Kimball Electronics 2Q FY2016 Net Sales Flat

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Kimball Electronics Inc. has announced net sales of $207 million for the second quarter of fiscal year 2016 (which ended December 31, 2015), flat compared to the previous year's second quarter. Operating income fell to $6.9 million from $8.7 million in the previous year, while net income totaled $4.56 million. Revenue growth was adversely impacted by the exit of Johnson Controls Inc. and foreign currency movements. Incremental costs associated with the start-up of the company’s new Romania facility reduced net income by $0.7 million in the quarter.

"On the top line, the firmer demand that we began to see at the end of the first quarter continued for the most part into the second quarter. We saw a double-digit increase both sequentially and year-over-year in our China automotive sales which was partially offset by softer overall demand in the U.S. while our Europe markets remained relatively stable," said Donald D. Charron, chairman and chief executive officer. "We are making good progress on the launches of a number of new business awards with both existing and new customers and we are expecting sales from these launches later this fiscal year. Our new business opportunities pipeline remains healthy, and we continue to work diligently to achieve our medium range goal of $1 billion in annual sales by fiscal year 2018.

"On the bottom line, this has been another challenging quarter for us. We experienced higher costs in a number of areas, including incremental costs related to the Romania Greenfield start-up, foreign exchange headwinds, and higher than expected healthcare costs in the U.S. We remain committed to our 4% operating income goal and are responding with the appropriate short-term actions while maintaining alignment with our long-term strategic plan."



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