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Electronics Production | February 06, 2009

Kimball Electronics reduced net loss in 2Q

Net sales within the public safety industry were higher in the 2Q/2009 compared to last year while net sales to customers in the automotive and industrial control industries experienced double digit percentage declines compared to the prior year. Sales to customers in the medical industry declined slightly when compared to the 2Q/2008.
Gross profit as a percent of net sales for the fiscal year 2009 second quarter declined in this segment when compared to the second quarter of the prior year primarily related to the lower volumes and the segment’s European operations which are currently being consolidated into one facility. Contractual customer price reductions on select products also negatively impacted gross profit in the second quarter compared to last year. Partially mitigating the lower margins are benefits the segment realized on the North American consolidation activities which were completed late in fiscal year 2008.

Despite the lower sales volumes and reduction in gross margins, the EMS segment reduced its net loss in the second quarter fiscal year 2009 compared to the prior year due to a 26% reduction in selling and administrative expenses. The reduced selling and administrative expenses were primarily related to benefits realized from restructuring activities, reduced spending on travel, and lower depreciation/amortization expense.

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