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Kimball International, Inc. Reports First Quarter Fiscal Year 2013 Results



  Kimball International, Inc. Reports First Quarter Fiscal Year 2013 Results

Business Wire

JASPER, Ind. -- November 01, 2012

Kimball International, Inc. (NASDAQ: KBALB) today reported net sales of $288.2
million and net income of $5.0 million, or $0.13 per Class B diluted share,
for the first quarter of fiscal year 2013 which ended September 30, 2012.

Consolidated Overview

Financial Highlights
(Amounts in Thousands, Except Per     Three Months Ended             
Share Data)
                                      September 30,   September 30,   Percent
                                      2012            2011            Change
Net Sales                             $  288,190      $  270,635      6     %
Gross Profit                          $  55,205       $  46,970       18    %
Gross Profit %                        19.2       %    17.4        %
Selling and Administrative Expenses   $  48,238       $  45,968       5     %
Selling and Administrative Expense    16.8       %    17.1        %
%
Restructuring Expense                 $  60           $  113          (47   %)
Operating Income                      $  6,907        $  889          677   %
Operating Income %                    2.4        %    0.3         %
Net Income (Loss)                     $  4,961        $  (146     )   3,498 %
Earnings Per Class B Diluted Share    $  0.13         $  0.00

  * Consolidated net sales in the first quarter of fiscal year 2013 increased
    6% from the prior year first quarter on increased net sales in the
    Electronic Manufacturing Services (EMS) segment.
  * First quarter gross profit as a percent of net sales improved 1.8
    percentage points from the prior year first quarter on improved margins in
    both the EMS segment and the Furniture segment.
  * Consolidated first quarter selling and administrative expenses increased
    5% compared to the prior year due to the adverse impact of the normal
    revaluation to fair value of the Company's Supplemental Employee
    Retirement Plan (SERP) liability. The SERP liability revaluation has an
    exact offsetting benefit in Other Income/Expense where the revaluation of
    the SERP investment is recorded resulting in no impact to the Company's
    consolidated net income. Lower sales and marketing costs in the Furniture
    segment and benefits realized from restructuring activities in the EMS
    segment were offset by increased profit-based incentive compensation
    costs.
  * Other Income/Expense for the first quarter of fiscal year 2013 was income
    of $0.3 million compared to expense of $1.2 million in the prior year
    first quarter. The favorable impact of the revaluation of the SERP
    investment mentioned above was partially offset by foreign currency
    exchange movement in the EMS segment.
  * Operating cash flow for the first quarter of fiscal year 2013 was a cash
    inflow of $9.5 million compared to an operating cash outflow of $6.6
    million in the first quarter of the prior year.
  * The Company's cash and cash equivalents increased to $77.5 million at
    September 30, 2012, compared to $75.2 million at June 30, 2012. The
    Company had no short-term borrowings outstanding at September 30, 2012 or
    June 30, 2012. Long-term debt including current maturities remains at $0.3
    million.

James C. Thyen, President and Chief Executive Officer, stated, "The EMS
segment continued its positive momentum into the first quarter. Successful
efforts by our business development team in expanding our customer base and
winning new programs with existing customers contributed to double-digit
revenue growth compared to last year. Also since completing our restructuring
activities in the first half of last fiscal year, we no longer have the
distraction or costs of consolidating operations. We have eliminated that
excess capacity and that has positively impacted our bottom line. We are
pleased with the progress we are seeing within the EMS segment."

Mr. Thyen concluded, "In the Furniture segment, we continued to experience a
decline in sales of office furniture to the federal government in the first
quarter resulting in a decline in our overall sales in this segment compared
to a year ago. However, our operating income improved despite the overall
lower volumes, which is a tribute to the flexibility and foresight of our team
to anticipate these changes and adjust operations accordingly."

