-----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, Fdx4ZyhzW7GmKbRI/YUEtCuGhHn6jEwTlA//QmhnVHbVcGgSNfUgWlzt7xSD5VmG SpLPNq8iQDvqL6R1Tku3bg== 0000055772-99-000009.txt : 19991101 0000055772-99-000009.hdr.sgml : 19991101 ACCESSION NUMBER: 0000055772-99-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991029 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: SEC FILE NUMBER: 000-03279 FILM NUMBER: 99737523 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 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, 1999 __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-3279 KIMBALL INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Indiana 35-0514506 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1600 Royal Street, Jasper, Indiana 47549-1001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (812) 482-1600 Not Applicable Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No___ The number of shares outstanding of the Registrant's common stock as of October 20, 1999 were: Class A Common Stock - 14,315,187 shares Class B Common Stock - 26,069,504 shares - 1 - KIMBALL INTERNATIONAL, INC. FORM 10-Q INDEX
PAGE NO. PART I FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Balance Sheets - September 30, 1999 (Unaudited) and June 30, 1999. . . . . . . 3 Consolidated Statements of Income (Unaudited) - Three Months Ended September 30, 1999 and 1998. . . . . . . . 4 Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended September 30, 1999 and 1998. . . . . . . . 5 Notes To Consolidated Financial Statements (Unaudited). . . . . 6-7 Item 2. Management's Discussion and Analysis Of Financial Condition and Results of Operations . . . . . . . . . 8-12 Item 3. Quantitative and Qualitative Disclosures about Market Risk. . . 13 PART II OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 14 Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . 15
- 2 - PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in thousands)
(unaudited) September 30, June 30, 1999 1999 Assets Current Assets: Cash and cash equivalents $ 8,427 $ 16,775 Short-term investments 119,749 114,996 Receivables, less allowances of $3,689 and $3,816, respectively 137,657 132,284 Inventories 107,044 96,157 Other 27,752 26,129 Total current assets 400,629 386,341 Property And Equipment - net of accumulated depreciation of $272,902 and $265,141, respectively 223,432 221,498 Other Assets 51,687 53,547 Total assets $675,748 $661,386 Liabilities And Share Owners' Equity Current Liabilities: Loans payable $ 7,074 $ 3,518 Current maturities of long-term debt 1,202 1,185 Accounts payable 83,289 77,976 Dividends payable 6,390 6,380 Accrued expenses 80,192 79,505 Total current liabilities 178,147 168,564 Other Liabilities: Long-term debt, less current maturities 1,393 1,730 Deferred income taxes and other 26,229 26,815 Total other liabilities 27,622 28,545 Share Owners' Equity: Common stock 2,151 2,151 Additional paid-in capital 6,722 6,379 Retained earnings 504,131 498,962 Accumulated other comprehensive income 1,256 1,312 Less: Treasury stock, at cost (44,281) (44,527) Total Share Owners' Equity 469,979 464,277 Total liabilities and Share Owners' equity $675,748 $661,386 See Notes to Consolidated Financial Statements
- 3 - KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands except for per share data)
(unaudited) Three Months Ended September 30, 1999 1998 Net Sales $278,402 $264,646 Cost of Sales 201,627 186,089 Gross Profit 76,775 78,557 Selling, General and Administrative Expenses 62,640 61,982 Operating Income 14,135 16,575 Other Income (Expense): Interest expense (92) (105) Interest income 1,443 1,964 Other - net 1,467 1,057 Other income - net 2,818 2,916 Income Before Taxes on Income 16,953 19,491 Taxes on Income 5,394 6,928 Net Income $ 11,559 $ 12,563 Earnings Per Share of Common Stock: Basic: Class A $ .28 $ .31 Class B $ .29 $ .31 Diluted: Class A $ .28 $ .30 Class B $ .29 $ .31 Dividends Per Share of Common Stock: Class A $ .155 $ .155 Class B $ .160 $ .160 Average Total Number of Shares Outstanding Class A and B Common Stock: Basic 40,374 40,930 Diluted 40,619 41,179 See Notes to Consolidated Financial Statements
- 4- KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (amounts in thousands)
