8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)    November 1, 2016

KIMBALL INTERNATIONAL, INC.

________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)

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)

Registrant's telephone number, including area code   (812) 482-1600

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

1

Item 2.02 Results of Operations and Financial Condition

On November 1, 2016, Kimball International, Inc. issued an earnings release for the quarter ended September 30, 2016.  The earnings release is attached as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure

Attached hereto as Exhibit 99.2 is an investor presentation that supplements the information to be discussed on the Kimball International, Inc. earnings call to be held on November 2, 2016 at 11:00 a.m. Eastern Time. The presentation attached as Exhibit 99.2 is incorporated into this Item 7.01 by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are furnished as part of this report:

Exhibit
Number	Description
99.1	Earnings Release dated November 1, 2016
99.2	First Quarter Fiscal Year 2017 Investor Presentation dated November 1, 2016

The information in this Current Report on Form 8-K set forth in Item 2.02, Item 7.01, and Exhibits 99.1 and 99.2, is being furnished in accordance with the provisions of General Instruction B.2 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, that is being furnished under Item 2.02 and Item 7.01 shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

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 hereunto duly authorized.

	KIMBALL INTERNATIONAL, INC.
By:	/s/ Michelle R. Schroeder
	MICHELLE R. SCHROEDER Vice President, Chief Financial Officer

Date: November 1, 2016

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Earnings Release dated November 1, 2016
99.2	First Quarter Fiscal Year 2017 Investor Presentation dated November 1, 2016

4

EX-99.1

Exhibit 99.1

KIMBALL INTERNATIONAL, INC. REPORTS FIRST QUARTER RESULTS —

Strong Sales Increase of 12% with GAAP Operating Income Increase of 78% (Non-GAAP Increases 42%); Company Meets Sales & Earnings Guidance

JASPER, IN (November 1, 2016) - Kimball International, Inc. (NASDAQ: KBAL) today announced first quarter fiscal year 2017 net sales of $175.0 million and net income of $11.0 million. Earnings per diluted share for the first quarter was $0.29, an increase of 93% over the prior year first quarter.  Adjusted earnings per diluted share, which excludes a $1.1 million after-tax gain related to a previously announced restructuring plan, was up 53%.

Bob Schneider, Chairman and CEO, stated, “The first quarter was a very nice one for Kimball, in fact exceeding all previous quarterly operating income results for the last 15 years. I am very pleased to report that we reached our sales and earnings guidance during this quarter and am especially encouraged that at this performance level, adjusted return on capital, excluding restructuring, of 25.5% is among the best in the industry. Achieving this level of earnings was in large part made possible by tremendous efforts to bring to market new products and marketing programs, along with the completion of the two restructuring plans since the spin-off of Electronics, and many other continuous improvement efforts. What Kimball accomplished the last two years is a real testament to the dedication of our 3,000 employees, all focused on serving the customer and continuous improvement."

Overview

Financial Highlights (Amounts in Thousands, Except Per Share Data)	Three Months Ended
	September 30, 2016			September 30, 2015			Percent Change
Net Sales	$	174,996		$	156,569		12	%
Gross Profit	$	58,687		$	51,082		15	%
Gross Profit %	33.5		%	32.6		%
Selling and Administrative Expenses	$	43,227		$	40,171		8	%
Selling and Administrative Expenses %	24.6		%	25.6		%
Restructuring (Gain) Expense	$	(1,832	)	$	1,186
Operating Income	$	17,292		$	9,725		78	%
Operating Income %	9.9		%	6.2		%
Adjusted Operating Income *	$	15,460		$	10,911		42	%
Adjusted Operating Income % *	8.8		%	7.0		%
Net Income	$	10,998		$	5,622		96	%
Adjusted Net Income *	$	9,879		$	6,347		56	%
Diluted Earnings Per Share	$	0.29		$	0.15		93	%
Adjusted Diluted Earnings Per Share *	$	0.26		$	0.17		53	%

* Items indicated represent Non-GAAP measurements. See “Reconciliation of Non-GAAP Financial Measures” below.

• Net sales in the first quarter of fiscal year 2017 increased 12% from the prior year first quarter. The increase was primarily driven by the healthcare vertical (up 40%), the education vertical (up 21%), and the hospitality vertical (up 15%). Healthcare and education vertical market sales benefited from strong sales growth through group purchasing organizations and a continued focus on these markets.  The sales growth in the hospitality vertical market was driven by increased non-custom business with major hotel chains.

