating activities,
and paid down our debt to its lowest level in three years.

We returned $12 million to you, our Share Owners, through
share repurchases.
Unfortunately, we also had to make some dif   cult decisions,
ones we did not take lightly as they directly impacted friends and
coworkers. We completed the divestiture of the non-core Automation,
Test, and Measurement business in the    scal year, and we
announced the closure of our facility in Tampa, streamlining
our network, improving global capacity utilization, aligning our
electronics manufacturing footprint in the U.S. with current and
long-term market demand, and positioning us to better leverage
our facilities in low-cost regions. We are grateful to the employees
in Tampa and for their accomplishments since the Reptron
acquisition in 2007. The team there played a vital role during
the pandemic, supplying ventilators to those in need    and we
appreciate their contributions as part of Kimball.
We recognize that we cannot    cut our way to greatness       and that
   controlling what we can control    means also focusing on top-line
growth. Our balance sheet is now a competitive strength with
ample liquidity to weather geopolitical unpredictability, while
providing dry powder for opportunistic investments in our return
to pro   table growth.
Building Tomorrow, Together
Our focus of Building Tomorrow, Together is more than just a theme.
It   s our strategic philosophy. It re   ects how we create long-term
value by aligning innovation, operational excellence, and purpose
with the needs of our customers, employees, and Share Owners.
Our emphasis on collaborative innovation extends beyond
technical solutions     it   s human centered, focusing on how
technology improves quality for life     whether it   s braking and
steering systems in vehicles, motor controls for HVAC systems,
or diagnostic and therapeutic equipment in the medical    eld. The
emphasis on quality and reliability is deeply embedded in how we
operate across all end market verticals. Internally, we reference a
      ve nines    reliability standard     99.999%     as a re   ection of the
performance and consistency we strive for. The medical CMO
aligns well with our expertise in a highly-regulated, highlyengineered, complex manufacturing environment. The recent
announcement by our largest medical customer that they were
making Kimball the sole supplier on their respiratory care    nal
assembly and Higher Level Assembly business is a great example
of our growth potential.
Focusing on Our Future
As we evaluate the medical CMO space, we see opportunities for
higher EBITDA margins. Our strategy is to pursue growth with blue
chip customers who have long product lifecycles. Not only will we
add capabilities, we will continue building our scalable platform
that creates opportunities for vertical integration, positions us to
take on more of the complex programs that align with our
strengths, and supports the work we already do well.
Our new 308,000-square-foot medical CMO facility in Indianapolis
is an important milestone in this strategy. It gives us the space we
need to expand our production capabilities in cold chain
management, complete device assembly, and precision-molded
plastics. Our current manufacturing expertise includes medical
disposables, single-use surgical instruments, and selected drug
delivery devices, such as auto-injectors. We   re expanding this
expertise to areas such as cardiology, orthopedics, minimally
invasive surgery, and surgical instruments & packaging. The
medical market presents us with a compelling opportunity to
diversify our revenue and leverage our core strengths as a trusted
partner in a complex and highly-regulated industry. With this
facility, we are well positioned to meet current and future customer
needs, while staying committed to exploring inorganic options to
augment this space where it makes strategic sense.
We expect FY26 to be another step forward in this journey, which
will unfold over time, and we anticipate positive top-line growth in
FY27. Throughout, we will stay true to our Guiding Principles and
continue to:

Be collaborative and team-oriented.

Set high aspirations    not unrealistic goals, but attainable
targets that require stretching.

Communicate openly and proactively.

Remain accountable to each other, to our Company, to our
customers, and to you, our Share Owners.
The recent move in our stock price re   ects investor con   dence that
we are on the right path. I   m excited for the future of the Company
and thank you for your support.
We invite you to stay informed by visiting our website at
www.kimballelectronics.com as we continue to build lasting
relationships for global success.
For more detailed insights into the past year, we encourage you
to read the following Form 10-K.
Richard D. Phillips
Chief Executive Of   cer
Building Tomorrow, Together
3

