<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 No.)
1600 Royal Street, Jasper, Indiana 47549-1001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (812) 482-1600
Not Applicable
Former name, former address and former fiscal year, if changed since last report
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___
The number of shares outstanding of the Registrant's common stock as of October
20, 1999 were:
Class A Common Stock - 14,315,187 shares
Class B Common Stock - 26,069,504 shares
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<TABLE>
KIMBALL INTERNATIONAL, INC.
FORM 10-Q
INDEX
<CAPTION>
PAGE NO.
<S> <C>
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
- September 30, 1999 (Unaudited) and June 30, 1999. . . . . . . 3
Consolidated Statements of Income (Unaudited)
- Three Months Ended September 30, 1999 and 1998. . . . . . . . 4
Consolidated Statements of Cash Flows (Unaudited)
- Three Months Ended September 30, 1999 and 1998. . . . . . . . 5
Notes To Consolidated Financial Statements (Unaudited). . . . . 6-7
Item 2. Management's Discussion and Analysis Of
Financial Condition and Results of Operations . . . . . . . . . 8-12
Item 3. Quantitative and Qualitative Disclosures about Market Risk. . . 13
PART II OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<CAPTION>
(unaudited)
September 30, June 30,
1999 1999
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 8,427 $ 16,775
Short-term investments 119,749 114,996
Receivables, less allowances
of $3,689 and $3,816, respectively 137,657 132,284
Inventories 107,044 96,157
Other 27,752 26,129
Total current assets 400,629 386,341
Property And Equipment - net of
accumulated depreciation of $272,902
and $265,141, respectively 223,432 221,498
Other Assets 51,687 53,547
Total assets $675,748 $661,386
Liabilities And Share Owners' Equity
Current Liabilities:
Loans payable $ 7,074 $ 3,518
Current maturities of long-term debt 1,202 1,185
Accounts payable 83,289 77,976
Dividends payable 6,390 6,380
Accrued expenses 80,192 79,505
Total current liabilities 178,147 168,564
Other Liabilities:
Long-term debt, less current maturities 1,393 1,730
Deferred income taxes and other 26,229 26,815
Total other liabilities 27,622 28,545
Share Owners' Equity:
Common stock 2,151 2,151
Additional paid-in capital 6,722 6,379
Retained earnings 504,131 498,962
Accumulated other comprehensive income 1,256 1,312
Less: Treasury stock, at cost (44,281) (44,527)
Total Share Owners' Equity 469,979 464,277
Total liabilities and Share Owners' equity $675,748 $661,386
See Notes to Consolidated Financial Statements
</TABLE>
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<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands except for per share data)
<CAPTION>
(unaudited)
Three Months Ended
September 30,
1999 1998
<S> <C> <C>
Net Sales $278,402 $264,646
Cost of Sales 201,627 186,089
Gross Profit 76,775 78,557
Selling, General and
Administrative Expenses 62,640 61,982
Operating Income 14,135 16,575
Other Income (Expense):
Interest expense (92) (105)
Interest income 1,443 1,964
Other - net 1,467 1,057
Other income - net 2,818 2,916
Income Before Taxes on Income 16,953 19,491
Taxes on Income 5,394 6,928
Net Income $ 11,559 $ 12,563
Earnings Per Share of Common Stock:
Basic:
Class A $ .28 $ .31
Class B $ .29 $ .31
Diluted:
Class A $ .28 $ .30
Class B $ .29 $ .31
Dividends Per Share of Common Stock:
Class A $ .155 $ .155
Class B $ .160 $ .160
Average Total Number of Shares
Outstanding Class A and B
Common Stock:
Basic 40,374 40,930
Diluted 40,619 41,179
See Notes to Consolidated Financial Statements
</TABLE>
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<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
<CAPTION>
(unaudited)
Three Months Ended
September 30,
1999 1998
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 11,559 $ 12,563
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,677 9,252
Gain on sales of assets (911) (208)
Deferred income tax and other deferred charges (1,100) (2,338)
Change in current assets and liabilities:
Receivables (5,373) (13,063)
Inventories (7,656) (3,436)
Other current assets (1,111) 469
Accounts payable 5,313 1,836
Accrued expenses (2,168) 1,029
Net cash provided by operating activities 9,230 6,104
Cash Flows From Investing Activities:
Capital expenditures (11,503) (17,977)
Proceeds from sales of assets 1,331 340
Net change in other assets 328 (17,357)
Purchases of held-to-maturity investments -0- (400)
Maturities of held-to-maturity investments 400 5,410
Purchases of available-for-sale securities (46,986) (13,462)
Sales and maturities of available-for-sale securities 41,590 33,575
Net cash used for investing activities (14,840) (9,871)
Cash Flows From Financing Activities:
Net change in short-term borrowings 3,556 4,075