(unaudited) Three Months Ended September 30, 1999 1998 Cash Flows From Operating Activities: Net income $ 11,559 $ 12,563 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,677 9,252 Gain on sales of assets (911) (208) Deferred income tax and other deferred charges (1,100) (2,338) Change in current assets and liabilities: Receivables (5,373) (13,063) Inventories (7,656) (3,436) Other current assets (1,111) 469 Accounts payable 5,313 1,836 Accrued expenses (2,168) 1,029 Net cash provided by operating activities 9,230 6,104 Cash Flows From Investing Activities: Capital expenditures (11,503) (17,977) Proceeds from sales of assets 1,331 340 Net change in other assets 328 (17,357) Purchases of held-to-maturity investments -0- (400) Maturities of held-to-maturity investments 400 5,410 Purchases of available-for-sale securities (46,986) (13,462) Sales and maturities of available-for-sale securities 41,590 33,575 Net cash used for investing activities (14,840) (9,871) Cash Flows From Financing Activities: Net change in short-term borrowings 3,556 4,075 Net change in long-term debt (319) 504 Acquisition of treasury stock, net of sales (435) (10,475) Dividends paid to share owners (6,380) (6,521) Proceeds from exercise of stock options 689 797 Other - net 151 (29) Net cash used for financing activities (2,738) (11,649) Effect of Exchange Rate Change on Cash and Cash Equivalents -0- (13) Net Decrease in Cash and Cash Equivalents (8,348) (15,429) Cash and Cash Equivalents-Beginning of Period 16,775 16,757 Cash and Cash Equivalents-End of Period $ 8,427 $ 1,328 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Income taxes $ 360 $ 125 Interest $ 98 $ 125 Total Cash, Cash Equivalents and Short-Term Investments: Cash and cash equivalents $ 8,427 $ 1,328 Short-term investments 119,749 131,014 Totals $128,176 $132,342 See Notes to Consolidated Financial Statements
- 5 - 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:
September 30, June 30, 1999 1999 (in thousands) Finished Products $ 37,157 $33,262 Work-in-Process 16,080 14,471 Raw Materials 53,807 48,424 Total inventory $107,044 $96,157 For interim reporting, LIFO inventories are computed based on estimated year-end quantities and interim changes in price levels. Changes in such estimates will be reflected in the interim financial statements in the period in which they occur.
Note 3. Segment Information Effective for the year ended June 30, 1999, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information. The adoption of SFAS 131 requires the presentation of segment information that is consistent with information utilized by management for purposes of allocating resources and assessing performance. Management organizes the Company into segments based upon differences in products and services offered in each segment. The Furniture and Cabinets Segment manufactures furniture for the office, residential, lodging and healthcare industries and store display fixtures, all sold under the Company's family of brand names. Other products produced by the Furniture and Cabinets Segment on an original equipment manufactured basis include store fixtures, television cabinets and stands, audio speaker systems and furniture components. The Electronic Contract Assemblies Segment is a global provider of design engineering, manufacturing, packaging and distribution of electronic assemblies, circuit boards, multi-chip modules and semiconductor components on a contract basis to customers in the transportation, industrial controls, telecommunications, computer and medical industries. Intersegment sales are insignificant. Unallocated corporate assets include cash and cash equivalents, short-term investments and other assets not allocated to segments. The basis of segmentation and accounting policies of the segments are consistent with those as disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 1999. - 6 - Note 3. Segment Information (continued)
Three Months Ended September 30, September 30, 1999 1998 (in thousands) Net Sales: Furniture and Cabinets $193,686 $191,687 Electronic Contract Assemblies 84,700 72,948 Unallocated Corporate and Eliminations 16 11 Consolidated $278,402 $264,646 Net Income: Furniture and Cabinets $ 5,293 $ 8,010 Electronic Contract Assemblies 3,440 2,444 Unallocated Corporate and Eliminations 2,826 2,109 Consolidated $11,559 $ 12,563 Total Assets: Furniture and Cabinets $399,461 $366,630 Electronic Contract Assemblies 148,706 138,867 Unallocated Corporate and Eliminations 127,581 126,869 Consolidated $675,748 $632,366
Note 4. Comprehensive Income Effective July 1, 1998, the Company adopted Financial Accounting Standards Board Statement No. 130 - Reporting Comprehensive Income. Comprehensive income includes all changes in equity during a period except those resulting from investments by, and distributions to, Share Owners. Comprehensive income, shown net of tax if applicable, for the three month period ending September 30, 1999 and 1998 is as follows:
Three Months Ended September 30, 1999 1998 (in thousands) Net Income $11,559 $12,563 Net Change in Unrealized Gains/Losses on Securities (243) (257) Foreign Currency Translation Adjustment 187 (12) Comprehensive Income $11,503 $12,294
