What changed in this filing

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Item 1. Business

2025-08-22 compared with 2024-08-23 · 71 added, 89 removed, 161 unchanged (50% of the section changed)

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Kimball Electronics was founded in 1961 and incorporated in 1998.

We deliver a package of value that begins with our core competency of producing durable electronics and further offer contract manufacturing services for non-electronic components, medical disposables, drug delivery solutions and precision molded plastics.

Our design and manufacturing expertise coupled with robust processes and procedures help us ensure that we deliver the highest levels of quality and reliability throughout the entire life cycle of our customers’ products.

We deliver award-winning service across our global footprint with an operations platform driven by highly integrated procedures, standardization, and teamwork.

Our Customer Relationship Management (“CRM”) model is key to providing our customers convenient access to our global footprint and all of our services throughout the entire product life cycle.

We deliver a package of value that includes durable, high-reliability electronics, higher level and final 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 life cycle 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.

Our corporate headquarters is located at 1205 Kimball Boulevard, Jasper, Indiana.

We manufacture products for our customers at facilities located in the United States, China, Mexico, Poland, Romania, and Thailand.

Reporting Segment

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assessing performance.

Each of our business units qualifies as an operating segment with its results regularly reviewed by our chief operating decision maker, the Chief Executive Officer.

Our operating segments meet the aggregation criteria under the accounting guidance for segment reporting.

As of June 30, 2025, all of our operating segments provided contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including medical devices, medical disposables, and precision molded plastics primarily in automotive, medical, and industrial applications, to the specifications and designs of our customers.

The nature of the products, the production process, the type of customers, and the methods used to distribute the products have similar characteristics across all our operating segments.

Each of our operating segments serves customers in multiple markets, and many of our customers’ programs are manufactured and serviced by multiple operating segments.

We leverage global processes such as component procurement and customer pricing that provide commonality and consistency among the various regions in which we operate.

All of our operating segments have similar long-term economic characteristics, and as such, have been aggregated into one reportable segment.

Our Business Strategy

We intend to achieve sustained, profitable growth in the markets we serve by supporting the global growth initiatives of our customers as a multifaceted manufacturing solutions company through:

• Leveraging Our Global Footprint – responding to customer demand through our presence in key regions with existing facilities, which we focus on expanding, and our consideration of potential new geographic regions;

• Expanding Our Package of Value – enhancing our core contract manufacturing services strengths and expanding our package of value in areas such as complex system assembly, specialized processes, and precision molded plastics with particular emphasis on Kimball medical solutions;

• Expanding Our Markets – exploring opportunities and making investments that will broaden existing or establish new markets.

Our Business Offerings

For 40 years, we have manufactured safety-critical electronic assemblies for automotive customers, developing invaluable expertise that extends beyond the automotive industry to benefit our medical and industrial customers as well.

Because they operate in industries that demand rigorous engineering controls and that commonly require long product life cycles, our customers rely on our track record of quality, international standard certifications, financial stability, social responsibility, and commitment to long-term relationships.

For over 35 years, we have manufactured safety-critical electronic assemblies for automotive customers, developing invaluable expertise that extends beyond the automotive industry to benefit our medical and industrial customers as well.

By harnessing our experience and expertise in design and process validation, traceability, process and control change, as well as lean manufacturing, we have achieved substantial growth and diversification.

Many of our customers are multinational companies operating across multiple global regions, and they maximize their supplier relationship by partnering with us for engineering, manufacturing, and supply chain services and support across multiple locations and regions.

We leverage key supply chain advantages and streamline our operations, enabling cost-effective manufacturing of both electronic and non-electronic products within a single production facility for customers from all three end market verticals.

Coupled with our CRM model and our global systems, procedures, processes, and teamwork, our strategic approach to expanding our global footprint aligns with our customers’ preferences in our three end market verticals.

This positions us strongly to support their global growth initiatives.

Many of our customers are multinational companies operating across multiple global regions, and they maximize their supplier relationship by partnering with us at multiple facilities across these locations and regions.

We leverage key supply chain advantages and our streamlined operations to cost-effectively manufacture both electronic and non-electronic products, from high volume-low mix to high mix-low volume, within a single production facility for customers from all three of our end market verticals.

Our robust new product introduction process and our extensive manufacturing capabilities give us the ability to execute to the various quality and reliability expectations of each of our customers.

Our CRM model and our strategic approach to expanding our global footprint aligns with our customers’ preferences in our three end market verticals allowing us to support their global growth initiatives.