Kimball Electronics has
been recognized by
CIRCUITS ASSEMBLY, a
leading brand and technical
publication for electronics
manufacturers worldwide,
for the past 11 years for
achieving the Highest
Overall Customer Ratings in
numerous service excellence
award categories.
Customer Loyalty
Our robust customer scorecard process
provides valuable feedback to all levels
of our company, driving continuous
improvement initiatives, strengthening
our award-winning service, and
fostering deep customer loyalty.
77%
of our revenue
in FY25 came from
customers with
relationships over
10+ Years.
Electronics Manufacturing Solutions
Kimball Electronics is a global leader in Electronics Manufacturing Services (EMS),
delivering high-reliability solutions across automotive, medical, and industrial markets
since our founding in 1961.
With over six decades of experience, Kimball Electronics has built
a reputation for excellence in EMS, which remains the core of our
business. The Company supports customers with innovative and
safety-critical electronics and operates a global footprint of
manufacturing facilities, leveraging Industry 4.0 capabilities to deliver
consistent quality and value throughout the product lifecycle.
In FY25, Kimball Electronics was ranked by Manufacturing Market
Insider (MMI) as the 24th largest EMS provider worldwide, with
leading positions in key verticals: 6th in automotive, 7th in
medical, and 22nd in industrial. In addition to core electronics
manufacturing, the Company offers comprehensive capabilities in
   nal assembly, high-level assembly, and full box build     delivering
complete,    nished products to global customers.
Guided by our core values     Focused, Aligned, Disciplined, and
Committed     Kimball Electronics continues to build lasting
relationships and deliver high-quality EMS solutions that meet
the exacting standards of global customers.
$737.9M
In 2025, we recognized and
celebrated one customer
for achieving the 30-year
relationship mark, two
others achieving the 20-year
mark, and one for achieving
the 15-year mark.
$352.6M
MEDICAL
NET SALES
INDUSTRIAL
NET SALES
Kimball Electronics has been committed to the complexity of the medical
industry through specialized electronics manufacturing services since
1999. We support our customers with FDA registration and offer EU
MDR and IVDR support. We manufacture products that support the
continuum of care: from prevention to early diagnostics, through clinical
and hospital diagnostics & treatment, to home & community care.
Strategic Automotive Solutions We Support:
    CHASSIS CONTROL in vehicle electronics manages and optimizes
a vehicle   s stability, handling, and ride comfort by coordinating
braking, steering, and suspension functions.
Strategic Medical Solutions We Support:
    RESPIRATORY CONTROL SOLUTIONS using electronics in
medical applications include devices like ventilators, CPAP
machines, and oxygen concentrators that support, monitor, and
manage patients    breathing and respiratory functions.
Strategic Industrial Solutions We Support:
    ELECTRONICS IN CLIMATE CONTROL AND SMART ENERGY
MANAGEMENT DEVICES enable precise regulation of indoor
environments that help to power networks, optimize energy
usage, and contribute to energy conservation through real-time
monitoring and predictive analytics.

ELECTRONIC DRUG DELIVERY DEVICES, such as auto-injectors,
insulin pumps, nebulizers, and smart inhalers, precisely control
and administer medications to patients, enhancing treatment
accuracy and adherence.

ELECTRONICS IN OFF-HIGHWAY EQUIPMENT, such as
construction machinery and agricultural vehicles, optimize
performance, enhance safety, and improve operational ef   ciency
through advanced control systems, diagnostics, and automation.

ELECTRONIC SURGICAL SYSTEMS, including robotic surgical
platforms and electrosurgical units, enhance precision, control,
and outcomes in medical procedures by integrating advanced
electronic technologies.

IOT AND FACTORY AUTOMATION SYSTEMS facilitate real-time
monitoring and control by connecting sensors, controllers, and
communication networks to enable ef   cient data collection and
process management.

Kimball Electronics
In FY25 we received the
highest overall ranking in
the seven categories of
dependability and timely
delivery, manufacturing
quality, responsiveness,
technology, value for the
price,    exibility, and
overall satisfaction.
Kimball Electronics remains committed to providing solutions for the
automotive market. In 2025, we celebrated 40 years of experience in
providing automotive solutions. The automotive market continues to
represent nearly half of our total revenue - this    scal year at $737.9
million. We continue actively reshaping our portfolio of solutions to
align with evolving customer demand and industry trends.