Note 5. New Accounting Standard In June, 1998, the Financial Accounting Standards Board issued Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, which requires the recognition of all derivatives as either assets or liabilities in the balance sheet and the measurement of those instruments at fair value. The Company currently engages in limited derivative activity and currently does not expect this new standard to have a material effect on the Company's financial condition or results of operations. This standard will be effective for the Company's fiscal year 2001. - 7 - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW Fiscal year 2000 first quarter sales of $278,402,000 exceeded the prior year by 5% and, even excluding prior year acquisitions, set a new record for first quarter sales. First quarter net income of $11,559,000 declined 8% from the first quarter of fiscal year 1999. Class B diluted earnings per share decreased to $0.29 which is a 6% decrease from the prior year. RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1998 Net sales for the first quarter of fiscal year 2000 surpassed first quarter 1999 levels on increases by both of the Company's segments -- the Furniture and Cabinets Segment and the Electronic Contract Assemblies Segment. Net income for the quarter declined in the Furniture and Cabinets Segment while net income for the Electronic Contract Assemblies Segment surpassed the prior year. FURNITURE AND CABINETS Product line offerings included in the Furniture and Cabinets Segment are office furniture, home furniture, lodging and healthcare furniture, store fixtures, original equipment manufactured (OEM) furniture and cabinets and furniture components. The Company's production flexibility allows it to utilize portions of the available production capacity created by lower volumes within these product lines to support and balance increased production schedules of other product lines within this segment. Fiscal year 2000 first quarter net sales increased 1% in the Furniture and Cabinets Segment when compared to the prior year. Sales increased in the OEM furniture and cabinets, home furniture and furniture component product lines while sales of lodging and healthcare product lines declined. First quarter net sales in the office furniture product line remained flat with the prior year. An increase in sales of casegoods product was offset by decreases in both systems and seating products. Excluding prior year acquisitions, first quarter office furniture sales growth held constant with the decline in shipments of 1.4% reported by the Business and Institutional Furniture Manufacturer's Association (BIFMA) for its three-month period ending August 1999. Net sales in the first quarter of fiscal year 2000 declined in the lodging and healthcare product lines partially due to a slowing in orders caused by the seasonal nature of the lodging industry and the timing of several large projects. Sales declined in both custom-made products and standard product offerings. The Company anticipates sales volumes to pick up in the latter half of the fiscal year, as evidenced by a 32% increase in the order backlog as of September 30, 1999 when compared to the beginning of the fiscal year. The preceding statement is a forward-looking statement under the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties including, but not limited to, customer order changes, raw material availability delays or other unexpected production delays. First quarter net sales of OEM furniture and cabinets exceeded the prior year sales levels primarily due to increased sales of contract residential furniture and metal component parts. Sales of television cabinets remained flat with the prior year partially the result of volume declines and price reductions on select products as the Company transitions some of its television cabinet production to its new Juarez, Mexico facility. - 8 - Net sales of furniture components increased in the first quarter of fiscal year 2000 primarily on increased sales of kitchen cabinet doors and dimension products. Net income in the Furniture and Cabinets Segment decreased in the first quarter of fiscal year 2000 when compared to one year ago. Gross profit, as a percent of sales, decreased as increased material and overhead costs, as a percent of sales, were partially offset by lower labor costs, as a percent of sales. Start-up costs and lower than expected sales to a key customer at the Company's recently acquired facility in Juarez, Mexico contributed to the decline in gross profit in the current year. The Company is addressing the cost issues and expects the results of those efforts to be reflected in the second and third quarters of the current fiscal year. Also contributing to the decline in gross profit was the lower volumes and a mix toward lower margin custom-made projects in the lodging and healthcare product lines. Selling, general and administrative expenses decreased in both dollars and as a percent of sales as a focus on cost reductions continues in fiscal year 2000. The above statement concerning the Company's Juarez, Mexico facility is a forward-looking statement under the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties including, but not limited to, customer order changes or additional unexpected manufacturing costs. ELECTRONIC CONTRACT ASSEMBLIES Net sales for the first quarter of fiscal year 2000 