<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required) for the fiscal year ended June 30, 1994 or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required) for the transition period
from____________ to____________
Commission file number 0-3279
KIMBALL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-0514506
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1600 Royal Street, Jasper, Indiana 47549-1001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (812) 482-1600
including area code
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Name of each exchange
Title of each class on which registered
Class A Common Stock, par
value $.31-1/4 per share None
Class B Common Stock, par
value $.31-1/4 per share NASDAQ
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( X )
Continued....
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The number of shares outstanding of the Registrant's common stock as of August
15, 1994 was:
Class A Common Stock - 7,357,323 shares
Class B Common Stock - 13,805,491 shares
The Class A Common Stock is not publicly traded and, therefore, no market value
is available. The Registrant estimates that the aggregate market value of the
Class B Common Stock held by non-affiliates, as defined in Rule 405, on August
15, 1994 (based upon an estimate that 86.2% of the shares of Class B Common
Stock is held by non-affiliates and upon the average of the high and low prices
for Class B Common Stock on such date) was $275.2 million.
Portions of the Proxy Statement for Annual Meeting of Share Owners to be held on
October 11, 1994, are incorporated by reference into Part III of this Form 10-K.
The exhibit index is located on page 49.
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<PAGE>
TABLE OF CONTENTS
KIMBALL INTERNATIONAL, INC.
FORM 10-K YEAR ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
PART I.
Pages
<S> <C> <C>
Item 1. Business 4-14
Item 2. Properties 14-16
Item 3. Legal Proceedings 16
Item 4. Submission of Matters to Vote of Security Holders 16
PART II.
Item 5. Market for the Registrant's Common Stock and
Related Share Owner Matters 18-19
Item 6. Selected Financial Data 19
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 20-23
Item 8. Financial Statements and Supplementary Data 24-40
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures 40
PART III.
Item 10. Directors and Executive Officers of the Registrant 41
Item 11. Executive Compensation 41
Item 12. Security Ownership of Certain Beneficial
Owners and Management 41
Item 13. Certain Relationships and Related Transactions 41
PART IV.
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 42
SIGNATURES 43-44
</TABLE>
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PART I
Item 1. - Business
As used herein, the term "Company" refers to Kimball International, Inc.,
the Registrant, and its subsidiaries unless the context indicates otherwise.
The Company was incorporated in Indiana in 1939, and present management
assumed control in 1950. The corporate headquarters is located at 1600 Royal
Street, Jasper, Indiana.
The Company operates in three principal business segments: Furniture and
Cabinets, Electronic Contract Assemblies, and Processed Wood Products and Other.
The Company utilizes a substantial degree of vertical integration, as
approximately 43% of the final products of the Processed Wood Products and Other
Segment are used in the manufacturing processes in the Furniture and Cabinets
Segment.
The Company does not consider seasonal fluctuations to be significant.
Production is carried on in facilities located in the United States, England,
Austria and Mexico. In the U.S., the Company has facilities and showrooms in 15
states.
Sales by segment, after elimination of intersegment sales, for each of the
three years in the period ended June 30, 1994 are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
(dollars in thousands)
<S> <C> <C> <C>
Furniture and Cabinets $548,767 $477,558 $424,840
Electronic Contract Assemblies 204,149 180,464 132,507
Processed Wood Products and Other 69,568 64,378 59,954
Total $822,484 $722,400 $617,301
</TABLE>
Financial information by industry segment and geographic area for each of
the three years in the period ended June 30, 1994, is referred to in Note 15,
Business Segment and Geographic Area Information, of the Notes to Consolidated
Financial Statements, which can be found in Item 8, and is incorporated herein
by reference.
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<PAGE>
Segments
FURNITURE AND CABINETS
Historical Overview
The Company began manufacturing wood furniture and cabinets in 1950 and has
manufactured and marketed office furniture under the Kimball (registered trade
mark) trade name since 1970. Through an acquisition in 1969, the Company
entered into the manufacture and sale of Reproduction Victorian furniture. In
1982, the Company began the manufacture and sale of French Provincial style
furniture. In 1986 and 1987 it entered the lodging-hospitality furniture
industry and the long-term care portion of the healthcare furniture industry,
respectively. In 1992, the Company began the manufacture and sale of office
furniture to be used in the home and in 1994, expanded its residential furniture
product line to include solid oak and cherry bedroom furniture. Also in 1992,
the Company expanded its product offering with the acquisition of certain assets
and assumption of certain liabilities of Harpers, a metal office furniture
manufacturer. Harpers has marketed metal office furniture under the Harpers
(registered trademark) trade name since 1982. Kimball and Harpers office
furniture systems have broad market application, while the Kimball and National
casegoods and seating lines are more focused to the wood segment of the office
furniture industry. The Cetra (registered trademark)line of Kimball office
furniture systems was introduced during fiscal year 1989 while the Footprint
(registered trademark)line, which integrates the Cetra system and helps
designers better manage office space, was introduced in fiscal year 1992. Cetra
(registered tradedmark) and Footprint (registered trademark) both utilize TRAXX
(registered trademark), which increases space efficiency and eliminates the need
for a secondary support structure by using existing walls.
Through a predecessor acquired in 1966, L. Bosendorfer of Vienna, Austria,
the Company has been engaged in acoustical piano manufacturing and sales since
1828. Domestically, the Company has been engaged in piano manufacturing, or
sales, since 1857 through a predecessor, W.W. Kimball Co., acquired in 1959.
Piano manufacturing and sales represent a small part of the Furniture and
Cabinets Segment. Approximately three years ago the Company realigned its piano
operations in the U.S. and last year restructured its piano operations in
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<PAGE>
Europe in response to significant declines in the U.S. and worldwide piano
markets, which are believed to be permanent.
In addition to the product lines noted above, products in this segment also
include television, audio speaker and audio component cabinets and television
stands produced and sold on a contract basis for leading manufacturers in the
home entertainment industry. The Company also produces a variety of other
original equipment manufacturer (OEM) wood related products on a contract basis
including furniture for a leading home furniture manufacturer.
Locations
Office, home, hospitality and healthcare furniture, T.V. cabinets and
related products, which make up the largest part of this segment, are produced
at sixteen plants, eleven located in Indiana and one each in Kentucky,
Mississippi, Alabama, California and England. Production at the California
plant ceased in July 1994, as the Company relocated its production of metal
office furniture from a leased facility in California to a Company owned
facility in Idaho. Of the sixteen facilities, ten produce office furniture,
one of which also manufactures healthcare furniture and one of which also
produces hospitality furniture, kitchen cabinet doors and trim accessories,
and other wood components; two produce T.V. cabinets and related products,
one of which also produces residential furniture and home furniture on a
contract basis; two produce hospitality furniture and healthcare furniture;
one produces Reproduction Victorian and French Provincial furniture; and lastly,
one produces metal beds for the healthcare product line and stamped metal parts,
which are used in other product lines of the Company as well as sold to
unaffiliated customers. Nine of the sixteen plants presently producing wood
furniture and cabinets could interchange production between these two basic
products if needed.
Acoustical pianos are produced in two facilities: one located in Indiana
and one in Austria. To utilize plant capacity at the Indiana facility,
additional OEM wood related products are manufactured and sold on a contract
basis.
Two other facilities, one located in England and the other in Mexico,
produce piano components. The Mexico facility also assembles electronic
components, electronic cable harnesses and other electronic products for the
Electronic Contract Assemblies Segment.
A facility in Jasper, Indiana houses an Education Center for dealer and
employee training, the
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<PAGE>
Product Design and Research Center, and a Corporate showroom for product
display.
In the United States, showrooms and district warehouse facilities are
maintained in eleven cities for office furniture and five cities for home
furniture. In certain cities there are separate office and home furniture
showrooms. In addition, office furniture is maintained in a showroom in London,
England and in July 1994, an office furniture showroom opened in Toronto,
Canada. In certain showrooms other Company products are also on display.
Marketing Channels
Kimball and National office furniture is marketed through Company
salespersons to independent dealers throughout North America and England.
Harpers markets its office furniture products through Company salespersons to
independent dealers in the Western states, and primarily through independent
manufacturers' representatives to independent dealers elsewhere in the United
States. Reproduction furniture and residential furniture are generally marketed
through independent sales representatives to independent furniture dealers
throughout the United States. Cabinets and contract furniture are generally
marketed through Company employees, while hospitality and healthcare furniture
is marketed through independent manufacturers' representatives. The Company's
channel marketing strategy facilitates the sale of office furniture, upholstery
and piano product lines within the hospitality and healthcare channels. Kimball
(registered trademark), Jasper American, Conn (registered trademark),
Bosendorfer (registered trademark) and private label pianos are marketed through
Company salespersons to independent dealers. Piano components are both used
internally and sold to other piano manufacturers through Company salespersons.
Major Competitive Factors
The major competitive factors in the office furniture industry are price in
relation to quality and appearance, the utility of the product, shorter customer
lead times, "on-time" delivery to the customer, and ability to respond to
requests for special, non-standard products. The Company maintains sufficient
finished good inventories to be able to offer to domestic dealers prompt
shipment of certain lines of Kimball, National and Harpers office furniture,
thereby permitting dealers to maintain smaller inventories. Many products are
shipped through the Company's
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delivery system. The Company believes that its trucking capability enables it
to reduce damage to shipments, enhance scheduling flexibility, and improve the
capability for "on-time" deliveries, which are all key competitive factors in
the office furniture industry.
The major competitive factors in the cabinet, home furniture and OEM product
markets are quality, performance history and price. Television, audio speaker
and audio component cabinets, television stands and contract home furniture are
produced to customer specifications from specific orders and finished goods
inventories are generally small, consisting of goods awaiting shipment to a
specific customer. The Company's own line of home furniture are offered for
sale on an immediate ship basis. Competitive factors in the hospitality and
healthcare furniture markets are quality, performance history, "on-time"
delivery, and price. While the Company produces hospitality and healthcare
furniture to customers' specifications on a contract basis, the company also
offers its own line of hospitality and healthcare furniture.
The major competitive factors in the acoustical piano industry are price in
relation to quality, appearance and acoustical tone.
Competitors
There are many manufacturers of office, home, hospitality, and healthcare
furniture. The Company believes, however, that there are a limited number of
relatively large producers of wood office, hospitality and healthcare furniture,
of which the Company believes that it is one of the larger in net sales. In
many instances wood office furniture competes in the market with metal office
furniture. Based on available industry statistics, metal office furniture has a
larger share of the total market than does wood. The Company has positioned
Harpers as a vehicle to strengthen its market share in the non-wood segment of
the industry. There are two other domestic manufacturers of Reproduction
Victorian furniture and a limited number of manufacturers of French Provincial
furniture. While the Company believes it has a significant share of the
Reproduction Victorian furniture domestic market, this market in total is a very
small part of the total home furniture market, as is the market for French
Provincial Furniture.
The Company believes that it is one of the largest independent domestic
manufacturers of television and audio speaker cabinets, but certain
manufacturers of televisions and audio speakers, including some customers of the
Company, produce cabinets for their own use.
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<PAGE>
The acoustical piano business is characterized by a number of competitors,
including, in addition to the Company, what are thought to be two major domestic
manufacturers and several international manufacturers.
Raw Material Availability
Many components used in the production of furniture, cabinets and pianos are
manufactured internally within the group or by other groups of the Company,
including processed wood parts, and on a limited basis, metal stamped parts and
certain polyurethane molded plastics. Raw materials used in the production of
wood furniture and cabinets are generally readily available. Certain metal
components used in various wood office furniture products, predominately Cetra
and seating, are purchased in a pre-fabricated stage with additional fabrication
and finishing performed by the Company. Raw materials used in the manufacture
of metal office furniture, primarily rolled steel, is readily available from
U.S. and foreign sources. Raw materials used in the Company's piano lines are
readily available.
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<PAGE>
ELECTRONIC CONTRACT ASSEMBLIES
The Company entered the electronic contract assemblies market in 1985 with
knowledge acquired from the production of electrical keyboards for musical
instruments, which was first produced in 1963. Electronic and
electro-mechanical products (electronic assemblies) are sold on a contract basis
and produced to customers' specifications. Production takes place at three
manufacturing facilities, two located in Indiana and one in Mexico. The
facility in Mexico assembles electronic components, electronic cable harnesses
and other electronic products for sale to outside customers. In addition, and
to a lesser extent, the facility assembles piano components and sub-assemblies
for use in the Company's piano lines. Products from the Mexico facility are
accumulated at, and shipped from, a Texas warehouse.
Products are marketed by Company salespersons and independent sales
representatives on a contract basis. As contract electronic assemblies are
manufactured based on specific orders, finished goods inventories are generally
small consisting of goods awaiting shipment to a specific customer.
The competitive factors in the electronic contract assemblies market are
price, quality, production flexibility and reliability of "on-time" delivery.
The Electronics industry is very competitive, with many manufacturers of
contract electronic assemblies. The Company does not have a significant share
of the market for such products. Raw Materials for contract electronic products
are generally readily available from both domestic and foreign sources.
Included in this segment are sales to three customers which account for
21.8%, 21.4% and 17.7% of consolidated net sales in 1994, 1993 and 1992,
respectively. Included in sales to these three customers are sales of
electronic assemblies to Kelsey-Hayes Company, Inc. which accounted for
approximately 11.9% of consolidated net sales in the year ended June 30, 1994,
compared to 12.4% in the year ended June 30, 1993 and 10.8% in the year ended
June 30, 1992.
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<PAGE>
PROCESSED WOOD PRODUCTS AND OTHER
The Company's manufacture and sale of processed wood products includes
unprocessed lumber, dimension lumber, plywood and veneer. The Company owns and
operates four sawmills, four lumber yards, four dimension lumber plants, a plant
which manufactures contract wood products, a sliced veneer plant, two facilities
which produce plywood and related products and one face veneer plant.
Processed wood products manufactured by the Company are used internally as
well as sold to others. For fiscal year 1994, an estimated 43% of the total
production of these operations was for products used internally in other
segments' end products. Products sold to others are marketed principally to
furniture manufacturers, primarily through Company personnel.
The competitive factors in the processed wood products market are price,
quality and availability. In processed wood materials, the Company competes
with many integrated forest and specialty hardwood product companies and does
not have a significant share of the market for such products. Raw materials
used in this business segment are generally readily available.
Various miscellaneous products are manufactured by the Company for sales to
unaffiliated customers as well as for its own use. These include polyurethane
and polyester molded products, carbide cutting tools and related services on
cutting tools. Products and services of the Company's automotive service center
are also sold to unaffiliated customers.
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OTHER INFORMATION
BACKLOG
At June 30, 1994, the aggregate sales price of production pursuant to
worldwide open orders, which may be canceled by the customer, was $198.7 million
as compared to $167.4 million at June 30, 1993.
BACKLOG BY SEGMENT (dollars in millions)
<TABLE>
<CAPTION>
June 30, 1994 June 30, 1993
<S> <C> <C>
Furniture and Cabinets $101.2 $ 89.2
Electronic Contract Assemblies 89.3 71.1
Processed Wood Products
& Other 8.2 7.1
$198.7 $167.4
</TABLE>
Open orders of furniture and cabinets generally are not indicative of future
sales trends.
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<PAGE>
RESEARCH, PATENTS, AND TRADEMARKS
Research costs for the fiscal year ended June 30, 1994 were approximately
$8,557,000 as compared to $5,913,000 and $3,479,000 for the years ended June 30,
1993 and 1992, respectively. Research activities include the development of
manufacturing processes for electronic sub-assemblies, major process
improvements, wood and plastic technology, and new product development.
The Company owns the Kimball (registered trademark) trademark, which it
believes is material to its office, electronic, hospitality, healthcare, piano
and home furniture businesses, and owns the following trademarks which it
believes are material to its piano business only: Bosendorfer (registered
trademark); and to the furniture business only: National (registered
trademark), Cetra (registered trademark), Footprint (registered trademark),
ARTEC (registered trademark), TRAXX (registered trademark) and Harpers
(registered trademark). The Company also owns certain patents and other
trademarks and has certain other patent applications pending, which in the
Company's opinion are not material to its business.
ENVIRONMENT AND ENERGY MATTERS
The Company's operations are subject to various Federal, State and Local
laws and regulations with respect to environmental matters. The Company
believes that it is in substantial compliance with present laws and regulations
and that there are no material liabilities associated in regard to such items.
The Company is dedicated to excellence, leadership and stewardship in
matters of protecting the environment and communities in which the Company has
operations. The Company believes that continued compliance with Federal, State
and Local laws and regulations which have been enacted relating to the
protection of the environment will not have a material effect on its capital
expenditures, earnings or competitive position. Management believes capital
expenditures for environmental control equipment during the two fiscal years
ending June 30, 1996 will not represent a material portion of total capital
expenditures during those years.
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<PAGE>
The Company's manufacturing operations require significant amounts of
energy, including natural gas and oil. Federal and State statutes and
regulations control the allocation of fuels available to the Company, but to
date the Company has experienced no interruption of production due to such
regulations. In its wood processing plants, significant energy requirements are
satisfied internally by the use of the Company's own wood waste products.
EMPLOYEES
At June 30, 1994, the Company had 8,463 full time employees, of which 7,539
were employed in the United States and 924 in foreign countries. The Company
has no collective bargaining agreements with respect to its domestic employees.
All of the Company's foreign operations are subject to collective bargaining
arrangements. The Company believes that its employee relations are good.
Item 2. - Properties
The location and number of the Company's major manufacturing, warehousing,
and service facilities, including the executive and administrative offices, are
as follows:
<TABLE>
<CAPTION>
Number of Facilities
Furniture Processed
and Electronic Contract Wood
Cabinets Assemblies Products and Other Total
<S> <C> <C> <C> <C>
Indiana 16 2 12 30
Kentucky 1 3 4
Alabama 1 1
Tennessee 3 3
Mississippi 1 1
Texas 1 1
North Carolina 1 1
California 2 2
Austria 2 2
England 2 2
Mexico 1 1
</TABLE>
These facilities have an aggregate of approximately 6,626,000 square feet,
of which approximately 5,286,000 square feet are owned in fee, 697,000 square
feet are owned through capitalized leases and 643,000 square feet are leased,
and are summarized as follows:
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<TABLE>
<CAPTION>
Approximate Square Footage
Furniture Processed
and Electronic Contract Wood
Cabinets Assemblies Products and Other
<S> <C> <C> <C>
Fee 3,293,000 437,000 1,556,000
Capitalized Leases 697,000 -0- -0-
Leased 637,000 6,000 -0-
Total 4,627,000 443,000 1,556,000
</TABLE>
Including certain leased furniture warehousing and showroom areas excluded
from the above listing, total facilities approximate 6.8 million square feet.
(See Note 6 - Long-Term Debt of Notes to Consolidated Financial Statements, in
Item 8, for additional information concerning capitalized leases and Note 5 -
Commitments - Leases, for additional information concerning non-capitalized
leases.)
Included in Processed Wood Products and Other are executive, national sales
and administrative offices, an automotive service center, a product design and
research center, the production facility for polyurethane and polyester molded
plastic, carbide cutting tools and related services on cutting tools, and an
energy center for the Kimball Industrial Park consisting of 3 trifuel boilers,
each with 1,000 hp. capacity.
Generally, properties are utilized at normal capacity levels on a single
shift basis, with several properties utilizing a reduced second shift to meet
increased demand levels. At times, certain facilities were not utilized at
normal capacity levels during the fiscal year, because of declines in sales.
