-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J/nQBWsv2x/iGtWzuj90r/r8L33oLQQ7ZDTKttNvld3zgOjz5aZW4MmuXq78N9wp MyryLNkjvshN1WsqSQNbgQ== 0000055772-95-000005.txt : 19951027 0000055772-95-000005.hdr.sgml : 19951027 ACCESSION NUMBER: 0000055772-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951026 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIMBALL INTERNATIONAL INC CENTRAL INDEX KEY: 0000055772 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE FURNITURE [2520] IRS NUMBER: 350514506 STATE OF INCORPORATION: IN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03279 FILM NUMBER: 95584431 BUSINESS ADDRESS: STREET 1: 1600 ROYAL ST CITY: JASPER STATE: IN ZIP: 47549 BUSINESS PHONE: 8124821600 MAIL ADDRESS: STREET 1: 1600 ROYAL STREET STREET 2: 1600 ROYAL STREET CITY: JASPER STATE: IN ZIP: 47549 FORMER COMPANY: FORMER CONFORMED NAME: JASPER CORP DATE OF NAME CHANGE: 19740826 10-Q 1 1ST QTR FORM 10-Q FOR KIMBALL INTERNATIONAL, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-3279 KIMBALL INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Indiana 35-0514506 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1600 Royal Street, Jasper, Indiana 47549-1001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (812) 482-1600 Not Applicable Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No___ The number of shares outstanding of the Registrant's common stock as of October 19, 1995 was: Class A Common Stock - 7,280,204 shares Class B Common Stock - 13,678,691 shares - 1 - KIMBALL INTERNATIONAL, INC. FORM 10-Q INDEX
PAGE NO. PART I FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Statement of Financial Condition - September 30, 1995 (Unaudited), June 30, 1995 and September 30, 1994 (Unaudited) . . . . . . . . . . . . . 3 Consolidated Statement of Income (Unaudited) - Three Months Ended September 30, 1995 and 1994 . . . . . . . 4 Consolidated Statement of Cash Flows (Unaudited) - Three Months Ended September 30, 1995 and 1994 . . . . . . . 5 Notes To Consolidated Financial Statements (Unaudited) . . . . 6 Item 2. Management's Discussion and Analysis Of Financial Condition and Results of Operations. . . . . . . . . 7-9 PART II OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 10 Signatures. . . . . . . . . . . . . . 10 - Exhibit #11 - Computation of Earnings Per Share (Part I Exhibit) - Exhibit #27 - Financial Data Schedule (Part I Exhibit)
- 2 - PART I. FINANCIAL INFORMATION KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (dollars in thousands)
(unaudited) (unaudited) September 30, June 30, September 30, ASSETS 1995 1995 1994 CURRENT ASSETS: Cash and cash equivalents $ 7,618 $ 15,278 $ 7,222 Short-term investments at cost, estimated market value of $109,416, $97,956, and $79,145. 109,046 97,534 79,389 Accounts and notes receivable, less allow- ance for possible losses of $4,087, $4,245, and $3,788. 106,648 96,057 98,479 Inventories 78,845 76,146 87,033 Other 20,127 21,801 19,908 Total Current Assets 322,284 306,816 292,031 PROPERTY AND EQUIPMENT - at cost, less accumulated depreciation of $217,262, $219,395, and $208,536. 176,122 177,130 172,215 OTHER ASSETS 13,914 13,140 11,909 Total Assets $512,320 $497,086 $476,155 LIABILITIES AND SHARE OWNERS' EQUITY CURRENT LIABILITIES: Loans payable to banks $ 2,488 $ 1,763 $ 1,440 Current maturities of long-term debt 391 393 1,210 Accounts payable 49,514 35,328 37,971 Dividends payable 4,802 4,811 4,424 Accrued expenses 60,938 62,751 57,223 Total Current Liabilities 118,133 105,046 102,268 OTHER LIABILITIES: Long-term debt, less current maturities 760 924 1,095 Deferred income taxes and other 19,802 19,779 17,675 Total Other Liabilities 20,562 20,703 18,770 SHARE OWNERS' EQUITY: Common stock 6,723 6,723 6,723 Additional paid-in capital 812 812 812 Foreign currency translation adjustment 1,668 1,981 1,193 Retained earnings 377,320 373,704 354,303 Less: Treasury stock, at cost (12,898) (11,883) (7,914) Total Share Owners' Equity 373,625 371,337 355,117 Total Liabilities and Share Owners' Equity $512,320 $497,086 $476,155 See Notes to Consolidated Financial Statements
- 3 - KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (dollars in thousands except per share amounts)
(unaudited) Three Months Ended September 30, 1995 1994 Net Sales $218,933 $209,411 Cost of Sales 163,077 150,553 Gross Profit 55,856 58,858 Selling, Administrative and General Expenses 45,160 45,854 Operating Income 10,696 13,004 Other Income (Expense): Interest Expense (88) (45) Interest Income 1,897 1,076 Other - net 1,464 480 3,273 1,511 Income Before Taxes on Income 13,969 14,515 Taxes on Income 5,551 6,092 Net Income $ 8,418 $ 8,423 Earnings Per Share of Common Stock: Class A Common Stock $ .40 $ .40 Class B Common Stock $ .40 $ .40 Dividends Per Share of Common Stock: Class A Common Stock $ .22 3/4 $ .20 3/4 Class B Common Stock $ .23 $ .21 Average total number of shares outstanding Class A and B Common Stock 20,972,043 21,157,497 See Notes to Consolidated Financial Statements
- 4- KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands)
