Indiana | 0-3279 | 35-0514506 | ||
(State or other jurisdiction of | (Commission File | (IRS Employer Identification No.) | ||
incorporation) | Number) |
1600 Royal Street, Jasper, Indiana | 47549-1001 | |
(Address of principal executive offices) | (Zip Code) |
Not Applicable |
(Former name or former address, if changed since last report) |
Exhibit | ||
Number | Description | |
99.1 | Earnings Release dated July 30, 2015 | |
99.2 | Fourth Quarter and Fiscal Year 2015 Investor Presentation dated July 30, 2015 |
KIMBALL INTERNATIONAL, INC. | |
By: | /s/ Michelle R. Schroeder |
MICHELLE R. SCHROEDER Vice President, Chief Financial Officer |
Exhibit | ||
Number | Description | |
99.1 | Earnings Release dated July 30, 2015 | |
99.2 | Fourth Quarter and Fiscal Year 2015 Investor Presentation dated July 30, 2015 |
Financial Highlights (Amounts in Thousands, Except Per Share Data) | Three Months Ended | |||||||||
June 30, 2015 | June 30, 2014 | Percent Change | ||||||||
Net Sales | $ | 159,061 | $ | 137,858 | 15 | % | ||||
Gross Profit | $ | 51,079 | $ | 42,056 | 21 | % | ||||
Gross Profit % | 32.1 | % | 30.5 | % | ||||||
Selling and Administrative Expenses | $ | 40,818 | $ | 42,175 | (3 | %) | ||||
Selling and Administrative Expenses % | 25.6 | % | 30.6 | % | ||||||
Restructuring Expense | $ | 1,567 | $ | 0 | ||||||
Operating Income (Loss) | $ | 8,694 | $ | (119 | ) | |||||
Operating Income (Loss) % | 5.5 | % | (0.1 | %) | ||||||
Adjusted Operating Income (Loss) * | $ | 10,384 | $ | (759 | ) | 1,468 | % | |||
Adjusted Operating Income (Loss) % * | 6.5 | % | (0.6 | %) | ||||||
Income from Continuing Operations | $ | 4,745 | $ | 359 | ||||||
Adjusted Income from Continuing Operations* | $ | 5,812 | $ | 230 | 2,427 | % | ||||
Diluted Earnings Per Share from Continuing Operations | $ | 0.12 | $ | 0.01 | ||||||
Adjusted Diluted Earnings Per Share from Continuing Operations * | $ | 0.15 | $ | 0.00 |
• | Net sales in the fourth quarter of fiscal year 2015 increased 15% from the prior year fourth quarter, primarily driven by increases in the hospitality and other commercial vertical markets. Net sales for the hospitality vertical increased 36% over the prior year, driven by strong sales of both custom and non-custom hospitality furniture. The other commercial vertical, which is the largest portion of our business focused on a broad variety of customers, increased 24% over the prior year fourth quarter, boosted by new product sales and the positive impact of marketing initiatives. |
• | Orders received during the fiscal year 2015 fourth quarter increased 15% over the prior year fourth quarter. Orders in all market verticals increased with the exception of the education vertical. The hospitality and other |
• | Fourth quarter gross profit as a percent of net sales increased 1.6 percentage points from the prior year fourth quarter. The margin improvement was driven by price increases, lower sales price discounting, cost reduction efforts, and the leverage gained on increased sales volumes. |
• | Selling and administrative expenses in the fourth quarter of fiscal year 2015 declined as a percent of sales by 5.0 percentage points on leverage from higher sales volumes, and decreased 3% in absolute dollars compared to the prior year. The lower selling and administrative expense was driven by declines in spin-off expenses, bad debt expenses, and the elimination of compensation and incentive pay related to executives who retired in conjunction with the spin-off. The year-over-year comparison was also impacted by a large gain on the sale of an idled manufacturing facility which occurred in the prior year fourth quarter. |
