Kimball Electronics, Inc. (KE): Business Model Canvas [11-2024 Updated]
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Kimball Electronics, Inc. (KE) Bundle
Understanding the Business Model Canvas of Kimball Electronics, Inc. (KE) offers invaluable insights into how this dynamic company operates within the electronics manufacturing sector. By examining key components such as value propositions, customer segments, and revenue streams, we can uncover the strategies that drive KE's success in serving industries from automotive to medical devices. Dive deeper to explore the intricate elements that shape Kimball Electronics' business approach and discover what sets them apart in a competitive landscape.
Kimball Electronics, Inc. (KE) - Business Model: Key Partnerships
Collaborations with suppliers for raw materials
Kimball Electronics collaborates with various suppliers to secure essential raw materials required for its manufacturing processes. As of September 30, 2024, the total inventory was valued at $335.3 million, which includes raw materials worth $335.1 million. This strategic collaboration helps mitigate risks associated with supply chain disruptions and ensures a steady flow of materials necessary for production.
Strategic alliances with technology providers
The company has formed strategic alliances with technology providers to enhance its manufacturing capabilities. These partnerships enable Kimball Electronics to integrate advanced technologies into its production processes, thereby improving efficiency and product quality. For instance, the company has engaged with suppliers like Nexteer Automotive, which accounted for 18% of net sales in the first quarter of fiscal year 2025. Additionally, Kimball Electronics utilizes a primary credit facility of $300 million, which allows for potential increases to $450 million, facilitating investments in technology and innovation.
Partnerships with logistics companies for efficient distribution
To ensure efficient distribution of its products, Kimball Electronics partners with logistics companies. These partnerships are critical in managing the complexities of global supply chain operations. The company has been actively working to streamline its logistics network, which is reflected in its cash flow management. For example, the net cash provided by operating activities for the three months ended September 30, 2024, was $45.5 million, indicating effective management of operational costs associated with logistics. Furthermore, the company expects to incur approximately $6.0 million to $7.0 million in total exit costs related to the restructuring of its logistics operations.
| Partnership Type | Key Partners | Impact on Business |
|---|---|---|
| Suppliers | Various raw material suppliers | Secures steady supply of materials, reducing risk of production delays |
| Technology Providers | Nexteer Automotive, ZF | Enhances manufacturing efficiency and product quality |
| Logistics Companies | Multiple logistics partners | Improves distribution efficiency and reduces operational costs |
Kimball Electronics, Inc. (KE) - Business Model: Key Activities
Manufacturing electronic assemblies and components
Kimball Electronics specializes in the manufacturing of electronic assemblies and components, primarily serving the automotive, medical, and industrial markets. For the three months ended September 30, 2024, the total net sales amounted to $374.3 million, a decrease of 15% compared to $438.1 million for the same period in 2023. The breakdown of net sales by vertical market for the same period is as follows:
| Vertical Market | Net Sales (2024, in Millions) | Net Sales (2023, in Millions) | % Change |
|---|---|---|---|
| Automotive | $188.4 | $212.5 | (11%) |
| Medical | $89.8 | $102.4 | (12%) |
| Industrial | $96.1 | $123.2 | (22%) |
Quality control and testing of products
Quality control is a critical aspect of Kimball Electronics' operations, ensuring that products meet stringent specifications and reliability standards. The company has received recognition for its quality, including awards for achieving the Highest Overall Customer Rating in Service Excellence. The gross profit for the three months ended September 30, 2024, was $23.6 million, representing 6.3% of net sales, compared to $35.5 million or 8.1% of net sales for the same period in 2023.
Research and development for innovative solutions
Kimball Electronics invests in research and development to drive innovation within its product offerings. The company incurred $2.3 million in restructuring expenses during the three months ended September 30, 2024, primarily related to workforce resizing to align with market demand. The focus on R&D is reflected in the overall strategy to adapt to changing customer needs and enhance product offerings, especially in the medical and automotive sectors, where technological advancements are crucial for competitiveness.
Kimball Electronics, Inc. (KE) - Business Model: Key Resources
Skilled workforce and management team
Kimball Electronics, Inc. employs a skilled workforce that is critical to its operations and customer satisfaction. As of September 30, 2024, the company had approximately 5,000 employees across its global operations, with a focus on continuous training and development to enhance skills and expertise in electronics manufacturing services.
