UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-3279
KIMBALL INTERNATIONAL, INC. |
(Exact name of registrant as specified in its charter) |
Indiana | 35-0514506 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
1600 Royal Street, Jasper, Indiana | 47549-1001 | |
(Address of principal executive offices) | (Zip Code) |
(812) 482-1600 |
Registrant's telephone number, including area code |
Not Applicable |
Former name, former address and former fiscal year, if changed since last report |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes __ No |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ___ Accelerated filer X Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No X |
The number of shares outstanding of the Registrant's common stock as of October 21, 2009 was: |
Class A Common Stock - 10,639,862 shares | |
Class B Common Stock - 26,686,515 shares |
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KIMBALL INTERNATIONAL, INC.
FORM 10-Q
INDEX
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except for Share and Per Share Data)
3
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except for Per Share Data)
4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
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Note 1. Summary of Significant Accounting Policies
Basis of Presentation:
The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the "Company") have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. All significant intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K.
Change in Estimates:
The Company periodically performs assessments of the useful lives of assets. In evaluating useful lives, the Company considers how long assets will remain functionally efficient and effective, given levels of technology, competitive factors, and the economic environment. If the assessment indicates that the assets will continue to be used for a longer period than previously anticipated, the useful life of the assets are revised, resulting in a change in estimate. Changes in estimates are accounted for on a prospective basis by depreciating assets' current carrying values over their revised remaining useful lives.
Effective July 1, 2009, the Company revised the useful lives of Surface Mount Technology (SMT) production equipment from 5 years to 7 years. Additionally, effective October 1, 2008, the Company revised the useful lives of Enterprise Resource Planning (ERP) software from 7 years to 10 years. The effect of these changes in estimates, compared to the original depreciation and amortization, for the three months ended September 30, 2009 was a pre-tax reduction in depreciation and amortization expense of, in thousands, ($537). The pre-tax (decrease) increase to depreciation and amortization expense in future periods is expected to be, in thousands, ($1,611) for the remaining nine months of fiscal year 2010, and ($1,010), $141, $1,052, and $1,350 in the four years ending June 30, 2014, and $2,017 thereafter.
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Revisions to the Earnings Per Share Calculation:
In June 2008, the Financial Accounting Standards Board (FASB) issued guidance on determining whether instruments granted in share-based payment transactions are participating securities. Under the guidance, unvested share-based payment awards that contain nonforfeitable rights to dividends are considered to be a separate class of securities and are excluded from the common stock EPS calculations. The Company's restricted share unit awards meet the definition of a participating security when held by retirement-age participants. The guidance became effective as of the beginning of the Company's fiscal year 2010 and required that previously reported earnings per share data be recast in financial statements issued in periods after the effective date. The guidance impacted the Company's Class A Common Stock earnings per share results for certain interim periods and the annual period of fiscal year 2009. There was no impact on the earnings per share result for the quarter ended September 30, 2008. The impact on fiscal year 2009 Class A basic earnings per share was a reduction from $0.47 as originally reported to $0.46. Class B Common Stock calculations were not impacted significantly enough to cause a change in the earnings per share result.
Goodwill and Other Intangible Assets:
The Electronic Manufacturing Services (EMS) segment had goodwill of, in thousands, $2,657 and $2,608, as of September 30, 2009 and June 30, 2009, respectively. Goodwill increased by, in thousands, $49 in the first quarter of fiscal year 2010 due to the effect of changes in foreign currency exchange rates.
Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset values resulting from business acquisitions. Annually, or if conditions indicate an earlier review is necessary, the Company compares the carrying value of the reporting unit to an estimate of the reporting unit's fair value to identify potential impairment. If the estimated fair value of the reporting unit is less than the carrying value, a second step is performed to determine the amount of potential goodwill impairment. If impaired, goodwill is written down to its estimated implied fair value. Goodwill is assigned to and the fair value is tested at the reporting unit level. The Company uses discounted cash flows to establish its reporting unit fair value. The calculation of the fair value of the reporting units considers current market conditions existing at the assessment date.
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In addition to performing the required annual testing, the Company will continue to monitor circumstances and events in future periods to determine whether additional goodwill impairment testing is warranted on an interim basis. The Company can provide no assurance that an impairment charge for the goodwill balance, which approximates only 0.4% of the Company's total assets, will not occur in future periods as a result of these analyses.