in the Electronic Contract Assemblies Segment exceeded the prior year by 16%. Sales of electronic transportation products, components for medical devices and component parts for appliances increased while sales of computer related products declined when compared to the prior year. Sales in the prior year first quarter were unfavorably impacted by the General Motors labor strike. First quarter net income increased over the prior year on the higher sales volumes. Gross profit, as a percent of net sales, increased in the first quarter compared to the prior year as decreased labor and overhead costs, as a percent of sales, more than offset increased material costs, as a percent of sales, caused by a shift in the product mix. Selling, general and administrative costs increased in dollars but decreased as a percent of sales, as sales grew at a faster pace than expenses. Included in this segment are sales to one customer, TRW Inc., which accounted for 16% and 13% of consolidated net sales in the first quarter of fiscal year 2000 and 1999, respectively. Sales to this customer represent approximately one half of total sales in the Electronic Contract Assemblies Segment, which has historically carried a higher operating income margin than the Company's other business segment. This segment's investment capital carries a higher degree of risk than the Company's other segment due to rapid technological changes, the contract nature of this industry and the importance of sales to one customer. CONSOLIDATED OPERATIONS Consolidated selling, general and administrative expenses decreased, as a percent of sales, 0.9 percentage point comparing the first quarter of fiscal year 2000 to fiscal year 1999. The Company began a focused effort on reducing costs in the latter half of the prior fiscal year and continues to review activities and processes to assess where costs could further be reduced while continuing to provide quality products and services to the marketplace. Other income decreased from the prior year on lower interest income caused by lower average investment balances. Miscellaneous income increased for the - 9 - period primarily due to gains on the sale of real estate property. The effective income tax rate decreased 3.7 percentage points in the first quarter compared to one year ago. An increase in the state tax rate was more than offset by a decrease in the federal effective tax rate as the Company utilized available capital loss carryforwards to offset capital gains and realized the benefit of research and development tax credits. Net income and Class B diluted earnings per share of $11,559,000 and $0.29, respectively, for the first quarter of fiscal year 2000 decreased 8% and 6%, respectively, from the prior year levels of $12,563,000 and $0.31. LIQUIDITY AND CAPITAL RESOURCES The Company's aggregate of cash, cash equivalents, and short-term investments decreased from $132 million at June 30, 1999 to $128 million at September 30, 1999. Working capital at September 30, 1999 was $222 million with a current ratio of 2.2, compared to working capital of $218 million and a current ratio of 2.3 at June 30, 1999. Operating activities generated $9 million of cash flow in the first quarter of fiscal year 2000 compared to $6 million in 1999. Net income and non-cash charges to net income were partially offset by increases in receivables and inventory. The Company reinvested $11 million into capital investments for the future, including production equipment and office facilities. Financing cash flow activities include $6 million in dividend payments. Net cash flow, excluding the purchases and maturities of short-term investments was an outflow of $3 million. To meet short-term capital requirements the Company maintains a $100 million revolving credit facility to be used for acquisitions and general corporate purposes. The agreement allows for both issuance of letters of credit and cash borrowings. At September 30, 1999, there were $3 million of short-term cash borrowings outstanding under the revolving credit facility, leaving $97 million of funds available. The Company anticipates maintaining a strong liquidity position for the 2000 fiscal year and believes its available funds on hand, unused credit line available under the revolving credit facility and cash generated from operations will be sufficient for working capital needs and to fund investments in the Company's future. This statement is a forward-looking statement under the Private Securities Litigation Reform Act of 1995 and is subject to certain risks and uncertainties including, but not limited to a downturn in the economy, loss of key customers or suppliers, availability or increased costs of raw materials, or a natural disaster or similar unforeseen event. YEAR 2000 READINESS DISCLOSURE The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in a major system failure or miscalculations. The Company completed an assessment of its computer