Electronics Production | May 07, 2007
Kimball Net Sales up 20%
Kimball International, Inc. today announced financial results for the third quarter of fiscal year 2007, which ended March 31, 2007. Net sales for the third quarter of fiscal year 2007 were $311.6 million, an increase of 20% over net sales of $260.7 million in the third quarter of fiscal year 2006.
Third quarter fiscal 2007 net sales included $79.2 million of sales from acquisitions in the Company's Electronic Contract Assemblies segment, one of which was completed during the current year third quarter and two that were completed during the fourth quarter of fiscal year 2006. Third quarter net sales in the Electronic Contract Assemblies segment increased 49% as a result of the acquisitions, and net sales in the Furniture and Cabinets segment decreased 2% primarily due to the planned exit of contract private label products. Income from continuing operations in the third quarter of fiscal year 2007, which decreased $3.3 million from the prior year, was $4.4 million of after-tax charges associated with restructuring activities. For the prior year third quarter, income from continuing operations was $7.7 million of after-tax restructuring charges. Net income for the current year third quarter was $3.8 million, which included a loss from discontinued operations of ($0.6) million after-tax. For the prior year third quarter, net income was $7.3 million, including a loss from discontinued operations of ($0.4) million after-tax. Consolidated gross profit as a percent of net sales was 19.4% in the current year third quarter compared to 23.8% in the prior year partially related to a shift in sales mix toward the Electronic Contract Assemblies segment which carries a lower gross profit percentage than the Furniture and Cabinets segment. In addition, both segments experienced a decline in gross profit percentage. The decline in gross profit as a percent of net sales in the Furniture and Cabinets segment was related primarily to higher discounting on select office furniture products, a shift in product mix to lower margin product, and higher manufacturing overhead costs which were partially offset by price increases on select product and benefits realized from changes in warehouse and distribution strategies. The decline in the gross profit percentage for the Electronic Contract Assemblies segment was primarily related to a shift in product sales mix. The Company is currently estimating that its annual effective tax rate from continuing operations for fiscal year 2007 will be approximately 38%, which is higher than in recent prior years primarily due to a higher mix of income being generated by domestic operations which carry a higher effective tax rate.