<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, 1995 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 ___
Continued....
-1-
<PAGE>
<PAGE>
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 )
The number of shares outstanding of the Registrant's common stock as August 31,
1995 were:
Class A Common Stock - 7,280,452 shares
Class B Common Stock - 13,678,443 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
31, 1995 (based upon an estimate that 86.1% 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 $304.8 million.
Portions of the Proxy Statement for the Annual Meeting of Share Owners to be
held on October 24, 1995, are incorporated by reference into Part III of this
Form 10-K.
The exhibit index is located on page 49.
-2-<PAGE>
<PAGE>
<TABLE>
TABLE OF CONTENTS
KIMBALL INTERNATIONAL, INC.
FORM 10-K YEAR ENDED JUNE 30, 1995
<CAPTION>
Pages
<S> <C> <C>
PART I.
Item 1. Business 4-13
Item 2. Properties 13-15
Item 3. Legal Proceedings 15
Item 4. Submission of Matters to Vote of Security Holders 15
PART II.
Item 5. Market for the Registrant's Common Stock and
Related Share Owner Matters 17-18
Item 6. Selected Financial Data 18
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 19-23
Item 8. Financial Statements and Supplementary Data 24-43
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures 43
PART III.
Item 10. Directors and Executive Officers of the Registrant 44
Item 11. Executive Compensation 44
Item 12. Security Ownership of Certain Beneficial
Owners and Management 44
Item 13. Certain Relationships and Related Transactions 44
PART IV.
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 45
SIGNATURES 46-47
</TABLE>
-3-<PAGE>
<PAGE>
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 41% 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 16
states.
<TABLE>
Sales by segment, after elimination of intersegment sales, for each of the
three years in the period ended June 30, 1995 are as follows:
<CAPTION>
(dollars in thousands)
1995 1994 1993
<S> <C> <C> <C>
Furniture and Cabinets $570,219 $544,719 $474,222
Electronic Contract Assemblies 245,101 204,149 180,464
Processed Wood Products and Other 80,592 73,616 67,714
Total $895,912 $822,484 $722,400
</TABLE>
Financial information by industry segment and geographic area for each of
the three years in the period ended June 30, 1995, 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.
-4-<PAGE>
<PAGE>
Segments
FURNITURE AND CABINETS
Historical Overview
Since 1950, the Company has produced wood furniture and cabinets, which
continue to be a significant part of the business. Products in this segment
include television, audio speaker and audio component cabinets, television
stands, furniture and other wood related products produced on a contract basis
and sold to leading manufacturers in the home entertainment and home furniture
industries. Office furniture has been manufactured and sold under the Kimball
(registered trademark) trade name since 1970. 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 and Footprint both utilize
TRAXX (registered trademark), which increases space efficiency and eliminates
the need for a secondary support structure by using existing walls.
The Company entered into the manufacture and sale of Reproduction Victorian
furniture through an acquisition in 1969. 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. During 1992, the
Company entered the residential furniture industry.
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 now represent a small part of the Furniture and
Cabinets Segment. A decision was reached in 1995 to redeploy certain assets
used in the piano product line, to other product lines within the Company to
improve utilization of those assets.
-5-<PAGE>
<PAGE>
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 fourteen plants, eleven located in Indiana and one each in Kentucky,
Alabama and Idaho. Eight of the fourteen 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 Original Equipment Manufacturer (OEM) wood related products are
manufactured and sold on a contract basis.
One facility located in England primarily produces piano components and also
produces kitchen and bathroom wood products. The lease on a separate European
facility was terminated during the year and operations were combined from the
two facilities into one facility. One facility in Mexico produced piano
components during the first half of the year. The Mexico facility ceased
production of piano components during 1995 to allow the Electronic Contract
Assemblies Segment to expand capacity at that facility.
A facility in Jasper, Indiana houses an Education Center for dealer and
employee training, the Product Design and Research Center, and a Corporate
showroom for product display.
In the United States, showrooms and district warehouse facilities are
maintained in twelve 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 showrooms in London,
England and 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 office furniture is marketed through Company salespersons to
independent dealers in the United States. Period 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), 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.
-6-<PAGE>
<PAGE>
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 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 is 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. The Company offers its own line of hospitality and
healthcare furniture as well as producing custom hospitality and healthcare
furniture to customers' specifications. Certain finished goods in the
hospitality and healthcare furniture lines are carried for immediate shipment.
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.
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.
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 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.
-7-<PAGE>
<PAGE>
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 in the
world market. Certain pre-fabricated components used in the Company's piano
lines are available from a limited number of sources, although no interruptions
in supplies have been experienced.
-8-<PAGE>
<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 were 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 two manufacturing facilities, one located in
Indiana and one in Mexico. An additional facility located in Indiana was used
for production during most of the year, and is currently in the process of being
redeployed for the production of office furniture. A separate facility recently
transferred from the Raw Materials and Other Segment, is being prepared for
future production and/or warehousing space by the Electronic Contract Assemblies
Segment. The facility in Mexico assembles electronic components, electronic
cable harnesses and other electronic products for sale to outside customers.
The Mexican facility ceased production of piano components during 1995 to allow
the Electronic Contract Assemblies Segment to expand capacity at that facility.
The redeployment of these facilities allows for a more effective use of Company
facilities. 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. Raw
materials for specific orders are not acquired until a firm order for assembly
is accepted.
The competitive factors in the electronic contract assemblies market are
price, quality, production flexibility and reliability of "on-time" delivery.
The trend of OEM's in the electronic industry to subcontract the assembly
process to companies with a core competence in this area, combined with the
proliferation of electronic components in today's technologically advanced
products has created growth in the electronic contract assemblies industry. The
Electronics industry is very competitive, with many manufacturers of contract
electronic assemblies, as well as in-house capabilities of existing and
potential customers. 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, although from time to time the
industry experiences allocations of certain components due to the rapid product
life cycles of certain components.
While the total electronic assemblies market has broad applications, the
Company's customers are concentrated in the automotive (automobiles and light
trucks), computer and telecommunications industries. Included in this segment
are sales to two customers which account for 20.8%, 18.2% and 17.2% of
consolidated net sales in 1995, 1994 and 1993, respectively. Included in sales
to these two customers are sales of electronic assemblies to Kelsey-Hayes
Company, Inc. which accounted for approximately 13.6% of consolidated net sales
in the year ended June 30, 1995, compared to 11.9% in the year ended June 30,
1994 and 12.4% in the year ended June 30, 1993. The success of this segment is
dependent on the success of our customers' products.
-9-<PAGE>
<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 and two
facilities which produce plywood and related products. An additional facility
which produced face veneer during most of the 1995 fiscal year, is being
prepared for redeployment to the Electronic Contract Assemblies Segment for
future use.
Processed wood and other products manufactured by the Company are used
internally as well as sold to others. For fiscal year 1995, an estimated 41% of
the total production of these operations was for products used internally in the
Furniture and Cabinets segment. 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, stamped metal parts, carbide cutting tools and
related services on cutting tools. Services of the Company's trucking fleet are
also sold to unaffiliated customers. The Company exited the automotive service
business during the year and the facility was leased to an outside party.
-10-<PAGE>
<PAGE>
OTHER INFORMATION
BACKLOG
At June 30, 1995, the aggregate sales price of production pursuant to
worldwide open orders, which may be canceled by the customer, were $230 million
as compared to $199 million at June 30, 1994.
<TABLE>
BACKLOG BY SEGMENT (dollars in millions)
<CAPTION>
June 30, 1995 June 30, 1994
<S> <C> <C>
Furniture and Cabinets $100 $100
Electronic Contract Assemblies 123 90
Processed Wood Products & Other 7 9
Totals $230 $199
Open orders as of June 30, 1995 are expected to be filled within the next fiscal
year. Open orders generally are not indicative of future sales trends.
</TABLE>
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<PAGE>
RESEARCH, PATENTS, AND TRADEMARKS
Research costs for the fiscal years ended June 30 were approximately, in
millions, $9.4 in 1995, $8.6 in 1994 and $5.9 in 1993. 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 furniture business only: National (registered
trademark), Cetra (registered trademark), Footprint (registered trademark),
ARTEC (registered trademark), TRAXX (registered trademark) and Harpers
(registered trademark); and to the piano business only: Bosendorfer
(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, 1997, will not represent a material portion of total capital
expenditures during those years.
-12-<PAGE>
<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, 1995, the Company had 8,675 full time employees, of which 7,471
were employed in the United States and 1,204 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, as
of June 30, 1995, 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 1 13 30
Kentucky 1 3 4
Alabama 1 1
Tennessee 3 3
Mississippi 1 1
Idaho 1 1
Texas 1 1
North Carolina 1 1
California 1 1
Austria 2 2
England 1 1
Mexico 1 1
</TABLE>
These facilities occupy approximately 6,505,000 square feet in aggregate,
of which approximately 6,455,000 square feet are owned in fee and 50,000 square
feet are leased. Square footage of these facilities are summarized as follows:
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<PAGE>
<TABLE>
<CAPTION>
-------- Approximate Square Footage ----------
Furniture Processed
and Electronic Contract Wood
Cabinets Assemblies Products and Other
<S> <C> <C> <C>
Fee 4,324,000 305,000 1,826,000
Leased 39,000 11,000 -0-
Sub-total 4,363,000 316,000 1,826,000
Sub-leased -0- -0- (44,000)
Total 4,363,000 316,000 1,782,000
</TABLE>
Including certain leased furniture showroom areas excluded from the above
listing, total facilities approximate 6.7 million square feet. (See Note 2 -
Commitments - Leases of Notes to Consolidated Financial Statements in Item 8,
for additional information concerning leases.)
Included in Processed Wood Products and Other are executive, national sales
and administrative offices, a product design and research center, the production
facility for polyurethane and polyester molded plastic, the production facility
for stamped metal products, the production facility for carbide cutting tools
and related services on cutting tools, an energy center for the Kimball
Industrial Park consisting of 3 trifuel boilers, and two facilities which were
in the process of being redeployed as of June 30, 1995.
Properties are generally utilized at normal capacity levels on a single
shift basis, with certain facilities operating a second shift, while other
facilities utilize a reduced second or third 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.
Operating leases totaling 50,000 square feet expire in the next fiscal year,
with substantially all leases subject to renewal options. Certain capitalized
leases expired in 1995, with ownership of the properties transferred to the
Company at the end of the leases. In addition to the above production,
warehouse and office properties, the Company has 23 leased showroom facilities
totaling 209,000 square feet, in eleven states in the United States, two
locations in London, England, one location in Vienna, Austria and one location
in Toronto, Canada.
-14-<PAGE>
<PAGE>
The Company owns approximately 14,226 acres of land which includes land
where various Company facilities reside, including approximately 13,302 acres
generally for hardwood timber reserves, approximately 196 acres of land in the
Kimball Industrial Park, Jasper, Indiana (a site for certain production and
other facilities and for future expansions), and approximately 60 acres in Post
Falls, Idaho, where a new Harpers plant is located. Relocation to the new
461,000 square foot Post Falls facility occurred during the 1995 fiscal year.
