JASPER, IN — Kimball International Inc. has announced net sales of $294.7 million and net income of $0.5 million for the first quarter of fiscal year 2011 ending Sept. 30. The company’s net sales grew 7 percent over 2009 figures for the same period.

The company reported net sales increases in both the Electronic Manufacturing Services (EMS) segment and in the Furniture segment. However, first quarter gross profit as a percent of net sales declined in comparison to the prior year due to lower margins in the Furniture segment, resulting primarily from competitive pricing pressures, commodity and freight cost increases, and higher employee benefit costs.

"We were pleased to see our Furniture segment return to profitability in the first quarter,” said James C. Thyen, CEO and president. “We have seen increased momentum in order rates of both office and hospitality furniture during the quarter. In our EMS segment, after posting two very strong quarters at the end of last fiscal year, this segment recorded a small net loss for the first quarter. We had unanticipated sharp demand changes of a few customer programs coupled with supply chain allocation. We chose to sustain our excellent service to our customers and incurred extra charges. We also had customer requested shipping delays in the EMS segment in the latter half of the first quarter which pushed some shipments into the second quarter.

"There continues to be economic uncertainty, but we are seeing some stability. We are well-positioned in our markets and intend to take advantage of market opportunities as they arise, sharpening our execution, while continuing to make investments for growth," he added.

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