• | Pre-tax restructuring costs in the fourth quarter of fiscal year 2015 totaled $1.6 million and were related to the Company's previously announced restructuring plan to consolidate its metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana. The restructuring plan remains on track for completion by September 30, 2016. |
• | The Company's 45.9% effective tax rate for the fourth quarter of fiscal year 2015 was higher than the prior year fourth quarter effective tax rate of 21.6%. The prior year fourth quarter effective tax rate was favorably impacted by a decrease in a foreign deferred tax asset valuation allowance coupled with relatively low pre-tax income. |
• | Operating cash flow for the fourth quarter of fiscal year 2015 was a positive cash flow of $1.8 million compared to a positive cash flow of $5.0 million in the fourth quarter of the prior year. The prior year figures include Kimball Electronics' operating cash flows, as cash management was centralized prior to the spin-off. |
• | The Company's cash and cash equivalents declined to $34.7 million at June 30, 2015, compared to June 30, 2014 cash and cash equivalents of $136.6 million (inclusive of Kimball Electronics). The decline was primarily due to the transfer of $63.0 million of cash to the Kimball Electronics subsidiary as of the October 31, 2014 spin-off date, at which time Kimball Electronics began operation as an independent company. Additionally, the Company expended $33.1 million for capital investments during fiscal year 2015, with the largest items being building renovation costs related to the spin-off and manufacturing equipment purchases related to the transition of metal fabrication production from the Post Falls facility to production facilities in Indiana. |
• | During fiscal year 2015, the Company acquired 1.0 million shares of its common stock at an aggregate purchase price of $11.3 million. Additionally the Company has paid $7.7 million of dividends to shareholders during fiscal year 2015, for a total year-to-date capital return to shareholders of $19.0 million. The Company repurchased its common stock pursuant to a previously announced stock repurchase program which allows for the repurchase of up to 2.0 million shares. |
Conference Call / Webcast | ||
Date: | July 31, 2015 | |
Time: | 11:00 AM Eastern Time | |
Dial-In #: | 877-415-3185 (International Calls - 857-244-7328) | |
Pass Code: | Kimball |
Condensed Consolidated Statements of Income | |||||||||||||
(Unaudited) | Three Months Ended | ||||||||||||
(Amounts in Thousands, except per share data) | June 30, 2015 | June 30, 2014 | |||||||||||
Net Sales | $ | 159,061 | 100.0 | % | $ | 137,858 | 100.0 | % | |||||
Cost of Sales | 107,982 | 67.9 | % | 95,802 | 69.5 | % | |||||||
Gross Profit | 51,079 | 32.1 | % | 42,056 | 30.5 | % | |||||||
Selling and Administrative Expenses | 40,818 | 25.6 | % | 42,175 | 30.6 | % | |||||||
Restructuring Expense | 1,567 | 1.0 | % | 0 | 0.0 | % | |||||||
Operating Income (Loss) | 8,694 | 5.5 | % | (119 | ) | (0.1 | %) | ||||||
Other Income, net | 84 | 0.0 | % | 577 | 0.4 | % | |||||||
Income from Continuing Operations Before Taxes on Income | 8,778 | 5.5 | % | 458 | 0.3 | % | |||||||
Provision for Income Taxes | 4,033 | 2.5 | % | 99 | 0.0 | % | |||||||
Income from Continuing Operations | 4,745 | 3.0 | % | 359 | 0.3 | % | |||||||
Income from Discontinued Operations, Net of Tax | 0 | 0.0 | % | 7,489 | 5.4 | % | |||||||
Net Income | $ | 4,745 | 3.0 | % | $ | 7,848 | 5.7 | % | |||||
Earnings Per Share of Common Stock: | |||||||||||||
Basic from Continuing Operations | $ | 0.12 | $ | 0.01 | |||||||||
Diluted from Continuing Operations | $ | 0.12 | $ | 0.01 | |||||||||
Basic | $ | 0.12 | $ | 0.21 | |||||||||
Diluted | $ | 0.12 | $ | 0.20 | |||||||||
Average Number of Total Shares Outstanding | |||||||||||||
Basic | 38,258 | 38,438 | |||||||||||
