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KIMBALL SALES INCREASE EIGHTH STRAIGHT QUARTER AS DOMESTIC OPERATIONS PERFORM STRONGLY

 JASPER, Ind., April 15 /PRNewswire/ -- Kimball International (NASDAQ: KBALB) increased sales for the eighth straight quarter as the company's U.S. operations continued to perform strongly in the three- month period ended March 31, 1993.
 Ongoing losses by the International Group, while smaller than in the year's two earlier quarters, caused consolidated net income in the fiscal third quarter to increase only slightly from the year ago quarter's performance. However, net income rose 19 percent over the second quarter when compared to results before a restructuring charge for two European subsidiaries.
 Douglas A. Habig, Kimball's president and chief executive officer, said consolidated sales were $181,715,000, an increase of 12 percent over the prior year's $162,524,000. Net income was $9,033,000, or 43 cents per share of Class B common stock, up two percent over the year- earlier $8,892,000, or 42 cents per Class B share.
 Kimball's U.S. operations achieved 13 percent increases in both sales and income over last year's third quarter. Domestic sales were four percent ahead of the record second quarter while net income advanced 12 percent.
 For the fiscal year's first nine months, sales were $528,731,000, an increase of 18 percent over the prior year's $449,308,000. Net income, before a second quarter charge of $2,850,000 for restructuring two European subsidiaries, was $23,945,000, or $1.13 per Class B share. This is a decrease of four percent from the prior year net income of $24,971,000, or $1.18 per Class B share, excluding the effect of last year's nonoperating gain of $1.228 million relating to insurance proceeds from the fire that destroyed the company's Chandler Veneers plant. Including this year's restructuring charge, nine months net income was $21,095,000, or $1.00 per Class B share, versus last year's $1.24 per Class B share, including the insurance proceeds.
 Gross profit margins declined in the third quarter and for the nine months due to continued competitive pricing pressures as a result of generally flat furniture markets and excess industry capacity; rising costs of materials, including lumber; changes in the business segment sales mix; and poor business conditions relative to international operations.
 The consolidated effective tax rate remained higher for the third quarter and nine months compared to the prior year periods. Habig said the tax rate has increased because no income tax benefits are currently available for the International Group's losses. The U.S. effective tax rate was steady for the quarter and nine months.
 Among Kimball's domestic operations, the Lodging Group increased sales and income in the quarter as shipments began for the major projects included in previous quarter backlogs. With order backlogs at record levels, the Lodging Group is expecting strong growth in the coming quarters.
 The Electronics Group posted gains in sales and income with good breadth in its customer and product base. Although margins have improved, primarily due to volume efficiency gains, the electronics industry remains very competitive with ongoing pressure to maintain and reduce pricing.
 The Office Furniture Group increased sales in the third quarter as systems and certain casegoods product lines remained strong. The higher sales level was aided by the inclusion of the sales of Harpers, the metal office furniture manufacturer acquired in last year's third quarter. Cetra, National Office Furniture and Harpers have gained market share in the past year.
 Office Furniture Group income in the quarter was down from the previous year due to the competitive marketplace and increased operating costs at Harpers as they transition their distribution eastward and develop new product lines.
 Although the Contract Furniture Group had higher sales, income was down, reflecting the continued softness in the TV cabinet segment. Signs of improvement are reinforced by recent higher order levels for cabinets and contract furniture.
 Kimball Piano's sales were up slightly while income levels improved due to the continued focus on process improvements and capacity absorption by the contract segment.
 The company's second quarter restructuring of Kimball Europe in England and Bosendorfer in Austria helped to improve the two subsidiaries' results in the third quarter. Habig said the pace of the Kimball Europe reorganization has been hindered by broad-based slowdowns in the subsidiary's primary markets. Short-term production inefficiencies are resulting from the integration of new equipment and processes into the manufacturing operations, according to Habig.
 Bosendorfer continues to be hampered by the worldwide depressed piano market. The subsidiary has decreased production to reduce inventories in response to lower sales.
 Habig said Kimball Europe and Bosendorfer are both expected to regain profitability as economic conditions improve and inefficiencies continue to be eliminated.
 Cash flow for the quarter was exceptionally strong, more than offsetting the recapitalization of Kimball Europe. The solid domestic operating results and a reduction in working capital generated a $17 million increase in cash on hand. Investment income was up accordingly from second quarter levels.
 The outlook for the fourth quarter is favorable, according to Habig. He said domestic operations look strong, largely because of high order backlogs in the Electronics, Lodging and Office Furniture Groups, and continued improvement is expected in the International Group.
 KIMBALL INTERNATIONAL, INC.
 FINANCIAL HIGHLIGHTS
 (dollars in thousands except for per share amounts)
 (unaudited)
 For the three months ended March 31: 1993 1992
 Net Sales $181,715 $162,524
 Cost of Sales 129,121 112,111
 Gross Profit 52,594 50,413
 Selling, Administrative & General
 Expenses 38,946 38,399
 Restructuring Expenses --- ---
 Operating Income 13,648 12,014
 Other Income -- Net 1,587 2,206
 Income Before Taxes on Income 15,235 14,220
 Taxes on Income 6,202 5,328
 Net Income $9,033 $8,892
 Earnings Per Share:
 Class A $.42 $.41
 Class B $.43 $.42
 Average Shares Outstanding (in thousands) 21,175 21,146
 For the nine months ended March 31:
 Net Sales $528,731 $449,308
 Cost of Sales 374,578 311,593
 Gross Profit 154,153 137,715
 Selling, Administrative & General
 Expenses 117,349 104,979
 Restructuring Expenses 2,850 ---
 Operating Income 33,954 32,736
 Other Income -- Net 3,592 9,348
 Income Before Taxes on Income 37,546 42,084
 Taxes on Income 16,451 15,885
 Net Income $21,095 $26,199
 Earnings Per Share:
 Class A $.99 $1.23
 Class B $1.00 $1.24
 Average Shares Outstanding (in thousands) 21,207 21,146
 -0- 4/15/93
 /CONTACT: Ken Sendelweck, assistant treasurer, Kimball International, 812-482-1600/
 (KBALB)


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

AR -- CL018 -- 6191 04/15/93 11:28 EDT
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Date:Apr 15, 1993
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