-- Substantial Increase in Fourth Quarter Profitability Driven by 21% Sales Growth and
370 bps Gross Margin Expansion --
-- Positive Business Momentum Reflected in 18% Workplace Order Rates Increase --
-- Results Demonstrate Strength of Ancillary Product Portfolio and Secondary Market Focus --
-- Guiding to Strong Fiscal 2023 Revenue Growth of 15% and EBITDA Growth of 47%, at the Midpoints --
Selected Financial Highlights:
Fourth Quarter FY 2022
- Net sales of
$176.9 million , up 21% year-over-year - Gross margin expanded 370 basis points to 34.3%
- Net income of
$4.4 million ; Adjusted net income of$9.0 million - Diluted EPS of
$0.12 ; Adjusted diluted EPS was$0.24 - Adjusted EBITDA of
$13.6 million , up$10.7 million year-over-year - Backlog of
$175.6 million
Management Commentary
CEO
“Our ancillary product portfolio, which accounted for 87% of full year sales, is resonating in the market and continues to differentiate the
“Poppin sales returned to pre-pandemic levels and reflected strong demand across its product portfolio and markets, including our recently opened showrooms in
Overview
Fourth Quarter Fiscal 2022 Results
Consolidated net sales increased 21% to
Fiscal Year 2022 Results
Fiscal year 2022 net sales were
Capital expenditures net of proceeds from the sale of assets for fiscal year 2022 were
Three Months Ended | Fiscal Year Ended | ||||||||||||||||
(Unaudited) | |||||||||||||||||
(Amounts in Millions) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||
Workplace * | $ | 127.7 | $ | 92.7 | 38 | % | $ | 464.1 | $ | 354.3 | 31 | % | |||||
Health | 28.6 | 25.1 | 14 | % | 104.8 | 97.3 | 8 | % | |||||||||
Hospitality | 20.6 | 28.4 | (27 | %) | 97.0 | 117.4 | (17 | %) | |||||||||
Total |
$ | 176.9 | $ | 146.2 | 21 | % | $ | 665.9 | $ | 569.0 | 17 | % |
Orders Received by End Market | |||||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||
(Unaudited) | |||||||||||||||||
(Amounts in Millions) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||
Workplace * | $ | 132.7 | $ | 112.2 | 18 | % | $ | 510.5 | $ | 367.5 | 39 | % | |||||
Health | 28.3 | 29.8 | (5 | %) | 114.8 | 105.7 | 9 | % | |||||||||
Hospitality | 16.1 | 16.4 | (2 | %) | 84.5 | 87.1 | (3 | %) | |||||||||
Total Orders | $ | 177.1 | $ | 158.4 | 12 | % | $ | 709.8 | $ | 560.3 | 27 | % |
* Workplace end market includes education, government, commercial, and financial vertical markets and eBusiness
Summary and Outlook
“Our second half fiscal 2022 results represented an inflection point for
“The alignment of the
FY 2023 Guidance Ranges | |||
Low | High | YoY Growth | |
Revenue | 15% at midpoint | ||
Adjusted EBITDA | 47% at midpoint |
The Company expects fiscal 2023 revenue and adjusted EBITDA to be weighted somewhat toward the second half of the year, with the fourth quarter being the strongest. We anticipate first quarter fiscal 2023 revenue will be similar to fourth quarter fiscal 2022 levels with Adjusted EBITDA tracking slightly lower due to higher labor and logistics costs and higher LIFO expense.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company’s financial performance that excludes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”) in
The orders received metric is a key performance indicator used to evaluate general sales trends and develop future operating plans. Orders received represent firm orders placed by our customers during the current quarter which are expected to be recognized as revenue during current or future quarters. The orders received metric is not intended to be presented as an alternative measure of revenue recognized in accordance with GAAP.