systems and the embedded systems contained in its machinery, equipment and other infrastructure, and executed a plan to resolve the Year 2000 issue. The phases of the plan include inventory assessment, remediation and testing. An Executive Committee oversees completion of these activities. All phases of the Year 2000 plan have been completed for the Company's mission critical systems and equipment. The Company also continues to make progress on Year 2000 compliance of non-critical computer - 10 - and embedded systems. The Company will continue its Year 2000 assessment and testing efforts for new or modified systems throughout 1999 and will continue to test its critical systems for continued Year 2000 compliance. A corporate freeze on the introduction of certain business and information technology (IT) initiatives will occur December 1, 1999 through January 15, 2000 to maintain a stable environment through the turn of the century. While the Year 2000 issue has been given the highest priority among the IT group, any deferrals of other IT projects by the Company will not have a material effect on its financial condition or results of operations. The total gross cost of Year 2000 compliance is estimated to range from $8.5 million to $10.5 million, of which approximately 85% had been incurred as of September 30, 1999. Existing information technology resources have been redeployed, which are anticipated to account for approximately 50% of the total costs, with the balance being incremental costs to the Company. Approximately 30% of the total gross costs relate to machinery and other fixed assets which will be capitalized or in certain situations leased, with the remaining costs being expensed as incurred. The Company believes the key risk factors associated with Year 2000 are those it cannot directly control, primarily the readiness of its key suppliers, distributors, customers, public infrastructure suppliers and other vendors. The Company continues to follow up with its mission critical suppliers on their state of readiness, and where appropriate, is conducting in-depth evaluations which could lead to replacement of the supplier. While the Company is working diligently to ensure its mission critical third parties will be compliant, there can be no assurance that the systems of any third party on which the Company's systems and operations rely will be timely converted and which will not have a material adverse effect on the Company. The determination of the effect on the Company's results of operations for its own noncompliance or for third party noncompliance is complex and hinges on numerous unknowns. Therefore, while the Company does not have a reasonable estimate of the impact this could have on its results of operations, it recognizes this noncompliance could range from the malfunction of an embedded chip in a piece of machinery temporarily shutting down a product line, to a select public infrastructure of one of the Company's outlying locations or international facilities being unable to provide service temporarily idling one or more production facilities. In addition, worst case scenarios could include a key customer being unable to process transactions halting production on one of the Company's product lines, to a single source supplier, as well as back-up suppliers, being unable to provide necessary materials also suspending production on a product line(s). Some of these individually, and in the aggregate, could have a material effect on the Company's results of operations. Contingency plans outlining recovery strategies for possible failures are being finalized. Contingency plans include such items as sourcing alternatives for single source suppliers, developing business resumption plans for all of the Company's business units, and evaluating temporary alternate manual processes. This Year 2000 disclosure contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 and is subject to risks and uncertainties including, but not limited to such factors as the availability and cost of human resources with expertise in this area, the ability to locate and correct all relevant computer codes and time constraints. - 11 - ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board issued Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, which requires the recognition of all derivatives as either assets or liabilities in the balance sheet and the measurement of those instruments at fair value. The Company currently engages in limited derivative activity and currently does not expect this new standard to have a material effect on the Company's financial condition or results of operations. This standard will be effective for the Company's fiscal year 2001. - ------------------------------------------------------------------------------- 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. - 12 - Item 3 - Quantitative and Qualitative Disclosures About Market Risk As of September 30, 1999, the