Kimball International, Inc. (KBAL) on Q1 2022 Results - Earnings Call Transcript
Operator: Good afternoon, ladies and gentlemen. My name is Richard and I will be conference call facilitator today. At this time, I would like to welcome everyone to the Kimball International First Quarter Fiscal 2022 Earnings Conference Call. As with prior conference calls, today's call, November 4, 2021, will be recorded and may contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from the forward-looking statements. Risk factors that may influence the outcome of forward-looking statements can be seen in the Kimball International Form 10-K. During today's call, the presenters will be making references to an earnings slide deck presentation that is available on the Investor Relations section of Kimball International's website. On today's call are Kristi Juster, Chief Executive Officer of Kimball International; and T.J. Wolfe, Executive Vice President and Chief Financial Officer. I would now like to turn the -- today's call over to Kristi Juster. Ms. Juster, you may begin. Kristi Juster: Thank you and good afternoon, everyone. We appreciate your interest in Kimball International. I am pleased to report our first quarter business trends were aligned with our expectations. And our -- and support our guidance for a year of substantial growth for Kimball International in fiscal 2022. There are several key takeaways from this quarter's results that I'd like to highlight. First, as anticipated, we experienced strong customer demand across our workplace and health and markets, with orders of 51% and together accounting for 86% of our net sales. This performance has more than offset the softness and hospitality where we have been consistent in our beliefs that the recovery will lag until the end of this year. Second within the workplace end-market Poppin is ramping very well, with sales up 22% sequentially and orders up 32%. Third, our business differentiators including our dominance and ancillary products, our positioning in midsized metropolitan markets, and our emphasis on new product development are all contributing to our ability to gain share in our targeted markets. And lastly, we have proven our agility and nimbleness during these difficult business conditions. We are navigating inflationary pressures, supply chain disruptions and labor availability challenges that are constraining sales and margin in the near-term. But we do see light at the end of the tunnel in the second half of this year. Taking a closer look at our business highlights in the first quarter. Workplace revenues increased 16% year-on-year led by the commercial and educational verticals. Even more impressive workplace orders in the first quarter were up 57% compared to last year's level in this growth was broad based representing substantial year-on-year increase across the majority of our verticals. While the spread of the Delta variant has delayed the return to office in some areas, we have not experienced any impact on either order rates or pipeline activity. Clients are actively addressing the changing dynamics of work environments by reconfiguring their spaces to faster collaboration and incorporate flexibility and adaptability. Additionally, our education vertical is benefiting from a boost in federal and state funding through the CARES Act and the America rescue plan, which is expected to remain in place until 2024. A key highlight of the first quarter was the recovery of the Poppin business model to near pre-pandemic levels. Based on order trends, Poppin could be back to pre-pandemic annual run rate of approximately $80 million as early as next quarter. Importantly, approximately 60% of Poppin’s first quarter revenue was generated through the core B2B channel, which is an indication of its strength in its historical business model and which supports our expectations for the continued robust performance of this business. Our health market was the first to ramp after COVID and continues to be a strong performer for us. Net sales in the first quarter increased 18% year-on-year and orders were up 30% reflecting the traction of our Interwoven dedicated health brand, our strong positioning in the government health sector whether it’s substantial federal funding and our development of relationships with large health systems. We continue to see a shift in the delivery of care due to COVID and further expansion of our growth in specialty centers and outpatient clinics. Well, there have been construction postponements due to the shortage of labor and materials. All indications are that the important structural trends will continue to accelerate and underscore the long-term growth potential of this market, along with the need for caregivers and patients alike to be surrounded by efficient, comfortable and adaptable furniture. We are also pleased to share at last week's healthcare design show Kimball International was selected as women and health care's recipient of the organization's award recognized for promoting an environment where each employee is value respected and treated with dignity, alongside an intentional focus on increasing diversity of leadership. Just a few words on our hospitality market, which was especially hard hit by the pandemic. Well, orders received in the first quarter were below last year's first quarter, the dollar amount of orders was the highest it has been in the year. This was a bright spot in a market that we do not expect to recover until the end of this fiscal year. In the meantime, we have taken steps to improve our margin profile in this market by closely managing costs and increasing our mix of customized products, which accounted for 73% of first quarter sales up from approximately 50% in the similar period last year. Looking ahead, we are confident that Kimball International is very well positioned for