JASPER, Ind. - In the same reporting period in which office and hospitality furniture manufacturer Kimball consolidated its Idaho plant, sales and earnings rose over last year. The company has reported a fourth quarter net income of $6.3 million, compared to $4.7 million during the same quarter last year.

Earnings also improved for the full year. For fiscal 2016, Kimball says its profit increased to $21.2 million, compared to $20.3 million in 2015.
 
"I am very pleased with the progress we made in our fourth quarter," said Kimball CEO Bob Schneider. "At this level of performance, our return on capital will be among the best in the industry."
 
The company says its move of Idaho operations to Indiana is complete. Kimball's Idaho operations were responsible for producing metal fabricated furniture. Metal furniture is now being produced in Indiana for the first time.
 
"We had normal production training and start-up costs during the fourth quarter which offset most of the planned savings from this effort, and we expect to be substantially past the normal start-up costs by the end of the calendar year." Schneider said. Kimball encountered "much higher than planned healthcare costs" in the period. 
 
Kimball's sales increase was driven by double-digit jumps in healthcare and government and education verticals.
 
Restructuring costs in the quarter totaled $1.4 million, mostly for the training of Indiana employees used to wood products manufacturing, in producing metal furniture. Prior to start of production, equipment relocation costs, and facility maintenance and shutdown costs related to the cessation of production in Idaho.
 
All production was transferred out of the Idaho facility as of March 2016. Kimball says it is continuing to train employees in Indiana, ramp-up production and eliminate the inefficiencies associated with the start-up of production in a new facility.
 
In 2014, the company spun-off its electronics business - which got its start from manufacturing television cabinets in the 1950s.
 
Some more details below:
 
Kimball's sales increase was primarily driven by the healthcare and government verticals (both up 17 percent), the education vertical (up 11% percent, and the hospitality vertical (up 6 percent).  The prior year fourth quarter includes $9.5 million in sales in the hospitality vertical related to a record order for a single property.  Excluding that order, the hospitality vertical would have had a 38 percent increase in sales during the fourth quarter.
 
Kimball continued its strategy of quick launches of new and innovative products to fuel growth, increasing sales of new office furniture products 34 percent over the prior year fourth quarter.  New product sales were about 29 percent of total office furniture sales in the current year fourth quarter compared to 22 percent in the prior year fourth quarter.  New products are defined as those introduced within the last three years.
 
Fourth quarter gross profit as a percent of net sales improved 0.5 of a percentage point over the prior year fourth quarter, driven by price increases, cost savings initiatives, and lower freight costs,  Gross profit also was aided by the Company's restructuring plan involving the transfer of metal fabrication production from Idaho into facilities in Indiana, however, most of the benefit was offset by training and start-up costs.