The Energy Center is not operating at full capacity.
Non-capitalized leases totaling 643,000 square feet expire in fiscal years
1995 through 2012. One lease totaling 535,000 square feet which supports the
Company's production of metal office furniture in California expires in fiscal
year 1995 as the Company relocates these operations from California to a new
Company owned facility in Idaho. Substantially all of the remaining leases are
subject to renewal options on the part of the Company. Capitalized leases
expire in 1995, with ownership of the properties transferring to the Company
thereafter. In addition to the above, the Company has Company owned or leased
facilities for showrooms and/or warehouses in twelve states in the United
States, as well as two locations in London, England and one in Vienna, Austria.
In July of 1994, the Company entered into a lease for a showroom in Toronto,
Canada.
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The Company owns in fee approximately 13,862 acres of land which includes
land where various Company facilities reside, including approximately 189 acres
of land in the Kimball Industrial Park, Jasper, Indiana (a site for certain
production and other facilities and for future expansions), and approximately
12,942 acres generally for hardwood timber reserves. Included in the
approximate 13,862 acres of land are approximately 60 acres in Post Falls,
Idaho, where a new Harpers plant is located. The facility, which was completed
in July 1994, totals 461,000 square-feet and houses manufacturing and
administrative offices. This facility is in addition to the previously stated
square footage amounts as of June 30, 1994 and replaces a 535,000 square foot
lease previously listed. Relocation to the new facility and start-up operations
occurred in July 1994, with full production expected to take place by the third
quarter of fiscal 1995.
Item 3. - Legal Proceedings
The Registrant and its subsidiaries are not parties to any material pending
legal proceedings, other than ordinary routine litigation incidental to the
business.
Item 4. - Submission of Matters to Vote of Security Holders
None to Report
Executive Officers of the Registrant
The executive officers of the Registrant as of August 31, 1994 are as
follows: (Age as of August 31, 1994)
<TABLE>
<CAPTION>
Office and Officer
Name Age Area of Responsibility Since
<S> <C> <C> <C>
Thomas L. Habig 66 Chairman of the Board of Directors 1955
Douglas A. Habig 47 President and Chief Executive Officer, 1975
and Director
Arnold F. Habig 87 Assistant to the Chief Executive 1950
Officer
James C. Thyen 50 Senior Executive Vice President - Chief 1974
Financial and Administrative Officer,
Treasurer, and Director
John B. Habig 61 Senior Executive Vice President - 1958
Operations Officer, Assistant Secretary,
and Director
Ronald J. Thyen 57 Senior Executive Vice President - 1966
Operations Officer, and Director
Anthony P. Habig 69 Executive Vice President - International, 1969
and Director (and 1959 to 1966)
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John T. Thyen 56 Senior Executive Vice President -Marketing 1978
and Sales, and Director
Gary P. Critser 57 Senior Executive Vice President - Chief 1967
Accounting Officer, Secretary, and Director
</TABLE>
Officers are elected annually by the Board of Directors.
Arnold F. Habig and Anthony P. Habig are brothers. Thomas L. Habig, John B.
Habig and Douglas A. Habig are brothers and are sons of Arnold F. Habig. James
C. Thyen, Ronald J. Thyen and John T. Thyen are brothers.
All of the executive officers have been employed by the Company for more
than the past five years in the capacity shown or some other executive
capacity.
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<PAGE>
PART II
Item 5. - Market for the Registrant's Common Stock and Related Share Owner
Matters Market Prices: Kimball International Class B Common Stock is traded
on the over-the-counter market. The symbol is KBALB. High and low price ranges
by quarter for the last two fiscal years as quoted by the National Association
of Security Dealers (NASDAQ) are as follows:
<TABLE>
<CAPTION>
1994 1993
High Low High Low
<S> <C> <C> <C> <C>
First Quarter. . . . . . . . $30 1/2 $27 1/4 $28 1/4 $23
Second Quarter . . . . . . . $34 1/2 $28 1/4 $27 3/4 $21 1/4
Third Quarter. . . . . . . . $32 1/2 $26 3/4 $32 1/2 $25 1/4
Fourth Quarter . . . . . . . $28 1/4 $22 1/2 $32 1/2 $26 1/4
</TABLE>
There is no active trading market for the Company's Class A Common Stock.
Dividends: There are no restrictions on the payment of dividends except that
dividends paid on Class B common stock must, by charter provisions, be on a
calendar year basis $.01 per share more than dividends paid on Class A common
stock. During fiscal year 1994 dividends declared were $17.7 million or $.83
per share on Class A Common Stock and $.84 per share on Class B Common Stock.
The dividends by quarter for 1994 compared to 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
Class A Class B Class A Class B
<S> <C> <C> <C> <C>
First Quarter. . . . . . . . $.20 3/4 $.21 $.18 3/4 $.19
Second Quarter . . . . . . . $.20 3/4 $.21 $.18 3/4 $.19
Third Quarter. . . . . . . . $.20 3/4 $.21 $.18 3/4 $.19
Fourth Quarter . . . . . . . $.20 3/4 $.21 $.20 3/4 $.21
Totals . . . . . . . . . . $.83 $.84 $.77 $.78
</TABLE>
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Share Owners: On July 22, 1994, the Company's Class A Common Stock was owned by
approximately 661 Share Owners of record and the Company's Class B Common Stock
by approximately 2,559 Share Owners of record, of which approximately 425 also
owned Class A Common Stock.
Item 6. - Selected Financial Data (dollars in thousands, except per share
amounts)
<TABLE>
<CAPTION>
Year Ended June 30,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net Sales $822,484 $722,400 $617,301 $555,263 $612,956
Net Income $ 36,169 $ 30,583 $ 38,628 $ 30,017 $ 43,475
Net Income Per
Common Share:
Class A $1.70 $1.44 $1.82 $1.41 $2.04
Class B $1.71 $1.45 $1.83 $1.42 $2.05
Total Assets $471,413 $452,705 $422,023 $382,685 $337,983
Long Term Debt-Less
Current Maturities $ 811 $ 2,017 $ 3,157 $ 4,392 $ 6,873
Cash Dividends Per
Common Share:
Class A $.83 $.77 $.69 $.65 $.57
Class B $.84 $.78 $.70 $.66 $.58
</TABLE>
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<PAGE>
Item 7. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Net sales totaled a record level of $822,484,000 in fiscal 1994, up 14% from
1993, as sales in each of the Company's three business segments--Furniture and
Cabinets, Electronic Contract Assemblies and Processed Wood Products and
Other--were above the prior year. Operating income levels increased 23% over
1993, led by improved operating income performance in wood office furniture
product lines within the Furniture and Cabinets Segment. Net income totaled
$36,169,000 in fiscal 1994, up 18% over the 1993 level. The 1994 net income
level includes the impact of adopting FASB Statement No. 109, Accounting for
Income Taxes, which increased net income by $1,200,000, or 5 cents per Class B
Share. Fiscal 1993 net income was unfavorably impacted by a $2,850,000, or 13
cents per share, charge to restructure European piano operations. Open orders
remained near record levels at June 30, 1994.
RESULTS OF OPERATIONS
1994 Discussion
The 1994 record net sales level of $822,484,000 was the result of each of the
Company's three business segments experiencing growth over fiscal 1993,
including double digit sales growth in the two largest segments--Furniture and
Cabinets and Electronic Contract Assemblies.
Sales in the Furniture and Cabinets Segment increased 15%, as all principal
product lines within this segment experienced increased sales levels over 1993.
Overall, the sales improvement was led by increased sales of office furniture
casegoods and systems product lines, in which volumes increased on both mature
and new product line offerings. Certain product lines within the Company's
total office furniture product offering experienced increases in market share.
Other product lines in the Furniture and Cabinets Segment that experienced
strong sales growth over 1993 include original equipment manufacturer (OEM)
cabinets and furniture, including a strong increase in sales of television and
speaker cabinets in wood and vinyl, and hospitality product line sales,
partially the result of large hospitality projects shipped in the first half of
the fiscal year. Sales of other OEM wood products increased over prior year
levels, as the Company's domestic piano unit increased its production and sales
of these products to utilize excess plant capacity caused by a continuing
decline in worldwide piano markets.
Sales in the Electronic Contract Assemblies Segment increased 13% over the 1993
level due to increased sales of computer and automotive electronic assemblies.
Included in this segment are sales to one customer that accounted for 12% of
consolidated net sales in 1994 and 1993.
Processed Wood Products and Other Segment sales were up 8%, largely due to
increased outside sales of wood products and plastic components. Increased
outside sales of wood products were the result of price and volume increases on
both lumber and dimension products. Increased sales of plastic components were
the result of volume increases, partially due to customer diversification.
Consolidated cost of sales as a percent of net sales in 1994 increased by .6
percentage point, due to increased material costs, resulting from both a sales
mix change within business segments and increased material prices. Labor costs
as a percent of net sales were flat, while overhead costs as a percent of net
sales were down from 1993, as the Company was able to hold fixed production
overhead costs relatively even with 1993 levels. Although selling, general and
administrative expenses as a percent of net sales continue to trend downward,
down .7 percentage point when compared to the prior year, the Company continues
to incur expenses relating to its ongoing employee training and development
programs, process re-engineering, and development and implementation of enhanced
information systems including a new
- 20 -<PAGE>
<PAGE>
enterprise business and manufacturing information system. Operating income as
a percent of net sales increased .5 percentage point when compared to 1993.
Most product lines within the Furniture and Cabinets Segment experienced
improvements in operating income levels when compared to fiscal 1993. The
strongest improvement was in wood office furniture product lines, including
record operating income levels on Kimball Office Furniture product line sales.
While fiscal 1994 operating losses in the Company's European units were reduced
by approximately 41% when compared to 1993, both units are forecast to
continue to operate at a loss in the near term, as they continue to be
negatively impacted by weak economic conditions in their principal markets. The
unit in England has also been negatively impacted by some operating
inefficiencies associated with the shift in its product line focus.
The Company incurred operating losses on steel office furniture product line
sales in fiscal 1994. These losses were due to elevated relocation expenses,
increased marketing costs, and operating inefficiencies. The Company forecasts
its steel office furniture lines will continue to operate at a loss over the
first half of fiscal 1995, before approaching monthly break-even levels sometime
in the second half, at which time the Company believes key learning curve
inefficiencies associated with the relocation will be diminished.
Operating income in the Electronic Contract Assemblies Segment decreased as a
result of a changing sales mix, expenses associated with process re-engineering,
development costs associated with the next generation of existing product lines
as well as material price increases. The electronics industry remains very
competitive, which has caused the Company to experience some difficulty in
passing on higher operating costs to its customers.
In the Processed Wood Products and Other Segment, operating income increased
over 1993 levels, principally due to improved operating income on sales of
lumber and dimension products and plastic components.
Interest expense in 1994 was down from the prior year as a result of reduced
outside borrowings in the Company's European subsidiaries and interest
capitalized on the construction of the new Harpers steel furniture manufacturing
facility in Idaho. Interest income was down in 1994 due to a lower average
investment balance and lower average yields when compared to the prior year.
Other-net decreased in the current year as a result of increased commercial
truck transportation and distribution expenses and the net change in several
other income/expense items.
The 1994 effective tax rate decreased 3.5 percentage points below the 1993
level, largely due to reduced foreign operating losses, including the prior year
restructuring charge, for which no income tax benefit is available. The 1994
effective tax rate includes the impact of a 1 percentage point increase in the
U.S. statutory tax rate and the impact of adopting FASB Statement No. 109 (as
discussed below), which reduced Taxes on Income by $1.2 million and the
effective tax rate by 2.0 percentage points.
Net income in 1994 was $36,169,000, or $1.71 per share of Class B Common Stock,
up 18% from the 1993 net income level of $30,583,000, or $1.45 per Class B
Share.
1993 Discussion
The 1993 net sales level of $722,400,000 increased 17% above 1992, as sales
increased in all three of the Company's business segments.
Sales in the Furniture and Cabinets Segment increased 12%, largely due to
increased sales of office furniture systems and certain casegoods lines, lodging
furniture and the additional sales of Harpers, which was acquired in the third
quarter of fiscal 1992.
Sales of office furniture systems improved significantly over 1992 levels
primarily as a result of a
-21-<PAGE>
<PAGE>
general trend throughout fiscal 1993 away from traditional casegoods to systems
and modular furniture and the additional sales of new product line offerings.
Sales of office furniture casegoods were up from 1992 levels, largely due to
increased sales of National Office Furniture casegoods product lines, which were
partially the result of new product line offerings and competitive pricing in
the marketplace.
Sales of hospitality furniture were up as the Company began to ship several
large hospitality projects in the latter half of the fiscal year. Fiscal 1993
sales of television and speaker cabinets in wood and vinyl were flat, while
sales of musical keyboard products were down in both the U.S. and abroad as a
result of depressed worldwide markets for these products.
Sales in the Electronic Contract Assemblies Segment increased 36% over the 1992
level. The increased sales levels were the result of increased sales of
computer and automotive assemblies, in part due to customer diversification.
Included in this segment are sales to one customer which accounted for 12% of
consolidated net sales.
Processed Wood Products and Other Segment sales were up, largely due to
increased outside sales of wood products, primarily a result of price increases
on both lumber and dimension products. The price increases were in response to
increased lumber material purchase costs, partially due to reduced supplies.
Consolidated cost of sales as a percent of net sales in 1993 increased 2.5
percentage points, largely due to increased material costs, resulting from both
a shifting product sales mix and increased material prices. In 1993, the most
pronounced shift in product sales mix was to higher electronic assembly sales,
which carried a lower gross margin than most other principal product lines.
Throughout 1993, the Company experienced rising material costs for electronic
component materials, lumber, veneer and other wood materials, partially due to
temporarily reduced supplies. Selling, general and administrative expenses as a
percent of net sales in 1993 decreased 1.4 percentage points when compared to
the prior year. While the percentage was down, the Company continued to incur
expenses as a result of its ongoing employee training and development programs,
process re-engineering, and development and implementation of enhanced
information systems. Operating income as a percent of net sales decreased 1.5
percentage points as stronger operating income performance in the U.S. was
offset by much weaker performance in Europe.
Operating income in the Furniture and Cabinets Segment decreased, primarily due
to significantly increased losses in the international furniture and musical
keyboard product operations, which more than offset a strong operating income
improvement in the U.S. musical keyboard product operations.
In the second quarter of 1993 the Company recorded a $2,850,000 charge to
restructure the Company's piano operations in England and Austria. While both
subsidiaries progressed in terms of their individual restructuring strategies
over the last half of fiscal 1993, both operated at a loss in 1993 as their
principal markets remained weak.
Operating income in the Electronic Contract Assemblies Segment increased due to
increased volume levels, better asset utilization and an expanded customer base.
The electronics industry remained very competitive with increasing pressure to
maintain and reduce pricing in spite of general cost increases on many component
materials.
Processed Wood Products and Other Segment operating income was down, principally
due to reduced operating income on sales of veneer and laminated wood products
and plastic components.
Interest expense increased in 1993 as a result of increased debt levels in the
international subsidiaries during the first half of the fiscal year. Interest
income decreased in 1993 in part due to lower interest rates and a higher
average investment balance in 1992 as the first half of 1992 reflected an
investment level before the acquisition of Harpers, which was funded entirely
out of
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<PAGE>
cash and short-term investments. Other income-net decreased in 1993 as
1992 included $1,961,000 of nonoperating gain, net of non-tax expenses, relating
to insurance proceeds from an accidental fire that destroyed the Chandler
Veneers plant.
In 1993 the effective tax rate increased 6.2 percentage points over the 1992
level largely due to foreign operating losses, including the restructuring
charge, for which no income tax benefit was available. The 1992 effective tax
rate benefited from the reorganization of subsidiaries in England that lowered
the rate by 1.7 percentage points. The Company's U.S. effective tax rate
remained steady.
Net income in 1993 was $30,583,000, or $1.45 per share of Class B Common Stock,
down 21% from the 1992 net income level of $38,628,000, or $1.83 per Class B
Share. The restructuring charge in 1993 decreased net income by $2,850,000, or
13 cents per Class B Share. The 1992 net income level includes the effect of a
nonoperating gain relating to the fire at the Chandler facility, which increased
net income by $1,228,000, or 6 cents per Class B Share.
LIQUIDITY AND CAPITAL RESOURCES
Cash, Cash Equivalents and Short-term Investments totaled $91.9 million at June
30, 1994, compared to $107.2 million at June 30, 1993. Working capital and the
current ratio were a strong $186.1 million and 2.8 to 1, respectively, as of
June 30, 1994, compared to $195.4 million and 3.0 to 1, respectively, in the
prior year. The Company expects to maintain this strong liquidity position
throughout fiscal 1995.
The Company generated a positive $58 million net cash from operating activities
in 1994, as positive cash flow provided by the Company's net income level was
somewhat reduced by an increased investment in accounts receivable. The
positive cash flow from operating activities was offset by the Company's
internal funding of capital investments for the future including: the
construction of a new steel furniture manufacturing facility in Idaho, continued
investment in information technology, including a new enterprise business and
manufacturing information system, and cash used to purchase other capital assets
that together totaled approximately $53 million in 1994. The Company used an
additional $22 million to fund financing activities, principally to pay
dividends. Cash flow, excluding the effect of purchases and maturities of
short-term investments, was a negative $15.3 million in 1994.
Fiscal 1994 was a period of high capital expansion for the Company, including
the construction of a new steel furniture manufacturing facility to relocate the
operations of Harpers from Torrance, California to Post Falls, Idaho. The
Company anticipates total relocation cash expenditures, including expenditures
for the new facility, will approximate $38 million. While relocation of the
operations is substantially complete, the Company forecasts cash payments
totaling approximately $10 million in the first quarter of fiscal 1995 relating
to activities surrounding the relocation. Also in fiscal 1995, the Company
plans to continue the internal funding of investments in new information
technology.
ADOPTION OF NEW ACCOUNTING STANDARD
Effective July 1, 1993, the Company adopted FASB Statement No. 109, Accounting
for Income Taxes. The impact of adopting the new statement, which, due to the
immateriality of this transaction was included in Taxes on Income in the
Consolidated Statement of Income, was $1,200,000, or 5 cents per Class B Share.
This one-time adoption impact was triggered by a lowering of the Company's net
deferred tax liability as Statement No. 109 requires all deferred tax items be
established at current enacted statutory rates.
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<PAGE>
Item 8. - Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . 26
Consolidated Statement of Financial Condition as of June 30, 1994 and 1993 . . . 27
Consolidated Statement of Income for the Three Years Ended June 30, 1994 . . . . 28
Consolidated Statement of Cash Flows for the Three Years Ended June 30, 1994 . . 29
Consolidated Statement of Share Owners' Equity for the Three Years Ended
June 30, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . 31-40
</TABLE>
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<PAGE>
REPORT OF MANAGEMENT
The management of Kimball International, Inc. is responsible for the preparation
of the accompanying financial statements of the Company and its subsidiaries.
The financial statements, including the notes, were prepared in accordance with
generally accepted accounting principles and include estimates and judgments,
which in the opinion of management are applied on a conservative basis. All
financial information in this annual report is consistent with the financial
statements.