accelerated growth in margin expansion as the industry recovers and supply chain headwinds abate. Our strategic choices have been clear and consistent. We are well positioned geographically with strong relationships in secondary fast growing metropolitan areas where the post-pandemic returned to office has been underway, and are expanding our position in these markets with the opening of three new Poppin showrooms in Miami, Austin and Atlanta this fiscal year. Kimball International specializes in ancillary products, which are precisely the types of products and solutions that customers are looking for, as they reconfigure their workspaces to adapt to post-pandemic working environment. These products accounted for 85% of our trailing 12-month revenues. To further leverage the strength of our broad portfolio across the dealer network, we introduced perfect harmony, an integrated go-to-market strategy for our five workplaces in health brands. This is providing our dealers with access to an expanded and complimentary array of products that offer our customers a much broader set of design possibilities than in the past. Additionally, in collaboration with a market research firm Ipsos we conducted research, we validated our initial market insights, namely that the right spaces create connections and we have identified six space types that we believe will define the post-pandemic workplace and reinforces the important role of the office in the exciting changing environment. The hub supports open and collaborated interaction. Work your way unique and personal user space, room on the move, flexible activity space, cultural cafe, brand and customer experience, the meetup functional and collaborative space and well and good design for employee wellness. These six space types fuel 22 new products at the Neocon tradeshow in October, with the largest being every space, a solution based system that addresses the constantly changing needs of the workplace, providing solutions that can span from open plan workstations to private offices to collaborative environments. The flexibility and adaptability of every space provides users the ability to feel focused, creative and connected all at once. To sum up, we were pleased with the demand trends, evident from our first quarter performance and in fact, the year-on-year revenue growth rate would have been twice as high if not for the supply chain issues that reduced our production and shipment capabilities. This demonstrates the relevance of our product portfolio and how well it is aligned with today's market needs. I'll now turn over the call to T.J. Wolfe, our Chief Financial Officer to provide a financial review of the first quarter and discuss the current supply chain and labor issues we are navigating and our expectations for fiscal 2022 results. T.J. Wolfe: Thank you, Kristi and good afternoon, everyone. As you can see on Slide 7, 2022 first quarter net sales increased 6% year-over-year to $156.6 million, including a 15.2 million contribution from Poppin. We'll discuss each end market in the next several slides. But as expected, our growth in the first quarter came from workplace and health, as these markets on a combined basis increased by 16% from the year ago quarter and together accounted for 86% of net sales. It is important to note the demand for our products remain strong as reflected in our expanding orders and backlog. However, our top line growth has been somewhat constrained due to the ongoing disruptions in our supply chain. Specifically, we've experienced challenges related to labor and material availability, along with dislocations across our logistics network. We expect these challenges to persist at relatively the same level in the second quarter before conditions begin to improve in the second half of our fiscal year. Gross margin declined 410 basis points compared to last year's first quarter, but expanded 70 basis points sequentially to 31.3%. Year-over-year decline reflects raw material inflationary pressures, as well as higher freight and labor costs partially offset by the price increase we implemented in March of 2021 along with improved production efficiencies and benefits from cost savings initiatives. We do anticipate gross margins will improve on a year-over-year basis in the back half of this fiscal year, as our price increases work their way through the order book and offset the inflationary pressures we are currently experiencing. Selling and administrative expenses were $50.2 million compared to $41.7 million in the year ago quarter. This increase is primarily related to costs associated with the Poppin acquisition and incremental investments to support our sales growth and new product introductions. Excluding amortization from the Poppin acquisition totaling $1.6 million as well as a supplemental employee retirement plan adjusted solid administrative costs were $48.6 million or 31.1% of sales, compared to $40.8 million or 27.6% in the prior year. The current year first quarter, our effective tax rate was 33.2%, which is higher than the statutory rate due to an earn-out adjustment as compared to a 25.7% tax rate in the year ago quarter. In the first quarter of fiscal 2022, we reported a net loss of $5 million or net loss per share of $0.14, which includes the after-tax contingent earn out loss of $3.4 million related to the Poppin acquisition. This compares to net income of $5.4 million or $0.14 cents per diluted share in the first quarter of fiscal 2021. Excluding the earn-out as well as the acquisition related non-GAAP charges and restructuring all totaling $2.4 million. Adjusted net income was $0.8 million or $0.02 per diluted share compared to $8.6 million or $0.23 per diluted share in the year ago quarter. Adjusted EBITDA was $4.9 million and compared to $15.8 million in the fiscal 2021 first quarter. Now let's move to Slide 