<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 March 31, 2000
__ 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 May
8, 2000 were:
Class A Common Stock - 14,279,155 shares
Class B Common Stock - 25,917,572 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
- March 31, 2000 (Unaudited) and June 30, 1999. . . . . . . . . 3
Consolidated Statements of Income (Unaudited)
- Three and Nine Months Ended March 31, 2000 and 1999 . . . . . 4
Consolidated Statements of Cash Flows (Unaudited)
- Nine Months Ended March 31, 2000 and 1999 . . . . . . . . . . 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 & 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)
March 31, June 30,
<S> 2000 1999
Assets <C> <C>
Current Assets:
Cash and cash equivalents $ 4,625 $ 16,775
Short-term investments 100,395 114,996
Receivables, less allowances
of $4,244 and $3,816, respectively 153,499 132,284
Inventories 112,245 96,157
Other 25,417 26,129
Total current assets 396,181 386,341
Property And Equipment - net of
accumulated depreciation of $284,314
and $265,141, respectively 235,690 221,498
Other Assets 58,768 53,547
Total assets $690,639 $661,386
Liabilities And Share Owners' Equity
Current Liabilities:
Loans payable $ 9,312 $ 3,518
Current maturities of long-term debt 798 1,185
Accounts payable 85,357 77,976
Dividends payable 6,386 6,380
Accrued expenses 79,684 79,505
Total current liabilities 181,537 168,564
Other Liabilities:
Long-term debt, less current maturities 2,389 1,730
Deferred income taxes and other 26,980 26,815
Total other liabilities 29,369 28,545
Share Owners' Equity:
Common stock 2,151 2,151
Additional paid-in capital 8,111 6,379
Retained earnings 515,121 498,962
Accumulated other comprehensive income 335 1,312
Less: Treasury stock, at cost (45,985) (44,527)
Total Share Owners' Equity 479,733 464,277
Total liabilities and Share Owners' equity $690,639 $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) (unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net Sales $309,495 $288,054 $882,172 $832,780
Cost of Sales 228,693 201,621 642,127 584,737
Gross Profit 80,802 86,433 240,045 248,043
Selling, General and
Administrative Expenses 63,755 64,241 192,390 190,938
Operating Income 17,047 22,192 47,655 57,105
Other Income (Expense):
Interest expense (128) (102) (365) (375)
Interest income 1,114 1,530 3,788 5,064
Other - net 510 744 2,956 4,896
Other income - net 1,496 2,172 6,379 9,585
Income Before Taxes on Income 18,543 24,364 54,034 66,690
Taxes on Income 6,992 9,175 18,697 24,003
Net Income $ 11,551 $ 15,189 $ 35,337 $ 42,687
Earnings Per Share of Common Stock:
Basic:
Class A $ .28 $ .37 $ .87 $1.04
Class B $ .29 $ .38 $ .88 $1.06
Diluted:
Class A $ .28 $ .37 $ .86 $1.03
Class B $ .29 $ .38 $ .88 $1.05
Dividends Per Share of Common Stock:
Class A $ .155 $ .155 $ .465 $ .465
Class B $ .160 $ .160 $ .480 $ .480
Average Total Number of Shares
Outstanding Class A and B
Common Stock:
Basic 40,416 40,536 40,389 40,721
Diluted 40,476 40,710 40,527 40,952
See Notes to Consolidated Financial Statements
</TABLE>
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KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
<CAPTION>
(unaudited)
Nine Months Ended
March 31,
2000 1999
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 35,337 $ 42,687
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 32,741 29,276
Gain on sales of assets (821) (424)
Deferred income tax and other deferred charges (122) 3,242
Change in current assets and liabilities:
Receivables (18,413) (23,017)
Inventories (11,987) (2,648)
Other current assets 390 (55)
Accounts payable 5,896 (1,961)
Accrued expenses (3,723) 6,546
Net cash provided by operating activities 39,298 53,646
Cash Flows From Investing Activities:
Capital expenditures (40,725) (43,482)
Proceeds from sales of assets 2,183 1,204
Increase in other assets (5,398) (21,612)
Purchases of held-to-maturity investments -0- (400)
Maturities of held-to-maturity investments 400 5,415
Purchases of available-for-sale securities (94,510) (23,799)
Sales and maturities of available-for-sale securities 107,969 48,080
Net cash used for investing activities (30,081) (34,594)
Cash Flows From Financing Activities:
Net change in short-term borrowings 3,210 (201)
Net change in long-term debt 272 638
Acquisition of treasury stock, net of sales (6,274) (16,921)
Dividends paid to share owners (19,172) (19,403)
Proceeds from exercise of stock options 712 940
Other - net (98) 82
Net cash used for financing activities (21,350) (34,865)
Effect of Exchange Rate Change on
Cash and Cash Equivalents (17) (5)
Net Decrease in Cash and Cash Equivalents (12,150) (15,818)
Cash and Cash Equivalents-Beginning of Period 16,775 16,757
Cash and Cash Equivalents-End of Period $ 4,625 $ 939
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Income taxes $ 22,491 $ 21,617
Interest $ 328 $ 386
Total Cash, Cash Equivalents and
Short-Term Investments:
Cash and cash equivalents $ 4,625 $ 939
Short-term investments 100,395 125,626
Totals $105,020 $126,565
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>
March 31, June 30,
2000 1999
(in thousands)
<S> <C> <C>
Finished Products $ 32,462 $33,262
Work-in-Process 17,237 14,471
Raw Materials 62,546 48,424
Total inventory $112,245 $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,
residential furniture 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 Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
(in thousands)
<S> <C> <C> <C> <C>
Net Sales:
Furniture and Cabinets $214,736 $200,835 $617,134 $588,199
Electronic Contract Assemblies 94,743 87,204 264,981 244,539
Unallocated Corporate and Eliminations 16 15 57 42
Consolidated $309,495 $288,054 $882,172 $832,780
Net Income:
Furniture and Cabinets $ 6,867 $ 9,221 $ 19,998 $ 24,772
Electronic Contract Assemblies 3,350 5,335 9,870 12,110
Unallocated Corporate and Eliminations 1,334 633 5,469 5,805
Consolidated $ 11,551 $ 15,189 $ 35,337 $ 42,687
Total Assets:
Furniture and Cabinets $423,657 $373,477
Electronic Contract Assemblies 155,838 141,043
Unallocated Corporate and Eliminations 111,144 121,801
Consolidated $690,639 $636,321
</TABLE>
In the nine month period ended March 31, 1999, Unallocated Corporate net income
includes, in thousands, a $1,337 gain ($.03 per share) on the sale of a stock
investment of which the Company held a minor interest.
Note 4. 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 and
nine month periods ending March 31, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
(in thousands)
<S> <C> <C> <C> <C>
Net Income $11,551 $15,189 $35,337 $42,687
Net Change in Unrealized Gains/Losses
on Securities (4) (250) (742) (1,088)
Foreign Currency Translation Adjustment (212) (87) (235) 74
Comprehensive Income $11,335 $14,852 $34,360 $41,673
</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 periodically engages in
limited forward purchases of foreign currency 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.
Note 6. Acquisition
In November 1999, the Company purchased Jackson of Danville, a privately
held manufacturer of custom and in-line fully upholstered seating
products and wood framed chairs. The acquisition was accounted for as a
purchase with operating results included in the Company's Consolidated
Statements of Income from the date of acquisition, and was financed with
available cash on hand and the Company's Class B Common Stock. The
acquisition price and operating results of this acquisition are not
material to the Company's fiscal year 2000 consolidated operating
results.
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Item 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
OVERVIEW
Net sales for the third quarter of fiscal year 2000 increased 7% over the prior
year to $309,495,000 setting a new quarterly record. Net income and Class B
diluted earnings per share were $11,551,000 and $0.29, respectively, for the
third quarter of fiscal 2000, both decreasing 24% from the prior year. Net sales
for the nine-month period ending March 31, 2000 of $882,172,000 surpassed the
prior year sales by 6%. Current year net income and Class B diluted earnings
per share for the nine-month period were $35,337,000 and $0.88, respectively, a
decrease of 17% and 16%, respectively, from the prior year. Fiscal year 1999
nine-month net income results include a $1,337,000 after tax gain ($0.03 per
diluted share) on the sale of a stock investment.