Our customers benefit from consistent supply chain processes across all regions thanks to our global component sourcing, procurement, quoting, and customer pricing operations.

Our central sourcing organization employs global procurement strategies that ensure consistent component availability and a uniform pricing approach by leveraging the purchasing volume of our entire organization.

Our central sourcing organization employs global procurement strategies that ensure consistent component availability and a uniform pricing approach by leveraging our collective global purchasing volume.

Our unified, global quoting model allows us to seamlessly respond to our customers’ production needs anywhere across our global footprint.

We combine cross-functional teams from multiple facilities in quality, operational excellence, quoting, and design engineering global support with our business development team members located in-region with our global customers.

Clear roles and responsibilities, combined with diverse skill sets, establish a robust conduit critical for executing our customers’ objectives and building strong customer relationships.

We combine cross-functional teams from multiple facilities in quality, operational excellence, quoting, and design engineering support with our business development team members located in-region with our global customers.

The diverse skill sets on these teams provide a robust conduit critical for executing our customers’ objectives and building strong customer relationships.

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.

Our customers trust and value our people, our deep-rooted Guiding Principles, and our sustainability policies.

Our corporate headquarters is located at 1205 Kimball Boulevard, Jasper, Indiana.

We manufacture products for our customers at facilities located in the United States, China, Mexico, Poland, Romania, and Thailand.

As discussed in the Our Business Strategy section below, we completed the divestiture of our automation, test, and measurement business on July 31, 2024, prior to which those subsidiaries manufactured products in China and Vietnam and maintained operations in India and Japan.

Our customers trust and value our people, our deep-rooted Guiding Principles, and our sustainability leadership.

We offer our services globally on a contract basis, and we manufacture products to our customers’ specifications.

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• High-level and final assembly of medical, automotive, and industrial products;

• Design services and support;

• Design services and support, including innovative Design for Excellence solutions;

• Supply chain services and support;

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We continuously seek opportunities to grow and diversify our business and the value we deliver to customers while enhancing our global presence.

Reporting Segment

Each of our business units qualifies as an operating segment with its results regularly reviewed by our chief operating decision maker, the Chief Executive Officer.

Our operating segments meet the aggregation criteria under the accounting guidance for segment reporting.

As of June 30, 2024, all of our operating segments provided contract manufacturing services, including engineering and supply chain support, for the production of electronic assemblies and other products including medical devices, medical disposables, precision molded plastics, and automation, test, and inspection equipment primarily in automotive, medical, and industrial applications, to the specifications and designs of our customers.

The nature of the products, the production process, the type of customers, and the methods used to distribute the products have similar characteristics across all our operating segments.

Each of our operating segments serves customers in multiple markets, and many of our customers’ programs are manufactured and serviced by multiple operating segments.

We leverage global processes such as component procurement and customer pricing that provide commonality and consistency among the various regions in which we operate.

All of our operating segments have similar long-term economic characteristics, and as such, have been aggregated into one reportable segment.

Our Business Strategy

We intend to achieve sustained, profitable growth in the markets we serve by supporting the global growth initiatives of our customers as a multifaceted manufacturing solutions company.

Key elements of executing our strategy include:

• Expanding Our Markets – exploring opportunities and making investments that will broaden existing or establish new markets.

In the third quarter of fiscal year 2024, we made the decision to divest GES, our automation, test and measurement business unit, and committed to a plan to sell the business, allowing for increased focus and support for the Company’s core operations.

We completed the divestiture of the GES business to Averna Technologies Inc.

on July 31, 2024.

See N ote 3 - Assets and Liabilities H eld for Sale of Notes to Condensed Consolidated Financial Statements for more information on this divestiture.

Our Business Offerings

We offer electronics manufacturing services, including engineering and supply chain support, to customers in the automotive, medical, and industrial end market verticals.

We further offer contract manufacturing services for non-electronic components, medical disposables, and precision molded plastics.

Our services support the complete product life cycle of our customers’ products, and our processes and capabilities cover a range of products from high volume-low mix to high mix-low volume.

We bring innovative, complete design solutions to our customers.

We offer Design for Excellence input to our customers as a part of our standard package of value.

We use sophisticated software tools to integrate the supply chain in a way that provides our customers with the flexibility their business requires.

Our robust new product introduction process and our extensive manufacturing capabilities give us the ability to execute to the various quality and reliability expectations of our customers in each of our end market verticals.