Forward-Looking Statements
This document may contain certain forward-looking statements about the Company, such as discussions of Company’s pricing trends, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements generally can be identified by the use of words or phrases, including, but not limited to, “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” “setting up,” “beginning to,” “will,” “should,” “would,” “resume” or similar statements. We caution that forward-looking statements are subject to known and unknown risks and uncertainties that may cause the Company’s actual future results and performance to differ materially from expected results including, but not limited to, the risk that any projections or guidance by the Company, including revenues, margins, earnings, or any other financial results are not realized; a shortage of manufacturing labor and related cost; disruptions in our supply chain and freight channels including impacts on cost and availability; adverse changes in global economic conditions; successful execution of the second phase of the Company’s restructuring plan; significant reduction in customer order patterns; loss of key suppliers; relationships with strategic customers and product distributors; changes in the regulatory environment; global health concerns (including the impact of the COVID-19 pandemic); or similar unforeseen events. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in filings made from time to time with the
Conference Call / Webcast | ||
Date: | ||
Time: | ||
Dial-In #: | 800-715-9871 | |
Pass Code: | 4129345 |
A webcast of the live conference call may be accessed by visiting Kimball International’s Investor Relations website at www.ir.kimballinternational.com.
For those unable to participate in the live webcast, the call will be archived at www.ir.kimballinternational.com within two hours of the conclusion of the live call.
About
For over 70 years, our brands have seized opportunities to customize solutions into personalized experiences, turning ordinary spaces into meaningful places. Our family of brands includes Kimball, National, Etc., Interwoven,
Financial highlights for the fourth quarter ended
Condensed Consolidated Statements of Income | |||||||||||||
(Unaudited) | Three Months Ended | ||||||||||||
(Amounts in Thousands, except per share data) | |||||||||||||
$ | 176,946 | 100.0 | % | $ | 146,191 | 100.0 | % | ||||||
Cost of Sales | 116,317 | 65.7 | % | 101,501 | 69.4 | % | |||||||
Gross Profit | 60,629 | 34.3 | % | 44,690 | 30.6 | % | |||||||
Selling and Administrative Expenses | 51,428 | 29.0 | % | 49,196 | 33.7 | % | |||||||
Contingent Earn-Out (Gain) Loss | (1,280 | ) | (0.7 | %) | (11,600 | ) | (7.9 | %) | |||||
Restructuring Expense | 6,294 | 3.6 | % | 2,254 | 1.5 | % | |||||||
Operating Income | 4,187 | 2.4 | % | 4,840 | 3.3 | % | |||||||
Other Income (Expense), net | (2,189 | ) | (1.3 | %) | 670 | 0.5 | % | ||||||
Income Before Taxes on Income | 1,998 | 1.1 | % | 5,510 | 3.8 | % | |||||||