(unaudited) Three Months Ended September 30, 1995 1994 Cash Flows From Operating Activities: Net income $ 8,418 $ 8,423 Non-cash charges (credits) to net income: Depreciation and amortization 8,044 7,560 Gain on sales of assets (1,620) (7) Deferred income tax and other deferred charges 466 633 (Increase) decrease in current assets: Accounts and notes receivable (10,591) (2,361) Inventories (2,699) (5,950) Other current assets 1,480 (1,015) Increase (decrease) in current liabilities: Accounts payable 14,186 4,838 Accrued expenses (2,256) (5,040) Net Cash Provided By Operating Activities 15,428 7,081 Cash Flows From Investing Activities: Capital expenditures (8,706) (7,609) Proceeds from sales of assets 3,266 216 Increase in other assets (716) (355) Purchases of short-term investments (37,879) (43,842) Maturities of short-term investments 26,367 40,947 Net Cash Used For Investing Activities (17,668) (10,643) Cash Flows From Financing Activities: Net change in short-term borrowings 726 (179) Decrease in long-term debt (166) (73) Dividends paid (4,812) (4,426) Acquisition of treasury stock, net (1,015) (245) Other - net (126) 231 Net Cash Used For Financing Activities (5,393) (4,692) Effect of Exchange Rate Change on Cash and Cash Equivalents (27) 24 Net Decrease in Cash and Cash Equivalents (7,660) (8,230) Cash and Cash Equivalents-Beginning of Period 15,278 15,452 Cash and Cash Equivalents-End of Period $ 7,618 $ 7,222 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Income Taxes $ 1,306 $ 1,788 Interest $ 97 $ 85 Total Cash, Cash Equivalents and Short-Term Investments: Cash and cash equivalents $ 7,618 $ 7,222 Short-term investments 109,046 79,389 Totals $116,664 $ 86,611 See Notes to Consolidated Financial Statements
- 5 - KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (1) The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. All significant intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments of a normal, recurring nature necessary to present fairly the financial statements of the interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. 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. (2) Inventories consist of: (in thousands)
September 30, June 30, September 30, 1995 1995 1994 Raw Materials $41,380 $39,527 $41,597 Work-in-Process 13,276 12,681 14,225 Finished Goods 24,189 23,938 31,211 Total $78,845 $76,146 $87,033
For interim reporting, LIFO inventories are computed based on estimated year-end quantities and price levels. Changes in such estimates will be reflected in the interim financial statements in the period in which they occur. (3) Earnings per share are computed under the method prescribed in Accounting Principles Board Opinion No. 15 for computing earnings per share for two class common stock due to the dividend preference of Class B Common Stock. (4) Certain prior year amounts have been reclassified to conform with the fiscal 1996 presentation. - 6 - KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Net sales for the first quarter of the 1996 fiscal year increased 5% when compared to the first quarter of the prior year. Net income and Class B earnings per share equaled the prior year's first quarter results despite the increase in sales, due primarily to an unfavorable change in the product mix. Cash flow for the first quarter was a positive $3,852,000, excluding the purchases and maturities of short-term investments. RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1994 First quarter 1996 net sales were $218,933,000, an increase of 5% when compared to the prior year's first quarter. Additional assembly volumes in the Electronic Contract Assemblies segment drove the increase in sales. Sales in the Furniture and Cabinets segment decreased 2% when compared to the first quarter in the prior year, primarily caused by lower shipments on original equipment manufacturer (OEM) product lines. In the office furniture product line, selling prices were impacted by increased competitive price discounting which is occurring in the industry. Production capacity constraints limited additional potential growth in the systems office furniture product line. The Company is in the process of dedicating an additional facility, which was previously utilized by another segment, to this product line with full production levels anticipated in the latter half of this fiscal year. Sales volumes increased in steel office furniture product lines, when compared to the first quarter of the prior year at which time shipment levels were negatively impacted by the relocation of the steel office furniture production facility to Idaho. Sales of OEM cabinets and furniture decreased from the prior year levels, as certain customers shifted production schedules, including brief temporary reductions in shipments. Rescheduling and production flexibility is inherent in the OEM supplier industry and periodically causes short-term fluctuations in any given quarter. The company's domestic piano production facility, which has increased its production mix towards OEM production