Kimball International Inc (KBAL) 10-Q Quarterly Report May 2021

CEO Kristie Juster commented, “In the third quarter, we moved ahead with several important initiatives aligned with our strategy to drive sustainable share gains, as our end markets adapt to a post-pandemic operating environment.

Although challenging business conditions persisted throughout what is our seasonally slowest quarter, we were pleased to see order rates in our Workplace and Health end markets improve progressively during the period, and that positive trend continued into April. Additionally, our bidding activity in the third quarter was substantially higher sequentially in both Workplace and Health, which together accounted for nearly 80% of our fiscal year-to-date sales.

As expected, the impact of inflationary pressures on raw materials and continued high logistics costs were most pronounced in the third quarter and will begin to be mitigated in future quarters by our recent price increases and continued manufacturing cost savings which will drive substantial improvement in gross margin levels in the fourth quarter.

“In the third quarter, we also made significant progress in our Health business qualifying over 100 additional products into the US Department of Veterans Affairs. We continue to gain traction by leading with our health experts in addressing the needs of the top health and government systems and are expanding our reach into adjacent health categories. In Hospitality, custom product, which has higher margins, accounted for 50% of our year-to-date sales in this market, up from 30% one year ago. We expect the recovery in Hospitality to be uneven and phased as leisure, business and international travel each ramps at a different pace, and we continue to closely manage our costs in this area.”

“At Kimball International, we have been actively engaged in understanding The Future of Work. At the center of the new forming hybrid model is a belief that flexibility in where you work will allow employers to attract, retain and develop the most qualified and diverse workforce. It is clear the office plays a crucial role as the centralized hub for collaboration, learning and teamwork, complemented by both work from home and satellite locations. Our third quarter activity shows the rapid pace at which we are launching new products to support wherever work happens. Poppin launched Spaces which is a first ever system of flexible walls for open spaces, National launched Eklund flexible seating solution for open social settings, and Etc. expanded our work from home desk assortment. Later in May, we also will move forward with the full roll out of Poppin Pro into the Kimball International Dealer Network. Our powerful portfolio of brands and range of options allows us to support the needed flexibility and adaptability to plan for today and tomorrow.

The following information was filed by Kimball International Inc (KBAL) on Tuesday, May 4, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Kimball International Inc's 10-Q Quarterly Report:

Revenue - Product Highlight
The following is a summary of the activities we will be undertaking pursuant to phase 2 of the transformation restructuring plan: As part of the previously announced plan to consolidate manufacturing of all brands into one world-class global operations group, we are streamlining our manufacturing facilities by leveraging production capabilities across all facilities, establishing centers of excellence, and setting up processes to facilitate flexing of product between facilities in response to volume fluctuations.

Financial - Expense Highlight
Management believes it is useful for investors to understand and to be able to meaningfully trend, analyze and benchmark how our core operations performed without market value adjustments related to our SERP liability, without expenses incurred in executing our transformation restructuring plan, without CEO transition costs, and without acquisition-related costs.
Other - Other Highlight
Transformation Restructuring Plan Phase 1 - In June 2019, we announced a transformation restructuring plan to optimize resources for future growth, improve efficiency, and build capabilities across our organization.
Financial - Expense Highlight
Transportation costs are managed by optimizing logistics and supply chain planning, but the current freight rate levels are elevated such that significant year-over-year increases occurred during our third quarter of fiscal year 2021 and are expected to remain above the prior year levels in our fourth quarter.
Financial - Expense Highlight
Savings realized from our transformation plan and a reduction in retirement expenses were more than offset by the loss of leverage on the lower sales volumes, increased freight expense and higher healthcare expenses.
Financial - Shares
We reinstated our share repurchase...Read more
Financial - Expense
Our accrued expenses decreased in...Read more
Other - Other
At March 31, 2021 we...Read more
Financial - Earnings
Gross profit as a percent...Read more
Financial - Expense
Transformation Restructuring Plan Phase 2...Read more
Other - Other
Additional cautionary statements regarding other...Read more
Financial - Debt
The adjusted leverage ratio was...Read more
Financial - Earnings
We expect to continue to...Read more
Financial - Earnings
Gross profit as a percent...Read more
Other - Other
New Accounting Standards See Note...Read more
Revenue - Product
The DSO increase was largely...Read more
Other - Other
Effective management of our manufacturing...Read more
Other - Other
We are also reviewing our...Read more
Financial - Expense
We believe phase 1 of...Read more
Other - Other
Each of these four business...Read more
Revenue - Product
The Company has been reorganized...Read more
Revenue - Product
Our ability to generate cash...Read more
Financial - Expense
During the quarter and year...Read more
Financial - Expense
Savings realized from our transformation...Read more
Financial - Expense
Partially offsetting the decline in...Read more
Financial - Cash Flow
Cash Flows from Financing Activities...Read more
Other - Other
Our effective tax rate was...Read more
Revenue - Product
Our accounts receivable balance declined...Read more
Other - Other
These rates were higher than...Read more
Other - Other
We had no credit facility...Read more
Financial - Income
A non-GAAP financial measure is...Read more
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In particular, should demand for...Read more
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The prior year capital investments...Read more
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We expect to continue to...Read more
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Other Income (Expense) consisted of...Read more
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The loans under the Credit...Read more
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Revenue - Product
For the third quarter and...Read more
Other - Other
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M & A - Other
In addition, the Poppin inventory...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Kimball International Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Kimball International, Inc. Ex-31.1

Exhibit 31.2: Kimball International, Inc. Ex-31.2

Exhibit 32.1: Kimball International, Inc. Ex-32.1

Exhibit 32.2: Kimball International, Inc.Ex-32.2

Ticker: KBAL
CIK: 55772
Form Type: 10-Q Quarterly Report
Accession Number: 0000055772-21-000040
Submitted to the SEC: Wed May 05 2021 10:23:46 AM EST
Accepted by the SEC: Wed May 05 2021
Period: Wednesday, March 31, 2021
Industry: Household Furniture