金博爾電子 (KE) 2026 財年第四季法說會：醫療業務成長與 2027 財年財測指引

重點摘要

• Kimball Electronics (NASDAQ: KE) 公佈 2026 財年第四季淨銷售額為 3.716 億美元，年減 2%，但季增 5%，三大垂直市場表現皆較第三季改善。
• 毛利率上升 90 個基點至 8.9%。調整後營業利潤為 1,810 萬美元，佔銷售額的 4.9%，而去年同期則分別為 1,960 萬美元及 5.2%。
• 醫療業務仍為主要成長動能。第四季醫療銷售額成長 1% 至 1.09 億美元；在扣除去年同期寄售庫存銷售影響後，經調整的 2026 財年醫療業務成長率超過 10%。
• 第四季營運現金流達 4,240 萬美元，連續第十個季度實現正現金流。借款金額年減 21% 至 1.166 億美元，創下四年多來最低水準。
• 管理層預計 2027 財年銷售額為 15.35 億美元至 15.6 億美元，代表成長 7% 至 9%，其中包括 3% 至 5% 的有機成長，以及來自 Helvoet Polymer Technologies 的約 6,000 萬美元貢獻。
• 印第安納波利斯醫療 CDMO 設施預計將於 2026 日曆年末開始初期生產。管理層估計其對 2027 財年獲利的拖累約為 650 萬至 700 萬美元，這將大致被 Helvoet 的增益貢獻所抵銷。

核心財務數據

2026 整個財年的總銷售額為 14.31 億美元。調整後營業利潤為 6,570 萬美元，佔銷售額的 4.6%，而營運現金流為 7,230 萬美元。資本支出總計 5,170 萬美元。

業務與營運表現

醫療業務銷售額為 1.09 億美元，年增 1%，佔公司總銷售額的 29%。管理層表示，報告的微幅成長反映出 2025 財年第四季兩筆一次性客戶庫存建置帶來的基期較高。在常態化基礎上，醫療業務的季度成長率接近 10%。

醫療需求由手術器材、體外診斷、病人監測與藥物給藥帶動。亞洲與歐洲市場各貢獻醫療銷售額的約 30%，並實現年成長。北美市場則因去年同期的比較基期較高而下降中個位數百分比。

汽車業務銷售額下降 3% 至 1.7 億美元，佔公司銷售額的 46%。新的轉向與煞車專案帶動波蘭與羅馬尼亞實現中個位數成長，中國則成長低個位數百分比。北美電動車需求疲軟抵銷了這些增長。轉向專案約佔汽車業務營收的 70%。

工業業務銷售額下降 5% 至 9,300 萬美元，佔總銷售額的 25%。北美 HVAC（暖通空調）需求下降是主因，部分被歐洲智慧電表銷售的持續復甦所抵銷。

從地理區域來看，第四季公司總銷售額中約 40% 來自北美，亞洲與歐洲則各貢獻約 30%。

管理層展望

管理層預計醫療業務的有機銷售額將以高個位數至低雙位數的速度成長，並接近公司總營收的 35%。工業業務成長預期將與公司平均水平一致，而汽車業務則可能保持大致平穩。

預計 2027 財年的營收分佈將相對均勻。該展望假設歐元對美元匯率為 1.14。

公司預計 Helvoet 將貢獻約 6,000 萬美元的營收，而 2025 日曆年約為 5,600 萬美元。管理層將部分差異歸因於涉及歐元和印度盧比的外匯換算。

風險與關注事項

2026 財年第四季的有效稅率從 48.3% 上升至 67.8%，反映出與國際稅務機關解決了兩項長期存在的股利預扣稅問題。全年的有效稅率為 47.5%。

印第安納波利斯的新設施在產生實質營收之前，正產生折舊、公用事業及其他廠房成本。預計將於 2026 日曆年末開始初期生產，但管理層表示，新專案可能需要大約 18 個月才能提升產能。

管理層也注意到供應鏈庫存再次遭受干擾以及零組件零星短缺的情況。客戶要求 Kimball Electronics 增加庫存儲備，公司預計 2027 財年的現金轉換天數將增加數天。

