Cover page
Cover page - shares | 6 Months Ended | |
Dec. 31, 2022 | Jan. 29, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-3279 | |
Entity Registrant Name | KIMBALL INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | IN | |
Entity Tax Identification Number | 35-0514506 | |
Entity Address, Address Line One | 1600 Royal Street | |
Entity Address, City or Town | Jasper | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 47546-2256 | |
City Area Code | (812) | |
Local Phone Number | 482-1600 | |
Title of 12(b) Security | Class B Common Stock, par value $0.05 per share | |
Trading Symbol | KBAL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000055772 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 166,789 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 36,245,269 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 14,067 | $ 10,934 |
Receivables, net of allowances of $927 and $1,041, respectively | 60,073 | 79,301 |
Inventories | 104,812 | 97,969 |
Prepaid expenses and other current assets | 15,531 | 30,937 |
Total current assets | 194,483 | 219,141 |
Property and equipment, net of accumulated depreciation of $189,077 and $188,530, respectively | 95,609 | 96,970 |
Right-of-use operating lease assets | 13,168 | 12,839 |
Goodwill | 11,160 | 47,844 |
Other intangible assets, net of accumulated amortization of $51,302 and $54,553, respectively | 52,563 | 54,767 |
Deferred tax assets | 16,476 | 14,472 |
Other assets | 14,742 | 15,245 |
Total Assets | 398,201 | 461,278 |
Current Liabilities: | ||
Current maturities of long-term debt | 0 | 33 |
Accounts payable | 57,249 | 70,936 |
Customer deposits | 32,171 | 29,706 |
Current portion of operating lease liability | 5,709 | 6,096 |
Dividends payable | 3,715 | 3,623 |
Accrued expenses | 36,739 | 41,088 |
Total current liabilities | 135,583 | 151,482 |
Long-term debt, less current maturities | 60,000 | 68,046 |
Long-term operating lease liability | 12,015 | 12,150 |
Other long-term liabilities | 13,402 | 16,064 |
Total long-term liabilities | 85,417 | 96,260 |
Common stock-par value $0.05 per share: | ||
Additional paid-in capital | 7,805 | 6,304 |
Retained earnings | 233,556 | 269,833 |
Accumulated other comprehensive income | 4,277 | 3,766 |
Less: Treasury stock, at cost, 6,517,000 shares and 6,179,000 shares, respectively | (70,588) | (68,518) |
Total Shareholders’ Equity | 177,201 | 213,536 |
Total Liabilities and Shareholders’ Equity | 398,201 | 461,278 |
Class A Common Stock | ||
Common stock-par value $0.05 per share: | ||
Common Stock | 8 | 8 |
Class B Common Stock | ||
Common stock-par value $0.05 per share: | ||
Common Stock | $ 2,143 | $ 2,143 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) Parentheticals - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Receivables allowance | $ 927 | $ 1,041 |
Accumulated depreciation | 189,077 | 188,530 |
Accumulated Amortization | $ 51,302 | $ 54,553 |
Treasury stock (in shares) | 6,517,000 | 6,179,000 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 167,000 | 167,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 42,856,000 | 42,856,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||
Net Sales | $ 182,947 | $ 151,403 | $ 360,758 | $ 308,013 |
Cost of Sales | 116,810 | 104,959 | 235,007 | 212,472 |
Gross Profit | 66,137 | 46,444 | 125,751 | 95,541 |
Selling and Administrative Expenses | 56,795 | 51,921 | 110,202 | 102,080 |
Contingent Earn-out (Gain) Loss | 0 | (22,510) | (3,160) | (17,900) |
Restructuring Expense | 1,679 | 1,010 | 2,049 | 2,465 |
Goodwill Impairment | 36,684 | 34,118 | 36,684 | 34,118 |
Operating Income (Loss) | (29,021) | (18,095) | (20,024) | (25,222) |
Other Income (Expense): | ||||
Interest income | 112 | 43 | 189 | 52 |
Interest expense | (696) | (275) | (1,377) | (532) |
Non-operating income, net | 670 | 709 | 180 | 523 |
Other income (expense), net | 86 | 477 | (1,008) | 43 |
Income (Loss) Before Taxes on Income | (28,935) | (17,618) | (21,032) | (25,179) |
Provision for Income Taxes | 7,128 | 3,696 | 8,475 | 1,184 |
Net Income (Loss) | $ (36,063) | $ (21,314) | $ (29,507) | $ (26,363) |
Earnings (Loss) Per Share of Common Stock: | ||||
Basic Earnings (Loss) Per Share (in dollars per share) | $ (0.99) | $ (0.58) | $ (0.81) | $ (0.72) |
Diluted Earnings (Loss) Per Share (in dollars per share) | $ (0.99) | $ (0.58) | $ (0.81) | $ (0.72) |
Class A and B Common Stock: | ||||
Average Number of Shares Outstanding - Basic (in shares) | 36,539 | 36,749 | 36,647 | 36,785 |
Average Number of Shares Outstanding - Diluted (in shares) | 36,539 | 36,749 | 36,647 | 36,785 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (36,063) | $ (21,314) | $ (29,507) | $ (26,363) |
Postemployment severance actuarial change | ||||
Postemployment severance actuarial change, Pre-tax | 244 | 298 | 373 | 563 |
Postemployment severance actuarial change, Tax | (63) | (76) | (96) | (145) |
Postemployment severance actuarial change, Net of Tax | 181 | 222 | 277 | 418 |
Unrealized gain (loss) on interest rate swap | ||||
Unrealized gain (loss) on interest rate swap, Pre-tax | 177 | 452 | 1,065 | 101 |
Unrealized gain (loss) on interest rate swap, Tax | (45) | (116) | (274) | (26) |
Unrealized gain (loss) on interest rate swap, Net of tax | 132 | 336 | 791 | 75 |
Amortization of actuarial change | ||||
Amortization of actuarial change, Pre-tax | (166) | (134) | (332) | (270) |
Amortization of actuarial change, Tax | 42 | 34 | 85 | 69 |
Amortization of actuarial change, Net of Tax | (124) | (100) | (247) | (201) |
Interest rate swap, Pre-tax | (281) | 75 | (417) | 133 |
Interest rate swap, Tax | 72 | (19) | 107 | (34) |
Interest rate swap, Net of Tax | (209) | 56 | (310) | 99 |
Other comprehensive income (loss) | ||||
Other comprehensive income (loss), Pre-tax | (26) | 691 | 689 | 527 |
Other comprehensive income (loss), Tax | 6 | (177) | (178) | (136) |
Other comprehensive income (loss) | (20) | 514 | 511 | 391 |
Total comprehensive income (loss) | $ (36,083) | $ (20,800) | $ (28,996) | $ (25,972) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Cash Flows From Operating Activities: | |||
Net income (loss) | $ (29,507) | $ (26,363) | |
Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities: | |||
Depreciation | 7,440 | 7,185 | |
Amortization | 4,414 | 4,854 | |
(Gain) loss on sales of assets | (14) | 25 | |
Restructuring and asset impairment charges | 1,346 | 1,342 | |
Deferred income tax and other deferred charges | (2,166) | (3) | |
Goodwill Impairment | 36,684 | 34,118 | |
Stock-based compensation | 2,509 | 2,555 | |
Change in earn-out liability | (3,160) | (17,900) | |
Other, net | (439) | (1,288) | |
Change in operating assets and liabilities: | |||
Receivables | 19,201 | 5,846 | |
Inventories | (7,158) | (17,846) | |
Prepaid expenses and other current assets | 14,530 | (1,138) | |
Accounts payable | (10,483) | 16,690 | |
Customer deposits | 2,465 | 12,247 | |
Accrued expenses | (4,129) | (7,704) | |
Net cash provided by operating activities | 31,533 | 12,620 | |
Cash Flows From Investing Activities: | |||
Capital expenditures | (9,416) | (9,343) | |
Proceeds from sales of assets | 337 | 124 | |
Purchases of capitalized software | (2,126) | (2,198) | |
Other, net | 100 | 104 | |
Net cash used for investing activities | (11,105) | (11,313) | |
Cash Flows From Financing Activities: | |||
Proceeds from revolving credit facility | 86,000 | 10,000 | |
Payments on revolving credit facility | (94,000) | (10,000) | |
Repayments of long-term debt | (79) | (30) | |
Dividends paid to shareholders | (6,618) | (6,620) | |
Repurchases of Common Stock | (2,951) | (2,447) | |
Repurchase of employee shares for tax withholding | (223) | (552) | |
Net cash used for financing activities | (17,871) | (9,649) | |
Net Decrease in Cash, Cash Equivalents, and Restricted Cash | [1] | 2,557 | (8,342) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash at Beginning of Period | [1] | 11,996 | 25,727 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash at End of Period | [1] | 14,553 | 17,385 |
Cash paid (refunded) during the period for: | |||
Income taxes | 2,289 | (149) | |
Interest expense | $ 1,328 | $ 497 | |
[1]The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in other assets on the balance sheet represents customer deposits held due to a foreign entity being classified as a restricted entity by a government agency subsequent to our receipt of the deposit. In addition, the restricted cash balance for periods June 30, 2022 and prior included cash held in escrow for repayment of the Payment Protection Program loan that Poppin, Inc. obtained prior to its acquisition and amounts pledged as collateral for a long-term financing arrangement as contractually required by a lender and the restriction lapsed when the related debt was paid. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - Cash Reconciliation - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | |
Statement of Cash Flows [Abstract] | |||||
Cash and cash equivalents | $ 14,067 | $ 10,934 | $ 16,323 | $ 24,336 | |
Restricted cash included in Other Assets | 486 | 1,062 | 1,062 | 1,391 | |
Total Cash, Cash Equivalents, and Restricted Cash at end of period | [1] | $ 14,553 | $ 11,996 | $ 17,385 | $ 25,727 |
[1]The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in other assets on the balance sheet represents customer deposits held due to a foreign entity being classified as a restricted entity by a government agency subsequent to our receipt of the deposit. In addition, the restricted cash balance for periods June 30, 2022 and prior included cash held in escrow for repayment of the Payment Protection Program loan that Poppin, Inc. obtained prior to its acquisition and amounts pledged as collateral for a long-term financing arrangement as contractually required by a lender and the restriction lapsed when the related debt was paid. |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Shareowners' Equity (unaudited) Statement - USD ($) $ in Thousands | Total | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock |
Balance at the beginning of the period at Jun. 30, 2021 | $ 239,670 | $ 9 | $ 2,142 | $ 5,298 | $ 299,034 | $ 1,980 | $ (68,793) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (26,363) | (26,363) | |||||
Other comprehensive income (loss) | 391 | 391 | |||||
Issuance of unrestricted stock | (3) | (242) | 239 | ||||
Conversion of Class A to Class B common stock | 0 | 0 | 0 | ||||
Compensation expense related to stock compensation plans | 2,555 | 2,555 | |||||
Restricted stock units issuance | (478) | (1,492) | 1,014 | ||||
Relative total shareholder return performance units issuance | (32) | (104) | 72 | ||||
Repurchase of Common Stock | (2,329) | (2,329) | |||||
Dividends declared | (6,747) | (6,747) | |||||
Balance at the end of the period at Dec. 31, 2021 | 206,664 | 9 | 2,142 | 6,015 | 265,924 | 2,371 | (69,797) |
Balance at the beginning of the period at Sep. 30, 2021 | 230,519 | 9 | 2,142 | 5,628 | 290,618 | 1,857 | (69,735) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (21,314) | (21,314) | |||||
Other comprehensive income (loss) | 514 | 514 | |||||
Issuance of unrestricted stock | 0 | (122) | 122 | ||||
Conversion of Class A to Class B common stock | 0 | 0 | 0 | ||||
Compensation expense related to stock compensation plans | 1,433 | 1,433 | |||||
Restricted stock units issuance | (302) | (924) | 622 | ||||
Repurchase of Common Stock | (806) | (806) | |||||
Dividends declared | (3,380) | (3,380) | |||||
Balance at the end of the period at Dec. 31, 2021 | 206,664 | 9 | 2,142 | 6,015 | 265,924 | 2,371 | (69,797) |
Balance at the beginning of the period at Jun. 30, 2022 | 213,536 | 8 | 2,143 | 6,304 | 269,833 | 3,766 | (68,518) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (29,507) | (29,507) | |||||
Other comprehensive income (loss) | 511 | 511 | |||||
Issuance of unrestricted stock | 41 | (374) | 415 | ||||
Conversion of Class A to Class B common stock | 0 | 0 | 0 | ||||
Compensation expense related to stock compensation plans | 2,509 | 2,509 | |||||
Restricted stock units issuance | (162) | (634) | 472 | ||||
Repurchase of Common Stock | (2,957) | (2,957) | |||||
