0000055772false00000557722022-11-032022-11-03


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 3, 2022

kbal-20221103_g1.jpg

KIMBALL INTERNATIONAL, INC.
________________________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
   
Indiana0-327935-0514506
(State or other jurisdiction of(Commission File(IRS Employer Identification No.)
incorporation)Number) 
   
1600 Royal Street, Jasper, Indiana
 47546-2256
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code  (812) 482-1600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading Symbol(s)Name of each exchange on which registered
Class B Common Stock, par value $0.05 per shareKBAL
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
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Item 2.02 Results of Operations and Financial Condition
On November 3, 2022, Kimball International, Inc. (the "Company") issued an earnings release for the quarter ended September 30, 2022.  The earnings release is attached as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
Attached hereto as Exhibit 99.2 is an investor presentation that supplements the information to be discussed on the Kimball International, Inc. earnings call to be held on November 3, 2022 at 5:00 p.m. Eastern Time. The presentation attached as Exhibit 99.2 is incorporated into this Item 7.01 by reference.

Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit 
NumberDescription
99.1
99.2
104Cover Page interactive data file (embedded within the Inline XBRL document)

The information in this Current Report on Form 8-K set forth in Item 2.02, Item 7.01, and Exhibits 99.1 and 99.2, is being furnished in accordance with the provisions of General Instruction B.2 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, that is being furnished under Item 2.02 and Item 7.01 shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
  
 KIMBALL INTERNATIONAL, INC.
  
By:/s/ Timothy J. Wolfe
 TIMOTHY J. WOLFE
Chief Financial Officer
Date: November 3, 2022

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Exhibit 99.1

KIMBALL INTERNATIONAL, INC. REPORTS FIRST QUARTER 2023 RESULTS

--Positive Momentum Continued with Profitability More than Doubling Year-on-Year--
--Workplace and Health Markets Delivered 20% Year-over-Year Revenue Growth--
--Favorable Product and Geographic Mix Continue to Drive Market Share Gains--
--Re-Affirms Fiscal 2023 Guidance for Revenue Growth of 15% and Adjusted EBITDA Growth of 47%, at the Midpoints--

JASPER, IN (November 3, 2022) - Kimball International, Inc. (NASDAQ: KBAL) today announced results for the first quarter ended September 30, 2022.
Selected Financial Highlights:
First Quarter FY 2023
•Net sales of $177.8 million, increased 14% year-over-year
•Gross margin expanded 220 basis points to 33.5%
•Net income of $6.6 million; Adjusted net income of $4.8 million
•Diluted EPS of $0.18; Adjusted diluted EPS was $0.13
•Adjusted EBITDA of $11.5 million, up $6.7 million year-over-year
•Backlog of $180.0 million
Management Commentary

CEO Kristie Juster commented, “This marks our third consecutive quarter of industry-leading performance reflecting and underlining Kimball International’s differentiated market positioning and growth strategy. A product portfolio aligned with the new-forming post-COVID workplace and health markets and a leadership position in faster-growing secondary markets provide proof points of our resilience and enable us to gain share. Top line growth, together with ongoing operating efficiencies, continues to drive margin improvement and robust earnings growth.

“Our first quarter results demonstrate the strategic choices that set Kimball International apart within our industry. Ancillary products, which provide the flexibility, collaboration and privacy needs of today’s developing workplace and healthcare settings, accounted for 87% of our trailing twelve-month revenues and continue to see the most robust demand across all categories. Similarly, shipments to secondary markets, which have experienced employment growth and a faster return-to-office, continue to lead the way and represented 78% of trailing twelve-month shipments.

“Our Workplace and Health end markets continued to drive year-on-year sales growth and represented 89% of total first quarter revenues. First quarter order rates were slightly ahead of last year’s levels and the positive momentum continued into October. We are also experiencing a pick-up in demand from the Hospitality vertical, another market where Kimball International is a leader, although a meaningful recovery is not expected until later this year.”