4
$396.2M
AUTOMOTIVE
NET SALES
We recognize customer
loyalty as a strategic
strength rooted in our
operational practices
and service excellence
philosophy.
DOMAIN CONTROL in vehicle electronics is a centralized
system that integrates and manages subsystems like
infotainment, powertrain, and advanced driver-assistance
to improve functionality.
POWERTRAIN ELECTRONICS FOR INTERNAL COMBUSTION
ENGINE (ICE), HYBRID AND ELECTRIC VEHICLES (EV) convert
and control electrical power for driving motors, managing battery
charging, and powering auxiliary systems in performance of
electric and hybrid vehicles.
Our electronics manufacturing services are built to meet the demands
of long product lifecycles and the high reliability required in typical
industrial applications. We manufactured our    rst assembly for the
industrial market in 1968, and we have continued to evolve as our
industrial customers have evolved ever since.
Building Tomorrow, Together
5

Contract
Manufacturing
Organization
1M+
Our strategic expansion into the medical
Contract Manufacturing Organization (CMO)
space will be anchored by a new, highly
automated facility in Indianapolis, designed
to support scalable growth and deepen our
customer partnerships across life sciences
and specialized medical markets.
SCIENTIFIC INJECTION MOLDING
Kimball Solutions continues to advance its molding capabilities
through a disciplined, scienti   c approach to injection molding. The
current and future Indianapolis facility features a fully equipped
mold maintenance shop, strategic partnerships for complex
repairs, and collaboration with both domestic and offshore mold
building vendors.
Our operations utilize state-of-the-art electric molding machines    
including Nissei, Sumitomo, Robo-shot, and Arburg     each
equipped with advanced monitoring and control systems to
ensure precision and consistency.
In FY25, Kimball Electronics shared our strategic vision to expand
our presence in the medical CMO space. A major milestone in this
journey was the leasing of our new 308,000-square-foot facility in
Indianapolis, purpose-built to support advanced capabilities like
cold chain management, full drug delivery device assembly
(auto-injectors), and precision molded plastics.
The Kimball team   s expertise spans a wide range of materials and
molding methods, supported by robust methodologies for process
development and operational performance quali   cations. These
capabilities are driven by a highly skilled engineering team,
reinforcing Kimball   s commitment to quality, reliability, and
innovation in medical manufacturing.
This highly automated site, scheduled to open in November of
2025 as Kimball Solutions, re   ects our commitment to scalable,
high-value medical and life sciences manufacturing. We   re building
a platform for long-term growth supporting areas such as life
sciences, medical disposable devices, and minimally invasive
surgery, while continuing to serve our existing medical device
and disposable product customers.
By aligning our operations with the specialized needs of the
medical and life sciences sectors, we   re positioning Kimball
Solutions as a differentiated and trusted partner for solutions
in the global CMO landscape.
170+
CURRENT EMPLOYEES AND
EXPANDING FOR THE FUTURE
New Indianapolis Facility at a Glance
308,000 FT2 Total Of   ce and Manufacturing Space
Discipline
Our disciplined, customer-focused approach has enabled us to
evolve from producing a single clinical laboratory test device to
manufacturing millions of single-use devices annually, building
lasting relationships across the healthcare continuum.
99.999% or Five Nines
Molding Area
A key differentiator in Kimball   s manufacturing
process is our commitment to       ve nines   
reliability     meaning a 99.999% success rate    
which is critical in medical applications where
patient safety and product performance are
non-negotiable. This level of precision is
supported by advanced capabilities such
as optical engineering, machine vision,
arti   cial intelligence, metrology, and
functional part testing.
32,400 FT2
Clean Room
Assembly Area
    32 Large Presses
ISO 8     19,050 FT2
    (6,164 ft2 / 8
Mid-Size Presses)
    (5,024 ft2 / 2 Rooms)
99.999% First
Kimball was the
manufacturer of the
   rst device recognized
by the FDA to meet
Five Nines or 99.999%
guidance and they
continue to manufacture
to this standard today.
20,000+
CURRENT AUTO-INJECTORS
ASSEMBLED PER DAY AND
EXPANDING
6
Kimball Electronics
CURRENT INJECTION MOLD
COMPONENTS PER WEEK
AND EXPANDING
Additional Medical
Assembly Area
CNC (Controlled Not
Classi   ed)
    30,900 ft2 (5,562 ft2
/ 2 Rooms)
Building Tomorrow, Together
7



 9/25/2025 Letter Continued (Full PDF)