Net change in long-term debt (319) 504
Acquisition of treasury stock, net of sales (435) (10,475)
Dividends paid to share owners (6,380) (6,521)
Proceeds from exercise of stock options 689 797
Other - net 151 (29)
Net cash used for financing activities (2,738) (11,649)
Effect of Exchange Rate Change on
Cash and Cash Equivalents -0- (13)
Net Decrease in Cash and Cash Equivalents (8,348) (15,429)
Cash and Cash Equivalents-Beginning of Period 16,775 16,757
Cash and Cash Equivalents-End of Period $ 8,427 $ 1,328
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Income taxes $ 360 $ 125
Interest $ 98 $ 125
Total Cash, Cash Equivalents and
Short-Term Investments:
Cash and cash equivalents $ 8,427 $ 1,328
Short-term investments 119,749 131,014
Totals $128,176 $132,342
See Notes to Consolidated Financial Statements
</TABLE>
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KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Basis of Presentation
The accompanying consolidated financial statements of Kimball
International, Inc. ("the Company") are unaudited and have been prepared
in accordance with the instructions to Form 10-Q. As such, certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. All significant intercompany transactions and balances have
been eliminated. Management believes the financial statements include all
adjustments (consisting only of normal recurring adjustments) considered
necessary to present fairly the financial statements of the interim period.
It is suggested that these financial statements be read in conjunction with
the financial statements and the notes thereto included in the Company's
latest annual report on Form 10-K.
Note 2. Inventories
Inventory components of the Company are as follows:
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
(in thousands)
<S> <C> <C>
Finished Products $ 37,157 $33,262
Work-in-Process 16,080 14,471
Raw Materials 53,807 48,424
Total inventory $107,044 $96,157
For interim reporting, LIFO inventories are computed based on estimated year-end
quantities and interim changes in price levels. Changes in such estimates will be
reflected in the interim financial statements in the period in which they occur.
</TABLE>
Note 3. Segment Information
Effective for the year ended June 30, 1999, the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information. The adoption of SFAS 131
requires the presentation of segment information that is consistent with
information utilized by management for purposes of allocating resources and
assessing performance.
Management organizes the Company into segments based upon differences in
products and services offered in each segment. The Furniture and Cabinets
Segment manufactures furniture for the office, residential, lodging and
healthcare industries and store display fixtures, all sold under the
Company's family of brand names. Other products produced by the Furniture
and Cabinets Segment on an original equipment manufactured basis include
store fixtures, television cabinets and stands, audio speaker systems and
furniture components. The Electronic Contract Assemblies Segment is a
global provider of design engineering, manufacturing, packaging and
distribution of electronic assemblies, circuit boards, multi-chip modules
and semiconductor components on a contract basis to customers in the
transportation, industrial controls, telecommunications, computer and
medical industries. Intersegment sales are insignificant. Unallocated
corporate assets include cash and cash equivalents, short-term
investments and other assets not allocated to segments. The basis of
segmentation and accounting policies of the segments are consistent with
those as disclosed in the Company's Annual Report on Form 10-K for the
year ended June 30, 1999.
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Note 3. Segment Information (continued)
<TABLE>
<CAPTION>
Three Months Ended
September 30, September 30,
1999 1998
(in thousands)
<S> <C> <C>
Net Sales:
Furniture and Cabinets $193,686 $191,687
Electronic Contract Assemblies 84,700 72,948
Unallocated Corporate and Eliminations 16 11
Consolidated $278,402 $264,646
Net Income:
Furniture and Cabinets $ 5,293 $ 8,010
Electronic Contract Assemblies 3,440 2,444
Unallocated Corporate and Eliminations 2,826 2,109
Consolidated $11,559 $ 12,563
Total Assets:
Furniture and Cabinets $399,461 $366,630
Electronic Contract Assemblies 148,706 138,867
Unallocated Corporate and Eliminations 127,581 126,869
Consolidated $675,748 $632,366
</TABLE>
Note 4. Comprehensive Income
Effective July 1, 1998, the Company adopted Financial Accounting Standards
Board Statement No. 130 - Reporting Comprehensive Income. Comprehensive
income includes all changes in equity during a period except those
resulting from investments by, and distributions to, Share Owners.