汽車需求仍面臨北美電動車專案產量低於預期的風險。管理層強調，這反映的是專案產量減少，而非失去了合約。來自中國在地製造商的競爭依然強勁。

法人說明會 Q&A 重點

管理層表示，2027 財年醫療業務的成長將是廣泛性的，涵蓋呼吸照護、手術器材、體外診斷、影像與藥物給藥。印第安納波利斯廠的初期生產將主要涉及現有工作轉移，因此預計該設施在該年不會帶來大幅的增量營收貢獻。

Helvoet 的整合正按照公司的總體計畫進行。管理層指出客戶反響正面，並指出了跨售潛在機會，涉及 Helvoet 在蒂爾堡與浦那的設施、Kimball 在美國的佈局，以及結合兩家公司能力的大型專案。然而，這些營收綜效的時間點與規模仍存在不確定性。

在資本配置方面，管理層認為槓桿率保持在 EBITDA 的 1.5 至 2 倍左右是合適的，同時保留併購能力。優先事項包括有機投資、持續實施庫藏股買回以及在 Helvoet 交易後償還債務。公司認為在 2027 財年不太可能進行另一次併購，因為計畫先整合 Helvoet 並發展營收綜效。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Good morning, ladies and gentlemen, and welcome to Kimball Electronics Fourth Quarter Fiscal 2026 Earnings Conference Call. My name is Sherry, and I will be the facilitator for today's call. [Operator Instructions] Today's call, August 13, 2026, is being recorded. A replay of the call will be available on the Investor Relations page of Kimball Electronics website.

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

Andrew Regrut

Thank you, and good morning, everyone. Welcome to our fourth quarter conference call. With me here today is Ric Phillips, our Chief Executive Officer; and Jana Croom, Chief Financial Officer. We issued a press release yesterday afternoon with our results for the fourth quarter and full fiscal year ended June 30, 2026. 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. Our commentary today will be focused on adjusted non-GAAP results. Reconciliations of GAAP to non-GAAP amounts are available in our press release.

This morning, Ric will start the call with a few opening comments. Jana will review the financial results for the quarter and guidance for fiscal 2027, and Ric will complete our prepared remarks before taking your questions. I'll now turn the call over to Ric.

Richard Phillips

Thank you, Andy, and good morning, everyone. 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 build-out 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 2 verticals and represent more than 1/3 of total company sales in the fiscal year, which is in line with our objective to balance the portfolio across the markets we serve.

Turning now to the fourth quarter. Net sales for the company were $372 million, a 2% decline compared to Q4 last year, but a 5% sequential increase with all 3 vertical markets posting gains over Q3. Geographically, sales in the fourth quarter were more evenly distributed around the world versus prior periods, with approximately 40% in North America and 30% in both Asia and Europe.

Once again, this quarter, our Medical business was the headliner, growing both year-over-year and sequentially and completing a fiscal year where the growth occurred in all 4 quarters and the total exceeded 10% versus a normalized fiscal '25 when adjusting for the consigned inventory sale last year. In Q4, Medical sales were $109 million, a 1% increase compared to the same period a year ago and 29% of the total company. Approximately 30% of these sales occurred in both Asia and Europe with the same year-over-year increases in each region. North America was down mid-single digits, which is below our run rate for most of the fiscal year. This apparent slowdown in the growth trajectory is more of a function of the comparison from a year ago than production this year.

In the fourth quarter of fiscal '25, we were supporting our customers with inventory builds for facility closures and transfers of work, both were onetime events. From a product category perspective, the growth was driven by demand for surgical devices, in vitro diagnostics, patient monitoring and drug delivery.

Next is Automotive, with net sales in Q4 of $170 million, down 3% compared to the same period last year and 46% of the total. Our business in the fourth quarter was roughly divided 1/3, 1/3 and 1/3 between North America, Asia and Europe, with Poland and Romania reporting mid-single-digit increases as a result of new steering and braking programs. China was up low single digits and North America was down, driven largely by lower EV demand, offsetting these increases.

Steering programs continue to be the largest concentration of work, accounting for approximately 70% of total Automotive sales for us. For the full year, our automotive business was down 7% year-over-year, so successive 3% declines in the back half of fiscal '26 suggest a stabilizing trend in this vertical.