The management team consists of experienced professionals with a strong track record in the electronics manufacturing industry. This leadership is essential for navigating market challenges and implementing strategic initiatives aimed at enhancing operational efficiency and customer service.
Advanced manufacturing facilities in multiple locations
Kimball Electronics operates advanced manufacturing facilities strategically located in the United States, Thailand, China, the Netherlands, and Poland. The company has invested significantly in these facilities to ensure they are equipped with the latest technologies and production capabilities.
| Facility Location | Key Capabilities | Square Footage |
|---|---|---|
| United States | Electronics Manufacturing Services | 300,000 sq. ft. |
| Thailand | Precision Molding and Medical Device Production | 250,000 sq. ft. |
| China | Contract Manufacturing | 200,000 sq. ft. |
| Netherlands | Logistics and Assembly | 150,000 sq. ft. |
| Poland | Electronics and Non-Electronics Components | 100,000 sq. ft. |
These facilities enable Kimball Electronics to meet diverse customer demands across various sectors, including automotive, medical, and industrial markets.
Strong financial position with substantial liquidity
As of September 30, 2024, Kimball Electronics reported a strong financial position with total assets of $1.15 billion. The company maintains a healthy liquidity profile, with cash and cash equivalents amounting to $78.4 million and a short-term liquidity total of $263.4 million, which includes unused credit facilities.
The company's working capital was $439.0 million, and it reported a current ratio of 2.3, indicating robust financial health. Additionally, the debt-to-equity ratio stood at 0.4, reflecting a prudent approach to leveraging debt while maintaining equity stability. This strong financial foundation supports ongoing investments in technology and facilities, ensuring that Kimball Electronics can continue to deliver value to its customers.
Kimball Electronics, Inc. (KE) - Business Model: Value Propositions
Custom manufacturing tailored to client specifications
Kimball Electronics provides customized manufacturing solutions that are specifically tailored to the unique specifications of its clients. This approach allows the company to cater to diverse industries, including automotive, medical, and industrial sectors. The flexibility in production processes ensures that they can adapt to varying customer requirements and preferences, thereby enhancing customer satisfaction and loyalty.
High-quality products with rigorous testing standards
The company emphasizes quality assurance through rigorous testing standards. In the first quarter of fiscal year 2025, Kimball Electronics reported a gross profit of $23.6 million, representing 6.3% of net sales, which totaled $374.3 million. This reflects their commitment to maintaining high-quality standards even amidst fluctuating sales. Their products are recognized for durability and reliability, which are critical in the sectors they serve.
Flexible supply chain solutions to meet varying demand
Kimball Electronics offers flexible supply chain solutions designed to respond to varying demand levels efficiently. As of September 30, 2024, the company reported working capital of $439 million and a current ratio of 2.3, indicating a strong ability to meet short-term obligations. The adaptability of their supply chain is crucial in mitigating risks associated with demand fluctuations, particularly in the automotive and medical markets, where customer demand has seen a decline of 11% and 12%, respectively.
| Value Proposition | Key Statistics | Details |
|---|---|---|
| Custom Manufacturing | N/A | Tailored solutions for diverse customer specifications across various industries. |
| High-Quality Products | Gross Profit: $23.6 million | 6.3% of Net Sales; rigorous testing standards to ensure product reliability. |
| Flexible Supply Chain | Working Capital: $439 million | Current Ratio: 2.3; ability to adapt to fluctuating demand levels across sectors. |
Kimball Electronics, Inc. (KE) - Business Model: Customer Relationships
Long-term contracts with key clients
Kimball Electronics has established long-term contracts with key clients, particularly in the automotive and medical sectors. For the three months ended September 30, 2024, net sales from the automotive sector were $188.4 million, while medical sector sales were $89.8 million. The company has reported that approximately 97% of net sales are recognized over time as manufacturing services are performed under customer contracts. This strategic focus helps ensure stable revenue streams and fosters strong client relationships through commitment and reliability.
Customer support and service teams for ongoing engagement
Kimball Electronics employs dedicated customer support and service teams that engage with clients to enhance satisfaction and address any issues proactively. The company reported that 78% of its net sales for the three months ended September 30, 2024, came from customers with whom it has maintained relationships for more than 10 years. This emphasis on long-term engagement is reflected in their customer service awards, including the Highest Overall Customer Ratings in four of seven categories in 2023 from CIRCUITS ASSEMBLY.