Electronic Manufacturing Services Segment

Financial Highlights        Three Months Ended             
(Amounts in Thousands)
                            September 30,   September 30,   Percent
                            2012            2011            Change
Net Sales                   $  164,175      $  142,828      15   %
Operating Income (Loss)     $  5,023        $  (2,255  )    323  %
Operating Income (Loss) %   3.1        %    (1.6       %)
Net Income (Loss)           $  3,283        $  (1,103  )    398  %

  * Fiscal year 2013 first quarter net sales in the EMS segment increased 15%
    compared to the first quarter of the prior year primarily related to
    double-digit sales growth to customers in the automotive and industrial
    markets.
  * Gross profit as a percent of net sales in the EMS segment for the first
    quarter of fiscal year 2013 improved 3.6 percentage points when compared
    to the first quarter of the prior year primarily related to higher
    absorption of fixed costs on the increased sales volumes, benefits
    realized related to restructuring activities completed in the prior year,
    and increased operational efficiencies.
  * Selling and administrative costs in this segment increased 2% in the
    fiscal year 2013 first quarter when compared to the prior year as benefits
    realized from restructuring activities were more than offset by increased
    profit-based incentive compensation costs related to the significant
    improvement in earnings. As a percent of net sales, selling and
    administrative costs declined 1.0 percentage point.

Furniture Segment

Financial Highlights     Three Months Ended             
(Amounts in Thousands)
                         September 30,   September 30,   Percent
                         2012            2011            Change
Net Sales                $  124,015      $  127,807      (3  %)
Operating Income         $  2,803        $  1,812        55  %
Operating Income %       2.3         %   1.4         %
Net Income               $  1,668        $  1,175        42  %

  * Fiscal year 2013 first quarter net sales in the Furniture segment declined
    3% compared to the prior year as increased net sales of hospitality
    furniture were more than offset by a decline in net sales of office
    furniture primarily attributable to lower demand from the federal
    government.
  * Gross profit as a percent of net sales improved 1.4 percentage points in
    the Furniture segment in the first quarter of fiscal year 2013 when
    compared to the prior year as benefits realized from price increases were
    partially offset by the impact of an unfavorable shift in sales mix to
    lower margin product.
  * Selling and administrative costs in the Furniture segment for the first
    quarter of fiscal year 2013 declined 1% compared to the prior year as
    lower sales and marketing costs were partially offset by higher
    profit-based incentive compensation costs.

Forward-Looking Statements

Certain statements contained within this release are considered
forward-looking under the Private Securities Litigation Reform Act of 1995 and
are subject to risks and uncertainties including, but not limited to, the
global economic conditions, significant volume reductions from key contract
customers, significant reduction in customer order patterns, loss of key
customers or suppliers within specific industries, financial stability of key
customers and suppliers, availability or cost of raw materials, and increased
competitive pricing pressures reflecting excess industry capacities.
Additional cautionary statements regarding other risk factors that could have
an effect on the future performance of the Company are contained in the
Company's Form 10-K filing for the fiscal year ended June 30, 2012 and other
filings with the Securities and Exchange Commission.

Conference Call / Webcast
            
Date:        November 1, 2012
Time:        11:00 AM Eastern Time
Dial-In #:   800-798-2884 (International Calls - 617-614-6207)
Pass Code:   Kimball

A webcast of the live conference call may be accessed by visiting Kimball's
Investor Relations website at www.ir.kimball.com.

For those unable to participate in the live webcast, the call will be archived
at www.ir.kimball.com within two hours of the conclusion of the live call and
will remain there for approximately 90 days. A telephone replay of the
conference call will be available within two hours after the conclusion of the
live event through November 15, 2012.

Replay Dial-In #:   888-286-8010 (International Calls - 617-801-6888)
Replay Pass Code:   90154737

About Kimball International, Inc.

Recognized with a reputation for excellence, Kimball International, Inc. is
committed to a high performance culture that values personal and
organizational commitment to quality, reliability, value, speed and ethical
behavior. Kimball employees know they are part of a corporate culture that
builds success for Customers while enabling employees to share in the
Company's success through personal, professional and financial growth.

Kimball International, Inc. provides a variety of products from its two
business segments: the Electronic Manufacturing Services segment and the
Furniture segment. The Electronic Manufacturing Services segment provides
engineering and manufacturing services which utilize common production and
support capabilities to a variety of industries globally. The Furniture
segment provides furniture for the office and hospitality industries sold
under the Company's family of brand names.

For more information about Kimball International, Inc., visit the Company's
website on the Internet at www.kimball.com.