• The Company continues to launch new and innovative products to fuel growth. Sales of new office furniture products increased 39% over the prior year first quarter. New product sales approximated 28% of total office furniture sales in the current year first quarter compared to 23% in the prior year first quarter. New products are defined as those introduced within the last three years.

• Orders received during the first quarter of fiscal year 2017 increased 7% over the prior year first quarter. Orders increased significantly in the healthcare vertical (up 39%) on growth in orders received through healthcare group purchasing organizations and expansion in certain territories. Orders in the hospitality vertical also grew substantially (up 24%) on very strong orders for custom products.

• First quarter gross profit as a percent of net sales improved 0.9 of a percentage point over the prior year first quarter, driven by pricing, leverage on higher sales volume, and benefits from the Company's restructuring plan involving the transfer of metal fabrication production from Idaho into facilities in Indiana.

• Selling and administrative expenses in the first quarter of fiscal year 2017 decreased as a percent of sales by 1.0 percentage point, and increased 7.6% in absolute dollars compared to the prior year first quarter. The higher selling and administrative expense was driven by increases in incentive compensation as a result of higher earnings levels, and an increase in expense due to the normal revaluation to fair value of our Supplemental Employee Retirement Plan (“SERP"). A higher stock market tends to increase the value of investments in the SERP, and related expense was recognized in selling and administrative expenses and offset by SERP investment gains in Other Income (Expense); and thus there was no effect on net income.

• Pre-tax restructuring recognized in the first quarter of fiscal year 2017 was a net gain of $1.8 million, which included a gain on the sale of the Post Falls, Idaho facility and land of $2.1 million and partially offsetting restructuring expense of $0.3 million. The sale generated $12.0 million of gross proceeds, or $11.2 million net of selling expenses. The manufacturing restructuring plan involving the exit of the Idaho facility and relocation to Indiana facilities is now complete. Pre-tax restructuring expenses in the prior year first quarter were $1.2 million.

• The Company's 37.8% effective tax rate for the first quarter of fiscal year 2017 was comparable to the prior year first quarter effective tax rate of 38.2%, as neither period had any unusual tax impacts.

• Operating cash flow for the first quarter of fiscal year 2017 was positive at $13.0 million compared to positive cash flow of $6.3 million in the first quarter of the prior year. The increase was primarily driven by improved profitability and the increased conversion of working capital balances to cash during the current quarter compared to the prior year quarter.

• The Company's balance in cash, cash equivalents, and short-term investments was $62.7 million at September 30, 2016, compared to June 30, 2016 cash and cash equivalents of $47.6 million. The increase during the first quarter of fiscal year 2017 was primarily due to the sale of the Post Falls building and land mentioned above.

Outlook

Mr. Schneider stated, “We are providing a mid-term outlook of sales increasing mid-single digits over the prior year.  With the manufacturing consolidation restructuring behind us, our mid-term outlook for operating income as a percent of sales, with the exception of our fiscal year third quarter, which tends to be seasonally lower than other quarters, is a range of 8% to 9%.  After finishing fiscal year 2016 with operating income excluding restructuring of 6.4%, our mid-term outlook of 8% to 9% would be a significant improvement over recent results.” 

At this earnings level, the Company expects its projected return on capital to exceed 20%, which is among the best in the office furniture industry.  The Company's outlook assumes that economic conditions do not significantly worsen, negatively affecting the industries which it serves.  It also does not include any potential impact to earnings related to the government's review of our subcontract reporting process.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's financial performance that excludes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States in the statement of income, statement of comprehensive income, balance sheet, or statement of cash flows of the Company. The non-GAAP financial measures used within this release include (1) operating income excluding restructuring gain/expense; (2) net income excluding restructuring gain/expense; (3) diluted earnings per share excluding restructuring gain/expense; and (4) return on capital excluding restructuring gain/expense. Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the Reconciliation of Non-GAAP Financial Measures table below. Management believes it is useful for investors to understand how its core operations performed without gains or expenses related to executing its restructuring plans. Excluding these amounts allows investors to meaningfully trend, analyze, and benchmark the performance of the Company's core operations. Many of the Company's internal performance measures that management uses

to make certain operating decisions exclude these gains/expenses to enable meaningful trending of core operating metrics.