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
-15-<PAGE>
<PAGE>
<TABLE>
Executive Officers of the Registrant
The executive officers of the Registrant as of August 31, 1995 are as
follows: (Age as of August 31, 1995)
<CAPTION>
Office and Officer
Name Age Area of Responsibility Since
<S> <C> <C> <C>
Thomas L. Habig 67 Chairman of the Board of Directors 1955
Douglas A. Habig 48 President and Chief Executive Officer, 1975
and Director
Arnold F. Habig 88 Assistant to the Chief Executive 1950
Officer
James C. Thyen 51 Senior Executive Vice President - Chief 1974
Financial and Administrative Officer,
Treasurer, and Director
John B. Habig 62 Senior Executive Vice President - 1958
Operations Officer, Assistant Secretary,
and Director
Ronald J. Thyen 58 Senior Executive Vice President - 1966
Operations Officer, and Director
John T. Thyen 57 Senior Executive Vice President -Marketing 1978
and Sales, and Director
Gary P. Critser 58 Senior Executive Vice President - Chief 1967
Accounting Officer, Secretary, and Director
Executive officers are elected annually by the Board of Directors.
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.
</TABLE>
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<PAGE>
PART II
<TABLE>
Item 5. - Market for the Registrant's Common Stock and Related Share Owner
Matters
Market Prices: The Company's Class B Common Stock trades on The Nasdaq Stock
Market under the symbol: 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:
<CAPTION>
------- 1995 ------ ------- 1994 ------
High Low High Low
<S> <C> <C> <C> <C>
First Quarter. . . . . . . . $26 1/4 $21 3/8 $30 1/2 $27 1/4
Second Quarter . . . . . . . $26 $23 $34 1/2 $28 1/4
Third Quarter. . . . . . . . $28 1/4 $23 3/4 $32 1/2 $26 3/4
Fourth Quarter . . . . . . . $28 3/4 $25 $28 1/4 $22 1/2
There is no active trading market for the Company's Class A Common Stock.
</TABLE>
<TABLE>
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 1995 dividends declared were $18.0 million or $.85
per share on Class A Common Stock and $.86 per share on Class B Common Stock.
The dividends by quarter for 1995 compared to 1994 are as follows:
<CAPTION>
------ 1995 ------ ------ 1994 ------
Class A Class B Class A Class B
<S> <C> <C> <C> <C>
First Quarter. . . . . . . . $.20 3/4 $.21 $.20 3/4 $.21
Second Quarter . . . . . . . $.20 3/4 $.21 $.20 3/4 $.21
Third Quarter. . . . . . . . $.20 3/4 $.21 $.20 3/4 $.21
Fourth Quarter . . . . . . . $.22 3/4 $.23 $.20 3/4 $.21
Totals . . . . . . . . . . . $.85 $.86 $.83 $.84
</TABLE>
-17-<PAGE>
<PAGE>
Share Owners: On July 26, 1995, the Company's Class A Common Stock was owned by
approximately 660 Share Owners of record and the Company's Class B Common Stock
by approximately 2,490 Share Owners of record, of which approximately 410 also
owned Class A Common Stock.
<TABLE>
Item 6. - Selected Financial Data (dollars in thousands, except per share
amounts)
<CAPTION>
Year Ended June 30,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Sales $895,912 $822,484 $722,400 $617,301 $555,263
Net Income $ 41,439 $ 36,169 $ 30,583 $ 38,628 $ 30,017
Net Income Per
Common Share:
Class A $1.96 $1.70 $1.44 $1.82 $1.41
Class B $1.97 $1.71 $1.45 $1.83 $1.42
Total Assets $497,086 $471,413 $452,705 $422,023 $382,685
Long Term Debt-Less
Current Maturities $ 924 $ 811 $ 2,017 $ 3,157 $ 4,392
Cash Dividends Per
Common Share:
Class A $.85 $.83 $.77 $.69 $.65
Class B $.86 $.84 $.78 $.70 $.66
</TABLE>
-18-<PAGE>
<PAGE>
Item 7. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
Net sales for fiscal year 1995 were a record $895,912,000, up 9% from 1994. Net
income and Class B earnings per share increased 15% from the prior year to
$41,439,000 and $1.97, respectively. The prior year's net income included the
impact of adopting FASB Statement No. 109, Accounting for Income Taxes, which
increased 1994 net income by $1,200,000 or 5 cents per Class B share. Cash flow
for the fiscal year was a positive $20,866,000, excluding the purchases and
maturities of short term investments. Open orders ended the year at
$229,788,000.
Results of Operations
1995 Discussion
Fiscal year 1995 sales level reached a record $895,912,000, as each of the
Company's three business segments - Furniture and Cabinets, Electronic Contract
Assemblies, and Processed Wood Products and Other - reported sales increases
above the prior year levels, including double digit growth in the Electronic
Contract Assemblies segment.
Sales in the Furniture and Cabinets segment increased 5% when compared to the
prior year, as sales increases on most major product lines were partially offset
by declines in steel office furniture product line sales. Certain systems,
casegoods and seating office furniture product lines experienced growth as the
result of increases on both new and mature product line offerings, including
market share gains in several product lines. Increased volume levels accounted
for most of the product line increases, as pricing remained competitive in the
office furniture industry. Production capacity constraints in systems office
furniture limited further sales growth during the year. The Company is in the
process of dedicating to this product line, an additional facility which was
previously utilized by another segment. Sales of steel office furniture product
lines declined from the prior year level, due to reduced production capacity
during the start-up phase at the new Idaho production facility during the 1995
fiscal year.
Increased sales of original equipment manufacturer (OEM) cabinets and furniture
and the Company's own line of hospitality furniture added to the increase in the
Furniture and Cabinets segment. Double digit volume increases were experienced
on OEM television and speaker cabinet product lines from existing customers,
while volume increases on OEM home furniture product lines resulted from both
new and existing customers. Sales of hospitality furniture increased as a
result of the Company's market strategy to link its own standardized product
lines of furniture to the hospitality renovation market. The Company's domestic
piano unit continued to focus on increasing sales and production of OEM wood
products to absorb excess production capacity resulting from the continuing
decline in worldwide piano markets.
Sales in the Electronic Contract Assemblies segment increased 20% above the
prior-year level as volume increases were experienced on new product assemblies
including computer peripheral and telecommunication assemblies and existing
product assemblies including automotive electronic assemblies. Included in this
-19-<PAGE>
<PAGE>
segment are sales to one customer that accounted for 13.6% of consolidated net
sales in 1995 and 11.9% in 1994.
Sales in the Processed Wood Products and Other segment increased by 9%, led by
an increase in outside sales of processed wood product lines and plastic
components. Increases in processed wood product lines were primarily volume
increases in lumber and to a lesser extent, price increases which were triggered
by increased material costs. Increased sales of plastic components were the
result of volume increases with new and existing customers.
Consolidated cost of sales as a percent of sales increased 0.5 percentage point
due in part to a change in the sales mix. A larger portion of consolidated
sales was derived from the Electronic Contract Assemblies Segment, which carries
a higher cost of sales percentage than most of the Company's other major product
lines. Increased material costs resulted from a sales mix change within and
among business segments to product lines that require a higher level of material
components, and increased material component prices. Labor costs as a percent
of sales decreased due to a change in sales mix to product lines that require
less labor input and efficiencies derived from the Company's process improvement
initiatives. Overhead costs as a percent of sales decreased as additional
production volumes were realized by improving utilization of fixed overhead
costs and reduced inventory carrying costs, both resulting from process
improvements. Selling, general and administrative expenses as a percent of
sales continued to decline, down 0.8 percentage point, as process improvements
allowed additional sales volumes to be supported by moderate additions to the
Company's overall existing infrastructure. Operating income as a percent of
sales increased 0.4 percentage point when compared to the prior year.
Operating income in the Furniture and Cabinets segment was down from the prior
year, due to material price increases and increased selling expenses in the
office furniture product lines. Timing on certain contractual selling
agreements and competitive pricing pressures in the office furniture industry
prevented the Company from immediately passing along material price increases to
customers. Steel office furniture product lines continued to incur operating
losses throughout the fiscal year on lower sales volumes, due in part to reduced
production capacity during the start-up phase of the new Idaho production
facility and competitive pricing pressures in this product line. The Company
anticipates that its steel office furniture lines will continue to operate at a
loss during the 1996 fiscal year.
Operating income improvements in OEM cabinets and furniture product lines were
the result of volume increases and re-engineered processes that allowed
additional volumes to be produced utilizing existing resources, while improving
cost structures. Hospitality product lines showed improvements in operating
income due to tactical product positioning of the Company's own standardized
line of furniture to the hospitality renovation market, allowing the Company to
place less reliance on costlier custom furniture sales, which are produced to
customer specifications.
Operating losses in Europe widened as costs were incurred during the latter half
of the fiscal year to consolidate two production facilities in the United
Kingdom into one facility, permanently lowering both fixed costs and future
break-even sales levels.
-20-<PAGE>
<PAGE>
In the Electronic Contract Assemblies segment, operating income increased on
additional volumes, due in part to process re-engineering initiatives begun in
prior years that allowed additional volumes and additional product assemblies to
be added during the current fiscal year. Competitive pricing pressures
continued in this segment, as operating margins on these product lines were
generally lower than those found on most of the Company's other major product
lines.
Operating income in the Processed Wood Products and Other segment increased
primarily as the result of volume increases on lumber and plastic component
product lines and process improvements. The Company experienced material price
increases, particularly on processed wood product lines, which were passed along
to customers on a delayed basis. Material cost price increases that were
experienced during most of the fiscal year have stabilized on certain
components, while a few of the components' costs have receded from their recent
high levels.
Other income increased over the prior-year level due to increased interest
income, as positive cash flows during the year resulted in higher average
investment balances and higher investment yields that were available in the
financial markets during the fiscal year. The devaluation of the Mexican Peso
during the fiscal year had an immaterial effect on earnings, due to the
Company's capital and financing structure of its Mexican operations.
The effective income tax rate for 1995 increased 2.4 percentage points over the
prior year's rate, mainly due to the adoption of FASB Statement No. 109,
Accounting for Income Taxes, which reduced the prior year's Taxes on Income by
$1.2 million and reduced the prior year's effective income tax rate by 2.0
percentage points. Increased losses in Europe, due to the facility combination
costs, accounted for the remaining increase, as there are no current tax
benefits available on these losses.
Net income for 1995 was $41,439,000, or $1.97 per share of Class B Common Stock,
up 15% from the 1994 net income level of $36,169,000, or $1.71 per Class B
share, and represents the second highest net income level in the history of the
Company.
1994 Discussion
In 1994, net sales of $822,484,000 increased 14% above 1993, as sales increased
in all three of the Company's business segments.
Sales in the Furniture and Cabinets segment increased 15%, as all principal
product lines experienced increased sales levels above 1993. Overall, the sales
improvement was led by increased sales of office furniture systems and casegoods
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 included 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
-21-<PAGE>
<PAGE>
projects shipped in the first half of the fiscal year. Sales of other OEM wood
products increased over the 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 0.6
percentage point, due to increased material costs, resulting from both a sales
mix change within the 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 continued to trend downward,
down 0.7 percentage point when compared to the prior year, the Company continued
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 enterprise business and manufacturing
information system. Operating income as a percent of net sales increased 0.5
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 lines.
