Kimball: EMS net sales increased 7% YoY

James C. Thyen, Chief Executive Officer and President, stated, "In our EMS segment, after posting two very strong quarters at the end of last fiscal year, this segment recorded a small net loss for the first quarter. We had unanticipated sharp demand changes of a few customer programs coupled with supply chain allocation. We chose to sustain our excellent service to our customers and incurred extra charges. We also had customer requested shipping delays in the EMS segment in the latter half of the first quarter which pushed some shipments into the second quarter." Mr. Thyen concluded, "There continues to be economic uncertainty, but we are seeing some stability. We are well-positioned in our markets and intend to take advantage of market opportunities as they arise, sharpening our execution, while continuing to make investments for growth." EMS segment First quarter net sales in the EMS segment increased 7% over the first quarter of the prior year with increased sales to customers in the medical, industrial control and public safety industries. First quarter net sales to customers in the automotive industry declined compared to the prior year which was aided by an increase in sales related to the government stimulus programs. Gross profit as a percent of net sales in the EMS segment for the first quarter of fiscal year 2011 increased over the first quarter of the prior year primarily due to improved cost absorption resulting from the increased volumes. Partially offsetting the favorable impact of the higher volumes, the Company incurred higher component costs and expedited freight charges resulting from the inventory component shortages and allocations within the industry. Selling and administrative costs in this segment increased 8% in the first quarter when compared to the prior year primarily related to increased labor and employee benefit costs.