We are committed to protecting the planet by combating climate change, including contributing to a lower carbon future, in our operations, our value chains, and in the services we offer to our customers.

Our strategies include actions to optimize our manufacturing facilities and processes for sustainability, increase clean energy in our purchased power mix, collaborate with our customers and supply chain to address upstream and downstream carbon emissions, invest in clean energy solutions for climate protection, and offer low carbon and clean technology products, technologies and services.

We value our customers and their unique needs and expectations.

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Our Competitive Strengths

We derive our competitive strengths from our experience of producing safety critical electronic assemblies for automotive customers for over 35 years and leveraging this experience to create valuable and innovative solutions for customers in different industries.

We derive our competitive strengths from our experience in producing safety critical electronic assemblies for automotive customers for 40 years and leveraging this experience to create valuable and innovative solutions for customers in different industries.

Our strengths include:

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Our competition includes EMS companies such as Benchmark Electronics, Inc., Flex Ltd., Jabil Inc., Plexus Corp., and Sanmina Corporation.

We do not have a significant share of the EMS market and were ranked the 18th largest global EMS provider for calendar year 2023 by Manufacturing Market Insider in the April 2024 edition published by New Venture Research.

As of August 23, 2024, we have nine manufacturing facilities with two located in Indiana, one in China, two in Mexico, and one located in each of Florida, Poland, Romania, and Thailand.

Prior to the divestiture of our automation, test, and measurement business, GES, on July 31, 2024, we also operated manufacturing facilities in Vietnam and China, performed software design services primarily at a location in India, and provided other support engineering services at locations in California and Japan.

We continually assess our capacity needs and evaluate our operations to optimize our service levels for supporting our customers’ needs around the globe, and we have recently expanded our facilities in Thailand, Mexico, and Poland.

We do not have a significant share of the EMS market and were ranked the 24th largest global EMS provider for calendar year 2024 by Manufacturing Market Insider in the March 2025 edition published by New Venture Research.

As of August 22, 2025, we have eight manufacturing facilities with two located in Indiana, two in Mexico, and one located in each of China, Poland, Romania, and Thailand.

We continually assess our capacity needs and evaluate our operations to optimize our service levels for supporting our customers’ needs around the globe, and we have recently executed a lease for a third manufacturing facility in Indiana to expand our medical CMO footprint.

When the leased facility is fully operational, it will replace the existing Indianapolis, Indiana facility.

See Item 1A - Risk Factors for information regarding financial and operational risks related to our international operations.

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While the total electronic assemblies market has broad applications, our customers are concentrated in the automotive, medical, and industrial end markets.

Beginning in fiscal year 2024, the Company changed its presentation of revenue for miscellaneous sales previously included in Other to include in the respective customers’ end market verticals.

Prior year periods have been recast to conform to the current year presentation.

Sales by industry as a percent of net sales for each of the three years in the period ended June 30, 2025 were as follows:

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Philips * * 14%

ZF 11% 13% 12%

* amount is less than 10% of total

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Raw materials are normally acquired for specific customer orders and often are not interchangeable among products.

Inherent risks associated with rapid technological changes within this our industry are mitigated by procuring raw materials, for the most part, based on firm orders.

Inherent risks associated with rapid technological changes within our industry are mitigated by procuring raw materials, for the most part, based on firm orders.

In certain instances, such as when lead times dictate, we enter into contractual agreements for material in excess of the levels required to fulfill customer orders.

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We have policies and procedures to identify and protect our own intellectual property and that of our customers and suppliers.

Corporate Social Responsibility

Sustainability Commitment

We are committed to responsible, sustainable environmental, social, and governance philosophies and practices, which have been a part of our fabric since our founding in 1961.

To showcase how our employees around the world share a strong sense of responsibility to protect the environment, sustain a safety focus at our facilities, and give back in meaningful ways to the communities where we live and work, we issued our latest annual Guiding Principles Report in March 2024.

The Report highlights the long-term environmental, social, and governance principles and practices designed to support the Company’s commitment to sustaining lasting relationships and achieving global success with its stakeholders wherever Kimball Electronics’ touch is felt throughout the world.

The Report reflects several long-standing Guiding Principles of the Company:

Our approach is guided by long-standing principles that emphasize environmental stewardship, workplace safety, ethical business conduct, and meaningful community engagement.

These principles are embedded in our operations and culture across all global locations.

To illustrate how our employees uphold these values in their daily work, we published our most recent annual Guiding Principles Report in March 2025.

