Kimball Electronics, Inc. (NASDAQ:KE) Q3 2022 Earnings Conference Call May 6, 2022 10:00 AM ET

Company Participants

Andy Regrut – Vice President, Investor Relations

Don Charron – Chairman & Chief Executive Officer

Jana Croom – Chief Financial Officer

Conference Call Participants

Anja Soderstrom – Sidoti

Hendi Susanto – Gabelli Funds

Mike Morales – Walthausen & Company

Operator

Good morning, ladies and gentlemen, and welcome to the Kimball Electronics Third Quarter Fiscal Earnings Conference Call. My name is Danielle, and I will be the facilitator for today's call. All lines have been placed in a listening only mode to prevent any background noise. After the completion of the prepared remarks from the Kimball Electronics leadership team, there will be a question-and-answer period. [Operator Instructions] Today's call May 6, 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 now like to turn the call over to Andy Regrut, Vice President, Investor Relations. Mr. Regrut, please you may begin.

Andy Regrut

Thank you, Danielle, and good morning everyone. Welcome to our third 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 third quarter of fiscal 2022. To accompany today's call a presentation has been posted to the Investor Relations page on 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. 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 2022, and Don will complete our prepared remarks before taking your questions.

I'll now turn the call over to Don.

Don Charron

Thanks, Andy. Good morning everyone. I'm very pleased with the incredibly strong results in Q3. Sales exceeded our all-time high in a quarter by 10%, operating margin was 5.5% of net sales, which was significantly better than the first half of the fiscal year and 80 basis points higher than a year ago. Diluted EPS increased more than 30% year-over-year with our backlog of open orders at record levels, and manufacturing facilities running at higher utilization and capacity expansions underway, we are ideally positioned to maintain strength and momentum in this bifurcated year, and we expect a strong pace to carry through the fourth quarter. Further, given the strength of our funnel in a slate of new product introductions, we are well positioned to continue this solid performance into fiscal year 2023 and beyond.