9 and discuss in more detail our revenue and order trends by end-markets. Net sales and workplace and health grew 16% and 18% year-over-year respectively. Order activity in the workplace end-market was strong and increased 57% compared to the year ago quarter, including the contribution from Poppin as order trends reached near pre-pandemic levels. Within workplace order trends were robust in a majority of our verticals, but most notably in education and commercial. Health orders increased 30% compared to the year ago quarter aided by robust end-market demand and strong customer demand for our new product launches. Regarding price during Q1, we announced the price increase that went into effect on October 1, covering the majority of our workplace and health products. This follows the price increase we previously implemented on March 1 of this year. In addition to these two price increases and in order to offset the continued inflationary pressures we are experiencing related to raw materials and transportation costs. We announced a price surcharge across the same product categories that will go into effect on November 15. We will continue to monitor the inflationary environment and adjust our pricing as needed. However, we would expect to transition this temporary surcharge into a permanent list price increase sometime during the third quarter. In the hospitality end-markets sales declined 32% reflecting the ongoing depress level demand, which we anticipate continuing for the remainder of the fiscal year. However, we have been successful in shifting the mix of our hospitality business from program to custom with custom and projects in accounting for approximately 73% of our revenue in Q1. Our total backlog at the end of the first quarter was $170.8 million, compared to $141 million in the prior quarter and $139.5 million in the first quarter of fiscal 2021. Now let's review our balance sheet and cash flows on Slide 10. We ended the quarter with total available liquidity of $111.2 million representing cash and the unused portion of our credit facility. Operating cash flow was $11.9 million and capital expenditures were $3.8 million. In fiscal 2022 first quarter, we returned $4.8 million of capital to shareholders in the form of dividends and share repurchases. We reaffirm our full year guidance for fiscal year 2022. As you can see, on Slide 11, we expect year-over-year revenue to increase approximately 15% to 20%, with significant growth occurring in the back half of the year. As sales growth accelerates in the back half of fiscal 2022 and our pricing actions are realized through sales, we anticipate a corresponding improvement in our gross margins. We expect capital expenditures net of disposals will total approximately $25 million unchanged from prior guidance. CapEx will be primarily directed toward the construction of our new warehouse in Jasper, with a portion of this project funded by proceeds received from the sale of our existing site, as well as an investment in a new automated metal manufacturing capability in our sales in facility. We continue to anticipate operational excellence projects to yield cost savings of approximately $10 million in fiscal 2022. These savings will partially fund our ongoing growth investments, namely the opening of new Poppin showrooms as Kristi mentioned earlier, as well as our marketing and promotional spend and building our salesforce. As a result, we project higher overall S&A spend in fiscal 2022 compared to the prior year. We expect our full year effective tax rate to be in the range of 25% to 27%. Now turn to our second quarter guidance. We forecast year-over-year revenue growth of 10% to 15%, with second quarter gross margins ranging from 32% to 33% and S&A expenses totaling $51 million to $53 million. Our revenue guidance reflects our current backlog of $170.8 million, which includes approximately $120 million scheduled to ship in the second quarter, as well as current order trends and the expected impact from production capacity constraints and the potential for temporary operational challenges related to complying with the vaccine mandate for government suppliers. With that, I will turn the call back to Kristi for closing remarks. Kristi Juster: Thank you, T.J. The choices we have made over the last 18 months have transformed how Kimball International goes to market and our new product designs have aligned our portfolio with a new forming workplace and the changes taking place in health care delivery. We are proud of these accomplishments of our industry wide reputation for high quality manufacturing and superior customer service that have been long standing attributes of this organization. In closing, I'd like to thank our employees for their hard work and dedication and to reference our ESG Summary Report. Our progress clearly emphasizes our continued commitment to being responsible stewards of the environment, maintaining a diverse and caring culture and having strong corporate governance practices. The Kimball International journey over the last year and a half demonstrates not only our transformational mindset, and our ability to navigate external factors, but also the power of our strategic choices to accelerate growth and value creation. Operator now I'd like to open the call for questions. Operator: Thank you. We will now begin the question-and-answer session. . And we're standing-by for questions. And our first question on the line comes from Mr. Greg Burns from Sidoti & Company. Please go ahead your line is open. Greg Burns: Good afternoon. I missed a little bit the beginning of the call. So forgive me if I'm repeating some things you went over already. But I want to start with Poppin. You mentioned in the release that the 60% of the revenue this quarter came from the core B2B businesses, does that mean the rest of the 40% coming