Overview

First Quarter Fiscal 2023 Results

Consolidated net sales of $177.8 million increased by 14% from the year ago quarter, driven by double-digit growth of Workplace and Health end markets. Gross margin expanded 220 basis points year-over-year to 33.5%, benefiting from price increases that more than offset ongoing freight and raw material inflation, as well as continued operational excellence savings. Selling and administrative expenses (S&A) of $53.4 million declined year-over-year as a percentage of total net sales by 210 basis points to 30.0% in the first quarter of fiscal 2023. Adjusted S&A was $52.4 million, or 29.4% of net sales, compared to $48.6 million, or 31.1% of net sales, in last year’s first quarter. Net income was $6.6 million, or $0.18 per diluted share, up from net loss of $5.0 million or $(0.14) per diluted share in the year ago quarter. Adjusted net income was $4.8 million, or $0.13 per diluted share, ahead of adjusted net income of $1.9 million, or $0.05 per diluted share in the first quarter of fiscal 2022. Adjusted EBITDA was $11.5 million compared to $4.9 million in the year ago quarter.


Capital expenditures in the first quarter of 2023 amounted to $5.4 million. Kimball International returned $4.3 million to shareholders in the form of dividends and share repurchases in the first quarter of 2023.


Net Sales by End Market
 Three Months Ended 
(Unaudited)September 30, 
(Amounts in Millions)20222021% Change
Workplace *$132.0 $108.6 22 %
Health26.1 23.0 13 %
Hospitality19.7 25.0 (21 %)
Total Net Sales$177.8 $156.6 14 %
Orders Received by End Market
Three Months Ended
(Unaudited)September 30,
(Amounts in Millions)20222021% Change
Workplace *$126.3 $124.7 1 %
Health29.7 28.9 3 %
Hospitality31.7 33.0 (4 %)
Total Orders$187.7 $186.6 1 %

* Workplace end market includes education, government, commercial, and financial vertical markets and eBusiness

Summary and Outlook

“First quarter results represented a strong start to fiscal 2023 and have set the stage for this to be another year of solid performance for Kimball International. Through our focused set of strategic choices, we are successfully delivering in-demand products and solutions to end markets and geographies of high growth, resiliency and favorable return-to-office dynamics. While we are mindful of the challenging macroeconomic environment and heightened recessionary risks, we are confident in our ability to outperform the industry, and we are pleased to reaffirm our guidance for substantial revenue and EBITDA growth in fiscal 2023,” Ms. Juster concluded.

FY 2023 Guidance Ranges
LowHighYoY Growth
Revenue
$750 million$780 million15% at midpoint
Adjusted EBITDA
$48 million$52 million47% 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 second quarter fiscal 2023 revenue to be similar to Q1 levels and adjusted EBITDA to be slightly below Q1 levels due to expected short-term inefficiencies in certain elements of our logistics network.

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 or includes 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 United States in the statements of operations, statements of comprehensive income, balance sheets, statements of cash flows, or statement of shareholders’ equity of the Company. The non-GAAP financial measures used within this release include:


•adjusted operating income, defined as operating income (loss) excluding restructuring expenses, market valuation adjustments related to our SERP liability, acquisition-related amortization and inventory valuation adjustments, and contingent earn-out gain or loss;
•adjusted operating income percentage, defined as adjusted operating income as a percentage of net sales;
•adjusted net income, defined as net income (loss) excluding restructuring expenses, acquisition-related amortization and inventory valuation adjustments, and contingent earn-out gain or loss;
•adjusted diluted earnings per share, defined as diluted earnings (loss) per share excluding restructuring expenses, acquisition-related amortization and inventory valuation adjustments, and contingent earn-out gain or loss;
•adjusted EBITDA, defined as earnings before interest, statutory income tax impacts for taxable after-tax measures, depreciation, and amortization and excluding restructuring expenses, acquisition-related inventory valuation adjustments, and contingent earn-out gain or loss; and
•adjusted EBITDA percentage, defined as adjusted EBITDA as a percentage of net sales.
Reconciliations of the reported GAAP numbers to these non-GAAP financial measures are included in the tables below. Management believes that adjusted EBITDA and other metrics excluding restructuring expense, market value adjustments related to the SERP liability, and acquisition-related adjustments are useful measurements to assist investors in comparing our performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect our core operating performance.

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 Securities and Exchange Commission, including but not limited to, our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Conference Call / Webcast
Date:November 3, 2022
Time:5:00 PM Eastern Time
US Toll free Dial-In #:
1-877-270-2148
International Dial-In #:1-412-902-6510
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 Kimball International, Inc.

Kimball International is a leading omnichannel commercial furnishings company with deep expertise in the Workplace, Health and Hospitality markets. We combine our bold entrepreneurial spirit, a history of craftsmanship and today’s design-driven thinking alongside a commitment to our culture of caring and lasting connections with our customers, shareholders, employees and communities.

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, Kimball Hospitality, D’style and Poppin.