Finally, sales in Industrial totaled $93 million, a 5% decrease compared to Q4 last year and 25% of the total company. Once again, this quarter, our industrial business was heavily concentrated in North America, where the majority of the decline occurred from lower demand for HVAC systems. This was partially offset by higher sales of smart meters in Europe, which continued to recover from prior year declines.

I'll now turn the call over to Jana for more detail on our financial results and guidance for fiscal 2027. Jana?

Jana Croom

Thank you, and good morning, everyone. As Ric highlighted, net sales in the fourth quarter were $371.6 million, a 2% decrease year-over-year. Foreign exchange had a 1% favorable impact on consolidated sales in Q4.

The gross margin rate in the fourth quarter was 8.9%, a 90 basis point improvement compared to 8% in Q4 of fiscal 2025, with the increase resulting from favorable mix, partially offset by incremental costs associated with the ramp-up of our medical CDMO facility in Indianapolis.

Adjusted selling and administrative expenses in the fourth quarter were $14.8 million, a $4 million increase year-over-year with higher expense from investments for future growth initiatives, including personnel costs and IT infrastructure. When measured as a percentage of sales, the rate was 4% this year compared to 2.8% in the same period last year.

Adjusted operating income in Q4 was $18.1 million or 4.9% of net sales, which compares to last year's adjusted result of $19.6 million or 5.2% of net sales.

Other income and expense was expense of $2.6 million compared to $3.8 million of expense last year. Once again, this quarter, interest expense drove the decrease, down nearly 30% year-over-year as a result of a combination of lower average debt levels and lower borrowing rates.

The effective tax rate in Q4 was 67.8% compared to 48.3% last year, with this year's rate adversely impacted by the resolution of 2 long-standing dividend withholding matters with tax authorities at international locations. We ended the fiscal year with an effective tax rate of 47.5%, and we're expecting the rate in fiscal '27 to be in the low 30s.

Net income in the fourth quarter was $8.5 million or $0.35 per diluted share. The adjusted result was skewed by the tax rate with Q4 posting a loss of $163,000 or a minus $0.01 per diluted share.

Turning now to the balance sheet. Cash and cash equivalents at June 30, 2026, were $88.9 million. Cash generated by operating activities in the quarter was a robust $42.4 million, our 10th consecutive quarter of positive cash. Cash conversion days were 82, an 8-day improvement compared to last quarter and 3 days better than the fourth quarter of fiscal '25. This is our best CCD in 17 quarters with all components posting good results, with DSO accounting for the most significant improvement versus prior periods.

Inventory ended the quarter at $271.9 million, down slightly, that is $1.4 million compared to Q3 and $1.6 million lower than a year ago.

Capital expenditures in Q4 were $8.5 million, much of the spend once again this quarter on leasehold improvements in the new facility in Indianapolis, plus investments to support new programs in Europe. For the full year, we invested $51.7 million in CapEx, which was in line with our estimates.

Borrowings at June 30, 2026, were $116.6 million, representing our lowest level in over 4 years and a decrease of $46.4 million from the third quarter and down $30.9 million or 21% from a year ago. Short-term liquidity available represented as cash and cash equivalents plus the unused portion of our credit facilities totaled $411.3 million at the end of the fourth quarter. As a reminder, the acquisition of Helvoet occurred on July 1, the beginning of fiscal '27. So the financing activities on that transaction are not reflected in the June 30 balances.

We invested $2.1 million in Q4 to repurchase 83,000 shares. Since October 2015, under our Board-authorized share repurchase program, a total of $115.6 million has been returned to our share owners by purchasing 7.1 million shares of common stock. In May, our Board of Directors unanimously increased the share repurchase program by $20 million. We now have $24.4 million available on the program.

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. We ended the fiscal year with net sales totaling $1.431 billion, with Medical up over 10% after normalizing last year for the consigned inventory sale. Adjusted operating income was $65.7 million or 4.6% of net sales. Cash generated from operating activities was $72.3 million, and we invested $11.9 million to repurchase 447,000 shares of common stock.