from new initiatives like Pro or I'm just trying to understand kind of where the strength is and where you're seeing the strength and Poppin and the nice recovery you are seeing there? T.J. Wolfe: Yes, sure, Greg. It's a mixture of what we would say is the wholesale business and Poppin Pro as well. So it's all the existing business that Poppin had before and their wholesale channels, but also we added with Pro would make up the remaining 40%. But again, B2B the majority and continuing to grow the fastest. Greg Burns: Okay. And then in terms of the incremental growth initiatives around Poppin Pro maybe bring in Poppin into second and third Tier markets. And I think there might have been a one or two other kind of incremental growth initiatives. Can you just talk about the status of those where you are in implementing those and if they're having any impact on the revenue yet? Kristi Juster: Sure. So let me take that, Greg, how are you? Greg Burns: Good. Kristi Juster: So let me start with Poppin Pro and just talk a little bit about Pro is exceeding our expectations to-date. We certainly enjoyed having the Poppin Pro dealers and product with us at Neocon, I'll just give you an example of kind of how that's playing out in our combination of our traditional market and what Poppin really provides. So an example would be we had a large end user in Wisconsin that was with us in Wisconsin that was with us in Neocon and they came in and explained to us how excited they were with Poppin and they are an existing customer, yet they outfitted all of their work from home for their employees with Poppin. So we absolutely are seeing crossover of the traditional Kimball International dealers working with a Poppin Pro portfolio. The other thing that's been very interesting is we've talked about the categories of pods and spaces. And we are seeing a different mix happen in Poppin Pro. And so pods and spaces are the largest categories that we're seeing from a mix perspective playing out. And that's what we were hoping for. Another example was we brought both pods and spaces with us to the healthcare design show that was in the Kimball International health booth. So lots of meaningful advancement in both how the distribution is growing, how the categories are growing. And then of course, we've announced the new showrooms, three showrooms, and show them in Atlanta is actually the bottom half is Poppin dedicated showroom and top half is Kimball International in the five brands represented under workplace in health. So lots of good examples, and we're very pleased with the progress even in the short-term and how the core is rebounding. Greg Burns: Okay. And then in terms of the healthcare market, you've made a lot of investments and they're very targeted, going after that broader market opportunity in the healthcare space. Can you just talk about -- are -- where you're seeing the growth, is it still mostly administrative? Are you getting more into the clinical side of the business? Like what's the split of your revenue between the different segments of the healthcare market? And how do you see that playing out overtime, like the -- in terms of maybe the growth opportunity for Kimball? Thank you. Kristi Juster: Sure. So let me go ahead and talk about how we think about the three different markets that we service with our health expertise. So we've talked about the 30 health systems that we have direct relationships with those end market health systems. And that has been a very important part of our growth. We also have talked about our Fed Gov. And we refer to veterans administration and how significantly, that portion of it is growing. And then that group of experts actually service our dealer community in workplace. So those were kind of the three ways that that's selling organizations that expertise, we call them health strategist, are actually deployed across the health market. And each of those segments are growing significantly. They're actually -- each of those segments are actually pacing at or above what the total workplace health portfolio is. So we're pleased with that. I would -- we have also expanded our health specialty product platform, We talked about the award that we got at healthcare design, two of our new product platforms were actually given what are called awards for design. So we're seeing it expand both in our distribution and route-to-market decisions and in our product platform decisions. But I don't know, T.J. if you want to add anything to that. T.J. Wolfe: Yes, I think that's the important word Greg is that the clinical products that we talked about while still -- the remainder, the portfolio is the majority, but the clinical product offering continues to grow as a focus as we showcase it Neocon. Greg Burns: Okay, great. And then T.J., you made some comments around S&A being up in ‘22. I didn't quite catch all those. And I guess the guidance for the second quarter implies it'll be up sequentially. So you've talked about that? What's driving that? And is this the second quarter number -- a good number to think about for the rest of the year? Is that going to continue to grow? T.J. Wolfe: Sure. So I think when we look at Q1 year-over-year, Greg, the biggest difference would be the acquisition of Poppin. So Poppin, was not in our Q1 in the prior year. And that was the biggest step-up year-over-year. But you're right, we did guide to a sequential increase. And that's a variety of things. Number one, the reintroduction of various elements of compensation that were pulled out in the prior year, and now are kind of moving on throughout the year. But the investments in new product introduction, direct marketing Poppin, we mentioned the showrooms, the growth of our salesforce. So what we are looking to do is as revenue scale throughout the year, and as we talked about, when you look at our revenue