Kimball Electronics expects its Medical business to represent more than one-third of total company sales in fiscal 2027, supported by high-single-digit to low-double-digit organic growth and approximately $60 million of expected revenue from Helvoet Polymer Technologies, while working-capital efficiency has improved to its best level in 17 quarters.
The outlook represents another step in Kimball’s strategy to rebalance its portfolio toward medical contract development and manufacturing. Medical generated $412.8 million of fiscal 2026 sales, representing 29% of total revenue, compared with $396.2 million and 27% of revenue in the prior year.
During the fourth quarter, Medical sales reached $108.8 million, or 29% of company revenue, compared with $107.2 million and 28% a year earlier. Management expects Medical to grow faster than its Automotive and Industrial businesses during fiscal 2027.
Helvoet is expected to accelerate that shift by adding approximately $60 million of fiscal 2027 revenue. Kimball is pairing the acquisition with organic investment in medical manufacturing, including the buildout of its new medical facility in Indianapolis.
Company-wide fiscal 2027 revenue is forecast at $1.535 billion to $1.560 billion, representing 7%-9% growth from fiscal 2026. Kimball expects organic sales growth of 3%-5%, Medical growth in the high-single-digit to low-double-digit range, and adjusted operating income equal to 4.4%-4.7% of sales.
The company plans $50 million to $60 million of capital expenditures during the fiscal year, giving it additional capacity to invest in growth while integrating Helvoet and expanding its medical CDMO platform.
Kimball enters the expansion period with improving working-capital performance. Cash Conversion Days declined to 82 at June 30 from 90 at March 31 and 85 a year earlier, marking the company’s best result in 17 quarters. Open orders stood at approximately $643 million.
Cash generation has also remained consistent. Kimball generated $42.4 million of operating cash flow during the fourth quarter, marking its 10th consecutive quarter of positive operating cash generation. Full-year operating cash flow totaled $72.3 million.
The cash flow has helped strengthen the balance sheet. Debt declined to $116.6 million, its lowest level in more than four years, while Kimball ended the fiscal year with $88.9 million of cash and approximately $322.4 million of borrowing capacity.
Fourth-quarter net sales were $371.6 million compared with $380.5 million a year earlier, although revenue increased 5% sequentially and all end-market verticals posted sequential gains. GAAP operating income increased to $29.1 million from $16.5 million, while net income increased to $8.5 million from $6.6 million.
Adjusted operating income was $18.1 million compared with $19.6 million a year earlier, giving Kimball an adjusted operating margin of 4.9% compared with 5.2%. The fiscal 2027 strategy therefore combines a return to top-line growth with acquisition-driven expansion in Medical and a balance sheet that management believes has capacity to support additional strategic investment.
KEY QUOTES:
“I’m proud of our results in the fourth quarter and very good finish to fiscal 2026. Sales in Q4 were in line with expectations, adjusted operating income was better than estimates, and we generated strong cash from operations, which was used to pay down debt to its lowest level in over 4 years. Our balance sheet continued to strengthen and we are actively leveraging it to make strategic investments in growth in the medical CDMO space, such as the buildout of our new medical facility in Indianapolis and the acquisition of Helvoet Polymer Technologies.”
“Our guidance for fiscal 2027 is highlighted by organic sales growth and the accretive impact from Helvoet. We are expecting Medical to continue to outpace the other two verticals and represent more than one-third of total Company sales in the fiscal year, which is in line with our objective to balance the portfolio across the markets we serve. Our strategic journey continues to build, and so does my excitement for the future of this Company.”
Richard D. Phillips, Chief Executive Officer of Kimball Electronics
“As we expected, fiscal 2026 was a year of transition and I am impressed with our team’s resilience and ability to deliver results in a challenging environment. As a CFO who takes great pride in the condition of our balance sheet, we exited the fiscal year in a position of strength, with plenty of dry powder in the form of borrowing capacity and available cash to strategically invest. Our guidance for fiscal 2027 projects a return to top line growth and we will be leveraging the balance sheet to support those efforts.”
Jana T. Croom, Chief Financial Officer of Kimball Electronics