The Report details our ESG priorities and performance, and highlights how our sustainability efforts support long-term stakeholder relationships and global business success.

It reflects several long-standing Guiding Principles of the Company:

our customer is our business;

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The Company’s website and the information contained therein, or incorporated therein, are not intended to be incorporated into this Annual Report on Form 10-K.

Socially Responsible Supply Chain

Environmental Stewardship and Energy Use

Our operations are subject to various foreign, federal, state, and local laws and regulations with respect to environmental and ecological matters.

We believe that we are in substantial compliance with present laws and regulations and that there are no material liabilities related to such items.

We believe that continued compliance with foreign, federal, state, and local laws and regulations which have been enacted relating to the protection of the environment will not have a material effect on our capital expenditures, earnings, or competitive position.

Management believes capital expenditures for environmental control equipment will not represent a material portion of total capital expenditures.

Our operations require significant amounts of energy, primarily in the form of electricity.

Federal, foreign, and state regulations may control the allocation of energy sources available to us, but to date we have experienced no interruption of production due to such regulations.

We participate in the Carbon Disclosure Project (CDP) climate change and water security questionnaires to quantify our environmental practices and demonstrate progress toward reducing our environmental impact.

Our participation in CDP, our annual Guiding Principles report, and other public sustainability communications reflect our commitment to transparency, continuous improvement, and environmental stewardship, consistent with our belief that ‘the environment is our home’ and our dedication to excellence, leadership, and responsibility in the communities where we operate.

Additionally, our annual Guiding Principles report aligns with the Global Reporting Initiative (GRI) Standards, the United Nations (UN) Sustainability Development Goals (SDG) and Global Compact (UNGC), the Sustainable Accounting Standards Board (SASB) Electronic Manufacturing Services & Original Design Manufacturing Standard, and the Task Force on Climate-related Financial Disclosures (TCFD) framework.

We are members of the Responsible Minerals Initiative.

We publish our sustainability report and our responses to the CDP climate change and water security questionnaires annually on our website at kimballelectronics.com/sustainability.

The contents of the sustainability reports and CDP questionnaire responses are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.

Refer to the discussion in Item 1A - Risk Factors for further details of the legal and regulatory initiatives related to environmental matters including climate change that could adversely affect our business, results of operations, and financial condition.

Responsible Sourcing and Supply Chain Integrity

We are committed to the use of a socially responsible supply chain to reduce the risk of human rights violations and the use of conflict minerals (tin, tungsten, tantalum and gold, or “3TG”) from the Democratic Republic of Congo and certain adjoining countries.

Our efforts include requiring our suppliers to undertake reasonable due diligence within their supply chain to ensure that the 3TG in the materials we source from them do not directly or indirectly contribute to significant adverse human rights impacts, as well as conducting due diligence before allowing a potential supplier to become one of our preferred suppliers.

Our responsible sourcing program also includes broader efforts to integrate ethical and environmental considerations into procurement practices, improve material efficiency, and monitor resource use across our operations and supply chain.

We request the return of reporting forms related to conflict minerals from our suppliers under the Responsible Minerals Initiative, or RMI, Conflict Minerals Survey.

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We believe in upholding principles of human rights, fair remuneration and economic inclusion, fair labor practices, worker safety, and observing fair labor practices within our organization and our supply chain.

Diversity, Equity, Inclusion, and Belonging

We value and work to promote a diverse, equitable and inclusive work environment.

We are committed to holding ourselves accountable, taking action to continuously improve our policies and practices, and to uphold the principles that encompass diversity, equity, inclusion, and belonging as outlined in our Diversity, Equity, Inclusion, and Belonging (“DEI&B”) statement.

Our strategy is to achieve excellence in customer service, employee relations, and business objectives through creativity, responsiveness, and innovation as a result of increased well-being, sense of belonging, and meaningful work for our employees.

We actively promote DEI&B, and incorporate DEI&B into our culture, values, and strategies.

We provide a report on the diversity of our employees to our Board, in our Guiding Principles Report, and in our 2023 Talent Attraction & Retention report on our website at https://www.kimballelectronics.com/sustainability.

Contributing to Our Communities

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See the Giving section of our Guiding Principles Report for more information about the ways that we supported a wide range of charitable and non-commercial causes through donations of time, talent, and treasure that align with our Guiding Principles.

Environment and Energy Matters

Our operations are subject to various foreign, federal, state, and local laws and regulations with respect to environmental and ecological matters.

