Kimball International, Inc. Reports Third Quarter 2021 Results

— Workplace and Health Order Rates Strengthened Throughout the Third Quarter and into April—
— Expects an Approximate 300-Basis Point Sequential Rebound in Gross Margin in the Fourth Quarter—
— On Track to Achieve $20 Million in Cost Savings in Fiscal 2021—
— Expansion into New Health End Markets, New Work from Home Portfolio and New Poppin Categories to Drive Future Market Share Gains—

Kimball International, Inc. (NASDAQ: KBAL) today announced results for the quarter ended March 31, 2021.

Selected Financial Highlights:

Third Quarter FY 2021

  • Net sales of $138.7 million
  • Gross margin was 28.7%
  • Net loss of $4.5 million; Adjusted net loss was $1.0 million
  • Diluted EPS of $(0.12); Adjusted diluted EPS was $(0.03)
  • Adjusted EBITDA of $1.9 million
  • Backlog of $129.6 million

Management Commentary

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.


Third Quarter Fiscal 2021 Results

Consolidated net sales were $138.7 million, compared to $178.2 million in the prior year third quarter. Organic net sales were $129.8 million. Gross margin of 28.7%, was impacted by higher domestic and ocean freight costs, raw material inflation, higher healthcare costs and the loss of leverage on a lower revenue base. Selling and administrative expenses (S&A) of $44.9 million declined $0.7 million compared to the prior year. Adjusted selling and administrative expenses were $42.6 million or 30.8% of net sales, compared to $47.2 million or 26.5% of net sales in last year’s third quarter. Our transformation plan benefits totaled $6.0 million in the third quarter. The net loss was $4.5 million, or $(0.12) per diluted share, compared to earnings per diluted share of $0.25 reported in the fiscal 2020 third quarter. Adjusted net loss and adjusted earnings per share, which exclude intangible amortization expense and acquisition-related and restructuring charges were $1.0 million, and $(0.03), respectively. Adjusted EBITDA was $1.9 million compared to $17.5 million in the year ago quarter.

The Company ended the third quarter in a strong financial position, with $117.3 million in short-term liquidity available, which includes cash, cash equivalents, and short-term investments plus the unused amount of our credit facility. Kimball International returned $4.8 million to shareholders in the form of dividends and share repurchases in the third quarter.

Summary and Outlook

“The cadence of Workplace and Health business activity improved as we moved through the third quarter and into April, which supports our view that the industry is showing signs of recovery, and Kimball International is positioned to capture market share gains given our focus on higher growth markets, products and geographies.

“We believe that our commitment to secondary markets and our expertise in ancillary product will be an advantage as the Workplace end market recovers. We expect the return to work will occur faster in the secondary markets, which represents almost 80% of our Workplace business. As the new workplace is forming, we expect the ancillary category to play a key role as companies and institutions adjust layouts to foster collaboration, safety and wellness, and amenity-rich spaces. Additionally, with Poppin we have gained a digital lead generation engine and direct platform that addresses the needs of the quickly forming new workplace including work from home and significantly expands the reach of Kimball International.

“Based on current backlog and order flows we expect fourth quarter revenue to be similar to third quarter levels, representing a sequential increase in Workplace and Health, offset by a sequential decline in Hospitality. Gross margin is expected to rebound considerably, expanding by approximately 300 basis points. We have achieved year-to-date cost savings of $16.8 million, supporting our projection for cost savings of $20 million in full year fiscal 2021. We plan to re-invest a portion of these savings in the fourth quarter, as we increase our S&A spend in anticipation of a business recovery in fiscal 2022 and the continued expansion of Poppin.

“Kimball International ended the first nine months of fiscal 2021 in a strong financial position and has entered the fourth quarter with a clear path forward as we continue to execute on our Connect 2.0 strategy and to complete the stage one priorities associated with the Poppin acquisition. We appreciate the continued support of our employees who have enabled the company to demonstrate continued resilience while operating under difficult business conditions, and we are confident in our growth prospects for the periods ahead,” Ms. Juster concluded.

The full text of Kimball International’s 3Q21 earnings release, including all tables, along with a replay of the company’s May 4 conference call, is archived at

About Kimball International, Inc.

Kimball International is a leading omnichannel commercial furnishings company. For over 70 years, we have crafted design-driven furnishings that help our customers shape ordinary spaces into vibrant places that spark collaboration, relaxation, wellness, and discovery. Our family of brands includes Kimball, National, Etc., Interwoven, Kimball Hospitality, D’style and Poppin. To learn more about Kimball International, Inc. (KBAL), visit