The Company maintains internal accounting control systems and related policies
and procedures designed to provide reasonable assurance that assets are
safeguarded, that transactions are executed in accordance with management's
authorization and properly recorded, and that accounting records may be relied
upon for the preparation of the financial statements. The design, monitoring
and revision of internal accounting control systems involve, among other things,
management's judgment with respect to the relative cost and expected benefits of
specific control measures. The system is tested and evaluated regularly by the
Company's internal auditors as well as by independent public accountants in
connection with their annual audit.
An Audit Committee of the Board of Directors, consisting of three outside
directors, meets regularly with management, the internal auditors and the
independent public accountants in connection with its review of matters relating
to the Company's internal audit program, the Company's system of internal
controls and the services of the independent public accountants. The internal
auditors and the independent accountants have free and direct access to the
Audit Committee, and they meet with the Committee periodically, without
management present, to discuss appropriate matters.
The financial statements have been audited by Arthur Andersen & Co., independent
public accountants, in accordance with generally accepted auditing standards.
As such, the independent accountants conduct such tests and related procedures
as they deem necessary to render their opinion as to the fairness of the
financial statements.
Douglas A. Habig
Douglas A. Habig
President
Chief Executive Officer
Gary P. Critser
Gary P. Critser
Senior Executive Vice President
Chief Accounting Officer
Secretary
August 3, 1994
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors and Share Owners of Kimball International, Inc.
We have audited the accompanying consolidated statement of financial condition
of Kimball International, Inc. (an Indiana corporation) and subsidiaries as of
June 30, 1994 and 1993, and the related consolidated statements of income, cash
flows and share owners' equity for each of the three years in the period ended
June 30, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Kimball
International, Inc. and subsidiaries as of June 30, 1994 and 1993, and the
results of their operations and their cash flows for each of the three years in
the period ended June 30, 1994, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the consolidated
statements taken as a whole. The schedules listed under Item 14 are the
responsibility of the Company's management and are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not part
of the basic consolidated financial statements. These schedules have been
subjected to the auditing procedures applied to the audit of the basic
consolidated financial statements and, in our opinion, fairly stated in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
August 3, 1994
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<PAGE>
KIMBALL INTERNATIONAL,INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Amounts in Thousands Except for Per Share Data)
<TABLE>
<CAPTION>
June 30
Assets 1994 1993
<S> <C> <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 15,452 $ 4,625
Short-term investments at cost, estimated market value of $76,479
and $102,900, respectively . . . . . . . . . . . . . . . . . . . 76,494 102,597
Accounts and notes receivable, less allowance for possible losses
of $4,036 and $4,916, respectively . . . . . . . . . . . . . . . 96,118 87,623
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,083 84,666
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,091 15,947
Total current assets . . . . . . . . . . . . . . . . . . . . . 288,238 295,458
Property and Equipment-at cost, less accumulated depreciation. . . . 171,243 152,361
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,932 4,886
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $471,413 $452,705
Liabilities and Share Owners' Equity
Current Liabilities:
Loans payable to banks. . . . . . . . . . . . . . . . . . . . . . . $ 1,619 $ 3,479
Current maturities of long-term debt. . . . . . . . . . . . . . . . 1,196 1,802
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 33,133 38,518
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . 4,426 4,428
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 61,790 51,843
Total current liabilities . . . . . . . . . . . . . . . . . . . . 102,164 100,070
Other Liabilities:
Long-term debt, less current maturities . . . . . . . . . . . . . . 811 2,017
Deferred income taxes and other . . . . . . . . . . . . . . . . . . 17,486 17,277
Total other liabilities . . . . . . . . . . . . . . . . . . . . . 18,297 19,294
Share Owners' Equity:
Common stock-par value $.31 1/4 per share:
Class A- Shares authorized-10,504,000 (10,523,000 in 1993)
Shares issued-7,362,000 (7,381,000 in 1993) . . . . . . . 2,301 2,307
Class B- Shares authorized-30,000,000
Shares issued-14,150,000 (14,131,000 in 1993) . . . . . . 4,422 4,416
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . 791 791
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 350,304 331,839
357,818 339,353
Foreign currency translation adjustment . . . . . . . . . . . . . . 836 1,351
Less: Treasury stock-at cost:
Class A- 5,000 shares (3,000 in 1993). . . . . . . . . . . . . . . (59) (11)
Class B- 345,000 shares (335,000 in 1993). . . . . . . . . . . . . (7,643) (7,352)
(7,702) (7,363)
Total share owners' equity . . . . . . . . . . . . . . . . . . . 350,952 333,341
Total Liabilities and Share Owners' Equity . . . . . . . . . . . . . $471,413 $452,705
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
KIMBALL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(Amounts in Thousands Except for Per Share Data)
<TABLE>
<CAPTION>
Year Ended June 30
1994 1993 1992
<S> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . . . . . . . $822,484 $722,400 $617,301
Cost of Sales. . . . . . . . . . . . . . . . . . . . . 588,849 512,781 422,563
Gross Profit . . . . . . . . . . . . . . . . . . . . . 233,635 209,619 194,738
Selling, Administrative and General Expenses . . . . . 176,428 160,192 145,598
Restructuring Expenses . . . . . . . . . . . . . . . . --- 2,850 ---
Operating Income . . . . . . . . . . . . . . . . . . . 57,207 46,577 49,140
Other Income (Expense):
Interest Expense. . . . . . . . . . . . . . . . . . . (202) (1,200) (991)
Interest Income . . . . . . . . . . . . . . . . . . . 2,240 4,237 7,146
Other-net . . . . . . . . . . . . . . . . . . . . . . 174 3,708 5,419
2,212 6,745 11,574
Income Before Taxes on Income. . . . . . . . . . . . . 59,419 53,322 60,714
Taxes on Income. . . . . . . . . . . . . . . . . . . . 23,250 22,739 22,086
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 36,169 $ 30,583 $ 38,628
Net Income Per Share of Common Stock, based on the
average number of shares outstanding during the year:
Class A . . . . . . . . . . . . . . . . . . . . . . . $1.70 $1.44 $1.82
Class B . . . . . . . . . . . . . . . . . . . . . . . $1.71 $1.45 $1.83
Average Number of Shares Outstanding:
Class A . . . . . . . . . . . . . . . . . . . . . . . 7,366 7,383 7,401
Class B . . . . . . . . . . . . . . . . . . . . . . . 13,799 13,816 13,750
Totals. . . . . . . . . . . . . . . . . . . . . . . 21,165 21,199 21,151
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
KIMBALL INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in Thousands)
<TABLE>
<CAPTION>
Year Ended June 30
1994 1993 1992
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,169 $ 30,583 $ 38,628
Non-cash charges (credits) to net income:
Depreciation and amortization . . . . . . . . . . . . . . . . . 28,726 27,328 25,282
Gain on sales of and involuntary conversion of assets . . . . . (950) (761) (3,654)
Deferred income tax provision . . . . . . . . . . . . . . . . . (3,096) (235) (744)
Minority interest in subsidiary . . . . . . . . . . . . . . . . --- --- (33)
Restructuring expenses. . . . . . . . . . . . . . . . . . . . . --- 2,850 ---
Exercise of Class B stock options . . . . . . . . . . . . . . . --- --- 331
(Increase) decrease in current assets:
Accounts and notes receivable . . . . . . . . . . . . . . . . . (8,495) (11,827) (18,537)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . 3,583 (12,217) (16,021)
Other current assets. . . . . . . . . . . . . . . . . . . . . . 196 (488) (1,289)
Increase (decrease) in current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . (6,860) 13,565 7,036
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . 8,946 (1,489) 7,441
Net cash provided by operating activities . . . . . . . . . . 58,219 47,309 38,440
Cash Flows From Investing Activities:
Capital expenditures. . . . . . . . . . . . . . . . . . . . . . . (46,607) (36,983) (33,096)
Proceeds from sales of and involuntary conversion of assets . . . 1,565 1,308 5,895
Purchase of minority interest . . . . . . . . . . . . . . . . . . --- --- (1,527)
Increase in other assets. . . . . . . . . . . . . . . . . . . . . (6,606) (1,171) (390)
Purchases of short-term investments . . . . . . . . . . . . . . . (28,512) (54,782) (73,512)
Maturities of short-term investments. . . . . . . . . . . . . . . 54,615 65,043 75,159
Net cash used for investing activities. . . . . . . . . . . . (25,545) (26,585) (27,471)
Cash Flows From Financing Activities:
Net change in short-term borrowings . . . . . . . . . . . . . . . (1,860) (2,461) 2,532
Reduction in long-term debt . . . . . . . . . . . . . . . . . . . (1,841) (1,010) (1,985)
Acquisition of treasury stock . . . . . . . . . . . . . . . . . . (339) (1,441) ---
Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . (17,706) (16,042) (14,305)
Exercise of Class B stock options . . . . . . . . . . . . . . . . --- --- 1,457
Other-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (48) 76 569
Net cash used for financing activities. . . . . . . . . . . . (21,794) (20,878) (11,732)
Effect of Exchange Rate Change on Cash and Cash Equivalents. . . . (53) (91) 19
Net Increase (Decrease) in Cash and Cash Equivalents . . . . . . . 10,827 (245) (744)
Cash and Cash Equivalents at Beginning of Year . . . . . . . . . . 4,625 4,870 5,614
Cash and Cash Equivalents at End of Year . . . . . . . . . . . . . $ 15,452 $ 4,625 $ 4,870
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,197 $ 26,590 $ 20,836
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 518 $ 1,249 $ 972
Total Cash, Cash Equivalents and Short-Term Investments:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 15,452 $ 4,625 $ 4,870
Short-term investments. . . . . . . . . . . . . . . . . . . . . . 76,494 102,597 112,858
Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 91,946 $107,222 $117,728
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
KIMBALL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF SHARE OWNERS' EQUITY
(Amounts in Thousands Except for Per Share Data)
<TABLE>
<CAPTION>
Three Years Ended June 30, 1994
Common Stock - $.31 1/4 Par Value
Class A Class B
Authorized Issued Authorized Issued
Shares Shares Amount Shares Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Amounts at June 30, 1991 . . . . . . . . . . . . . . . . 10,577 7,435 $2,324 30,000 14,077 $4,399
Net income for the year. . . . . . . . . . . . . . . . .
Exercise of Class B Common Stock Options . . . . . . . .
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions. . . . . . (48) (48) (15) 48 15
Cash dividends:
Class A ($.69 per share). . . . . . . . . . . . . . .
Class B ($.70 per share). . . . . . . . . . . . . . .
Amounts at June 30, 1992 . . . . . . . . . . . . . . . . 10,529 7,387 $2,309 30,000 14,125 $4,414
Net income for the year. . . . . . . . . . . . . . . . .
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions. . . . . . (6) (6) (2) 6 2
Treasury stock acquired-net. . . . . . . . . . . . . . .
Cash dividends:
Class A ($.77 per share). . . . . . . . . . . . . . .
Class B ($.78 per share). . . . . . . . . . . . . . .
Amounts at June 30, 1993 . . . . . . . . . . . . . . . . 10,523 7,381 $2,307 30,000 14,131 $4,416
Net income for the year. . . . . . . . . . . . . . . . .
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions. . . . . . (19) (19) (6) 19 6
Treasury stock acquired-net. . . . . . . . . . . . . . .
Cash dividends:
Class A ($.83 per share). . . . . . . . . . . . . . .
Class B ($.84 per share). . . . . . . . . . . . . . .
Amounts at June 30, 1994 . . . . . . . . . . . . . . . . 10,504 7,362 $2,301 30,000 14,150 $4,422
</TABLE>
<TABLE>
<CAPTION>
Additional
Paid-In Retained Treasury Stock
Capital Earnings Shares Amount
<S> <C> <C> <C> <C>
Amounts at June 30, 1991 . . . . . . . . . . . . . . . --- $293,827 (367) $(7,084)
Net income for the year. . . . . . . . . . . . . . . . 38,628
Exercise of Class B Common Stock Options . . . . . . . 791 87 1,162
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions. . . . .
Cash dividends:
Class A ($.69 per share). . . . . . . . . . . . . . (5,101)
Class B ($.70 per share). . . . . . . . . . . . . . (9,644)
Amounts at June 30, 1992 . . . . . . . . . . . . . . . $791 $317,710 (280) $(5,922)
Net income for the year. . . . . . . . . . . . . . . . 30,583
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions. . . . .
Treasury stock acquired-net. . . . . . . . . . . . . . (58) (1,441)
Cash dividends:
Class A ($.77 per share). . . . . . . . . . . . . . (5,684)
Class B ($.78 per share). . . . . . . . . . . . . . (10,770)
Amounts at June 30, 1993 . . . . . . . . . . . . . . . $791 $331,839 (338) $(7,363)
Net income for the year. . . . . . . . . . . . . . . . 36,169
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions. . . . .
Treasury stock acquired-net. . . . . . . . . . . . . . (12) (339)
Cash dividends:
Class A ($.83 per share). . . . . . . . . . . . . . (6,114)
Class B ($.84 per share). . . . . . . . . . . . . . (11,590)
Amounts at June 30, 1994 . . . . . . . . . . . . . . . $791 $350,304 (350) $(7,702)
See Notes to Consolidated Financial Statements
</TABLE>
-30-<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation: The consolidated financial statements include the
accounts of all domestic and foreign subsidiaries. All significant intercompany
balances and transactions have been eliminated in the consolidation.
On January 23, 1992, the Company acquired certain assets and assumed certain
liabilities of Harpers, a manufacturer of metal office furniture. The
acquisition was accounted for as a purchase and, accordingly, operating results
of Harpers have been included in the Company's Consolidated Statement of Income
since acquisition.
Cash, Cash Equivalents and Short-Term Investments: For purposes of the
Consolidated Statement of Cash Flows, cash equivalents consist primarily of
highly liquid investments with original maturities of three months or less at
the time of acquisition. Short-term investments are cash investments, primarily
U.S. Government securities, municipal bonds, and limited partnership interests
in hedged debt and equity securities, with maturities exceeding three months at
the time of acquisition. At June 30, 1994, approximately 31% of the short-term
investment portfolio was composed of limited partnership interests in hedged
debt and equity securities. The portfolio strategy is to remain
"market-neutral" with the intent of earning rates of return in excess of current
treasury rates without taking on significantly higher degrees of risk. The
Company is in the process of liquidating its investment in the limited
partnership interests of hedged debt and equity securities. Other-net in the
Consolidated Statement of Income included net investment income on this
portfolio totaling $495,000 in 1994, $3,341,000 in 1993 and $1,763,000 in 1992.
Foreign Currency Translation: Foreign financial statements (except for Mexico,
whose functional currency is the U.S. Dollar) are translated under the
provisions of the Financial Accounting Standards Board Statement No. 52, whereby
foreign balance sheet accounts are translated at the exchange rate in effect at
year-end, income accounts are translated at the average rate of exchange during
the year, and translation gains and losses are excluded from net income by being
recorded as a component of share owners' equity (foreign currency translation
adjustment). This component of share owners' equity reflects the cumulative
effect of the translation adjustments which are excluded from net income.
Financial statements of Mexican operations are translated into U.S. Dollars
using both the current and historical exchange rates, with translation gains and
losses included in net income. The Consolidated Statement of Income includes a
net foreign exchange loss on transactions of $103,000 in 1994, a loss of
$260,000 in 1993 and a gain of $164,000 in 1992.
Inventory Pricing: Inventories are stated at cost or market, whichever is
lower. Cost includes material, labor and applicable manufacturing overhead and
is determined using the last-in, first-out (LIFO) method for the majority of
domestic inventories and the first-in, first-out (FIFO) method for the remaining
inventories.
Property, Equipment and Depreciation: Property and equipment are stated at
cost. Depreciation is provided over the estimated useful life of the assets
using the straight-line method for financial reporting purposes and accelerated
methods for income tax purposes. Maintenance, repairs and minor renewals and
betterments are expensed; major improvements are capitalized.
Capitalized Software: Purchased software and related consulting fees are
capitalized at cost and amortized over the useful life of the software using the
straight-line method for both financial reporting and income tax purposes.
Useful lives range from 2 to 7 years. Capitalized software, net of related
accumulated amortization, amounted to $7,204,000 in 1994 and $965,000 in 1993,
and is included in Other Assets.
Medical Care and Disability Benefit Plans: The Company is self-insured with
respect to certain medical care and disability benefit plans for substantially
all employees. The costs for such plans are charged against earnings in the
year incurred. The Company does not provide benefits under these plans to
retired employees.
Research and Development Costs: The costs of research and development are
expensed as incurred. These expenses were approximately, in millions, $8.6 in
1994, $5.9 in 1993 and $3.5 in 1992.
- 31 -<PAGE>
<PAGE>
Income Taxes: Effective July 1, 1993, the Company changed its method of
accounting for income taxes from the deferred method to the liability method as
required by Financial Accounting Standards Board Statement No. 109, Accounting
for Income Taxes. Under the new rules, deferred taxes are required to be stated
at a net realizable value using current statutory tax rates. The cumulative
effect of adopting FASB Statement No. 109 increased net income by $1.2 million
in 1994. This cumulative effect is included in 1994 Taxes on Income.
Unremitted earnings of foreign subsidiaries have been included in the
consolidated financial statements without giving effect to the United States
taxes that may be payable on distribution to the United States because it is not
anticipated such earnings will be remitted to the United States. If remitted,
the additional United States taxes paid would not be material.
Earnings Per Share: Earnings per share are based on the average number of
shares outstanding and are computed using the two-class common stock method
because of the dividend preference of Class B Common Stock. In the years ended
June 30, 1994 and 1992, outstanding stock options, if exercised, would not have
had a material dilutive effect on earnings per share. There were no stock
options outstanding during the year ended June 30, 1993.
Off-Balance Sheet Risk: The Company engages in several types of financing
arrangements with customers, primarily certain guarantees, and also has credit
risks in certain industries. However, the amount of such risks, in dollar
terms, is not considered to be significant.
NOTE 2. RESTRUCTURING CHARGE:
The Company's 1993 net income included a $2,850,000 charge, or $.13 per share,
to restructure the Company's piano operations in England and Austria. The
restructuring charge in England included provisions for workforce reductions,
the write-down of certain inventory and equipment to net realizable value and
the reorganization of certain production lines as the subsidiary shifted its
industry focus from piano components to office furniture, kitchen cabinet doors,
accessory and trim parts for kitchens and baths, and furniture components. The
restructuring charge in Austria included provisions for workforce reductions,
the write-down of certain inventory to net realizable value, production
realignment and other associated restructuring costs in response to what the
Company believed to be a permanent downward shift in the piano industry markets.
NOTE 3. INVENTORIES:
The majority of domestic inventories are valued using the lower of last-in,
first-out (LIFO) cost or market method. The remaining inventories, valued using
the lower of first-in, first-out (FIFO) cost or market method, represent
approximately 43% of consolidated inventories at June 30, 1994, 48% at June 30,
1993 and 31% at June 30, 1992.
Had the FIFO method been used for all inventories, net income would have been,
in millions, $1.2 higher in 1994, $1.0 higher in 1993, and $.03 lower in 1992.
Additionally, inventories would have been, in millions, $19.6, $17.5 and $15.8
higher at June 30, 1994, 1993 and 1992, respectively, if the FIFO method had
been used.