The orders received metric is a key performance indicator used to evaluate general sales trends and develop future operating plans. Orders received represent firm orders placed by our customers during the current quarter which are expected to be recognized as revenue during current or future quarters. The orders received metric is not intended to be presented as an alternative measure of revenue recognized in accordance with GAAP.

Forward-Looking Statements

Certain statements contained within this release are considered forward-looking under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties including, but not limited to, the risk that any projections or guidance, including revenues, margins, earnings, or any other financial results are not realized, the outcome of a governmental review of our subcontractor reporting practices, adverse changes in the global economic conditions, significant volume reductions from key contract customers, significant reduction in customer order patterns, financial stability of key customers and suppliers, and availability or cost of raw materials. Additional cautionary statements regarding other risk 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 fiscal year ended June 30, 2016 and other filings with the Securities and Exchange Commission.

Conference Call / Webcast
Date:	November 2, 2016
Time:	11:00 AM Eastern Time
Dial-In #:	844-602-5643 (International Calls - 574-990-3014)
Pass Code:	Kimball

A webcast of the live conference call may be accessed by visiting Kimball's Investor Relations website at www.ir.kimball.com.

For those unable to participate in the live webcast, the call will be archived at www.ir.kimball.com within two hours of the conclusion of the live call.

About Kimball International, Inc.

Kimball International, Inc. creates design driven, innovative furnishings sold through our family of brands: Kimball Office, National Office Furniture, and Kimball Hospitality. Our diverse portfolio offers solutions for the workplace, learning, healing, and hospitality environments. Dedicated to our Guiding Principles, our values and integrity are evidenced by public recognition as a highly trusted company and an employer of choice. “We Build Success” by establishing long-term relationships with customers, employees, suppliers, share owners and the communities in which we operate. To learn more about Kimball International, Inc. (NASDAQ: KBAL), visit www.kimball.com.

Financial highlights for the first quarter ended September 30, 2016 are as follows:

Condensed Consolidated Statements of Income
(Unaudited)	Three Months Ended
(Amounts in Thousands, except per share data)	September 30, 2016					September 30, 2015
Net Sales	$	174,996		100.0	%	$	156,569		100.0	%
Cost of Sales	116,309			66.5	%	105,487			67.4	%
Gross Profit	58,687			33.5	%	51,082			32.6	%
Selling and Administrative Expenses	43,227			24.6	%	40,171			25.6	%
Restructuring (Gain) Expense	(1,832		)	(1.0	%)	1,186			0.8	%
Operating Income	17,292			9.9	%	9,725			6.2	%
Other Income (Expense), net	397			0.2	%	(624		)	(0.4	%)
Income Before Taxes on Income	17,689			10.1	%	9,101			5.8	%
Provision for Income Taxes	6,691			3.8	%	3,479			2.2	%
Net Income	$	10,998		6.3	%	$	5,622		3.6	%
Earnings Per Share of Common Stock:
Basic	$	0.29				$	0.15
Diluted	$	0.29				$	0.15
Average Number of Total Shares Outstanding:
Basic	37,609					37,515
Diluted	38,008					37,827

Condensed Consolidated Statements of Cash Flows	Three Months Ended
(Unaudited)	September 30,
(Amounts in Thousands)	2016			2015
Net Cash Flow provided by Operating Activities	$	13,012		$	6,324
Net Cash Flow used for Investing Activities	(7,761		)	(5,902		)
Net Cash Flow used for Financing Activities	(5,966		)	(12,694		)
Net Decrease in Cash and Cash Equivalents	(715		)	(12,272		)
Cash and Cash Equivalents at Beginning of Period	47,576			34,661
Cash and Cash Equivalents at End of Period	$	46,861		$	22,389

	(Unaudited)		(Unaudited)
Condensed Consolidated Balance Sheets	September 30, 2016		June 30, 2016
(Amounts in Thousands)
ASSETS
Cash and cash equivalents	$	46,861	$	47,576
Short-term investments	15,842		0
Receivables, net	52,716		51,710
Inventories	41,765		40,938
Prepaid expenses and other current assets	5,773		10,254
Assets held for sale	0		9,164
Property and Equipment, net	85,657		87,086
Intangible Assets, net	2,898		3,021
Deferred Tax Assets	14,261		12,790
Other Assets	12,306		11,031
Total Assets	$	278,079	$	273,570
LIABILITIES AND SHARE OWNERS' EQUITY
Current maturities of long-term debt	$	31	$	29
Accounts payable	44,020		41,826
Customer deposits	20,052		18,625
Dividends payable	2,316		2,103
Accrued expenses	40,352		44,292
Long-term debt, less current maturities	188		212
Other	16,304		16,615
Share Owners' Equity	154,816		149,868
Total Liabilities and Share Owners' Equity	$	278,079	$	273,570