Regular performance reviews to enhance satisfaction
To maintain high levels of customer satisfaction, Kimball Electronics conducts regular performance reviews with its clients. These reviews are essential for identifying areas of improvement and ensuring that service levels meet or exceed client expectations. The company’s focus on continuous improvement is supported by a comprehensive warranty program that covers workmanship and compliance with customer specifications. As of September 30, 2024, the company had open orders amounting to $594 million, indicating ongoing commitments to service delivery and client engagement.
| Customer Engagement Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 |
|---|---|---|
| Net Sales (Automotive) | $188.4 million | $212.5 million |
| Net Sales (Medical) | $89.8 million | $102.4 million |
| Percentage of Sales from Customers > 10 Years | 78% | 74% |
| Open Orders | $594 million | $907 million |
| Customer Ratings (CIRCUITS ASSEMBLY) | Highest Overall Customer Ratings in 4 of 7 Categories | Not Available |
Kimball Electronics, Inc. (KE) - Business Model: Channels
Direct sales to large clients in automotive and medical sectors
In the first quarter of fiscal year 2025, Kimball Electronics reported net sales of $188.4 million in the automotive sector, representing an 11% decrease from $212.5 million in the same period of the previous year. In the medical sector, sales were $89.8 million, down 12% from $102.4 million. This reduction in sales is attributed to decreased customer demand, particularly in North America and Europe.
Online platforms for order management and communication
Kimball Electronics utilizes online platforms to facilitate order management and communication with clients. The company has implemented electronic tools that streamline the order process, enhancing efficiency and customer interaction. In the current fiscal year, the company reported $45.5 million in net cash provided by operating activities, reflecting the effectiveness of these platforms in managing customer relationships and operational cash flow.
Trade shows and industry conferences for visibility
Kimball Electronics participates in trade shows and industry conferences to enhance its market visibility and establish connections with potential clients. The company’s presence at these events aims to showcase its manufacturing capabilities and innovative solutions in electronics manufacturing services (EMS). This strategy is vital given the competitive landscape of the EMS industry, where maintaining visibility can significantly impact client acquisition and retention.
| Channel Type | 2024 Sales (in millions) | 2023 Sales (in millions) | Percentage Change |
|---|---|---|---|
| Automotive | $188.4 | $212.5 | -11% |
| Medical | $89.8 | $102.4 | -12% |
| Industrial | $96.1 | $123.2 | -22% |
| Total Net Sales | $374.3 | $438.1 | -15% |
As of September 30, 2024, Kimball Electronics reported open orders of $594 million, a 35% decrease from $907 million in the same quarter of the previous year. This decline is reflective of reduced demand and customer cancellations in both automotive and medical sectors.
Kimball Electronics, Inc. (KE) - Business Model: Customer Segments
Automotive manufacturers seeking custom components
Kimball Electronics serves major automotive manufacturers by providing custom electronic components tailored to specific vehicle applications. In the first quarter of fiscal year 2025, net sales to the automotive sector amounted to $188.4 million, a decrease of 11% compared to $212.5 million in the same period of fiscal year 2024. This decline is attributed to reduced customer demand, particularly in North America and Europe.
Medical device companies requiring precision parts
In the medical device sector, Kimball Electronics offers precision parts essential for various medical applications. The company reported net sales of $89.8 million in the medical market for the first quarter of fiscal year 2025, reflecting a 12% decline from $102.4 million in the same quarter of fiscal year 2024. This reduction is primarily due to lower customer demand within the medical industry, emphasizing the need for adaptable manufacturing solutions in a fluctuating market.
Industrial firms needing electronic assemblies
Kimball Electronics also caters to industrial firms by providing electronic assemblies necessary for various industrial applications. In fiscal year 2025, net sales to the industrial market were $96.1 million, marking a 22% decline from $123.2 million in fiscal year 2024. Approximately half of this decrease is linked to the divestiture of its Global Electronics Solutions (GES) segment, with the remainder reflecting ongoing softness in specific industrial sectors.
| Customer Segment | Net Sales (FY 2025) | Net Sales (FY 2024) | % Change |
|---|---|---|---|
| Automotive | $188.4 million | $212.5 million | -11% |
| Medical | $89.8 million | $102.4 million | -12% |
| Industrial | $96.1 million | $123.2 million | -22% |
Overall, Kimball Electronics' diversified customer base enables it to leverage its manufacturing capabilities across multiple sectors, though it faces challenges in maintaining sales amid fluctuating demand.