RESULTS OF OPERATIONS - THREE AND NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO
THREE AND NINE MONTHS ENDED MARCH 31, 1999
Net sales for the Company for the three and nine-month periods of fiscal year
2000 surpassed fiscal year 1999 levels on increases from both of the Company's
segments -- the Furniture and Cabinets Segment and the Electronic Contract
Assemblies Segment. Net income declined in both segments for the three and
nine-month periods when compared to fiscal year 1999.
FURNITURE AND CABINETS SEGMENT
Product line offerings in the Furniture and Cabinets Segment include 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, when necessary.
In November 1999, the Company purchased Jackson of Danville, a privately held
manufacturer of custom and in-line fully upholstered seating products and wood
framed chairs. The acquisition was accounted for as a purchase with operating
results included in the Company's consolidated results from the date of
acquisition, and was financed with available cash on hand and the Company's
Class B Common Stock. The acquisition price and operating results of this
acquisition are not material to the Company's fiscal year 2000 consolidated
operating results.
Fiscal year 2000 third quarter and nine-month net sales increased 7% and 5%,
respectively, in the Furniture and Cabinets Segment when compared to the prior
year. Sales increased in the office furniture, OEM furniture and cabinets, home
furniture and furniture component product lines while sales in the lodging and
healthcare product line declined for both periods.
Net sales for both the three and nine-month periods of fiscal year 2000
increased in the office furniture product line over the prior year driven by
increased sales of casegoods and systems product groups. The Company's office
furniture sales, for the two-month period ending February 2000, lagged the
industry's estimated growth in shipments. However, for the eight-month period
ending February 2000 the Company's office furniture sales, excluding
acquisitions, equaled the industry's estimated growth rate of 2% as reported by
the Business and Institutional Furniture Manufacturer's Association (BIFMA) for
the same eight-month period ending February 2000 compared to the period ending
February 1999.
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Net sales for both the three and nine-month periods in the lodging and
healthcare product line declined from the prior year. Sales of custom-made
products increased while sales of standard product offerings declined in the
third quarter. While sales declined compared to prior year, third quarter sales
increased over both the first and second quarters of the current year as
projected in the Company's second quarter Form 10Q filing. On a year-to-date
basis, sales of both custom-made products and standard product offerings
decreased. Gross margins of lodging and healthcare products have declined in
the third quarter and for the first nine-months of fiscal year 2000 as lower
margin custom-made projects account for a greater percentage of the product mix.
Net sales of OEM furniture and cabinets for both the third quarter and
nine-month period exceeded the prior year sales. Third quarter and nine-month
sales of television cabinets, residential contract furniture, and metal
component parts all increased over the prior year.
Net sales of furniture components increased in both the third quarter and
nine-month period of fiscal year 2000 when compared to the prior year primarily
on increased sales of lumber products.
Net income in the Furniture and Cabinets Segment decreased in the third quarter
of fiscal year 2000 when compared to one year ago. Gross profit in this
segment, as a percent of sales, decreased due to pricing competition and
increased material and overhead costs, as a percent of sales. Lower labor
costs, as a percent of sales, partially offset the increased material and
overhead costs. The Company's Juarez, Mexico facility continues to negatively
impact the gross profitability in this segment when compared to the prior year
third quarter and nine-month periods. However, both sales and gross profit have
increased in the third quarter, for the Juarez operation, when compared to the
first two quarters of fiscal year 2000. Significant improvements in labor
efficiencies and overhead costs, as a percent of sales, were the factors driving
the third quarter improvement for the Juarez operation. Higher commodity prices
and low yields, at the Juarez operation, prevented improvement in material
costs, as a percent of sales. The Company anticipates continued improvement in
sales growth and gross profitability at this facility. The preceding 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, unexpected manufacturing inefficiencies or material price changes.
Selling, general and administrative expenses decreased, as a percent of sales,
in the third quarter compared to the same period last year on lower incentive
compensation costs which are linked to company profitability. Net income for
the nine-month period also declined primarily due to the lower sales margins on
lodging and healthcare products, lower margins on furniture components, and
start-up costs at the recently acquired Juarez, Mexico facility mentioned above.
ELECTRONIC CONTRACT ASSEMBLIES SEGMENT
Net sales for the third quarter of fiscal year 2000 in the Electronic Contract
Assemblies Segment exceeded the prior year by 9%. Third quarter sales of
electronic transportation components, telecommunication components and medical
components increased while sales of computer related components and industrial
controls declined when compared to the prior year. Segment sales for the
nine-month period increased 8% compared to one year ago aided partially by the
unfavorable impact the General Motors labor strike had on the prior year
nine-month results.
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Net income for both the third quarter and nine-month periods decreased from the
prior year. Gross profit, as a percent of net sales, decreased for both the
quarter and nine-month comparisons. With a planned diversification of its
customer base into a variety of new products as well as production of the next
generation of anti-locking braking components, the Company's gross profit
margins in this segment are lower when compared to historic margins that were
achieved on more mature product lines. Start up costs associated with a new
manufacturing facility in Laem Chebang, Thailand and a new high flexibility
production facility in Jasper, Indiana also contributed to the lower net income.
Net income was also impacted during the period due to labor inefficiencies and
separation costs associated with the release of approximately 250 employees from
Kimball's Reynosa, Mexico manufacturing facility. Selling, general and
administrative costs for the third quarter decreased as a percent of sales when
compared to the prior year. Selling, general and administrative costs for the
nine-month period decreased in total dollars and as a percent of sales when
compared to the prior year primarily as a result of lower incentive compensation
which is linked to company profitability.
Included in this segment are sales to one customer, TRW Inc., which accounted
for 17% of consolidated net sales in the third quarter of both fiscal year 2000
and 1999, and 16% and 15% of consolidated net sales in the nine-month period
ending March 31, 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 in the third
quarter from the same period last year in both total dollars ($0.5 million) and
as a percent of sales (1.7 percentage points). For the nine-month period ending
March 31, 2000 consolidated selling, general, and administrative expenses
decreased as a percent of sales by 1.1 percentage points when compared to the
prior period. The decreases in consolidated selling, general, and
administrative expenses for both the three and nine-month periods are related to
continued cost management efforts along with lower incentive compensation costs
which are linked to company profitability.
Other income decreased from the prior year for the third quarter on lower
interest income caused by lower average investment balances. For the first
nine-months of the fiscal year other income is down from the prior year on lower
interest income. Miscellaneous income in the prior year includes a $2.1 million
gain ($1.3 million after-tax effect) relating to the sale of a stock investment.
The effective income tax rate remained unchanged in the third quarter compared
to one year ago as a decrease in the state tax rate offset an increase in the
federal tax rate. The fiscal year 2000 nine-month effective tax rate declined
1.4 percentage points from the prior year. An increase in the state tax rate
was more than offset by a decrease in the federal effective tax rate as the
Company realized the benefit of research and development tax credits in the
current year.
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Net income and Class B diluted earnings per share of $11,551,000 and $0.29,
respectively, for the third quarter of fiscal year 2000 both decreased 24% from
the prior year levels of $15,189,000 and $0.38. Fiscal 2000 year-to-date net
income and Class B diluted earnings per share of $35,337,000 and $0.88,
decreased 17% and 16%, respectively, from the prior year levels of
$42,687,000 and $1.05. Fiscal year 1999 nine-month net income results include a
$1,337,000 after tax gain ($0.03 per diluted share) on the sale of a stock
investment.
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 $105 million at March 31, 2000.
Working capital at March 31, 2000 was $215 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 $39 million of cash flow in the first nine months
of fiscal year 2000 compared to $54 million in 1999. The Company reinvested $46
million into capital investments for the future, including production equipment,
a new, state-of-the-art veneer mill and veneer face operation in Chandler,
Indiana, and office facilities. Financing cash flow activities include $25
million in dividend payments and stock repurchases including 401,900 shares of
Class B common stock.
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 March 31, 2000, $5.9 million of short-term cash borrowings were
outstanding under the revolving credit facility.
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 DISCLOSURE
The Company implemented a plan to alleviate any potential problems which may
have been caused by the Year 2000 which included inventory assessment,
remediation and testing. The Company has not experienced any major
interruptions or malfunctions in its operations related to the Year 2000 issue,
or the leap year date of February 29, 2000, and does not anticipate any. In
addition, the Company has currently not experienced any interruptions caused by
a lack of Year 2000 readiness by any of its key suppliers, distributors,
customers, public infrastructure suppliers and other vendors.