Company had an investment portfolio of fixed income securities, excluding those classified as cash and cash equivalents, of $120 million. The Company classifies its short-term investments in accordance with Financial Accounting Standards Board Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities. Held-to-maturity securities are stated at amortized cost and available-for-sale securities are stated at market value with unrealized gains and losses being recorded net of tax related effect, if any, as a component of Share Owners' Equity. These securities, like all fixed income instruments, are subject to interest rate risk and will decline in value if market interest rates increase. A hypothetical 100 basis point increase in market interest rates from levels at September 30, 1999 would cause the fair value of these short-term investments to decline by an immaterial amount. The Company operates internationally, and thus is subject to potentially adverse movements in foreign currency rate changes. As of the latest fiscal year-end, foreign subsidiaries' sales, operating income and assets each comprised less than 3% of consolidated amounts. Historically, the effect of movements in the exchange rates have been immaterial to the consolidated operating results of the Company. - 13 - PART II. OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) (11) Computation of Earnings Per Share (27) Financial Data Schedule (b) Reports on Form 8-K Form 8-K dated July 8, 1999, was filed pursuant to Item 5 (Other Events) which contained the Company's news release dated July 8, 1999, announcing the sales of two of the Company's business units. Form 8-K dated July 19, 1999, was filed pursuant to Item 5 (Other Events) which contained the Company's news release dated July 16, 1999, announcing the Company's intent to construct a state-of-the-art veneer mill. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KIMBALL INTERNATIONAL, INC. Douglas A. Habig DOUGLAS A. HABIG (Chairman, Chief Executive Officer) Roy W. Templin ROY W. TEMPLIN (Vice President, Corporate Controller) Date: October 29, 1999 - 14 - Kimball International, Inc Exhibit Index Exhibit No. Description 11 Computation of Earnings Per Share 27 Financial Data Schedule
- 15 - EX-11 2 EXHIBIT 11 FOR KIMBALL INTERNATIONAL, INC. KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE THREE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED)
(Amounts in Thousands, Except Per Share Data) Available Average Earnings Per Share Income Shares Class A Class B --------- ----------- ------- -------- Net income, three months ended 09/30/1999. . . $ 11,559 Distributed earnings: Class A dividends declared . . . . . . . . . (2,219) $ .155 Class B dividends declared . . . . . . . . . (4,171) $ .160 Undistributed basic earnings . . . . . . . . . $ 5,169 40,374 $ .128 $ .128 Basic Earnings Per Share . . . . . . . . . . . $ .283 $ .288 Basic Earnings Per Share (rounded) . . . . . . $ .28 $ .29 Dilutive effect of stock options . . . . . . . (39) 245 Undistributed diluted earnings . . . . . . . . $ 5,130 40,619 $ .126 $ .126 Diluted Earnings Per Share . . . . . . . . . . $ .281 $ .286 Diluted Earnings Per Share (rounded) . . . . . $ .28 $ .29 773,000 of the 2,027,000 average outstanding stock options were antidilutive, and were excluded from the dilutive computation for this period.
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE THREE MONTHS ENDED SEPTMEBER 30, 1998 (UNAUDITED)
(Amounts in Thousands, Except Per Share Data) Available Average Earnings Per Share Income Shares Class A Class B --------- ----------- ------- -------- Net income, three months ended 09/30/1998. . . $12,563 Distributed earnings: Class A dividends declared . . . . . . . . . (2,229) $ .155 Class B dividends declared . . . . . . . . . (4,212) $ .160 Undistributed basic earnings . . . . . . . . . $ 6,122 40,930 $ .150 $ .150 Basic Earnings Per Share . . . . . . . . . . . $ .305 $ .310 Basic Earnings Per Share (rounded) . . . . . . $ .31 $ .31 Dilutive effect of stock options . . . . . . . (40) 249 Undistributed diluted earnings . . . . . . . . $ 6,082 41,179 $ .148 $ .148 Diluted Earnings Per Share . . . . . . . . . . $ .303 $ .308 Diluted Earnings Per Share (rounded) . . . . . $ .30 $ .31 840,000 of the 1,846,000 average outstanding stock options were antidilutive, and were excluded from the dilutive computation for this period.
Exhibit(11) EX-27 3 FINANCIAL DATA SCHEDULE FOR KIMBALL INTERNATIONAL
5 This schedule contains three month summary financial information extracted from Kimball International, Inc., and subsidiaries 2000 first quarter Form 10-Q and is qualified in its entirety by reference to such Form 10-Q filing. 1000 3-MOS JUN-30-2000 SEP-30-1999 8,427 119,749 141,346 3,689 107,044 400,629 496,334 272,902 675,748 178,147 0 0 0 2,151 467,828 675,748 278,402 278,402 201,627 201,627 0 29 92 16,953 5,394 11,559 0 0 0 11,559 .29 .29
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