Diluted | 38,565 | 39,045 |
(Unaudited) | Fiscal Year Ended | ||||||||||||
(Amounts in Thousands, except per share data) | June 30, 2015 | June 30, 2014 | |||||||||||
Net Sales | $ | 600,868 | 100.0 | % | $ | 543,817 | 100.0 | % | |||||
Cost of Sales | 412,003 | 68.6 | % | 377,092 | 69.3 | % | |||||||
Gross Profit | 188,865 | 31.4 | % | 166,725 | 30.7 | % | |||||||
Selling and Administrative Expenses | 166,253 | 27.6 | % | 164,781 | 30.3 | % | |||||||
Restructuring Expense | 5,290 | 0.9 | % | 0 | 0.0 | % | |||||||
Operating Income | 17,322 | 2.9 | % | 1,944 | 0.4 | % | |||||||
Other Income, net | 357 | 0.0 | % | 2,268 | 0.4 | % | |||||||
Income from Continuing Operations Before Taxes on Income | 17,679 | 2.9 | % | 4,212 | 0.8 | % | |||||||
Provision for Income Taxes | 6,536 | 1.0 | % | 793 | 0.2 | % | |||||||
Income from Continuing Operations | 11,143 | 1.9 | % | 3,419 | 0.6 | % | |||||||
Income from Discontinued Operations, Net of Tax | 9,157 | 1.5 | % | 30,042 | 5.6 | % | |||||||
Net Income | $ | 20,300 | 3.4 | % | $ | 33,461 | 6.2 | % | |||||
Earnings Per Share of Common Stock: | |||||||||||||
Basic from Continuing Operations | $ | 0.29 | $ | 0.09 | |||||||||
Diluted from Continuing Operations | $ | 0.29 | $ | 0.09 | |||||||||
Basic | $ | 0.53 | $ | 0.88 | |||||||||
Diluted | $ | 0.52 | $ | 0.86 | |||||||||
Average Number of Total Shares Outstanding | |||||||||||||
Basic | 38,645 | 38,404 | |||||||||||
Diluted | 38,971 | 39,037 |
Condensed Consolidated Statements of Cash Flows | Fiscal Year Ended | ||||||
(Unaudited) | June 30, | ||||||
(Amounts in Thousands) | 2015 | 2014 | |||||
Net Cash Flow provided by Operating Activities | $ | 13,843 | $ | 69,871 | |||
Net Cash Flow used for Investing Activities | (30,657 | ) | (27,546 | ) | |||
Net Cash Flow used for Financing Activities | (83,895 | ) | (9,441 | ) | |||
Effect of Exchange Rate Change on Cash and Cash Equivalents | (1,254 | ) | 140 | ||||
Net (Decrease) Increase in Cash and Cash Equivalents | (101,963 | ) | 33,024 | ||||
Cash and Cash Equivalents at Beginning of Year | 136,624 | 103,600 | |||||
Cash and Cash Equivalents at End of Year | $ | 34,661 | $ | 136,624 |
(Unaudited) | |||||||
Condensed Consolidated Balance Sheets | June 30, 2015 | June 30, 2014 | |||||
(Amounts in Thousands) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 34,661 | $ | 136,624 | |||
Receivables, net | 55,710 | 175,695 | |||||
Inventories | 37,634 | 140,475 | |||||
Prepaid expenses and other current assets | 23,548 | 46,998 | |||||
Property and Equipment, net | 97,163 | 188,833 | |||||
Goodwill | 0 | 2,564 | |||||
Other Intangible Assets, net | 2,669 | 4,191 | |||||
Other Assets | 14,744 | 26,766 | |||||
Total Assets | $ | 266,129 | $ | 722,146 | |||
LIABILITIES AND SHARE OWNERS' EQUITY | |||||||
Current maturities of long-term debt | $ | 27 | $ | 25 | |||
Accounts payable | 41,170 | 160,306 | |||||
Customer deposits | 18,618 | 14,130 | |||||
Dividends payable | 1,921 | 1,883 | |||||
Accrued expenses | 45,425 | 77,256 | |||||
Long-term debt, less current maturities | 241 | 268 | |||||
Other | 17,222 | 26,745 | |||||
Share Owners' Equity | 141,505 | 441,533 | |||||
Total Liabilities and Share Owners' Equity | $ | 266,129 | $ | 722,146 |
Supplementary Information | |||||||||||||||
Components of Other Income, net | Three Months Ended | Fiscal Year Ended | |||||||||||||
(Unaudited) | June 30, | June 30, | |||||||||||||
(Amounts in Thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Interest Income | $ | 62 | $ | 35 | $ | 213 | $ | 179 | |||||||
Interest Expense | (6 | ) | (7 | ) | (24 | ) | (26 | ) | |||||||
Foreign Currency/Derivative Loss | (8 | ) | (3 | ) | (48 | ) | (59 | ) | |||||||
Gain on Supplemental Employee Retirement Plan Investment | 84 | 538 | 603 | 2,579 | |||||||||||