Supplementary Information
Components of Other Income (Expense), net	Three Months Ended
(Unaudited)	September 30,
(Amounts in Thousands)	2016			2015
Interest Income	$	110		$	71
Interest Expense	(5		)	(6		)
Foreign Currency Loss	(7		)	(23		)
Gain (Loss) on Supplemental Employee Retirement Plan Investment	367			(575		)
Other Non-Operating Expense	(68		)	(91		)
Other Income (Expense), net	$	397		$	(624	)

Net Sales by End Market Vertical
	Three Months Ended
(Unaudited)	September 30,
(Amounts in Millions)	2016		2015		% Change
Commercial	$	50.5	$	49.9	1	%
Education	26.6		21.9		21	%
Finance	16.7		14.9		12	%
Government	19.7		19.9		(1	%)
Healthcare	22.6		16.2		40	%
Hospitality	38.9		33.8		15	%
Total Net Sales	$	175.0	$	156.6	12	%

Orders Received by End Market Vertical
	Three Months Ended
(Unaudited)	September 30,
(Amounts in Millions)	2016		2015		% Change
Commercial	$	52.2	$	58.7	(11	%)
Education	19.3		17.8		8	%
Finance	19.0		16.5		15	%
Government	19.9		21.4		(7	%)
Healthcare	26.1		18.8		39	%
Hospitality	40.7		32.7		24	%
Total Orders Received	$	177.2	$	165.9	7	%

During the first quarter of fiscal year 2017, we redefined our vertical market reporting to better reflect the end markets that we serve. The largest shifts among vertical markets were sales to certain government-affiliated customers such as state universities, which were previously classified in the government vertical market and are now classified in the education vertical market.  Prior period information is also being reported on a comparable basis to reflect the new vertical market definitions.

Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Amounts in Thousands, except per share data)
Operating Income excluding Restructuring Expense
	Three Months Ended
	September 30,
	2016			2015
Operating Income, as reported	$	17,292		$	9,725
Pre-tax Restructuring (Gain) Expense	(1,832		)	1,186
Adjusted Operating Income	$	15,460		$	10,911
Net Income excluding Restructuring Expense
	Three Months Ended
	September 30,
	2016			2015
Net Income, as reported	$	10,998		$	5,622
Pre-tax Restructuring (Gain) Expense	(1,832		)	1,186
Tax on Restructuring (Gain) Expense	713			(461		)
After-tax Restructuring (Gain) Expense	(1,119		)	725
Adjusted Net Income	$	9,879		$	6,347
Return on Capital excluding Restructuring Expense
	Three Months Ended
	September 30,
	2016			2015
Adjusted Operating Income — see non-GAAP reconciliation above	$	15,460		$	10,911
Median Effective Income Tax Rate for trailing four quarters	37.2		%	42.1		%
Median Income Tax Expense	5,751			4,594
Net Operating Profit After-Tax (NOPAT)	9,709			6,317
Average Capital *	152,572			139,371
Adjusted Return on Capital (annualized)	25.5		%	18.1		%
* Capital is defined as Total Equity plus Total Debt
Diluted Earnings Per Share excluding Restructuring Expense
	Three Months Ended
	September 30,
	2016			2015
Diluted Earnings Per Share, as reported	$	0.29		$	0.15
After-tax Restructuring (Gain) Expense	(0.03		)	0.02
Adjusted Diluted Earnings Per Share	$	0.26		$	0.17

EX-99.2

INVESTOR PRESENTATION First Quarter Fiscal Year 2017 Exhibit 99.2

SAFE HARBOR STATEMENT Certain statements contained within this release are considered forward-looking under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties including, but not limited to, the risk that any projections or guidance, including revenues, margins, earnings, or any other financial results are not realized, the outcome of a governmental review of our subcontractor reporting practices, adverse changes in the global economic conditions, significant volume reductions from key contract customers, significant reduction in customer order patterns, financial stability of key customers and suppliers, and availability or cost of raw materials. Additional cautionary statements regarding other risk 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 fiscal year ended June 30, 2016 and other filings with the Securities and Exchange Commission. 1

COMPANY SNAPSHOT Headquarters: Jasper, IN, USA Founded: 1950 Employees: ~3,000 Furniture focused since Oct 31, 2014 Spin-off FY’17 Revenue: $175M (3 months of FY’17) FY’17 Adj. Operating Profit (1): $15.5M / 8.8% FY’16 Revenue: $635M FY’16 Adj. Operating Profit (1): $40.8M / 6.4% 2 _____________________ (1) Unaudited. See Appendix for Non-GAAP reconciliation.