to absorb excess plant capacity, also reported lower sales due to the rescheduling of certain OEM product line shipments along with the continuing decline in the worldwide piano market. Sales of hospitality furniture increased from the prior year levels as a result of the Company focusing its marketing efforts on the hospitality renovation market. Sales in the Electronic Contract Assemblies segment grew 30% when compared to the prior year's first quarter sales. Sales of new computer and computer peripheral product assemblies from both new and existing customers added to existing product assemblies, including electronic automotive and telecommunication assemblies. Re-engineering of production and supporting processes allowed the Company to add this additional business to existing production facilities. Included in this segment are sales to one customer that accounted for 13% of consolidated first quarter net sales in fiscal year 1996 - 7 - and 14% in 1995. Open orders increased 34% above the prior year's first quarter level. Sales in the Processed Wood Products and Other segment declined 17%, primarily on lower sales volumes of processed wood product lines. Sales of lumber and dimension wood product lines declined from the prior year, primarily as a result of lower sales volumes to outside parties during the first quarter of fiscal year 1996. Sales volumes on plastic components also decreased from the prior year's first quarter. Consolidated cost of sales as a percent of sales increased 2.6 percentage points due in part to an unfavorable change in the product mix. The Company continued to experience a change in sales mix towards products which contain a higher material content, particularly those product lines in the Electronic Contract Assemblies segment. Labor costs as a percent of sales decreased 1.2 percentage points as the change in product mix shifted to product lines requiring less labor content. Labor efficiency was hampered as the result of new product start-up inefficiencies and the effect of the July-August intense heat on the production labor force during the first quarter of fiscal year 1996. Overhead costs as a percent of sales decreased 0.6 percentage point as process improvements allowed additional production volumes to be supported by the Company's existing production overhead structure. Selling, general and administrative expenses as a percent of sales declined 1.3 percentage points as these fixed costs were able to support additional sales volumes. Cost reduction initiatives are currently being accelerated to reduce the Company's cost structure and promote improved profitable growth. Operating income in the Furniture and Cabinets segment declined from the prior year's first quarter due to increased price discounting in the office furniture market, a change in the product mix within office furniture product lines and increased material costs. Costs were incurred in the first quarter of the 1996 fiscal year to improve future profitability, including costs to prepare an existing facility for redeployment to the systems office furniture product line during this fiscal year, re-engineering and technology costs. Steel office furniture product lines continued to operate at a loss during the first quarter and the Company anticipates that these product lines will continue to operate at a loss during the remainder of the 1996 fiscal year. OEM product lines, which traditionally have variation in quarter over quarter comparisons, reported lower operating income when compared to the same quarter in the prior year due to lower product shipments requested by certain customers. Operating income on hospitality product lines declined in the quarter as production start-up costs were incurred to expand the standard in-line product line offering. Operating losses in Europe were reduced in this year's first quarter due to benefits derived from the Company combining two production facilities into one during the latter half of the prior year, thereby permanently reducing the European cost structure. Operating income improvements in the Electronic Contract Assemblies segment were the result of additional sales volumes from both new and existing customers, as compared to the prior year's first quarter. These additional volumes were produced at existing facilities, which was made possible through the Company's re-engineering efforts to simplify and streamline various production processes. Although the dollar amount of operating income - 8 - increased as the result of additional assembly volumes, operating income as a percent of sales declined, as start-up costs on certain new assemblies reduced the operating profit generated from those sales. Operating margins on these product lines, as a percent of sales, are generally lower than those found on most of the Company's other product lines. Operating income in the Processed Wood Products and Other segment declined primarily due to lower sales volumes on lumber and dimension wood product lines. Operating profit on metal part sales improved over the