Provision (Benefit) for Income Taxes | (2,356 | ) | (1.4 | %) | (1,887 | ) | (1.3 | %) | |||||
Net Income | $ | 4,354 | 2.5 | % | $ | 7,397 | 5.1 | % | |||||
Earnings Per Share of Common Stock: | |||||||||||||
Basic | $ | 0.12 | $ | 0.20 | |||||||||
Diluted | $ | 0.12 | $ | 0.20 | |||||||||
Average Number of Total Shares Outstanding: | |||||||||||||
Basic | 36,827 | 36,809 | |||||||||||
Diluted | 36,904 | 37,157 |
(Unaudited) | Fiscal Year Ended | ||||||||||||
(Amounts in Thousands, except per share data) | |||||||||||||
$ | 665,877 | 100.0 | % | $ | 569,008 | 100.0 | % | ||||||
Cost of Sales | 454,571 | 68.3 | % | 386,580 | 67.9 | % | |||||||
Gross Profit | 211,306 | 31.7 | % | 182,428 | 32.1 | % | |||||||
Selling and Administrative Expenses | 202,291 | 30.4 | % | 181,780 | 31.9 | % | |||||||
Other General (Income) Expense | (4,523 | ) | (0.7 | %) | 0 | 0.0 | % | ||||||
Contingent Earn-Out (Gain) Loss | (17,030 | ) | (2.6 | %) | (11,600 | ) | (2.0 | %) | |||||
Restructuring Expense | 10,489 | 1.6 | % | 10,727 | 1.9 | % | |||||||
Goodwill Impairment | 34,118 | 5.1 | % | 0 | 0.0 | % | |||||||
Operating Income (Loss) | (14,039 | ) | (2.1 | %) | 1,521 | 0.3 | % | ||||||
Other Income (Expense), net | (3,381 | ) | (0.5 | %) | 3,089 | 0.5 | % | ||||||
Income (Loss) Before Taxes on Income | (17,420 | ) | (2.6 | %) | 4,610 | 0.8 | % | ||||||
Provision (Benefit) for Income Taxes | (1,706 | ) | (0.2 | %) | (2,806 | ) | (0.5 | %) | |||||
Net Income (Loss) | $ | (15,714 | ) | (2.4 | %) | $ | 7,416 | 1.3 | % | ||||
Earnings (Loss) Per Share of Common Stock: | |||||||||||||
Basic | $ | (0.43 | ) | $ | 0.20 | ||||||||
Diluted | $ | (0.43 | ) | $ | 0.20 | ||||||||
Average Number of Total Shares Outstanding: | |||||||||||||
Basic | 36,798 | 36,901 | |||||||||||
Diluted | 36,798 | 37,372 |
(Unaudited) | |||||
Condensed Consolidated Balance Sheets | 2022 |
2021 |
|||
(Amounts in Thousands) | |||||
ASSETS | |||||
Cash and cash equivalents | $ | 10,934 | $ | 24,336 | |
Receivables, net | 79,301 | 58,708 | |||
Inventories | 97,969 | 54,291 | |||
Prepaid expenses and other current assets | 30,937 | 22,012 | |||
Property and Equipment, net | 96,970 | 90,623 | |||
Right of use operating lease assets | 12,839 | 14,654 | |||
47,844 | 81,962 | ||||
Other Intangible Assets, net | 54,767 | 64,478 | |||
Deferred Tax Assets | 14,472 | 16,368 | |||
Other Assets | 15,245 | 17,163 | |||
Total Assets | $ | 461,278 | $ | 444,595 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Current maturities of long-term debt | 33 | 30 | |||
Accounts payable | 70,936 | 41,537 | |||
Customer deposits | 29,706 | 24,438 | |||
Current portion of operating lease liability | 6,096 | 6,590 | |||
Dividends payable | 3,623 | 3,532 | |||
Accrued expenses | 41,088 | 39,115 | |||
Long-term debt, less current maturities | 68,046 | 40,079 | |||
Long-term operating lease liability | 12,150 | 12,536 | |||
Long-term earn-out liability | 3,160 | 20,190 | |||
Other | 12,904 | 16,878 | |||
Shareholders’ Equity | 213,536 | 239,670 | |||
Total Liabilities and Shareholders’ Equity | $ | 461,278 | $ | 444,595 |