Inventory components at June 30 are as follows:
(Amounts in Thousands)
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Finished products. . . . . . . . . . . . . $23,780 $23,513 $22,450
Work-in-process. . . . . . . . . . . . . . 14,603 17,527 15,460
Raw materials. . . . . . . . . . . . . . . 42,700 43,626 35,002
Total inventory . . . . . . . . . . . $81,083 $84,666 $72,912
</TABLE>
- 32 -<PAGE>
<PAGE>
NOTE 4. PROPERTY AND EQUIPMENT:
Major classes of property and equipment consist of the following:
(Amounts in Thousands)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . $ 5,501 $ 4,150
Buildings and improvements . . . . . . . . 119,544 117,877
Machinery and equipment. . . . . . . . . . 224,792 211,550
Construction-in-progress . . . . . . . . . 26,433 3,242
Totals . . . . . . . . . . . . . . . . . 376,270 336,819
Less: Accumulated depreciation . . . 205,027 184,458
Net property and equipment . . . . . . . $171,243 $152,361
</TABLE>
Construction-in-progress at June 30, 1994, includes $24 million of expenditures
on a new plant facility which was substantially complete at June 30, 1994.
The useful lives, based on the Company's estimate of the service life of the
classes of property, used in computing depreciation are as follows:
<TABLE>
<CAPTION>
Years
<S> <C>
Buildings and improvements . . . . . . . . 5 to 40
Machinery and equipment. . . . . . . . . . 3 to 15
Automotive equipment . . . . . . . . . . . 3 to 5
Office equipment . . . . . . . . . . . . . 3 to 10
Leasehold improvements . . . . . . . . . . Life of Lease
</TABLE>
Depreciation and amortization of property and equipment totaled, in millions,
$26.9 for 1994, $26.2 for 1993 and $24.9 for 1992. Imputed interest costs,
related to the financing of certain construction projects, of $345,000, $112,000
and $84,000 were capitalized during 1994, 1993 and 1992, respectively.
NOTE 5. COMMITMENTS - LEASES:
Operating leases for certain office, showroom, warehouse and manufacturing
facilities, and equipment, which expire 1995-2012, contain provisions under
which minimum annual lease payments are, in millions, $3.9, $2.4, $2.0, $1.7 and
$1.3 for the five years ended June 30, 1999, respectively, and aggregate $8.8
million from 2000 to the expiration of the leases in 2012. The Company is
obligated under certain of the real estate leases to maintain the properties and
pay real estate taxes.
Total rental expenses (including rental expenses in prior years associated with
leases from the retirement trust - see Note 17) amounted to, in millions, $9.5,
$9.9 and $8.5 in 1994, 1993 and 1992, respectively.
NOTE 6. LONG-TERM DEBT:
Long-Term Debt includes capitalized lease obligations expiring in fiscal year
1995. These capitalized lease obligations relate to certain plant facilities
constructed or purchased with the proceeds from the sale of Industrial Revenue
Bonds and subsequently leased to the Company. The remaining long-term debt
consists of foreign borrowings. Aggregate maturities of long-term debt for the
next five years are $1,196,000, $377,000, $277,000, $157,000 and $0,
respectively. Interest rates range from 6% to 9.125%. Based upon borrowing
rates currently available to the Company, the fair value of the Company's debt
approximates the carrying value.
- 33 -<PAGE>
<PAGE>
NOTE 7. RETIREMENT PLAN:
The Company has one trusteed defined contribution Retirement Plan in effect for
substantially all domestic employees meeting the eligibility requirements.
Company contributions are based on a percent of net income as defined in the
plan; the percent of contribution is determined by the Board of Directors up to
specific maximum limits. Payments by the Company to the trusteed plan are
vested and held for the sole benefit of participants. Total contributions to
the Retirement Plan for 1994, 1993 and 1992 were approximately, in millions,
$9.0, $7.5 and $7.1, respectively.
Employees of certain foreign subsidiaries are covered by local pension or
retirement plans. Annual expense and accumulated benefits of these foreign
plans are not significant to the consolidated financial statements.
NOTE 8. INCENTIVE STOCK OPTIONS:
On August 11, 1987, the Board of Directors adopted the 1987 Stock Incentive
Program (1987 plan), which was approved by the Company's Share Owners on October
13, 1987. Under this plan, 1,800,000 shares of Class B Common Stock are
reserved for incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock awards, and performance share awards to be
granted to officers and other key employees of the Company and to members of the
Board of Directors who are not employees. Approximately 109 employees are
eligible to participate in the 1987 plan.
Transactions during 1994 are as follows:
<TABLE>
<CAPTION>
Number Per Share
of Shares Option Price
<S> <C> <C>
Options outstanding June 30, 1993. . . . . . --- ---
Granted. . . . . . . . . . . . . . . . . . . 106,650 $29.60
Exercised. . . . . . . . . . . . . . . . . . --- ---
Expired. . . . . . . . . . . . . . . . . . . (550) $29.60
Options outstanding June 30, 1994. . . . . . 106,100 $29.60
Shares available for option June 30, 1994. . 1,712,848
</TABLE>
NOTE 9. INCOME TAXES:
As stated in Note 1, the Company adopted Financial Accounting Standards Board
Statement No. 109, Accounting for Income Taxes, effective July 1, 1993.
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. A valuation reserve is
provided for deferred tax assets relating to foreign net operating losses, due
to uncertainty surrounding the utilization of these deferred tax assets.
The components of the deferred tax assets and liabilities as of June 30, 1994,
are as follows:
(Amounts in Thousands)
<TABLE>
<S> <C>
Deferred tax assets:
Accounts receivable. . . . . . . . $1,688
Inventory. . . . . . . . . . . . . 1,910
Other liabilities and reserves . . 3,701
Foreign net operating losses . . . 5,785
Valuation reserve. . . . . . . . (5,785)
Other. . . . . . . . . . . . . . . 3,086
Total. . . . . . . . . . . . . $10,385
Deferred tax liabilities:
Property & equipment . . . . . . . $12,959
Other assets . . . . . . . . . . . 1,407
Other. . . . . . . . . . . . . . . 416
Total. . . . . . . . . . . . . $14,782
</TABLE>
- 34 -<PAGE>
<PAGE>
The components of income before taxes on income are as follows:
(Amounts in Thousands)
<TABLE>
<CAPTION>
Year Ended June 30
1994 1993 1992
<S> <C> <C> <C>
United States . . . . . . . . . . . . . . . . . . $64,532 $63,185 $61,715
Foreign . . . . . . . . . . . . . . . . . . . . . (5,113) (9,863) (1,001)
Total income before taxes. . . . . . . . . . $59,419 $53,322 $60,714
Taxes on income are composed of the following items:
(Amounts in Thousands)
1994 1993 1992
Currently payable:
Federal. . . . . . . . . . . . . . . . . . . $22,500 $19,351 $19,160
Foreign. . . . . . . . . . . . . . . . . . . --- --- (223)
State. . . . . . . . . . . . . . . . . . . . 3,846 3,623 3,893
26,346 22,974 22,830
Deferred:
Federal. . . . . . . . . . . . . . . . . . . (2,734) (25) (882)
Foreign. . . . . . . . . . . . . . . . . . . 7 (248) 258
State. . . . . . . . . . . . . . . . . . . . (369) 38 (120)
(3,096) (235) (744)
Total taxes on income . . . . . . . . . . $23,250 $22,739 $22,086
</TABLE>
A reconciliation of the statutory U.S. income tax rate to the Company's
effective income tax rate follows:
<TABLE>
<CAPTION>
Year Ended June 30
(Amounts in Thousands) 1994 1993 1992
Amount % Amount % Amount %
<S> <C> <C> <C> <C> <C> <C>
Taxes computed at statutory rate . . . . . . . . . . . . . . . . . $20,797 35.0% $18,130 34.0% $20,643 34.0%
State income taxes, net of Federal income tax benefit . . . . . . 2,500 4.2 2,416 4.5 2,490 4.1
Tax benefit-U.K. Reorganization. . . . . . . . . . . . . . . . . . --- --- --- --- (1,044) (1.7)
Foreign operating losses-limited tax benefit currently available . 1,796 3.0 3,105 5.8 128 .2
Adoption of FASB No. 109 . . . . . . . . . . . . . . . . . . . . . (1,200) (2.0) --- --- --- ---
Other-net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (643) (1.1) (912) (1.7) (131) (.2)
Total taxes on income . . . . . . . . . . . . . . . . . . . . $23,250 39.1% $22,739 42.6% $22,086 36.4%
</TABLE>
NOTE 10. SHORT-TERM LINES OF CREDIT:
The Company obtains short-term funds under lines of credit extended by several
principal banks, at negotiated rates. Additional information for the years
ended June 30, 1994, 1993 and 1992 is as follows:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1994 1993 1992
<S> <C> <C> <C>
Available unused short-term lines of credit at June 30 . . . . . . . . . . $5,119 $5,559 $6,824
Maximum short-term borrowings outstanding during the year. . . . . . . . . $3,499 $8,740 $7,462
Average short-term borrowings outstanding during the year. . . . . . . . . $1,823 $5,117 $6,364
Weighted average interest rate on short-term borrowings during the year. . 6.6% 9.4% 9.4%
Average interest rate on borrowings outstanding at June 30 . . . . . . . . 5.4% 7.8% 9.8%
Compensating balances on deposit at June 30. . . . . . . . . . . . . . . . --- --- $ 250
</TABLE>
The Company maintained a compensating balance of 5% of its domestic bank lines
of credit at June 30, 1992.
- 35 -<PAGE>
<PAGE>
NOTE 11. COMMON STOCK:
Shares of Class B Common Stock are entitled to dividends, out of funds legally
available therefore, in each calendar year in which dividends are paid on the
Company's Class A Common Stock, at a differential of $.01 per share, each
calendar year more than the dividends paid in such a year on Class A Common
Stock. The owners of both Class A and Class B Common Stock are entitled to
share pro-rata, irrespective of class, in the distribution of the Company's
available assets upon dissolution.
Owners of Class B Common Stock are entitled to elect, as a class, one member of
the Company's Board of Directors. In addition, owners of Class B Common Stock
are entitled to full voting powers, as a class, with respect to any
consolidation, merger, sale, lease, exchange, mortgage, pledge, or other
disposition of all or substantially all of the Company's fixed assets, or
dissolution of the Company. Otherwise, except as provided by statute with
respect to certain amendments to the Articles of Incorporation, the owners of
Class B Common Stock have no voting rights, and the entire voting power is
vested in the Class A Common Stock, which has one vote per share.
The owner of a share of Class A Common Stock may, at their option, at any time,
convert such share into one share of Class B Common Stock. All Class A Common
Stock surrended for conversion will be cancelled and retired permanently.
If cash dividends are not paid on shares of the Company's Common Stock for a
period of thirty-six consecutive months, or if at any time the total number of
shares of Class A Common Stock issued and outstanding is less than 15% of the
total number of issued and outstanding shares of both Class A and Class B Common
Stock, then all shares of Class B Common Stock shall automatically have the same
rights and privileges as the Class A Common Stock, with full and equal voting
rights and with equal rights to receive dividends as and if declared by the
Board of Directors.
NOTE 12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
Quarterly financial information is summarized as follows:
(Amounts in Thousands Except for Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended
September 30 December 31 March 31 June 30
<S> <C> <C> <C> <C>
1994:
Net Sales. . . . . . . . . . . . . . . . $197,882 $205,804 $208,576 $210,222
Gross Profit . . . . . . . . . . . . . . $ 57,135 $ 56,611 $ 58,905 $ 60,984
Net Income . . . . . . . . . . . . . . . $ 10,280 $ 8,404 $ 8,681 $ 8,804
Net Income Per Share of Common Stock:
Class A . . . . . . . . . . . . . . . . $.48 $.40 $.41 $.41
Class B . . . . . . . . . . . . . . . . $.48 $.40 $.42 $.41
1993:
Net Sales. . . . . . . . . . . . . . . . $171,191 $175,825 $181,715 $193,669
Gross Profit . . . . . . . . . . . . . . $ 50,610 $ 50,949 $ 52,594 $ 55,466
Net Income . . . . . . . . . . . . . . . $ 7,320 $ 4,742 $ 9,033 $ 9,488
Net Income Per Share of Common Stock:
Class A . . . . . . . . . . . . . . . . $.34 $.23 $.42 $.45
Class B . . . . . . . . . . . . . . . . $.34 $.23 $.43 $.45
1992:
Net Sales. . . . . . . . . . . . . . . . $138,560 $148,224 $162,524 $167,993
Gross Profit . . . . . . . . . . . . . . $ 42,651 $ 44,651 $ 50,413 $ 57,023
Net Income . . . . . . . . . . . . . . . $ 9,171 $ 8,136 $ 8,892 $ 12,429
Net Income Per Share of Common Stock:
Class A . . . . . . . . . . . . . . . . $.43 $.39 $.41 $.59
Class B . . . . . . . . . . . . . . . . $.43 $.39 $.42 $.59
</TABLE>
Net income in the first quarter of 1994 was increased by $1,200,000, or $.05 per
share, due to the Company's adoption of FASB Statement No. 109, Accounting for
Income Taxes.
- 36 -<PAGE>
<PAGE>
Net income in the second quarter of 1993 includes a restructuring charge of
$2,850,000, or $.13 per share, relating to the restructuring of the Company's
piano operations in Europe.
Net income in the fourth quarter of 1993 was reduced by $911,000, or $.04 per
share, relating to the Company's year-end inventory valuation, in part due to
the inflationary impact of LIFO costs being higher at year-end than had been
forecast during interim periods.
Net income in the first quarter of 1992 includes a nonoperating gain of
$1,228,000, or $.06 per share, relating to insurance proceeds from an accidental
fire that destroyed the Chandler Veneers plant.
Net income in the fourth quarter of 1992 was improved $647,000, or $.03 per
share, due to a downward adjustment of the LIFO inventory reserve. The
adjustment resulted from inventory quantities and cost at year-end being lower
than was forecast. In addition, net income in the fourth quarter of 1992 was
also improved $401,000, or $.02 per share, due to an inventory adjustment
resulting, in part, from certain LIFO cost estimates used to charge costs out of
inventory being higher than actual costs.
NOTE 13. SHORT-TERM INVESTMENTS:
These accounts are summarized as follows:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1994 1993
Fair Value Amortized Cost Fair Value Amortized Cost
<S> <C> <C> <C> <C>
Debt Securities:
Held-to-Maturity Securities:
U.S. Treasury Notes. . . . . . . . . . $ 35,053 $ 35,149 $ 50,895 $ 50,703
Tax Advantaged Municipal Bonds . . . . 15,282 15,186 17,479 17,368
Other Securities . . . . . . . . . . . 1,986 2,001 110 110
Total Held-to-Maturity Securities . . . 52,321 52,336 68,484 68,181
Other Investments . . . . . . . . . . . . 24,158 24,158 34,416 34,416
Total Investments . . . . . . . . . . . . $ 76,479 $ 76,494 $102,900 $102,597
</TABLE>
Effective June 30, 1994, the Company adopted Financial Accounting Standards
Board Statement No. 115, Accounting for Certain Investments in Debt and Equity
Securities. Under the new rules, the Company's debt securities are classified
as held-to-maturity securities. The Company's Other Investments consist of
investments in limited partnership interests in hedged debt and equity
securities. The new accounting rules are consistent with the Company's
prevailing accounting policy and, consequently, do not effect the Company's
current earnings, financial position, or cash flow.
The Company has the positive intent and financial ability to hold all securities
classified as held-to-maturity until their contractual maturity dates.
Discounts and premiums are amortized over the life of the security. Unrealized
holding gains and (losses) were $113,000 and $(128,000) at June 30, 1994, and
$318,000 and $(15,000) at June 30, 1993, respectively. Fair values are
estimated based upon the quoted market values of those, or similar instruments.
All held-to-maturity securities mature within a period of 0-14 months.
NOTE 14. ACCRUED EXPENSES:
Accrued expenses at June 30 consist of:
(Amounts in Thousands)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Income taxes . . . . . . . . . . . . . . $ 2,673 $ 1,468
Property taxes . . . . . . . . . . . . . 5,944 5,185
Compensation . . . . . . . . . . . . . . 23,797 18,113
Retirement plan. . . . . . . . . . . . . 9,036 7,515
Other expenses . . . . . . . . . . . . . 20,340 19,562
Total accrued expenses. . . . . . . . . $ 61,790 $ 51,843
</TABLE>
- 37 -<PAGE>
<PAGE>
NOTE 15. BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION:
The Company has three business segments which are as follows:
Furniture and Cabinets: Sales include office, lodging and home furniture;
television and stereo cabinets; pianos and piano cases, keys and actions; and
other miscellaneous products. Intersegment sales are insignificant.
Electronic Contract Assemblies: Sales include electronic and electro-mechanical
products (electronic assemblies) manufactured on a contract basis to customers'
specifications. There are no intersegment sales.
Processed Wood Products and Other: Processed Wood Products include the sales of
lumber, lumber banded particleboard, dimension lumber, plywood, veneer, and
other sales. "Other" sales include plastic components, carbide cutting tools
and related services on cutting tools, fleet and automotive services, and other
miscellaneous products and services, totaling approximately 22% in 1994, 21% in
1993, and 25% in 1992, of the total customer sales of this segment.
Intersegment sales include these same basic wood products, assembled components
and miscellaneous products, which are used in the final production of pianos,
cabinets, office, home, hospitality and healthcare furniture; thus, intersegment
sales consist of sales to the Furniture and Cabinets segment.
Total United States sales by geographic area includes export sales of, in
millions, $18.4 in 1994, $18.2 in 1993, and $17.1 in 1992. Included in the
Electronic Contract Assemblies segment are sales to three customers which
account for 22%, 21% and 18% of consolidated net sales in 1994, 1993 and 1992,
respectively. One customer accounts for 11.9% of consolidated net sales in
1994, 12.4% in 1993, and 10.8% in 1992. Foreign customer sales are generally to
European customers. The eliminations from operating income are various
transactions including intercompany profit in inventories. Identifiable assets
eliminated generally consist of intercompany profit in inventories and
intercompany accounts receivable.
Intersegment sales are generally priced at cost plus a percentage mark-up, and
are generally thought to be marginally less than prices which would be charged
for the same product to unaffiliated customers.
