Strong Order Growth for Kimball

Strong Order Growth for Kimball

(FEBRUARY 5, 2020) Contract furniture supplier Kimball International reported order growth of 13% in its second quarter driven by the office and hospitality segments.

Although the company’s Q2 sales fell by 4% to $192 million, this was in line with expectations due a “realignment” at the Kimball brand to higher-margin products and strong comparisons from last year. Nevertheless, organic growth was below the expected range of 4-7%, noted CEO Kristie Juster.

The education and government verticals both grew in the double digits during the quarter, although they were more than offset by a 12% fall in Kimball’s largest vertical, Commercial.

All areas reported order growth in the quarter, with hospitality leading the way at 31% – this was due, in particular, to a strong Las Vegas market. Investments in the high-margin healthcare vertical resulted in a 10% improvement, following on from a 22% increase 12 months ago.

Sales of new office products – defined as those introduced in the past three years – continued to do well, representing approximately 29% of total office sales, an increase of two percentage points. The National brand had new product growth of 28% with much of this focused on ancillary products.

Q2 adjusted EBITDA of around $21 million was a 23% year-on-year increase. This was achieved thanks to a gross profit increase of 1% – despite the drop in quarterly sales – and cost savings of $7.1 million that exceeded expectations. - (OPI)