Design Driven and Award Winning Furniture Brands Evolving Office Environment Driving Demand and Continued Hospitality Growth Dividend Yield Approximates 2% Accelerating Revenue From New Product Introductions - Increasing Market Share WHY INVEST IN US Improving Financial Performance Capital Available for Growth 3 Strong Return on Capital Relative to Competitors

WHO WE ARE Kimball International, Inc. creates design driven, innovative furnishings sold through our family of brands: Kimball Office, National Office Furniture, and Kimball Hospitality. Our diverse portfolio offers solutions for the workplace, learning, healing, and hospitality environments. Dedicated to our Guiding Principles, our values and integrity are evidenced by public recognition as a highly trusted company and an employer of choice. “We Build Success” by establishing long- term relationships with customers, employees, suppliers, share owners and the communities in which we operate. We are committed to sales growth, profitability and return on capital that is among the best in each of our markets. We Build Success 4

WHERE WE PLAY Commercial Government Education Healthcare Finance Hospitality [CELLRAN GE] [CELLRAN GE] [CELLRAN GE] [CELLRAN GE] [CELLRAN GE] [CELLRAN GE] 5

Contract Magazine Top 10 Brand in Desks/Credenzas HOW WE ARE RECOGNIZED 6

 Increased mobility/technology requires flexible work space  Shifting to more open and collaborative office layouts to promote teamwork  Promotion of healthy work environments  Real Estate Optimization  Change is driving furniture demand New Work Areas MARKET CHANGES DRIVING OFFICE FURNITURE DEMAND 7

176 0 0 137 132 126 237 23 23 46 46 46 51 132 156 252 202 59 FURNITURE INDUSTRY INDICATORS 8

3.9% 7.2% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 0 2000 4000 6000 8000 10000 12000 14000 16000 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 F 2 0 1 7 F BIFMA ($millions) S ou rc e U S B ur ea u of E co no m ic A na ly si s (J un e 20 16 ) S ou rc e: U S B ur ea u of L ab or S ta tis tic s (S ep t. 20 16 ) S ou rc e: A IA ( A ug us t 2 01 6) Continued Growth MIXED U.S. FURNITURE LEADING INDICATORS Above 50 6 out of last 7 months. 9 Architectural Billing Index August at 49.7 S ou rc e: B IF M A (F eb . 2 01 6) 100 105 110 115 120 125 130 8 /1 /2 0 0 4 1 /1 /2 0 0 5 6 /1 /2 0 0 5 1 1 /1 /2 0 0 5 4 /1 /2 0 0 6 9 /1 /2 0 0 6 2 /1 /2 0 0 7 7 /1 /2 0 0 7 1 2 /1 /2 0 0 7 5 /1 /2 0 0 8 1 0 /1 /2 0 0 8 3 /1 /2 0 0 9 8 /1 /2 0 0 9 1 /1 /2 0 1 0 6 /1 /2 0 1 0 1 1 /1 /2 0 1 0 4 /1 /2 0 1 1 9 /1 /2 0 1 1 2 /1 /2 0 1 2 7 /1 /2 0 1 2 1 2 /1 /2 0 1 2 5 /1 /2 0 1 3 1 0 /1 /2 0 1 3 3 /1 /2 0 1 4 8 /1 /2 0 1 4 1 /1 /2 0 1 5 6 /1 /2 0 1 5 1 1 /1 /2 0 1 5 4 /1 /2 0 1 6 9 /1 /2 0 1 6 Service Sector Employment (millions workers) 0 200 400 600 800 1000 1200 1400 1600 1800 1 2 /1 /2 0 0 2 6 /1 /2 0 0 3 1 2 /1 /2 0 0 3 6 /1 /2 0 0 4 1 2 /1 /2 0 0 4 6 /1 /2 0 0 5 1 2 /1 /2 0 0 5 6 /1 /2 0 0 6 1 2 /1 /2 0 0 6 6 /1 /2 0 0 7 1 2 /1 /2 0 0 7 6 /1 /2 0 0 8 1 2 /1 /2 0 0 8 6 /1 /2 0 0 9 1 2 /1 /2 0 0 9 6 /1 /2 0 1 0 1 2 /1 /2 0 1 0 6 /1 /2 0 1 1 1 2 /1 /2 0 1 1 6 /1 /2 0 1 2 1 2 /1 /2 0 1 2 6 /1 /2 0 1 3 1 2 /1 /2 0 1 3 6 /1 /2 0 1 4 1 2 /1 /2 0 1 4 6 /1 /2 0 1 5 1 2 /1 /2 0 1 5 6 /1 /2 0 1 6 US Corporate Profit After Tax With IVA and CCA adjustment ($billion)