The total gross cost of Year 2000 compliance approximated $8.1 million which
favorably compares to estimated costs disclosed in the Company's Form 10-K
filing for its fiscal year ended June 30, 1999 of $9 million to $11 million.
Existing information technology resources were redeployed, which accounted for
approximately 50% of the total gross costs above. Approximately 30% of the
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<PAGE>
above total gross costs relate to machinery and other fixed assets which were
capitalized or in certain situations leased, with the remaining costs being
expensed as incurred.
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 unexpected
hidden problems relating to the Year 2000 that may not have surfaced to this
point.
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 periodically engages in limited forward purchases of
foreign currency 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.
------------------------------------------------------------------------
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 March 31, 2000, the Company had an investment portfolio of fixed income
securities, excluding those classified as cash and cash equivalents, of $100
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. 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 March 31, 2000
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.
- 13 -
<PAGE>
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)
(3b) Restated By-laws of the Company
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K dated March 20, 2000, was filed pursuant to Item 5
(Other Events) which contained the Company's news release dated
March 16, 2000, announcing that earnings for the third quarter of
fiscal 2000 would not meet analysts' estimates.
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: May 10, 2000
- 14 -
<PAGE>
<PAGE>
<TABLE>
Kimball International, Inc
Exhibit Index
<S> <C>
Exhibit No. Description
3b Restated By-laws of the Company
11 Computation of Earnings Per Share
27 Financial Data Schedule
</TABLE>
- 15 -
<PAGE> RESTATED
BY-LAWS
OF
KIMBALL INTERNATIONAL, INC.
(Reflecting all amendments through February 8, 2000)
ARTICLE I: LOCATION OF OFFICES
Section 1 - Principal Office: The principal office of the corporation shall
be at 1600 Royal Street, Jasper, Indiana.
Section 2 - Other Offices: The corporation may have and maintain such other
offices as the Board of Directors may deem expedient.
ARTICLE II: CORPORATE SEAL
Section 1 - The corporation shall have a corporate seal which shall be as
follows: A circular disc, on the outer margin of which shall appear the
corporate name and State of Incorporation, with the words "Corporate Seal"
through the center, so mounted that it may be used to impress these words in
raised letters upon paper.
ARTICLE III: FISCAL YEAR
Section 1 - The fiscal year of the corporation shall begin with the first
day of July and terminate on the thirtieth day of June of each year.
ARTICLE IV: STOCKHOLDERS' MEETINGS
Section 1 - Place of Meetings: All meetings of the stockholders shall be
held at the principal office of the corporation except such meetings as the
Board of Directors by resolution determine shall be held elsewhere, in which
case meetings may be held upon notice as hereinafter provided at such place or
places within or without the State of Indiana as said Board of Directors may
determine.
Section 2 - Annual Meetings: The annual meeting of the stockholders shall
be held on the third Tuesday of October in each year or on such other date as
may be fixed by the Board of Directors, provided such annual meeting shall be
held in any event within five (5) months after the close of each fiscal year of
the corporation. If the day fixed for the annual meeting shall be a legal
holiday, such meeting shall be held on the next succeeding business day. At
each annual meeting, the stockholders shall elect the directors and shall
conduct only such other business as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be
(i) specified in the notice of the meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (ii) otherwise properly brought
before the meeting by or at the direction of the Board of Directors or
(iii) otherwise properly brought before the meeting by a stockholder of the
corporation who (A) was a stockholder of record at the time of giving the notice
provided for in this Section, (B) is entitled to vote at the meeting and
<PAGE>
(C) complied with the notice procedures set forth in this Section. For business
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the corporation at the principal executive office of the corporation. To be
timely, a stockholder's notice shall be delivered not less than 90 days nor more
than 110 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, notice by the stockholder, to be timely, must be so
delivered not earlier than the 110th day prior to such annual meeting and not
later than the close of business on the later of the 90th day prior to such
annual meeting or the 10th day following the day on which public announcement
(as defined herein) of the date of such meeting is first made.
Such stockholder's notice shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; (ii) as to the stockholder giving the notice and the beneficial owner, if
any, on whose behalf the proposal is made (A) the name and address of such
stockholder, as they appear on the corporation's books, and the name and address
of such beneficial owner, (B) the class and number of shares of the corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner as of the date such notice is given, and (C) a representation
that such stockholder intends to appear in person or by proxy at the meeting to
propose such business; (iii) in the event that such business includes a proposal
to amend either the Articles of Incorporation or the By-laws of the corporation,
the language of the proposed amendment; and (iv) if the stockholder intends to
solicit proxies in support of such stockholder's proposal, a representation to
that effect. The foregoing notice requirements shall be deemed satisfied by a
stockholder if the stockholder has notified the corporation of his or her
intention to present a proposal at an annual meeting and such stockholder's
proposal has been included in a proxy statement that has been prepared by
management of the corporation to solicit proxies for such annual meeting;
provided, however, that if such stockholder does not appear or send a qualified
representative to present such proposal at such annual meeting, the corporation
need not present such proposal for a vote at such meeting, notwithstanding that
proxies in respect of such vote may have been received by the corporation.
Notwithstanding anything in these By-laws to the contrary, no business shall be
conducted at any annual meeting except in accordance with this paragraph, and
the Chairman of the Board or other person presiding at an annual meeting of
stockholders may refuse to permit any business to be brought before an annual
meeting without compliance with the foregoing procedures or if the stockholder
solicits proxies in support of such stockholder's proposal without such
stockholder having made the representation required by clause (iv) of the second
preceding sentence.
For the purposes of this paragraph "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to Sections 13,
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In addition to the provisions of this paragraph, a stockholder shall
also comply with all applicable requirements of the Exchange Act and the rules
<PAGE>
and regulations thereunder with respect to the matters set forth herein.
Nothing in these By-laws shall be deemed to affect any rights of the
stockholders to request inclusion of proposals in the corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
Section 3 - Special Meetings: Special meetings of the stockholders may be
called only by the Board of Directors.
Section 4 - Notices: A written or printed notice stating the place, day and
hour of either annual or special meetings and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be delivered or
mailed by the Secretary or by the officers or persons calling the meeting to
each holder of the capital stock of the corporation at the time entitled to vote
at such address as appears upon the records of the corporation at least ten, but
not more than sixty, days before the date of the meeting. Notice of any
stockholders' meeting may be waived in writing by any stockholder if the waiver
sets forth in reasonable detail the purpose or purposes for which the meeting is
called and the time and place thereof. Except as required by the Indiana
Business Corporation Law, no notice of the holding of an adjourned meeting shall
be necessary. Each stockholder who has in the manner above provided waived
notice of a stockholders' meeting or who is present in person or represented
thereat by a proxy complying with the requirements set forth in Article IV,
Section 8, shall be conclusively presumed to have been given due notice of such
meeting, except as required by the Indiana Business Corporation Law.
Section 5 - Quorum: At any meeting of stockholders, a majority of the
shares of the capital stock outstanding and entitled by the Articles of
Incorporation to vote, represented in person or by proxy, shall constitute a
quorum for the transaction of business, but less than a majority may convene and
adjourn.
Section 6 - Voting: Stockholders entitled to vote by the Articles of
Incorporation shall be entitled to vote at all meetings in person or by proxy.
At all meetings, each share of stock entitled to vote by the Articles of
Incorporation shall be entitled to one vote on all questions, and a majority of
the votes of such stock cast at any such meeting shall be sufficient for the
adoption or rejection of any question presented (other than the election of the
Board of Directors) unless otherwise provided by law or by the Articles of
Incorporation of the corporation. The Board of Directors shall be elected by a
plurality of the votes properly cast.
For the purpose of determining stockholders entitled to vote at any meeting
of the stockholders or any adjournment thereof, or stockholders entitled to
receive payment of any dividend, or in order to make a determination of
stockholders for any other purpose, only those stockholders who are stockholders
of record on the record date fixed by the Board of Directors or as provided in
Article XI, Section 2 hereof, shall be entitled to vote.
Shares standing in the name of a corporation may be voted by such officers,
agent or proxy as the Board of Directors of such corporation may appoint.