Kimball International is based in Jasper, Indiana.

www.kimballinternational.com



Financial highlights for the first quarter ended September 30, 2022 are as follows:
Condensed Consolidated Statements of Operations
(Unaudited)Three Months Ended
(Amounts in Thousands, except per share data)September 30, 2022September 30, 2021
Net Sales$177,811 100.0 %$156,610 100.0 %
Cost of Sales118,197 66.5 %107,513 68.7 %
Gross Profit59,614 33.5 %49,097 31.3 %
Selling and Administrative Expenses53,407 30.0 %50,159 32.1 %
Contingent Earn-Out (Gain) Loss(3,160)(1.8 %)4,610 2.9 %
Restructuring Expense370 0.2 %1,455 0.9 %
Operating Income (Loss)8,997 5.1 %(7,127)(4.6 %)
Other Expense, net(1,094)(0.7 %)(434)(0.2 %)
Income (Loss) Before Taxes on Income7,903 4.4 %(7,561)(4.8 %)
Provision (Benefit) for Income Taxes1,347 0.7 %(2,512)(1.6 %)
Net Income (Loss)$6,556 3.7 %$(5,049)(3.2 %)
Earnings (Loss) Per Share of Common Stock:
Basic$0.18 $(0.14)
Diluted$0.18 $(0.14)
Average Number of Total Shares Outstanding:
Basic36,754 36,821 
Diluted36,976 36,821 



(Unaudited)
Condensed Consolidated Balance SheetsSeptember 30,
2022		June 30,
2022
(Amounts in Thousands)
ASSETS
    Cash and cash equivalents$16,760 $10,934 
    Receivables, net64,726 79,301 
    Inventories105,935 97,969 
    Prepaid expenses and other current assets24,754 30,937 
    Property and Equipment, net97,069 96,970 
    Right of use operating lease assets13,172 12,839 
    Goodwill47,844 47,844 
    Other Intangible Assets, net53,644 54,767 
    Deferred Tax Assets15,528 14,472 
    Other Assets14,928 15,245 
        Total Assets$454,360 $461,278 
LIABILITIES AND SHAREHOLDERS’ EQUITY
    Current maturities of long-term debt0 33 
    Accounts payable69,731 70,936 
    Customer deposits36,427 29,706 
    Current portion of operating lease liability5,718 6,096 
    Dividends payable3,710 3,623 
    Accrued expenses31,378 41,088 
    Long-term debt, less current maturities65,000 68,046 
    Long-term operating lease liability12,228 12,150 
    Other12,797 16,064 
    Shareholders’ Equity217,371 213,536 
        Total Liabilities and Shareholders’ Equity$454,360 $461,278 




Condensed Consolidated Statements of Cash FlowsThree Months Ended
(Unaudited)September 30,
(Amounts in Thousands)20222021
Net Cash Flow provided by Operating Activities$18,092 $11,905 
Net Cash Flow used for Investing Activities(4,946)(3,592)
Net Cash Flow used for Financing Activities(7,399)(5,085)
Net Increase in Cash, Cash Equivalents, and Restricted Cash5,747 3,228 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period11,996 25,727 
Cash, Cash Equivalents, and Restricted Cash at End of Period$17,743 $28,955 





Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Amounts in Thousands, except per share data)

Adjusted Selling and Administrative Expense
Three Months Ended
September 30,
20222021
Selling and Administrative Expense, as reported$53,407 $50,159 
Less: Pre-tax Expense Adjustment to SERP Liability459 93 
Less: Pre-tax Acquisition-related Amortization(1,502)(1,609)
Adjusted Selling and Administrative Expense$52,364 $48,643 
Adjusted Selling and Administrative Expense %29.4 %31.1 %
Adjusted Operating Income
Three Months Ended
September 30,
20222021
Operating Income (Loss), as reported$8,997 $(7,127)
Add: Pre-tax Restructuring Expense370 1,455 
Add: Pre-tax Expense Adjustment to SERP Liability(459)(93)
Add: Pre-tax Acquisition-related Amortization1,502 1,609 
Add: Pre-tax Acquisition-related Inventory Valuation Adjustment0 143 
Add: Pre-tax Contingent Earn-Out (Gain) Loss(3,160)4,610 
Adjusted Operating Income$7,250 $597 
Adjusted Operating Income %4.1 %0.4 %
Adjusted Net Income
Three Months Ended
September 30,
20222021
Net Income (Loss), as reported$6,556 $(5,049)
Pre-tax Restructuring Expense370 1,455 
Tax on Restructuring Expense(96)(375)
Add: After-tax Restructuring Expense274 1,080 
Pre-tax Acquisition-related Amortization1,502 1,609 
Tax on Acquisition-related Amortization(387)(414)
Add: After-tax Acquisition-related Amortization1,115 1,195 
Pre-tax Acquisition-related Inventory Valuation Adjustment0 143 
Tax on Acquisition-related Inventory Valuation Adjustment0 (37)
Add: After-tax Acquisition-related Inventory Adjustment0 106 
Pre-tax Contingent Earn-Out (Gain) Loss(3,160)4,610 
Tax on Contingent Earn-Out (Gain) Loss0 0 
Add: After-tax Contingent Earn-Out (Gain) Loss(3,160)4,610 
Adjusted Net Income$4,785 $1,942 