Condensed Consolidated Statements of Cash Flows | Fiscal Year Ended | ||||||
(Unaudited) | |||||||
(Amounts in Thousands) | 2022 | 2021 | |||||
$ | (4,573 | ) | $ | 27,294 | |||
(19,863 | ) | (115,984 | ) | ||||
10,705 | 21,973 | ||||||
(13,731 | ) | (66,717 | ) | ||||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 25,727 | 92,444 | |||||
Cash, Cash Equivalents, and Restricted Cash at End of Period | $ | 11,996 | $ | 25,727 |
Reconciliation of Non-GAAP Financial Measures | |||||||||||
(Unaudited) | |||||||||||
(Amounts in Thousands, except per share data) | |||||||||||
Organic |
|||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
$ | 176,946 | $ | 146,191 | $ | 665,877 | $ | 569,008 | ||||
Less: |
0 | 0 | 28,718 | 2,678 | |||||||
Organic |
$ | 176,946 | $ | 146,191 | $ | 637,159 | $ | 566,330 |
(1)
Adjusted Gross Profit | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Gross Profit, as reported | $ | 60,629 | $ | 44,690 | $ | 211,306 | $ | 182,428 | |||||||
Add: Pre-tax COVID vaccine incentive | 0 | 0 | 1,569 | 0 | |||||||||||
Add: Pre-tax Acquisition-related Inventory Valuation Adjustment | 29 | 247 | 282 | 536 | |||||||||||
Adjusted Gross Profit | $ | 60,658 | $ | 44,937 | $ | 213,157 | $ | 182,964 | |||||||
Adjusted Gross Profit % | 34.3 | % | 30.7 | % | 32.0 | % | 32.2 | % | |||||||
Adjusted Selling and Administrative Expense | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Selling and Administrative Expense, as reported | $ | 51,428 | $ | 49,196 | $ | 202,291 | $ | 181,780 | |||||||
Less: Pre-tax Expense Adjustment to SERP Liability | 1,622 | (757 | ) | 1,922 | (3,324 | ) | |||||||||
Less: Pre-tax CEO Transition Costs | 0 | (141 | ) | 0 | (564 | ) | |||||||||
Less: Pre-tax Acquisition-related Amortization | (1,610 | ) | (1,671 | ) | (6,440 | ) | (3,737 | ) | |||||||
Less: Pre-tax Costs of Acquisition | 0 | (144 | ) | 0 | (3,579 | ) | |||||||||
Less: Pre-tax COVID Vaccine incentive | 0 | 0 | (1,140 | ) | 0 | ||||||||||
Adjusted Selling and Administrative Expense | $ | 51,440 | $ | 46,483 | $ | 196,633 | $ | 170,576 | |||||||
Adjusted Selling and Administrative Expense % | 29.1 | % | 31.8 | % | 29.5 | % | 30.0 | % |
Adjusted Operating Income (Loss) | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Operating Income (Loss), as reported | $ | 4,187 | $ | 4,840 | $ | (14,039 | ) | $ | 1,521 | ||||||
Add: Pre-tax Restructuring Expense | 6,294 | 2,254 | 10,489 | 10,727 | |||||||||||
Add: Pre-tax Goodwill Impairment | 0 | 0 | 34,118 | 0 | |||||||||||
Add: Pre-tax Other General (Income) Expense(2) | 0 | 0 | (4,523 | ) | 0 | ||||||||||
Add: Pre-tax Expense Adjustment to SERP Liability | (1,622 | ) | 757 | (1,922 | ) | 3,324 | |||||||||
Add: Pre-tax CEO Transition Costs | 0 | 141 | 0 | 564 | |||||||||||
Add: Pre-tax Acquisition-related Amortization | 1,610 | 1,671 | 6,440 | 3,737 | |||||||||||
Add: Pre-tax Acquisition-related Inventory Valuation Adjustment | 29 | 247 | 282 | 536 | |||||||||||
Add: Pre-tax Costs of Acquisition | 0 | 144 | 0 | 3,579 | |||||||||||