Shares held by fiduciaries may be voted by the fiduciaries in such manner as the
instrument or order appointing such fiduciaries may direct. In the absence of
any such direction or the inability of the fiduciaries to act in accordance
therewith, shares held jointly by three (3) or more fiduciaries shall be voted
in accordance with the will of the majority and, where the fiduciaries or a
<PAGE>
majority of them cannot agree or where they are equally divided upon the
questions of voting such shares, any Court of general equity jurisdiction may,
upon petition filed by any of such fiduciaries or by any party in interest,
direct the voting of such shares as it may deem for the best interest of the
beneficiaries, and such shares shall be voted in accordance with such direction.
Shares that are pledged may, unless otherwise provided in the agreement of
pledge, be voted by the stockholder pledging the same until the shares have been
transferred to the pledgee on the books of the corporation, and, thereafter,
they may be voted by the pledgee.
Section 7 - Voting Lists: The officer or agent having charge of the stock
transfer book shall make, at least five (5) business days before each meeting of
stockholders, a complete list of the stockholders arranged in alphabetical order
with the address and number of shares held by each, which list shall be on file
at the principal office of the corporation and subject to inspection by any
stockholder. Such list shall be produced and kept open at the time and place of
meeting and subject to the inspection of any stockholder during the holding of
such meeting. The original stock register or transfer book, or a duplicate
thereof kept in the State of Indiana, shall be the only evidence as to who are
the stockholders entitled to examine such list or the stock ledger or transfer
book or to vote at any meeting of the stockholders.
Section 8 - Proxies: A shareholder may vote his or her shares either in
person or by proxy. A shareholder may appoint a proxy to vote or otherwise act
for the shareholder (including authorizing the proxy to receive, or to waive,
notice of any shareholders' meetings within the effective period of such proxy)
by signing an appointment form, either personally or by the shareholder's
attorney-in-fact. An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate votes and is
effective for eleven (11) months unless a shorter or longer period is expressly
provided in the appointment form. The proxy's authority may be limited to a
particular meeting or may be general and authorize the proxy to represent the
shareholder at any meeting of shareholders held within the time provided in the
appointment form. Subject to the Indiana Business Corporation Law and to any
express limitation on the proxy's authority appearing on the face of the
appointment form, the corporation is entitled to accept the proxy's vote or
other action as that of the shareholder making the appointment.
Section 9 - Written Consent: Any action required or permitted to be taken
at a shareholders' meeting may be taken without a meeting if the action is taken
by all the shareholders entitled to vote on the action. The action must be
evidenced by one (1) or more written consents describing the action taken,
signed by all the shareholders entitled to vote on the action (facsimile
signatures may be accepted), and delivered to the corporation for inclusion in
the minutes or filing with the corporate records. Action taken under this
Section 9 is effective when the last shareholder signs the consent, unless the
consent specifies a different prior or subsequent effective date, in which case
the action is effective on or as of the specified date. Such consent shall have
the same effect as a unanimous vote of all shareholders and may be described as
such in any document.
Section 10 - Participation by Conference Telephone: Any or all
shareholders may participate in any shareholders' meeting by, or through the use
of, any means of communication, such as conference telephone, by which all
<PAGE>
shareholders participating may simultaneously hear each other during the
meeting. Any shareholder participating in a meeting by such means is deemed to
be present in person for all purposes at the meeting.
ARTICLE V: DIRECTORS
Section 1 - Number: The Board of Directors of this corporation shall
consist of twelve (12) members, eleven (11) of whom shall be elected by holders
of Class A Common Stock, voting as a class, and one (1) of whom shall be elected
by holders of Class B Common Stock, voting as a class.
Section 2 - Election: Directors shall be elected annually at the annual
meeting of stockholders; provided that, in the event of failure to hold such
meeting or to hold such election thereat, they may be elected at any special
meeting of stockholders called for that purpose. At such election, the Chairman
of the Board or the Secretary may appoint inspectors or judges who shall report
to the meeting upon the validity of all proxies received and count the votes
cast and make a report thereof to the stockholders' meeting, and, in the absence
of any such appointments, the Secretary of the corporation shall report to the
meeting upon the validity of all proxies received, count the votes cast and make
a report thereof at the stockholders' meeting.
Section 3 - Term of Office: The directors shall hold office from the date
of their election until the next succeeding annual meeting or until their
successors are elected and shall qualify.
Section 4 - Vacancies: Any vacancy, or vacancies, in the Board of
Directors, arising from any cause, shall be filled by a majority vote of the
remaining members of the Board until the next annual meeting of the
stockholders.
Section 5 - Fees: Each director of the corporation shall receive an annual
retainer in an amount, plus a sum for each of the six (6) regular meetings of
the Board, all as fixed and determined from time to time by the Board of
Directors and in addition thereto, reimbursement for expenses incurred by each
member of the Board in attending each regular, special or adjourned meeting of
the Board which has been called, whether or not a quorum is present.
Section 6 - Nominations: Nominations of persons for election as directors
may be made by the Board of Directors or by any stockholder who is a stockholder
of record at the time of giving the notice of nomination provided for in this
Section 6 and who is entitled to vote in the election of directors. Any
stockholder of record entitled to vote in the election of directors at a meeting
may nominate a person or persons for election as directors only if timely
written notice of such stockholder's intent to make such nomination is given to
the Secretary of the corporation in accordance with the procedures for bringing
business before an annual meeting set forth in Section 2 of Article IV of these
By-laws. To be timely, a stockholder's notice shall be delivered (i) with
respect to an election to be held at an annual meeting of stockholders, not less
than 90 days nor more than 110 days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than 30 days or delayed by more
than 60 days from such anniversary date, notice by the stockholder, to be
timely, must be so delivered not earlier than the 110th day prior to such annual
meeting and not later than the close of business on the later of the 90th day
<PAGE>
prior to such annual meeting or the 10th day following the day on which public
announcement (as defined in Section 2 of Article IV of these By-laws) is first
made of the date of such meeting, and (ii) with respect to an election to be
held at a special meeting of stockholders, not earlier than the 110th day prior
to such special meeting and not later than the close of business on the later of
the 90th day prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees to be elected at such meeting.
Such stockholder's notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination, of the person or persons to be
nominated and of the beneficial owner, if any, on whose behalf the nomination is
made; (b) a representation that the stockholder is a holder of record of stock
of the corporation entitled to vote at such meeting in such election and intends
to appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings
between the stockholder, any such beneficial owner, each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each nominee been nominated,
or intended to be nominated, by the Board of Directors; (e) the consent of each
nominee to serve as a director if so elected; and (f) if the stockholder intends
to solicit proxies in support of such stockholder's nominee(s), a representation
to that effect. The chairman of any meeting of stockholders to elect directors
and the Board of Directors may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure or if the stockholder
solicits proxies in support of such stockholder's nominee(s) without such
stockholder having made the representation required by clause (f) of the
preceding sentence. In addition to the provisions of this paragraph, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein.
ARTICLE VI: DIRECTORS' MEETINGS
Section 1 - Regular Meetings: Regular meetings of the Board of Directors
shall be held in the months of February, April, June, August, October and
December of each year on such day of the month, and at such time of day and
place, within or without the State of Indiana, as the Board of Directors may
designate or as may be determined by the Chairman of the Board or the Vice
Chairman of the Board, provided that each director shall be given at least two
(2) days' advance notice of the date, time and place of any regular meeting set
by any of the foregoing officers.
Section 2 - Special Meetings: Special meetings of the Board of Directors
may be held at any time at the principal office of the corporation or elsewhere
within or without the State of Indiana, as shall be specified in the notice of
such meeting.
The Secretary shall call a special meeting whenever and wherever so
requested by the Chairman of the Board, the Vice Chairman of the Board, the
Chief Executive Officer or the President, or by three (3) directors.
<PAGE>
Section 3 - Organization Meeting: Immediately following the meeting of the
stockholders at which the directors are elected, the Board of Directors shall
meet and organize, and they may also transact such other business as may be
presented.
Section 4 - Notice: No notice shall be required for a regular meeting of
the Board of Directors, except as provided in Article VI, Section 1. No notice
shall be required for an "organization meeting", if held on the same day as the
stockholders' meeting at which the directors were elected. No notice of the
holding of an adjourned meeting shall be necessary. Each director shall be
given at least two (2) days' advance notice of the date, time and place of each
special meeting of the Board of Directors. The notice of a special meeting need
not describe the purpose of such meeting. Notice of any meeting may be waived
in writing.
