• Second quarter net sales of $284 million, up 10% year-over-year
• Net income of $7.1 million and diluted earnings per share of $0.27
• Returned $13.3 million to Share Owners in stock repurchases during the quarter
• Completed the GES acquisition on October 1, 2018

JASPER, Ind., Feb. 06, 2019 (GLOBE NEWSWIRE) -- Kimball Electronics, Inc. (Nasdaq: KE), a leading global electronics manufacturing services provider of high-quality, durable electronic products, today announced financial results for its second quarter ended December 31, 2018.

^{(1) As of the beginning of fiscal year 2019, the Company adopted the new accounting standard on Revenue from Contracts with Customers on a modified retrospective basis.  For the three months ended December 31, 2018, the adoption increased Net Sales $6.0 million, Net Income increased $0.2 million, and Diluted EPS was unchanged.  For the six months ended December 31, 2018, the adoption increased Net Sales $6.4 million, Net Income increased $0.3 million, and Diluted EPS increased $0.01.  The prior periods were not restated.
(2) Prior period amounts have been restated to reflect the retrospective adoption of new accounting guidance on improving the presentation of net periodic pension cost and net periodic postretirement benefit cost.
(3) A reconciliation of GAAP and non-GAAP financial measures is included below.}

Donald D. Charron, Chairman and Chief Executive Officer, stated, “We achieved solid year-over-year organic growth in three of our four end market verticals as the ramp-up of new program launches helped to more than offset continued softness in certain other programs primarily caused by global macro-economic conditions, component shortages, and trade uncertainties.”

Mr. Charron continued, “We made good progress in optimizing our core business and with the acquisition of GES, we took a significant step in our strategy to diversify ourselves into a multifaceted manufacturing solutions provider.  We are cautiously optimistic that our goal of 8% organic growth remains in reach for fiscal year 2019, and we expect to meet our 4.5% operating income goal for the second half of fiscal year 2019.”

Second Quarter Fiscal Year 2019 Overview:

• Consolidated net sales increased 10% compared to the second quarter of fiscal year 2018.  Net sales in the second quarter were impacted by:
     ◦ The GES acquisition increased net sales by 2%.
     ◦ Net sales increased 2% as a result of the adoption of new revenue recognition accounting rules.
     ◦ Unfavorable foreign currency movements decreased net sales by 1% compared to the prior year second quarter. 
• The Romania facility improved its impact on consolidated operating income percent by 30 basis points compared to the prior year second quarter as its ramp-up progresses; however, GES unfavorably impacted consolidated operating income percent by 60 basis points, including 20 basis points resulting from the amortization of acquired intangibles.
• Other Income (Expense), net includes interest expense of $1.1 million in the current year quarter compared to $0.1 million in the prior year quarter as a result of increased borrowings on the credit facilities, in large part related to the financing of the GES acquisition.
• Adjusted Net Income and Adjusted Diluted EPS exclude $16.6 million of provisional discrete tax expense for the three and six months ended December 31, 2017 related to the U.S. Tax Cuts and Jobs Act (“Tax Reform”) and a $0.3 million income tax benefit for the three and six months ended December 31, 2018 from adjustments to the Tax Reform provisions prior to the end of the measurement period.  See below for additional information and a reconciliation of non-GAAP financial measures.