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. As Ric highlighted, our guidance for fiscal 2027 projects a return to growth, and we will be leveraging our balance sheet to support those efforts.

Net sales in fiscal '27 are expected to be in the range of $1.535 billion to $1.56 billion, a 7% to 9% increase compared to fiscal 2026 with organic sales growth of 3% to 5% and revenue from Helvoet of $60 million. From a vertical market perspective, organic growth in Medical is expected in the high single to low double-digit range, Industrial in line with the company average and Automotive will likely be flattish for the year. Revenue should be fairly evenly distributed over the fiscal year. Adjusted operating income is estimated to be 4.4% to 4.7% of net sales and capital expenditures are expected to be in the range of $50 million to $60 million.

For FY '27, the dilutive impact of the ramp of our new facility in Indianapolis is roughly offset by the accretive benefit from our acquisition of Helvoet. We expect this combination of assets to drive significant revenue synergies as we execute our CDMO strategy over time. This outlook reflects the efforts and contributions from all areas of the company, and I am grateful for the collaboration and our return to profitable growth.

I'll now turn the call back over to Ric.

Richard Phillips

Thanks, Jana. Before we open the lines for questions, I'd like to share a few thoughts in closing. We are thrilled to see our base business stabilize and a return to organic sales growth, which, as Jana highlighted, will be led by our medical vertical. As I noted in my opening comments, our guidance implies medical will approach 35% of the total company in fiscal '27. And Helvoet, the newest member of the Kimball family, is an important contributor. Since the deal announcement in early July, the integration efforts have gone very well with our #1 priority focused on unlocking top line synergies.

Customer interest around the acquisition has been strong with many customers wanting more information about Helvoet operations in Tilburg and Pune as well as new requests to tour our facility in Indianapolis, which we welcome as the team there continues to make good progress moving out of the existing campus. Production equipment is now being installed in the new facility and the qualification of certain manufacturing processes is expected to start in the fall. If all goes according to plan, early production will commence at the end of this calendar year, and the move will be completed in the next 18 months.

The addition of Helvoet has given us reason to reconsider how we talk about our Medical business, in particular, the co-development work that both organizations do. You may have noticed that we're now incorporating the letter D in our reference to the Medical CDMO business. This is reflective of our go-to-market strategy as a full-service provider in Kimball Solutions and will be used going forward.

Looking ahead, we continue to evaluate strategic opportunities that could accelerate the expansion of this business, including the lift and shift of active [indiscernible] adds to this strategy with expertise in precision manufacturing and automation, exposure to highly attractive medical end markets, a presence or expanded presence in a new geography and a well-run operation with an excellent management team. We believe this strategy will be powerful in driving value creation. Our strategic journey continues to build and so does my excitement for the future of the company.

Operator, we would now like to open the lines for questions.

Operator

[Operator Instructions] Our first question is from Brett Fishbin with KeyBanc Capital Markets.

分析師問答

Brett Fishbin

Just wanted to start off by asking if you could provide a little bit more color on what you saw in the Medical segment this quarter, particularly in Asia and Europe, which seemed a little bit stronger. And then it sounded like North America, the biggest impact was comps, but if there's anything else to call out in that geography as well.

Richard Phillips

So I think with that adjustment, Brett, and thanks for joining the call. Good to have you. It really was a continuation of the trend that we've been seeing throughout the year. As you know, Helvoet will now be included in the results, and of course, it wasn't at all in the prior year with the July 1 close. But we saw a pretty consistent double-digit increase over the course of each of the quarters. And again, with that adjustment that you mentioned, Q4 looked pretty similar.

Jana Croom

Yes. So to give you some technical color. In Q4 of '25, we had 2 onetime builds for customers. One was related to a transfer of work and one was related to a facility closure where they needed to build up inventory in support of that. And so if you adjust for those things, a normalized quarter-v-quarter FY '26, FY '25 is closer to 10%.

Brett Fishbin

All right. Great. And then maybe just following up on that. It sounds like a key part of the return to positive organic growth in FY '27 is continued performance in the Medical segment with high single-digit to low double-digit organic growth expected. I was hoping you could just walk through kind of the key drivers and components of that level of growth expected in Medical, particularly how much you think could come from the early ramp of the new facility in Indy or if there's any other incremental contributors compared to FY '26?