While fiscal 1994 operating losses in the Company's European units were reduced
by approximately 41% when compared to 1993, both units were negatively impacted
by weak economic conditions in their principal markets. The unit in England was
also negatively impacted by operating inefficiencies associated with the shift
in its product line focus.
The Company incurred operating losses on its steel office furniture product line
sales in fiscal 1994. These losses were due to elevated relocation expenses,
increased marketing costs and operating inefficiencies.
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 remained very
competitive, which 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
-22-<PAGE>
<PAGE>
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.
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 income tax rate included the impact of a 1.0 percentage point increase
in the U.S. statutory tax rate and the impact of adopting FASB Statement No.
109, Accounting for Income Taxes, 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.
Liquidity and Capital Resources
Cash, Cash Equivalents and Short-Term Investments totaled $113 million at June
30, 1995 as compared to $92 million one year earlier. Working capital and the
current ratio continued to be strong at $202 million and 2.9 to 1, respectively,
at June 30, 1995 as compared to $186 million and 2.8 to 1, respectively, one
year earlier.
The Company generated $21 million of positive cash flow during the year,
excluding the effect of purchases and maturities of short-term investments. Net
cash flow from operations generated a positive $78 million for 1995 as net
income was augmented by non-cash charges for depreciation and a reduction in
inventories. Positive cash flow from operations was used to internally finance
$37 million of capital investments for the future, $18 million of dividend
payments and $4 million of treasury stock purchases. Capital investments were
primarily in the areas of production equipment upgrades, production facility
expansion and conversion for planned redeployment to other product lines,
process improvements and information technology.
Due to the strong financial condition of the Company and the ability to generate
cash, management believes there is a substantial amount of unused short-term and
long-term borrowing capacity which could be utilized if necessary. For the 1996
fiscal year, the Company plans to maintain a strong liquidity position and
continue to fund investments for the future from cash generated by operations.
-23-<PAGE>
<PAGE>
<TABLE>
Item 8. - Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
Page
<S> <C>
Report of Management . . . . .. . . . . . . . . . . . . . . . . . . . . . 25
Report of Independent Public Accountants . . . . . . . . . . . . . . . . 26
Consolidated Statement of Financial Condition
as of June 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . 27
Consolidated Statement of Income
for the Three Years Ended June 30, 1995. . . . . . . . . . . . . . . . 28
Consolidated Statement of Cash Flows
for the Three Years Ended June 30, 1995. . . . . . . . . . . . . . . . 29
Consolidated Statement of Share Owners' Equity
for the Three Years Ended June 30, 1995 . . . . . . . . . . . . . . . 30
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . 31-43
</TABLE>
-24-<PAGE>
<PAGE>
REPORT OF MANAGEMENT
To The Share Owners of Kimball International, Inc.
The management of Kimball International, Inc. is responsible for the preparation
and integrity of the accompanying financial statements and other related
information in this report. The consolidated financial statements of the
Company and its subsidiaries, including the footnotes, were prepared in
accordance with generally accepted accounting principles and include judgement
and estimates, which in the opinion of management are applied on a conservative
basis.
The Company maintains a system of internal controls intended to provide
reasonable assurance that assets are safeguarded from loss or material misuse,
transactions are authorized and recorded properly, and that the accounting
records may be relied upon for the preparation of the financial statements.
This system is tested and evaluated regularly for adherence and effectiveness by
the Company's staff of internal auditors, as well as the independent public
accountants in connection with their annual audit.
The Audit Committee of the Board of Directors, which is comprised of three
directors who are not employees of the Company, meets regularly with management,
the internal auditors and the independent public accountants to review the work
performed and to ensure that each is properly discharging its responsibilities.
The internal auditors and the independent public accountants have free and
direct access to the Audit Committee, and they meet periodically, without
management present, to discuss appropriate matters.
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, 1995
-25-<PAGE>
<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, 1995 and 1994, 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, 1995. 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, 1995 and 1994, and the
results of their operations and their cash flows for each of the three years in
the period ended June 30, 1995, 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
Chicago, Illinois
August 3, 1995
-26-<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Amounts in Thousands, Except for Share Data)
<CAPTION>
June 30
1995 1994
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 15,278 $ 15,452
Short-term investments-at cost, estimated market
values of $97,956 and $76,479, respectively. . . . . . . . . . 97,534 76,494
Accounts and notes receivable, less allowance for
possible losses of $4,245 and $4,036, respectively . . . . . . 96,057 96,118
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,146 81,083
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,801 19,091
Total current assets . . . . . . . . . . . . . . . . . . . . 306,816 288,238
Property and Equipment-at cost, less accumulated depreciation. . . 177,130 171,243
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,140 11,932
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $497,086 $471,413
Liabilities and Share Owners' Equity
Current Liabilities:
Loans payable to banks. . . . . . . . . . . . . . . . . . . . . . $ 1,763 $ 1,619
Current maturities of long-term debt. . . . . . . . . . . . . . . 393 1,196
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . 35,328 33,133
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . 4,811 4,426
Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . 62,751 61,790
Total current liabilities. . . . . . . . . . . . . . . . . . 105,046 102,164
Other Liabilities:
Long-term debt, less current maturities . . . . . . . . . . . . . 924 811
Deferred income taxes and other . . . . . . . . . . . . . . . . . 19,779 17,486
Total other liabilities. . . . . . . . . . . . . . . . . . . 20,703 18,297
Share Owners' Equity:
Common stock-par value $.31 1/4 per share:
Class A-Shares authorized-10,477,000 (10,504,000 in 1994)
Shares issued-7,335,000 (7,362,000 in 1994). . . . . . . 2,292 2,301
Class B-Shares authorized-30,000,000
Shares issued-14,177,000 (14,150,000 in 1994). . . . . . 4,431 4,422
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . 812 791
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 373,704 350,304
Foreign currency translation adjustment . . . . . . . . . . . . . 1,981 836
Less: Treasury stock-at cost:
Class A-15,000 shares (5,000 in 1994). . . . . . . . . . . . . . (325) (59)
Class B-499,000 shares (345,000 in 1994) . . . . . . . . . . . . (11,558) (7,643)
Total share owners' equity . . . . . . . . . . . . . . . . . 371,337 350,952
Total Liabilities and Share Owners' Equity . . . . . . . . . . . . $497,086 $471,413
See Notes to Consolidated Financial Statements
</TABLE>
-27-<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(Amounts in Thousands, Except for Per Share Data)
<CAPTION>
Year Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Net Sales. . . . . . . . . . . . . . . . . . . . . . . $895,912 $822,484 $722,400
Cost of Sales. . . . . . . . . . . . . . . . . . . . . 645,591 588,849 512,781
Gross Profit . . . . . . . . . . . . . . . . . . . . . 250,321 233,635 209,619
Selling, Administrative and General Expenses . . . . . 188,495 179,981 161,984
Restructuring Expenses . . . . . . . . . . . . . . . . --- --- 2,850
Operating Income . . . . . . . . . . . . . . . . . . . 61,826 53,654 44,785
Other Income (Expense):
Interest Expense . . . . . . . . . . . . . . . . . . (273) (202) (1,200)
Interest Income. . . . . . . . . . . . . . . . . . . 5,755 2,240 4,237
Other, Net . . . . . . . . . . . . . . . . . . . . . 3,487 3,727 5,500
Other Income, Net . . . . . . . . . . . . . . . . . 8,969 5,765 8,537
Income Before Taxes on Income. . . . . . . . . . . . . 70,795 59,419 53,322
Taxes on Income. . . . . . . . . . . . . . . . . . . . 29,356 23,250 22,739
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 41,439 $ 36,169 $ 30,583
Net Income Per Share of Common Stock, based on the
average number of shares outstanding during the year:
Class A . . . . . . . . . . . . . . . . . . . . . . . $1.96 $1.70 $1.44
Class B . . . . . . . . . . . . . . . . . . . . . . . $1.97 $1.71 $1.45
Average Number of Shares Outstanding:
Class A . . . . . . . . . . . . . . . . . . . . . . . 7,334 7,366 7,383
Class B . . . . . . . . . . . . . . . . . . . . . . . 13,737 13,799 13,816
Totals. . . . . . . . . . . . . . . . . . . . . . . 21,071 21,165 21,199
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
KIMBALL INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in Thousands)
<CAPTION>
Year Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income. . . . . . . . . . . . . . . . . . . . . . $ 41,439 $ 36,169 $ 30,583
Non-cash charges (credits) to net income:
Depreciation and amortization . . . . . . . . . . . 30,079 28,726 27,328
Gain on sales of assets . . . . . . . . . . . . . . (370) (950) (761)
Deferred income tax and other deferred charges. . . 940 (3,096) (235)
Restructuring expenses. . . . . . . . . . . . . . . --- --- 2,850
(Increase) decrease in current assets:
Accounts and notes receivable . . . . . . . . . . . 61 (8,495) (11,827)
Inventories . . . . . . . . . . . . . . . . . . . . 4,937 3,583 (12,217)
Other current assets. . . . . . . . . . . . . . . . (1,730) 196 (488)
Increase (decrease) in current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . 2,195 (6,860) 13,565
Accrued expenses. . . . . . . . . . . . . . . . . . 762 8,946 (1,489)
Net cash provided by operating activities . . . . 78,313 58,219 47,309
Cash Flows From Investing Activities:
Capital expenditures. . . . . . . . . . . . . . . . . (34,508) (46,607) (36,983)
Proceeds from sales of assets . . . . . . . . . . . . 2,267 1,565 1,308
Increase in other assets. . . . . . . . . . . . . . . (2,770) (6,606) (1,171)
Purchases of short-term investments . . . . . . . . . (110,926) (28,512) (54,782)
Maturities of short-term investments. . . . . . . . . 89,886 54,615 65,043
Net cash used for investing activities. . . . . . (56,051) (25,545) (26,585)
Cash Flows From Financing Activities:
Net change in short-term borrowings . . . . . . . . . 143 (1,860) (2,461)
Reduction in long-term debt . . . . . . . . . . . . . (1,061) (1,841) (1,010)
Acquisition of treasury stock, net. . . . . . . . . . (4,160) (339) (1,441)
Dividends paid. . . . . . . . . . . . . . . . . . . . (17,653) (17,706) (16,042)
Other-net . . . . . . . . . . . . . . . . . . . . . . 125 (48) 76
Net cash used for financing activities. . . . . . (22,606) (21,794) (20,878)
Effect of Exchange Rate Change
on Cash and Cash Equivalents . . . . . . . . . . . . 170 (53) (91)
Net (Decrease) Increase in Cash and Cash Equivalents . (174) 10,827 (245)
Cash and Cash Equivalents at Beginning of Year . . . . 15,452 4,625 4,870
Cash and Cash Equivalents at End of Year . . . . . . . $ 15,278 $ 15,452 $ 4,625
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Income taxes . . . . . . . . . . . . . . . . . . . . $ 30,600 $ 25,197 $ 26,590
Interest . . . . . . . . . . . . . . . . . . . . . . $ 281 $ 518 $ 1,249
Total Cash, Cash Equivalents and Short-Term Investments:
Cash and cash equivalents . . . . . . . . . . . . . . $ 15,278 $ 15,452 $ 4,625
Short-term investments. . . . . . . . . . . . . . . . 97,534 76,494 102,597
Totals. . . . . . . . . . . . . . . . . . . . . . . $112,812 $ 91,946 $107,222
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF SHARE OWNERS' EQUITY
(Amounts in Thousands, Except for Per Share Data)
<CAPTION>
Three Years Ended June 30, 1995
----------- Common Stock-$.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, 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 $4,422
Net income for the year . . . . . . . . . . . .