Other intangible assets consist of capitalized software, product rights, and customer relationships and are reported as Other Intangible Assets on the Condensed Consolidated Balance Sheets. Intangible assets are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets.
A summary of other intangible assets subject to amortization by segment is as follows:
Amortization expense related to other intangible assets was, in thousands, $629 and $1,671 during the three-month periods ended September 30, 2009 and 2008, respectively. Amortization expense in future periods is expected to be, in thousands, $1,800 for the remainder of fiscal year 2010, and $2,048, $1,810, $1,474, and $1,110 in the four years ending June 30, 2014, and $1,269 thereafter. The amortization period for product rights is 7 years. The amortization periods for customer relationship intangible assets range from 10 to 16 years. The estimated useful life of internal-use software ranges from 3 to 10 years.
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Internal-use software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process reengineering costs are expensed in the period in which they are incurred.
Product rights to produce and sell certain products are amortized on a straight-line basis over their estimated useful lives, and capitalized customer relationships are amortized based on the estimated attrition rate of customers. The Company has no intangible assets with indefinite useful lives which are not subject to amortization.
Non-operating Income (Expense):
Non-operating income (expense) includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on Supplemental Employee Retirement Plan (SERP) investments, non-production rent income, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is exactly offset by a change in the SERP liability that is recognized in selling and administrative expenses.
Components of Non-operating income (expense), net: Three Months Ended (Amounts in Thousands) September 30 2009 2008 Foreign Currency/Derivative Gain $ 327 $ 511 Gain (Loss) on Supplemental Employee Retirement Plan Investments 1,517 (1,123) Other (120) (166) Non-operating income (expense), net $ 1,724 $ (778) Effective Tax Rate:
In determining the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which the Company operates. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.
Subsequent Events:
The Company has evaluated the impact of subsequent events through November 5, 2009, which is the date these financial statements were issued.
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New Accounting Standards:
Inventory components of the Company were as follows:
September 30, June 30, (Amounts in Thousands) 2009 2009 Finished Products $ 34,694 $ 35,530 Work-in-Process 15,024 11,752 Raw Materials 106,118 93,999 Total FIFO Inventory $155,836 $141,281 LIFO Reserve (13,004) (14,277) Total Inventory $142,832 $127,004 For interim reporting, LIFO inventories are computed based on quantities as of the end of the quarter and interim changes in price levels. Changes in quantities and price levels are reflected in the interim financial statements in the period in which they occur, except in cases where LIFO inventory liquidations are expected to be reinstated by fiscal year end. During the three-month periods ended September 30, 2009 and 2008, LIFO inventory liquidations increased net income by, in thousands, $596 and $82, respectively.
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Note 3. Comprehensive Income (Loss)
Comprehensive income (loss) includes all changes in equity during a period except those resulting from investments by and distributions to Share Owners. Comprehensive income (loss), shown net of tax if applicable, for the three-month periods ended September 30, 2009 and 2008 was as follows:
Management organizes the Company into segments based upon differences in products and services offered in each segment. The EMS segment provides engineering and manufacturing services which utilize common production and support capabilities to a variety of industries globally. The EMS segment focuses on electronic assemblies that have high durability requirements and are sold on a contract basis and produced to customers' specifications. The EMS segment currently sells primarily to customers in the medical, automotive, industrial controls, and public safety industries. The Furniture segment provides furniture for the office and hospitality industries, sold under the Company's family of brand names. Each segment's product line offerings consist of similar products and services sold within various industries. Intersegment sales are insignificant.
Unallocated corporate assets include cash and cash equivalents, short-term investments, and other assets not allocated to segments. Unallocated corporate net income consists of income not allocated to segments for purposes of evaluating segment performance and includes income from corporate investments and other non-operational items. The basis of segmentation and accounting policies of the segments are consistent with those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2009.
