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© yuriy-chaban-dreamstime.com Electronics Production | February 06, 2014

Industrial and automotive drives Kimball

Fiscal year 2014 second quarter net sales in the EMS segment increased 10% compared to the second quarter of the prior year on solid growth to customers in the industrial and automotive industries.
Net sales to the public safety and medical industries however, declined compared to the prior year.

Gross profit as a percent of net sales in the EMS segment for the second quarter of fiscal year 2014 increased 0.4 of a percentage point when compared to the second quarter of the prior year. The improvement in margin is due to the impact of a USD 1.1 million inventory write-down in the prior year second quarter which favorably impacts the year-over-year comparison.

Selling and administrative expenses in this segment increased 18% in the fiscal year 2014 second quarter when compared to the prior year primarily due to higher incentive compensation costs related to the improved earnings. As a percent of sales, selling and administrative costs in the EMS segment increased 0.5 of a percentage point for the second quarter of fiscal year 2014 compared to the prior year.

Earnings in this segment in the second quarter of fiscal year 2014 were favorably impacted by a USD 0.7 million tax adjustment related to a tax law change in Mexico.



James C. Thyen, President and Chief Executive Officer, stated, "In our EMS segment, the 10% increase in sales was driven by the success of our business development efforts and continued strength in both the industrial and automotive markets. Overall, we were very pleased with the solid performance in both of our segments this quarter."

Spin-off of Electronic Manufacturing Services Segment

On January 20, 2014, the Company its plan to spin off its electronic manufacturing services segment. The separation will result in two independent publicly-traded companies: Kimball International (the furniture side of the business) and Kimball Electronics (the EMS-provider). The company expects the spin-off, which is intended to be tax-free to shareholders, to be completed in approximately 8 - 12 months.

Image © Kimball
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January 11 2019 8:28 pm V11.10.27-1