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions . (27) (27) (9) 27 9
Treasury stock acquired-net . . . . . . . . . .
Cash dividends:
Class A ($.85 per share) . . . . . . . . . .
Class B ($.86 per share) . . . . . . . . . .
Amounts at June 30, 1995 . . . . . . . . . . . . 10,477 7,335 $2,292 30,000 14,177 $4,431
</TABLE>
<TABLE>
<CAPTION>
Additional
Paid-In Retained -- Treasury Stock --
Capital Earnings Shares Amount
<S> <C> <C> <C> <C>
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)
Net income for the year . . . . . . . . . . . . . . . 41,439
Shares of Class A Common Stock converted to Class B
Common Stock pursuant to charter provisions . . . .
Treasury stock acquired-net . . . . . . . . . . . . . 21 (164) (4,181)
Cash dividends:
Class A ($.85 per share) . . . . . . . . . . . . . (6,230)
Class B ($.86 per share) . . . . . . . . . . . . . (11,809)
Amounts at June 30, 1995 . . . . . . . . . . . . . . . $812 $373,704 (514) $(11,883)
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 steel 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 and municipal bonds with maturities exceeding three
months at the time of acquisition and are stated at amortized cost. Cash
equivalents are stated at cost, which approximate market value. The Company
liquidated its investment in limited partnership interests in hedged debt and
equity securities during the year, which comprised 31% of the short-term
investment portfolio balance at June 30, 1994. Other-net in the Consolidated
Statement of Income included net investment income on this portfolio totaling
$134,000 in 1995, $495,000 in 1994 and $3,341,000 in 1993.
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 devaluation of the Mexican Peso during the
current fiscal year had an immaterial effect on the consolidated results of
operations, due to the financing and capital structure of the Company's Mexican
operations.
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.
-31-
<PAGE>
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. Maintenance,
repairs and minor renewals and betterments are expensed; major improvements are
capitalized.
Capitalized Software: Purchased software used in the operations of the Company,
and related consulting fees, are capitalized at cost and amortized over the
estimated useful life of the software using the straight-line method for
financial reporting purposes. Estimated useful lives range from 2 to 7 years.
Capitalized software, net of related accumulated amortization, amounted to
$7,965,000 in 1995 and $7,204,000 in 1994, 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: The costs of research and development are expensed as
incurred. These costs were approximately, in millions, $9.4 in 1995, $8.6 in
1994 and $5.9 in 1993.
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.
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, 1995 and 1994, 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 concentrated in the automotive, computer and telecommunication industries.
Reclassifications: Certain prior year amounts have been reclassified to conform
with the 1995 presentation.
-32-<PAGE>
<PAGE>
New Accounting Standard: The Company has elected early adoption of Financial
Accounting Standards Board Statement No. 121, Accounting for the Impairment of
Long Lived Assets and for Long Lived Assets to be Disposed Of. The statement
requires a write-down of long lived assets' carrying value equal to the sum of
undiscounted future cash flows generated by those assets, if an event or change
in circumstances indicates the carrying value will not be recovered. The new
accounting standard has no impact on the carrying value of the Company's long
lived assets as of June 30, 1995.
NOTE 2 COMMITMENTS - LEASES
Operating leases for certain office, showroom, warehouse and manufacturing
facilities, and equipment, which expire 1996-2005, contain provisions under
which minimum annual lease payments are, in millions, $3.7, $2.6, $2.0, $1.3 and
$1.1 for the five years ended June 30, 2000, respectively, and aggregate $4.9
million from 2001 to the expiration of the leases in 2005.
Total rental expenses (including rental expenses in 1993 associated with
leases from the retirement trust - see Note 16) amounted to, in millions, $9.6,
$9.5 and $9.9 in 1995, 1994 and 1993, respectively.
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 38% of consolidated inventories at June 30, 1995, 43% at June 30,
1994 and 48% at June 30, 1993.
Had the FIFO method been used for all inventories, net income would have been,
in millions, $0.9 higher in 1995, $1.2 higher in 1994, and $1.0 higher in 1993.
Additionally, inventories would have been, in millions, $21.1, $19.6 and $17.5
higher at June 30, 1995, 1994 and 1993, respectively, if the FIFO method had
been used.
<TABLE>
Inventory components at June 30 are as follows:
(Amounts in Thousands)
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Finished products. . . . . . . . . . . . . $23,938 $23,780 $23,513
Work-in-process. . . . . . . . . . . . . . 12,681 14,603 17,527
Raw materials. . . . . . . . . . . . . . . 39,527 42,700 43,626
Total inventory . . . . . . . . . . . $76,146 $81,083 $84,666
</TABLE>
-33-<PAGE>
<PAGE>
NOTE 4 PROPERTY AND EQUIPMENT
<TABLE>
Major classes of property and equipment consist of the following:
(Amounts in Thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . $ 6,058 $ 5,501
Buildings and improvements . . . . . . . . 140,285 119,544
Machinery and equipment. . . . . . . . . . 241,112 224,792
Construction-in-progress . . . . . . . . . 9,070 26,433
Totals . . . . . . . . . . . . . . . . . 396,525 376,270
Less: Accumulated depreciation . . . 219,395 205,027
Net property and equipment . . . . . . . $177,130 $171,243
Construction-in-progress at June 30, 1994, included $24 million of expenditures
on a new plant facility which was substantially complete at June 30, 1994.
</TABLE>
<TABLE>
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:
<CAPTION>
Years
<S> <C>
Buildings and improvements . . . . . . . . 5 to 50
Machinery and equipment. . . . . . . . . . 3 to 15
Leasehold improvements . . . . . . . . . . Life of Lease
</TABLE>
Depreciation and amortization of property and equipment totaled, in millions,
$27.7 for 1995, $26.9 for 1994 and $26.2 for 1993. Imputed interest costs of
$345,000 and $112,000, related to the financing of certain construction
projects, were capitalized during 1994 and 1993, respectively. No interest
costs were capitalized during 1995.
NOTE 5 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, wood home finishing
accessories 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. The Company has completed all of
the actions provided for.
-34-<PAGE>
<PAGE>
NOTE 6 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. The plan includes a 401(k) feature, thereby permitting
participants to make voluntary contributions on a pretax basis. 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 1995, 1994 and
1993 were approximately, in millions, $9.0, $9.0 and $7.5, 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 7 INCENTIVE STOCK OPTIONS
On August 11, 1987, the Board of Directors adopted the 1987 Stock Incentive
Program, 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 available for grant to
officers and other key employees of the Company and to members of the Board of
Directors who are not employees. Stock options are priced at the fair market
value of the stock at the date of grant. Stock options are exercisable
beginning 2 years after the date of grant and expire 5 years after the date of
grant. No shares were exercisable during fiscal 1994 or 1995. Approximately
110 employees were eligible to participate in the program during 1995 and 1994.
Approximately 250 employees are expected to be eligible to participate in the
program during 1996.
<TABLE>
Transactions during 1994 and 1995 are as follows:
<CAPTION>
Number Per Share
of Shares Option Price
<S> <C> <C>
Options outstanding June 30, 1993. . . . . . --- ---
Granted. . . . . . . . . . . . . . . . . . 106,650 $29.60
Exercised. . . . . . . . . . . . . . . . . --- ---
Forfeited. . . . . . . . . . . . . . . . . (550) $29.60
Options outstanding June 30, 1994. . . . . . 106,100 $29.60
Granted. . . . . . . . . . . . . . . . . . 171,500 $24.44
Exercised. . . . . . . . . . . . . . . . . --- ---
Forfeited. . . . . . . . . . . . . . . . . (6,200) $24.44 - $29.60
Options outstanding June 30, 1995. . . . . . 271,400 $24.44 - $29.60
Shares available for future options. . . . . 1,441,448
</TABLE>
-35-<PAGE>
<PAGE>
NOTE 8 INCOME TAXES
The Company uses the liability method to account for income taxes. 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. As stated in Note 1,
the Company adopted Financial Accounting Standards Board Statement No. 109,
Accounting for Income Taxes, effective July 1, 1993.
<TABLE>
The components of the deferred tax assets and liabilities as of June 30, 1995
and 1994, are as follows:
(Amounts in Thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax assets:
Accounts receivable. . . . . . . . $ 1,751 $ 1,688
Inventory. . . . . . . . . . . . . 2,175 1,910
Employee benefits. . . . . . . . . 3,964 3,086
Other. . . . . . . . . . . . . . . 4,266 3,701
Foreign net operating losses . . . 8,078 5,785
Valuation reserve . . . . . . . . (8,078) (5,785)
Total. . . . . . . . . . . . . . $12,156 $10,385
Deferred tax liabilities:
Property & equipment . . . . . . . $12,240 $12,959
Other. . . . . . . . . . . . . . . 3,769 1,823
Total. . . . . . . . . . . . . . $16,009 $14,782
</TABLE>
-36-<PAGE>
<PAGE>
<TABLE>
The components of income before taxes on income are as follows:
(Amounts in Thousands)
<CAPTION>
Year Ended June 30
1995 1994 1993
<S> <C> <C> <C>
United States . . . . . . . . . . . . . . $76,989 $64,532 $63,185
Foreign . . . . . . . . . . . . . . . . . (6,194) (5,113) (9,863)
Total income before taxes. . . . . . $70,795 $59,419 $53,322
<CAPTION>
Taxes on income are composed of the following items:
(Amounts in Thousands)
1995 1994 1993
<S> <C> <C> <C>
Currently payable:
Federal. . . . . . . . . . . . . . . $25,119 $22,500 $19,351
Foreign. . . . . . . . . . . . . . . --- --- ---
State. . . . . . . . . . . . . . . . 4,781 3,846 3,623
29,900 26,346 22,974
Deferred:
Federal. . . . . . . . . . . . . . . (544) (2,734) (25)
Foreign. . . . . . . . . . . . . . . --- 7 (248)
State. . . . . . . . . . . . . . . . --- (369) 38
(544) (3,096) (235)
Total taxes on income . . . . . . $29,356 $23,250 $22,739
</TABLE>
<TABLE>
A reconciliation of the statutory U.S. income tax rate to the Company's
effective income tax rate follows:
<CAPTION>
Year Ended June 30
(Amounts in Thousands) 1995 1994 1993
Amount % Amount % Amount %
<S> <C> <C> <C> <C> <C> <C>
Taxes computed at statutory rate . . . . . . $24,778 35.0% $20,797 35.0% $18,130 34.0%
State income taxes,
net of Federal income tax benefit . . . . 3,107 4.4 2,500 4.2 2,416 4.5
Foreign operating losses - limited
tax benefit currently available. . . . . . 2,168 3.1 1,796 3.0 3,105 5.8
Adoption of FASB No. 109 . . . . . . . . . . --- --- (1,200) (2.0) --- ---
Other-net. . . . . . . . . . . . . . . . . . (697) (1.0) (643) (1.1) (912) (1.7)
Total taxes on income . . . . . . . . . $29,356 41.5% $23,250 39.1% $22,739 42.6%
</TABLE>
NOTE 9 SHORT-TERM LINES OF CREDIT
<TABLE>
The Company obtains short-term funds primarily in its European operations, under
lines of credit extended by several principal banks at negotiated rates.