Add: Pre-tax Contingent Earn-Out (Gain) Loss | (1,280 | ) | (11,600 | ) | (17,030 | ) | (11,600 | ) | |||||||
Add: Pre-tax COVID vaccine incentive | 0 | 0 | 2,709 | 0 | |||||||||||
Adjusted Operating Income (Loss) | $ | 9,218 | $ | (1,546 | ) | $ | 16,524 | $ | 12,388 | ||||||
Adjusted Operating Income (Loss) % | 5.2 | % | (1.1% | ) | 2.5 | % | 2.2 | % | |||||||
Adjusted Net Income (Loss) | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net Income (Loss), as reported | $ | 4,354 | $ | 7,397 | $ | (15,714 | ) | $ | 7,416 | ||||||
Pre-tax Restructuring Expense | 6,294 | 2,254 | 10,489 | 10,727 | |||||||||||
Tax on Restructuring Expense | (1,620 | ) | (580 | ) | (2,699 | ) | (2,761 | ) | |||||||
Add: After-tax Restructuring Expense | 4,674 | 1,674 | 7,790 | 7,966 | |||||||||||
Pre-tax Goodwill Impairment | 0 | 0 | 34,118 | 0 | |||||||||||
Tax on Goodwill Impairment | 0 | 0 | 0 | 0 | |||||||||||
Add: After-tax Goodwill Impairment | 0 | 0 | 34,118 | 0 | |||||||||||
Pre-tax Other General (Income) Expense(2) | 0 | 0 | (4,523 | ) | 0 | ||||||||||
Tax on Other General (Income) Expense | 0 | 0 | 1,164 | 0 | |||||||||||
Add: After-tax Other General (Income) Expense | 0 | 0 | (3,359 | ) | 0 | ||||||||||
Pre-tax CEO Transition Costs | 0 | 141 | 0 | 564 | |||||||||||
Tax on CEO Transition Costs | 0 | (36 | ) | 0 | (144 | ) | |||||||||
Add: After-tax CEO Transition Costs | 0 | 105 | 0 | 420 | |||||||||||
Pre-tax Acquisition-related Amortization | 1,610 | 1,671 | 6,440 | 3,737 | |||||||||||
Tax on Acquisition-related Amortization | (414 | ) | (430 | ) | (1,658 | ) | (962 | ) | |||||||
Add: After-tax Acquisition-related Amortization | 1,196 | 1,241 | 4,782 | 2,775 | |||||||||||
Pre-tax Acquisition-related Inventory Valuation Adjustment | 29 | 247 | 282 | 536 | |||||||||||
Tax on Acquisition-related Inventory Valuation Adjustment | (7 | ) | (64 | ) | (73 | ) | (139 | ) | |||||||
Add: After-tax Acquisition-related Inventory Adjustment | 22 | 183 | 209 | 397 | |||||||||||
Pre-tax Costs of Acquisition | 0 | 144 | 0 | 3,579 | |||||||||||
Tax on Costs of Acquisition | 0 | (37 | ) | 0 | (921 | ) | |||||||||
Add: After-tax Costs of Acquisition | 0 | 107 | 0 | 2,658 | |||||||||||
Pre-tax Contingent Earn-Out (Gain) Loss | (1,280 | ) | (11,600 | ) | (17,030 | ) | (11,600 | ) | |||||||
Tax on Contingent Earn-Out (Gain) Loss | 0 | 0 | 0 | 0 | |||||||||||
Add: After-tax Contingent Earn-Out (Gain) Loss | (1,280 | ) | (11,600 | ) | (17,030 | ) | (11,600 | ) | |||||||
Pre-tax COVID Vaccine Incentive | 0 | 0 | 2,709 | 0 | |||||||||||
Tax on COVID Vaccine Incentive | 0 | 0 | (697 | ) | 0 | ||||||||||
Add: After-tax COVID Vaccine Incentive | 0 | 0 | 2,012 | 0 | |||||||||||
Adjusted Net Income (Loss) | $ | 8,966 | $ | (893 | ) | $ | 12,808 | $ | 10,032 | ||||||
Adjusted Diluted Earnings (Loss) Per Share | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Diluted Earnings (Loss) Per Share, as reported | $ | 0.12 | $ | 0.20 | $ | (0.43 | ) | $ | 0.20 | ||||||
Add: After-tax Restructuring Expense | 0.12 | 0.05 | 0.21 | 0.22 | |||||||||||