We believe that we are in substantial compliance with present laws and regulations and that there are no material liabilities related to such items.

We are dedicated to excellence, leadership, and stewardship in protecting the environment and communities in which we have operations.

Management believes capital expenditures for environmental control equipment will not represent a material portion of total capital expenditures.

Our operations require significant amounts of energy, including natural gas and electricity.

Federal, foreign, and state regulations may control the allocation of fuels available to us, but to date we have experienced no interruption of production due to such regulations.

Kimball Electronics participates in the Carbon Disclosure Project (CDP) climate change and water security questionnaires to quantify our environmental practices, provide transparency on our progress, and assist in the reduction of our contributions to climate change.

Additionally, we publish disclosures in our annual Guiding Principles report that are written in accordance with the Global Reporting Initiative (GRI) Standards and are aligned to the United Nations (UN) Sustainability Development Goals (SDG) and Global Compact (UNGC), the Sustainable Accounting Standards Board (SASB) Electronic Manufacturing Services & Original Design Manufacturing Standard, and the Task Force on Climate-related Financial Disclosures (TCFD) framework.

We are members of the Responsible Minerals Initiative.

We publish our sustainability report and our responses to the CDP climate change and water security questionnaires annually on our website at kimballelectronics.com/sustainability.

We publish this information because our Guiding Principles remind us that the environment is our home and that we will be leaders in not only protecting but enhancing our world.

Our People are the Company:

Inclusion, Engagement, and Accountability;

Human Capital Management

We believe our people are the company.

We believe in creating quality for life.

We believe our people are the company.

We believe lasting relationships create our global success.

We believe our people are the competitive edge for our service, quality, and value.

We believe our people are our competitive edge for our service, quality, and value.

Our people are the reason for our success.

Kimball Electronics has been built upon the tradition of pride in craftsmanship, mutual trust, personal integrity, respect for dignity of the individual, a spirit of cooperation, and a sense of family and good humor.

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We believe in the inherent value of all individuals.

To raise awareness of our commitment to human rights and to foster compliance with our Global Human Rights Policy, we have incorporated it as an integral part of our Code of Conduct, train all of our employees worldwide on human rights issues, and require our suppliers, vendors, contractors, and partners to meet the same standards.

To this end, through our Guiding Principles, we champion transparency and accountability for ourselves.

Because our people are the reason for our success, central to our long-term strategy is attracting, developing, and retaining the best talent globally and strengthening collaboration.

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As of June 30, 2025, Kimball Electronics employed approximately 5,700 people worldwide, with approximately 1,000 located in the United States and approximately 4,700 located in foreign countries.

Currently, three of our seven independent members of the Board of Directors are female, along with four of our seven executive leadership team members and over 50% of our global workforce.

We continue to execute on our commitment to diversity, equity, inclusion, and belonging, and exhibit our commitment to gender, racial, and ethnic diversity by striving toward the corporate goals we outline in both our Global Human Rights Policy and Diversity, Equity, Inclusion, and Belonging statement, including by:

• Increasing female representation globally at the executive and senior management levels;

• Maintaining an enterprise-wide target and expectation that 100% of the candidate slates for Board of Directors, executive, and director-level employee positions include candidates from underrepresented groups;

• Holding leadership accountable for diversity, equity, inclusion, and belonging outcomes.

Three of our Independent Directors are female along with 50% of the Board’s leadership and 50% of our executive leadership team.

We value and work to promote a diverse, equitable, and inclusive work environment.

We are committed to holding ourselves accountable, taking action to continuously improve our policies and practices, and upholding the principles that encompass diversity, equity, inclusion, and belonging as outlined in our Diversity, Equity, Inclusion, and Belonging (“DEI&B”) statement.

We actively promote DEI&B, and incorporate DEI&B into our culture, values, and strategies.

We provide a report on the diversity of our employees to our Board and in our Guiding Principles Report.

The average tenure within our workforce is 8 years, and we work hard to mitigate turnover risk by consistently and formally surveying our workforce about how well we are living up to our People Guiding Principles by asking them to anonymously rate us on a scale from 1 (low) to 10 (high).

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Upon completion of this survey every year, each local management team receives qualitative and quantitative feedback and are responsible for crafting improvement plans based on our people’s inputs.

These commitments are further detailed in our 2024 Guiding Principles Report, available at https://www.kimballelectronics.com/sustainability.

operations are not subject to collective bargaining arrangements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business