JASPER, IN — Despite a 15% increase in net sales for furniture, Kimball International recorded a 4% drop in consolidated net sales for the second quarter, which ended Dec. 31. Net sales for the company were $296.9 million for the period, and net income was $3.2 million.

Kimball’s Furniture segment, representing office and hospitality furniture, recorded net sales of $148.8 million for the quarter, compared to $129.2 the previous year. "In the Furniture segment, our sales and net income performance in the second quarter was the best quarterly performance in the last three years in this segment," CEO/President James Thyen said in a statement.

The Electronic Manufacturing Services segment however dropped 18% compared to the same period a year ago, down to $148.1 million. The company attributed the loss to the expiration of a contract with Bayer AG. “Excluding sales to this customer, current year second quarter consolidated net sales increased 8% compared to the prior year,” the company said in a statement.

Compared to the first quarter fiscal 2012, net sales for Kimball’s Furniture segment rose 16%, due primarily to an increase in hospitality furniture sales, the company said. Kimball’s furniture is sold under the Kimball Office, National Office Furniture and Kimball Hospitality brands.

In October 2011, Kimball Hospitality entered into a strategic manufacturing partnership with Linwood Furniture LLC to produce domestically manufactured Kimball Hospitality casegoods. According to Kimball, Linwood will exclusively manufacture the hospitality product for the company.

Although Kimball International noted it has made "great strides" second quarter in both of its market segments, Thyen said, "our outlook remains guarded given the global economic challenges that persist and continue to drive volatility and uncertainty in our markets. Trade industry forecasts in both segments have shown a declining trend from previous forecasts."