Section 5 - Quorum: At all meetings of the Board of Directors, a majority
of the whole Board shall be necessary to constitute a quorum for the transaction
of any business except the filling of vacancies, but less than a majority may
convene and adjourn.
Section 6 - Voting: All questions coming before any meeting of the Board
of Directors for action shall be decided by a majority vote of the directors
present at said meeting unless otherwise provided by law, by the Articles of
Incorporation or by these By-laws.
Section 7 - Written Consents: Any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting if the
action is taken by all members of the Board of Directors. The action must be
evidenced by one (1) or more written consents describing the action taken,
signed by each director (facsimile signatures may be accepted), and included in
the minutes or filed with the corporate records reflecting the action taken.
Action taken under this Section 7 is effective when the last director signs the
consent, unless the consent specifies a different prior or subsequent effective
date, in which cases the action is effective on or as of the specified date. A
consent signed under this Section 7 shall have the same effect as a unanimous
vote of all members of the Board of Directors and may be described as such in
any document.
Section 8 - Participation by Conference Telephone: Any or all directors
may participate in a regular or special meeting by, or through the use of, any
means of communication, such as conference telephone, by which all directors
participating may simultaneously hear each other during the meeting. A director
participating in a meeting by such means shall be deemed to be present in person
at the meeting.
ARTICLE VII: EXECUTIVE COMMITTEE
Section 1 - Number, Qualifications, Appointment: The Board of Directors may
appoint, by a majority vote of all directors in office, not less than two (2)
directors who, together with the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer (if the Chief Executive Officer is also a
director) and the President (if the President is also a director), shall
constitute the Executive Committee of the corporation. The Chairman of the
Board shall serve as chairman of said committee.
<PAGE>
Section 2 - Powers and Duties: The Executive Committee shall advise with
and aid the officers of the corporation in all matters concerning its interests
and the management of its business, and, when the Board of Directors is not in
session, the Executive Committee shall have and may exercise all of the powers
of the Board of Directors with reference to the conduct of the business of the
corporation, except as otherwise provided by the Indiana Business Corporation
Law.
Section 3 - Term of Office: The members of the Executive Committee shall
hold office from the date of their appointment until the next succeeding
organization meeting of the directors, provided that the Board of Directors
shall at all times have the power to remove any member of the Executive
Committee.
Section 4 - Vacancies: Any vacancy, or vacancies, in the Executive
Committee, arising from any cause, shall be filled by a majority vote of the
remaining members of the Board until the next annual or special meeting of the
shareholders.
Section 5 - Fees: Members of the Executive Committee, as such, shall not
receive any stated salary for their services, but expenses, if any, of
attendance and a fee in such an amount as may be determined by the Board of
Directors from time to time shall be paid for attendance at each such Executive
Committee meeting.
Section 6 - Meetings: The Executive Committee shall meet at such times and
places as the Chairman of the Board, the Vice Chairman of the Board, the Chief
Executive Officer (if the Chief Executive Officer is a member of the Executive
Committee) or the President (if the President is a member of the Executive
Committee) may designate, provided that at least one day's advance notice of
such meeting shall be given to each member of the committee. A majority of the
Executive Committee shall constitute a quorum for the transaction of all
business. All questions coming before any meeting of the Executive Committee
for action shall be decided by a majority vote of the members present at said
meeting.
Section 7 - Written Consents: Any action required or permitted to be taken
at any meeting of the Executive Committee may be taken without a meeting if the
action is taken by all members of the Executive Committee. The action must be
evidenced by one (1) or more written consents describing the action taken,
signed by each member (facsimile signatures may be accepted), and included in
the minutes or filed with the corporate records reflecting the action taken.
Action taken under this Section 7 is effective when the last member signs the
consent, unless the consent specifies a different prior or subsequent effective
date, in which cases the action is effective on or as of the specified date. A
consent signed under this Section 7 shall have the same effect as a unanimous
vote of all members of the Executive Committee and may be described as such in
any document.
Section 8 - Participation by Conference Telephone: Any or all members of
the Executive Committee may participate in any meeting of the Executive
Committee by, or through the use of, any means of communication, such as
conference telephone, by which all members participating may simultaneously hear
each other during the meeting. A member participating in a meeting by such
means shall be deemed to be present in person at the meeting.
<PAGE>
ARTICLE VIII: AUDIT COMMITTEE
The Board of Directors shall appoint an Audit Committee consisting of three
or more members of the Board of Directors who are not employees of the Company
and are deemed to be independent under the regulations of the National
Association of Security Dealers, Inc. (NASD) and are 'financially literate' as
defined in the regulations of NASD, one of whom shall have employment experience
in financial or accounting or other comparable background as defined by NASD.
The committee shall have such duties, responsibilities and powers as defined in
the Audit Committee Charter approved by the Board of Directors.
ARTICLE IX: OFFICERS
Section 1 - Titles: The officers of the corporation shall consist of the
Chairman of the Board, the Vice Chairman of the Board, the Chief Executive
Officer, the President, an Assistant to the Chief Executive Officer, a Chief
Financial Officer, a Chief Administrative Officer, an Assistant to the
President, one or more Chief Operations Officer(s), a Secretary, a Treasurer,
and a Chief Accounting Officer. The Board of Directors may elect, at the
request of the Chairman of the Board, the Vice Chairman of the Board, the Chief
Executive Officer or the President, one or more Senior Executive Vice
Presidents, Executive Vice Presidents or Vice Presidents, and one or more
Assistants to the officers of the corporation.
Section 2 - Qualifications of the Chairman of the Board and Vice Chairman
of the Board: The Chairman of the Board and the Vice Chairman of the Board
shall be chosen from among the members of the Board of Directors.
Section 3 - Election of Officers: The officers elected by the Board of
Directors shall be elected annually at the organization meeting of the Board,
provided that any officers not so elected at such meeting may be elected
subsequently at any regular or special meeting of the Board.
Section 4 - Term of Office: All officers shall serve at the pleasure of the
Board and shall hold office from the date of their election until the next
succeeding annual organization meeting of the Board of Directors or until their
successors are elected and shall qualify.
Section 5 - Vacancies: Any vacancy or vacancies among the officers, arising
from any cause, shall be filled by the Board of Directors.
Section 6 - Combining Offices: Any two or more offices may be held by the
same person except that the duties of President and Secretary shall not be
performed by the same person.
ARTICLE X: POWER AND DUTIES OF DIRECTORS AND OFFICERS
Section 1 - Directors: The business and affairs of the corporation shall be
managed by a Board of Directors except where specifically excepted by law and
these By-laws.
<PAGE>
<PAGE>
Section 2 - Executive Committee: In the interim between meetings of the
Board of Directors, the Executive Committee shall have and exercise all the
powers and authority of the Board of Directors, except as otherwise provided by
the Indiana Business Corporation Law, provided that no action of the committee
shall conflict with action had or taken by the Board of Directors.
Section 3 - Officers: The Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer and the President, in addition to the duties
hereinafter specified, shall perform all duties incident to the office held by
them, as well as such other duties as may be assigned to them from time to time
by the Board of Directors, and, in the case of the Vice Chairman of the Board,
the Chief Executive Officer and the President, such duties as may be assigned to
them from time to time by the Chairman of the Board. Each of the other officers
of the corporation shall perform all duties incident to the office held by them,
as well as such other duties as may be assigned to them from time to time by the
Board of Directors, the Chief Executive Officer or the President.
Section 4 - Chairman of the Board: The Chairman of the Board shall preside
at all meetings of the Board of Directors and shall have general control and
management of the business of the corporation.
Section 5 - Vice Chairman of the Board: In addition to his or her other
duties, in the absence of the Chairman of the Board, the Vice Chairman of the
Board shall preside at meetings of the Board of Directors.
Section 6 - Chief Executive Officer: The Chief Executive Officer shall have
day-to-day control and management of the business and affairs of the corporation
subject to the control of the Board of Directors. He or she shall preside at
all meetings of shareholders and, in the absence of the Chairman of the Board
and the Vice Chairman of the Board, at meetings of the Board of Directors. The
Chief Executive Officer shall have specific charge and supervision of all
subordinate officers and all employees of the corporation and may delegate or
assign to such officers and employees such of his or her duties and
responsibilities as he or she may elect which are not specifically prescribed by
the By-laws or resolutions of the Board of Directors.