Dividends declared | (6,770) | (6,770) | |||||
Balance at the end of the period at Dec. 31, 2022 | 177,201 | 8 | 2,143 | 7,805 | 233,556 | 4,277 | (70,588) |
Balance at the beginning of the period at Sep. 30, 2022 | 217,371 | 8 | 2,143 | 7,283 | 272,993 | 4,297 | (69,353) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (36,063) | (36,063) | |||||
Other comprehensive income (loss) | (20) | (20) | |||||
Issuance of unrestricted stock | 0 | (185) | 185 | ||||
Conversion of Class A to Class B common stock | 0 | 0 | 0 | ||||
Compensation expense related to stock compensation plans | 1,341 | 1,341 | |||||
Restricted stock units issuance | (162) | (634) | 472 | ||||
Repurchase of Common Stock | (1,892) | (1,892) | |||||
Dividends declared | (3,374) | (3,374) | |||||
Balance at the end of the period at Dec. 31, 2022 | $ 177,201 | $ 8 | $ 2,143 | $ 7,805 | $ 233,556 | $ 4,277 | $ (70,588) |
Condensed Consolidated Statem_6
Condensed Consolidated Statement of Shareowners' Equity (unaudited) Parentheticals - $ / shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Issuance of non-restricted stock (in shares) | 17,000 | 9,000 | 39,000 | 18,000 |
Conversion of Class A to Class B common stock (in shares) | 1,000 | 7,000 | 1,000 | 7,000 |
Vesting of restricted stock units (in shares) | 50,000 | 48,000 | 50,000 | 78,000 |
Relative total shareholder return performance units issuance (in shares) | 5,000 | |||
Repurchase of Common Stock (in shares) | 285,000 | 72,000 | 427,000 | 196,000 |
Dividends declared (in dollars per share) | $ 0.09 | $ 0.09 | $ 0.18 | $ 0.18 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball International,” “we,” “us,” or “our”) 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 we believe that the disclosures are adequate to make the information presented not misleading. 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 our latest annual report on Form 10-K. Prior Period Reclassification: |
Recent Accounting Pronouncement
Recent Accounting Pronouncements and Supplemental Information | 6 Months Ended |
Dec. 31, 2022 | |
Recent Accounting Pronouncements and Supplemental Information [Abstract] | |
Recent Accounting Pronouncements and Supplemental Information | Recent Accounting Pronouncements and Supplemental Information Recently Issued Accounting Pronouncements Not Yet Adopted: In October 2021, the Financial Accounting Standards Board issued guidance on accounting for contract assets and contract liabilities, related to revenue contracts with customers, during a business combination by the acquiring business entity. The acquirer is to measure the contract asset and contract liability as of the acquisition date as if the acquirer had originated the contracts. This is a departure from the current practice under U.S. GAAP of recognizing contract assets and contract liabilities at fair value as of the acquisition date. The guidance will be effective in our first quarter of fiscal year 2024, though early adoption is permitted. Management is unable to predict whether the adoption of this guidance will have a material impact on our financial statements. Goodwill and Other Intangible Assets: Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Goodwill is assigned to and the fair value is tested at the reporting unit level. Annually, or if conditions indicate an earlier review is necessary, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount. We also have the option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test which compares the carrying value of the reporting unit to the reporting unit’s fair value to identify impairment. Under the quantitative assessment, if the fair value of the reporting unit is less than the carrying value, goodwill is written down to its fair value. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting unit considers current market conditions existing at the assessment date and reporting unit specific scenarios weighted on probability of outcome. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, and determination of our weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. While we have historically performed goodwill impairment testing annually during the second fiscal quarter, changes in circumstances may require interim assessments of the carrying amounts of our reporting units relative to their fair values. In connection with our annual goodwill impairment test and the preparation of our financial statements, we assessed goodwill at the reporting unit level for impairment during our second quarter of fiscal year 2023 and based on our analysis our Poppin reporting unit had a carrying amount that exceeded its fair value. Lower revenue and earnings growth projections in the Poppin reporting unit drove the decline in the fair value of the reporting unit. As a result, we recorded a goodwill impairment loss of $36.7 million during the second quarter of fiscal year 2023, as further discussed in Note 12 - Fair Value of Notes to Condensed Consolidated Statements of Operations. The changes in the carrying amount of goodwill are summarized as follows: (Amounts in Thousands) Gross Goodwill Accumulated Impairment Net Carrying Amount June 30, 2021 $ 83,695 $ (1,733) $ 81,962 Additions / (Impairments) — (34,118) (34,118) June 30, 2022 83,695 (35,851) 47,844 Additions / (Impairment) — (36,684) (36,684) December 31, 2022 $ 83,695 $ (72,535) $ 11,160 Other Intangible Assets reported on the Condensed Consolidated Balance Sheets consist of capitalized software, customer relationships, trade names, acquired technology, patents and trademarks, and non-compete agreements. 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. As a result of the downward revision in the forecasted operations of Poppin, management identified that a triggering event had occurred, indicating that certain long-lived assets may not be recoverable. The intangible assets of the Poppin reporting unit were assessed for recoverability during the second quarter of fiscal year 2023, and the recoverability assessment indicated no impairment. A summary of intangible assets subject to amortization is as follows: December 31, 2022 June 30, 2022 (Amounts in Thousands) Cost Accumulated Net Value Cost Accumulated Net Value Capitalized Software $ 47,841 $ 36,114 $ 11,727 $ 46,246 $ 35,521 $ 10,725 Customer Relationships 12,000 4,320 7,680 19,050 10,518 8,532 Trade Names 36,570 8,640 27,930 36,570 6,811 29,759 Acquired Technology 7,000 2,065 4,935 7,000 1,563 5,437 Patents and Trademarks 354 63 291 354 47 307 Non-Compete Agreements 100 100 — 100 93 7 Other Intangible Assets $ 103,865 $ 51,302 $ 52,563 $ 109,320 $ 54,553 $ 54,767 A summary of the useful lives of intangible assets subject to amortization is as follows: Years Capitalized Software 3 to 13 Customer Relationships 10 Trade Names 10 Acquired Technology 7 Patents 14 Trademarks 15 Non-Compete Agreements 5 Amortization expense incurred and future expected expenses related to intangible assets were: Three months ended Six Months Ended December 31 December 31 Remainder Future Fiscal Years (Amounts in Thousands) 2022 2021 2022 2021 2023 2024 2025 2026 2027 Thereafter Amortization Expense $ 2,219 $ 2,415 $ 4,414 $ 4,854 $ 5,186 $ 9,446 $ 9,227 $ 8,829 $ 6,481 $ 13,394 Capitalized 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 re-engineering costs are expensed in the period in which they are incurred. Trade names, non-compete agreements, acquired technology, patents and trademarks are amortized on a straight-line basis over their estimated useful lives. Customer relationships are amortized based on estimated attrition rates of customers. We have no intangible assets with indefinite useful lives which are not subject to amortization. Non-operating Income (Expense), net: Non-operating income and expense include the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, amortization of actuarial income, foreign currency rate movements, 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 offset by a change in the SERP liability that is recognized in selling and administrative expenses. Components of the Non-operating income, net line, were: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands) 2022 2021 2022 2021 Gain on Supplemental Employee Retirement Plan Investments $ 619 $ 680 $ 160 $ 587 Other 51 29 20 (64) Non-operating income, net $ 670 $ 709 $ 180 $ 523 |
Restructuring
Restructuring | 6 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring We recognized pre-tax restructuring expense of $1.7 million and $2.0 million in the three and six months ended December 31, 2022, and recognized $1.0 million and $2.5 million for the three and six months ended December 31, 2021. We utilized available market prices and management estimates to determine the fair value of impaired assets. Restructuring is included in the Restructuring Expense line item on our Condensed Consolidated Statements of Operations. Transformation Restructuring Plan: Current actions under our transformation restructuring plan are focused on activities such as the streamlining of manufacturing facilities, the consolidation of showrooms, and the closure of our manufacturing facility in Tijuana, Mexico which was completed during the year-to-date period of fiscal year 2023. This phase of the transformation restructuring plan began in the first quarter of our fiscal year 2021, and we expect a substantial majority of the restructuring actions to be completed by the end of fiscal year 2023. This phase of the transformation restructuring plan is expected to generate annualized pre-tax savings of approximately $19.0 million when it is fully implemented. We currently estimate this phase of the transformation restructuring plan will incur total pre-tax restructuring charges of approximately $22.7 million to $23.3 million, with approximately $1.8 million expected to be recorded in remainder of fiscal year 2023. The restructuring charges are expected to consist of approximately $7.3 million for severance and other employee-related costs, $6.0 million to $6.2 million for facility costs, and $9.4 million to $9.8 million for lease and other asset impairment. Approximately 60% of the total cost estimate is expected to be cash expense. A summary of the charges recorded in connection with the second phase of the transformation restructuring plan is as follows: Three Months Ended Six Months Ended Charges Incurred to Date December 31 December 31 (Amounts in Thousands) 2022 2021 2022 2021 Cash-related restructuring charges: Severance and other employee related costs $ 284 $ 87 $ 474 $ 233 $ 7,309 Facility exit costs and other cash charges 363 434 1,296 890 5,244 Total cash-related restructuring charges $ 647 $ 521 $ 1,770 $ 1,123 $ 12,553 Non-cash charges: Impairment of assets and accelerated depreciation 1,032 489 279 1,342 8,810 Total charges $ 1,679 $ 1,010 $ 2,049 $ 2,465 $ 21,363 A summary of the current period activity in accrued restructuring related to the second phase of the transformation restructuring plan is as follows: (Amounts in Thousands) Severance and other employee related costs Balance at June 30, 2022 $ 974 Additions charged to expense 466 Cash payments charged against reserve (1,393) Non-cash adjustments (47) Balance at December 31, 2022 $ — |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table provides information about revenue by operating segment: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Millions) 2022 2021 2022 2021 Workplace & Health $ 141.2 $ 121.0 $ 284.0 $ 237.3 Hospitality 27.7 16.9 47.4 41.9 eBusiness 14.1 13.5 29.4 28.8 Total Net Sales $ 183.0 $ 151.4 $ 360.8 $ 308.0 For the three and six months ended December 31, 2021, the Workplace and Health categories have been combined based on our reassessment of disaggregation of revenue based on our current method of evaluating our business. Contract Balances Receivables in the Condensed Consolidated Balance Sheets represent the amount of consideration to which we are entitled in exchange for the goods or services sold to our customers, net of allowances for doubtful accounts. Receivables are recorded when the right to consideration from the customer becomes unconditional, which is generally upon billing or upon satisfaction of a performance obligation, whichever is earlier. |