Business Segment
<TABLE>
<CAPTION>
(Amounts in Thousands) Year Ended June 30
1994 1993 1992
Customers Intersegment Customers Intersegment Customers Intersegment
<S> <C> <C> <C> <C> <C> <C>
Net Sales:
Furniture and Cabinets. . . . . . . . . $548,767 $ 501 $477,558 $ 524 $424,840 $ 781
Electronic Contract Assemblies. . . . . 204,149 --- 180,464 --- 132,507 ---
Processed Wood Products and Other . . . 69,568 52,354 64,378 44,656 59,954 41,629
Totals. . . . . . . . . . . . . . . . . $822,484 $ 52,855 $722,400 $45,180 $617,301 $ 42,410
</TABLE>
<TABLE>
<CAPTION>
(Amounts in Thousands) Year Ended June 30
1994 1993 1992
<S> <C> <C> <C>
Net Income:
Operating Income:
Furniture and Cabinets . . . . . . . . . . . . . $ 35,842 $ 25,838 $ 36,279
Electronic Contract Assemblies . . . . . . . . . 13,638 14,830 7,119
Processed Wood Products and Other. . . . . . . . 7,727 5,898 5,903
Eliminations . . . . . . . . . . . . . . . . . . 0 11 (161)
Total Operating Income. . . . . . . . . . . . . 57,207 46,577 49,140
Net Interest Income . . . . . . . . . . . . . . . 2,038 3,037 6,155
Other Income (Expense)-Net. . . . . . . . . . . . 174 3,708 5,419
Income Before Taxes on Income . . . . . . . . . . 59,419 53,322 60,714
Taxes on Income . . . . . . . . . . . . . . . . . 23,250 22,739 22,086
Net Income . . . . . . . . . . . . . . . . . . . $ 36,169 $ 30,583 $ 38,628
Identifiable Assets:
Furniture and Cabinets. . . . . . . . . . . . . . $262,359 $241,845 $227,051
Electronic Contract Assemblies. . . . . . . . . . 79,313 65,545 45,094
Processed Wood Products and Other . . . . . . . . 42,826 42,092 40,895
Eliminations. . . . . . . . . . . . . . . . . . . (5,031) (3,999) (8,745)
Totals. . . . . . . . . . . . . . . . . . . . . 379,467 345,483 304,295
- 38 -<PAGE>
<PAGE>
Unallocated Corporate Assets:
Cash, Cash Equivalents and Short-Term Investments 91,946 107,222 117,728
Total Assets. . . . . . . . . . . . . . . . . . . $471,413 $452,705 $422,023
</TABLE>
<TABLE>
<CAPTION>
Business Segment
(Amounts in Thousands) 1994 1993 1992
Depreciation Depreciation Depreciation
and Capital and Capital and Capital
Amortization Expenditures Amortization Expenditures Amortization Expenditures
<S> <C> <C> <C> <C> <C> <C>
Furniture and Cabinets . . . . . . $ 19,450 $ 36,167 $ 19,220 $24,540 $ 17,488 $28,057
Electronic Contract Assemblies . . 4,954 7,092 3,566 8,577 3,159 3,438
Processed Wood Products and Other. 4,322 3,348 4,542 3,866 4,635 2,270
</TABLE>
<TABLE>
<CAPTION>
Geographic Area
(Amounts in Thousands)
Year Ended June 30
1994 1993 1992
<S> <C> <C> <C>
Net Sales:
United States . . . . . . . . . . . . . . . . . . . . . . . $802,117 $702,279 $591,681
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . 22,371 23,193 30,579
Eliminations. . . . . . . . . . . . . . . . . . . . . . . . (2,004) (3,072) (4,959)
Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . $822,484 $722,400 $617,301
Net Income:
Operating Income:
United States . . . . . . . . . . . . . . . . . . . . . . . $ 62,236 $ 54,920 $ 49,764
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . (5,424) (9,190) (378)
Eliminations. . . . . . . . . . . . . . . . . . . . . . . . 395 847 (246)
Total Operating Income. . . . . . . . . . . . . . . . . . . 57,207 46,577 49,140
Net Interest Income . . . . . . . . . . . . . . . . . . . . 2,038 3,037 6,155
Other Income (Expense)-Net. . . . . . . . . . . . . . . . . 174 3,708 5,419
Income Before Taxes on Income . . . . . . . . . . . . . . . 59,419 53,322 60,714
Taxes on Income . . . . . . . . . . . . . . . . . . . . . . 23,250 22,739 22,086
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . $ 36,169 $ 30,583 $ 38,628
Identifiable Assets:
United States . . . . . . . . . . . . . . . . . . . . . . . $372,440 $340,618 $286,509
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . 22,149 26,750 30,791
Eliminations. . . . . . . . . . . . . . . . . . . . . . . . (15,122) (21,885) (13,005)
Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . 379,467 345,483 304,295
Unallocated Corporate Assets:
Cash, Cash Equivalents and Short-Term Investments . . . . . 91,946 107,222 117,728
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . $471,413 $452,705 $422,023
</TABLE>
NOTE 16. SUPPLEMENTARY INCOME STATEMENT INFORMATION:
The following costs and expenses were charged against income during the three
years ended June 30:
(Amounts in Thousands)
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Maintenance and repairs. . . . . . . . . . . . . . . . . . . . $10,906 $10,722 $ 9,251
Depreciation and amortization of property and equipment. . . . 26,919 26,205 24,902
Amortization of intangibles. . . . . . . . . . . . . . . . . . 1,807 1,123 380
Taxes other than those on income and payroll . . . . . . . . . 5,457 4,891 4,241
Advertising costs. . . . . . . . . . . . . . . . . . . . . . . 7,394 8,774 6,616
Research and development . . . . . . . . . . . . . . . . . . . 8,557 5,913 3,479
Rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,502 9,917 8,540
</TABLE>
- 39 -<PAGE>
<PAGE>
NOTE 17. AFFILIATED COMPANIES AND AFFILIATED DEPOSITORY:
The Habig family owns directly or shares voting power in excess of 50% of the
Class A Common Stock of Kimball International, Inc. (See Note 11)
The Company maintains as a depository a bank; the majority of the stock of the
bank holding company is owned by officers and directors of the Company and the
Kimball International, Inc. Employee Retirement Trust. The bank renders
services to the Company; the aggregate net annual expense of such services is
not material in amount.
On June 30, 1993, the Company purchased from its Employee Retirement Trust four
parcels of real estate which the Company had previously leased from the Trust.
The purchase price of the four parcels totaled $7.7 million, which represented
the market value of the real estate at the date of purchase based upon
independent appraisals. The annual rental payments under the leases aggregated
$795,000 in each of the years ended June 30, 1993 and 1992.
Item 9. - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None
- 40 -<PAGE>
<PAGE>
PART III
Item 10. - Directors and Executive Officers of the Registrant
Directors
The information called for by this item with respect to Directors is
incorporated by reference to the material contained in the Registrant's Proxy
Statement for its annual meeting of share owners to be held October 11, 1994
under the captions - "Election of Directors"; "Information Concerning the Board
of Directors and Committees"; and "Compensation of Executive Officers".
Executive Officers of the Registrant
The information called for by this item with respect to Executive Officers
of the Registrant is included at the end of Part I and is incorporated herein by
reference.
Item 11. - Executive Compensation
The information called for by this item is incorporated by reference to the
material contained in the Registrant's Proxy Statement for its annual meeting of
share owners to be held October 11, 1994 under the caption "Compensation of
Executive Officers".
Item 12. - Security Ownership of Certain Beneficial Owners and Management
The information called for by this item is incorporated by reference to the
material contained in the Registrant's Proxy Statement for its annual meeting of
share owners to be held October 11, 1994 under the caption "Share Ownership
Information".
Item 13. - Certain Relationships and Related Transactions
The information called for by this item is incorporated by reference to the
material contained in the Registrant's Proxy Statement for its annual meeting of
share owners to be held October 11, 1994 under the caption "Compensation
Committee Interlocks and Insider Participation".
- 41 -<PAGE>
<PAGE>
PART IV
Item 14. - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this Report:
1. Financial Statements:
The following consolidated financial statements of the Registrant are found
in Item 8 and incorporated herein.
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . 26
Consolidated Statement of Financial Condition as of June 30, 1994 and 1993 . . . . 27
Consolidated Statement of Income for the Three Years Ended June 30, 1994 . . . . . 28
Consolidated Statement of Cash Flows for the Three Years Ended June 30, 1994 . . . 29
Consolidated Statement of Share Owners' Equity for the Three Years Ended
June 30, 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . 31-40
</TABLE>
2. Financial Statement Schedules:
<TABLE>
<CAPTION>
Page
<S> <C>
I. Marketable Securities - Other Investments for the Year Ended June 30, 1994 . . 45
V. Property and Equipment for the Three Years Ended June 30, 1994 . . . . . . . . 46
VI. Accumulated Depreciation of Property and Equipment for the Three Years
Ended June 30, 1994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
VIII. Valuation and Qualifying Accounts for the Three Years Ended June 30, 1994. . . 48
</TABLE>
Schedules other than those listed above are omitted because they are either
not required or not applicable, or the required information is presented in the
Consolidated Financial Statements.
3. Exhibits
See the Exhibit Index on page 49 for a list of the exhibits filed or
incorporated herein as a part of this report.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the fourth quarter of 1994.
- 42 -<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
KIMBALL INTERNATIONAL, INC.
by Gary P. Critser
GARY P. CRITSER
Senior Executive Vice President, Chief Accounting
Officer and Secretary
September 15, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
James C. Thyen
JAMES C. THYEN
Senior Executive Vice President - Chief
Financial and Administrative Officer
and Treasurer
September 15, 1994
Douglas A. Habig
DOUGLAS A. HABIG
President and Chief Executive Officer
September 15, 1994
Gary P. Critser
GARY P. CRITSER
Senior Executive Vice President, Chief Accounting
Officer and Secretary
September 15, 1994
- 43 -<PAGE>
<PAGE>
Signature Signature
THOMAS L. HABIG* DOUGLAS A. HABIG*
Director Director
JOHN B. HABIG* JAMES C. THYEN*
Director Director
JOHN T. THYEN* ANTHONY P. HABIG*
Director Director
GARY P. CRITSER* BRIAN K. HABIG*
Director Director
CHRISTINE M. VUJOVICH* JACK R. WENTWORTH*
Director Director
* The undersigned does hereby sign this document on my behalf pursuant to
powers of attorney duly executed and filed with the Securities and Exchange
Commission, all in the capacities as indicated:
Date
September 15, 1994 Ronald J. Thyen
RONALD J. THYEN
Director
September 16, 1994 Leonard B. Marshall, Jr.
LEONARD B. MARSHALL, JR.
Director
Attorneys-In-Fact
- 44 -<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Schedule I -- Marketable Securities - Other Investments
June 30, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Amount at which
each portfolio of
Number of shares Market Value equity security
Name of Issuer or units-principal of each Issue issues and each other
and title amount of bonds Cost of at balance security issues carried
of each issue and notes each Issue (1) sheet date (1) in the balance sheet (1)
<S> <C> <C> <C> <C>
Cash Equivalents
U.S. Government Securities $12,825,000 $12,825,000 $12,825,000 $12,825,000
Municipal Securities 3,900,000 3,900,000 3,970,452 3,900,000
Corporate Debt Securities 1,989,088 1,989,088 1,989,088 1,989,088
Bank Obligations 996,416 996,416 996,416 996,416
Total $19,710,504 $19,710,504 $19,780,956 $19,710,504
Outstanding Disbursements (4,258,892)
Total Cash & Cash Equivalents $15,451,612
Short-Term Investments
U.S. Government Securities $37,000,000 $37,649,219 $37,028,750 $37,139,639
Bank Obligations 140,104 140,104 140,104 140,104
Municipal Securities 14,905,000 16,090,793 15,281,640 15,186,363
Limited Partnership Interests in
Hedged Debt & Equity Securities 24,028,044 24,028,044 24,028,044 24,028,044
Total Short Term Investments $76,073,148 $77,908,160 $76,478,538 $76,494,150
Grand Total $95,783,652 $97,618,664 $96,259,494 $91,945,762
</TABLE>
(1) NOTE - No individual security exceeds two percent of total consolidated net
assets.
- 45 -<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Schedule V. -- Property and Equipment
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G
Balance at Current Year Balance
Beginning FASB 52 Additions Other at End
DESCRIPTION of Year Adjusts. (A) at Cost (B) Retirements(B) Changes of Year (C)
YEAR ENDED JUNE 30, 1994:
<S> <C> <C> <C> <C> <C> <C>
Property and Equipment:
Land $ 4,149,912 $ (6,003) $ 1,357,370 $ 47 $ --- $ 5,501,232
Buildings & Improvements 117,876,698 (159,847) 2,303,670 476,623 --- 119,543,898
Machinery & Equipment 211,550,108 (311,368) 19,959,680 6,406,124 --- 224,792,296
Construction in Progress 3,242,101 --- 23,190,492 --- --- 26,432,593
Totals $336,818,819 $ (477,218) $46,811,212 $ 6,882,794 $ --- $376,270,019
YEAR ENDED JUNE 30, 1993:
Property and Equipment:
Land $ 4,099,160 $ (15,248) $ 66,000 $ --- $ --- $ 4,149,912
Buildings & Improvements 107,391,042 (121,827) 10,847,952 240,469 --- 117,876,698
Machinery & Equipment 202,205,331 (643,096) 29,245,547 19,257,674 --- 211,550,108
Construction in Progress 2,586,979 --- 655,122 --- --- 3,242,101
Totals $316,282,512 $ (780,171) $40,814,621 $19,498,143 $ --- $336,818,819
YEAR ENDED JUNE 30, 1992:
Property and Equipment:
Land $ 4,091,435 $ 14,642 $ --- $ 6,917 $ --- $ 4,099,160
Buildings & Improvements 105,979,239 272,048 1,830,599 690,844 --- 107,391,042
Machinery & Equipment 180,861,585 581,061 30,398,040 9,635,355 --- 202,205,331
Construction in Progress 1,406,366 --- 1,180,613 --- --- 2,586,979
Totals $292,338,625 $ 867,751 $33,409,252 $10,333,116 $ --- $316,282,512
</TABLE>
(A) Adjustments for the differential in exchange rates between the beginning and
end of the fiscal year for the Property and Equipment of certain
international subsidiaries.
(B) Buildings and Improvements additions at cost in 1993 include $7,652,000
related to the Company's purchase of four parcels of real estate from its
Employee Retirement Trust which the Company had previously leased from the
Trust.
Machinery and Equipment additions at cost in 1993 include expenditures to
expand production capabilities in the Electronic Contract Assemblies
Segment, primarily relating to additional surface mount technology
capability, the purchase of a new mainframe computer and the purchase of a
company plane. Both the mainframe computer and company plane purchase
included the trade-in of existing equipment reflected in the retirement
column at the original cost.
Machinery and Equipment additions at cost in the year ended June 30, 1992,
include the acquisition of Harpers.
(C) Construction in Progress at June 30, 1994, includes $24 million of
expenditures on a new plant facility which was substantially complete at
June 30, 1994.
- 46 -<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Schedule VI. -- Accumulated Depreciation of Property and Equipment
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G
Additions
Balance at Current Year Charged Balance
Beginning FASB 52 to Cost and Other at End
DESCRIPTION of Year Adjusts. (A) Expense Retirements(B) Changes of Year
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 30, 1994:
Property and Equipment:
Buildings & Improvements $ 55,720,864 $ (71,720) $ 5,558,047 $ 698,116 $ --- $ 60,509,075
Machinery & Equipment 128,737,456 (210,185) 21,361,319 5,370,666 --- 144,517,924
Totals $184,458,320 $(281,905) $26,919,366 $ 6,068,782 $ --- $205,026,999
YEAR ENDED JUNE 30, 1993:
Property and Equipment:
Buildings & Improvements $ 50,723,694 $ (19,986) $ 5,187,397 $ 170,241 $ --- $ 55,720,864
Machinery & Equipment 123,254,837 (395,741) 21,016,815 15,138,455 --- 128,737,456
Totals $173,978,531 $(415,727) $26,204,212 $15,308,696 $ --- $184,458,320
YEAR ENDED JUNE 30, 1992:
Property and Equipment:
Buildings & Improvements $ 45,909,515 $ 126,553 $ 5,211,571 $ 523,945 $ --- $ 50,723,694
Machinery & Equipment 110,671,941 385,826 19,690,433 7,493,363 --- 123,254,837
Totals $156,581,456 $ 512,379 $24,902,004 $ 8,017,308 $ --- $173,978,531
</TABLE>
(A) Adjustments for the differential in exchange rates between the beginning and
end of the fiscal year and the weighted average depreciation rates used in
the income statement of certain international subsidiaries.
(B) Machinery and Equipment retirements in 1993 include the accumulated
depreciation on a mainframe computer and company plane that were traded-in
as part of the purchase of a new mainframe computer and company plane.
- 47 -<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Schedule VIII. - Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Charged Accounts
Balance at to Costs Charged Written Off Balance
Beginning and to Other Net of at End
Description of Year Expenses Accounts Recoveries of Year
<S> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 30, 1994:
Allowances for possible losses:
Bad Debts $4,916,300 $ 25,498 --- $(905,854) $4,035,944
Valuation Allowance:
**Deferred Tax Asset --- $5,784,980 --- --- $5,784,980
YEAR ENDED JUNE 30, 1993:
Allowances for possible losses:
Bad Debts $4,550,132 $1,047,718 --- $(681,550) $4,916,300
YEAR ENDED JUNE 30, 1992:
Allowances for possible losses:
Bad Debts $4,663,819 $ 471,624 $62,500* $(647,811) $4,550,132
</TABLE>
* Amount relates to the allowance for possible losses: bad debts assumed with
the purchase of Harpers.
** The company adopted Financial Accounting Standards Board Statement No. 109,
Accounting for Income Taxes, effective July 1, 1993. Upon adoption, a
valuation allowance was provided to offset the increase in deferred tax
assets, relating to foreign net operating losses, due to uncertainty
surrounding the utilization of those deferred tax assets.
- 48 -<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Sequential
Page Numbers
<S> <C> <C>
3(a) Restated Articles of Incorporation of the Company. 50-56
3(b) Restated By-Laws of the Company. 57-74
10(a) Supplemental Bonus Plan. 75
10(b) Employment Contract with Arnold F. Habig dated
June 12, 1990. (Incorporated by reference to the
Company's Form 10-K for the year ended June 30, 1990.)
10(c) Agreement with Directors who are also employees of the
Company concerning $25,000 payment to a named beneficiary
upon death. (Incorporated by reference to the Company's
Form 10-K for the year ended June 30, 1992.)
10(d) 1987 Stock Incentive Program. (Incorporated by reference
to the Company's Form 10-K for the year ended June 30, 1993.)
10(e) Amendments to 1987 Stock Incentive Program. (Incorporated
by reference to the Company's Form 10-K for the year ended
June 30, 1993.)
10(f) Form of Incentive Stock Option. (Incorporated by reference
to the Company's Form 10-K for the year ended June 30, 1993.)
10(g) Form of Nonqualified Stock Option. (Incorporated by reference
to the Company's Form 10-K for the year ended June 30, 1993.)
11 Computation of earnings per share. 76-77
21 Significant subsidiaries of the Company. 78
23 Consent of Independent Public Accountants. 79
24 Power of Attorney. 80
27 Financial Data Schedule 81
</TABLE>
- 49-
<PAGE>
RESTATED
ARTICLES OF INCORPORATION
OF
KIMBALL INTERNATIONAL, INC.
Kimball International, Inc., a corporation existing pursuant to the
provisions of The Indiana Business Corporation Law, pursuant to action of its
Board of Directors, hereby restates its Articles of Incorporation in their
entirety in accordance with I.C. 23-1-38-7. These Restated Articles of
Incorporation shall supersede and take the place of the existing Amended
Articles of Incorporation of Kimball International, Inc., filed with the Indiana
Secretary of State on November 30, 1972, and all subsequent amendments thereto.
These Restated Articles of Incorporation are dated April 9, 1991.
ARTICLE I
NAME
The name of the corporation is Kimball International, Inc.