Add: After-tax CEO Transition Costs | 0.00 | 0.00 | 0.00 | 0.01 | |||||||||||
Add: After-tax Goodwill Impairment | 0.00 | 0.00 | 0.93 | 0.00 | |||||||||||
Add: After-tax Other General (Income) Expense(2) | 0.00 | 0.00 | (0.09 | ) | 0.00 | ||||||||||
Add: After-tax Acquisition-related Amortization | 0.03 | 0.03 | 0.13 | 0.07 | |||||||||||
Add: After-tax Acquisition-related Inventory Valuation Adjustment | 0.00 | 0.01 | 0.01 | 0.01 | |||||||||||
Add: After-tax Costs of Acquisition | 0.00 | 0.00 | 0.00 | 0.07 | |||||||||||
Add: After-tax Contingent Earn-Out (Gain) Loss | (0.03 | ) | (0.31 | ) | (0.46 | ) | (0.31 | ) | |||||||
Add: After-tax COVID Vaccine Incentive | 0.00 | 0.00 | 0.05 | 0.00 | |||||||||||
Adjusted Diluted Earnings (Loss) Per Share | $ | 0.24 | $ | (0.02 | ) | $ | 0.35 | $ | 0.27 |
Adjusted EBITDA | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||
Net Income (Loss) | $ | 4,354 | $ | 7,397 | $ | (15,714 | ) | $ | 7,416 | ||||||
Provision (Benefit) for Income Taxes | (2,356 | ) | (1,887 | ) | (1,706 | ) | (2,806 | ) | |||||||
Income (Loss) Before Taxes on Income | 1,998 | 5,510 | (17,420 | ) | 4,610 | ||||||||||
Interest Expense | 561 | 190 | 1,483 | 453 | |||||||||||
Interest Income | (52 | ) | (88 | ) | (129 | ) | (336 | ) | |||||||
Depreciation | 3,676 | 3,675 | 14,496 | 14,511 | |||||||||||
Amortization | 2,402 | 2,471 | 9,614 | 6,683 | |||||||||||
Pre-tax Restructuring Expense | 6,294 | 2,254 | 10,489 | 10,727 | |||||||||||
Pre-tax Goodwill Impairment | 0 | 0 | 34,118 | 0 | |||||||||||
Pre-tax Other General (Income) Expense(2) | 0 | 0 | (4,523 | ) | 0 | ||||||||||
Pre-tax CEO Transition Costs | 0 | 141 | 0 | 564 | |||||||||||
Pre-tax Acquisition-related Inventory Valuation Adjustment | 29 | 247 | 282 | 536 | |||||||||||
Pre-tax Costs of Acquisition | 0 | 144 | 0 | 3,579 | |||||||||||
Pre-tax Contingent Earn-Out (Gain) Loss | (1,280 | ) | (11,600 | ) | (17,030 | ) | (11,600 | ) | |||||||
Pre-tax COVID Vaccine Incentive | 0 | 0 | 2,709 | 0 | |||||||||||
Adjusted EBITDA | $ | 13,628 | $ | 2,944 | $ | 34,089 | $ | 29,727 | |||||||
Adjusted EBITDA % | 7.7 | % | 2.0 | % | 5.1 | % | 5.2 | % |
(2) Fiscal year 2022 Other General (Income) Expense consists of a gain realized on the sale of a warehouse totaling
Supplementary Information | |||||||||||||||
Components of Other Income (Expense), net | Three Months Ended | Fiscal Year Ended | |||||||||||||
(Unaudited) | |||||||||||||||
(Amounts in Thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||
Interest Income | $ | 52 | $ | 88 | $ | 129 | $ | 336 | |||||||
Interest Expense | (561 | ) | (190 | ) | (1,483 | ) | (453 | ) | |||||||
Gain (Loss) on Supplemental Employee Retirement Plan Investments | (1,622 | ) | 757 | (1,922 | ) | 3,324 | |||||||||
Other Non-Operating Income (Expense) | (58 | ) | 15 | (105 | ) | (118 | ) | ||||||||
Other Income (Expense), net | $ | (2,189 | ) | $ | 670 | $ | (3,381 | ) | $ | 3,089 |
For additional information contact:
Telephone 812.482.1600

Source: Kimball International, Inc.