Leases
Leases | 6 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Our operating lease portfolio is primarily comprised of showrooms, which expire at various dates through fiscal year 2030. We have no financing leases. Certain operating lease agreements include rental payments adjusted periodically for inflationary indices. Additionally, some leases include options to renew or terminate the leases which can be exercised at our discretion. Lease terms include the noncancellable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods. Certain leases have terms that are dependent upon the occurrence of events, activities, or circumstances in lease agreements and incur variable lease expense driven by warehouse square footage utilized, property taxes assessed, and other non-lease component charges. Variable lease expense is presented as operating expense in our Condensed Consolidated Statements of Operations in the same line item as expense arising from fixed lease payments for operating leases. For all classes of assets, we do not separate non-lease components of a contract from the lease components to which they relate. We do not recognize a right-of-use asset or lease liability for short-term leases that have a lease term of twelve months or less. The components of our lease expenses are as follows: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Millions) 2022 2021 2022 2021 Operating lease expense $ 1.2 $ 1.2 $ 2.5 $ 2.4 Variable lease expense 2.0 0.3 3.7 1.7 Total lease expense $ 3.2 $ 1.5 $ 6.2 $ 4.1 Right-of-use assets for operating leases are tested for impairment in the same manner as long-lived assets used in operations as explained in Note 12 - Fair Value of Notes to Condensed Consolidated Financial Statements. During the first six months of fiscal year 2023 we had no lease impairment, however for the first six months of fiscal year 2022 we recorded $0.7 million of right-of-use asset and associated leasehold improvement impairments. The impairment charge is included in the Restructuring Expense line item on our Condensed Consolidated Statements of Operations. Supplemental cash flow and other information related to leases are as follows: Six Months Ended December 31 (Amounts in Millions) 2022 2021 Cash flow information: Operating lease payments impacting lease liability $ 3.2 $ 3.4 Non-cash impact of obtaining new right-of-use assets $ 2.7 $ 0.8 As of December 31 2022 2021 Other information: Weighted-average remaining term (in years) 4.3 4.0 Weighted-average discount rate 4.6 % 4.7 % The following table summarizes the future minimum lease payments as of December 31, 2022: Fiscal Year Ended (Amounts in Millions) June 30 (1) 2023 $ 3.1 2024 5.4 2025 4.0 2026 2.8 2027 2.1 Thereafter 2.1 Total lease payments $ 19.5 Less interest 1.8 Present value of lease liabilities $ 17.7 (1) Lease payments include options to extend lease terms that are reasonably certain of being exercised. The payments exclude legally binding minimum lease payments for leases signed but not yet commenced. At December 31, 2022, we have additional operating leases that have not yet commenced for which we will record both right-of-use assets and lease liabilities of $9.6 million. The first lease is expected to commence in our third quarter of fiscal year 2023 with a term of approximately 10 years at $5.7 million, while a second lease is expected to commence in our fourth quarter of fiscal year 2023 with a lease term of approximately 12 years at $3.9 million. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share are based on the weighted average number of shares outstanding during the period. Diluted earnings per share are based on the weighted average number of shares outstanding plus the assumed issuance of common shares for all potentially dilutive securities. Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands, Except for Per Share Data) 2022 2021 2022 2021 Net Income (Loss) $ (36,063) $ (21,314) $ (29,507) $ (26,363) Average Shares Outstanding for Basic EPS Calculation 36,539 36,749 36,647 36,785 Dilutive Effect of Average Outstanding Compensation Awards — — — — Average Shares Outstanding for Diluted EPS Calculation 36,539 36,749 36,647 36,785 Basic Earnings (Loss) Per Share $ (0.99) $ (0.58) $ (0.81) $ (0.72) Diluted Earnings (Loss) Per Share $ (0.99) $ (0.58) $ (0.81) $ (0.72) All stock compensation awards were antidilutive as a result of the net losses for the second quarters and year-to-date periods ended December 31, 2022 and December 31, 2021. For the year-to-date period ended December 31, 2022, 831,000 average restricted stock units, 131,000 average relative total shareholder return awards, and 103,000 average performance unit awards were excluded from the dilutive calculation. For the year-to-date period ended December 31, 2021, 741,000 average restricted stock units and 173,000 average relative total shareholder return awards were excluded from the dilutive calculation. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesIn determining the quarterly provision for income taxes we use 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 we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur. Our effective tax rates for the three and six months ended December 31, 2022 were negative tax rates of (24.6%) and (40.3%), respectively, which were lower than the combined federal and state statutory tax rates primarily due to the book versus tax treatment of nondeductible goodwill impairment, earn-out valuation adjustments, and sale of Mexican subsidiary stock. Our effective tax rates for the three and six months ended December 31, 2021 were negative tax rates of (21.0%) and (4.7%), respectively, driven by the book versus tax treatment of nondeductible goodwill impairment and earn-out valuation adjustments. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventory components were as follows: (Amounts in Thousands) December 31, June 30, Finished products $ 74,364 $ 66,890 Work-in-process 1,581 1,974 Raw materials 52,347 52,878 Total FIFO inventory 128,292 121,742 LIFO reserve (23,480) (23,773) Total inventory $ 104,812 $ 97,969 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income During the three months ended December 31, 2022 and 2021, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows: Accumulated Other Comprehensive Income (Amounts in Thousands) Postemployment Benefits Net Actuarial Gain (Loss) Interest Rate Swap Gain (Loss) Accumulated Other Comprehensive Income Balance at September 30, 2022 $ 2,264 $ 2,033 $ 4,297 Other comprehensive income (loss) before reclassifications 181 132 313 Reclassification to (earnings) loss (124) (209) (333) Net current-period other comprehensive income (loss) 57 (77) (20) Balance at December 31, 2022 $ 2,321 $ 1,956 $ 4,277 Balance at September 30, 2021 $ 2,075 $ (218) $ 1,857 Other comprehensive income (loss) before reclassifications 222 336 558 Reclassification to (earnings) loss (100) 56 (44) Net current-period other comprehensive income (loss) 122 392 514 Balance at December 31, 2021 $ 2,197 $ 174 $ 2,371 During the six months ended December 31, 2022 and 2021, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows: Accumulated Other Comprehensive Income (Amounts in Thousands) Postemployment Benefits Net Actuarial Gain (Loss) Interest Rate Swap Gain (Loss) Accumulated Other Comprehensive Income Balance at June 30, 2022 $ 2,291 $ 1,475 $ 3,766 Other comprehensive income (loss) before reclassifications 277 791 1,068 Reclassification to (earnings) loss (247) (310) (557) Net current-period other comprehensive income (loss) 30 481 511 Balance at December 31, 2022 $ 2,321 $ 1,956 $ 4,277 Balance at June 30, 2021 $ 1,980 $ — $ 1,980 Other comprehensive income (loss) before reclassifications 418 75 493 Reclassification to (earnings) loss (201) 99 (102) Net current-period other comprehensive income (loss) 217 174 391 Balance at December 31, 2021 $ 2,197 $ 174 $ 2,371 The following reclassifications were made from Accumulated Other Comprehensive Income to the Condensed Consolidated Statements of Operations: Reclassifications from Accumulated Other Comprehensive Income Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statements of Operations December 31 December 31 (Amounts in Thousands) 2022 2021 2022 2021 Postemployment Benefits Amortization of Actuarial Gain $ 166 $ 134 $ 332 $ 270 Non-operating income (expense), net (42) (34) (85) (69) Benefit (Provision) for Income Taxes $ 124 $ 100 $ 247 $ 201 Net Income (Loss) Interest Rate Swap Gain (Loss) $ 281 $ (75) $ 417 $ (133) Interest expense (72) 19 (107) 34 Benefit (Provision) for Income Taxes $ 209 $ (56) $ 310 $ (99) Net Income (Loss) Total Reclassifications for the Period $ 333 $ 44 $ 557 $ 102 Net Income (Loss) Amounts in parentheses indicate reductions to income. |
Long-Term Debt and Revolving Cr
Long-Term Debt and Revolving Credit Facility | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Revolving Credit Facility | Long-Term Debt and Revolving Credit Facility Short-term borrowings and long-term debt consisted of the following obligations: (Amounts in Thousands) December 31, June 30, Long-term debt under revolving credit facility due December 2025; 5.88% variable interest rate at December 31, 2022 $ 60,000 $ 68,000 Other debt matured August 2022; 9.25% fixed interest rate — 79 Total Debt $ 60,000 $ 68,079 As of December 31, 2022 we had a $125.0 million revolving credit facility with a maturity date of December 2025 that allowed for both issuances of letters of credit and cash borrowings. We also have an option to request an increase of the amount available for borrowing to $200.0 million, subject to participating banks’ consent. The revolving loans under the Credit Agreement could consist of, at our election, advances in U.S. dollars or advances in any other currency that was agreed to by the lenders. The proceeds of the loans are to be used for general corporate purposes including acquisitions. A portion of the revolving credit facility, not to exceed $10.0 million of the principal amount, was available for the issuance of letters of credit. At December 31, 2022, we had $1.8 million in letters of credit outstanding, which reduced our borrowing capacity on the revolving credit facility. Total availability to borrow under the revolving credit facility was $63.2 million at December 31, 2022. The commitment fee on the unused portion of principal amount of the revolving credit facility is payable at a rate that ranges from 20 to 30 basis points per annum as determined by our ratio of consolidated total indebtedness to adjusted consolidated EBITDA. During the second quarter of fiscal year 2023, we entered into a Third Amendment to Amended and Restated Credit Agreement which provides, among other items, amendments to the Credit Agreement to extend the maturity date of the Credit Facility from October 24, 2024 to December 21, 2025, and establish SOFR (“Secured Overnight Financial Rate”) as a pricing benchmark for dollar borrowings in replacement of LIBOR. We were in compliance with all debt covenants of the revolving credit facility during the six-month period ended December 31, 2022. We have an interest rate swap agreement with a bank with a notional value of $40.0 million. The interest rate swap became effective in July 2021 and is accounted for using hedge accounting. See Note 14 - Derivative Instruments of Notes to Condensed Consolidated Statements of Operations for information regarding modification of our swap agreement which occurred during January 2023. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Guarantees: Standby letters of credit were issued to lessors and insurance institutions and can only be drawn upon in the event of our failure to pay our obligations to a beneficiary. As of December 31, 2022, we had a maximum financial exposure from unused standby letters of credit totaling $1.8 million. We are not aware of circumstances that would require us to perform under these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our Condensed Consolidated Financial Statements. Accordingly, no liability has been recorded as of December 31, 2022 with respect to the standby letters of credit. We also enter into commercial letters of credit to facilitate payments to vendors and from customers. Product Warranties: We provide an assurance-type warranty that guarantees our product complies with agreed-upon specifications. This warranty is not sold separately and does not convey any additional services to the customer. We estimate 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 periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. The product warranty liability is included on the Accrued Expenses and Other lines of our Condensed Consolidated Balance Sheets. Changes in the product warranty accrual for the six months ended December 31, 2022 and 2021 were as follows: Six Months Ended December 31 (Amounts in Thousands) 2022 2021 Product Warranty Liability at the beginning of the period $ 2,530 $ 2,861 Additions to warranty accrual (including changes in estimates) 2,687 178 Settlements made (in cash or in kind) (2,132) (912) Product Warranty Liability at the end of the period $ 3,085 $ 2,127 |