Richard Phillips

Sure. And Brett, we're really pleased as we look across the product categories within medical and look at our expectations for the coming year, we see growth in most categories, respiratory care, surgical devices, in vitro diagnostics, imaging, drug delivery. So we're really pleased to see that. I think the Indy impact is definitely going to take time. As you heard on the call, if all goes according to plan, we'll begin to see production by the end of the calendar year, but that's going to start with production that is currently taking place in our -- the facility in Indianapolis that we're going to close. So that would be transfer rather than incremental growth.

What I'd say is -- and we can talk more about this, we're really encouraged. And obviously, this acquisition just closed, as you know, July 1. But the opportunities that we're talking about in terms of synergies are multiple. Helvoet was looking for U.S. footprint anyway, independent of the transaction because of demand from their customers for U.S. footprint for what they do, which they'll now have. We have customers that want footprint in Europe and India that we didn't necessarily have specifically for those technologies. And we're working together to collaborate on scaled larger programs that bring forth the capabilities of both companies.

So I wouldn't expect you'll see a big impact in '27 from Indianapolis just because new programs take time to ramp. We may have some good opportunities with lift and shift programs that are already in market that we could move there, but those will take some time as well. So it's really a more broad-based improvement kind of building on the momentum that we saw this year.

Brett Fishbin

All right. Super helpful. Last question for me is just on the inorganic contribution. I believe when you announced the deal, I think Helvoet had revenue of around $56 million in calendar year 2025. So it just seems like the outlook for inorganic revenue might be a little bit lower than the normalized growth rate for that asset. So just curious if there's any transition impacts that you're assuming for year 1 or any other near-term headwinds that may be impacting like the speed of growth for Helvoet?

Jana Croom

Brett, great question. So there are really 2 impacts. One is actually FX and the FX translation from the INR and the euro on the U.S. dollar. That's going to be an impact for our fiscal year. And -- so not really a transition impact because we've been really, really thoughtful about not interrupting what they've got going on in terms of sales and actually trying to unlock opportunity there in terms of cross-selling opportunities geographically. So it's much more just business as usual and looking for revenue synergies, but there will be some currency impact. But going from $56 million to $60 million-ish, still 8% top line growth in that range feels pretty good.

Operator

Our next question is from Mike Crawford with B. Riley Securities.

Michael Crawford

Just so we get this into the transcript, what was your EBITDA and EBITDA margin in the fourth quarter?

Jana Croom

Mike thanks for the question. Hold on. I should have that here right in front of me.

Michael Crawford

Was it $27.2 million and 7.3%, Jana?

Jana Croom

It's $28.2 million and yes, 7.6%. And the press release -- we put it in for the first time, specifically for you, Mike, it's in the press release.

Michael Crawford

It's hidden in the press release somewhere. Okay. I need to look more closely. So I think, Ric, you said that the drag from Indianapolis ramp in the current fiscal year is going to be offset by Helvoet. I mean -- so does that mean that there's only a $5 million drag from ramp-up in Indianapolis?

Jana Croom

So you can't necessarily correlate on a revenue dollar for dollar basis. The drag from Indianapolis is probably closer to $6.5 million, $7 million, all in.

Michael Crawford

Okay. And -- is it -- would it be fair to assume that there's really almost no drag in the next fiscal year?

Jana Croom

No. So think of it this way. You've got all of the associated depreciation, plant costs, just all the things associated utility expense, et cetera, for a facility that's empty. It's not that there won't be a drag in FY '28. It's that eventually, it will produce enough revenue to overcome the drag.

Michael Crawford

Are you saying the 18 -- so the 18 months isn't -- that's from when you actually start production?

Jana Croom

So -- and we opened the building in February. We're still -- we're bearing all of the costs associated with that facility, but it's not producing revenue. All the revenue is at the existing campus. It will start producing revenue. It will open for production in the fourth quarter of the calendar year, our second quarter fiscal year. And then we'll be putting business in it and it will start to ramp, and it will be able to cover the incremental cost.