3.1% 2.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Luxury Upper Scale Upscale Upper Middle Scale Midscale Economy Independents US 2016 2017 Source: PWC Hospitality Directions May 2015 Revenue Per Available Room (RevPAR) Growth Rates Estimated (1) Occupancy stabilizing at peak levels GROWTH IN HOSPITALITY LEADING INDICATORS 10 2016 (1) 2017 (1) (1) Source PWC August 2016 Hospitality Directions

KIMBALL INTERNATIONAL FINANCIAL OVERVIEW Basis of financial information is Continuing Operations adjusted for certain non-operating and non-core transactions for comparability. Financial information included throughout is unaudited. 11

$525.3 $500.0 $543.8 $600.9 $635.1 [VALUE] -1.4% 1.6% 4.8% [VALUE] -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% $0 $100 $200 $300 $400 $500 $600 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Net Sales Adjusted Pro Forma Operating Income from Continuing Operations Improving Performance 12 ($ in millions) Annual Net Sales and Operating Income (1) (1) Unaudited. Adjusted Pro Forma Operating Income from Continuing Operations. See Appendix for Non-GAAP reconciliation. Operating Income (1) +55.9% CAGR Sales +4.9% CAGR Best Profit in 15 Years

Sales Growth Each Quarter 13 $156.6 $163.8 $150.0 $164.7 $175.0 $100 $125 $150 $175 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Net Sales ($ in millions) (1) Unaudited Quarterly sales growth fueled by new product introductions Quarterly Sales and Year Over Year Growth (1) Year Over Year Growth 8.4% 8.2% 2.8% 3.5% 11.8%

STRONG SALES GROWTH IN NEW PRODUCT INTRODUCTIONS OFFICE FURNITURE (1) 5% 21% 26% 57% 33% 45% 54% 34% 39% 0% 10% 20% 30% 40% 50% 60% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 ($ in millions) (1) Unaudited Year Over Year Growth 14 28% of total office furniture sales

ORDER GROWTH EACH QUARTER 15 $165.9 $168.2 $148.4 $176.4 $177.2 $130.0 $135.0 $140.0 $145.0 $150.0 $155.0 $160.0 $165.0 $170.0 $175.0 $180.0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Orders Received ($ in millions) (1) Unaudited Quarterly Orders and Year Over Year Growth (1) Quarterly order growth fueled by Hospitality and New Product Introductions 2.5% 5.8% 13.4% 2.4% 6.9%

ORDER TREND RELATIVE TO OFFICE FURNITURE MARKET 16 * Sales and order data are not available for the Hospitality furniture industry (BIFMA industry data excludes Hospitality furniture). Therefore, to get a comparable industry comparison, sales and orders for the Hospitality vertical are excluded from the Kimball International numbers presented in this graph. 8% 13% 6% 6% 3% 2% 0% -1% 3% -1% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Orders * Kimball Int'l (excluding Hospitality vertical) Office Furniture Industry (BIFMA) Growth in orders exceeded industry growth for each of the last 7 quarters (1) (1) Q1’17 BIFMA based upon July ‘16 and August ‘16 only. September not available when published.

