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 JASPER, Ind., Aug. 3 /PRNewswire/ -- Kimball International (NASDAQ: KBALB) announced record sales of $193,669,000 in the fiscal fourth quarter ended June 30, 1993. Douglas A. Habig, president and chief executive officer, said sales for the quarter represented the ninth consecutive quarter of sales growth and were 7 percent higher than the strong third quarter level.
 Fourth quarter sales were 15 percent ahead of the year-ago quarter and brought fiscal year 1993 sales to $722,400,000, an increase of 17 percent over the previous year's $617,301,000.
 Net income for the quarter was $9,488,000, or 45 cents per share of Class B Common Stock, a 5 percent improvement over the third quarter's 43 cents per share. Other than last year's fourth quarter ($12,429,000 -- 59 cents per share), which was aided by year-end inventory adjustments and tax benefits from the reorganization of the England subsidiary, this represented the strongest quarterly performance in three years.
 Net income for the year totaled $30,583,000, or $1.45 per Class B share, including a $2,850,000 restructuring charge provided for the European operations in the fiscal second quarter. This compares with fiscal 1992's $38,628,000, or $1.83 per Class B share, including the $1,228,000 Chandler Veneers fire gain recorded in last year's first quarter.
 Kimball's two European subsidiaries continued their subpar performance in the fourth quarter, according to Habig. He said the subsidiaries faced ongoing economic deterioration in their major markets as they began implementing the restructuring initiatives undertaken in the second quarter.
 Fourth quarter operating losses of $1.9 million by Kimball Europe and Bosendorfer brought their total losses in fiscal 1993 to $9.6 million (45 cents per share), including the restructuring charge. Although progress is being made, Habig said the overall strategy remains focused on the longer term. Major improvement is not expected in the early part of fiscal 1994.
 Excluding the before-mentioned year-end inventory adjustments and U.K. tax reorganization benefits, the company's domestic business units reported record earnings in the fourth quarter. Earnings were up 15 percent from the third quarter and 13 percent from the year-ago quarter.
 Gross margins were again impacted by the changing sales mix, competitive pricing pressures -- particularly in the electronics and furniture segments -- and inflationary trends on raw material components. The company's year-end inventory valuation resulted in a fourth quarter net income reduction of approximately $900,000 versus a positive adjustment of $1,000,000 in last year's fourth quarter. This year's adjustment resulted in part from the inflationary impact on LIFO costs being higher at year-end than had been forecast during interim periods.
 The consolidated effective tax rate edged down in the fourth quarter from the previous quarter but remained significantly higher than the year-ago quarter. This is a continuation of the year-long impact of the European losses for which little tax benefit is available at the present time. The company's U.S. effective tax rate remained steady.
 Fourth quarter cash flow was a negative $16 million due to heavy capital expenditures, an increase in working capital consumption and continued recapitalization of the European subsidiaries. For the year, cash and short-term investments decreased $11 million; investment income was impacted accordingly.
 The Kimball Lodging Group and the Contract Cabinet and Furniture Group finished the fiscal year strongly by increasing sales 42 percent and 27 percent, respectively, over the third quarter. Sales by both groups also were significantly higher than the year-earlier quarter. Income levels improved considerably in the fourth quarter from the previous quarter, as well as the prior year quarter, primarily as a result of the sales volume increases.
 The Office Furniture Group increased sales 4 percent over third quarter levels. Sales of Cetra systems, which had a record quarter, and National Office Furniture casegoods led the improvement trends. Income was level with the third quarter, although off substantially from the year-ago quarter, reflecting the continued competitiveness in the marketplace. The Harpers relocation from southern California to Idaho is on schedule. Initial relocation costs, combined with market expansion costs and the overall sluggish California economy, have reduced Harper's profit margins.
 Kimball Electronics Group sales and income were flat with the third quarter; however, both were up significantly when compared to last year's fourth quarter.
 Kimball Piano Group sales were down 4 percent from the improved third quarter while income was up as cost containment efforts continue. Sales and income were both up from the previous year's fourth quarter.
 Raw Materials Group sales were up from the third quarter as intercompany business improved. Operating profits were flat, both versus third quarter and prior year fourth quarter, reflecting in part the pricing and supply pressures on lumber and flakeboard.
 Habig said the domestic operations' momentum appears sustainable into early fiscal 1994, particularly considering a record order backlog at June 30, 1993. He said U.S. order backlogs were up 24 percent from a year earlier, including increases in all major product groups. Although certain individual segments lag behind the overall domestic improvement trends, the market share gains and process improvement initiatives will provide a solid foundation for the coming year, Habig said.
 (dollars in thousands except for per share amounts)
 For the three months ended June 30 1993 1992
 Net Sales $193,669 $167,993
 Cost of Sales 138,203 110,970
 Gross Profit 55,466 57,023
 Selling, Administrative & General
 Expenses 42,843 40,619
 Operating Income 12,623 16,404
 Other Income -- Net 3,153 2,226
 Income Before Taxes on Income 15,776 18,630
 Taxes on Income 6,288 6,201
 Net Income $ 9,488 $ 12,429
 Earnings Per Share:
 Class A $.45 $.59
 Class B $.45 $.59
 Average Shares Outstanding (in thousands) 21,175 21,167
 For the year ended June 30
 Net Sales $722,400 $617,301
 Cost of Sales 512,781 422,563
 Gross Profit 209,619 194,738
 Selling, Administrative & General
 Expenses 160,192 145,598
 Restructuring Expenses 2,850 ---
 Operating Income 46,577 49,140
 Other Income -- Net 6,745 11,574
 Income Before Taxes on Income 53,322 60,714
 Taxes on Income 22,739 22,086
 Net Income $ 30,583 $ 38,628
 Earnings Per Share:
 Class A $1.44 $1.82
 Class B $1.45 $1.83
 Average Shares Outstanding (in thousands) 21,199 21,151
 -0- 8/3/93
 /CONTACT: Ken Sendelweck of Kimball International, 812-482-1600/

CO: Kimball International, Inc. ST: Indiana IN: ENT SU: ERN

KL -- CL031 -- 9058 08/03/93 16:35 EDT
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Publication:PR Newswire
Date:Aug 3, 1993

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