Kimball Electronics, Inc. (KE) - Business Model: Cost Structure
Labor costs associated with skilled workers
As of September 30, 2024, Kimball Electronics reported a restructuring expense of $2.3 million primarily related to employee-related costs. The total net income for the same period was $3.2 million, indicating a significant impact of labor costs on overall profitability. Additionally, the average number of employees has fluctuated, with workforce resizing efforts ongoing to align with market demand.
Material costs for raw components and supplies
Material costs for Kimball Electronics are heavily influenced by raw materials and inventory levels. As of September 30, 2024, total inventories were valued at $335.3 million, with raw materials accounting for a significant portion. The cost of sales for the first quarter of fiscal year 2025 was reported at $350.7 million, reflecting a decrease from the previous year, primarily due to reduced production levels. The change in inventories from the previous quarter to September 30, 2024, indicated a cash outflow of $5.1 million, driven by investment in supporting new business awards.
| Cost Category | Amount (in Millions) |
|---|---|
| Raw Materials Inventory | $335.3 |
| Cost of Sales | $350.7 |
| Cash Used for Inventory Changes | $5.1 |
Overhead costs for facility maintenance and operations
Kimball Electronics incurs overhead costs related to facility maintenance and operations, which amounted to $13.4 million in selling and administrative expenses during the first quarter of fiscal year 2025. The company has also reported capital investments of $13.4 million for the same period, primarily focusing on facility expansions and replacing older machinery. This capital expenditure indicates the ongoing commitment to maintaining and upgrading operational capabilities.
| Overhead Cost Components | Amount (in Millions) |
|---|---|
| Selling and Administrative Expenses | $13.4 |
| Capital Investments | $13.4 |
Kimball Electronics, Inc. (KE) - Business Model: Revenue Streams
Service fees for manufacturing contracts
Kimball Electronics generates significant revenue through service fees associated with manufacturing contracts. For the three months ended September 30, 2024, the company reported net sales of $374.3 million, a decrease of 15% from $438.1 million in the same period of 2023. Approximately 97% of net sales were recognized over time as manufacturing services were performed under customer contracts. The breakdown of net sales by vertical market shows:
| Vertical Market | Net Sales (2024, Millions) | Net Sales (2023, Millions) | % Change |
|---|---|---|---|
| Automotive | 188.4 | 212.5 | (11%) |
| Medical | 89.8 | 102.4 | (12%) |
| Industrial | 96.1 | 123.2 | (22%) |
| Total | 374.3 | 438.1 | (15%) |
Sales of finished products to various sectors
In addition to service fees, Kimball Electronics earns revenue from the sale of finished products across various sectors. The company’s primary markets include automotive, medical, and industrial, with a focus on producing durable electronics and medical devices. As of September 30, 2024, the company reported a gross profit of $23.6 million, representing a gross margin of 6.3%. The following table summarizes the key financial metrics related to product sales:
| Metric | Value (2024) | Value (2023) |
|---|---|---|
| Net Sales | $374.3 million | $438.1 million |
| Gross Profit | $23.6 million | $35.5 million |
| Gross Margin % | 6.3% | 8.1% |
Potential revenue from technology partnerships and innovations
Kimball Electronics is actively seeking to enhance its revenue streams through technology partnerships and innovations. The company completed the divestiture of GES on July 31, 2024, resulting in cash proceeds of $18.5 million. This strategic move is aimed at sharpening the company's focus on core competencies and expanding its technological capabilities. The potential revenue from partnerships is not explicitly quantified but is expected to contribute positively to future financial performance.
In the context of customer relationships, as of September 30, 2024, Kimball Electronics had approximately 60 customers, with 78% of net sales generated from customers with whom they have maintained relationships for over 10 years.
Updated on 16 Nov 2024
Resources:
- Kimball Electronics, Inc. (KE) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Kimball Electronics, Inc. (KE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kimball Electronics, Inc. (KE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.