Additional information for the years ended June 30, 1995, 1994 and 1993 is as
follows:
-37-<PAGE>
<PAGE>
(Amounts in Thousands)
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Available unused short-term lines of credit at June 30 . . . . . . . . . . . $5,069 $5,119 $5,559
Maximum short-term borrowings outstanding during the year. . . . . . . . . . $1,826 $3,499 $8,740
Weighted average short-term borrowings outstanding during the year . . . . . $1,597 $1,823 $5,117
Weighted average interest rate on short-term borrowings during the year. . . 5.1% 6.6% 9.4%
Weighted average interest rate on borrowings outstanding at June 30. . . . . 5.6% 5.4% 7.8%
</TABLE>
NOTE 10 COMMON STOCK
Shares of Class B Common Stock are entitled to dividends at a differential of
$.01 per share more, on a calendar year basis, than the dividends paid in such a
year on Class A Common Stock, during each calendar year in which dividends are
paid on the Company's 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.
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.
-38-<PAGE>
<PAGE>
NOTE 11 QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
Quarterly financial information is summarized as follows:
(Amounts in Thousands, Except for Per Share Data)
<CAPTION>
Three Months Ended
September 30 December 31 March 31 June 30
<S> <C> <C> <C> <C>
1995:
Net Sales. . . . . . . . . . . . . . . . $209,411 $230,088 $236,819 $219,594
Gross Profit . . . . . . . . . . . . . . $ 58,858 $ 65,030 $ 63,888 $ 62,545
Net Income . . . . . . . . . . . . . . . $ 8,423 $ 11,660 $ 10,831 $ 10,525
Net Income Per Share of Common Stock:
Class A . . . . . . . . . . . . . . . . $.40 $.55 $.51 $.50
Class B . . . . . . . . . . . . . . . . $.40 $.55 $.52 $.50
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
</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.
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.
-39-<PAGE>
<PAGE>
NOTE 12 SHORT-TERM INVESTMENTS
<TABLE>
Short-term investments are summarized as follows:
(Amounts in Thousands)
<CAPTION>
------ 1995 ------ ------ 1994 -----
Fair Amortized Fair Amortized
Value Cost Value Cost
<S> <C> <C> <C> <C>
Debt Securities:
Held-to-Maturity Securities:
U.S. Treasury Notes. . . . . . . $84,363 $83,983 $35,053 $35,149
Tax Advantaged Municipal Bonds . 6,421 6,389 15,282 15,186
Other Securities . . . . . . . . 7,042 7,032 1,986 2,001
Total Held-to-Maturity Securities. 97,826 97,404 52,321 52,336
Other Investments . . . . . . . . . 130 130 24,158 24,158
Total Short-term Investments. . . . $97,956 $97,534 $76,479 $76,494
</TABLE>
The Company's debt securities are classified as held-to-maturity securities
under Financial Accounting Standards Board Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities. The Company's Other
Investments listed in 1994 consisted of investments in limited partnership
interests in hedged debt and equity securities, which were liquidated during the
1995 fiscal year.
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 $550,000 and $(128,000) at June 30, 1995, and
$113,000 and $(128,000) at June 30, 1994, respectively. Fair values are
estimated based upon the quoted market values of those, or similar instruments.
The majority of the held-to-maturity securities mature within a 12-month period.
NOTE 13 LONG-TERM DEBT
Long-Term Debt is principally foreign borrowing incurred to finance long-term
requirements in Europe. Aggregate maturities of long-term debt for the next
five years are $393,000, $309,000, $167,000, $13,000 and $14,000, respectively.
Interest rates range from 5.25% to 10.375%. Based upon borrowing rates
currently available to the Company, the fair value of the Company's debt
approximates the carrying value.
-40-<PAGE>
<PAGE>
NOTE 14 ACCRUED EXPENSES
<TABLE>
Accrued expenses at June 30 consist of:
(Amounts in Thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Income taxes . . . . . . . . . . . . . . . . . $ 1,573 $ 2,673
Property taxes . . . . . . . . . . . . . . . . 5,982 5,944
Compensation . . . . . . . . . . . . . . . . . 24,463 23,797
Retirement plan. . . . . . . . . . . . . . . . 8,877 9,036
Other expenses . . . . . . . . . . . . . . . . 21,856 20,340
Total accrued expenses. . . . . . . . . . . . $62,751 $61,790
</TABLE>
NOTE 15 BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION
The Company has three business segments which are as follows:
Furniture and Cabinets: Sales include office, hospitality, healthcare 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, dimension lumber, plywood, veneer and other miscellaneous wood product
sales. "Other" sales include plastic components, stamped metal products,
carbide cutting tools and related services on cutting tools, and other
miscellaneous services, totaling approximately 31% in 1995, 22% in 1994, and 21%
in 1993, 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 office, home, hospitality
and healthcare furniture, cabinets and pianos; 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, $25.3 in 1995, $18.4 in 1994, and $18.2 in 1993, primarily to North
American customers. Included in the Electronic Contract Assemblies segment are
sales to two customers which accounted for 20.8%, 18.2% and 17.2% of
consolidated net sales in 1995, 1994 and 1993, respectively. One customer
accounted for 13.6% of consolidated net sales in 1995, 11.9% in 1994, and 12.4%
in 1993. 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.
-41-<PAGE>
<PAGE>
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.
<TABLE>
Business Segment
(Amounts in Thousands)
<CAPTION>
-------------------------- Year Ended June 30 --------------------------
------- 1995 --------- ------- 1994 --------- ------- 1993 --------
Customers Intersegment Customers Intersegment Customers Intersegment
<S> <C> <C> <C> <C> <C> <C>
Net Sales:
Furniture and Cabinets. . . . . . . $570,219 $ 295 $544,719 $ 501 $474,222 $ 524
Electronic Contract Assemblies. . . 245,101 --- 204,149 --- 180,464 ---
Processed Wood Products and Other . 80,592 55,980 73,616 54,597 67,714 47,294
Total Net Sales . . . . . . . . . $895,912 $56,275 $822,484 $55,098 $722,400 $47,818
</TABLE>
<TABLE>
(Amounts in Thousands)
<CAPTION>
------ Year Ended June 30 --------
1995 1994 1993
<S> <C> <C> <C>
Operating Income:
Furniture and Cabinets . . . . . . . . . $ 30,966 $ 33,034 $ 24,229
Electronic Contract Assemblies . . . . . 20,804 13,496 14,722
Processed Wood Products and Other. . . . 10,056 7,124 5,823
Eliminations . . . . . . . . . . . . . . 0 0 11
Total Operating Income . . . . . . . . $ 61,826 $ 53,654 $ 44,785
Identifiable Assets:
Furniture and Cabinets . . . . . . . . . $253,597 $256,423 $235,464
Electronic Contract Assemblies . . . . . 90,235 79,313 65,545
Processed Wood Products and Other. . . . 43,159 48,762 48,473
Eliminations . . . . . . . . . . . . . . (2,717) (5,031) (3,999)
Totals . . . . . . . . . . . . . . . . 384,274 379,467 345,483
Unallocated Corporate Assets:
Cash, Cash Equivalents and
Short-Term Investments. . . . . . . . . 112,812 91,946 107,222
Total Assets . . . . . . . . . . . . . $497,086 $471,413 $452,705
</TABLE>
<TABLE>
Business Segment
(Amounts in Thousands)
<CAPTION>
--------- 1995 --------- --------- 1994 --------- --------- 1993 ---------
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 . . . . . . $19,674 $19,995 $19,062 $36,051 $18,830 $24,454
Electronic Contract Assemblies . . 5,790 9,277 4,954 7,092 3,566 8,577
Processed Wood Products and Other. 4,615 5,636 4,710 3,464 4,932 3,952
</TABLE>
-42-<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Geographic Area
(Amounts in Thousands)
--------- Year Ended June 30 ---------
1995 1994 1993
<S> <C> <C> <C>
Net Sales:
United States. . . . . . . . . . . . . . $873,543 $802,117 $702,279
Foreign. . . . . . . . . . . . . . . . . 23,350 22,371 23,193
Eliminations . . . . . . . . . . . . . . (981) (2,004) (3,072)
Total Net Sales. . . . . . . . . . . . $895,912 $822,484 $722,400
Operating Income:
United States. . . . . . . . . . . . . . $ 67,285 $ 58,933 $ 53,308
Foreign. . . . . . . . . . . . . . . . . (5,889) (5,674) (9,370)
Eliminations . . . . . . . . . . . . . . 430 395 847
Total Operating Income . . . . . . . . $ 61,826 $ 53,654 $ 44,785
Identifiable Assets:
United States. . . . . . . . . . . . . . $378,983 $372,440 $340,618
Foreign. . . . . . . . . . . . . . . . . 19,415 22,149 26,750
Eliminations . . . . . . . . . . . . . . (14,124) (15,122) (21,885)
Totals . . . . . . . . . . . . . . . . 384,274 379,467 345,483
Unallocated Corporate Assets:
Cash, Cash Equivalents and
Short-Term Investments. . . . . . . . . 112,812 91,946 107,222
Total Assets . . . . . . . . . . . . . $497,086 $471,413 $452,705
</TABLE>
NOTE 16 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 10).
The Company maintains as a depository a bank; an influential portion 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. Annual rental payments under the leases aggregated
$795,000 in the fiscal year ended June 30, 1993.
Item 9. - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None
-43-<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 24, 1995
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 24, 1995 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 24, 1995 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 24, 1995 under the caption "Compensation
Committee Interlocks and Insider Participation".
-44-<PAGE>
<PAGE>
PART IV
Item 14. - Exhibits, Financial Statement Schedules and Reports on Form 8-K
<TABLE>
(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.
<CAPTION>
Page
<S> <C>
Report of Management . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Report of Independent Public Accountants . . . . . . . . . . . . . . . . 26
Consolidated Statement of Financial Condition
as of June 30, 1995 and 1994. . . . . . . . . . . . . . . . . . . . . 27
Consolidated Statement of Income
for the Three Years Ended June 30, 1995 . . . . . . . . . . . . . . . 28
Consolidated Statement of Cash Flows
for the Three Years Ended June 30, 1995 . . . . . . . . . . . . . . . 29
Consolidated Statement of Share Owners' Equity
for the Three Years Ended June 30, 1995 . . . . . . . . . . . . . . . 30
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 31-43
</TABLE>
<TABLE>
2. Financial Statement Schedules:
<CAPTION>
Page
<S> <C>
VIII. Valuation and Qualifying Accounts
for the Three Years Ended June 30, 1995. . . . . . . . . . . . 48
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.
