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A business consultancy, based in London, England, John Sacks' JSA Consultancy Services provides expert, in-depth, information advice and guidance as to how to exploit successfully the office furniture and interiors markets in Europe, North America, Australasia and Japan.

Kimball quarterly earnings climb

Saturday 4 February 2012

Kimball International improved its earnings last quarter even as its net sales dropped, the company reported Friday.
The Jasper-based company reported net income of $3.2 million (9 cents per diluted share) for the quarter ending 31 December 2011, as compared to net income of $876,000 (2 cents per diluted share) during the same period a year earlier.
Net sales totalled $296.9 million last quarter, down 4 percent from a year earlier.
“We were pleased in the improvement in our second quarter results,” Board Chairman Douglas Habig told analysts during an earnings call.
Kimball operates two business segments — furniture and electronics. The furniture segment includes the office and hospitality industries, while the electronics segment includes the medical, automotive, industrial control and public safety industries.
The company’s office furniture segment, which operates at a higher gross profit percentage than its electronics segment, made up a higher percentage of sales as compared to a year ago.
Last quarter the company’s net sales were evenly split between both segments. During the same period a year earlier, sales from electronics represented 58 percent of net sales as compared to 42 percent from furniture.
In the electronics segment, Kimball’s net sales for the quarter totalled $148.1 million, down 18 percent as compared to the same period a year earlier.
The company said the decline was because of the previously-announced expiration of a contract with medical customer Bayer AG. The loss of that contract accounted for a $36.6 million reduction in net sales during the quarter, management said.
Kimball is working to replace those lost sales but has not yet found enough business to offset the Bayer loss, said Kimball Chief Financial Officer Bob Schneider.
In the furniture segment sales rose 15 percent, to $148.8 million. Selling and administrative costs in this segment rose 4 percent because of increased spending on sales and marketing, higher labor costs and higher commissions related to the improved sales.
Net income in the furniture segment stood at $3.4 million last quarter, up from $801,000 the previous year.
Looking ahead, Habig said, Kimball sees a mixed picture for the overall economy.
U.S. political squabbles and the European debt crisis are contributing to an air of instability, Habig said, and in China growth rates are slowing and costs are rising.
But on the plus side, he said, the U.S. unemployment rate is down, employers are adding jobs and the manufacturing sector is strengthening.

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