Kimball achieves record third quarter results.

JASPER, Ind.--(BUSINESS WIRE)--April 11, 1997--Kimball International, Inc. (NASDAQ National Market:KBALB), a Fortune 1,000 diversified furniture and electronics manufacturer, today announced record third quarter and year-to-date results.

The Company posted third quarter net sales of $243.3 million, a 9 percent increase over revenues of $223.9 million in the year-ago quarter, and a third quarter Company best. Record third quarter net income of $14.5 million, or $.70 per Class B share, was also realized for the three months ending March 31, 1997, a 23 percent increase over the period one year earlier, excluding the domestic piano exit costs of $.09 per Class B share recorded in the third quarter of fiscal 1996. Including the exit costs, current quarter earnings increased 46 percent.

Fiscal year-to-date sales grew by 10 percent to $744.8 million, a high for the nine months ending March 31. Earnings jumped 31 percent to $42.7 million ($2.06 per Class B share), also a nine months ending March 31 best. This significant increase was achieved excluding the effects of the $1.9 million after-tax charge related to the domestic piano exit in fiscal 1996. Including the exit costs, the prior fiscal year-to-date net income was $30.7 million.

"Through a combination of continued sales growth in lodging furniture, electronic assemblies and office furniture, manufacturing efficiency improvements, cost containment efforts and a heightened awareness of more effectively deploying our capital, we have been able to sustain meaningful growth in our profits which translates into enhanced Share Owner return," said President and Chief Executive Officer Douglas A. Habig.

Sales in the Company's largest segment, Furniture and Cabinets, increased 3 percent to $151 million for the third quarter of fiscal year 1997, compared to the prior year, while operating income decreased somewhat, due primarily to a continued decline in OEM sales. For the nine months ending March 31, 1997, revenues grew to $469 million, an 8 percent increase over sales of $436 million in the prior year. Year-to-date earnings have grown by more than a third when compared to the nine months ending March 31, 1996, excluding the domestic piano exit costs in the third quarter of that year.

In the Office Furniture Group, sales in the value-oriented and metal office furniture lines contributed to increases in this segment. In addition, lower material costs and efficiencies gained through improved manufacturing processes have enhanced profits in the segment. However, administrative expenses are being impacted by preparation costs related to implementing a new business information system.

The Lodging Group has posted increases in sales and operating income for the quarter and on a year-to-date basis. These gains are attributable to a hospitality industry refurbishing cycle which is in full force, combined with strength in new hotel construction and increased sales of longer term healthcare and assisted living furniture.

Sales and income for the OEM Cabinet and Furniture Group continued to slide when compared to the prior year. A historically softer cyclical quarter was also negatively impacted due to certain major customers seeing decreased market demand for their products in addition to reducing their accumulated inventory from an overly optimistic selling season. A shift to lower margin products has also contributed to the decrease in income. However, the excess capacity generated by lower OEM sales volumes within this Group has been partially utilized to supplement lodging product demand and to begin expanding Kimball's home furniture lines.

Sales in the Company's second largest segment, Electronic Contract Assemblies, jumped 23 percent, to $80 million, during the third quarter and 17 percent, to $237 million, year-to-date when compared to the prior year. Increased sales in both computer and automotive products has sparked this segment's revenue growth. Operating profits on both a quarterly and year-to-date basis have increased due to these volume gains, favorable product mix changes and operating efficiencies.

In the Processed Wood Products and Other segment, the Company's smallest, sales for the third quarter increased by 7 percent over the prior year, but remained flat for the nine months ended March 31, 1997. Increased sales in dimension and lumber led the way for the third quarter, but were offset by a decline in the sale of plastic components and a change in customer mix on a year-to-date basis. Operating income decreases for the three months ending and nine months ending March 31, 1997 reflect the continuous margin pressures felt by the lumber and dimension industry, changes in sales mix and upfront investment costs linked to ongoing re-engineering initiatives. The Company, with its vertically integrated supply chain, relies on this segment to supply considerable amounts of material components to the Furniture and Cabinets segment.

Through strong operational cash flow of $88 million year-to-date, the Company continued to pay regular quarterly dividends, updated vital business information systems and installed state-of-the-art production equipment, all while maintaining excellent balance sheet liquidity. Net of these expenditures, cash flow of $39 million has been achieved year-to-date. As of March 31, 1997, cash, cash equivalents and short-term investments totalled $153 million.

"We are excited about the improvements and gains our Company has achieved," said Habig. "Our commitment to provide our customers excellent quality and value, a conscientious and dedicated workforce and a focus on deploying our capital wisely to create returns in excess of our cost of capital have provided us with enhanced revenues and earnings. These critical success factors are the cornerstone for our future growth and increased Share Owner return, and our efforts to improve upon them never cease. As the demands of the marketplace continue to increase, so too will our energies to meet and exceed them," Habig said.

To the degree any statements contained herein are determined to be "forward-looking", please reference the cautionary statement as contained in the Company's 8-K filing of April 10, 1997.

Financial Highlights to Follow -0-

Kimball International, Inc.
Quarterly Share Owner's Report
Third Quarter 1997

                                        (not audited)
Consolidated Statement         Three Months         Nine Months
of Income (000's) except      Ending March 31      Ending March 31
           per share          1997       1996       1997       1996
                              ____       ____       ____       ____

Net Sales                   $243,277   $223,915   $744,757   $677,387
Cost of  Sales               169,458    159,791    522,635    492,682
                            ________   ________  _________   ________
Gross Profit                  73,819     64,124    222,122    184,705
Selling, Administrative &
   General Expenses           53,282     46,535    162,236    139,016
Product Line Exit Costs        -          3,400       -         3,400
                            ________   ________  _________   ________
Operating Income              20,537     14,189     59,886     42,289
Other Income - Net             2,790      2,839      4,994      8,809
                            ________   ________  _________   ________
Income Before Taxes
  on Income                   23,327     17,028     64,880     51,098
Taxes on Income                8,806      7,059     22,217     20,420
                            ________   ________  _________   ________
Net Income                   $14,521    $ 9,969    $42,663    $30,678
                            ________   ________  _________   ________
                            ________   ________  _________   ________
Earnings Per Share
      Class A Common Stock     $0.69      $0.47      $2.05      $1.46
      Class B Common Stock     $0.70      $0.48      $2.06      $1.47
Avg. Shares Outstanding       20,696     20,906     20,733     20,930
          (000's)


Condensed Consolidated
Balance Sheet (000's)
                                  (not audited)
                                    March 31,         June 30,
Assets                               1997               1996
______                               ____               ____

Current Assets                     $367,391           $342,251
Property & Equipment - Net of
   Accumulated Depreciation         179,029            174,009
Other Assets                         21,112             21,965
                                   ________           ________
   Totals                          $567,532           $538,225
                                   ________           ________
                                   ________           ________

Liabilities & Share Owners' Equity
__________________________________

Current Liabilities                $129,000          $122,043
Long Term Debt                        2,542             3,016
Deferred Income Taxes & Other        23,159            22,152
Share Owners' Equity                412,831           391,014
                                   ________           ________
   Totals                          $567,532          $538,225
                                   ________           ________
                                   ________           ________

CONTACT: Kimball International, Inc.

Kenneth L. Sendelweck, 812/482-1600