Three Months Ended September 30 (Amounts in Thousands) 2009 2008 Net Sales: Electronic Manufacturing Services $165,486 $182,921 Furniture 109,166 156,574 Unallocated Corporate and Eliminations 7 -0- Consolidated $274,659
$339,495 Net Income (Loss): Electronic Manufacturing Services $ (219)
$ (768) Furniture 1,780
3,183 Unallocated Corporate and Eliminations 213
(231) Consolidated $ 1,774 (1)
$ 2,184 (2)
(1) Net Income (Loss) included after-tax restructuring charges, in thousands, of $292 in the three months ended September 30, 2009. The EMS segment recorded, in the three months ended September 30, 2009, in thousands, $276 of after-tax restructuring charges. The Furniture segment recorded, in the three months ended September 30, 2009, in thousands, $8 of after-tax restructuring charges. Unallocated Corporate and Eliminations recorded, in the three months ended September 30, 2009, in thousands, $8 of after-tax restructuring charges. See Note 6 - Restructuring Expense of Notes to Condensed Consolidated Financial Statements for further discussion.
(2) Net Income (Loss) included after-tax restructuring charges, in thousands, of $594 in the three months ended September 30, 2008. The EMS segment recorded, in thousands, $435 in the three months ended September 30, 2008 of after-tax restructuring charges. The Furniture segment recorded, in the three months ended September 30, 2008, in thousands, $146 of after-tax restructuring charges. Unallocated Corporate and Eliminations recorded, in the three months ended September 30, 2008, in thousands, $13 of after-tax restructuring charges. See Note 6 - Restructuring Expense of Notes to Condensed Consolidated Financial Statements for further discussion.
September 30, June 30, (Amounts in Thousands) 2009 2009 Total Assets: Electronic Manufacturing Services $375,755 $351,506 Furniture 176,817 184,755 Unallocated Corporate and Eliminations 104,789 106,008 Consolidated $657,361
$642,269
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Note 5. Commitments and Contingent Liabilities
Standby letters of credit are issued to third-party suppliers, lessors, and insurance and financial institutions and can only be drawn upon in the event of the Company's failure to pay its obligations to the beneficiary. As of September 30, 2009, the Company had a maximum financial exposure from unused standby letters of credit totaling $4.8 million. The Company is not aware of circumstances that would require it to perform under any of these arrangements and believes that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the Company's financial statements. Accordingly, no liability has been recorded as of September 30, 2009 with respect to the standby letters of credit. The Company also enters into commercial letters of credit to facilitate payment to vendors and from customers.
The Company estimates product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability in cases where specific warranty issues become known.
Changes in the product warranty accrual for the three months ended September 30, 2009 and 2008 were as follows:
Three Months Ended
September 30(Amounts in Thousands) 2009
2008
Product Warranty Liability at the beginning of the period $ 2,176 $ 1,470 Accrual for warranties issued 210 357 Reductions related to pre-existing warranties (including changes in estimates) (18) (10) Settlements made (in cash or in kind) (324) (127) Product Warranty Liability at the end of the period $ 2,044 $ 1,690 15
16
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Note 7. Fair Value of Financial Assets and Liabilities
The Company categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:
There were no changes in the Company's valuation techniques used to measure fair values compared to those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2009.
Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3: Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.
Recurring Fair Value Measurements:
As of September 30, 2009 and June 30, 2009, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:
September 30, 2009
(Amounts in Thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$56,620
$ -0-
$ -0-
$56,620 Available-for-sale securities: Municipal Securities
-0-
24,443
-0-
24,443 Derivatives
-0-
824
-0-
824 Nonqualified supplemental employee retirement plan assets
12,702
-0-
-0-
12,702 Total assets at fair value
$69,322 $25,267 $ -0- $94,589 Liabilities
Derivatives
$ -0- $ 2,227 $ -0-
$ 2,227�� Total liabilities at fair value
$ -0- $ 2,227 $ -0- $ 2,227
June 30, 2009
(Amounts in Thousands)
Level 1
Level 2
Level 3
Total
Assets
Cash equivalents
$42,114
$ -0-
$ -0-
$42,114 Available-for-sale securities: Municipal Securities
-0-
25,376
-0-
25,376 Derivatives
-0-
784
-0-
784 Nonqualified supplemental employee retirement plan assets
10,992
-0-
-0-
10,992 Total assets at fair value
$53,106 $26,160 $ -0- $79,266 Liabilities
Derivatives
$ -0- $ 3,407 $ -0-
$ 3,407 Total liabilities at fair value
$ -0- $ 3,407 $ -0- $ 3,407 18
Non-Recurring Fair Value Measurements:
During the quarter ended September 30, 2009, the Company had no fair value adjustments applicable to items that are subject to non-recurring fair value measurement after the initial measurement date.