Sales by Vertical – Good Diversification 17 Sales Mix by End Market Vertical (1) _____________________ (1) Unaudited. $49.9 $50.5 $19.9 $19.7 $33.8 $38.9 $14.9 $16.7 $16.2 $22.6 $21.9 $26.6 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q1'16 Q1'17 Commercial Government Hospitality Finance Healthcare Education +15% +21% +40% ($ in millions)

Orders by Vertical 18 Order Mix by End Market Vertical (1) _____________________ (1) Unaudited. $58.7 $52.2 $21.4 $19.9 $32.7 $40.7 $16.5 $19.0 $18.8 $26.1 $17.8 $19.3 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Q1'16 Q1'17 Commercial Government Hospitality Finance Healthcare Education ($ in millions) +39% +24%

Gross Profit (1) 19 $51.1 $53.3 $45.8 $53.6 $58.7 32.6% 32.5% 30.5% 32.6% 33.5% 25.0% 26.0% 27.0% 28.0% 29.0% 30.0% 31.0% 32.0% 33.0% 34.0% 35.0% $30 $40 $50 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Gross Profit % of Net Sales Cyclically lower sales in Q3 results in lower Gross Profit. Gross Profit % improved year over year despite inefficiencies related to restructuring. ($ in millions) _____________________ (1) Unaudited.

$40.2 $41.2 $38.8 $42.8 $43.2 25.6% 25.2% 25.8% 26.1% 24.6% 20.0% 21.0% 22.0% 23.0% 24.0% 25.0% 26.0% 27.0% 28.0% 29.0% 30.0% $30 $35 $40 $45 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 S&A S&A % of Net Sales Selling and Administrative Expenses (1) 20 ($ in millions) _____________________ (1) Unaudited.

OPERATING PROFIT (1) 21 1.3% -1.4% 1.6% 4.8% 6.4% 7.0% 7.3% 4.7% 6.6% 8.8% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2012 2013 2014 2015 2016 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Adjusted Pro Forma Operating Income from Continuing Operations Series 2 Fiscal Year Quarterly Seasonally lower sales effect Best in 15 years _____________________ (1) Unaudited. See Appendix for Non-GAAP reconciliation.

Free Cash Flow (1) 22 _____________________ (1) Unaudited. Defined as adjusted net income, plus depreciation and amortization, less capital expenditures, plus non-cash stock compensation, plus change in working capital. Net income is adjusted to exclude after-tax restructuring charges. See Appendix for Non-GAAP adjustments. $2.0 $6.0 $20.8 $5.8 $13.8 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 -$10.0 -$5.0 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 Adjusted Net Income Depreciation/Amortization Capital Expenditures Non-Cash Stock Comp Change in Working Capital Adjusted Free Cash Flow ($ in millions)

[CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] $0.045 $0.050 $0.055 $0.060 $0.065 $0 $5 $10 $15 $20 $25 FY'12 FY'13 FY'14 FY'15 FY'16 Q1'17 Dividends Share Repurchases Quarterly Dividends Per Share (4) Financially Strong 23 18.1% 21.5% 12.3% 18.5% 25.5% 0.0% 10.0% 20.0% 30.0% $0 $5 $10 $15 $20 $25 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Free Cash Flow Adjusted Return on Capital _____________________ (1) See Prior Slide for definition. (2) See Appendix for Non-GAAP reconciliation. (3) Includes total Class A and Class B dividends declared. (4) Represents Class B dividends per share prior to the Class A and Class B stock unification. Note: All quarterly periods presented above are unaudited. (2) (1) ($ in millions) (3) Among best in the office furniture industry

Sales Growth over Prior Year Mid-Single Digits Operating Income (except Q3 which tends to be lower due to seasonality) 8 to 9% Adjusted Return on Capital (1) Exceeding 20% (1) See appendix for definition. Mid-Term Outlook 24

