Kimball International, Inc. announced results for the quarter ended September 30, 2020. Consolidated net sales were $147.9 million, down 27% from $201.5 million in the year ago quarter.
Gross margin expanded by 50 basis points to 35.4% driven by cost savings from 2021 transformation program. Selling and administrative expenses of $41.7 million declined $9.2 million compared to the prior year, and now account for 28.2% of net sales, compared to 25.2% in the same quarter a year ago.
Adjusted selling and administrative (S&A) expenses were $40.8 million, or 27.6% of net sales, compared to $50.7 million, or 25.2% of net sales in last year’s 1Q.
Net income decreased 53% to $5.4 million, and GAAP earnings per diluted share were $0.14, compared to $0.31 reported in the fiscal 1Q 2020. Adjusted earnings per share, which excludes restructuring charges, decreased 43% to $0.23, compared to $0.40 last year. Adjusted EBITDA decreased 34% to $15.8 million, and adjusted EBITDA margin declined 110 basis points to 10.7%.
CEO Kristie Juster commented, “Kimball International continued to effectively navigate COVID-19 related end market softness and deliver structural savings from our transformation and restructuring plans, which will significantly benefit our results as market conditions improve. We were especially pleased with the sequential and year-over-year gross margin expansion, which was achieved despite considerably lower sales volumes. While business conditions remain challenging, we are beginning to see some areas of stability in the market. Notably, we experienced a 15% sequential increase in our order rates; our business with the Federal Government continues to show resiliency; and overall quoting activity is strong.
“We remain on-track with Phase 2 of our restructuring program and other cost reduction initiatives, which are projected to yield cost savings of approximately $20 million in fiscal 2021. In the 1Q, initial aspects of the program resulted in approximately $4.8 million in savings,” Ms. Juster concluded.
Kimball International consists of three furniture brands: Kimball, National, and Kimball Hospitality.