Comprehensive income, shown net of tax if applicable, for the three month
period ending September 30, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1999 1998
(in thousands)
<S> <C> <C>
Net Income $11,559 $12,563
Net Change in Unrealized Gains/Losses
on Securities (243) (257)
Foreign Currency Translation Adjustment 187 (12)
Comprehensive Income $11,503 $12,294
</TABLE>
Note 5. New Accounting Standard
In June, 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities, which requires the recognition of all derivatives as
either assets or liabilities in the balance sheet and the measurement of
those instruments at fair value. The Company currently engages in limited
derivative activity and currently does not expect this new standard to
have a material effect on the Company's financial condition or results of
operations. This standard will be effective for the Company's fiscal year
2001.
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Item 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
OVERVIEW
Fiscal year 2000 first quarter sales of $278,402,000 exceeded the prior year by
5% and, even excluding prior year acquisitions, set a new record for first
quarter sales. First quarter net income of $11,559,000 declined 8% from the
first quarter of fiscal year 1999. Class B diluted earnings per share decreased
to $0.29 which is a 6% decrease from the prior year.
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE
MONTHS ENDED SEPTEMBER 30, 1998
Net sales for the first quarter of fiscal year 2000 surpassed first quarter 1999
levels on increases by both of the Company's segments -- the Furniture and
Cabinets Segment and the Electronic Contract Assemblies Segment. Net income for
the quarter declined in the Furniture and Cabinets Segment while net income for
the Electronic Contract Assemblies Segment surpassed the prior year.
FURNITURE AND CABINETS
Product line offerings included in the Furniture and Cabinets Segment are office
furniture, home furniture, lodging and healthcare furniture, store fixtures,
original equipment manufactured (OEM) furniture and cabinets and furniture
components. The Company's production flexibility allows it to utilize portions
of the available production capacity created by lower volumes within these
product lines to support and balance increased production schedules of other
product lines within this segment.
Fiscal year 2000 first quarter net sales increased 1% in the Furniture and
Cabinets Segment when compared to the prior year. Sales increased in the OEM
furniture and cabinets, home furniture and furniture component product lines
while sales of lodging and healthcare product lines declined.
First quarter net sales in the office furniture product line remained flat with
the prior year. An increase in sales of casegoods product was offset by
decreases in both systems and seating products. Excluding prior year
acquisitions, first quarter office furniture sales growth held constant with the
decline in shipments of 1.4% reported by the Business and Institutional
Furniture Manufacturer's Association (BIFMA) for its three-month period ending
August 1999.
Net sales in the first quarter of fiscal year 2000 declined in the lodging and
healthcare product lines partially due to a slowing in orders caused by the
seasonal nature of the lodging industry and the timing of several large
projects. Sales declined in both custom-made products and standard product
offerings. The Company anticipates sales volumes to pick up in the latter half
of the fiscal year, as evidenced by a 32% increase in the order backlog as of
September 30, 1999 when compared to the beginning of the fiscal year. The
preceding statement is a forward-looking statement under the Private Securities
Litigation Reform Act of 1995 and is subject to certain risks and uncertainties
including, but not limited to, customer order changes, raw material availability
delays or other unexpected production delays.
First quarter net sales of OEM furniture and cabinets exceeded the prior year
sales levels primarily due to increased sales of contract residential furniture
and metal component parts. Sales of television cabinets remained flat with the
prior year partially the result of volume declines and price reductions on
select products as the Company transitions some of its television cabinet
production to its new Juarez, Mexico facility.
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Net sales of furniture components increased in the first quarter of fiscal year
2000 primarily on increased sales of kitchen cabinet doors and dimension
products.
Net income in the Furniture and Cabinets Segment decreased in the first quarter
of fiscal year 2000 when compared to one year ago. Gross profit, as a percent
of sales, decreased as increased material and overhead costs, as a percent of
sales, were partially offset by lower labor costs, as a percent of sales.