</TABLE>
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 1995 fiscal year.
-45-<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 6, 1995
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 6, 1995
Douglas A. Habig
DOUGLAS A. HABIG
President and Chief Executive Officer
September 7, 1995
Gary P. Critser
GARY P. CRITSER
Senior Executive Vice President,
Chief Accounting Officer and Secretary
September 6, 1995
-46-<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 7, 1995 Ronald J. Thyen
RONALD J. THYEN
Director
September 9, 1995 Leonard B. Marshall, Jr.
LEONARD B. MARSHALL, JR.
Director
Attorneys-In-Fact
-47-<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Schedule VIII. - Valuation and Qualifying Accounts
<CAPTION>
(Amounts in Thousands)
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, 1995:
Allowances for possible losses:
Bad Debts $4,036 $ 772 --- $(563) $4,245
Valuation Allowance:
Deferred Tax Asset $5,785 $2,293 --- --- $8,078
YEAR ENDED JUNE 30, 1994:
Allowances for possible losses:
Bad Debts $4,916 $ 26 --- $(906) $4,036
Valuation Allowance:
**Deferred Tax Asset --- $5,785 --- --- $5,785
YEAR ENDED JUNE 30, 1993:
Allowances for possible losses:
Bad Debts $4,550 $1,048 --- $(682) $4,916
** 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. Subsequent
additions to foreign deferred tax assets are provided for by additions to
the valuation account.
</TABLE>
-48-<PAGE>
<PAGE>
<TABLE>
<CAPTION>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX OF EXHIBITS
<S> <C>
3(a) Restated Articles of Incorporation of the Company. (Incorporated by
reference to the Company's Form 10-K for the year ended June 30, 1994.)
3(b) Restated Bylaws of the Company. (Incorporated by reference to the
Company's Form 10-K for the year ended June 30, 1994.)
10(a)* Supplemental Bonus Plan. (Incorporated by reference to the Company's
Form 10-K for the year ended June 30, 1994.)
10(b)* Employment Contract with Arnold F. Habig dated June 12, 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.)
10(h)* Form of Split Dollar Life Insurance Contract.
10(i)* Supplemental Executive Retirement Plan.
11 Computation of Earnings Per Share.
21 Significant Subsidiaries of the Company.
23 Consent of Independent Public Accountants.
24 Power of Attorney.
27 Financial Data Schedule.
* = constitutes management contract or compensatory arrangement.
</TABLE>
-49-
<PAGE>
EMPLOYMENT AGREEMENT
BETWEEN
KIMBALL INTERNATIONAL, INC.
AND
ARNOLD F. HABIG
THIS AGREEMENT, made and entered into as of the 12th day of June, 1990, by
and between KIMBALL INTERNATIONAL, INC., an Indiana corporation with its
principal office located in the City of Jasper, Indiana (hereinafter referred to
as the "COMPANY"), and ARNOLD F. HABIG of the City of Jasper, Indiana
(hereinafter referred to as "HABIG").
WITNESSETH:
WHEREAS, the parties entered into an Employment Agreement dated December 8,
1981, as extended by Supplemental Agreement dated April 13, 1982, and February
24, 1987, whereby HABIG agreed to perform certain executive services for the
COMPANY, which the COMPANY agreed to accept; and,
WHEREAS, it is the desire of the parties hereto, to enter into a new
employment agreement superseding and setting aside the Employment Agreement
dated December 8, 1981, as supplemented, effective as of the date of the
execution of this agreement; and,
WHEREAS, HABIG is currently the Assistant to the Chief Executive Officer of
the COMPANY and has previously served the COMPANY as President and Chairman of
its Board of Directors over many years and has managed its affairs capably,
efficiently and in such manner that, largely as a result thereof, the COMPANY
has attained and continues to maintain a pre-eminent position in the industry of
which it is a part, both foreign and nationwide; and,
WHEREAS, it is the mutual desire of the parties that HABIG shall continue to
serve as an officer in the official capacity as Assistant to the Chief Executive
Officer of the COMPANY, all as hereinafter set forth;
NOW, THEREFORE, as an inducement to HABIG to continue in the service of the
COMPANY and in order to obtain the benefit of his expertise and his knowledge of
the administrative, economic and financial affairs of the COMPANY and the
industry of which it is a part, and in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth the parties agree as
follows:
I.
EMPLOYMENT - TERM - DUTIES
The COMPANY hereby continues to employ HABIG as Assistant to the Chief
Executive Officer to perform such duties consistent with his experience,
abilities and present position as the Board of Directors of the COMPANY may from
time to time reasonably assign to him in accordance with the intent and purposes
expressed in this Agreement, such employment under this Agreement to commence
with the date hereof and to continue thereafter for a term of ten (10) years,
Exhibit 10(b)
<PAGE>
<PAGE>
all in accordance with and subject to the provisions hereof. HABIG's duties
hereunder shall be executive in character; and he shall continue to devote such
of his time, effort and attention to the COMPANY as is comparable to that which
has been customary for him to devote to the business of the COMPANY in the past.
II.
COMPENSATION FOR EXECUTIVE SERVICES
Subject to the provisions herein stated, the COMPANY shall pay to HABIG as
compensation for his services the following:
(a) An annual salary of One Hundred Sixty Thousand Dollars ($160,000),
payable in equal bi-weekly installments; provided that, from time to time as and
when the average of the salaries of Senior Executives of the COMPANY shall be
increased or decreased, the then salary of HABIG shall be increased or
decreased, as the case may be, in the same proportion. For purposes of this
Agreement the term "Senior Executives" means the Chairman, the President and the
Senior Executive Vice Presidents.
(b) Such annual bonus as shall be authorized in writing by the Board of
Directors.
HABIG shall continue to be a Participant under and pursuant to the
COMPANY's Retirement Plan and shall participate in the Flex Benefit Plan,
including health care, and other benefits of the COMPANY as long as he performs
services as required thereby in terms of hours worked or various other
requirements contained therein from time to time.
III.
TEMPORARY DISABILITY
In the event HABIG suffers a temporary disability and the length of such
disability exceeds the COMPANY's corporate policy for the continuance of regular
compensation while on leave of absence because of disability, HABIG's
compensation shall be reduced to an amount equal to sixty per cent (60%) of the
aggregate of his regular compensation at the time he became disabled and his
most recent bonus prior to the disability. During such extended temporary
disability HABIG's participation in the Retirement Plan, the Flex Benefit Plan
and other benefits shall continue according to his eligibility for such
benefits. Such reduced compensation shall continue until HABIG returns to full
service, in which event his compensation shall be restored to the amounts
provided in Paragraph II above, or until he is declared permanently disabled or
elects to retire, in which event he shall be compensated thereafter as provided
in Paragraph IV below.
IV.
PERMANENT DISABILITY OR RETIREMENT
If the Board of Directors of the COMPANY shall at any time determine by
resolution on the basis of sufficient and competent medical advice that because
of mental or physical disability, HABIG has become permanently and totally
incapacitated to perform all duties which might reasonably be assigned to him
hereunder by said Board, or should HABIG elect to retire completely from the
Exhibit 10(b) (Continued)
<PAGE>
<PAGE>
performance of any duties on behalf of the COMPANY, then and in either of such
events, commencing with the date of the occurrence thereof and continuing
thereafter during the remainder of his life, HABIG shall be relieved from
performing any duties under this Agreement. HABIG shall have the option to
retire at any time by giving written notice thereof to the COMPANY. In the
event of HABIG's permanent disability or retirement HABIG shall be entitled to
receive and the COMPANY shall pay to him in recognition of his past services, in
equal bi-weekly installments, annual compensation at the rate of One Hundred
Fifty Thousand Dollars ($150,000) per year for as long as he shall live. In the
event of permanent disability or retirement HABIG's participation in the COMPANY
bonus, medical and other benefit plans shall cease, effective on the date of
such permanent disability or retirement.
V.
BENEFITS TO WIDOW
In the event of the death of HABIG during the term of this Agreement leaving
his wife Barbara T. Habig surviving him, the COMPANY shall pay Barbara T. Habig
the sum of Fifty Thousand Dollars ($50,000) per year, payable in equal bi-weekly
installments for a period of five (5) years immediately following the death of
HABIG.
VI.
PAYMENT OF EXPENSES
In addition to the payment by the COMPANY of compensation for his Executive
services pursuant to this Agreement as set forth in paragraph II of this
Agreement, the COMPANY shall pay HABIG all expenses incurred by him in the
performance of his duties as set forth in paragraph I hereof.
VII.
EFFECTIVE DATE AND TERMINATION
OF DECEMBER 8, 1981 AGREEMENT
This Agreement shall be binding upon the COMPANY, its successors and assigns
and upon HABIG, his personal representatives, heirs and beneficiaries from and
after the date first above set forth and shall supersede and replace any and all
prior agreements between the parties relating to the subject matter hereof,
including the agreement dated December 8, 1981, as supplemented.
VIII.
AMENDMENT
This Agreement may be amended at any time by a writing executed by HABIG and
the COMPANY as authorized by the Board of Directors.
THIS AGREEMENT is executed in triplicate, each copy of which when so executed
shall be an original but all three copies shall constitute one and the same
instrument.
Exhibit 10(b) (Continued)
<PAGE>
<PAGE>
KIMBALL INTERNATIONAL, INC.
By DOUGLAS A. HABIG
Its President
ATTEST:
H.E. THYEN
Its Secretary
"COMPANY"
ARNOLD F. HABIG
"HABIG"
STATE OF INDIANA )
) SS:
COUNTY OF DUBOIS )
Before me, the undersigned, a Notary Public, within and for said County and
State, on this 12th day of June, 1990, came KIMBALL INTERNATIONAL, INC., an
Indiana corporation, by Douglas A. Habig, its President and H.E. Thyen, its
Secretary, who, as such President and Secretary, respectively, for and on behalf
of said corporation acknowledged the execution of the foregoing agreement and
the affixing thereto of the corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
DARLENE M. OFER
Notary Public
My County of Residence is
Dubois, State of Indiana
and my Commission Expires:
FEBRUARY 27, 1991
STATE OF INDIANA )
)
COUNTY OF DUBOIS )
Before me, the undersigned, a Notary Public, in and for said County and
State, personally appeared the above named Arnold F. Habig, and acknowledged the
execution of the foregoing Agreement to be his voluntary act and deed for the
uses and purposes therein set forth this 12th day of June, 1990.
DARLENE M. OFER
Notary Public
My County of Residence is
Dubois, State of Indiana
and My Commission Expires:
FEBRUARY 21, 1991
Exhibit 10(b) (Continued)
<PAGE>
SPLIT DOLLAR INSURANCE AGREEMENT
THIS SPLIT DOLLAR INSURANCE AGREEMENT (the "Agreement") is entered into the
_________ day of ____________________, 1995, by Kimball International, Inc., a
Indiana corporation (the "Company") and _________________________, Trustee of
the______________________ ___________________________________________Irrevocable
Trust dated ________________ (the "Trust").