prior year's first quarter, due to increased production efficiencies combined with product pricing and marketing analysis. Investment income increased due to higher average investment balances and higher effective yields from those investments, when compared to the prior year's first quarter. Other-net increased primarily due to increased gains realized on the sale of certain assets, when compared to the prior year's first quarter. The effective income tax rate for the first quarter of fiscal year 1996 decreased 2.3 percentage points from the prior year's first quarter as a result of lower operating losses in Europe. Net income for the first quarter of the 1996 fiscal year was $8,418,000 or 40 cents per share, on par with last year's net income of $8,423,000 or 40 cents per share. LIQUIDITY AND CAPITAL RESOURCES Cash, Cash Equivalents and Short-Term Investments total $117 million at September 30, 1995 as compared to $87 million one year earlier. Working capital and the current ratio continued to be a strong $204 million and 2.7 to 1, respectively, at September 30, 1995 as compared to $190 million and 2.9 to 1, respectively, one year earlier. The Company generated $3.9 million positive cash flow during the first quarter of the 1996 fiscal year, excluding purchases and maturities of short-term investments. Net cash flow from operations generated a positive $15.4 million for the first quarter. The Company invested $9.4 million in capital additions and other assets for the future. Primary areas of investment were production equipment upgrades, facility conversion for planned redeployment to other product lines, and facility upgrades. The Company incurred $5.4 million of net cash outflows for financing purposes, primarily to pay dividends and acquire $1.0 million of treasury stock during the first quarter. The company expects to maintain a strong liquidity position throughout the 1996 fiscal year with cash needs being met by cash provided by operations, cash balances and short-term investments on hand. Due to the Company's strong financial condition and ability to generate cash from operations, management believes there is a substantial amount of unused short-term and long-term borrowing capacity which could be utilized if necessary. - 9 - PART II. OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) (11) Computation of earnings per share (27) Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K have been filed during the three months ended September 30, 1995. 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 (President and Chief Executive Officer) Gary P. Critser GARY P. CRITSER (Senior Exec. Vice President, Chief Accounting Officer and Secretary) Date: October 26, 1995 - 10 - EX-11 2 EXHIBIT 11 TO KIMBALL'S 10-Q KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE THREE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED) Net income, three months ended September 30, 1995 . . . . . . . . $8,418,000 Dividends declared: Class A Common -- $.2275 per share . . . . . . . . . . . . . .$(1,656,000) Class B Common -- $.23 per share . . . . . . . . . . . . . . . (3,146,000) (4,802,000) Undistributed earnings . . . . . . . . . . . . . . . . . . . . . $3,616,000 Undistributed earnings divided by 20,972,043 average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . $.1724 Class A Class B Undistributed earnings per share . . . . . . . . . . . . . . . . $.1724 $.1724 Assumed distribution of earnings . . . . . . . . . . . . . . . . .2275 .2300 Earnings per share . . . . . . . . . . . . . . . . . . . . . . $.3999 $.4024 Rounded . . . . . . . . . . . . . . . . . . . . . . . . . . . . $.40 $.40
COMPUTATION OF EARNINGS PER SHARE THREE MONTHS ENDED SEPTEMBER 30, 1994 (UNAUDITED) Net income, three months ended September 30, 1994 . . . . . . . . $8,423,000 Dividends declared: Class A Common -- $.2075 per share . . . . . . . . . . . . . .$(1,523,000) Class B Common -- $.21 per share . . . . . . . . . . . . . . . (2,901,000) (4,424,000) Undistributed earnings . . . . . . . . . . . . . . . . . . . . . $3,999,000 Undistributed earnings divided by 21,157,497 average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . $.1890 Class A Class B Undistributed earnings per share . . . . . . . . . . . . . . . . $.1890 $.1890 Assumed distribution of earnings . . . . . . . . . . . . . . . . .2075 .2100 Earnings per share . . . . . . . . . . . . . . . . . . . . . . $.3965 $.3990 Rounded . . . . . . . . . . . . . . . . . . . . . . . . . . . . $.40 $.40
PartI-Exhibit(11) EX-27 3 EXHIBIT 27 TO KIMBALL'S 10-Q
5 This schedule contains three month summary financial information extracted from Kimball International, Inc. and subsidiaries 1996 first quarter Form 10-Q and is qualified in its entirety by reference to such Form 10-Q filing. 1,000 3-MOS JUN-30-1996 JUL-01-1995 SEP-30-1995 7,618 109,046 110,735 4,087 78,845 322,284 393,384 217,262 512,320 118,133 0 6,723 0 0 366,902 512,320 218,933 218,933 163,077 163,077 0 (28) 88 13,969 5,551 8,418 0 0 0 8,418 .40 .40
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