Michael Crawford

Okay. So just to clarify, it's 18 months to ramp not from February, but from December?

Jana Croom

Roughly, yes.

Richard Phillips

For new programs.

Jana Croom

For new programs, yes.

Michael Crawford

Not lift and shift. Okay. And then...

Jana Croom

Not lift and shift.

Michael Crawford

Yes. What -- given that your leverage is now 1x-ish EBITDA, do you have -- is there the best capital structure to run a consistent business like this with perhaps more leverage? And if so, then what are your capital allocation priorities or deployment priorities?

Jana Croom

Yes. That's a really great question and something we've been burning a lot of calories on. So somewhere between 1.5 and 2x feels good for our business, but you need to keep your balance sheet strong enough when incremental growth opportunities that are inorganic present themselves, you've got the dry powder to act. So you're going to see the cost of the acquisition show up on our balance sheet in Q1. We're going to be actively utilizing our operating cash flow and global cash repatriation options to pay that down so that we can continue to have dry powder should another inorganic opportunity present itself, plus we've got $50 million of organic CapEx needs that we need to deploy.

We do plan on continuing our share repurchase program at the rate that it's been at for the past few fiscal years. And so we don't plan on stopping that. We think share repurchase, particularly where our stock price is right now is also a very compelling opportunity. So we plan on doing -- it really is sort of a do-it-all strategy, share repurchase, yes, investment in the organic business, yes, but maintaining the dry powder so that we can take advantage of inorganic opportunities. We could take the leverage ratio actually over 3x debt to EBITDA. I don't -- obviously, that would be short-lived and we would have to work aggressively to pay it down. But for the right inorganic opportunity in the short run, would we be willing to do that, probably.

Operator

Our next question is from Derek Soderberg with Cantor Fitzgerald.

Derek Soderberg

So it looks like Automotive sales ended up being down this fiscal year and sort of flattish next year. It sounds like European braking growth is sort of offsetting some of the North America stuff. I guess I was wondering if you could just kind of detail your thoughts on that segment sort of turning positive. I know there's individual aspects of the automotive piece by region and braking and steering. I was just wondering if you can maybe comment on when you think that's going to turn positive, kind of the puts and takes between the regions and segments. Just any sort of additional detail on the Automotive segment for us to think about?

Richard Phillips

Sure. And Derek, thanks for joining the call. I think we're encouraged to see this stabilizing. The decline is really, as I mentioned earlier on the call, has been driven by low demand for EV programs that we won. It's not programs that we lost. It's just programs that have underperformed in terms of the volumes that we originally anticipated. So we'll see how that continues to evolve with regulations and incentives and so on over time. I don't know how to predict that one. But yes, Europe is strong, and these are fairly new programs that will continue to ramp. So we feel really good about where that's at. China is very competitive. Our business has performed pretty well there over a good period of time. But the local Chinese competitors are tough.

So I'd say our relationships remain as strong as they've ever been. We continue to win the next-gen programs, which is really important to us. And so stabilization and an eventual return to growth, market-driven there appears ahead of us, and we're going to stay close to those customers and hopefully see some of that demand come back, which it looks like it is overall.

Derek Soderberg

Got it. Appreciate the detail there. And then, Jana, congrats on the cash conversion days, really has been trending in the right direction for some time here. I was wondering if that sort of 82-day conversion days, is that sustainable as you guys sort of see growth accelerate here, both on an organic and inorganic basis? Any additional thoughts there would be great.

Jana Croom

Yes. Thank you. 82 days was hard thought. And so it also gives me an opportunity to touch on what we're seeing in the business now, which is we're getting back to an environment where there's some inventory disruption in the supply chain and golden screw type events. Customers are wanting us to carry more inventory, the turns of certain things as we're waiting for that one golden screw is flowing. And so I'm anticipating that there is going to be some pressure in working capital generally in FY '27.

We've taken that into consideration as we're thinking about the guide for next year and the impact that it's going to have on the balance sheet, and we're managing through it with our -- but we're already seeing the impact. So if it rose a couple of days in FY '27, let me say that differently. We are planning for it to rise a few days in FY '27.

Operator

Our next question is from Max Michaelis with Lake Street Capital Markets.

