Kimball Intl Inc (NASDAQ:KBALB)

CAPS Rating: 4 out of 5

The Company provides a variety of products from its two business segments: the Furniture segment and the Electronic Contract Assemblies segment.


Player Avatar NetscribeRetail (90.90) Submitted: 3/28/2007 2:11:15 AM : Outperform Start Price: $15.29 KBALB Score: -36.31

Kimball International, Inc. provides wood furniture and cabinets, as well as electronic assemblies for use in various industries worldwide. It operates in two segment, Furniture and Cabinets, and Electronic Contract Assemblies. The Furniture and Cabinets segment offers furniture for the office and hospitality industries and its Electronic Contract Assemblies segment produces and sells electronics and electro-mechanical products.
Company is earning fifty percent of the revenues from its furniture segment, which caters towards the demands from hospitality and office industry. Office furniture segment contributes maximum sales to this segment and looking ahead, the consumption of furniture from this industry is expected to increase 7.3% and 8.4% in FY 07 and FY 08 respectively. The company is assessing excess capacity and developing plans to better utilize manufacturing operations, including shifting manufacturing capacity to lower cost which will help reduce the extra cost and improve the margins further.
Remaining fifty percent of the sales for the company comes from its Electronic Contract Assemblies segment. Its recent acquisitions and opening of a new China facility will bring this segment up to become the major contributor in company’s sales in near future. This segment operates at a lower gross profit percentage but it also operates at lower selling, general and administrative costs retaining positive margins for the company. Worldwide EMS market is expected to grow to $244 billion in FY 08 as compared to $195 billion in FY 06; with ongoing restructuring programs and acquisitions, the company is expected to follow the suite. Kimball International’s over all sales have shown a continuous rising trend over the past, and with stable margins and profits, it proves to be a safe bet for all of its investors.

Featured Broker Partners