Recitals
A. The Trust has acquired a policy of life insurance in the face amount of
________________the "Policy"), issued by the _________________________(the
"Insurer"), insuring the lives of ______________________________, an employee of
the Company, and __________________________________ (the "Insureds"), which
Policy is described in Exhibit A attached hereto and make a part hereof.
B. The Trust is the Trustee of an irrevocable trust for the benefit of
certain family members of the Insureds. The Trust desires to maintain life
insurance on the lives of the Insureds for the beneficiaries of such trust and
desires that such life insurance have an equity or cash value feature. In
connection with the Company's payment of the life insurance premiums the insured
employee of the Company will be assessed for tax reporting purposes with an
amount equal to the annual cost of current life insurance protection on the
lives of the Insureds as measured by the lowest amount of imputed income
attributable to the payment of the death benefit under the Policy by the then
applicable federal income tax law, regulations or rulings applicable to split
dollar arrangements. The Company, in the interest of _________________________
as a valuable employee of the Company and his family, and as an investment of
Company assets, desires to pay the annual premium. The only interest of the
Company with respect to the Policy is the Company's investment in the Policy as
hereinafter described.
C. The Trust is the owner of the Policy and possesses all incidents of
ownership in and to the Policy.
D. In order to secure the recovery of the investment by the Company in the
Policy in the event of the termination of this Agreement, the Company wishes to
have the Policy collaterally assigned to it by the Trust.
E. The parties intend that by such collateral assignment the Company shall
have only the right to receive recovery of the investment by the Company under
this Agreement, with the Trust retaining all other ownership rights in the
Policy, as specified in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties agree as follows:
1. Ownership. The Trust shall be the sole and absolute owner of the
Policy and shall have the right to designate beneficiaries and settlement
options, subject to the terms of this Agreement. All other ownership rights
Exhibit 10(h)<PAGE>
<PAGE>
granted by the terms of the Policy, including, but not limited to, the rights to
select dividend options, borrow on the security of the Policy and to surrender
or cancel the Policy may be exercised by the Trust only with the prior written
consent of the Company. With respect to the exercise of the right to borrow on
the security of the Policy, the Trust agrees that the Trust will not borrow on
the security of the Policy in any manner so as to impair the security of the
Company under any collateral assignment executed in favor of the Company
pursuant to the terms of this Agreement to secure the recovery of the Company
Investment under paragraph 6 and other applicable provisions of this Agreement.
If requested by the Company, the Trust will produce information verified by the
Insurer showing the amount of indebtedness on the Policy at the time of such
request.
2. Trust's Premium Payment Obligation. Under the terms of this Agreement
the Trust's share of the premium shall be that amount of the premiums due on the
Policy equal to the lowest amount of imputed income attributable to the payment
of the death benefit under the Policy by the then applicable federal income tax
law, regulations or rulings applicable to split dollar arrangements. Until the
termination of this Split Dollar Agreement, the Company shall pay the Trust's
share of the premium and shall charge such amount as income to the Insured
employee of the Company.
3. Company's Payment Premiums as Investment. The Company for its own
account and as an investment of general Company assets shall pay all Policy
premium amounts not paid by the Trust pursuant to paragraph 2 of this Agreement
until such time as the Company, at its discretion, cancels this Split Dollar
Agreement and discontinues the payment of any premium amount with respect to the
Policy. Such payments shall be referred to as the "Company Investment."
4. Premium Payment Period. The Company agrees that subject to its rights to
cancel this Agreement and discontinue the payment of any premium amount with
respect to the Policy, the premium payment period for purposes of this Agreement
shall be based upon the fifteen (15) year period as projected by the parties to
this Agreement and such premium payment period shall continue notwithstanding
the death of _______________________________ prior to the expiration of such
projected premium payment period with __________________________ surviving.
5. Manner of Payment. On or before the due date of each Policy premium,
or within the grace period provided therein, the Company shall pay the premium
to the Insurer and shall promptly furnish the Trust with evidence of timely
payment. The Trust, in its sole discretion, may elect to pay the Trust's
portion of the premium payment by notifying the Company of its intention to do
so and providing the amount of the Trust's share to the Company for payment to
the Insurer prior to the due date for the payment of such premium.
6. Recovery of Company Interest. For the purposes of this Agreement, the
Company Interest to be recovered shall be defined and determined as follows:
(a) Death of Survivor of Insureds. Upon the death of the survivor of
the Insureds, the Company Interest shall be and the Company shall have the right
to receive an amount of the death benefit payable under the Policy equal to the
Company Investment. The Company and the Trust shall take all action necessary
Exhibit 10(h) (Continued)<PAGE>
<PAGE>
to obtain the death benefit provided under the Policy.
(b) Other Termination. Upon any other termination of this Agreement,
the Company Interest shall be and the Company shall have the right to receive
from the Trust or the assignee of the Trust an amount equal to the Company
Investment.
7. Collateral Assignment. To secure the recovery by the Company of the
Company Interest the Trust shall assign the Policy to the Company as collateral
(the "Collateral Assignment").
8. Company Rights as Assignee. The Company, during the lifetime of the
Insureds and prior to the termination of this Agreement, may exercise any of its
rights as Assignee of the Policy without the consent of the Trust. If a policy
loan is taken by the Company, it shall be responsible for the interest thereon
and shall pay such interest as it becomes due.
The Trust agrees not to withdraw, surrender, borrow against, or pledge as
security for a loan any portion of the Policy cash value while this agreement is
in effect.
9. Payment of Benefits. The Insurer may pay benefits under the Policy
either by separate checks to the parties or agent assignees entitled thereto, or
by a joint check. If the Insurer pays by joint check, the Trust and the Company
shall divide the benefit as provided herein.
10. Obligations of Insurer. The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefit to the
beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy. In no event shall the Insurer be considered a part of
this Agreement, or any modification or amendment to this Agreement. No
provision of this Agreement, nor of any modification or amendment hereof, shall
in any way be construed as enlarging, changing, varying, or in any way affecting
the obligations of the Insurer as expressly provided in the Policy, except
insofar as the provisions hereof are made a part of the Policy by the Collateral
Assignment executed by the Trust and filed with the Insurer.
11. Appointment of Fiduciary. The Company is hereby designated as the
named fiduciary under this Agreement. The fiduciary shall have authority to
control and manage the operation and administration of this Agreement.
12. Amendment. This Agreement may not be amended, altered or modified,
except by a written instrument signed by the parties hereto, or their respective
successors or assigns, and may not be otherwise terminated except as provided
herein.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company and the Trust and their respective
successors, assigns, heirs, executors, administrators and beneficiaries.
14. Notices. All notices consents or demands required or permitted to be
given under the provisions of this Agreement shall be sent by certified mail to:
Exhibit 10(h) (Continued)<PAGE>
<PAGE>
Trust: __________________________________________
Trustee________________________________Irrevocable Trust
dated _________________________________
__________________________
__________________________
Company: Kimball International, Inc.
1600 Royal Street
Jasper, Indiana 47549
Notice shall be effective when received by the recipient.
15. Termination of Agreement. This Agreement shall terminate if any of
the following takes place:
(a) upon the election of the Company after resolution passed by the Board
of Directors;
(b) the bankruptcy of the Company;
the failure of the Company to pay the premium under Section 2 of this
Agreement;
(d) payment to the Company by the Trust of the aggregate amount of the
advances made by the Company pursuant to this agreement; or
(e) the death of the survivor of Insureds, after payment of the
Company Investment.
In the event of the termination of this Agreement, the aggregate of the advances
made by the Company pursuant to this Agreement less any outstanding Policy loans
received by the Company prior to such termination shall become due and payable
to the Company. Upon payment of such amount, whether from the Policy, the
Trust, or whatever other source, the Company shall execute a release of the
Collateral Assignment Agreement and deliver such release and the Policy to the
Trust.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana.
IN WITNESS WHEREOF the parties have signed this Agreement effective this
_________ day of ____________________________, 1995.
KIMBALL INTERNATIONAL, INC.
By Gary P. Critser
COMPANY
Exhibit 10(h) (Continued)
<PAGE>
<PAGE>
____________________________ Trustee
____________________________ Irrevocable Trust
dated ______________________
by _________________________
____________________________
Exhibit 10(h) (Continued)<PAGE>
<PAGE>
The following life insurance policy is subject to the attached Split-Dollar
Insurance Agreement:
Trust: ____________________________________, Trustee
____________________________________, Irrevocable Trust
dated ______________________________
Insurer: ___________________________________
Insureds: ____________________________________
Policy Number: _______________________________
Face Amount: _________________________________
Date of Issue: _______________________________
EXHIBIT A
Exhibit 10(h) (Continued)
<PAGE>
KIMBALL INTERNATIONAL, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(SERP)
(1995 Revision)
Article 1 -- Name and Purpose of Plan
The name of this Plan is the Kimball International, Inc. Supplemental Executive
Retirement Plan (the "Plan" or the "SERP"). Its purpose is to provide a select
group of United States officers and senior managers employed by Kimball
International, Inc. (the Company) with the opportunity to defer cash
compensation otherwise payable to them as employees of the Company. The Plan
shall be administered by the SERP Committee as provided in Article 10.
Article 2 -- Effective Date of Plan; Plan Year
The Plan shall be effective as of July 1, 1994--the first day of the Company's
1994-95 fiscal year. Beginning January 1, 1996 the Plan Year shall be the
calendar year.
Article 3 -- Participants
Each person who is a United States officer or senior manager of the Company on
or after the Effective Date (an "Eligible Employee") shall be eligible to
participate in the Plan, but only during the period of time that he is and
remains a member of the Company's Executive Committee; provided, however, that a
member of the Executive Committee may only be an "Eligible Employee" if that
person is one of the highest 4% paid employees of the Company. Any Eligible
Employee who elects to participate in the Plan shall hereinafter be called a
"Participant." The Company shall establish for each Participant a deferred
compensation account, as specified in Article 5.
Article 4 -- Deferral Election
Each Participant shall be entitled to make an advance written irrevocable
election to defer receipt of up to 50% of the cash compensation otherwise
payable by the Company to him for the 1994-95 fiscal year of the Company, and up
to 10% of the cash compensation otherwise payable by the Company to him for any
later year. Such election may be expressed in terms of a percentage or
percentages of compensation, or if permitted by the SERP Committee, a specified
dollar amount. This written election shall include elections as to the period
of deferral, the form of payment, and a beneficiary. The written irrevocable
election must be received by the Company by May 31, 1994 for the 1994-95 fiscal
year, and by the December 31 preceding the beginning of any later year (the
period from July 1, 1995 through December 31, 1995 being treated as a year for
this purpose, due to the change of the Plan Year to a calendar year).
A Participant may elect:
Exhibit 10 (i)
<PAGE>
<PAGE>
a. Before December 31, to change the amount of cash compensation to be
deferred for the following year, and, subject to the provisions of Article 6,
the period of deferral and/or the form of payment thereof; and/or
b. At any time, to change his beneficiary designation.
Notwithstanding the foregoing, to the extent the SERP Committee deems it
possible and reasonably feasible, any deferral (or portion thereof) under this
Plan by a Participant under the age of 71 may be recharacterized, no later than
2-1/2 months after the end of the Company's fiscal year during which the
deferral was made, as an Elective Tax-Deferred Participant Contribution under,
and subject to the terms of, the Company's Retirement Plan. In such event, the
Company shall contribute the recharacterized portion of the deferral to the
Retirement Plan in accordance with the terms thereof.