ARTICLE II
PURPOSES
The purposes for which the corporation is formed are:
(a) to transact any and all lawful businesses for which corporations may
be incorporated under the Indiana General Corporation Act;
(b) to carry on the trade or business of manufacturing, purchasing,
buying, selling, handling, disposing of, merchandising and dealing in,
either at wholesale or at retail, manufactured products of metal,
wood, or other materials and/or the combinations thereof, of the
various and several kinds, and especially furniture of the various and
several kinds of construction, parts, and accessories, and in
general, the engagement in manufacturing and merchandising and
as before said, either at wholesale or at retail, and all or either,
in whole or in part, as the further interests and opportunities may
suggest, and as the subsequent conditions may indicate or require;
(c) to engage and conduct a business in the United States and
internationally for the manufacture of products of metal, wood or
other materials and/or the combinations thereof; to buy, sell, own,
manufacture, assemble, build, construct and otherwise handle and deal
in all kinds of machinery, equipment, supplies, parts or accessories,
and to manufacture, build and construct furniture of the various and
several kinds of construction, parts and accessories and to dispose
and deal in the same as manufacturers, jobbers, wholesalers and
retailers;
(d) to acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage and otherwise deal in and dispose of Letters Patent of
the United States or any foreign country, patent rights, licenses and
privileges, inventions, improvements and processes, copyrights,
trademarks and trade names incident to or useful in connection with
any business of this corporation;
(e) to acquire the capital stock, bonds or other evidences of
indebtedness, secured or unsecured, of any other corporation and to
acquire the good will, rights, assets and property and to undertake
and assume all or any part of the obligations or liabilities of any
other corporation, firm, association or person;
Exhibit 3(a)
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<PAGE>
(f) to acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any of the shares
of the capital stock, or any voting trust certificates in respect of
the shares of capital stock, scrip, warrants, rights, bonds,
debentures, notes, trust receipts and other securities, obligations,
choses in action and evidence of indebtedness or interest issued or
created by any corporations, joint stock companies, syndicates,
associations, firms, trusts or persons, public or private, or by the
government of the United States of America, or by any foreign
government, or by any state, territory, province, municipality or
other political subdivision or by any governmental agency, and as
owner thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute consents and
vote thereon, and to do any and all acts and things necessary or
advisable for the preservation, protection, improvement and
enhancement in value thereof;
(g) to buy, hold, own, improve, manage, operate, lease as lessee or as
lessor, sell, convey and/or mortgage either alone or in conjunction
with others, real estate of every kind, character and description
whatsoever and wheresoever situated, and any interest therein; and to
purchase, acquire, hold, mortgage, pledge, hypothecate, exchange,
sell, deal in and dispose of, alone or in syndicates, or otherwise in
conjunction with others, commodities and other personal property of
every kind, character and description whatsoever and wheresoever
situated, and any interest therein;
(h) to act as agent or representative of others for any lawful business
purposes;
(i) to make contracts; to make any guaranty respecting stocks, leases,
securities, indebtedness, interest, contracts, or other obligations;
to borrow money; to issue bonds, promissory notes, debentures, and
other evidences of indebtedness; to secure such evidence of
indebtedness by pledge, mortgage and/or hypothecation of certain or
all of the assets of the corporation; to enter into indentures
specifying the various terms and incidents of such evidences of
indebtedness; and to do any and all other incidental acts and things
necessary to borrow money on the part of the corporation;
(j) to borrow or raise monies for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or
nonnegotiable instruments and evidences of indebtedness, and to secure
the payment of any thereof and of the interest thereon by mortgage
upon or pledge, conveyance or assignment in trust of the whole or any
part of the property of the corporation, whether at the time owned or
thereafter acquired, and to sell, pledge or otherwise dispose of such
bonds or other obligations of the corporation for its corporate
purposes;
(k) to purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the
purchase of its own shares of capital stock when such use would cause
any impairment of its capital except as otherwise permitted by law,
and provided further that shares of its own capital stock belonging to
it shall not be voted upon directly or indirectly;
(l) to have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount, to
purchase or otherwise acquire, hold, own, amortize, sell, convey or
otherwise deal in or dispose of real and personal property of every
class and description in any of the states, districts, territories or
colonies of the Exhibit 3(a)
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<PAGE>
United States, and in any and all foreign counties, subject to the
laws of such state, district, territory, colony, or country;
(m) in general, to carry on any other businesses in connection with the
foregoing and to have and exercise all of the powers conferred by the
laws of the State of Indiana upon corporations by the Indiana General
Corporation Act.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the corporation shall continue is perpetual.
ARTICLE IV
RESIDENT AGENT AND PRINCIPAL OFFICE
Section 1. Resident Agent. The name and address of the resident agent
in charge of the corporation's principal office is Thomas L. Habig, 1600 Royal
Street, Jasper, Indiana, 47549.
Section 2. Principal Office. The Post Office address of the principal
office of the corporation is 1600 Royal Street, Jasper, Indiana, 47549.
ARTICLE V
SHARES
Section 1. Number. The total number of shares into which the
corporation's capital stock is to be divided is 40,700,000 shares, identified by
class and par value of shares as follows:
(a) 10,700,000 shares of Class A Common Stock of the par value of $.31-1/4
per share; and (since reduced by reason of conversions made
subsequent to November 6, 1987, pursuant to Section 3(c) of
this Article V)
(b) 30,000,000 shares of Class B Common Stock of the par value of $.31-1/4
per share.
Section 2. Changes and Reclassifications. At the time that this
amendment becomes effective [which was November 6, 1987], and without any
further action on the part of the corporation or its shareholders, each share of
Class A Common Stock, $.62-1/2 par value, then issued (including shares held by
the corporation as treasury shares), shall be changed and reclassified into two
fully paid and non-assessable shares of Class A Common Stock, $.31-1/4 par value
per share, and each share of Class B Common Stock, $.62-1/2 par value, then
issued (including shares held by the corporation as treasury shares), shall be
changed and reclassified into two fully paid and non-assessable shares of Class
B Common Stock, $.31-1/4 par value per share. To reflect the change and
reclassification provided above, each certificate representing shares of Class A
Common Stock, $.62-1/2 par value, theretofore issued and outstanding or
theretofore issued and held in the corporate treasury, and each certificate
representing shares of Class B Common Stock, $.62-1/2 par value, theretofore
issued and outstanding or theretofore issued and held in the corporate treasury,
shall continue to represent, after the effective date of this amendment, the
same number of shares of Class A Common Stock and Class B Common Stock,
respectively, theretofore represented by such certificate, and each holder of
shares of Class A Common Stock or Class B Common Stock shall be entitled, as
soon as practicable after the effective date of this amendment, to receive a new
certificate representing a number of shares of Class A Common Stock, $.31-1/4
par value, or Class B Common Stock, $.31-1/4 par value, respectively as
authorized by this
Exhibit 3(a)
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<PAGE>
amendment, equal to the number of shares theretofore held so that, upon this
amendment becoming effective, each holder of record of a certificate theretofore
representing issued Class A Common Stock or Class B Common Stock will be
entitled to certificates representing in the aggregate two shares of Class A
Common Stock, $.31-1/4 par value, or Class B Common Stock, $.31-1/4 par value,
respectively, for each share of Class A Common Stock, $.62-1/2 par value, or
Class B Common Stock, $.62-1/2 par value, respectively, of which the shareholder
was the holder prior to the effectiveness of this amendment.
Section 3. Terms. The relative rights, preferences, limitations and
restrictions of each class of shares of Common Stock are as follows:
(a) Dividends.
The holders of Class A Common Stock and Class B Common Stock shall be
entitled to receive, when and as declared by the Board of Directors, from
funds lawfully available therefor, all dividends payable in cash or other
property of the corporation, and for this purpose Class A Common Stock and
Class B Common Stock shall be considered as one class, and the holders
thereof shall be entitled to participate ratably, share for share, and
without preference of either class over the other, in all dividends so
declared and paid. Notwithstanding the foregoing, the holders of Class B
Common Stock shall be entitled to receive dividends in each fiscal year of
the corporation in an amount which is $.01 per share (the "Differential")
greater than the amount of dividends which are paid on the Class A Common
Stock in such year; provided, however, that
(i) if any such fiscal year shall consist of less than 360
days, then the Differential shall be equal to $.01 per share multiplied by
a fraction, the numerator of which is the number of whole calendar months
in such fiscal year, and the denominator of which is twelve;
(ii) with respect to the first fiscal year ending after the date
this amendment becomes effective, the Differential shall be equal to $.01
per share multiplied by a fraction, the numerator of which is the number
of whole calendar months between the date this amendment becomes effective
and the end of such fiscal year, and the denominator which is twelve; and
(iii) in the event of a split or division of the outstanding
shares of Class B Common Stock into more shares of that class, or a
combination of the outstanding shares of Class B Common Stock into a
lesser number of shares of that class, or the declaration and payment of a
stock dividend payable in shares of Class B Common Stock on the
outstanding shares of Class B Common Stock, then, effective upon the
effectiveness of such split, division or combination, or upon the payment
of such stock dividend, as the case may be, the Differential shall be
adjusted to $.01 per share multiplied by a fraction, the numerator of
which is the number of shares of Class B Common Stock outstanding
immediately prior to the effectiveness of such split, division or
combination, or the payment of such stock dividend, as the case may be,
and the denominator of which is the number of shares of Class B Common
Stock outstanding immediately following such split, division or
combination, or the payment of such stock dividend, as the case may be.
All per share computations under clauses (i) and (ii) of this
Section 3(a) shall be rounded to the nearest tenth of a cent and all
payments to a holder of Class B Common Stock on any payment date with
respect to all shares of Class B Common Stock held by such holder shall be
rounded to the nearest whole cent.
No stock dividend may be declared or paid on the outstanding shares
of any class of Common Stock unless payable in shares of that class and no
stock dividend may be declared or paid on the outstanding shares of any
class of Common Stock unless, at the same time, a stock dividend, at the
same rate, is declared and paid on the outstanding shares of each class of
Common Stock, payable in shares of that class. The outstanding shares of
any class of
Exhibit 3(a)
- 53 -<PAGE>
<PAGE>
Common Stock shall not be split or divided into more shares of that class,
or combined into a lesser number of shares of that class, unless, at the
same time, the outstanding shares of each class of Common Stock are
similarly split, divided or combined.
(b) Voting. Except as otherwise provided in this Article V and except
as otherwise required by law, the voting power of the corporation shall vest in
the holders of Class A Common Stock, the holder of each issued and outstanding
share of Class A Common Stock being entitled to one vote in person or by proxy
for each such share, on all matters requiring the vote of shareholders, and the
holders of Class B Common Stock shall not be entitled by reason of their
holdings thereof to any voice or vote in the management or affairs of the
corporation. Notwithstanding the foregoing, the holders of Class B Common Stock
at any time issued and outstanding shall be entitled, as a class, (i) elect, at
each meeting of shareholders at which directors are elected, one member of the
Board of Directors of the corporation but shall not be entitled to vote upon the
election of the remaining members of the Board of Directors of the corporation,
and (ii) to full voting powers at any meeting of the shareholders of the
corporation with respect to any proposed amendment to this Article V or with
respect to any consolidation, merger, sale, lease, exchange, mortgage, pledge or
other disposition of all or substantially all of its fixed assets, or the
dissolution of the corporation. In addition to the foregoing, the express terms
and provisions of any class of Common Stock shall not be changed without the
affirmative vote of the holders of at least a majority of the issued and
outstanding shares of such class of Common Stock.
(c) Conversion. Any record holder of shares of Class A Common Stock
shall be entitled, at any time or from time to time, to convert any or all of
such shares held by such holder into the same number of shares of Class B Common
Stock. A record holder desiring to effect the conversion of shares of Class A
Common Stock into shares of Class B Common Stock shall furnish the corporation
with (i) a signed written notice of the intended conversion, stating that such
record holder desires to convert such shares of Class A Common Stock into the
same number of shares of Class B Common Stock and requesting that the
corporation issue all of such shares of Class B Common Stock to such holder, and
(ii) the certificate or certificates representing the shares of Class A Common
Stock to be converted, in proper form for transfer. All Class A Common Stock
surrendered for conversion hereunder shall be cancelled and retired permanently
and shall not be reissued.
(d) Dissolution. The Class A Common Stock and Class B Common Stock
shall participate equally per share in all distributions of assets of the
corporation upon voluntary or involuntary dissolution.
(e) Elimination of the Foregoing Provisions. If, at any time, the
number of issued and outstanding shares of Class A Common Stock shall constitute
less than 15% of the aggregate number of shares of Class A Common Stock and
Class B Common Stock then issued and outstanding or the corporation shall not
have paid any dividends on the Class B Common Stock for a period of thirty-six
consecutive calendar months, then thereupon, all of the rights, preferences,
limitations and restrictions set forth in this Section 3 relating to Class B
Common Stock shall become the same as the rights, preferences, limitations and
restrictions of the Class A Common Stock provided for herein, without any
further action on the part of the corporation or its shareholders, and all
distinctions between Class A Common Stock and Class B Common Stock shall
thereupon and thereby be eliminated, so that all shares of Class B Common Stock
shall be equal to shares of Class A Common Stock with respect to all matters,
including without limitation, dividend payments and voting rights and all
holders of shares of Class A Common Stock and Class B Common Stock shall vote as
a single class (except as otherwise required by applicable law) on all matters
submitted to a vote of the shareholders of the corporation; provided, however,
the right and power to convert any shares of Class A Common Stock into shares of
Class B Common Stock shall continue and, upon written request from the
corporation to all holders of Class A Common Stock, such holders shall promptly
take such steps as shall be necessary to convert the shares of Class A Common
Stock held by such holders into shares of Class B Common Stock.
Exhibit 3(a)
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<PAGE>
ARTICLE VI
DIRECTORS
Section 1. Number of Directors. The number of directors of the
corporation shall be not less than seven (7) nor more than fifteen (15), as may
from time to time be specified by the By-laws and there shall be thirteen (13)
Directors whenever the By-laws do not contain such authorized provision.
Section 2. Qualifications of Directors. Directors need not be
shareholders of the corporation. A majority of the Directors at any time shall
be citizens of the United States.
ARTICLE VII
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
The business and conduct of the affairs of the corporation shall be
regulated as follows:
(a) The corporate seal of this corporation shall be circular in form
and shall have around the circumference in raised letters and words
"Kimball International, Inc.", and in other respects shall be in
such form and device as the Board of Directors may determine. The
directors may change the form, device and inscription of the seal
at pleasure.
(b) The shares of this corporation may be issued by the corporation for
such amount of consideration as may be fixed from time to time by
the Board of Directors.
(c) Meetings of the shareholders of the corporation shall be held at
such place, within or without the State of Indiana, as may be
specified in the respective notices, or waivers of notice, thereof.
(d) Meetings of the directors of the corporation shall be held at such
place, within or without the State of Indiana, as may be specified
in the respective notices, or waivers of notice, thereof.
(e) The Board of Directors of the corporation shall have power, without
the assent or vote of the shareholders, to make, alter, amend or
repeal the Code by By-laws of the corporation, but the affirmative
vote of a majority of the members of the Board of Directors for the
time being, shall be necessary to effect any alteration, amendment
or repeal.
(f) The corporation reserves the right to amend, alter, change, or
repeal any provisions contained in these Articles of Incorporation
in the manner now or hereafter prescribed by the provisions of the
Indiana General Corporation Act, or any other pertinent enactment
of the General Assembly of the State of Indiana; and all rights and
powers conferred hereby on shareholders, directors and/or officers
are subject to this reserve power.
(g) No contract or other transaction between this corporation and any
one or more members of the Board of Directors, or between this
corporation and another corporation, firm, partnership, joint
venture, trust or other enterprise of which any one or more such
interested members are directors, officers, shareholders, partners,
members, employees or agents or in which any one or more such
interested members are financially interested, shall be void or
voidable because of such relationship or
Exhibit 3(a)
- 55 -<PAGE>
<PAGE>
interest or because such interested member or members are present
at the meeting of the Board of Directors at which such contract or
transaction is authorized or approved or because such interested
member's or members' votes are counted for such purposes, if (1)
the fact of such relationship or interest is disclosed or known to
the disinterested members of the Board of Directors who authorize,
approve or ratify such contract or transaction by a vote or consent
sufficient for the purpose without counting the votes of such
interested member or members of the Board of Directors, or (2) the
fact of such relationship or interest is disclosed or known to the
holders of shares of this corporation and such holders authorize,
approve or ratify such contract or transaction by a vote or consent
sufficient for the purpose, or (3) such contract or transaction is
fair and reasonable insofar as this corporation is concerned. Such
interested member or members of the Board of Directors may be
counted in determining the presence of a quorum at a meeting of the
Board of Directors at which such contract or transaction is
authorized, approved or ratified. This paragraph (g) shall not be
construed to invalidate any contract or other transaction which
would otherwise be valid under applicable common and statutory law.
(h) It is intended that this corporation may acquire and own wasting
assets or property having a limited life. The depletion of such
assets by sale, lapse of time or otherwise need not be deducted in
the computation or surplus available for dividends.
(i) Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without
a meeting, if prior to such action the written consent thereto is
signed by all members of the Board or of such committee, as the
case may be, and such written consent is filed with the minutes of
the proceedings of the Board of committee.
-0-0-0-
This instrument was prepared by Jeffrey R. Kinney, a member of the law firm of
Bamberger, Foreman, Oswald and Hahn; 7th Floor, Hulman Building, P.O. Box 657;
Evansville, Indiana 47704
Exhibit 3(a)
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<PAGE>
RESTATED
BY-LAWS
OF
KIMBALL INTERNATIONAL, INC.
(reflecting all amendments through June 30, 1993)
ARTICLE I: LOCATION OF OFFICES
Section 1 - Principal Office: The principal office of the corporation
shall be at 1600 Royal Street, Jasper, Indiana.
Section 2 - Other Offices: The corporation may have and maintain such
other offices as the Board of Directors may deem expedient.
ARTICLE II: CORPORATE SEAL
Section 1 - The corporation shall have a corporate seal which shall be as
follows: A circular disc, on the outer margin of which shall appear the
corporate name and State of Incorporation, with the words "Corporate Seal"
through the center, so mounted that it may be used to impress these words
in raised letters upon paper.
ARTICLE III: FISCAL YEAR
Section 1 - The fiscal year of the corporation shall begin with the first
day of July and terminate on the thirtieth day of June of each year.
ARTICLE IV: STOCKHOLDERS' MEETINGS
Section 1 - Place of Meetings: All meetings of the stockholders shall be
held at the principal office of the corporation except such meetings as the
Board of Directors by resolution determine shall be held elsewhere, in
which case meetings may be held upon notice as hereinafter provided at such
place or places within or without the State of Indiana as said Board of
Directors may determine.
Section 2 - Annual Meeting: The annual meeting of the stockholders shall
be held at 10:00 o'clock A.M. on the 2nd Tuesday of October in each year or
on such other date as may be fixed by the Board of Directors, provided such
annual meeting shall be held in any event within five (5) months after the
close of each fiscal year of the corporation, for the purpose of electing
directors and for the transaction of such other business as may regularly
come before the meet-
Exhibit 3(b)
- 57 -<PAGE>
<PAGE>
ing. If the day fixed for the annual meeting shall be a legal holiday,
such meeting shall be held on the next succeeding business day.
Section 3 - Special Meetings: Special meetings of the stockholders may be
called by the Board of Directors, by the President, by the Secretary under
the written direction of a majority of the directors, or by the
stockholders holding not less than one-fourth of all of the shares of
capital stock outstanding and entitled to vote.