APPENDIX 25

ANNUAL NON-GAAP RECONCILIATION (UNAUDITED) 26 (millions $) 2012 2013 2014 2015 2016 Operating Income from Continuing Operations $5.0 -$10.6 $1.9 $17.3 $33.5 Add: Spin Cost – Included in SGA Add: Restructuring $1.5 $3.2 $5.3 $7.3 Adjusted Operating Income from Continuing Operations $5.0 -$10.6 $3.4 $25.8 $40.8 Adjusted Operating Income from Continuing Operations as a % of Sales 1.0% -2.1% .6% 4.3% 6.4% Add: Employee Retirements – Included in SGA (1) Add: Other Non-operational – Included in SGA (2) $3.2 $5.0 $6.8 -$.5 $3.3 Adjusted Pro Forma Operating Income from Continuing Operations before External Reverse Synergies $8.2 -$5.6 $9.7 $29.1 $40.8 Deduct: External Reverse Synergies (3) -$1.3 -$1.3 -$1.2 -$0.4 Adjusted Pro Forma Operating Income from Continuing Operations (3) $6.9 -$6.9 $8.5 $28.7 $40.8 Adjusted Pro Forma Operating Income from Continuing Operations as a % of Sales 1.3% -1.4% 1.6% 4.8% 6.4% _____________________ (1) Estimated cost associated with the retirement and separation of people due to spin. Costs include that for salary, incentive compensation, performance shares, retirement contribution, and payroll tax. (2) Includes: pre-tax airplane write-off $1.2M and gain from sale of idle property of $1.7M in FY’14. (3) Adjusted pro forma operating income includes external reverse synergies representing estimated increases to the cost structure necessitated by the split into two companies. For example, pre-spin Kimball had one board of directors, and such costs were allocated to Furniture and Electronics. Post spin, there are two boards with each company experiencing a cost increase merely because of the separation. Other examples include IT expenditures and certain insurance cost among others. The $1.3M per year reflected in the table above is a mid-point of a range estimated to be from $1.0M to $1.5M adjusting the adjusted pro forma operating income from continuing operations to reflect this estimated increase in cost structure post spin. In addition to external cost, internal reverse synergy cost also exist and are embedded in the calculation of Operating Income from continuing operations reducing income. Different than external cost, these costs do not have to be separately deducted in this reconciliation because by way of the discontinued operation calculation this cost increase remains within the computed Operating Income from continuing operations. As an example for this type of cost, pre-spin Kimball had an SEC financial reporting function, and such costs were allocated to Furniture and Electronics. Post spin, there are two separate functions experiencing a cost increase as it takes more resource to perform this function for two separate companies than one. This cost increase is estimated to be $500k to $1M. So in total, it is estimated that reverse synergy cost will increase cost structure post spin by $1.5 to $2.5M per year as already reflected in the adjusted results included in the reconciliation above. Note: We had formerly excluded Supplemental Employee Retirement Plan (SERP) expense from adjusted pro forma operating income. We are no longer excluding SERP because it does not have a material impact on the trend of operating income. The annual amounts of SERP expense now included in adjusted pro forma operating income are $1.7M in FY’13, $2.6M in FY’14, and $0.6M in FY’15 and none in FY’12 & FY’16.

QUARTERLY NON-GAAP RECONCILIATION (UNAUDITED) 27 (millions $) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Operating Income, as reported $9.7 $10.0 $4.3 $9.5 $17.3 Pre-tax Restructuring (Gain) Expense $1.2 $2.0 $2.8 $1.3 -$1.8 Adjusted Operating Income $10.9 $12.0 $7.1 $10.8 $15.5 Adjusted Operating Income as a % of Sales (1) 7.0% 7.3% 4.7% 6.6% 8.8% (millions $) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Net Income, as reported $5.6 $6.5 $2.8 $6.3 $11.0 Restructuring After-Tax Expense (Income) $0.7 $1.2 $1.6 $0.8 -$1.1 Adjusted Net Income – used in Free Cash Flow Calculation $6.3 $7.7 $4.4 $7.1 $9.9 (1) We had formerly excluded Supplemental Employee Retirement Plan (SERP) expense from adjusted pro forma operating income. We are no longer excluding SERP because it does not have a material impact on the trend of operating income. The quarterly amounts of SERP expense (income) that are included in adjusted operating income are ($0.6) million in Q1’16, $0.3 m illion in Q2’16, $0.1 million in Q3’16, $0.2 million in Q4’16, and $0.4 million in Q1’17. Because SERP is no longer excluded, and that was the only pro forma adjustment during the quarters presented, we are no longer reporting pro forma figures for these periods. (millions $) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Adjusted Operating Income – see non-GAAP reconciliation above $10.9 $12.0 $7.1 $10.8 $15.5 Median Effective Income Tax Rate for Trailing Four Quarters 42.1% 37.4% 38.1% 37.3% 37.2% Median Income Tax Expense $4.6 $4.5 $2.7 $4.0 $5.8 Net Operating Profit After-Tax (NOPAT) $6.3 $7.5 $4.4 $6.8 $9.7 Average Capital (Total Equity plus Total Debt) $139.4 $139.9 $143.7 $147.4 $152.6 Adjusted Return on Capital (annualized) 18.1% 21.5% 12.2% 18.4% 25.5%