projections, we got into the back half would be stronger than the front half, those S&A investments will continue to ramp up with the revenue ramp over the course of the year. Kristi Juster: And T.J., I'll just add one of the things that we're working through is obviously, the revenue line is up 6%. But we talked about 86% in the business, the orders are up 51%. And so you think about what we have to service, what the organization, the volume that the organization has actually servicing right now and the opportunity that's ahead of us. And so we are being very thoughtful, but certainly we're -- we want to scale with the order number. And we just got to do that step-by-step. And that's why the SG&A is moving up overtime. Greg Burns: Okay, so -- but production constraint now so the order growth might not necessarily translate into revenue and we'll see the backlog grow. Is that how we should think about it in the near-term? T.J. Wolfe: That's right, Greg. And if you look at the backlog that we talked about this quarter $170 million, that is, again, it's growing because of the significant demand spike that we're seeing. But it's also being elevated because of the production constraints that we have in place. And so -- but as Kristi mentioned, when those orders are coming in, we still have design requirements, we're still assisting with the specification, and getting the order into the system. And all of that work is still coming through our system right now. So that's generating additional needs for investment in personnel. And then we're going to see that as we begin to remove the production constraints, it will flow through into sales in the second half. Greg Burns: Okay. Okay. Okay. Great. Thank you. Operator: Thank you. Our next question line comes from Rudy Yang from Berenberg. Please go ahead. Rudy Yang: Hey, guys, thanks for taking my questions. On margin headwinds, I guess, are you able to specifically quantify the impact you saw this quarter from higher material costs, pledge instructions, shipping and labor? And I guess we can't get that granular in detail. What would you say the order of magnitude would be in terms of areas you're saying that the most impacts right now? T.J. Wolfe: Sure, Rudy. So I would put it into four buckets, I would think -- we're talking about material inflation, freight inflation, labor rates and then I would also throw I know, it's an accounting convention, but the LIFO reserve. And if you look at those four elements, they were roughly the same level of magnitude with material being slightly ahead of the others. So I would put material at the forefront, and then equal parts labor freight, and the LIFO reserve, which is something that we have to account for in real time. So those were the components of the pressure. Again, the offset to that was price and operational excellence. Actually, operational excellence contributed more to our offset of those than price did. And this is because we -- again, we talked about a little bit in our comments, the pricing is going to take time to work through the backlog. And so we see the majority of that pricing benefit happening in the second half of the year. Rudy Yang: That's super helpful. Appreciate that. And then just could you just clarify a little bit about the price surcharge are now saying is that increase of like the same magnitude compared to your previous price increases? And if I -- I am sorry if I missed this, but was there a specific deadline, you were expected to be temporarily until? T.J. Wolfe: Sure, sure. So just to recap again, we had a price Increase and list price increase on March 1, another list price increase on October 1. And this surcharge is effective as of November 15. And again, just the mechanical differences that with a surcharge, we don't adjust the actual list prices it's incremental to those. The list price or the surcharge, pardon me, is roughly equivalent to the combination of the prior two list price increases. So it is it is higher in magnitude. And again, the reason for that action is that we wanted to give ourselves flexibility to assess the inflationary environment over the next several months before we made another final decision about list price changes. So we just feel that it gives us a little bit more ability to offset inflation in the near-term, but gives us flexibility with how we price our products to remain competitive over the longer term. Rudy Yang: Got it. That make sense. And then could you kind of discuss the order trends on hospitality a little bit, obviously work have continued to be strong. But I think last quarter, you guys saw positive order growth and hospitality. And this quarter, it declined a little bit. So I'm just wondering what that was mainly attributable to? T.J. Wolfe: Sure. I think in hospitality, as we've said, it's something that we expect to recover towards the end of the fiscal year and into the following year, I think the orders in hospitality because many of them are rather large projects, that does tend to be a bit choppy. So you can see some quarter-over-quarter volatility that doesn't necessarily indicate a trend. We were pleased with the highest order rate in 12 -- the trailing 12-month that we've seen, but we're still quite cautious and want to maintain, the right margin profile for that business and ensure that we're setting it up for success in the long run. Rudy Yang: Got it. And then lastly, from me just a follow up on your point on Poppin reaching kind of pre-pandemic levels by the end of the year. I guess, do you see any kind of upside for that to kind of accelerate faster than your expectations? And if you do, what kind of areas with that mainly being without kind of being mostly in B2B returning quicker or where do you kind of see that that upside if possible? T.J. Wolfe: Yes, sure, really. So I think what we're guiding towards is