Section 7 - President: In the absence of the Chairman of the Board, the
Vice Chairman of the Board and the Chief Executive Officer, the President shall
have the general control and management of the business and affairs of the
corporation.
Section 8 - Assistant to the Chief Executive Officer: The Assistant to the
Chief Executive Officer shall perform such duties as may be assigned to him or
her from time to time by the Chief Executive Officer.
Section 9 - Chief Financial Officer: The Chief Financial Officer shall be
responsible for all financial matters of the corporation.
Section 10 - Chief Operations Officer(s): The Chief Operations Officer(s)
shall be responsible for all manufacturing and production of the corporation.
Section 11 - Chief Administrative Officer: The Chief Administrative Officer
shall be responsible for all administrative functions of the corporation
affecting the corporation as a whole.
<PAGE>
Section 12 - Assistant to the President: The Assistant to the President
shall perform such duties as may be assigned to him or her from time to time by
the President.
Section 13 - Vice Presidents: The Senior Executive Vice Presidents,
Executive Vice Presidents or other Vice Presidents shall perform such duties as
may be respectively assigned to them from time to time by the Board of
Directors, the Chief Executive Officer or the President. The Board of Directors
or Executive Committee may designate one or more of the Vice Presidents as
Senior Executive Vice Presidents or Executive Vice Presidents.
Section 14 - Secretary: Subject to the authority of the Board of Directors,
the Chief Executive Officer and the President, the Secretary shall have the
custody of the corporate seal and records of the corporation and charge of all
the records of the corporation. He or she shall act as Secretary at meetings of
the stockholders, directors and the Executive Committee and enter the minutes of
such meetings in a book provided for that purpose and shall attend to
publishing, giving and serving all official notices of the corporation. He or
she shall perform such other duties as may be assigned to him or her.
Section 15 - Assistant Secretaries: In the absence or disability of the
Secretary, the Assistant Secretaries shall act with all the powers of the
Secretary. They shall perform such other duties as may be assigned to them.
Section 16 - Treasurer: Subject to the authority of the Board of Directors,
the Chief Executive Officer and the President, the Treasurer shall have the
custody of all negotiable instruments and securities of the corporation and
shall have responsibility for all collections and disbursements of corporate
funds. He or she may endorse all commercial documents requiring endorsement for
or on behalf of the corporation. He or she shall perform such other duties as
may be assigned to him or her.
Section 17 - Assistant Treasurers: In the absence or disability of the
Treasurer, the Assistant Treasurers shall act with all the powers of the
Treasurer. They shall perform such other duties as may be assigned to them.
Section 18 - Chief Accounting Officer: Subject to the authority of the
Board of Directors, the Chief Executive Officer and the President, the Chief
Accounting Officer shall have general supervision of the accounting of the
corporation. He or she shall perform such other duties as may be assigned to
him or her.
<PAGE>
ARTICLE XI: STOCK
Section 1 - Stock Certificates: Each stockholder shall be entitled to a
certificate signed by the Chairman of the Board, the President or a Vice
President and by the Secretary or an Assistant Secretary of the corporation and
sealed with the corporate seal of the corporation, certifying to the number of
shares owned by him or her in the corporation. Where such certificate is also
signed by a transfer agent and a registrar, the signatures of any such Chairman
of the Board, President, Vice President, Secretary or Assistant Secretary and
the seal of the corporation may be facsimiles. In case any officer or officers
who shall have signed or whose facsimile signature shall have been used on any
such certificate or certificates shall cease to be such officer or officers of
the corporation before such certificate or certificates shall have been
delivered by the corporation, such certificate or certificates may,
nevertheless, be issued and delivered by the corporation with the same effect as
if such officer or officers had not ceased to be such at the date of its issue.
Section 2 - Transfer of Shares: Stock shall be transferable on the stock
transfer books of the corporation in person or by an attorney duly authorized
and upon surrender and cancellation of the old certificates therefor.
The Board of Directors of the corporation may close its stock transfer
books for a period of time up to the maximum period of time permitted by rules
and regulations of the Securities and Exchange Commission and the Indiana
Business Corporation Law preceding the date of any meeting of stockholders or
the date for the payment of any dividend, provided, however, that in lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date pursuant to any applicable rules and regulations of the Securities and
Exchange Commission (which, as to stockholders' meetings, shall be a date not
more than seventy (70) days prior to the meeting), as the record date for the
determination of the stockholders entitled to notice of and to vote at any such
meeting, or entitled to receive payment of any such dividend, and in such case
such stockholders and only such stockholders as shall be stockholders of record
on the date so fixed shall be entitled to such notice of and to vote at such
meeting, or to receive payment of such dividend, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
such record date fixed as aforesaid. If the stock transfer books are not
closed, and no record date is fixed by the Board of Directors, no shares shall
be voted at any meeting which shall have been transferred on the books of the
corporation within ten (10) days next preceding the date of such meeting.
Section 3 - Replacing Certificates: In case of the loss or destruction of
any certificate of stock and the submission of proper proof thereof by the
owner, a new certificate may be issued in lieu thereof under such regulations
and restrictions as the Board of Directors may prescribe.
<PAGE>
ARTICLE XII: AUTHORIZED SIGNATURES
Section 1 - Negotiable Instruments: The Chief Executive Officer, the
President or the Treasurer may authorize the use of facsimile signatures for
certain types of accounts maintained by the corporation or with respect to
checks or drafts which are less than a designated amount. The Chief Executive
Officer, the President or the Treasurer also may authorize employees of
particular business units of the corporation to sign or authorize checks,
drafts, other negotiable instruments and electronic funds transfers up to a
designated dollar amount if the corporation's Audit and Management Group (or any
successor to such Group) certifies that such business unit meets such standards
regarding internal control as may be specified by the Chief Executive Officer,
the President or the Treasurer. Except as so authorized, all checks, drafts,
other negotiable instruments and electronic funds transfers shall be made in the
name of the corporation and signed or authorized by one officer or employee of
the corporation and countersigned or counterauthorized by a different officer or
employee of the corporation. The Chief Executive Officer, the President and the
Treasurer each are authorized and empowered to designate in writing both officer
and non-officer employees of the corporation who shall be empowered to sign or
countersign checks, drafts, and negotiable instruments for and on behalf of the
corporation, and any such written designation shall have the same force and
binding legal effect on the corporation as a resolution of the Board of
Directors so empowering such officer or non-officer employees. Any such written
designation may be revoked at any time by the Chief Executive Officer, the
President or the Treasurer, and, in their absence or unavailability, any member
of the Executive Committee of the Board of Directors may revoke such written
designation.
Section 2 - Contracts and Documents: The Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer or the President may, in the
corporation's name, sign all deeds, leases, contracts or similar documents that
may be authorized by the Board of Directors unless otherwise directed by the
Board of Directors or otherwise provided herein or in the Articles of
Incorporation or as otherwise required by law. The Chairman of the Board, the
Chief Executive Officer or the President is authorized and empowered to
designate in writing both officer and non-officer employees of the corporation
who shall be empowered to sign contracts or other documents for and on behalf of
the corporation, and any such written designation shall have the same force and
binding legal effect on the corporation as a resolution of the Board of
Directors so empowering such officer or non-officer employees. Any such written
designation may be revoked at any time by the Chairman of the Board, the Chief
Executive Officer or the President, and, in their absence or unavailability, any
member of the Executive Committee of the Board of Directors may revoke such
written designation.
ARTICLE XIII: FIDELITY BONDS
Section 1 - The officers and employees of the corporation shall, in the
discretion of the Board of Directors, the Chairman of the Board or the
President, give bonds for the faithful discharge of their respective duties, in
such form and such amounts as may be directed by the Board of Directors, the
Chairman of the Board or the President.
