Kimball Electronics, Inc. (NASDAQ:KE) Q1 2023 Results Conference Call November 8, 2022 10:00 AM ET

Company Participants

Andrew Regrut - VP, IR

Donald Charron - Chairman & CEO

Jana Croom - CFO

Conference Call Participants

Max Michaels - Lake Street Capital Markets

Anja Soderstrom - Sidoti

Hendi Susanto - Gabelli Funds

Operator

Good morning, ladies and gentlemen, and welcome to the Kimball Electronics First Quarter Fiscal 2023 Earnings Conference Call. My name is [Darius La] (ph) and I'll be the facilitator for today’s call. All lines have been place in a listen-only mode to prevent any background noise. After the completion of the prepared remarks from the Kimball Electronics leadership team there will be question-and-answer period. [Operator Instructions] [Operator Instructions] Today's call, November 8, 2022 is being recorded. A replay of the call will be available on the Investor Relations page of the Kimball Electronics website.

At this time, I would like to turn the call over to Andy Regrut, Vice President, Investor Relations. Mr. Regrut, you may begin.

Andrew Regrut

Thank you, Darius, and good morning, everyone. Welcome to our first quarter conference call. With me here today is Don Charron, our Chairman and CEO; and Jana Croom, Chief Financial Officer. We issued a press release yesterday afternoon with our results for the first quarter of fiscal 2023. To accompany today's call, a presentation has been posted to the Investor Relations page of our company website.

Before we get started, I'd like to remind you that we will be making forward-looking statements that involve risk and uncertainty and are subject to our safe harbor provisions as stated in our press release and SEC filings. And that actual results can differ materially from the forward-looking statements. All commentary today is focused on adjusted non-GAAP results. Reconciliations of GAAP to non-GAAP amounts are available in our press release.

One additional housekeeping item, as a reminder, starting in Q1 we have combined the reporting of results for our industrial and public safety vertical markets. Reclassified amounts for prior periods are available in our press release and SEC filings.

This morning, Don will start the call with a few opening comments, Jana will review the financial results for the quarter and guidance for fiscal 2023, and Don will complete our prepared remarks before taking your questions.

I'll now turn the call over to Don.

Donald Charron

Thanks, Andy, and good morning, everyone. I'm pleased with our results in Q1 and a strong start to the new fiscal year. For the third consecutive quarter, net sales surged to a record-breaking level setting another all-time high for our company, and operating margin improved compared to the same period last year. This was in line with our estimates as we ramp up production on new and existing programs and leverage our facility expansions in Thailand and Mexico. These investments, however, increased fixed costs that were not fully absorbed when comparing the operating margin rate to Q4 of fiscal year 2022.