Maxwell Michaelis

Just a few questions around the model. I mean 8.9% on the gross margin, really strong quarter. Obviously, that was impacted by a favorable mix. Just curious to know what you're sort of expecting for 2027. I mean should we be looking for gross margins kind of north of that 8% mark just with given the increased focus on the medical side of the business?

Jana Croom

Yes. So our S&A is sort of trending in that 4% range again. And so if you consider the midpoint of the guide that we put out being like, call it, 4.5-ish, you would need a gross margin in the range of 8.5% for that math to work.

Maxwell Michaelis

That's awesome. And then I think I heard on the call, you're sort of expecting a balanced revenue quarter-by-quarter throughout the remainder of next year. Is that correct?

Jana Croom

Yes. And that's important because sometimes it's skewed right. First quarter is really heavy or fourth quarter is really heavy this year, it just so happens that the way that the forecast is shaking out right now, the quarters are going to be pretty even.

Operator

[Operator Instructions] Our next question comes from Anja Soderstrom with Sidoti & Company.

Unknown Analyst

This is Alex on for Anja. Jana, I know you touched on FX. I know it's a modest tailwind in '26. What euro assumptions, I'm just curious, underpin the 2027 guide now that Helvoet adds euro-denominated revenue?

Jana Croom

Yes, $1.14. It's engraved in my brain.

Unknown Analyst

Very good. And I know you've touched on some of the Helvoet contributions for the next year. I'm curious with the improved balance sheet and recognizing obviously June 30 figures of pre-Helvoet, how you're thinking about capital allocation priorities on a pro forma basis? And is there a leverage level you're managing towards?

Jana Croom

Yes. So somewhere in the 1.5 range feels good. We don't want to be underleveraged. We don't want to be overleveraged. As I said, the key is supporting the organic growth of the business and the needs there, but also having enough dry powder that should an inorganic opportunity pop up that was attractive to us, we could use our balance sheet to take advantage of it. And so it's really walking that line of investing in the base business, which I'll remind everyone is still the overwhelming portion of Kimball and supporting the growth opportunities that we have there, but also dry powder for other tuck-in acquisitions that we were going to be force multipliers for the CDMO strategy.

I would also add, though, that we just closed on this acquisition July 1. We need to absorb it, integrate it, get the revenue synergies, the top line synergies out of it. So it's also not likely that we would make another acquisition for -- in this fiscal year. We had said that we would want to be serial acquirers in terms of our opportunity set, but we need to give this one time to work before we start chewing on the next one.

Unknown Analyst

Helpful context. And last one from us. I'm curious if there have been any surprises, good or bad, post the Helvoet acquisition, customer retention, integration pace, go-to-market, anything that's tracking differently, good or bad than what you underwrote?

Richard Phillips

Great question, right? There's always -- in any acquisition, there's things that you're going to learn. I'd say, on balance, really positive. The customer conversations, they ask some good questions. Are you going to keep the footprint that Helvoet has today, for example? Yes, we are. And I think those all went really well. We anticipate keeping those customers. And I think probably the integration process itself is going as expected, really encouraged. All the leaders are engaged. All the functions are engaged. Facilities are talking to each other.

We have a master integration plan that we're on track for. So the process itself feels really good and -- but it's as we expected. I wouldn't see any big changes there. If anything, the top line synergy opportunities, which are very much still taking shape, have been really encouraging. And we're so early when exactly are they going to happen and where exactly will they be located and how big will they be is -- those are the things that we're working on. But the teams across both organizations are talking to every single week at least about a pretty impressive list of potential synergy opportunities, leveraging the combined footprint.

And also one of the areas of capital, these aren't huge numbers yet, but there were some things with customers that Helvoet had identified that needed to be funded in order to make that opportunity happen, and we're eager to invest in those and have already identified and started to move forward in those capital processes, which are great returns for us.

Jana Croom

And that is contemplated in our CapEx guide.

Operator

There are no further questions at this time. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. A replay of the call will be available on the Investor Relations page of Kimball Electronics website or by dialing (877) 660-6853. ID number is 13761725. Please disconnect your lines, and have a wonderful day.