<PAGE>
ARTICLE XIV: INDEMNIFICATION
Section 1 - Every person (and the heirs, executors and administrators of
such person) who is or was a director or officer of this corporation or of any
subsidiary of this corporation or who, at the request of the Board of Directors
of this corporation, served in any position or capacity or on any committee for
this corporation or for or in any other corporation, partnership, association,
trust, foundation, not-for-profit corporation, employee benefit plan or other
organization or entity, shall be indemnified by the corporation against any and
all liability and reasonable expense that may be incurred by him in connection
with or resulting from any claim, action, suit or proceeding in which either
(i) such person is wholly successful, thereby entitling such person to Mandatory
Indemnification, or (ii) such person is not wholly successful but it is
nevertheless determined, pursuant to the procedures set forth below in Section 2
of this Article XIV of these By-laws, that such person acted in good faith and
that such person reasonably believed that (a) in the case of conduct in his
official capacity, his conduct was in the corporation's best interests, or
(b) in all other cases, his conduct was at least not opposed to the best
interests of such corporation, entity or organization, and, in addition with
respect to any criminal action or proceeding, either had reasonable cause to
believe his conduct was lawful or had no reasonable cause to believe his conduct
was unlawful, thereby entitling such person to Permissive Indemnification. A
person shall be considered to have been serving an employee benefit plan at the
request of the corporation if his duties to the corporation also impose duties
on, or otherwise involve services by, him to the plan or to participants in or
beneficiaries of the plan. The terms "claim", "action", "suit" or "proceeding"
shall mean and include any threatened, pending or completed claim, action, suit
or proceeding (whether brought by or in the right of the corporation of any
other corporation or otherwise), and all appeals thereof, whether civil,
criminal, administrative or investigative, formal or informal, in which any
person described in the first sentence of this section may become involved as a
party or otherwise:
(a) by reason of his being or having been a director or officer of
the corporation, or of any subsidiary corporation of the
corporation, or of any other corporation where he served as such
at the request of the corporation, or
(b) by reason of his acting or having acted in any position or
capacity or on any committee for this corporation or any
subsidiary corporation of this corporation, or in any position
or capacity in or for a partnership, association, trust,
foundation, not-for-profit corporation, employee benefit plan or
other organization or entity where he served as such at the
request of the corporation, or
(c) by reason of any action taken or not taken by him in any such
capacity, whether or not he continues in such capacity at the
time such liability or expense shall have been incurred.
The terms "liability" and "expenses" shall include, but shall not be limited to,
counsel fees and disbursements and amounts of judgments, fines or penalties
against, and amounts paid in settlement by or on behalf of, a person, and excise
taxes assessed with respect to an employee benefit plan, but shall not in any
event include any liability or expenses on account of profits realized by him in
<PAGE>
the purchase or sale of securities of the corporation. The term "wholly
successful" shall mean (a) termination of any action, suit or proceeding against
the person in question without any finding of liability or guilt against him,
(b) the expiration of a reasonable period of time after the making of any claim
or threat of an action, suit or proceeding without the institution of the same,
without any payment or promise made to induce a settlement, or (c) approval by a
court, with knowledge of the indemnity herein provided, of a settlement of any
claim, action, suit or proceeding. The termination of any claim, action, suit
or proceeding by judgment, order, settlement (whether with or without court
approval), or conviction or upon a plea of guilty or of nolo contendere, or its
equivalent, shall not by itself create a presumption that a person did not meet
the standards of conduct for Permissive Indemnification. The actions of a
person with respect to an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974 shall be deemed to have been taken in
what the person reasonably believed to be the best interests of the corporation
if the person reasonably believed he was acting in conformity with the
requirements of such Act or he reasonably believed his actions to be in the
interests of the participants in or beneficiaries of the plan.
Section 2 - With regard to Permissive Indemnification, the determination
that a person acted in good faith and that such person reasonably believed that
(a) in the case of conduct in his official capacity, his conduct was in the
corporation's best interests, or (b) in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and, in addition,
with respect to any criminal action or proceeding, either had reasonable cause
to believe that his conduct was lawful or had no reasonable cause to believe
that his conduct was unlawful with regard to a specific claim, action, suit or
proceeding in or as to which such person is not wholly successful shall be made
by or for the Board of Directors of the corporation in the manner hereinafter
described. Any requests for such indemnification must first be proposed to the
Board of Directors of the corporation, and a motion for such indemnification may
be made by any director of the corporation, including a director who is seeking
such indemnification for himself. If a quorum of directors eligible to decide
the matter exists within the limitations and requirements of I.C. 23-1-37-12
(b)(1), such directors may either (i) decide the question themselves; (ii) refer
the matter to Special Legal Counsel for decision pursuant to
I.C. 23-1-37-12(b)(3)(A); or (iii) decline to take any action to either decide
the question of such indemnification or refer the matter for decision to Special
Legal Counsel.
If there does not exist a quorum of directors eligible to decide the matter
within the limitations and requirements of I.C. 23-1-37-12(b)(1), a majority of
the entire Board of Directors may either (i) refer the matter to a committee of
two or more directors who are eligible to vote thereon pursuant to
I.C. 23-1-37-12(b)(2) who may either decide the matter themselves or refer the
matter to Special Legal Counsel for decision pursuant to
I.C. 23-1-37-12(b)(3)(A); (ii) if such a committee cannot be appointed, refer
the matter to Special Legal Counsel pursuant to the procedures described in
I.C. 23-1-37-12(b)(3)(B); or (iii) decline to take any action to refer the
matter of such indemnification to a committee or to Special Legal Counsel. Any
decision on the question of entitlement to such Permissive Indemnification by a
majority of a quorum of the Board of Directors eligible to vote pursuant to
I.C. 23-1-37-12(b)(1); by a special committee of eligible directors pursuant to
I.C. 23-1-37-12(b)(2); or by Special Legal Counsel duly appointed pursuant to
the provisions of I.C. 23-1-37-12(b)(3), shall be in the sole and absolute
<PAGE>
discretion of such person or persons who are to make such determination. If it
is determined and decided that such Permissive Indemnification should be given
in a specific situation, the authorization for such indemnification and a
determination of the amount thereof shall be made in accordance with the
procedures and requirements of I.C. 23-1-37-12(c). For purposes of this
Section 2 Permissive Indemnification shall be deemed to have been denied (i) if
a majority of any group of persons who are to decide the question do not vote in
favor of the proposed indemnification; (ii) if the Board of Directors or any
committee thereof declines to take any permitted action to either decide the
question, refer it to a committee, or refer it to Special Legal Counsel;
(iii) if no decision is made by the person or persons who were to decide such
question within a period of six (6) months after such indemnification was first
proposed to the Board of Directors of the corporation; or (iv) to the extent
that the dollar amount of any indemnification to be made by the corporation is
less than the total dollar amount of indemnification proposed or requested to be
made. If proposed Permissive Indemnification is denied, the question may not be
reconsidered at any subsequent time by the corporation.
Section 3 - Expenses incurred with respect to any claim, action, suit or
proceeding may be advanced by the corporation (by action of the Board of
Directors, whether or not a disinterested quorum exists) prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount unless he is entitled to indemnification under
this Article of these By-laws.
Section 4 - The rights of mandatory and Permissive Indemnification provided
in this Article of the By-laws shall be in addition to any rights to which any
such person may otherwise be entitled by contract, as matter of law, or pursuant
to I.C. 23-1-37. Any person claiming the right to indemnification pursuant to
any provisions of these By-laws may at any time apply for indemnification to or
seek review of any decision denying indemnification or determining the amount
thereof by a court pursuant to I.C. 23-1-37-11. Persons who are not directors
or officers of the corporation but who are directors or officers of any
subsidiary may be indemnified to the extent authorized at any time or from time
to time by the Board of Directors.
Section 5 - Irrespective of the provisions of this Article of the By-laws,
the Board of Directors may, at any time or from time to time, approve
indemnification of directors and officers or other persons to the full extent
permitted by the provisions of the Indiana Business Corporation Law at the time
in effect, whether on account of past or future transactions.
Section 6 - To the extent not inconsistent with Indiana law as in effect
from time to time, the Board of Directors may, at any time or from time to time,
approve the purchase and maintenance of insurance on behalf of any person
described in the first sentence of Section 1 of this Article XIV against any
liability asserted against him in his capacity or arising out of his status as
such a person, whether or not the corporation would have the power to indemnify
him under the provisions of this Article of the By-laws. In the event that any
expense or liability otherwise subject to indemnification hereunder is covered
entirely or in part by any insurance, the indemnification provided for by this
Article of these By-laws shall only be available, if at all, as to any uninsured
liability or expense or that portion which is in excess of the amount of all
available insurance coverage. Under no circumstances shall any insurer or other
<PAGE>
person making payment under such an insurance policy or contract be subrogated
to the rights of any person entitled to indemnification under this Article of
these By-laws.
