Kimball International, Inc. announced the following results for the quarter ended September 30, 2017:
- First quarter revenue was $169.5 million, a 3% decrease coming off of very strong prior year first quarter growth of 12%.
- First quarter adjusted operating income was $16.0 million, or 9.4% of net sales, representing the best earnings since 2001.
- First quarter GAAP net income was $11.0 million which was flat compared to the prior year first quarter, and exclusive of a prior year restructuring gain, net income increased 11% over prior year adjusted net income.
- Quarterly return on capital equaled 23.2%, the best in the industry, where public data is available.
- Quarterly dividend was increased to 7 cents per share, a 17% increase over the previous quarterly dividend and the fourth successive dividend increase in the last four years.
- D’style, Inc. acquisition was announced today and is expected to close in the next 30 days.
“I am very pleased with our ability to convert lower sales into higher earnings for the first quarter,” Bob Schneider, chairman and CEO, said. “Our first quarter results reflect strong execution and focus on continuous improvement, as our 9.4% adjusted operating income excluding restructuring was the highest in over 15 years. Improved sales in the office verticals was offset by lower sales in our hospitality vertical, resulting in our consolidated revenue declining 3%. Our hospitality vertical revenues have historically fluctuated from quarter to quarter, and we expect second quarter revenues to increase substantially from the first quarter.”
Scheider also addressed the pending acquisition of D’style.
“I am also very excited by our pending acquisition of D’style, along with its subsidiary Allan Copley Designs,” Schneider said. “D’style, headquartered in Chula Vista, Calif., is well-known and respected in the hospitality industry for providing public space furnishings and guest room accent pieces and will be a natural fit with our existing hospitality brand. These offerings will also enable us to take advantage of the trend where hospitality, residential, and commercial designs are merging. D’style sells primarily in North America with prior calendar year sales of approximately $20 million. The acquisition is expected to be accretive to earnings in fiscal year 2018. We look forward to welcoming the D’style employees to the Kimball International team.”