Kimball Electronics, Inc. announced financial results for the third quarter ended March 31, 2025, with net sales of $374.6 million, a 12% decrease year-over-year, or 10% excluding the divested AT&M business. Adjusted diluted EPS for the quarter was $0.27, compared to $0.39 in the prior year period. Adjusted operating income reached $15.7 million, or 4.2% of net sales, showing sequential margin improvement.
The company continued its strong financial discipline, generating $30.9 million in cash from operating activities, marking its fifth consecutive quarter of positive cash flow. Borrowings on credit facilities were reduced to $178.8 million, a $116 million reduction from the start of the fiscal year. Cash conversion days improved to 99 days, down from 110 days a year prior.
Kimball Electronics reiterated its guidance for fiscal year 2025, expecting net sales in the range of $1.4 billion to $1.44 billion and adjusted operating income between 3.4% and 3.6% of net sales, with management anticipating achieving the high end of these ranges. Capital expenditures are expected to be at the low end of the $40 million to $50 million guidance range.
A significant strategic development is the lease of a new 300,000 square foot facility in Indianapolis, specifically dedicated to the medical industry. This facility will support the company's Medical Contract Manufacturing Organization (CMO) strategy, providing capacity for higher-value medical assemblies and drug-device combinations. The company also noted a $24 million non-recurring consignment inventory sale in the Medical segment related to an FDA recall, which favorably impacted Q3 medical sales.
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