Kimball Electronics, Inc. announced its financial results for the first quarter ended September 30, 2024, reporting net sales of $374.3 million, a 15% decrease year-over-year. Adjusted diluted EPS for the quarter was $0.22, compared to $0.48 in the prior year period. Adjusted operating income stood at $12.6 million, or 3.4% of net sales.
Despite the revenue decline, the company generated $45.5 million in cash from operating activities, marking its third consecutive quarter of positive cash flow. Borrowings on credit facilities were reduced by $48.9 million to $245.9 million, reaching a two-year low. Inventory levels also saw a significant reduction of $147 million, or 30%, compared to the first quarter of fiscal 2024.
As part of its strategic repositioning, Kimball Electronics confirmed the divestiture of its Automation, Test, and Measurement (AT&M) business, effective July 31, 2024. Additionally, the company announced plans to close its manufacturing facility in Tampa, Florida, by the end of fiscal year 2025, with production activities transferring to its Mexico and Jasper facilities. This move is expected to incur $8 million to $11 million in exit costs, but proceeds from the property sale are anticipated to exceed these costs.
For fiscal year 2025, the company reiterated its guidance, expecting net sales in the range of $1.44 billion to $1.54 billion, representing an 8% to 14% decline year-over-year when excluding AT&M sales. Adjusted operating income is projected to be between 4.0% and 4.5% of net sales, with capital expenditures estimated at $40 million to $50 million.
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