Section 4 - Notices: A written or printed notice stating the place, day
and hour of either annual or special meetings and, in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered or mailed by the Secretary or by the officers or persons calling
the meeting to each holder of the capital stock of the corporation at the
time entitled to vote at such address as appears upon the records of the
corporation at least ten days before the date of the meeting. Notice of
any stockholders' meeting may be waived in writing by any stockholder if
the waiver sets forth in reasonable detail the purpose or purposes for
which the meeting is called and the time and place thereof. No notice of
the holding of an adjourned meeting shall be necessary. Each stockholder
who has in the manner above provided waived notice of a stockholders'
meeting or who is represented thereat by a proxy complying with the
requirements above set forth shall be conclusively presumed to have been
given due notice of such meeting.
Section 5 - Quorum: At any meeting of stockholders, a majority of the
shares of the capital stock outstanding and entitled by the Articles of
Incorporation to vote, represented in person or by proxy, shall constitute
a quorum for the transaction of business but a less number may convene and
adjourn.
Section 6 - Voting: Stockholders entitled by the Articles of Incorporation
shall be entitled to vote at all meetings in person or by proxy. At all
meetings, each share of stock entitled to vote by the Articles of
Incorporation shall be entitled to one vote on all questions, and a
majority of the votes of such stock cast at any such meeting shall be
sufficient for the adoption or rejection of any question presented unless
otherwise provided by law or by the Articles of Incorporation of the
corporation.
No share shall be voted at any meeting:
(1) Upon which an installment is due and unpaid; or
Exhibit 3(b)
- 58 -<PAGE>
<PAGE>
(2) Which belongs to the corporation.
For the purpose of determining stockholders entitled to vote at any meeting
of the stockholders or any adjournment thereof, or stockholders entitled to
receive payment of any dividend, or in order to make a determination of
stockholders for any other purpose, only those stockholders who are
stockholders of record on the record date fixed by the Board of Directors
or as provided in Article XI, Section 2 hereof, shall be entitled to vote.
Any stockholder acquiring title to shares of stock after said record date
shall, upon written request to the stockholder of record, be entitled to
receive from such stockholder a proxy with power of substitution to vote
such stock.
Shares standing in the name of a corporation may be voted by such officers,
agent or proxy as the Board of Directors of such corporation may appoint.
Shares held by fiduciaries may be voted by the fiduciaries in such manner
as the instrument or order appointing such fiduciaries may direct. In the
absence of any such direction or the inability of the fiduciaries to act in
accordance therewith, shares held jointly by three (3) or more fiduciaries
shall be voted in accordance with the will of the majority and, where the
fiduciaries or a majority of them cannot agree or where they are equally
divided upon the questions of voting such shares, any Court of general
equity jurisdiction may, upon petition filed by any of such fiduciaries or
by any party in interest, direct the voting of such shares as it may deem
for the best interest of the beneficiaries, and such shares shall be voted
in accordance with such direction. Shares that are pledged may, unless
otherwise provided in the agreement of pledge, be voted by the stockholder
pledging the same until the shares have been transferred to the pledgee on
the books of the corporation, and, thereafter, they may be voted by the
pledgee.
Section 7 - Voting Lists: The officer or agent having charge of the stock
transfer book shall make, at least five (5) days before each election of
directors, a complete list of the stockholders arranged in alphabetical
order with the address and number of shares held by each, which list shall
be on file at the principal office of the corporation and subject to
inspection by any stockholder. Such list shall be produced and kept open
at the time and place of election and subject to the inspection of any
stockholder during the holding of such election. The original stock
register or transfer book, or a duplicate thereof kept in the State of
Indiana, shall be the only evidence as to who are the stock-
Exhibit 3(b)
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<PAGE>
holders entitled to examine such list or the stock ledger or transfer book
or to vote at any meeting of the stockholders.
ARTICLE V: DIRECTORS
Section 1 - Number: The Board of Directors of this corporation shall
consist of twelve (12) members, eleven of whom shall be elected by holders
of Class A Common Stock, voting as a class, and one of whom shall be
elected by holders of Class B Common Stock, voting as a class.
Section 2 - Election: Directors shall be elected annually at the annual
meeting of stockholders; provided that, in the event of failure to hold
such meeting or to hold such election thereat, they may be elected at any
special meeting of stockholders called for that purpose. At such election,
the President may appoint inspectors or judges who shall report to the
meeting upon the validity of all proxies received and count the votes cast
and make a report thereof to the stockholders' meeting, and, in the absence
of any such appointments, the Secretary of the corporation shall report to
the meeting upon the validity of all proxies received, count the votes cast
and make a report thereof at the stockholders' meeting.
Section 3 - Term Of Office: The directors shall hold office from the date
of their election until the next succeeding annual meeting or until their
successors are elected and shall qualify.
Section 4 - Vacancies: Any vacancy, or vacancies, in the Board of
Directors, arising from any cause, shall be filled by a majority vote of
the remaining members of the Board until the next annual meeting of the
stockholders.
Section 5 - Fees: Each director of the corporation shall receive an annual
salary in an amount, plus a sum for each of the six (6) regular meetings of
the Board, all as fixed and determined from time to time by the Board of
Directors and in addition thereto, reimbursement for expenses incurred by
each member of the Board in attending each regular, special or adjourned
meeting of the Board which has been called, whether or not a quorum is
present.
ARTICLE VI: DIRECTORS' MEETINGS
Section 1 - Regular Meetings: Regular meetings of the Board of Directors
shall be held at the principal office of the corporation on the second
Tuesday in the months of February, April, June, August, October and
December of each year at
Exhibit 3(b)
- 60 -<PAGE>
<PAGE>
10:00 o'clock A.M., or on such other day of the month, time of the day or
place, within or without the State, as the Board of Directors may
designate.
Section 2 - Special Meetings: Special meetings of the Board of Directors
may be held at any time at the principal office of the corporation or
elsewhere within or without the State, as shall be specified in the notice
of such meeting.
The Secretary shall call a special meeting whenever and wherever so
requested by the Chairman of the Board, the President, or the Chief
Executive Officer or by three (3) directors.
Section 3 - Organization Meeting: Immediately following the meeting of the
stockholders at which the directors are elected, the Board of Directors
shall meet and organize, and they may also transact such other business as
may be presented.
Section 4 - Notice: No notice shall be required for a regular meeting of
the Board of Directors. No notice shall be required for an "organization
meeting", if held on the same day as the stockholders' meeting at which the
directors were elected. No notice of the holding of an adjourned meeting
shall be necessary. A reasonable notice of special meetings, in writing or
otherwise, shall be given to each director or sent to his residence or
place of business. Notice of a special meeting shall specify the time and
place of holding the meeting and, unless otherwise stated, any and all
business may be transacted at such special meeting.
Notice of any meeting may be waived in writing.
Section 5 - Quorum: At all meetings of the Board of Directors, a majority
of the whole Board shall be necessary to constitute a quorum for the
transaction of any business except the filling of vacancies but a lesser
number may convene and adjourn.
Section 6 - Voting: All questions coming before any meeting of the Board
of Directors for action shall be decided by a majority vote of the
directors present at said meeting unless otherwise provided by law or by
these By-laws.
ARTICLE VII: EXECUTIVE COMMITTEE
Section 1 - Number, Qualifications, Appointment: The Board of Directors
may appoint not less than two (2) directors who, together with the
Chairman, the President, and the
Exhibit 3(b)
- 61 -<PAGE>
<PAGE>
Chief Executive Officer, shall constitute the Executive Committee of the
corporation. The Chief Executive Officer shall serve as chairman of said
committee.
Section 2 - Powers and Duties: - The Executive Committee shall advise with
and aid the officers of the corporation in all matters concerning its
interests and the management of its business, and, when the Board of
Directors is not in session, the Executive Committee shall have and may
exercise all of the powers of the Board of Directors with reference to the
conduct of the business of the corporation.
Section 3 - Term of Office: The members of the Executive Committee shall
hold office from the date of their appointment until the next succeeding
organization meeting of the directors, provided that the Board of Directors
shall at all times have the power to remove any member of the Executive
Committee.
Section 4 - Vacancies: Any vacancy, or vacancies, in the Executive
Committee, arising from any cause, shall be filled by a majority vote of
the remaining members of the Board until the next annual or special meeting
of the shareholders.
Section 5 - Fees: Members of the Executive Committee, as such, shall not
receive any stated salary for their services, but expenses, if any, of
attendance and a fee in such an amount as may be determined by the Board of
Directors from time to time shall be paid for attendance at each such
Executive Committee meeting.
Section 6 - Meetings: The Executive Committee shall meet at such times and
places as the Chairman of the Board or the Chief Executive Officer may
designate, provided that reasonable notice of such meeting shall be given
to each member of the committee. A majority of the Executive Committee
shall constitute a quorum for the transaction of all business.
ARTICLE VIII: AUDIT COMMITTEE
The Board of Directors shall appoint an Audit Committee consisting of three
(3) members of the Board of Directors of which at least two shall not be
officers of the corporation as defined in Article IX of these By-laws. The
third member of the Audit Committee may be an officer of the corporation
who is a member of the Board of Directors who is not either the Chairman of
the Board of Directors, the President, or the Chief Executive Officer. The
committee shall have such responsibilities and powers appropriate to the
nature of
Exhibit 3(b)
- 62 -<PAGE>
<PAGE>
said committee including review of the annual audit prepared by the
independent auditors appointed by the Board of Directors with respect
to the corporation within the scope and area of responsibility of said
committee.
ARTICLE IX: OFFICERS
Section 1 - Titles: The officers of the corporation shall consist of the
Chairman of the Board of Directors, the President, the Chief Executive
Officer, an Assistant to the Chief Executive Officer, a Chief Financial
Officer, a Chief Administrative Officer, an Assistant to the Chief
Administrative Officer, one or more Chief Operations Officer(s), a
Secretary, a Treasurer, and a Chief Accounting Officer. The Board of
Directors may elect, at the request of the Chairman of the Board, the
President, or the Chief Executive Officer, one or more Senior Executive
Vice Presidents, Executive Vice Presidents, or Vice Presidents, and one or
more Assistants to the officers of the corporation.
Section 2 - Qualifications of the Chairman of the Board, President, and
Chief Executive Officer. The Chairman of the Board of Directors, the
President, and the Chief Executive Officer shall be chosen from among the
members of the Board of Directors.
Section 3 - Election of Officers: The officers elected by the Board of
Directors shall be elected annually at the organization meeting of the
Board, provided that any officers not so elected at such meeting may be
elected subsequently at any regular or special meeting of the Board.
Section 4 - Term of Office: All officers shall serve at the pleasure of
the Board and shall hold office from the date of their election until the
next succeeding annual organization meeting of the Board of Directors or
until their successors are elected and shall qualify.
Section 5 - Vacancies: Any vacancy or vacancies among the officers,
arising from any cause, shall be filled by the Board of Directors.
Section 6 - Combining Offices: Any two or more offices may be held by the
same person except that the duties of President and Secretary shall not be
performed by the same person.
Exhibit 3(b)
- 63 -<PAGE>
<PAGE>
ARTICLE X: POWER AND DUTIES OF DIRECTORS AND OFFICERS
Section 1 - Directors: The business and affairs of the corporation shall
be managed by a Board of Directors except where specifically excepted by
law and these By-laws.
Section 2 - Executive Committee: In the interim between meetings of the
Board of Directors, the Executive Committee shall have and exercise all the
powers and authority of the Board of Directors, provided that no action of
the committee shall conflict with action had or taken by the Board of
Directors.
Section 3 - Chairman of the Board: The Chairman of the Board shall preside
at all meetings of the Board of Directors and shall have general control
and management of the business of the corporation. In general, he shall
perform all duties incident to the office of Chairman of the Board and such
other duties as may be assigned to him from time to time by the Board of
Directors.
Section 4 - President: In the absence of both the Chairman and the Chief
Executive Officer, the President shall have the general control and
management of the business and affairs of the corporation. In the absence
of the Chairman of the Board and the Chief Executive Officer, he shall
preside at meetings of the Board of Directors, the Executive Committee, and
shareholders. As the President, he shall perform all duties incident to
the office of the President and such other duties as may be assigned to him
from time to time by the Board of Directors.
Section 5 - Chief Executive Officer: The Chief Executive Officer shall
have day-to-day control and management of business and affairs of the
corporation subject to the control of the Board of Directors. He shall
preside at all meetings of shareholders and, in the absence of the Chairman
of the Board, at meetings of the Board of Directors. The Chief Executive
Officer shall have specific charge and supervision of all subordinate
officers and all employees of the corporation and may delegate or assign to
such officers and employees such of his duties and responsibilities as he
may elect which are not specifically prescribed by the By-laws or
resolutions of the Board of Directors. As the Chief Executive Officer, he
shall perform all duties incident to the office of Chief Executive Officer
and such other duties as may be assigned to him from time to time by the
Board of Directors.
Exhibit 3(b)
- 64 -<PAGE>
<PAGE>
Section 6 - Assistant to the Chief Executive Officer: The Assistant to the
Chief Executive Officer shall perform such duties incident to the office of
Assistant to the Chief Executive Officer and such other duties as may be
assigned to him from time to time by the Board of Directors.
Section 7 - Chief Financial Officer: The Chief Financial Officer shall be
responsible for all financial matters of the corporation.
Section 8 - Chief Operations Officer(s): The Chief Operations Officer(s)
shall be responsible for all manufacturing and production of the
corporation.
Section 9 - Chief Administrative Officer: The Chief Administrative Officer
shall be responsible for all administrative functions of the corporation
affecting the corporation as a whole.
Section 10 - Assistant to the Chief Administrative Officer: The Assistant
to the Chief Administrative Officer shall perform such duties incident to
the Assistant to the Chief Administrative Officer and such other duties as
may be assigned to him from time to time by the Board of Directors.
Section 11 - Vice Presidents: The Senior Executive, or other Vice
Presidents shall perform such duties as may be respectively assigned to
them from time to time by the Board of Directors, the Executive Committee,
or the Chief Executive Officer. The Board of Directors or Executive
Committee may designate one or more of the Vice Presidents as Senior
Executive Vice Presidents or Executive Vice Presidents.
Section 12 - Secretary: Subject to the Board of Directors, the Executive
Committee, the Chairman of the Board, the President, and the Chief
Executive Officer, the Secretary shall have the custody of the corporate
seal and records of the corporation and charge of all the records of the
corporation. He shall act as Secretary at meetings of the stockholders,
directors and the Executive Committee and enter the minutes of such
meetings in a book provided for that purpose and shall attend to
publishing, giving and serving all official notices of the corporation. He
shall perform such other duties as may be assigned to him.
Section 13 - Assistant Secretaries: In the absence or disability of the
Secretary, the Assistant Secretaries shall act with all the powers of the
Secretary. They shall perform such other duties as may be assigned to
them.
Exhibit 3(b)
- 65 -<PAGE>
<PAGE>
Section 14 - Treasurer: Subject to the Board of Directors and the
Executive Committee, the Treasurer shall have the custody of all negotiable
instruments and securities of the corporation and shall have responsibility
for all collections and disbursements of corporate funds. He may endorse
all commercial documents requiring endorsement for or on behalf of the
corporation. He shall perform other duties as may be assigned to him by
the Board of Directors.
Section 15 - Assistant Treasurers: In the absence or disability of the
Treasurer, the Assistant Treasurers shall act with all the powers of the
Treasurer. They shall perform such other duties as may be assigned to
them.
Section 16 - Chief Accounting Officer: Subject to the Board of Directors,
the Executive Committee, the Chairman of the Board, the President, and the
Chief Executive Officer, the Chief Accounting Officer shall have general
supervision of the accounting of the corporation. He shall perform such
other duties as may be assigned to him.
ARTICLE XI: STOCK
Section 1 - Stock Certificates: Each stockholder shall be entitled to a
certificate signed by the President or a Vice President and the Secretary
or an Assistant Secretary of the corporation and sealed with the corporate
seal of the corporation, certifying to the number of shares owned by him in
the corporation. Where such certificate is also signed by a transfer agent
and a registrar, the signatures of any such President, Vice President,
Secretary or Assistant Secretary and the seal of the corporation may be
facsimiles. In case any officer or officers who shall have signed or whose
facsimile signature shall have been used on any such certificate or
certificates shall cease to be such officer or officers of the corporation
before such certificate or certificates shall have been delivered by the
corporation, such certificate or certificates may, nevertheless, be issued
and delivered by the corporation with the same effect as if such officer or
officers had not ceased to be such at the date of its issue.
Section 2 - Transfer of Shares: Stock shall be transferable on the stock
transfer books of the corporation in person or by an attorney duly
authorized and upon surrender and cancellation of the old certificates
therefor.
The Board of Directors of the corporation may close its stock transfer
books for a period of time up to the maximum period of time permitted by
rules and regulations of the
Exhibit 3(b)
- 66 -<PAGE>
<PAGE>
Securities and Exchange Commission and the Indiana Business Corporation Law
preceding the date of any meeting of stockholders or the date for the
payment of any dividend, provided, however, that in lieu of closing the
stock transfer books, the Board of Directors may fix in advance a date
pursuant to any applicable rules and regulations of the Securities and
Exchange Commission (which, as to stockholders' meetings, shall be a date
not more than seventy (70) days prior to the meeting), as the record date
for the determination of the stockholders entitled to notice of and to vote
at any such meeting, or entitled to receive payment of any such dividend,
and in such case such stockholders and only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to such
notice of and to vote at such meeting, or to receive payment of such
dividend, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after such record date fixed as aforesaid. If
the stock transfer books are not closed, and no record date is fixed by the
Board of Directors, no shares shall be voted at any meeting which shall
have been transferred on the books of the corporation within ten (10) days
next preceding the date of such meeting.
Section 3 - Replacing Certificates: In case of the loss or destruction of
any certificate of stock and the submission of proper proof thereof by the
owner, a new certificate may be issued in lieu thereof under such
regulations and restrictions as the Board of Directors may prescribe.
ARTICLE XII: AUTHORIZED SIGNATURES
Section 1 - The Chairman of the Board, the President, the Chief Executive
Officer, and the Assistant to the Chief Executive Officer are authorized to
sign any check, draft or negotiable instrument on behalf of and in the name
of the corporation or to initiate electronic funds transfers without any
countersignature or counterauthorization of any other officer or employee
of the corporation. The Board of Directors may authorize the use of
facsimile signatures for certain types of accounts maintained by the
corporation or with respect to checks or drafts which are less than
a designated amount. As to all other officers or employees of the
corporation, all checks, drafts, other negotiable instruments and
electronic funds transfers shall be made in the name of the corporation and
signed or authorized by one of the said officers or by such other employee
of the corporation and shall be countersigned or counterauthorized by such
other officer or by such other employee of the corporation provided that
the same officer or employee shall not
Exhibit 3(b)
- 67 -<PAGE>
<PAGE>
sign and countersign or counterauthorize the same instrument or transfer.
The Chairman of the Board, the President, or the Chief Executive Officer
are authorized and empowered to designate in writing both officer and
non-officer employees of this corporation who shall be empowered to sign or
countersign checks, drafts, and negotiable instruments for and on behalf of
the corporation, and any such written designation shall have the same force
and binding legal effect on the corporation as a resolution of the Board of
Directors so empowering such officer or non-officer employees. Any such
written designation may be revoked at any time by the Chairman of the
Board, the President, or the Chief Executive Officer, and, in their absence
or unavailability, any member of the Executive Committee of the Board of
Directors may revoke such written designation.
ARTICLE XIII: FIDELITY BONDS
Section 1 - The officers and employees of the corporation shall, in the
discretion of the Chief Executive Officer, give bonds for the faithful
discharge of their respective duties, in such form and such amounts as may
be directed by the Chief Executive Officer.