Disclosure of Other Financial Instruments:
Other financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value have carrying amounts that approximate fair value as follows:
Assets Liabilities Certain cash and cash equivalents Accounts payable Receivables Borrowings under credit facilities Other assets not recorded at fair value Dividends payable Accrued expenses The fair value estimate for long-term debt, excluding capital leases, was estimated using a discounted cash flow analysis based on quoted long-term debt market rates adjusted for the Company's non-performance risk. There was an immaterial difference between the carrying value and estimated fair value of long-term debt as of September 30, 2009 and June 30, 2009.
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Note 8. Derivative Instruments
21
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Note 9. Short-Term Investments
The Company's short-term investment portfolio consists of available-for-sale securities which is comprised of exempt securities issued by municipalities ("Municipal Securities") which can be in the form of General Obligation Bonds, Revenue Bonds, Tax Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes, pre-refunded (by U.S. Govt. or State and Local Govt.) bonds, and short-term putable bonds. The Company's investment policy dictates that Municipal Securities must be investment grade quality.
Available-for-sale securities are recorded at fair value. See Note 7 - Fair Value of Financial Assets and Liabilities of Notes to Condensed Consolidated Financial Statements for more information on the fair value of available-for-sale securities. The amortized cost basis reflects the original purchase price, with discounts and premiums amortized over the life of the security. Unrealized losses on debt securities are recognized in earnings when a company has an intent to sell or is likely to be required to sell before recovery of the loss, or when the debt security has incurred a credit loss. Otherwise, unrealized gains and losses are recorded net of the tax related effect as a component of Share Owners' Equity. Municipal Securities mature within a four-year period.
Municipal Securities September 30,
2009June 30,
2009(Amounts in Thousands) Amortized cost basis $23,699 $24,606 Unrealized holding gains 744 770 Unrealized holding losses -0- -0- Other-than-temporary impairment -0- -0- Fair Value $24,443 $25,376
There were no investments which were in an unrealized loss position as of September 30, 2009 and June 30, 2009.
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Activity for the Municipal Securities that were classified as available-for-sale was as follows:
Municipal Securities Three Months Ended
September 30(Amounts in Thousands)
2009
2008
Proceeds from sales
$1,553
$1,658 Gross realized gains from sale of available-for-sale securities included in earnings
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31 Gross realized losses from sale of available-for-sale securities included in earnings
-0-
-0- Net unrealized holding gain (loss) included in Accumulated Other Comprehensive Income (Loss) -0- 35 Net (gains) losses reclassified out of Accumulated Other Comprehensive Income (Loss) (26) (31) Realized gains and losses are reported in Other Income (Expense) category of the Condensed Consolidated Statements of Income. The cost of each individual security was used in computing the realized gains and losses.
The Company maintains a self-directed supplemental employee retirement plan (SERP) for executive employees. The SERP is structured as a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. The Company recognizes SERP investment assets on the balance sheet at current fair value. A SERP liability of the same amount is recorded on the balance sheet representing the Company's obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income. Adjustments made to revalue the SERP liability are also recognized in income and exactly offset valuation adjustments on SERP investment assets. The change in net unrealized holding gains and (losses) for the three-month periods ended September 30, 2009 and 2008 was, in thousands, $1,606 and ($1,135), respectively. SERP asset and liability balances were as follows:
September 30,
2009June 30,
2009(Amounts in Thousands) SERP investment - current asset $ 4,134 $ 3,536 SERP investment - other long-term asset 8,568 7,456 Total SERP investment $ 12,702 $ 10,992 SERP obligation - current liability $ 4,134 $ 3,536 SERP obligation - other long-term liability 8,568 7,456 Total SERP obligation $ 12,702 $ 10,992 24
At both September 30, 2009 and June 30, 2009, in thousands, assets totaling $1,358 were classified as held for sale and consisted of $1,160 for a facility and land related to the Gaylord, Michigan, exited operation within the EMS segment and $198 for equipment related to previously held timberlands. All of the assets were reported as unallocated corporate assets for segment reporting purposes. The Company expects to sell these assets during the next 12 months.
