What are the drivers behind the decrease in operating income and adjusted operating income?

The drop in both operating income ($45.5 m vs. $49.3 m a year earlier) and non‑GAAP adjusted operating income ($61.3 m vs. $?? m) is primarily driven by a significant contraction in top‑line revenue – net sales fell 13.3% year‑over‑year to $1.49 bn. The slower sales pace reflects weaker demand in Kimball’s core high‑mix, low‑volume electronics manufacturing segment, likely stemming from a broader slowdown in consumer‑electronics spend and tighter OEM budgets. The revenue decline also altered the product mix, shifting sales toward lower‑margin contract work while higher‑margin design‑win projects lagged, further eroding gross margins. Coupled with relatively fixed cost structures (labor, facility overhead, and R&D) and modest inflation‑related expense growth, the reduced scale amplified the hit to operating earnings.

From a market‑technical standpoint, the earnings miss has already depressed KE’s price action, pushing the stock below its 50‑day moving average and into a bearish channel. Volume spikes on the downside suggest sellers are reacting to the earnings‑driven outlook downgrade. Traders should watch for a potential breakdown of the $12‑$13 support zone as a short‑entry signal, while a bounce back above the 200‑day moving average could signal a buying opportunity on a technical reversal. Fundamentally, unless the company can secure new design‑win contracts or improve margin leverage, the near‑term trend remains negative, warranting caution on long positions until clearer upside catalysts emerge.