Exhibit 3(b)
- 68 -<PAGE>
<PAGE>
ARTICLE XIV: INDEMNIFICATION
Section 1 - Every person (and the heirs, executors and administrators of such
person) who is or was a director or officer of this corporation or of any
subsidiary of this corporation or who, at the request of the Board of Directors
of this corporation, served in any position or capacity or on any committee for
this corporation or for or in any other corporation, partnership, association,
trust, foundation, not-for-profit corporation, employee benefit plan or other
organization or entity, shall be indemnified by the corporation against any and
all liability and reasonable expense that may be incurred by him in connection
with or resulting from any claim, action, suit or proceeding in which either (i)
such person is wholly successful, thereby entitling such person to Mandatory
Indemnification, or (ii) such person is not wholly successful but it is
nevertheless determined, pursuant to the procedures set forth below in Section 2
of this Article XIV of these By-laws, that such person acted in good faith and
that such person reasonably believed that (a) in the case of conduct in his
official capacity, his conduct was in the corporation's best interests, or (b)
in all other cases, his conduct was at least not opposed to the best interests
of such corporation, entity or organization, and, in addition with respect to
any criminal action or proceeding, either had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful, thereby entitling such person to Permissive Indemnification. A person
shall be considered to have been serving an employee benefit plan at the request
of the corporation if his duties to the corporation also impose duties on, or
otherwise involve services by, him to the plan or to participants in or
beneficiaries of the plan. The terms "claim", "action", "suit" or "proceeding"
shall mean and include any threatened, pending or completed claim, action, suit
or proceeding (whether brought by or in the right of the corporation of any
other corporation or otherwise), and all appeals thereof, whether civil,
criminal, administrative or investigative, formal or informal, in which any
person described in the first sentence of this section may become involved as a
party or otherwise:
(a) by reason of his being or having been a director or officer of the
corporation, or of any subsidiary corporation of the corporation, or of any
other corporation where he served as such at the request of the corporation,
or
(b) by reason of his acting or having acted in any position or capacity or on
any committee for this corporation or any subsidiary corporation of this
corporation, or in any
Exhibit 3(b)
- 69 -<PAGE>
<PAGE>
position or capacity in or for a partnership, association, trust,
foundation, not-for-profit corporation, employee benefit plan or other
organization or entity where he served as such at the request of the
corporation, or
(c) by reason of any action taken or not taken by him in any such capacity,
whether or not he continues in such capacity at the time such liability or
expense shall have been incurred.
The terms "liability" and "expenses" shall include, but shall not be limited to,
counsel fees and disbursements and amounts of judgements, fines or penalties
against, and amounts paid in settlement by or on behalf of, a person, and excise
taxes assessed with respect to an employee benefit plan, but shall not in any
event include any liability or expenses on account of profits realized by him in
the purchase or sale of securities of the corporation. The term "wholly
successful" shall mean (a) termination of any action, suit or proceeding against
the person in question without any finding of liability or guilt against him,
(b) the expiration of a reasonable period of time after the making of any claim
or threat of an action, suit or proceeding without the institution of the same,
without any payment or promise made to induce a settlement, or (c) approval by a
court, with knowledge of the indemnity herein provided, of a settlement of any
claim, action, suit or proceeding. The termination of any claim, action, suit
or proceeding by judgment, order, settlement (whether with or without court
approval), or conviction or upon a plea of guilty or of nolo contendere, or its
equivalent, shall not by itself create a presumption that a person did not meet
the standards of conduct for Permissive Indemnification. The actions of a
person with respect to an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974 shall be deemed to have been taken in
what the person reasonably believed to be the best interests of the corporation
if the person reasonably believed he was acting in conformity with the
requirements of such Act or he reasonably believed his actions to be in the
interests of the participants in or beneficiaries of the plan.
Section 2 - With regard to Permissive Indemnification, the determination that a
person acted in good faith and that such person reasonably believed that (a) in
the case of conduct in his official capacity, his conduct was in the
corporation's best interests, or (b) in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and, in addition,
with respect to any criminal action or proceeding, either had reasonable cause
to believe that his conduct was lawful or had no reasonable cause to believe
that his conduct was unlawful with regard to a specific claim, action, suit or
Exhibit 3(b)
- 70 -<PAGE>
<PAGE>
proceeding in or as to which such person is not wholly successful shall be made
by or for the Board of Directors of the corporation in the manner herinafter
described. Any requests for such indemnification must first be proposed to the
Board of Directors of the corporation, and a motion for such indemnification may
be made by any director of the corporation, including a director who is seeking
such indemnification for himself. If a quorum of directors eligible to decide
the matter exists within the limitations and requirements of I.C. 23-1-37-12 (b)
(1), such directors may either (i) decide the question themselves; (ii) refer
the matter to Special Legal Counsel for decision pursuant to I.C. 23-1-37-12 (b)
(3) (A); or (iii) decline to take any action to either decide the question of
such indemnification or refer the matter for decision to Special Legal Counsel.
If there does not exist a quorum of directors eligible to decide the matter
within the limitations and requirements of I.C. 23-1-37-12 (b) (1), a majority
of the entire Board of Directors may either (i) refer the matter to a committee
of two or more directors who are eligible to vote thereon pursuant to I.C.
23-1-37-12 (b) (2) who may either decide the matter themselves or refer the
matter to Special Legal Counsel for decision pursuant to I.C. 23-1-37-12 (b) (3)
(A); (ii) if such a committee cannot be appointed, refer the matter to Special
Legal Counsel pursuant to the procedures described in I.C. 23-1-37-12 (b) (3)
(B); or (iii) decline to take any action to refer the matter of such
indemnification to a committee or to Special Legal Counsel. Any decision on the
question of entitlement to such Permissive Indemnification by a majority of a
quorum of the Board of Directors eligible to vote pursuant to I.C. 23-1-37-12
(b) (1); by a special committee of eligible directors pursuant to I.C.
23-1-37-12 (b) (2); or by Special Legal Counsel duly appointed pursuant to the
provisions of I.C. 23-1-37-12 (b) (3), shall be in the sole and absolute
discretion of such person or persons who are to make such determination. If it
is determined and decided that such Permissive Indemnification should be given
in a specific situation, the authorization for such indemnification and a
determination of the amount thereof shall be made in accordance with the
procedures and requirements of I. C. 23-1-37-12 (c). For purposes of this
Section 2, Permissive Indemnification shall be deemed to have been denied (i) if
a majority of any group of persons who are to decide the question do not vote in
favor of the proposed indemnification; (ii) if the Board of Directors or any
committee thereof declines to take any permitted action to either decide the
question, refer it to a committee, or refer it to Special Legal Counsel; (iii)
if no decision is made by the person or persons who were to decide such question
within a period of six (6) months after such indemnification was first proposed
to the Board of Directors of the corporation; or (iv) to the extent that the
dollar amount of any indemnification to be made by the corporation is less than
the total dollar amount of indemnification proposed or requested to be made. If
proposed
Exhibit 3(b)
- 71 -<PAGE>
<PAGE>
Permissive Indemnification is denied, the question may not be reconsidered at
any subsequent time by the corporation.
Section 3 - Expenses incurred with respect to any claim, action, suit or
proceeding may be advanced by the corporation (by action of the Board of
Directors, whether or not a disinterested quorum exists) prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount unless he is entitled to indemnification under
this Article of these By-laws.
Section 4 - The rights of mandatory and Permissive Indemnification provided in
this Article of the By-laws shall be in addition to any rights to which any such
person may otherwise be entitled by contract, as matter of law, or pursuant to
I.C. 23-1-37. Any person claiming the right to indemnification pursuant to any
provisions of these By-laws may at any time apply for indemnification to or seek
review of any decision denying indemnification or determining the amount thereof
by a court pursuant to I.C. 23-1-37-11. Persons who are not directors or
officers of the corporation but who are directors or officers of any subsidiary
may be indemnified to the extent authorized at any time or from time to time by
the Board of Directors.
Section 5 - Irrespective of the provisions of this Article of the By-laws, the
Board of Directors may, at any time or from time to time, approve
indemnification of directors and officers or other persons to the full extent
permitted by the provisions of the Indiana Business Corporation Law at the time
in effect, whether on account of past or future transactions.
Section 6 - To the extent not inconsistent with Indiana law as in effect from
time to time, the Board of Directors may, at any time or from time to time,
approve the purchase and maintenance of insurance on behalf of any person
described in the first sentence of Section 1 of this Article XIV against any
liability asserted against him in his capacity or arising out of his status as
such a person, whether or not the corporation would have the power to indemnify
him under the provisions of this Article of the By-laws. In the event that any
expense or liability otherwise subject to indemnification hereunder is covered
entirely or in part by any insurance, the indemnification provided for by this
Article of these By-laws shall only be available, if at all, as to any uninsured
liability or expense or that portion which is in excess of the amount of all
available insurance coverage. Under no circumstances shall any insurer or other
person making payment under such an insurance policy or contract be subrogated
to the
Exhibit 3(b)
- 72 -<PAGE>
<PAGE>
rights of any person entitled to indemnification under this Article of these
By-laws.
Section 7 - Any and all references contained in Article XIV of these By-laws to
any provision, section, subsection or portion of the Indiana Code (I.C.) shall
mean the Indiana Code as the same existed on December 9, 1986, and no subsequent
amendment, repeal, modification, change, or judicial invalidation of any
provision of the Indiana Code subsequent to December 9, 1986, shall alter,
modify, or otherwise affect these By-laws, and these By-laws shall be construed
and interpreted under the statutory law of the State of Indiana as it existed as
of the date of adoption of these By-laws.
Section 8 - The indemnification herein required or permitted by these amended
indemnification By-laws shall be a contractual obligation, undertaking and
commitment of the corporation as to any person who either continued to serve or
commenced to serve, following the date of the adoption of these amended
indemnification By-laws, as a director or officer of this corporation or any
subsidiary of this corporation, or in any other position or capacity, at the
request of this corporation or any subsidiary corporation, on any committee,
partnership, association, trust, foundation, not-for-profit corporation,
employee benefit, plan, or other organization or entity, and no subsequent
amendment or repeal of these By-laws and no judicial decision invalidating the
legislation authorizing the indemnification provided for by these By-laws or
invalidating all or any part of these indemnification By-laws shall in any
manner deny, diminish, limit, restrict, or qualify the indemnification herein
provided for, for any such person who so continued to serve or commenced to
serve with regard to any claim concerning any matter which occurred, which
commenced to occur, or which continued to occur subsequent to the adoption of
these amended indemnification By-laws and prior to any such amendment, repeal,
or judicial invalidation.
Exhibit 3(b)
- 73 -<PAGE>
<PAGE>
ARTICLE XV: REGULATION OF SHAREHOLDERS
Section 1 - Election not to be governed by Chapter 42 (Control Share
Acquisitions) of 1986 Indiana Business Corporation Law. This Corporation,
having filed with the Indiana Secretary of State on August 18, 1986, its
resolution electing to be governed by the Indiana Business Corporation Law,
I.C. 23-1-18 through I.C. 23-1-54, effective September 15, 1986, now
elects, pursuant to the provisions of I.C. 23-1-42-5, not to be governed by
the provisions of Chapter 42 of the 1986 Indiana Business of Corporation
Law (I.C. 23-1-42), the same being Section 26 of House Enrolled Act No.
1257 as enacted by the General Assembly of the State of Indiana at the
Second Regular Session of the 104th General Assembly.
Section 2 - Election not to be governed by Chapter 43 [Five-Year Freeze
(Business Combinations) provisions] of the 1986 Indiana Business
Corporation Law. This Corporation, having filed with the Indiana Secretary
of State on August 18, 1986, its resolution electing to be governed by the
Indiana Business Corporation Law, I.C. 23-1-18 through I.C. 23-1-54,
effective September 15, 1986, now, within 30 days of the effective date of
such new law and pursuant to the provisions of I.C. 23-1-43-22 (B), hereby
expressly elects not to be governed by the provisions of Chapter 43 of the
1986 Indiana Business Corporation Law (I.C. 23-1-43), the same being
Section 27 of House Enrolled Act No. 1257 as enacted by the General
Assembly of the State of Indiana at the Second Regular Session of the 104th
General Assembly.
ARTICLE XVI: MISCELLANEOUS
Section 1 - Depositories: The funds of the corporation shall be deposited
in the name of the corporation with such depositories as may be designated
by the Board of Directors.
ARTICLE XVII: AMENDMENTS
Section 1 - These By-laws may be altered, amended or repealed by a majority
vote of the whole Board of Directors at any meeting, the notice of which
includes notice of the proposed alteration, amendment or repeal.
Exhibit 3(b)
- 74 -
<PAGE>
SUPPLEMENTAL BONUS PLAN
The Board of Directors, on an annual basis, approves a total dollar bonus pool
for the Supplemental Bonus Plan, which may be distributed to eligible employees,
up to a maximum of one and one-half percent (1 1/2%) of the Company's
consolidated net income calculated before: 1) amount payable to employees under
the Company's Profit Sharing Bonus Plan, and 2) federal income taxes.
The Board of Directors empowers the Chairman of the Board and President and
Chief Executive Officer to grant individual bonuses under the plan to eligible
participants up to the total dollar bonus pool approved by the Board.
Supplemental bonuses are awarded based upon outstanding individual efforts
not recognized under the Company's Profit Sharing Bonus Plan.
Eligible participants are the Chairman of the Board, President and Chief
Executive Officer, Assistant to the Chief Executive Officer, Assistant to the
Chief Financial and Administrative Officer, Secretary, Treasurer, Senior
Executive Vice Presidents, Executive Vice Presidents and Vice Presidents of the
Company and any other salaried employee of the Company as the Chairman and
President and Chief Executive Officer may select.
Any bonus under this plan awarded to the Chief Executive Officer must be
approved by the Compensation Committee of the Board of Directors.
The payments under this plan are made under the same provisions as the Profit
Sharing Bonus Plan, including provision for forfeitures.
Exhibit 10(a)
- 75 -
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
FISCAL YEAR ENDED JUNE 30, 1994
<TABLE>
<S> <C> <C>
Net income, fiscal year ended June 30, 1994 $36,169,000
Dividends declared:
Class A Common -- $.83 per share $(6,114,000)
Class B Common -- $.84 per share (11,590,000)
(17,704,000)
Undistributed Earnings $18,465,000
Undistributed earnings divided by
21,164,905 average number of
shares outstanding $0.8724
Class A Class B
Undistributed Earnings Per Share $ .8724 $ .8724
Assumed Distribution of Earnings .8300 .8400
Earnings Per Share $1.7024 $1.7124
</TABLE>
COMPUTATION OF EARNINGS PER SHARE
FISCAL YEAR ENDED JUNE 30, 1993
<TABLE>
<S> <C> <C>
Net income, fiscal year ended June 30, 1993 $30,583,000
Dividends declared:
Class A Common -- $.77 per share $(5,684,000)
Class B Common -- $.78 per share (10,770,000)
(16,454,000)
Undistributed Earnings $14,129,000
Undistributed earnings divided by
21,198,789 average number of
shares outstanding $0.6665
Class A Class B
Undistributed Earnings Per Share $ .6665 $ .6665
Assumed Distribution of Earnings .7700 .7800
Earnings Per Share $1.4365 $1.4465
</TABLE>
Exhibit 11
Page 1 of 2
- 76 -<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
FISCAL YEAR ENDED JUNE 30, 1992
<TABLE>
<S> <C> <C>
Net income, fiscal year ended June 30, 1992 $38,628,000
Dividends declared:
Class A Common -- $.69 per share $(5,101,000)
Class B Common -- $.70 per share (9,644,000)
(14,745,000)
Undistributed Earnings $23,883,000
Undistributed earnings divided by
21,151,031, average number of
shares outstanding $1.1292
Class A Class B
Undistributed Earnings Per Share $1.1292 $1.1292
Assumed Distribution of Earnings .6900 .7000
Earnings Per Share $1.8192 $1.8292
</TABLE>
Exhibit 11
Page 2 of 2
- 77 -
<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Significant Subsidiaries of Registrant
As of June 30, 1994 the significant subsidiaries of the Registrant were as
follows:
<TABLE>
<CAPTION>
Percent Of
State of Voting Stock Owned
Incorporation By the Registrant
<S> <C> <C>
Kimball International Marketing, Inc. Indiana 100%
Kimball International Manufacturing, Inc. Indiana 100%
Kimball Electronics, Inc. Delaware 100%
Kimball, Inc. Delaware 100%
Kimball Hospitality Furniture, Inc. Indiana 100%
Harpers, Inc. Delaware 100%
McAllen-American Corporation Texas 100%
Kimball International Transit, Inc. Indiana 100%
Kimco, S.A. de C.V. Mexico 100%
L. Bosendorfer Klavierfabrik GmbH Austria 100%
Kimball Europe P.L.C. England 100%
</TABLE>
Each of the above subsidiaries is included in the Registrant's consolidated
financial statements for the year ended June 30, 1994.
Exhibit 21
- 78 -
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 10-K, into the Company's previously filed
Registration Statement File No. 33-20125.
Arthur Andersen LLP
Indianapolis, Indiana,
September 21, 1994
Exhibit 23
- 79 -
<PAGE>
POWER OF ATTORNEY
The undersigned does hereby constitute and appoint LEONARD B. MARSHALL, JR. and
RONALD J. THYEN, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place and stead, to sign the Form 10-K Annual Report of Kimball
International, Inc. (and each amendment thereto, if any) pursuant to Section 13
or 15 (d) of the Securities Exchange Act of 1934, for the fiscal year ended June
30, 1994, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto the attorneys-in-fact full power and authority to sign such document on
behalf of the undersigned and to make such filing, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that the attorneys-in-fact, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
Dated: August 20, 1994
Thomas L. Habig Dr. Jack R. Wentworth
Thomas L. Habig Dr. Jack R. Wentworth
James C. Thyen Brian K. Habig
James C. Thyen Brian K. Habig
John B. Habig John T. Thyen
John B. Habig John T. Thyen
Anthony P. Habig Gary P. Critser
Anthony P. Habig Gary P. Critser
Christine M. Vujovich Douglas A. Habig
Christine M. Vujovich Douglas A. Habig
Ronald J. Thyen Leonard B. Marshall, Jr.
Ronald J. Thyen Leonard B. Marshall, Jr.
Exhibit 24
- 80 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Kimball
International, Inc. 1994 Form 10-K and is qualified in its entirety by
reference to such Form 10-K filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> JUN-30-1994
<CASH> 15,452
<SECURITIES> 76,494
<RECEIVABLES> 100,154
<ALLOWANCES> 4,036
<INVENTORY> 81,083
<CURRENT-ASSETS> 288,238
<PP&E> 376,270
<DEPRECIATION> 205,027
<TOTAL-ASSETS> 471,413
<CURRENT-LIABILITIES> 102,164
<BONDS> 811
<COMMON> 6,723
0
0
<OTHER-SE> 344,229
<TOTAL-LIABILITY-AND-EQUITY> 471,413
<SALES> 822,484
<TOTAL-REVENUES> 822,484
<CGS> 588,849
<TOTAL-COSTS> 588,849
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 25
<INTEREST-EXPENSE> 202
<INCOME-PRETAX> 59,419
<INCOME-TAX> 23,250
<INCOME-CONTINUING> 36,169
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,169
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
</TABLE>