Fair Value
Fair Value | 6 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value We categorize 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: • 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. Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the six months ended December 31, 2022 and 2021. There were no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022. In connection with the acquisition of Poppin, we entered into an earn-out arrangement with remaining contingent payments up to $45.0 million based on revenue and profitability milestones achieved through June 30, 2024. We do not currently expect to have any earn-out payments under this arrangement, therefore our contingent earn-out liability as of December 31, 2022 was zero. As of June 30, 2022 the fair value of the contingent earn-out liability was $3.2 million. The liability is carried at fair value and is classified in Level 3 of the fair value hierarchy and is included in Other long-term liabilities line on our Condensed Consolidated Balance Sheet. During the three and six months ended December 31, 2022, the recurring revaluation to fair value resulted in a gain of $0.0 million and $3.2 million, respectively. During the three and six months ended December 31, 2021, the recurring revaluation to fair value resulted in a gain of $22.5 million and $17.9 million, respectively. Financial Instruments Recognized at Fair Value: The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Assets: Stock warrants 3 Market - The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. The value of the stock warrants fluctuates primarily in relation to the value of the privately-held company's underlying securities. Derivative Asset: Interest Rate Swap 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. Recurring Fair Value Measurements: As of December 31, 2022 and June 30, 2022, the fair values of financial assets that are measured at fair value on a recurring basis using the market or income approach are categorized as follows: December 31, 2022 (Amounts in Thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 8,308 $ — $ — $ 8,308 Derivatives: Interest rate swap contract — 2,635 — 2,635 Trading Securities: Mutual funds in nonqualified SERP 10,533 — — 10,533 Derivatives: Stock warrants — — 1,500 1,500 Total assets at fair value $ 18,841 $ 2,635 $ 1,500 $ 22,976 June 30, 2022 (Amounts in Thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 5,508 $ — $ — $ 5,508 Derivatives: Interest rate swap contract — 1,986 — 1,986 Trading Securities: Mutual funds in nonqualified SERP 10,517 — — 10,517 Derivatives: Stock warrants — — 1,500 1,500 Total assets at fair value $ 16,025 $ 1,986 $ 1,500 $ 19,511 Liabilities Contingent earn-out liability — — 3,160 3,160 Total liabilities at fair value $ — $ — $ 3,160 $ 3,160 Non-Recurring Fair Value Measurements: Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Non-recurring Fair Value Adjustment Level Valuation Technique/Inputs Used Impairment of Right of Use Lease Assets and Related Asset Groups 3 Income - Based on a valuation model that measures the present value of remaining lease payments less estimated sublease income at a discount rate that captures the risk associated with the future cash flows. Impairment of Goodwill 3 Income - Based on a valuation model that determines fair value based on estimated discounted future cash flows of each reporting unit, requiring the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, future market conditions and discount rates that capture the risk associated with future cash flows. During the year-to-date period of fiscal year 2022, we recorded $0.7 million of right-of-use asset and associated leasehold improvement impairment resulting from closure from our leased Pennsylvania and Maryland facilities as part of our transformation restructuring plan. The impairment loss is included as a component of the Restructuring Expense line item on our Condensed Consolidated Statements of Operations. The asset groups used to calculate impairment included the right-of-use lease assets, leasehold improvements, and lease liabilities. During the second quarter of fiscal years 2023 and 2022, we recorded $36.7 million and $34.1 million, respectively, of goodwill impairment related to our Poppin business. Annual goodwill testing in both years determined the carrying value of the Poppin reporting unit exceeded its relative fair value. No goodwill remains on the Poppin goodwill reporting unit. Financial Instruments Not Carried At Fair Value: Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk. Equity securities without readily determinable fair value 3 Cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Impairment is assessed qualitatively. The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, customer deposits, and dividends payable approximates fair value due to their relatively short maturity and immaterial non-performance risk. Based upon variable interest rates currently available to the Company, the fair value of our debt approximates the carrying value. |
Investments
Investments | 6 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Investments | Investments Supplemental Employee Retirement Plan Investments: We maintain a self-directed supplemental employee retirement plan (“SERP”) in which executive employees are eligible to participate. The SERP utilizes a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. We recognize SERP investment assets on the Condensed Consolidated Balance Sheets at current fair value. A SERP liability of the same amount is recorded on the Condensed Consolidated Balance Sheets representing an 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 the Other Income (Expense) section of the Condensed Consolidated Statements of Operations. Adjustments made to revalue the SERP liability are also recognized in income or expense as selling and administrative expenses and offset valuation adjustments on SERP investment assets. Net unrealized holding gains (losses) for the six months ended December 31, 2022 and 2021 were, in millions, $(0.2) and $0.2, respectively. SERP asset and liability balances were as follows: (Amounts in Thousands) December 31, June 30, SERP investments - current asset $ 3,191 $ 3,284 SERP investments - other long-term asset 7,342 7,233 Total SERP investments $ 10,533 $ 10,517 SERP obligation - current liability $ 3,191 $ 3,284 SERP obligation - other long-term liability 7,342 7,233 Total SERP obligation $ 10,533 $ 10,517 Equity securities without readily determinable fair value: We hold a total investment of $2.0 million in a privately-held company, including $0.5 million in equity securities without readily determinable fair value. The investment in equity securities without readily determinable fair value is included in the Other Assets line of the Condensed Consolidated Balance Sheets. See Note 12 - Fair Value of Notes to Condensed Consolidated Financial Statements for more information on the valuation of these securities. We do not hold a majority voting interest and are not the variable interest primary beneficiary of the privately-held company, thus consolidation is not required. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Interest Rate Swap: We are subject to interest rate risk related to the revolving credit facility and we historically have entered into interest rate swap agreements that are based on LIBOR to manage this exposure. The interest rate swap agreements are designated as cash flow hedges that qualify for hedge accounting under the hypothetical derivative method. Fair value adjustments are recorded as a component of Accumulated Other Comprehensive Income (“AOCI”), net of tax in the Condensed Consolidated Balance Sheets. Balances in AOCI are reclassified into earnings when transactions related to the underlying risk are settled. As of December 31, 2022 we held an interest rate swap with a notional value totaling $40.0 million and a weighted average LIBOR fixed rate of 0.834%. At December 31, 2022, our interest rate swap was recorded at fair value in current assets and non-current assets at $1.4 million and $1.2 million, respectively. At June 30, 2022, our interest rate swap was recorded in current assets and non-current assets at $0.9 million and $1.1 million, respectively. The pre-tax balance of interest rate swap gains in AOCI as of December 31, 2022 was $2.6 million. See Note 9 - Accumulated Other Comprehensive Income of Notes to Condensed Consolidated Financial Statements for information regarding activity recorded as a component of AOCI during the three and six months ended December 31, 2022. As of December 31, 2022, we have $1.4 million of interest rate swap gains recorded in AOCI which are expected to be reclassified into earnings within the next twelve months. Subsequent to our second quarter of fiscal year 2023, we modified our interest rate swap agreement to be based on SOFR to align with the rate in our Third Amendment to Amended and Restated Credit Agreement that we entered into during December 2022. Stock Warrants: We hold a total investment of $2.0 million in a privately-held company, including $1.5 million in stock warrants. The investment in stock warrants is accounted for as a derivative instrument and is included in the Other Assets line of the Condensed Consolidated Balance Sheets. The stock warrants are convertible into equity shares of the privately-held company upon achieving certain milestones. The value of the stock warrants will fluctuate primarily in relation to the value of the privately-held company's underlying securities, either providing an appreciation in value or potentially expiring with no value. During the quarter ended December 31, 2022, the change in fair value of the stock warrants was not significant. See Note 12 - Fair Value |
Stock Compensation