Start-up costs and lower than expected sales to a key customer at the Company's
recently acquired facility in Juarez, Mexico contributed to the decline in gross
profit in the current year. The Company is addressing the cost issues and
expects the results of those efforts to be reflected in the second and third
quarters of the current fiscal year. Also contributing to the decline in gross
profit was the lower volumes and a mix toward lower margin custom-made projects
in the lodging and healthcare product lines. Selling, general and
administrative expenses decreased in both dollars and as a percent of sales as a
focus on cost reductions continues in fiscal year 2000. The above statement
concerning the Company's Juarez, Mexico facility is a forward-looking statement
under the Private Securities Litigation Reform Act of 1995 and is subject to
certain risks and uncertainties including, but not limited to, customer order
changes or additional unexpected manufacturing costs.
ELECTRONIC CONTRACT ASSEMBLIES
Net sales for the first quarter of fiscal year 2000 in the Electronic Contract
Assemblies Segment exceeded the prior year by 16%. Sales of electronic
transportation products, components for medical devices and component parts for
appliances increased while sales of computer related products declined when
compared to the prior year. Sales in the prior year first quarter were
unfavorably impacted by the General Motors labor strike.
First quarter net income increased over the prior year on the higher sales
volumes. Gross profit, as a percent of net sales, increased in the first
quarter compared to the prior year as decreased labor and overhead costs, as a
percent of sales, more than offset increased material costs, as a percent of
sales, caused by a shift in the product mix. Selling, general and
administrative costs increased in dollars but decreased as a percent of sales,
as sales grew at a faster pace than expenses.
Included in this segment are sales to one customer, TRW Inc., which accounted
for 16% and 13% of consolidated net sales in the first quarter of fiscal year
2000 and 1999, respectively. Sales to this customer represent approximately one
half of total sales in the Electronic Contract Assemblies Segment, which has
historically carried a higher operating income margin than the Company's other
business segment.
This segment's investment capital carries a higher degree of risk than the
Company's other segment due to rapid technological changes, the contract nature
of this industry and the importance of sales to one customer.
CONSOLIDATED OPERATIONS
Consolidated selling, general and administrative expenses decreased, as a
percent of sales, 0.9 percentage point comparing the first quarter of fiscal
year 2000 to fiscal year 1999. The Company began a focused effort on reducing
costs in the latter half of the prior fiscal year and continues to review
activities and processes to assess where costs could further be reduced while
continuing to provide quality products and services to the marketplace.
Other income decreased from the prior year on lower interest income caused by
lower average investment balances. Miscellaneous income increased for the
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period primarily due to gains on the sale of real estate property.
The effective income tax rate decreased 3.7 percentage points in the first
quarter compared to one year ago. An increase in the state tax rate was more
than offset by a decrease in the federal effective tax rate as the Company
utilized available capital loss carryforwards to offset capital gains and
realized the benefit of research and development tax credits.
Net income and Class B diluted earnings per share of $11,559,000 and $0.29,
respectively, for the first quarter of fiscal year 2000 decreased 8% and 6%,
respectively, from the prior year levels of $12,563,000 and $0.31.
LIQUIDITY AND CAPITAL RESOURCES
The Company's aggregate of cash, cash equivalents, and short-term investments
decreased from $132 million at June 30, 1999 to $128 million at September 30,
1999. Working capital at September 30, 1999 was $222 million with a current
ratio of 2.2, compared to working capital of $218 million and a current ratio of
2.3 at June 30, 1999.
Operating activities generated $9 million of cash flow in the first quarter of
fiscal year 2000 compared to $6 million in 1999. Net income and non-cash
charges to net income were partially offset by increases in receivables and
inventory. The Company reinvested $11 million into capital investments for the
future, including production equipment and office facilities. Financing cash
flow activities include $6 million in dividend payments. Net cash flow,
excluding the purchases and maturities of short-term investments was an outflow
of $3 million.
To meet short-term capital requirements the Company maintains a $100 million
revolving credit facility to be used for acquisitions and general corporate
purposes. The agreement allows for both issuance of letters of credit and cash
borrowings. At September 30, 1999, there were $3 million of short-term cash
borrowings outstanding under the revolving credit facility, leaving $97 million
of funds available.
The Company anticipates maintaining a strong liquidity position for the 2000
fiscal year and believes its available funds on hand, unused credit line
available under the revolving credit facility and cash generated from operations
will be sufficient for working capital needs and to fund investments in the
Company's future. This statement is a forward-looking statement under the
Private Securities Litigation Reform Act of 1995 and is subject to certain risks
and uncertainties including, but not limited to a downturn in the economy, loss
of key customers or suppliers, availability or increased costs of raw materials,
or a natural disaster or similar unforeseen event.
