Kimball International Announces Record First QuarterSales.

JASPER, Ind.--(BUSINESS WIRE)--Oct. 14, 1999--

Kimball International, Inc. (Nasdaq:KBALB), today reported first quarter consolidated sales of $278.4 million, an increase of 5% from consolidated sales of $264.6 million reported during the first quarter of fiscal 1999 and a new record for

first quarter sales. Net income for the three-month period ended September 30, 1999 was $11.6 million, a decrease of 8% from net income of $12.6 million during the comparable period. Earnings per diluted share of Class B common stock were 29 cents, a 6% decline from earnings of 31 cents per diluted share of Class B common stock recorded during the first quarter of fiscal 1999.

"A solid first quarter sales performance by our Electronic Contract Assemblies segment as well as most of our product lines within the Furniture and Cabinets segment was unfortunately offset by softness in our cyclical lodging and healthcare product lines and start-up inefficiencies at our recently acquired cabinet manufacturing facility in Juarez, Mexico," explained Kimball International Chairman and Chief Executive Officer, Douglas A. Habig. "During fiscal 1999, we invested a record amount of capital throughout Kimball including several acquisitions. We anticipated some normal start-up inefficiencies; however, it has taken longer than we expected to ramp up sales volumes and improve manufacturing efficiencies at our new Juarez operation. We are taking action to address these issues and expect improvement over the second and third quarters. With respect to our slow first quarter lodging and healthcare product lines, we are very encouraged by a 32% increase in our order backlog as of September 30, 1999 as compared to the start of the first quarter of fiscal 2000."

Operating Performance Summary

The Furniture and Cabinets segment posted an increase in sales of 1% during the first quarter of fiscal 2000 when compared to the first quarter of fiscal 1999. Sales of office furniture, including sales of Transwall, which was acquired by Kimball in September 1998, were unchanged from the comparable period of fiscal 1999. Excluding Transwall, sales of office furniture for the three-month period ended September 30, 1999 approximated the office furniture industry's decline in shipments of 1.4% during the three month-period ended August 31, 1999 according to the Business and Institutional Furniture Manufacturer's Association (BIFMA). Sales of furniture components and furniture and cabinets produced on an original equipment manufactured basis were higher during the first quarter while sales of lodging and healthcare product lines decreased. The decline in sales of lodging and healthcare product lines is due in part to the general slowdown in orders due to the seasonal nature of the lodging industry and the timing of several large projects.

of the manufacturing facility located in Juare The Electronic Contract Assemblies segment reported a 16% increase in sales during the first quarter of fiscal 2000 primarily due to the continued strength in sales United Auto Workers labor strike against Generalng the first quarter of fiscal 2000.

Net income in the Electronic Contract Assemblies segment during the first quarter of fiscal 2000 improved from the first quarteses. Cash, cash equivalents and short-term inveng under the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties including, but not limited to, loss of key customers or supplier Kimball International, Inc. provides a vast afor the office, residential, lodging and healthixtures, television cabinets and stands, audio speaker systems and furniture components. The Electronic Contract Assemblies Segment is a global provider of design enginee (Unaudited) Condensed---

1999 1998

---- ---- Net Sales $278,402 $264,646 Cost of Sales 61,982

------------------------------------------- Net Income

$11,559 $12,563

-------------------------

$0.28 $0.30

ted 40,619 41,179

Condensed Consolidated Balance Sheets ($000's)

(Unaudited)

September 30, June 30,

$400,629 $386,341 Property & Equipment Totals

$67ity ---------------------------------- Current Liabilities

$178,147 $168,564 Long-Term Debt, Less Current Maturities

1,393 -------------------------

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