Stock Compensation | 6 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation | Stock Compensation Stock-based compensation expense during the quarter and year-to-date periods ended December 31, 2022, was $1.3 million and $2.5 million, respectively, and during the quarter and year-to-date periods ended December 31, 2021, was $1.5 million and $2.6 million, respectively. The total income tax benefit for stock compensation arrangements during the quarter and year-to-date periods ended December 31, 2022, was $0.2 million and $0.5 million, respectively, and during the quarter and year-to-date periods ended December 31, 2021, was $0.3 million and $0.6 million, respectively. During fiscal year 2023, the following stock compensation was awarded to officers and other key employees and to members of the Board of Directors who are not employees. All awards were granted under the 2017 Stock Incentive Plan. For more information on stock compensation awards, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2022. Type of Award Quarter Awarded Targeted Shares or Units Grant Date Fair Value (4) Performance Units (1) 1st Quarter 152,034 $7.33 Performance Units (1) 2nd Quarter 6,160 $6.52 Restricted Stock Units (2) 1st Quarter 379,087 $7.83 Restricted Stock Units (2) 2nd Quarter 10,415 $6.59 - $7.39 Unrestricted Shares (3) 1st Quarter 21,318 $7.77 Unrestricted Shares (3) 2nd Quarter 17,940 $7.41 (1) Performance units were awarded to key officers. Vesting occurs at June 30, 2025. Participants will earn from 0% to 200% of the target award depending upon the compound annual growth rate of Kimball International’s adjusted earnings per share at the end of the performance period. The maximum number of units that can be issued under these awards is 316,388. (2) Restricted stock units were awarded to officers and key employees. Vesting occurs at June 30, 2023 and June 30, 2025. Upon vesting, the outstanding number of restricted stock units and the value of dividends accumulated over the vesting period are converted to shares of common stock. (3) Unrestricted shares were awarded to non-employee members of the Board of Directors as consideration for service to Kimball International and do not have vesting periods, holding periods, restrictions on sale, or other restrictions. (4) The grant date fair value of the performance units was 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 units. The grant date fair value of the restricted stock units and unrestricted shares was based on the stock price at the date of the award. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Prior Period Reclassification | Prior Period Reclassification:We combined the Long-term earn-out liability line with the Other long-term liabilities line on our June 30, 2022 balance sheet as the balance no longer requires separate presentation. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements and Supplemental Information (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Recent Accounting Pronouncements and Supplemental Information [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball International,” “we,” “us,” or “our”) 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 we believe that the disclosures are adequate to make the information presented not misleading. 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 our latest annual report on Form 10-K. Prior Period Reclassification: |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted:In October 2021, the Financial Accounting Standards Board issued guidance on accounting for contract assets and contract liabilities, related to revenue contracts with customers, during a business combination by the acquiring business entity. The acquirer is to measure the contract asset and contract liability as of the acquisition date as if the acquirer had originated the contracts. This is a departure from the current practice under U.S. GAAP of recognizing contract assets and contract liabilities at fair value as of the acquisition date. The guidance will be effective in our first quarter of fiscal year 2024, though early adoption is permitted. Management is unable to predict whether the adoption of this guidance will have a material impact on our financial statements. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Goodwill is assigned to and the fair value is tested at the reporting unit level. Annually, or if conditions indicate an earlier review is necessary, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount. We also have the option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test which compares the carrying value of the reporting unit to the reporting unit’s fair value to identify impairment. Under the quantitative assessment, if the fair value of the reporting unit is less than the carrying value, goodwill is written down to its fair value. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting unit considers current market conditions existing at the assessment date and reporting unit specific scenarios weighted on probability of outcome. |
Impairment Or Disposal Of Intangible Assets | Other Intangible Assets reported on the Condensed Consolidated Balance Sheets consist of capitalized software, customer relationships, trade names, acquired technology, patents and trademarks, and non-compete agreements. 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. |
Intangible Assets | Capitalized 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 re-engineering costs are expensed in the period in which they are incurred. Trade names, non-compete agreements, acquired technology, patents and trademarks are amortized on a straight-line basis over their estimated useful lives. Customer relationships are amortized based on estimated attrition rates of customers. |
Non-operating Income and Expense, net | Non-operating Income (Expense), net: Non-operating income and expense include the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, amortization of actuarial income, foreign currency rate movements, 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 offset by a change in the SERP liability that is recognized in selling and administrative expenses. |
Impairment or Disposal of Long-lived Assets | We utilized available market prices and management estimates to determine the fair value of impaired assets. Restructuring is included in the Restructuring Expense line item on our Condensed Consolidated Statements of Operations. |
Recognition of Asset and Liability for Lease | Certain leases have terms that are dependent upon the occurrence of events, activities, or circumstances in lease agreements and incur variable lease expense driven by warehouse square footage utilized, property taxes assessed, and other non-lease component charges. Variable lease expense is presented as operating expense in our Condensed Consolidated Statements of Operations in the same line item as expense arising from fixed lease payments for operating leases. |
Separation of Lease and Non-lease Components | For all classes of assets, we do not separate non-lease components of a contract from the lease components to which they relate. |
Short-term Leases | We do not recognize a right-of-use asset or lease liability for short-term leases that have a lease term of twelve months or less. |
Income Tax | In determining the quarterly provision for income taxes we use 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 we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur. |
Inventory | 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. |
Product Warranties | We estimate 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 periodically based on changes in historical cost trends and in certain cases where specific warranty issues become known. The product warranty liability is included on the Accrued Expenses and Other lines of our Condensed Consolidated Balance Sheets. |
Fair Value | We categorize 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: • 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. Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the six months ended December 31, 2022 and 2021. There were no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022. The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Assets: Stock warrants 3 Market - The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. The value of the stock warrants fluctuates primarily in relation to the value of the privately-held company's underlying securities. Derivative Asset: Interest Rate Swap 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. |
Fair Value of Financial Instruments Policy Continued | The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Assets: Stock warrants 3 Market - The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. The value of the stock warrants fluctuates primarily in relation to the value of the privately-held company's underlying securities. Derivative Asset: Interest Rate Swap 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. |
Fair Value Measurement, Non-Recurring | Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Non-recurring Fair Value Adjustment Level Valuation Technique/Inputs Used Impairment of Right of Use Lease Assets and Related Asset Groups 3 Income - Based on a valuation model that measures the present value of remaining lease payments less estimated sublease income at a discount rate that captures the risk associated with the future cash flows. Impairment of Goodwill 3 Income - Based on a valuation model that determines fair value based on estimated discounted future cash flows of each reporting unit, requiring the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, future market conditions and discount rates that capture the risk associated with future cash flows. |
Fair Value of Financial Instruments Not Carried at Fair Value | Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk. Equity securities without readily determinable fair value 3 Cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Impairment is assessed qualitatively. |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements and Supplemental Information (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Recent Accounting Pronouncements and Supplemental Information [Abstract] | |
Schedule of Finite-Lived Intangible Assets | A summary of intangible assets subject to amortization is as follows: December 31, 2022 June 30, 2022 (Amounts in Thousands) Cost Accumulated Net Value Cost Accumulated Net Value Capitalized Software $ 47,841 $ 36,114 $ 11,727 $ 46,246 $ 35,521 $ 10,725 Customer Relationships 12,000 4,320 7,680 19,050 10,518 8,532 Trade Names 36,570 8,640 27,930 36,570 6,811 29,759 Acquired Technology 7,000 2,065 4,935 7,000 1,563 5,437 Patents and Trademarks 354 63 291 354 47 307 Non-Compete Agreements 100 100 — 100 93 7 Other Intangible Assets $ 103,865 $ 51,302 $ 52,563 $ 109,320 $ 54,553 $ 54,767 A summary of the useful lives of intangible assets subject to amortization is as follows: Years Capitalized Software 3 to 13 Customer Relationships 10 Trade Names 10 Acquired Technology 7 Patents 14 Trademarks 15 Non-Compete Agreements 5 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense incurred and future expected expenses related to intangible assets were: Three months ended Six Months Ended December 31 December 31 Remainder Future Fiscal Years (Amounts in Thousands) 2022 2021 2022 2021 2023 2024 2025 2026 2027 Thereafter Amortization Expense $ 2,219 $ 2,415 $ 4,414 $ 4,854 $ 5,186 $ 9,446 $ 9,227 $ 8,829 $ 6,481 $ 13,394 |
Components of Non-operating Income (Expense), Net | Components of the Non-operating income, net line, were: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands) 2022 2021 2022 2021 Gain on Supplemental Employee Retirement Plan Investments $ 619 $ 680 $ 160 $ 587 Other 51 29 20 (64) Non-operating income, net $ 670 $ 709 $ 180 $ 523 |
Schedule of Goodwill | The changes in the carrying amount of goodwill are summarized as follows: (Amounts in Thousands) Gross Goodwill Accumulated Impairment Net Carrying Amount June 30, 2021 $ 83,695 $ (1,733) $ 81,962 Additions / (Impairments) — (34,118) (34,118) June 30, 2022 83,695 (35,851) 47,844 Additions / (Impairment) — (36,684) (36,684) December 31, 2022 $ 83,695 $ (72,535) $ 11,160 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | A summary of the charges recorded in connection with the second phase of the transformation restructuring plan is as follows: Three Months Ended Six Months Ended Charges Incurred to Date December 31 December 31 (Amounts in Thousands) 2022 2021 2022 2021 Cash-related restructuring charges: Severance and other employee related costs $ 284 $ 87 $ 474 $ 233 $ 7,309 Facility exit costs and other cash charges 363 434 1,296 890 5,244 Total cash-related restructuring charges $ 647 $ 521 $ 1,770 $ 1,123 $ 12,553 Non-cash charges: Impairment of assets and accelerated depreciation 1,032 489 279 1,342 8,810 Total charges $ 1,679 $ 1,010 $ 2,049 $ 2,465 $ 21,363 |