                              "We Build Success"

 
Financial highlights for the first quarter ended September 30, 2012 are as
follows:
 

Condensed Consolidated Statements of Income
(Unaudited)                     Three Months Ended
(Amounts in Thousands,          September 30, 2012      September 30, 2011
except per share data)
Net Sales                       $ 288,190     100.0 %   $ 270,635     100.0 %
Cost of Sales                   232,985       80.8  %   223,665       82.6  %
Gross Profit                    55,205        19.2  %   46,970        17.4  %
Selling and Administrative      48,238        16.8  %   45,968        17.1  %
Expenses
Restructuring Expense           60            0.0   %   113           0.0   %
Operating Income                6,907         2.4   %   889           0.3   %
Other Income (Expense), net     287           0.1   %   (1,202    )   (0.4  %)
Income (Loss) Before Taxes      7,194         2.5   %   (313      )   (0.1  %)
on Income
Provision (Benefit) for         2,233         0.8   %   (167      )   0.0   %
Income Taxes
Net Income (Loss)               $ 4,961       1.7   %   $ (146    )   (0.1  %)
Earnings (Loss) Per Share
of Common Stock:
Basic Earnings (Loss) Per
Share:
Class A                         $ 0.12                  $ (0.01   )
Class B                         $ 0.13                  $ 0.00
Diluted Earnings (Loss) Per
Share:
Class A                         $ 0.12                  $ (0.01   )
Class B                         $ 0.13                  $ 0.00
                                                                       
Average Number of Shares
Outstanding
Class A and B Common Stock:
Basic                           38,017                  37,836
Diluted                         38,256                  37,836
                                                                       

Condensed Consolidated Statements of Cash Flows        Three Months Ended
(Unaudited)                                            September 30,
(Amounts in Thousands)                                 2012         2011
Net Cash Flow provided by (used for) Operating         $ 9,486      $ (6,647 )
Activities
Net Cash Flow used for Investing Activities            (5,138   )   (6,358   )
Net Cash Flow used for Financing Activities            (2,141   )   (2,119   )
Effect of Exchange Rate Change on Cash and Cash        96           (1,334   )
Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents   2,303        (16,458  )
Cash and Cash Equivalents at Beginning of Period       75,197       51,409    
Cash and Cash Equivalents at End of Period             $ 77,500     $ 34,951  
                                                                              

                                             (Unaudited)    
Condensed Consolidated Balance Sheets        September 30,   June 30,
(Amounts in Thousands)                       2012            2012
ASSETS
Cash and cash equivalents                    $  77,500       $ 75,197
Receivables, net                             141,382         139,467
Inventories                                  125,931         117,681
Prepaid expenses and other current assets    41,221          44,636
Assets held for sale                         1,709           1,709
Property and Equipment, net                  186,094         186,099
Goodwill                                     2,498           2,480
Other Intangible Assets, net                 5,814           6,206
Other Assets                                 22,845          22,041
Total Assets                                 $  604,994      $ 595,516
                                                              
LIABILITIES AND SHARE OWNERS' EQUITY
Current maturities of long-term debt         $  15           $ 14
Accounts payable                             144,746         137,423
Dividends payable                            1,861           1,843
Accrued expenses                             43,398          48,460
Long-term debt, less current maturities      258             273
Other                                        22,762          21,275
Share Owners' Equity                         391,954         386,228
Total Liabilities and Share Owners' Equity   $  604,994      $ 595,516
                                                                

Supplementary Information                                          
Components of Other Income (Expense), net                 Three Months Ended
(Unaudited)                                               September 30,
(Amounts in Thousands)                                    2012      2011
Interest Income                                           $ 110     $ 120
Interest Expense                                          (7    )   (9       )
Foreign Currency/Derivative Gain (Loss)                   (393  )   744
Gain (Loss) on Supplemental Employee Retirement Plan      703       (1,962   )
Investment
Other Non-Operating Expense                               (126  )   (95      )
Other Income (Expense), net                               $ 287     $ (1,202 )

Contact:

Kimball International
Martin Vaught, Director of Public Relations, 812-482-1600
martin.vaught@kimball.com
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