Adjusted Diluted Earnings Per Share
Three Months Ended
September 30,
20222021
Diluted Earnings (Loss) Per Share, as reported$0.18 $(0.14)
Add: After-tax Restructuring Expense0.01 0.03 
Add: After-tax Acquisition-related Amortization0.03 0.03 
Add: After-tax Acquisition-related Inventory Valuation Adjustment0.00 0.01 
Add: After-tax Contingent Earn-Out (Gain) Loss(0.09)0.12 
Adjusted Diluted Earnings Per Share$0.13 $0.05 
    

Adjusted EBITDA
Three Months Ended
September 30,
20222021
Net Income (Loss)$6,556 $(5,049)
Provision (Benefit) for Income Taxes1,347 (2,512)
Income (Loss) Before Taxes on Income7,903 (7,561)
Interest Expense681 257 
Interest Income(77)(9)
Depreciation3,634 3,562 
Amortization2,195 2,439 
Pre-tax Restructuring Expense370 1,455 
Pre-tax Acquisition-related Inventory Valuation Adjustment0 143 
Pre-tax Contingent Earn-Out (Gain) Loss(3,160)4,610 
Adjusted EBITDA$11,546 $4,896 
Net Income (Loss) %3.7 %(3.2 %)
Adjusted EBITDA %6.5 %3.1 %

Supplementary Information
Components of Other Income (Expense), netThree Months Ended
(Unaudited)September 30,
(Amounts in Thousands)20222021
Interest Income$77 $9 
Interest Expense(681)(257)
Loss on Supplemental Employee Retirement Plan Investments(459)(93)
Other Non-Operating Expense(31)(93)
Other Expense, net$(1,094)$(434)

For additional information contact:

Chris Kuepper - chris.kuepper@kimballinternational.com
Lynn Morgen - lynn.morgen@advisiry.com
Eric Prouty - eric.prouty@advisiry.com

Kimball International
1600 Royal Street
Jasper, IN 47546-2256
Telephone 812.482.1600
Q1 FY ‘23 Quarterly Earnings & Strategic Update November 3, 2022 Exhibit 99.2

 
Safe Harbor Statement 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; the potential for impairment of goodwill; 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 Securities and Exchange Commission, including but not limited to, our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. 2

 
 Strong start to fiscal 2023 reflects the positive momentum in our business  20% increase in Workplace and Health Q1 FY ‘23 sales driven by relevance of portfolio and focus on key markets  Third consecutive quarter of substantial year- over-year profitability gains  Focused strategy, customer excellence and applied research provide continued growth and share gains Key Takeaways 3 |

 
Expertise in Ancillary Products & Secondary Geographies1 Major SecondarySystems Ancillary 87% 78% ANCILLARY PRODUCTS SECONDARY GEOGRAPHIES The office is evolving into a place to foster collaboration and culture development as companies return to hybrid or fully in-person settings Ancillary products provide the flexibility and aesthetics that employers are looking for in this post-pandemic environment Secondary geographies are experiencing a faster return to office We have a strong, long-time presence, established relationships, and noticeable momentum in these key markets 4 | 1 Based on trailing-twelve-months financials

 
 Workplace sales increased 22% in Q1 FY ‘23 year-over-year  Double-digit growth achieved across most verticals, led by Commercial and Education  Perfect Harmony implementation driving 25% of Q1 FY ‘23 year-over-year sales growth  New pop-up showroom in NYC, Poppin LA showroom re-opened in new location  Poppin pod category revenue up 38% in Q1 FY ‘23 year-over-year  PoppinPro over 15% of total Poppin sales for third quarter in a row Workplace 5