that if we continue as trajectory Poppin, we could be at the $80 million revenue, annual revenue run rate as early as this coming quarter in Q2 of the fiscal year. I think when you look beyond that, what are the accelerators that drive it Poppin Pro is certainly one as we've talked about, and Poppin expanding through the Kimball dealer network, the core B2B business will certainly be a driver. And then I think again, how quickly we can scale and begin to produce -- get production out of these new showrooms that we're opening. So, I would say those three are the things that I would look towards. And then beyond that things like the corporate sponsorship programs, those are more longer term plays, it'll still take time to develop. Rudy Yang: Perfect, appreciate it. Thanks guys. Operator: Thank you. We have a question on line from . Please go ahead. Unidentified Analyst: Hi, good afternoon. Thanks for taking my question. If you guys could please unpack the Poppin customer base a little bit more and describe that sales cycle versus the traditional sales cycle from the government projects in traditional business? Kristi Juster: Sure, so let me go ahead and talk about the business model that actually exists. And then we can follow up T J can talk a little bit about the mix of that business. So that is a direct the majority of that business is a direct B2B model. And it is a digital lead gen model. And we've talked about that actually 80% of the leads are generated digitally, they come into through a sales development funnel, and they're qualified and then they're handed it off to an account executive. Once that they're actually put in the hands of as an account executive, they are converted at about a 70% rate. And then historically Poppin has been at about a 60% repeat customer rate. And the reason I -- we look at that figure so closely, is because a lot of those customers are ordering multiple times for satellite offices and secondary locations and new work from home for their employees. And so we really value that repeat customer base. One of the things we are seeing as the core is growing that we are seeing new customers come in which we're very pleased with, you're talking about the core business growth. But again 60% of the business that we talked about, sits in this direct B2B environment, we have the wholesale business that we talked about, we have the Poppin Pro business that is growing quickly. And then we do have a direct customer business, but it's a small portion of that business. And certainly all of our marketing dollars in go into the B2B environment. So that's kind of how the model in general, I don't know, T.J., if I missed anything. T.J. Wolfe: I think that covers all. Unidentified Analyst: Great. And then one more about the stickiness of the price increase. Do you see that coming down after the demand spike is over or is that -- or those increases have those been priced into the existing contracts and option years are getting executed? T.J. Wolfe: Sure. So the price -- the list price increases that we have already taken, we've had a great success in realizing those. Again, it's not 100% across our entire customer base, because we do have longer term contracts where that's not always possible. But we've had a high rate of acceptance realization, we would say that those would remain in the long-term. And that's been typically the position that we've taken within the company is that we want -- we see prices being sticky and longer term. And we have a good amount of realization. With regard to the surcharge that we're going to evaluate month-by-month and quarter-by-quarter as the inflationary environment progresses to determine what we want to do next with that, but I would say at the same time, despite these price increases, we remain -- we believe competitive in the market with not just the right products set, but again, at a very the right value proposition for our customers. We haven't seen any noticeable change in our win rate as a result of that. Unidentified Analyst: Great, thank you. T.J. Wolfe: Kristi. Operator: And I'm showing we have no further questions at this time, I'd like to turn the call over to Kristi Juster for closing comments. Kristi Juster: Thank you, Richard. Well, I'd like to end the call by personally thanking not only the entire Kimball International team, but also our customers and suppliers. And we are proving together that we can get through the short-term challenges that we all face, but actually grow and see the opportunities for the future of this business. So, we appreciate the partnership that exists with all of our stakeholders, and we very much thank you for joining our call today at Kimball International and wish everybody a good evening. Operator: And thank you ladies and gentlemen this concludes today’s conference. Thank you for participating. You may now disconnect.KBAL Ratings Summary
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Kimball International Reports Strong Q3 Results
Kimball International, Inc.(NASDAQ:KBAL) reported its Q3 results, with revenue coming in at $180.9 million (up 30% year-over-year), above the consensus estimate of $171.8 million. Non-GAAP EPS was $0.21, beating the consensus estimate of $0.03.
Workplace and Health sales remained robust, growing 52% and 8% year-over-year, respectively. Hospitality sales declined 2% year-over-year, due to continued softness in travel levels. Orders grew across all segments, with Workplace, Health, and Hospitality delivering 36%, 2%, and 43% year-over-year growth, respectively.
Analysts at Berenberg Bank shared their views following the earnings announcement, expecting demand strength for Workplace orders to continue, given the ongoing population growth in secondary geographies (Kimball’s target market), and the emerging use of well-designed offices to attract and retain talent.
