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STRONG PERFORMANCE BY KIMBALL'S U.S. OPERATIONS OFFSET BY INTERNATIONAL LOSSES, RESTRUCTURING CHARGE

 JASPER, Ind., Jan. 22 /PRNewswire/ -- Kimball International (NASDAQ-NMS: KBALB) reported that continued losses by the International Group and a $2.85 million restructuring charge for the company's piano operations in England and Austria offset solid performance by domestic operations in the fiscal second quarter ended Dec. 31, 1992.
 Douglas A. Habig, president and chief executive officer, said Kimball's U.S. operations increased sales by 20 percent and increased income by 14 percent compared to the year-earlier quarter. However, significantly higher losses by the company's European subsidiaries caused Kimball's consolidated net income to decline even without the restructuring charge.
 Kimball's consolidated sales were $175,825,000, up 19 percent over the prior year's $148,224,000, representing a record quarter as well as an increase for the seventh consecutive quarter.
 Net income, before the restructuring charge, was $7,592,000, or 36 cents per share of Class B Common Stock, down 8 percent from the year-earlier $8,136,000, or 39 cents per Class B share. Including the restructuring charge of $2,850,000, net income was $4,742,000, or 23 cents per Class B share, a decrease of 42 percent from the year before.
 Habig said the restructuring charge includes provisions for the realignment of manufacturing facilities, employee downsizing, and the writedown of certain inventory and equipment to estimated net realizable values.
 For the fiscal year's first six months, sales were $347,016,000, up 21 percent over last year's $286,784,000. Net income, before the restructuring charge, was $14,912,000, or 70 cents per Class B share, a decrease of 8 percent from last year's $16,079,000, or 76 cents 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 the restructuring charge, six months net income was $12,062,000, or 57 cents per Class B share.
 As the International Group's operating losses and restructuring charge have no income tax benefits at the present time, Kimball's effective tax rate is significantly higher for both the second quarter and year-to-date while the U.S. effective tax rate remains steady, according to Habig.
 The restructure of the European piano operations follows a realignment of Kimball's domestic piano operations approximately two years ago. It is based on the assumption that the decline in many markets for pianos and related components -- although accelerated by very weak economic conditions in those markets -- could prove to be permanent. Therefore stronger action was appropriate, Habig said.
 Kimball Europe, the company's subsidiary in England, is shifting its industry focus from piano components to office furniture, kitchen cabinets and accessories, and furniture components. Kimball Europe has undergone a change in general managers as well as an organizational realignment in the corporate reporting structure to support the shift in industry focus.
 Bosendorfer, Kimball's Austrian subsidiary, is also under new local management and has begun a major initiative to lower its cost structure because of the perceived decline in the piano industry.
 Habig said the International Group is expected to regain profitability as the restructuring is completed and the economies in their major markets improve.
 The Kimball Electronics Group had record sales in the second quarter for the second consecutive quarter. Although the group's income increased substantially, reflecting the higher sales volume and improved operating efficiencies, overall profit margins remained well below most of Kimball's other product lines.
 The Office Furniture Group's sales increased 9 percent over the prior-year quarter in a generally flat market, excluding the added sales of Harpers, the West Coast metal furniture company acquired in last year's third quarter. Sales growth was strongest in Kimball Office Furniture systems and National Office Furniture casegoods.
 Habig said Harpers continued to be hindered by the poor California economy, which is their primary market. They have also incurred additional costs to begin expanding their distribution eastward as well as for new product development.
 The Kimball Lodging Group's sales declined from the previous year's record quarter but improved over the preceding three-month period. The order backlog for hospitality furniture at the end of the second quarter was more than three times higher than a year earlier.
 The Contract Furniture Group's sales and income declined, largely because of the continued depressed market for wood TV cabinets.
 The domestic piano unit operated at slightly over break-even, primarily due to increased contract business. Planned inventory reductions achieved during the quarter, which generated considerable cash flow, resulted in the lowest piano inventory levels in more than 20 years.
 Habig said the company remains optimistic entering 1993 given the strong order backlogs for the Office Furniture Group, the Kimball Electronics Group and the Kimball Lodging Group.
 KIMBALL INTERNATIONAL, INC.
 FINANCIAL HIGHLIGHTS
 (dollars in thousands)
 For the three months ended December 31: 1992 1991
 Net Sales $175,825 $148,224
 Cost of Sales 124,876 103,573
 Gross Profit 50,949 44,651
 Selling, Administrative & General Expenses 39,558 34,674
 Restructuring Expenses 2,850 ---
 Operating Income 8,541 9,977
 Other Income -- Net 1,102 2,602
 Income Before Taxes on Income 9,643 12,579
 Taxes on Income 4,901 4,443
 Net Income $4,742 $8,136
 Earnings Per Share:
 Class A $.23 $.39
 Class B $.23 $.39
 Average Shares Outstanding (in thousands) 21,213 21,145
 For the six months ended December 31:
 Net Sales $347,016 $286,784
 Cost of Sales 245,457 199,482
 Gross Profit 101,559 87,302
 Selling, Administrative & General Expenses 78,403 66,580
 Restructuring Expenses 2,850 ---
 Operating Income 20,306 20,722
 Other Income -- Net 2,005 7,142
 Income Before Taxes on Income 22,311 27,864
 Taxes on Income 10,249 10,557
 Net Income $12,062 $17,307
 Earnings Per Share:
 Class A $.57 $.82
 Class B $.57 $.82
 Average Shares Outstanding (in thousands) 21,223 21,145
 -0- 1/22/93
 /CONTACT: Ken Sendelweck of Kimball International, 812-482-1600/
 (KBALB)


CO: Kimball International ST: Indiana IN: LEI SU: ERN

ML -- CL005 -- 7873 01/22/93 11:17 EST
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Date:Jan 22, 1993
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