Section 7 - Any and all references contained in Article XIV of these
By-laws to any provision, section, subsection or portion of the Indiana Code
(I.C.) shall mean the Indiana Code as the same existed on December 9, 1986, and
no subsequent amendment, repeal, modification, change, or judicial invalidation
of any provision of the Indiana Code subsequent to December 9, 1986, shall
alter, modify, or otherwise affect these By-laws, and these By-laws shall be
construed and interpreted under the statutory law of the State of Indiana as it
existed as of the date of adoption of these By-laws.
Section 8 - The indemnification herein required or permitted by these
amended indemnification By-laws shall be a contractual obligation, undertaking
and commitment of the corporation as to any person who either continued to serve
or commenced to serve, following the date of the adoption of these amended
indemnification By-laws, as a director or officer of this corporation or any
subsidiary of this corporation, or in any other position or capacity, at the
request of this corporation or any subsidiary corporation, on any committee,
partnership, association, trust, foundation, not-for-profit corporation,
employee benefit plan, or other organization or entity, and no subsequent
amendment or repeal of these By-laws and no judicial decision invalidating the
legislation authorizing the indemnification provided for by these By-laws or
invalidating all or any part of these indemnification By-laws shall in any
manner deny, diminish, limit, restrict, or qualify the indemnification herein
provided for, for any such person who so continued to serve or commenced to
serve with regard to any claim concerning any matter which occurred, which
commenced to occur, or which continued to occur subsequent to the adoption of
these amended indemnification By-laws and prior to any such amendment, repeal,
or judicial invalidation.
ARTICLE XV: REGULATION OF SHAREHOLDERS
Section 1 - Election not to be governed by Chapter 42 (Control Share
Acquisitions) of 1986 Indiana Business Corporation Law. This Corporation,
having filed with the Indiana Secretary of State on August 18, 1986, its
resolution electing to be governed by the Indiana Business Corporation Law, I.C.
23-1-18 through I.C. 23-1-54, effective September 15, 1986, now elects, pursuant
to the provisions of I.C. 23-1-42-5, not to be governed by the provisions of
Chapter 42 of the 1986 Indiana Business of Corporation Law (I.C. 23-1-42), the
same being Section 26 of House Enrolled Act No. 1257 as enacted by the General
Assembly of the State of Indiana at the Second Regular Session of the 104th
General Assembly.
Section 2 - Election not to be governed by Chapter 43 Five-Year Freeze
(Business Combinations) provisions of the 1986 Indiana Business Corporation Law.
This Corporation, having filed with the Indiana Secretary of State on August 18,
1986, its resolution electing to be governed by the Indiana Business Corporation
Law, I.C. 23-1-18 through I.C. 23-1-54, effective September 15, 1986, now,
within 30 days of the effective date of such new law and pursuant to the
provisions of I.C. 23-1-43-22(B), hereby expressly elects not to be governed by
the provisions of Chapter 43 of the 1986 Indiana Business Corporation Law (I.C.
23-1-43), the same being Section 27 of House Enrolled Act No. 1257 as enacted by
<PAGE>
the General Assembly of the State of Indiana at the Second Regular Session of
the 104th General Assembly.
ARTICLE XVI: MISCELLANEOUS
Section 1 - Depositories: The funds of the corporation shall be deposited
in the name of the corporation with such depositories as may be designated by
the Board of Directors, the Chief Executive Officer, the President or the
Treasurer.
ARTICLE XVII: AMENDMENTS
Section 1 - These By-laws may be altered, amended or repealed by a majority
vote of the whole Board of Directors at any meeting, the notice of which
includes notice of the proposed alteration, amendment or repeal.
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED MARCH 31, 2000
(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 03/31/2000 . . . $ 11,551
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,215) $ .155
Class B dividends declared . . . . . . . . . (4,171) $ .160
Undistributed basic earnings . . . . . . . . . $ 5,165 40,416 $ .128 $ .128
Basic Earnings Per Share . . . . . . . . . . . $ .283 $ .288
Basic Earnings Per Share (rounded) . . . . . . $ .28 $ .29
Dilutive effect of stock options . . . . . . . (10) 60
Undistributed diluted earnings . . . . . . . . $ 5,155 40,476 $ .127 $ .127
Diluted Earnings Per Share . . . . . . . . . . $ .282 $ .287
Diluted Earnings Per Share (rounded) . . . . . $ .28 $ .29
1,459,000 of the 2,056,000 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 MARCH 31, 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 03/31/1999. . . $15,189
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,221) $ .155
Class B dividends declared . . . . . . . . . (4,161) $ .160
Undistributed basic earnings . . . . . . . . . $ 8,807 40,536 $ .217 $ .217
Basic Earnings Per Share . . . . . . . . . . . $ .372 $ .377
Basic Earnings Per Share (rounded) . . . . . . $ .37 $ .38
Dilutive effect of stock options . . . . . . . (28) 174
Undistributed diluted earnings . . . . . . . . $ 8,779 40,710 $ .216 $ .216
Diluted Earnings Per Share . . . . . . . . . . $ .371 $ .376
Diluted Earnings Per Share (rounded) . . . . . $ .37 $ .38
1,089,000 of the 1,976,000 average outstanding stock options were antidilutive, and were excluded from the
dilutive computation for this period.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
NINE MONTHS ENDED MARCH 31, 2000
(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, nine months ended 03/31/2000 . . . $35,337
Distributed earnings:
Class A dividends declared . . . . . . . . . (6,650) $ .465
Class B dividends declared . . . . . . . . . (12,528) $ .480
Undistributed basic earnings . . . . . . . . . $16,159 40,389 $ .400 $ .400
Basic Earnings Per Share . . . . . . . . . . . $ .865 $ .880
Basic Earnings Per Share (rounded) . . . . . . $ .87 $ .88
Dilutive effect of stock options . . . . . . . (66) 138
Undistributed diluted earnings . . . . . . . . $16,093 40,527 $ .397 $ .397
Diluted Earnings Per Share . . . . . . . . . . $ .862 $ .877
Diluted Earnings Per Share (rounded) . . . . . $ .86 $ .88
1,374,000 of the 2,042,000 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
NINE MONTHS ENDED MARCH 31, 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, nine months ended 03/31/1999 . . . $42,687
Distributed earnings:
Class A dividends declared . . . . . . . . . (6,670) $ .465
Class B dividends declared . . . . . . . . . (12,593) $ .480
Undistributed basic earnings . . . . . . . . . $23,424 40,721 $ .575 $ .575
Basic Earnings Per Share . . . . . . . . . . . $1.040 $1.055
Basic Earnings Per Share (rounded) . . . . . . $1.04 $1.06
Dilutive effect of stock options . . . . . . . (111) 231
Undistributed diluted earnings . . . . . . . . $23,313 40,952 $ .569 $ .569
Diluted Earnings Per Share . . . . . . . . . . $1.034 $1.049
Diluted Earnings Per Share (rounded) . . . . . $1.03 $1.05
964,000 of the 1,911,000 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 nine month summary financial information extracted from
Kimball International, Inc., and subsidiaries 2000 third quarter Form 10-Q and
is qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 4,625
<SECURITIES> 100,395
<RECEIVABLES> 157,743
<ALLOWANCES> 4,244
<INVENTORY> 112,245
<CURRENT-ASSETS> 396,181
<PP&E> 520,004
<DEPRECIATION> 284,314
<TOTAL-ASSETS> 690,639
<CURRENT-LIABILITIES> 181,537
<BONDS> 0
0
0
<COMMON> 2,151
<OTHER-SE> 477,582
<TOTAL-LIABILITY-AND-EQUITY> 690,639
<SALES> 882,172
<TOTAL-REVENUES> 882,172
<CGS> 642,127
<TOTAL-COSTS> 642,127
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 870
<INTEREST-EXPENSE> 365
<INCOME-PRETAX> 54,034
<INCOME-TAX> 18,697
<INCOME-CONTINUING> 35,337
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,337
<EPS-BASIC> .88
<EPS-DILUTED> .88
</TABLE>