Other Non-Operating Income (Expense) | (48 | ) | 14 | (387 | ) | (405 | ) | ||||||||
Other Income, net | $ | 84 | $ | 577 | $ | 357 | $ | 2,268 |
Net Sales by End Market Vertical | |||||||||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
(Unaudited) | June 30, | June 30, | |||||||||||||||||||
(Amounts in Millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||
Education | $ | 10.0 | $ | 9.9 | 1 | % | $ | 38.5 | $ | 39.9 | (4 | %) | |||||||||
Finance | 14.3 | 14.0 | 2 | % | 56.3 | 62.2 | (9 | %) | |||||||||||||
Government | 22.9 | 25.4 | (10 | %) | 96.0 | 90.5 | 6 | % | |||||||||||||
Healthcare | 16.5 | 14.4 | 15 | % | 60.4 | 59.3 | 2 | % | |||||||||||||
Hospitality | 40.5 | 29.8 | 36 | % | 143.2 | 118.1 | 21 | % | |||||||||||||
Other Commercial | 54.9 | 44.4 | 24 | % | 206.5 | 173.8 | 19 | % | |||||||||||||
Total Net Sales | $ | 159.1 | $ | 137.9 | 15 | % | $ | 600.9 | $ | 543.8 | 11 | % |
Orders Received by End Market Vertical | |||||||||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||||||
(Unaudited) | June 30, | June 30, | |||||||||||||||||||
(Amounts in Millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||
Education | $ | 13.4 | $ | 14.8 | (9 | %) | $ | 39.9 | $ | 37.9 | 5 | % | |||||||||
Finance | 17.1 | 15.5 | 10 | % | 59.3 | 64.2 | (8 | %) | |||||||||||||
Government | 29.6 | 28.5 | 4 | % | 100.7 | 95.1 | 6 | % | |||||||||||||
Healthcare | 17.5 | 16.0 | 9 | % | 63.4 | 58.7 | 8 | % | |||||||||||||
Hospitality | 38.7 | 25.0 | 55 | % | 144.2 | 114.6 | 26 | % | |||||||||||||
Other Commercial | 56.0 | 50.1 | 12 | % | 216.7 | 183.3 | 18 | % | |||||||||||||
Total Orders Received | $ | 172.3 | $ | 149.9 | 15 | % | $ | 624.2 | $ | 553.8 | 13 | % |
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
(Unaudited) | |||||||||||||||
(Amounts in Thousands, except per share data) | |||||||||||||||
Operating Income (Loss) excluding Spin-off Expenses, Restructuring Charges, and Gain on Sale of Idle Facility | |||||||||||||||
Three Months Ended | |||||||||||||||
June 30, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Operating Income (Loss), as reported | $ | 8,694 | $ | (119 | ) | ||||||||||
Add: Pre-tax Spin-off Expenses | 123 | 1,109 | |||||||||||||
Add: Pre-tax Restructuring Charges | 1,567 | 0 | |||||||||||||
Less: Pre-tax Gain on Sale of Idle Facility | 0 | 1,749 | |||||||||||||
Adjusted Operating Income (Loss) | $ | 10,384 | $ | (759 | ) | ||||||||||
Income from Continuing Operations excluding Spin-off Expenses, Restructuring Charges, and Gain on Sale of Idle Facility | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Income from Continuing Operations, as reported | $ | 4,745 | $ | 359 | $ | 11,143 | $ | 3,419 | |||||||
Add: After-tax Spin-off Expenses | 107 | 940 | 3,193 | 1,353 | |||||||||||
Add: After-tax Restructuring Charges | 960 | 0 | 3,235 | 0 | |||||||||||
Less: After-tax Gain on Sale of Idle Facility | 0 | 1,069 | 0 | 1,069 | |||||||||||
Adjusted Income from Continuing Operations | $ | 5,812 | $ | 230 | $ | 17,571 | $ | 3,703 | |||||||
Diluted Earnings Per Share from Continuing Operations excluding Spin-off Expenses, Restructuring Charges, and Gain on Sale of Idle Facility | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Diluted Earnings Per Share from Continuing Operations, as reported | $ | 0.12 | $ | 0.01 | $ | 0.29 | $ | 0.09 | |||||||
Add: Impact of Spin-off Expenses | 0.00 | 0.02 | 0.08 | 0.04 | |||||||||||
Add: Impact of Restructuring Charges | 0.03 | 0.00 | 0.08 | 0.00 | |||||||||||
Less: Impact of Gain on Sale of Idle Facility | 0.00 | 0.03 | 0.00 | 0.03 | |||||||||||
Adjusted Diluted Earnings Per Share from Continuing Operations | $ | 0.15 | $ | 0.00 | $ | 0.45 | $ | 0.10 |
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