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© verticalarray dreamstime.com Electronics Production | February 06, 2013

EMS net sales increase YoY for Kimball

Fiscal year 2013 second quarter net sales in the EMS segment increased 11% compared to the second quarter of the prior year related to sales growth to customers in the automotive, industrial and public safety industries.
Sales to customers in the medical industry declined in the second quarter compared to the prior year.

Gross profit as a percent of net sales in the EMS segment for the second quarter of fiscal year 2013 improved 2.1 percentage points when compared to the second quarter of the prior year. Second quarter fiscal year 2013 gross profit was unfavorably impacted by a$1.1 millioninventory reserve relating to a customer that announced they are going out of business.

Selling and administrative expenses in this segment increased 12% in the fiscal year 2013 second quarter when compared to the prior year primarily due to increased incentive compensation costs related to the significant improvement in earnings. As a percent of net sales, selling and administrative costs in the EMS segment increased 0.1 percentage point.

© Kimball

James C. Thyen, President and Chief Executive Officer, stated:

"We were very pleased with the strong second quarter results in spite of the earnings charges for the customer that notified us they are going out of business and the impaired investment in a start-up company. These two charges had an after-tax impact of4 centsper share and offset nice progress in the EMS segment. During the second quarter, our EMS segment continued its trend of gaining traction with double-digit sales growth and improved margins. We again saw sales growth to customers in the automotive market during the quarter as the overall U.S. automotive industry experienced steady growth in calendar year 2012. Sales to the industrial and public safety vertical markets also increased compared to last year partially resulting from the ramp up of sales to new customers. Quote activity in this segment has been strong, and we are optimistic in this segment going into the second half of our fiscal year."

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