Accrued Restructuring Charges Activity | A summary of the current period activity in accrued restructuring related to the second phase of the transformation restructuring plan is as follows: (Amounts in Thousands) Severance and other employee related costs Balance at June 30, 2022 $ 974 Additions charged to expense 466 Cash payments charged against reserve (1,393) Non-cash adjustments (47) Balance at December 31, 2022 $ — |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | The following table provides information about revenue by operating segment: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Millions) 2022 2021 2022 2021 Workplace & Health $ 141.2 $ 121.0 $ 284.0 $ 237.3 Hospitality 27.7 16.9 47.4 41.9 eBusiness 14.1 13.5 29.4 28.8 Total Net Sales $ 183.0 $ 151.4 $ 360.8 $ 308.0 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | The components of our lease expenses are as follows: Three Months Ended Six Months Ended December 31 December 31 (Amounts in Millions) 2022 2021 2022 2021 Operating lease expense $ 1.2 $ 1.2 $ 2.5 $ 2.4 Variable lease expense 2.0 0.3 3.7 1.7 Total lease expense $ 3.2 $ 1.5 $ 6.2 $ 4.1 |
Supplemental Cash Flow and Other Information Related to Leases | Supplemental cash flow and other information related to leases are as follows: Six Months Ended December 31 (Amounts in Millions) 2022 2021 Cash flow information: Operating lease payments impacting lease liability $ 3.2 $ 3.4 Non-cash impact of obtaining new right-of-use assets $ 2.7 $ 0.8 As of December 31 2022 2021 Other information: Weighted-average remaining term (in years) 4.3 4.0 Weighted-average discount rate 4.6 % 4.7 % |
Future Minimum Lease Payments | The following table summarizes the future minimum lease payments as of December 31, 2022: Fiscal Year Ended (Amounts in Millions) June 30 (1) 2023 $ 3.1 2024 5.4 2025 4.0 2026 2.8 2027 2.1 Thereafter 2.1 Total lease payments $ 19.5 Less interest 1.8 Present value of lease liabilities $ 17.7 (1) Lease payments include options to extend lease terms that are reasonably certain of being exercised. The payments exclude legally binding minimum lease payments for leases signed but not yet commenced. At December 31, 2022, we have additional operating leases that have not yet commenced for which we will record both right-of-use assets and lease liabilities of $9.6 million. The first lease is expected to commence in our third quarter of fiscal year 2023 with a term of approximately 10 years at $5.7 million, while a second lease is expected to commence in our fourth quarter of fiscal year 2023 with a lease term of approximately 12 years at $3.9 million. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended Six Months Ended December 31 December 31 (Amounts in Thousands, Except for Per Share Data) 2022 2021 2022 2021 Net Income (Loss) $ (36,063) $ (21,314) $ (29,507) $ (26,363) Average Shares Outstanding for Basic EPS Calculation 36,539 36,749 36,647 36,785 Dilutive Effect of Average Outstanding Compensation Awards — — — — Average Shares Outstanding for Diluted EPS Calculation 36,539 36,749 36,647 36,785 Basic Earnings (Loss) Per Share $ (0.99) $ (0.58) $ (0.81) $ (0.72) Diluted Earnings (Loss) Per Share $ (0.99) $ (0.58) $ (0.81) $ (0.72) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventory components were as follows: (Amounts in Thousands) December 31, June 30, Finished products $ 74,364 $ 66,890 Work-in-process 1,581 1,974 Raw materials 52,347 52,878 Total FIFO inventory 128,292 121,742 LIFO reserve (23,480) (23,773) Total inventory $ 104,812 $ 97,969 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | During the three months ended December 31, 2022 and 2021, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows: Accumulated Other Comprehensive Income (Amounts in Thousands) Postemployment Benefits Net Actuarial Gain (Loss) Interest Rate Swap Gain (Loss) Accumulated Other Comprehensive Income Balance at September 30, 2022 $ 2,264 $ 2,033 $ 4,297 Other comprehensive income (loss) before reclassifications 181 132 313 Reclassification to (earnings) loss (124) (209) (333) Net current-period other comprehensive income (loss) 57 (77) (20) Balance at December 31, 2022 $ 2,321 $ 1,956 $ 4,277 Balance at September 30, 2021 $ 2,075 $ (218) $ 1,857 Other comprehensive income (loss) before reclassifications 222 336 558 Reclassification to (earnings) loss (100) 56 (44) Net current-period other comprehensive income (loss) 122 392 514 Balance at December 31, 2021 $ 2,197 $ 174 $ 2,371 During the six months ended December 31, 2022 and 2021, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows: Accumulated Other Comprehensive Income (Amounts in Thousands) Postemployment Benefits Net Actuarial Gain (Loss) Interest Rate Swap Gain (Loss) Accumulated Other Comprehensive Income Balance at June 30, 2022 $ 2,291 $ 1,475 $ 3,766 Other comprehensive income (loss) before reclassifications 277 791 1,068 Reclassification to (earnings) loss (247) (310) (557) Net current-period other comprehensive income (loss) 30 481 511 Balance at December 31, 2022 $ 2,321 $ 1,956 $ 4,277 Balance at June 30, 2021 $ 1,980 $ — $ 1,980 Other comprehensive income (loss) before reclassifications 418 75 493 Reclassification to (earnings) loss (201) 99 (102) Net current-period other comprehensive income (loss) 217 174 391 Balance at December 31, 2021 $ 2,197 $ 174 $ 2,371 |
Reclassifications from Accumulated Other Comprehensive Income | The following reclassifications were made from Accumulated Other Comprehensive Income to the Condensed Consolidated Statements of Operations: Reclassifications from Accumulated Other Comprehensive Income Three Months Ended Six Months Ended Affected Line Item in the Condensed Consolidated Statements of Operations December 31 December 31 (Amounts in Thousands) 2022 2021 2022 2021 Postemployment Benefits Amortization of Actuarial Gain $ 166 $ 134 $ 332 $ 270 Non-operating income (expense), net (42) (34) (85) (69) Benefit (Provision) for Income Taxes $ 124 $ 100 $ 247 $ 201 Net Income (Loss) Interest Rate Swap Gain (Loss) $ 281 $ (75) $ 417 $ (133) Interest expense (72) 19 (107) 34 Benefit (Provision) for Income Taxes $ 209 $ (56) $ 310 $ (99) Net Income (Loss) Total Reclassifications for the Period $ 333 $ 44 $ 557 $ 102 Net Income (Loss) Amounts in parentheses indicate reductions to income. |
Long-Term Debt and Revolving _2
Long-Term Debt and Revolving Credit Facility (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Short-term borrowings and long-term debt consisted of the following obligations: (Amounts in Thousands) December 31, June 30, Long-term debt under revolving credit facility due December 2025; 5.88% variable interest rate at December 31, 2022 $ 60,000 $ 68,000 Other debt matured August 2022; 9.25% fixed interest rate — 79 Total Debt $ 60,000 $ 68,079 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | Changes in the product warranty accrual for the six months ended December 31, 2022 and 2021 were as follows: Six Months Ended December 31 (Amounts in Thousands) 2022 2021 Product Warranty Liability at the beginning of the period $ 2,530 $ 2,861 Additions to warranty accrual (including changes in estimates) 2,687 178 Settlements made (in cash or in kind) (2,132) (912) Product Warranty Liability at the end of the period $ 3,085 $ 2,127 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | The following methods and assumptions were used to measure fair value: Financial Instrument Level Valuation Technique/Inputs Used Cash Equivalents: Money market funds 1 Market - Quoted market prices Trading securities: Mutual funds held in nonqualified SERP 1 Market - Quoted market prices Derivative Assets: Stock warrants 3 Market - The pricing of recent purchases or sales of the investment are considered, if any, as well as positive and negative qualitative evidence, in the assessment of fair value. The value of the stock warrants fluctuates primarily in relation to the value of the privately-held company's underlying securities. Derivative Asset: Interest Rate Swap 2 Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball International's non-performance risk. Contingent earn-out liability 3 Income - Based on a valuation model that measures the present value of the probable cash payments based upon the forecasted operating performance of the acquisition and a discount rate that captures the risk associated with the liability. Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following: Financial Instrument Level Valuation Technique/Inputs Used Notes receivable 2 Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk. Equity securities without readily determinable fair value 3 Cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Impairment is assessed qualitatively. |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of December 31, 2022 and June 30, 2022, the fair values of financial assets that are measured at fair value on a recurring basis using the market or income approach are categorized as follows: December 31, 2022 (Amounts in Thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 8,308 $ — $ — $ 8,308 Derivatives: Interest rate swap contract — 2,635 — 2,635 Trading Securities: Mutual funds in nonqualified SERP 10,533 — — 10,533 Derivatives: Stock warrants — — 1,500 1,500 Total assets at fair value $ 18,841 $ 2,635 $ 1,500 $ 22,976 June 30, 2022 (Amounts in Thousands) Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 5,508 $ — $ — $ 5,508 Derivatives: Interest rate swap contract — 1,986 — 1,986 Trading Securities: Mutual funds in nonqualified SERP 10,517 — — 10,517 Derivatives: Stock warrants — — 1,500 1,500 Total assets at fair value $ 16,025 $ 1,986 $ 1,500 $ 19,511 Liabilities Contingent earn-out liability — — 3,160 3,160 Total liabilities at fair value $ — $ — $ 3,160 $ 3,160 |
Non-recurring Fair Value Adjustment Technique | Non-recurring Fair Value Adjustment Level Valuation Technique/Inputs Used Impairment of Right of Use Lease Assets and Related Asset Groups 3 Income - Based on a valuation model that measures the present value of remaining lease payments less estimated sublease income at a discount rate that captures the risk associated with the future cash flows. Impairment of Goodwill 3 Income - Based on a valuation model that determines fair value based on estimated discounted future cash flows of each reporting unit, requiring the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, future market conditions and discount rates that capture the risk associated with future cash flows. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Investments [Abstract] | |
Trading Securities (and Certain Trading Assets) | SERP asset and liability balances were as follows: (Amounts in Thousands) December 31, June 30, SERP investments - current asset $ 3,191 $ 3,284 SERP investments - other long-term asset 7,342 7,233 Total SERP investments $ 10,533 $ 10,517 SERP obligation - current liability $ 3,191 $ 3,284 SERP obligation - other long-term liability 7,342 7,233 Total SERP obligation $ 10,533 $ 10,517 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value | Type of Award Quarter Awarded Targeted Shares or Units Grant Date Fair Value (4) Performance Units (1) 1st Quarter 152,034 $7.33 Performance Units (1) 2nd Quarter 6,160 $6.52 Restricted Stock Units (2) 1st Quarter 379,087 $7.83 Restricted Stock Units (2) 2nd Quarter 10,415 $6.59 - $7.39 Unrestricted Shares (3) 1st Quarter 21,318 $7.77 Unrestricted Shares (3) 2nd Quarter 17,940 $7.41 (1) Performance units were awarded to key officers. Vesting occurs at June 30, 2025. Participants will earn from 0% to 200% of the target award depending upon the compound annual growth rate of Kimball International’s adjusted earnings per share at the end of the performance period. The maximum number of units that can be issued under these awards is 316,388. (2) Restricted stock units were awarded to officers and key employees. Vesting occurs at June 30, 2023 and June 30, 2025. Upon vesting, the outstanding number of restricted stock units and the value of dividends accumulated over the vesting period are converted to shares of common stock. (3) Unrestricted shares were awarded to non-employee members of the Board of Directors as consideration for service to Kimball International and do not have vesting periods, holding periods, restrictions on sale, or other restrictions. (4) The grant date fair value of the performance units was based on the stock price at the date of the award, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding performance units. The grant date fair value of the restricted stock units and unrestricted shares was based on the stock price at the date of the award. |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements and Supplemental Information - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accounting Standards and Supplemental Information [Line Items] | ||||||