Article 5 -- Deferred Compensation Accounts
A separate account within the financial records of the Company shall be
established and maintained for each Participant. This account shall reflect the
cash compensation deferred by the Participant, and any investment earnings or
losses credited thereto from time to time.
The cash compensation deferred hereunder by a Participant and any Retirement
Plan make-ups made pursuant to Article 7 shall be credited with deemed
investment earnings or losses in accordance with procedures established from
time to time by the SERP Committee. In particular, the SERP Committee may treat
all or a portion of a Participant's account as though it were invested in the
same manner as the Participant's account in the Company's Retirement Plan. The
Participant shall receive a statement of account at least annually.
In the event a Participant's deferral for any period is, pursuant to Article 4,
treated as an Elective Tax-Deferred Participant Contribution to the Company's
Retirement Plan, the Participant's account under this Plan shall be reduced
accordingly.
Article 6 -- Distribution of Deferred Compensation Accounts
No distribution of a Participant's deferred compensation account shall be made
except as provided in this Article 6, or, upon termination of the Plan, as
provided in Article 11. Whenever a payment is to be made under this Plan the
SERP Committee, in its sole discretion, may cause it to be deferred and paid as
soon as administratively practical following the end of the Company's fiscal
year in which occurs the event causing such payment to be due.
Termination of Employment. If a Participant's employment with the Company
terminates for any reason prior to the time when the Participant meets the
requirements which would entitle him to retire under the terms of Section 4.1 of
the Company's Retirement Plan, notwithstanding any election made under Article
4, the deferred compensation account of that Participant shall be payable to him
in a lump sum following such termination.
Exhibit 10 (i) (Continued)
<PAGE>
<PAGE>
Form of Payment. Subject to the preceding paragraphs, a Participant's deferred
compensation account shall be payable in accordance with the Participant's
elections made under Article 4 -- in a lump sum or in installment payments over
a period of either 5 or 10 years, commencing at the time elected by the
Participant under Article 4.
Death. If the Participant dies before receiving all amounts credited to his
deferred compensation account, then the unpaid amounts in the Participant's
account shall be paid to the Participant's designated beneficiary in a single
lump sum following the Participant's death. If the Participant has no surviving
or existing designated beneficiary, then the amounts shall be paid to the
Participant's estate.
Retirement. If the Participant retires at a time when he meets the requirements
which would entitle him to retire under the terms of Section 4.1 of the
Company's Retirement Plan, then the balance in the Participant's account shall
be paid to the Participant, in the form of payment elected pursuant to Article
4.
Hardship. Notwithstanding the deferral election made by a Participant pursuant
to Article 4, a Participant may request an earlier distribution for serious
financial hardship. The SERP Committee shall, in its sole discretion, make the
determination of serious financial hardship, including the amount, if any, to be
distributed and the timing of the distribution.
Article 7 -- Retirement Plan "Makeups"
A Participant's compensation that is deferred under this Plan, as well as a
Participant's compensation in excess of the Internal Revenue Code Section
401(a)(17) limits, will not be eligible compensation for purposes of calculating
the amount of the Participant's allocations under the Company's Retirement Plan.
In addition, Internal Revenue Code Section 415 may further limit the amount of
Company contributions that can be allocated to the account of a Participant
under the Retirement Plan.
Pursuant to rules and procedures established by the SERP Committee, any loss of
Company contributions under the Company's Retirement Plan due to the deferral of
compensation under this Plan or to the application of Internal Revenue Code
Section 401(a)(17) and/or Section 415 may be compensated for by the Company
through a deposit by the Company to the Participant's deferred compensation
account in an amount equal to the lost Company contribution that would otherwise
have been allocated to the Participant's account under that Plan if there had
been no deferral of compensation made under this Plan and if the limitations of
Internal Revenue Code Sections 401(a)(17) and 415 did not exist. Such deposit
shall be subject to the applicable vesting provisions of the Retirement Plan.
Article 8 -- Participant's Rights
The establishment of this Plan shall not be construed as giving any Participant
the right to be retained in the Company's service or employ, or the right to
receive any benefits not specifically provided by the Plan. A Participant shall
Exhibit 10 (i) (Continued)
<PAGE>
<PAGE>
have an immediate 100% vested interest in the portion of his deferred
compensation account attributable to his deferrals elected pursuant to Article 4
(including investment earnings or losses credited under Article 5); and a
Participant shall have the same percentage vested interest in the Company
contributions made to his account under Article 7 (including investment earnings
or losses credited under Article 5) that he has in the Company contributed
portion of his account under the Company's Retirement Plan.
Article 9 -- Nonalienability and Nontransferability
The rights of a Participant to the distribution of his deferred compensation
account shall not be assignable or transferable, or be subject in any manner to
alienation, anticipation, pledge, encumbrance or charge. No Participant may
borrow against his account. No account shall be subject in any manner to
garnishment, execution, or levy of any kind, whether voluntary or involuntary,
including but not limited to any liability that is for alimony or other payments
for the support of a spouse or former spouse, or for any other relative of a
Participant.
Article 10 -- Administration of Plan
This Plan shall be administered by the SERP Committee appointed by the Board of
Directors of the Company. That Committee shall have authority to adopt rules
and regulations for administering the Plan and to interpret, construe, and
implement the provisions hereof. Any decision or interpretation of any
provision of the Plan adopted by that Committee shall be final and conclusive.
A Participant who is a member of that Committee shall not participate in any
decision involving a request made by him or relating specifically to his rights,
duties, and obligations as a Participant.
Article 11 -- Amendment and Termination of Plan
The Plan may, at any time and from time to time, be amended, modified, or
terminated by the SERP Committee; and that Committee, in conjunction with the
termination of the Plan, may cause immediate lump-sum distributions to be made
to the Participants of their deferred compensation accounts, regardless of the
tax consequences to the Participants or the Company. In no other case, however,
may an amendment, modification, or termination of the Plan adversely affect any
Participant's rights with respect to amounts then-accrued in his deferred
compensation account.
Article 12 -- Rabbi Trust
Any and all compensation deferred by a Participant may be held, in the
discretion of the Company, under a grantor trust (i.e., a "rabbi trust")
established for this Plan. Plan Participants and beneficiaries shall have no
interest in the assets of the trust or in any specific assets of the Company
relative to rights and/or benefits under this Plan; and the rights to deferred
amounts in the trust shall be subject to the nonalienability and
Exhibit 10 (i) (Continued)
<PAGE>
<PAGE>
nontransferability restrictions set forth in Article 9. Participants shall have
rights under this Plan no greater than the rights of a general, unsecured
creditor of the Company.
Article 13 -- General Provisions
a. Controlling Law. Except to the extent superseded by federal law, the laws
of the State of Indiana shall be controlling in all matters relating the Plan,
including construction and performance hereof.
b. Captions. The captions of articles and paragraphs of this Plan are for
convenience of reference only. They shall not control or affect the meaning or
construction of any of the Plan's provisions.
c. Facility of Payment. Any amounts payable hereunder to any person who is
under legal disability or who, in the judgment of the SERP Committee, is unable
to manage his financial affairs, may be paid to the legal representative of such
person or may be applied for the benefit of such person in any manner that the
SERP Committee may select. Any such payment shall be deemed to be payment for
such person's account, and shall be a complete discharge of all liability of the
Company with respect to the amount so paid.
d. Withholding Payroll Taxes. To the extent required by the laws in effect at
the time when compensation is deferred, and at the time amounts are distributed
from a Participant's deferred compensation account, the Company shall withhold
from compensation, or from payments made hereunder, any taxes required to be
withheld under federal, state, or local law.
e. Administrative Expenses. All out-of-pocket expenses of administering the
Plan shall be borne by the Company, and no part thereof shall be charged against
any Participant's account or any amounts distributable hereunder.
f. Survival of Nonprohibited Provisions. Any provision of this Plan prohibited
by the law of any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition without invalidating the remaining provisions
hereof.
g. Protection of SERP Committee, Etc. Except as otherwise expressly provided
by law, no member of the Company's Board of Directors or SERP Committee, and no
officer, employee, or agent of the Company, shall have any liability to any
person, firm, or corporation based on or arising out of the Plan except in the
case of gross negligence or fraud.
* * * * *
Exhibit 10 (i) (Continued)
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Kimball International, Inc. has caused this 1995 Revision of
the Plan to be signed this ______________ day of May, 1995.
KIMBALL INTERNATIONAL, INC.
By _________________________
Title _________________________
Exhibit 10 (i) (Continued)
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
FISCAL YEAR ENDED JUNE 30, 1995
<S> <C> <C>
Net income, fiscal year ended June 30, 1995. . . . . $41,439,000
Dividends declared:
Class A Common -- $.85 per share . . . . . . . . $(6,230,000)
Class B Common -- $.86 per share . . . . . . . . (11,809,000)
(18,039,000)
Undistributed Earnings . . . . . . . . . . . . . . . $23,400,000
Undistributed earnings divided by
21,071,445 average number of
shares outstanding . . . . . . . . . . . . . . . $1.1105
Class A Class B
------- -------
Undistributed Earnings Per Share . . . . . . . . . . $1.1105 $1.1105
Assumed Distribution of Earnings . . . . . . . . . . 0.8500 0.8600
Earnings Per Share . . . . . . . . . . . . . . . . $1.9605 $1.9705
</TABLE>
<TABLE>
COMPUTATION OF EARNINGS PER SHARE
FISCAL YEAR ENDED JUNE 30, 1994
<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>
Exhibit 11
Page 1 of 2<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
FISCAL YEAR ENDED JUNE 30, 1993
<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 2 of 2
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
Significant Subsidiaries of Registrant
As of June 30, 1995 the significant subsidiaries of the Registrant were as
follows:
<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%
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%
Each of the above subsidiaries is included in the Registrant's consolidated
financial statements for the year ended June 30, 1995.
</TABLE>
Exhibit 21
<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
Chicago, Illinois
September 13, 1995
Exhibit 23
<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, 1995, 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 15, 1995
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Kimball
International, Inc. 1995 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> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 15,278
<SECURITIES> 97,534
<RECEIVABLES> 100,302
<ALLOWANCES> 4,245
<INVENTORY> 76,146
<CURRENT-ASSETS> 306,816
<PP&E> 396,525
<DEPRECIATION> 219,395
<TOTAL-ASSETS> 497,086
<CURRENT-LIABILITIES> 105,046
<BONDS> 0
<COMMON> 6,723
0
0
<OTHER-SE> 364,614
<TOTAL-LIABILITY-AND-EQUITY> 497,086
<SALES> 895,912
<TOTAL-REVENUES> 895,912
<CGS> 645,591
<TOTAL-COSTS> 645,591
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 772
<INTEREST-EXPENSE> 273
<INCOME-PRETAX> 70,795
<INCOME-TAX> 29,356
<INCOME-CONTINUING> 41,439
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,439
<EPS-PRIMARY> 1.97
<EPS-DILUTED> 1.97
</TABLE>