Note 11. Postemployment Benefits
The Company maintains severance plans for all domestic employees. These plans provide severance benefits to eligible employees meeting the plans' qualifications, primarily involuntary termination without cause. The components of net periodic postemployment benefit cost applicable to the Company's severance plans were as follows:
Three Months Ended September 30 (Amounts in Thousands) 2009 2008 Service cost $ 193 $ 114 Interest cost 108 48 Amortization of prior service costs 71 71 Amortization of actuarial change 152 10 Net periodic benefit cost $ 524 $ 243 The benefit cost in the above table includes only normal recurring levels of severance activity, as estimated using an actuarial method. Unusual or non-recurring severance actions, such as those disclosed in Note 6 - Restructuring Expense of Notes to Condensed Consolidated Financial Statements, are not estimable using actuarial methods and are expensed in accordance with the applicable U.S. GAAP.
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Note 12. Stock Compensation Plan
During the first quarter of fiscal year 2010, the following stock compensation was awarded to officers and key employees. All awards were granted under the 2003 Stock Option and Incentive Plan. For more information on performance share awards, refer to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2009.
Performance Shares Quarter Awarded
Maximum Potential Shares Issuable Grant Date Fair Value (3) Annual Performance Shares - Class A (1) 1st Quarter 240,000 $ 6.24 Long-Term Performance Shares - Class A (2) 1st Quarter 726,350 $ 6.24
(1) Annual performance shares were awarded to officers. Payouts will be based upon the fiscal year 2010 cash incentive payout percentages calculated under the Company's 2005 Profit Sharing Incentive Bonus Plan. The number of shares issued will be less than the maximum potential shares issuable if the maximum cash incentive payout percentages are not achieved. Annual performance shares vest after one year. (2) Long-term performance shares were awarded to officers and other key employees. Payouts will be based upon the cash incentive payout percentages calculated under the Company's 2005 Profit Sharing Incentive Bonus Plan. Long-term performance shares are based on five successive annual performance measurement periods, with each annual tranche having a grant date when economic profit tiers are established at the beginning of the applicable fiscal year and a vesting date at the end of each annual period. The number of shares issued will be less than the maximum potential shares issuable if the maximum cash incentive payout percentages are not achieved. (3) The grant date fair value of performance shares is based on the stock price at the date of the award, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding performance share awards. The grant date fair value shown for long-term performance shares is applicable to the first tranche only.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to market risks from the information disclosed in Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2009.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon their evaluation of those controls and procedures performed as of September 30, 2009, the Chief Executive Officer and Chief Financial Officer of the Company concluded that its disclosure controls and procedures were effective.
(b) Changes in internal control over financial reporting.
There have been no changes in the Company's internal control over financial reporting that occurred during the quarter ended September 30, 2009 that have materially affected, or that are reasonably likely to materially affect, the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
A share repurchase program authorized by the Board of Directors was announced on October 16, 2007. The program allows for the repurchase of up to two million shares of any combination of Class A and Class B shares and will remain in effect until all shares authorized have been repurchased. The Company did not repurchase any shares under the repurchase program during the first quarter of fiscal year 2010. At September 30, 2009, two million shares remained available under the repurchase program.
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Exhibits (numbered in accordance with Item 601 of Regulation S-K)
(3(a)) Amended and restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3(a) to the Company's Form 10-K for the fiscal year ended June 30, 2007)
(3(b)) Restated By-laws of the Company (Incorporated by reference to Exhibit 3(b) to the Company's Form 8-K filed October 23, 2009)
(10) Summary of Director and Named Executive Officer Compensation
(11) Computation of Earnings Per Share
(31.1) Certification filed by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(31.2) Certification filed by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32.1) Certification furnished by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(32.2) Certification furnished by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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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 thereunto duly authorized.
KIMBALL INTERNATIONAL, INC. By: /s/ James C. Thyen JAMES C. THYEN
President,
Chief Executive OfficerNovember 5, 2009 By: /s/ Robert F. Schneider ROBERT F. SCHNEIDER
Executive Vice President,
Chief Financial OfficerNovember 5, 2009 42
Kimball International, Inc.
Exhibit Index
Exhibit No. Description 3(a) Amended and restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3(a) to the Company's Form 10-K for the fiscal year ended June 30, 2007) 3(b) Restated By-laws of the Company (Incorporated by reference to Exhibit 3(b) to the Company's Form 8-K filed October 23, 2009) 10 Summary of Director and Named Executive Officer Compensation 11 Computation of Earnings Per Share 31.1 Certification filed by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification filed by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification furnished by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification furnished by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 43