 
Health  Net sales increased 13% in Q1 FY ‘23 year- over-year  Won Nightingale Award for our EverySpace modular solution at Healthcare Design Expo  Interwoven brand revenues increased 27% in Q1 FY ‘23 year-over-year  Federal Government Health end market comprised more than 10% of sales in Q1 FY ‘23  Continued investments in applied research, product development and partnering with our customer and dealer communities 6 |

 
7 Prioritizing Flexibility Focusing on Inclusion & Belonging Balancing Hybrid Environments Supporting Health & Well-Being

 
$186.6 $170.8 $187.7 $180.0 Orders Backlog Q1 FY22 Q1 FY23 Backlog and Quarterly Orders by Market1 Year-over-year Quarter Comparison Q1 ’23 vs. Q1 ’22 (in millions) 8 1 Unaudited. 2 Workplace end market includes commercial, educational, government and financial verticals and eBusiness $124.7 $126.3 Orders Q1 FY22 Q1 FY23 Workplace2 Health Hospitality Kimball International $28.9 $29.7 Orders Q1 FY22 Q1 FY23 $33.0 $31.7 Orders Q1 FY22 Q1 FY23 +1% +3% -4% +1% +5%

 
Quarterly Sales by Market1 Year-over-year Quarter Comparison Q1 ’23 vs. Q1 ’22 (in millions) 9 1 Unaudited. 2 Workplace end market includes commercial, educational, government and financial verticals and eBusiness $108.6 $132.0 Net Sales Q1 FY22 Q1 FY23 Workplace2 Health Hospitality $23.0 $26.1 Net Sales Q1 FY22 Q1 FY23 $25.0 $19.7 Net Sales Q1 FY22 Q1 FY23 $156.6 $177.8 Net Sales Q1 FY22 Q1 FY23 +22% +13% -21% +14% Kimball International

 
Q1 FY ’23 Financial Highlights1 33.5% GROSS MARGIN $52.4M ADJ. S&A EXPENSE2 $4.8M ADJ. NET INCOME2 $0.13 ADJ. EPS2 $177.8M REVENUE $11.5M ADJ. EBITDA2 1 Unaudited. 2 Non-GAAP Financial Measure. See Appendix for Non-GAAP reconciliations. $53.4M S&A EXPENSE $6.6M NET INCOME $0.18 EPS 1 0 |

 
Q1 FY ’23 Liquidity and Capital Allocation $75.0M CASH, CASH EQUIVALENTS, PLUS THE UNUSED AMOUNT OF OUR CREDIT FACILITY 1 1 | $5.4M CAPEX $4.3M TOTAL CAPITAL RETURNED TO SHAREHOLDERS $18.1M CASH FROM OPERATIONS

 
FY ’23 Guidance $750M - $780M REVENUE $48M - $52M ADJUSTED EBITDA 1 2 Fiscal 2023 revenue and adjusted EBITDA will be weighted somewhat toward the second half of the year, with the fourth quarter being the strongest. Second quarter fiscal 2023 revenue will be similar to first quarter fiscal 2023 levels with Adjusted EBITDA tracking slightly lower due to expected short-term inefficiencies in certain elements of our logistics network.

 
 Solid start to fiscal 2023, primed for another year of growth  Successfully delivering products and solutions to end markets and geographies of high growth, resiliency, and favorable return-to-office dynamics  Confident in ability to gain share and outperform the industry, while being mindful of challenging macroeconomic environment and heightened recessionary risks  Strong, well-aligned product portfolio with relevance to the emerging trends in today’s marketplaces Looking Ahead Whittaker Lounge by Kimball, Frill Tables by David Edward, Idara Chair & Whimsy Ottoman by National, Xanthe Credenza by Etc. 1 3 |

 
Environmental, Social and Governance (ESG) Roadmap Our Vision for Impact 5 Focus Areas Environmental, Social & Governance (ESG) Roadmap Kimball International is dedicated to building a more sustainable future and making a difference in our communities through five important focus areas. Environmental Management & Sustainable Products Investing In Our People with Talent Development Diversity, Equity, Inclusion & Belonging Product Quality & Safety Responsible Supply Chain Management 1 2 3 4 5 1 4 |

 
Appendix

 
Non-GAAP Reconciliation (Unaudited) APPENDIX 1 6 |

 
Non-GAAP Reconciliation (Unaudited) (cont.) APPENDIX 1 7 |