YEAR 2000 READINESS DISCLOSURE
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000, which could result in a major system
failure or miscalculations.
The Company completed an assessment of its computer systems and the embedded
systems contained in its machinery, equipment and other infrastructure, and
executed a plan to resolve the Year 2000 issue. The phases of the plan include
inventory assessment, remediation and testing. An Executive Committee oversees
completion of these activities. All phases of the Year 2000 plan have been
completed for the Company's mission critical systems and equipment. The Company
also continues to make progress on Year 2000 compliance of non-critical computer
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and embedded systems. The Company will continue its Year 2000 assessment and
testing efforts for new or modified systems throughout 1999 and will continue to
test its critical systems for continued Year 2000 compliance. A corporate
freeze on the introduction of certain business and information technology (IT)
initiatives will occur December 1, 1999 through January 15, 2000 to maintain a
stable environment through the turn of the century. While the Year 2000 issue
has been given the highest priority among the IT group, any deferrals of other
IT projects by the Company will not have a material effect on its financial
condition or results of operations.
The total gross cost of Year 2000 compliance is estimated to range from $8.5
million to $10.5 million, of which approximately 85% had been incurred as of
September 30, 1999. Existing information technology resources have been
redeployed, which are anticipated to account for approximately 50% of the total
costs, with the balance being incremental costs to the Company. Approximately
30% of the total gross costs relate to machinery and other fixed assets which
will be capitalized or in certain situations leased, with the remaining costs
being expensed as incurred.
The Company believes the key risk factors associated with Year 2000 are those it
cannot directly control, primarily the readiness of its key suppliers,
distributors, customers, public infrastructure suppliers and other vendors. The
Company continues to follow up with its mission critical suppliers on their
state of readiness, and where appropriate, is conducting in-depth evaluations
which could lead to replacement of the supplier. While the Company is working
diligently to ensure its mission critical third parties will be compliant, there
can be no assurance that the systems of any third party on which the Company's
systems and operations rely will be timely converted and which will not have a
material adverse effect on the Company.
The determination of the effect on the Company's results of operations for its
own noncompliance or for third party noncompliance is complex and hinges on
numerous unknowns. Therefore, while the Company does not have a reasonable
estimate of the impact this could have on its results of operations, it
recognizes this noncompliance could range from the malfunction of an embedded
chip in a piece of machinery temporarily shutting down a product line, to a
select public infrastructure of one of the Company's outlying locations or
international facilities being unable to provide service temporarily idling one
or more production facilities. In addition, worst case scenarios could include
a key customer being unable to process transactions halting production on one of
the Company's product lines, to a single source supplier, as well as back-up
suppliers, being unable to provide necessary materials also suspending
production on a product line(s). Some of these individually, and in the
aggregate, could have a material effect on the Company's results of operations.
Contingency plans outlining recovery strategies for possible failures are being
finalized. Contingency plans include such items as sourcing alternatives for
single source suppliers, developing business resumption plans for all of the
Company's business units, and evaluating temporary alternate manual processes.
This Year 2000 disclosure contains forward-looking statements under the Private
Securities Litigation Reform Act of 1995 and is subject to risks and
uncertainties including, but not limited to such factors as the availability and
cost of human resources with expertise in this area, the ability to locate and
correct all relevant computer codes and time constraints.
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ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities, which requires the recognition of all derivatives as either assets
or liabilities in the balance sheet and the measurement of those instruments at
fair value. The Company currently engages in limited derivative activity and
currently does not expect this new standard to have a material effect on the
Company's financial condition or results of operations. This standard will be
effective for the Company's fiscal year 2001.
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This document contains certain statements which could be considered
forward-looking under the Private Securities Litigation Reform Act of 1995.
Cautionary statements regarding these statements have been included in this
document, when appropriate. Additional cautionary statements regarding these
types of Statements and other factors that could have an effect on the future
performance of the Company are contained in the Company's Form 10-K filing for
the period ending June 30, 1999.
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Item 3 - Quantitative and Qualitative Disclosures About Market Risk
As of September 30, 1999, the Company had an investment portfolio of fixed
income securities, excluding those classified as cash and cash equivalents, of
$120 million. The Company classifies its short-term investments in accordance
with Financial Accounting Standards Board Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities. Held-to-maturity securities
are stated at amortized cost and available-for-sale securities are stated at
market value with unrealized gains and losses being recorded net of tax related
effect, if any, as a component of Share Owners' Equity. These securities, like
all fixed income instruments, are subject to interest rate risk and will decline
in value if market interest rates increase. A hypothetical 100 basis point
increase in market interest rates from levels at September 30, 1999 would cause
the fair value of these short-term investments to decline by an immaterial
amount.