Goodwill impairment | $ 36,684 | $ 34,118 | $ 36,684 | $ 34,118 | $ 34,118 | |
Goodwill | 11,160 | 11,160 | $ 47,844 | $ 81,962 | ||
Indefinite-lived intangible assets (excluding goodwill) | 0 | $ 0 | ||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 0 |
Recent Accounting Pronounceme_5
Recent Accounting Pronouncements and Supplemental Information - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Goodwill [Roll Forward] | |||||
Goodwill in the beginning of the period | $ 83,695 | $ 83,695 | $ 83,695 | ||
Additions / (Impairments) | 0 | 0 | |||
Goodwill at the end of the period | $ 83,695 | 83,695 | 83,695 | ||
Goodwill, Accumulated Impairment Loss [Roll Forward] | |||||
Accumulated Impairment at beginning of period | (35,851) | (1,733) | (1,733) | ||
Additions / (Impairment) | (36,684) | $ (34,118) | (36,684) | (34,118) | (34,118) |
Accumulated Impairment at end of period | (72,535) | (72,535) | (35,851) | ||
Goodwill, Net Carrying Amount [Roll Forward] | |||||
Net Carrying Amount, beginning balance | 47,844 | 81,962 | 81,962 | ||
Additions / (Impairment) | (36,684) | $ (34,118) | (36,684) | $ (34,118) | (34,118) |
Net Carrying Amount, Ending balance | $ 11,160 | $ 11,160 | $ 47,844 |
Recent Accounting Pronounceme_6
Recent Accounting Pronouncements and Supplemental Information - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets | ||
Cost | $ 103,865 | $ 109,320 |
Accumulated Amortization | 51,302 | 54,553 |
Net Value | 52,563 | 54,767 |
Capitalized Software | ||
Finite-Lived Intangible Assets | ||
Cost | 47,841 | 46,246 |
Accumulated Amortization | 36,114 | 35,521 |
Net Value | $ 11,727 | 10,725 |
Capitalized Software | Minimum | ||
Finite-Lived Intangible Assets | ||
Useful life (in years) | 3 years | |
Capitalized Software | Maximum | ||
Finite-Lived Intangible Assets | ||
Useful life (in years) | 13 years | |
Customer Relationships | ||
Finite-Lived Intangible Assets | ||
Cost | $ 12,000 | 19,050 |
Accumulated Amortization | 4,320 | 10,518 |
Net Value | $ 7,680 | 8,532 |
Useful life (in years) | 10 years | |
Trade Names | ||
Finite-Lived Intangible Assets | ||
Cost | $ 36,570 | 36,570 |
Accumulated Amortization | 8,640 | 6,811 |
Net Value | $ 27,930 | 29,759 |
Useful life (in years) | 10 years | |
Acquired Technology | ||
Finite-Lived Intangible Assets | ||
Cost | $ 7,000 | 7,000 |
Accumulated Amortization | 2,065 | 1,563 |
Net Value | $ 4,935 | 5,437 |
Useful life (in years) | 7 years | |
Patents and Trademarks | ||
Finite-Lived Intangible Assets | ||
Cost | $ 354 | 354 |
Accumulated Amortization | 63 | 47 |
Net Value | 291 | 307 |
Non-Compete Agreements | ||
Finite-Lived Intangible Assets | ||
Cost | 100 | 100 |
Accumulated Amortization | 100 | 93 |
Net Value | $ 0 | $ 7 |
Useful life (in years) | 5 years | |
Patents | ||
Finite-Lived Intangible Assets | ||
Useful life (in years) | 14 years | |
Trademarks | ||
Finite-Lived Intangible Assets | ||
Useful life (in years) | 15 years |
Recent Accounting Pronounceme_7
Recent Accounting Pronouncements and Supplemental Information - Amortization Expense and Future Expected Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Recent Accounting Pronouncements and Supplemental Information [Abstract] | ||||
Amortization Expense | $ 2,219 | $ 2,415 | $ 4,414 | $ 4,854 |
Remainder of fiscal year | 5,186 | 5,186 | ||
2024 | 9,446 | 9,446 | ||
2025 | 9,227 | 9,227 | ||
2026 | 8,829 | 8,829 | ||
2027 | 6,481 | 6,481 | ||
Thereafter | $ 13,394 | $ 13,394 |
Recent Accounting Pronounceme_8
Recent Accounting Pronouncements and Supplemental Information - Components of Non-operating income (expense), net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Recent Accounting Pronouncements and Supplemental Information [Abstract] | ||||
Gain on Supplemental Employee Retirement Plan Investments | $ 619 | $ 680 | $ 160 | $ 587 |
Other | 51 | 29 | 20 | (64) |
Non-operating income, net | $ 670 | $ 709 | $ 180 | $ 523 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Expense and Other Related Items | ||||
Restructuring expense | $ 1,679 | $ 1,010 | $ 2,049 | $ 2,465 |
Transformation Restructuring Plan | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring expense | 1,679 | $ 1,010 | 2,049 | $ 2,465 |
Effect on future earnings, amount | 19,000 | |||
Restructuring and expected cost remaining | 1,800 | $ 1,800 | ||
Percentage of restructuring costs expected in cash | 60% | |||
Transformation Restructuring Plan | Minimum | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | 22,700 | $ 22,700 | ||
Transformation Restructuring Plan | Minimum | Severance and other employee related costs | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | 7,300 | 7,300 | ||
Transformation Restructuring Plan | Minimum | Facility exit costs and other cash charges | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | 6,000 | 6,000 | ||
Transformation Restructuring Plan | Minimum | Impairment of assets and accelerated depreciation | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | 9,400 | 9,400 | ||
Transformation Restructuring Plan | Maximum | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | 23,300 | 23,300 | ||
Transformation Restructuring Plan | Maximum | Facility exit costs and other cash charges | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | 6,200 | 6,200 | ||
Transformation Restructuring Plan | Maximum | Impairment of assets and accelerated depreciation | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring and related expected costs | $ 9,800 | $ 9,800 |
Restructuring - Charges related
Restructuring - Charges related to Transformation Restructuring Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Expense and Other Related Items | ||||
Restructuring expense | $ 1,679 | $ 1,010 | $ 2,049 | $ 2,465 |
Transformation Restructuring Plan | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring expense | 1,679 | 1,010 | 2,049 | 2,465 |
Charges Incurred to Date | 21,363 | 21,363 | ||
Transformation Restructuring Plan | Cash-related restructuring charges: | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring expense | 647 | 521 | 1,770 | 1,123 |
Charges Incurred to Date | 12,553 | 12,553 | ||
Transformation Restructuring Plan | Cash-related restructuring charges: | Severance and other employee related costs | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring expense | 284 | 87 | 474 | 233 |
Charges Incurred to Date | 7,309 | 7,309 | ||
Transformation Restructuring Plan | Cash-related restructuring charges: | Facility exit costs and other cash charges | ||||
Restructuring Expense and Other Related Items | ||||
Restructuring expense | 363 | 434 | 1,296 | 890 |
Charges Incurred to Date | 5,244 | 5,244 | ||
Transformation Restructuring Plan | Non-cash charges: | Impairment of assets and accelerated depreciation | ||||
Restructuring Expense and Other Related Items | ||||
Impairment of assets and accelerated depreciation | 1,032 | $ 489 | 279 | $ 1,342 |
Charges Incurred to Date | $ 8,810 | $ 8,810 |
Restructuring - Current Period
Restructuring - Current Period activity in accrued restructuring related to Transformation Restructuring Reserve (Details) - Severance and other employee related costs - Transformation Restructuring Plan $ in Thousands | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at the beginning of the period | $ 974 |
Additions charged to expense | 466 |
Cash payments charged against reserve | (1,393) |
Non-cash adjustments | (47) |
Balance at the end of the period | $ 0 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net Sales (including immaterial rounding adjustment) | $ 183,000 | |||
Net Sales | 182,947 | $ 151,403 | $ 360,758 | $ 308,013 |
Workplace & Health | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 141,200 | 121,000 | 284,000 | 237,300 |
Hospitality | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | 27,700 | 16,900 | 47,400 | 41,900 |
eBusiness | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales | $ 14,100 | $ 13,500 | $ 29,400 | $ 28,800 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue Recognition [Abstract] | |
Customer deposit balance | $ 27.5 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Finance lease liability | $ 0 | |
Operating lease, impairment loss | $ 0 | $ 0.7 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 1.2 | $ 1.2 | $ 2.5 | $ 2.4 |
Variable lease expense | 2 | 0.3 | 3.7 | 1.7 |
Total lease expense | $ 3.2 | $ 1.5 | $ 6.2 | $ 4.1 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow relating to Leases (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease payments impacting lease liability | $ 3.2 | $ 3.4 |
Non-cash impact of obtaining new right-of-use assets | $ 2.7 | $ 0.8 |
Weighted-average remaining term (in years) | 4 years 3 months 18 days | 4 years |
Weighted-average discount rate | 4.60% | 4.70% |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Lessee, Lease, Description [Line Items] | |
2023 | $ 3.1 |
2024 | 5.4 |
2025 | 4 |
2026 | 2.8 |
2027 | 2.1 |
Thereafter | 2.1 |
Total lease payments | 19.5 |
Less interest | 1.8 |
Present value of lease liabilities | 17.7 |
Operating leases that have not yet commenced, Right-of-use asset | 9.6 |
Operating leases that have not yet commenced, liability | 9.6 |
Lease Term Lease One Approximately Ten Years | |
Lessee, Lease, Description [Line Items] | |
Operating leases that have not yet commenced, liability | $ 5.7 |
Operating lease not yet commenced, term of contract (in years) | 10 years |
Lease Term Lease One Approximately Twelve Years | |
Lessee, Lease, Description [Line Items] | |
Operating leases that have not yet commenced, liability | $ 3.9 |
Operating lease not yet commenced, term of contract (in years) | 12 years |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of EPS Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ (36,063) | $ (21,314) | $ (29,507) | $ (26,363) |
Average Shares Outstanding for Basic EPS Calculation (in shares) | 36,539 | 36,749 | 36,647 | 36,785 |
Dilutive Effect of Average Outstanding Compensation Awards (in shares) | 0 | 0 | 0 | 0 |
Average Shares Outstanding for Diluted EPS Calculation (in shares) | 36,539 | 36,749 | 36,647 | 36,785 |
Basic Earnings (Loss) Per Share (in dollars per share) | $ (0.99) | $ (0.58) | $ (0.81) | $ (0.72) |
Diluted Earnings (Loss) Per Share (in dollars per share) | $ (0.99) | $ (0.58) | $ (0.81) | $ (0.72) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Units (RSUs) | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 831 | 741 |
Relative Total Shareholder Return | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 131 | 173 |
Performance Shares | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 103 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation percent | (24.60%) | (21.00%) | (40.30%) | (4.70%) |
Inventories - Inventory Compone
Inventories - Inventory Components (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 74,364 | $ 66,890 |
Work-in-process | 1,581 | 1,974 |
Raw materials | 52,347 | 52,878 |
Total FIFO inventory | 128,292 | 121,742 |
LIFO reserve | (23,480) | (23,773) |
Total inventory | $ 104,812 | $ 97,969 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||||
Effect of LIFO inventory on expense | $ (0.7) | $ 1.3 | $ (0.3) | $ 3.7 |
Effect of LIFO inventory on income | $ 0 | $ 0 | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income- Schedule of Balances of Each Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income | ||||
Balance at the beginning of the period | $ 217,371 | $ 230,519 | $ 213,536 | $ 239,670 |
Other comprehensive income (loss) before reclassifications | 313 | 558 | 1,068 | 493 |
Reclassification to (earnings) loss | (333) | (44) | (557) | (102) |
Net current-period other comprehensive income (loss) | (20) | 514 | 511 | 391 |
Balance at the end of the period | 177,201 | 206,664 | 177,201 | 206,664 |
Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income | ||||
Balance at the beginning of the period | 4,297 | 1,857 | 3,766 | 1,980 |
Balance at the end of the period | 4,277 | 2,371 | 4,277 | 2,371 |
Postemployment Benefits Net Actuarial Gain (Loss) | ||||
Accumulated Other Comprehensive Income | ||||
Balance at the beginning of the period | 2,264 | 2,075 | 2,291 | 1,980 |
Other comprehensive income (loss) before reclassifications | 181 | 222 | 277 | 418 |
Reclassification to (earnings) loss | (124) | (100) | (247) | (201) |
Net current-period other comprehensive income (loss) | 57 | 122 | 30 | 217 |
Balance at the end of the period | 2,321 | 2,197 | 2,321 | 2,197 |
Interest Rate Swap Gain (Loss) | ||||
Accumulated Other Comprehensive Income | ||||
Balance at the beginning of the period | 2,033 | (218) | 1,475 | 0 |
Other comprehensive income (loss) before reclassifications | 132 | 336 | 791 | 75 |
Reclassification to (earnings) loss | (209) | 56 | (310) | 99 |
Net current-period other comprehensive income (loss) | (77) | 392 | 481 | 174 |
Balance at the end of the period | $ 1,956 | $ 174 | $ 1,956 | $ 174 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Nonoperating Income (Expense) | $ 86 | $ 477 | $ (1,008) | $ 43 |
Provision for Income Taxes | 7,128 | 3,696 | 8,475 | 1,184 |
Net income (loss) | (36,063) | (21,314) | (29,507) | (26,363) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Net income (loss) | 333 | 44 | 557 | 102 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Including Portion Attributable to Noncontrolling Interest | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Nonoperating Income (Expense) | 166 | 134 | 332 | 270 |
Provision for Income Taxes | (42) | (34) | (85) | (69) |
Net income (loss) | 124 | 100 | 247 | 201 |
Reclassification out of Accumulated Other Comprehensive Income | AOCI, Derivative Qualifying as Hedge, Excluded Component, Noncontrolling Interest | ||||
Reclassification Adjustment from Accumulated Other Comprehensive Income | ||||
Nonoperating Income (Expense) | 281 | (75) | 417 | (133) |
Provision for Income Taxes | (72) | 19 | (107) | 34 |
Net income (loss) | $ 209 | $ (56) | $ 310 | $ (99) |
Long-Term Debt and Revolving _3
Long-Term Debt and Revolving Credit Facility - Schedule of Short-term and Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Total Debt | $ 60,000 | $ 68,079 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 5.88% | |
Long-term debt under revolving credit facility due December 2025; 5.88% variable interest rate at December 31, 2022 | $ 60,000 | 68,000 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 9.25% | |
Other debt | $ 0 | $ 79 |
Long-Term Debt and Revolving _4
Long-Term Debt and Revolving Credit Facility - Narrative (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 125 |
Line of credit facility, remaining borrowing capacity | 63.2 |
Interest Rate Swap | Designated as Hedging Instrument | |
Debt Instrument [Line Items] | |
Derivative notional amount | 40 |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity upon request | $ 200 |
Minimum | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Unused capacity, commitment fee percentage (basis points) | 0.20% |
Maximum | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Amount available for letters of credit | $ 10 |
Unused capacity, commitment fee percentage (basis points) | 0.30% |
Financial Standby Letter of Credit | |
Debt Instrument [Line Items] | |
Letters of credit, amount | $ 1.8 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities - Narrative (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Financial Standby Letter of Credit | |
Guarantor Obligations | |
Letters of credit, amount | $ 1,800 |
Standby Letters of Credit | |
Guarantor Obligations | |
Loss contingency accrual | $ 0 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities - Product Warranty (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Product Warranty Liability at the beginning of the period | $ 2,530 | $ 2,861 |
Additions to warranty accrual (including changes in estimates) | 2,687 | 178 |
Settlements made (in cash or in kind) | (2,132) | (912) |
Product Warranty Liability at the end of the period | $ 3,085 | $ 2,127 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Recurring revaluation to fair value resulting in a gain | $ 0 | $ (22,500) | $ (3,200) | $ (17,900) | ||
Operating lease, impairment loss | 0 | 700 | ||||
Goodwill Impairment | 36,684 | $ 34,118 | 36,684 | $ 34,118 | $ 34,118 | |
Goodwill | 11,160 | 11,160 | 47,844 | $ 81,962 | ||
Poppin, Inc. | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Goodwill | 0 | 0 | ||||
Poppin, Inc. | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Long-term earn-out liability | 0 | 0 | $ 3,200 | |||
Poppin, Inc. | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Contingent earn-out liability | $ 45,000 | $ 45,000 |
Fair Value - Recurring Fair Val
Fair Value - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Assets | ||
Trading Securities: Mutual funds in nonqualified SERP | $ 10,533 | $ 10,517 |
Fair Value, Measurements, Recurring | ||
Assets | ||
Total assets at fair value | 22,976 | 19,511 |
Liabilities | ||
Contingent earn-out liability | 3,160 | |
Total liabilities at fair value | 3,160 | |
Fair Value, Measurements, Recurring | Interest Rate Swap | ||
Assets | ||
Derivatives: Stock warrants | 2,635 | 1,986 |
Fair Value, Measurements, Recurring | Warrant | ||
Assets | ||
Derivatives: Stock warrants | 1,500 | 1,500 |
Fair Value, Measurements, Recurring | Money Market Funds | ||
Assets | ||
Cash equivalents: Money market funds | 8,308 | 5,508 |
Fair Value, Measurements, Recurring | Mutual Fund | ||
Assets | ||
Trading Securities: Mutual funds in nonqualified SERP | 10,533 | 10,517 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Assets | ||
Total assets at fair value | 18,841 | 16,025 |
Liabilities | ||
Contingent earn-out liability | 0 | |
Total liabilities at fair value | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Interest Rate Swap | ||
Assets | ||
Derivatives: Stock warrants | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Warrant | ||
Assets | ||
Derivatives: Stock warrants | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Money Market Funds | ||
Assets | ||
Cash equivalents: Money market funds | 8,308 | 5,508 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Mutual Fund | ||
Assets | ||
Trading Securities: Mutual funds in nonqualified SERP | 10,533 | 10,517 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Assets | ||
Total assets at fair value | 2,635 | 1,986 |
Liabilities | ||
Contingent earn-out liability | 0 | |
Total liabilities at fair value | 0 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Interest Rate Swap | ||
Assets | ||
Derivatives: Stock warrants | 2,635 | 1,986 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Warrant | ||
Assets | ||
Derivatives: Stock warrants | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Money Market Funds | ||
Assets | ||
Cash equivalents: Money market funds | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Mutual Fund | ||
Assets | ||
Trading Securities: Mutual funds in nonqualified SERP | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Assets | ||
Total assets at fair value | 1,500 | 1,500 |
Liabilities | ||
Contingent earn-out liability | 3,160 | |
Total liabilities at fair value | 3,160 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Interest Rate Swap | ||
Assets | ||
Derivatives: Stock warrants | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Warrant | ||
Assets | ||
Derivatives: Stock warrants | 1,500 | 1,500 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Money Market Funds | ||
Assets | ||
Cash equivalents: Money market funds | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Mutual Fund | ||
Assets | ||
Trading Securities: Mutual funds in nonqualified SERP | $ 0 | $ 0 |
Investments - Supplemental Empl
Investments - Supplemental Employee Retirement Investments Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments [Abstract] | ||
Unrealized holding gains (losses) | $ (0.2) | $ 0.2 |
Investments - Supplemental Em_2
Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 |
Schedule of Trading Securities and Other Trading Assets | ||
Total SERP investments | $ 10,533 | $ 10,517 |
Total SERP obligation | 10,533 | 10,517 |
SERP investments - current asset | ||
Schedule of Trading Securities and Other Trading Assets | ||
Total SERP investments | 3,191 | 3,284 |
Total SERP obligation | 3,191 | 3,284 |
SERP investments - other long-term asset | ||
Schedule of Trading Securities and Other Trading Assets | ||
Total SERP investments | 7,342 | 7,233 |
Total SERP obligation | $ 7,342 | $ 7,233 |
Investments - Investments - Equ
Investments - Investments - Equity securities without readily determinable fair value Textuals (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Investment owned, at cost | $ 2 |
Other Assets | Preferred Stock | |
Equity securities without readily determinable fair value | $ 0.5 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Derivative [Line Items] | |||||
Interest rate contract losses in AOCI | $ 177 | $ 452 | $ 1,065 | $ 101 | |
Investment owned, at cost | 2,000 | 2,000 | |||
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Interest rate contract losses in AOCI | 2,600 | ||||
Interest rate swap contract losses expected to be reclassified into earnings in the next twelve months | 1,400 | ||||
Designated as Hedging Instrument | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative notional amount | $ 40,000 | $ 40,000 | |||
Designated as Hedging Instrument | Interest Rate Swap | London Interbank Offered Rate (LIBOR) Swap Rate | |||||
Derivative [Line Items] | |||||
Derivative, interest rate | 0.834% | 0.834% | |||
Designated as Hedging Instrument | Other Current Assets | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative asset, fair value, gross asset | $ 1,400 | $ 1,400 | $ 900 | ||
Designated as Hedging Instrument | Other Noncurrent Assets | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative asset, fair value, gross asset | 1,200 | 1,200 | 1,100 | ||
Fair Value, Measurements, Recurring | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Derivative asset, fair value, gross asset | 2,635 | 2,635 | 1,986 | ||
Fair Value, Measurements, Recurring | Warrant | |||||
Derivative [Line Items] | |||||
Derivative asset, fair value, gross asset | 1,500 | 1,500 | $ 1,500 | ||
Fair Value, Measurements, Recurring | Not Designated as Hedging Instrument | Other Assets | Warrant | |||||
Derivative [Line Items] | |||||
Derivative asset, fair value, gross asset | $ 1,500 | $ 1,500 |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Share-based compensation expense | $ 1.3 | $ 1.5 | $ 2.5 | $ 2.6 |
Share-based payment arrangement, expense, tax benefit | $ 0.2 | $ 0.3 | $ 0.5 | $ 0.6 |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Awards (Details) - $ / shares | 3 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Targeted Shares or Units (in shares) | 6,160 | 152,034 |
Grant Date Fair Value (in dollars per share) | $ 7.33 | |
Performance Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Grant Date Fair Value (in dollars per share) | $ 6.52 | |
Payout percentage | 0% | |
Performance Shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Payout percentage | 200% | |
Number of shares authorized (in shares) | 316,388 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Targeted Shares or Units (in shares) | 10,415 | 379,087 |
Restricted Stock Units (RSUs) | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Grant Date Fair Value (in dollars per share) | $ 6.59 | $ 7.83 |
Restricted Stock Units (RSUs) | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Grant Date Fair Value (in dollars per share) | $ 7.39 | |
Unrestricted Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Targeted Shares or Units (in shares) | 17,940 | 21,318 |
Grant Date Fair Value (in dollars per share) | $ 7.41 | |
Unrestricted Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Grant Date Fair Value (in dollars per share) | $ 7.77 |