The Company operates internationally, and thus is subject to potentially adverse
movements in foreign currency rate changes. As of the latest fiscal year-end,
foreign subsidiaries' sales, operating income and assets each comprised less
than 3% of consolidated amounts. Historically, the effect of movements in the
exchange rates have been immaterial to the consolidated operating results of the
Company.
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PART II. OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated July 8, 1999, was filed pursuant to Item 5 (Other
Events) which contained the Company's news release dated July 8, 1999,
announcing the sales of two of the Company's business units.
Form 8-K dated July 19, 1999, was filed pursuant to Item 5 (Other
Events) which contained the Company's news release dated July 16, 1999,
announcing the Company's intent to construct a state-of-the-art veneer
mill.
Pursuant to the requirements 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.
Douglas A. Habig
DOUGLAS A. HABIG
(Chairman, Chief Executive Officer)
Roy W. Templin
ROY W. TEMPLIN
(Vice President, Corporate Controller)
Date: October 29, 1999
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<TABLE>
Kimball International, Inc
Exhibit Index
<S> <C>
Exhibit No. Description
11 Computation of Earnings Per Share
27 Financial Data Schedule
</TABLE>
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<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<CAPTION>
(Amounts in Thousands, Except Per Share Data)
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, three months ended 09/30/1999. . . $ 11,559
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,219) $ .155
Class B dividends declared . . . . . . . . . (4,171) $ .160
Undistributed basic earnings . . . . . . . . . $ 5,169 40,374 $ .128 $ .128
Basic Earnings Per Share . . . . . . . . . . . $ .283 $ .288
Basic Earnings Per Share (rounded) . . . . . . $ .28 $ .29
Dilutive effect of stock options . . . . . . . (39) 245
Undistributed diluted earnings . . . . . . . . $ 5,130 40,619 $ .126 $ .126
Diluted Earnings Per Share . . . . . . . . . . $ .281 $ .286
Diluted Earnings Per Share (rounded) . . . . . $ .28 $ .29
773,000 of the 2,027,000 average outstanding stock options were antidilutive, and were excluded from the
dilutive computation for this period.
</TABLE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED SEPTMEBER 30, 1998
(UNAUDITED)
<CAPTION>
(Amounts in Thousands, Except Per Share Data)
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, three months ended 09/30/1998. . . $12,563
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,229) $ .155
Class B dividends declared . . . . . . . . . (4,212) $ .160
Undistributed basic earnings . . . . . . . . . $ 6,122 40,930 $ .150 $ .150
Basic Earnings Per Share . . . . . . . . . . . $ .305 $ .310
Basic Earnings Per Share (rounded) . . . . . . $ .31 $ .31
Dilutive effect of stock options . . . . . . . (40) 249
Undistributed diluted earnings . . . . . . . . $ 6,082 41,179 $ .148 $ .148
Diluted Earnings Per Share . . . . . . . . . . $ .303 $ .308
Diluted Earnings Per Share (rounded) . . . . . $ .30 $ .31
840,000 of the 1,846,000 average outstanding stock options were antidilutive, and were excluded from the
dilutive computation for this period.
</TABLE>
Exhibit(11)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains three month summary financial information extracted from
Kimball International, Inc., and subsidiaries 2000 first quarter Form 10-Q and
is qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 8,427
<SECURITIES> 119,749
<RECEIVABLES> 141,346
<ALLOWANCES> 3,689
<INVENTORY> 107,044
<CURRENT-ASSETS> 400,629
<PP&E> 496,334
<DEPRECIATION> 272,902
<TOTAL-ASSETS> 675,748
<CURRENT-LIABILITIES> 178,147
<BONDS> 0
0
0
<COMMON> 2,151
<OTHER-SE> 467,828
<TOTAL-LIABILITY-AND-EQUITY> 675,748
<SALES> 278,402
<TOTAL-REVENUES> 278,402
<CGS> 201,627
<TOTAL-COSTS> 201,627
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 29
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 16,953
<INCOME-TAX> 5,394
<INCOME-CONTINUING> 11,559
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,559
<EPS-BASIC> .29
<EPS-DILUTED> .29
</TABLE>
