Kimball unveils transformation planJune 20, 2019
From Local Sources
JASPER — Kimball International Inc.’s board of directors has approved a transformation plan in alignment with the company’s recently announced Kimball International Connect strategy.
These activities are expected to optimize resources for future growth, improve efficiency and build capabilities across the organization that will establish a more cost-efficient structure to better align operations with long-term strategic goals.
Highlights of the transformation plan are:
• Review of overall manufacturing facility footprint to reduce excess capacity and gain efficiencies. As part of this initiative, the company plans to exit a leased seating manufacturing facility in Martinsville, Virginia, as well as evaluate its production capabilities and capacity across the organization for additional opportunities.
• Creation of center-led functions for finance, human resources, information technology and legal functions, which are expected to result in standardization of processes and elimination of duplication. In addition, the company is centralizing its supply chain efforts to maximize supplier value and plans to drive more efficient practices and operations within its logistics function.
• Reallocation of Kimball brand-selling resources to higher-growth markets; exit four product showrooms across the brands.
• Efforts expected to result in annualized pre-tax savings of approximately $10 million when all actions are complete with pre-tax restructuring charges incurred through 2020 estimated between $8 and $9 million.
The transformation plan will begin immediately, and the company expects a substantial majority of the underlying activities of these actions to be completed by the end of its fiscal year 2020.
“Following the recent unveiling of our new strategy, Kimball International Connect, today marks the next step of our plan to deliver on our vision and achieve our 3-year financial targets,” said Kimball International CEO Kristie Juster. “Through our comprehensive strategic review process, we have identified a clear roadmap to transform our company, guided by our Purpose, as we seek to delight our customers, inspire our employees and deliver value to our shareholders.”
In addition to the expected savings from the restructuring plan, the company is also targeting an additional savings in fiscal year 2020 of $8 million related to other cost reduction initiatives not included in the transformation plan. The total savings in fiscal year 2020 related to both the transformation plan and other cost-reduction initiatives is expected to be approximately $16 million.
As part of its organizational structure review, the board of directors, in consultation with Don Van Winkle, determined the positions of president and chief operating officer, currently held Van Winkle, would be eliminated. Van Winkle is also currently serving as interim president for the Kimball brand and will remain in his capacity as president and chief operating officer and interim president for Kimball brand through a thoughtful transition as the company works to fill the Kimball brand president role.
“In his almost 30 years with Kimball International, Don has been instrumental in helping grow the Company and his contribution as a member of the executive leadership team has been truly impactful,” Juster said. “We thank Don for his leadership, dedication and operational execution and extend our deepest appreciation to him for his incredible service to Kimball International.”
In May, Kimball International introduced a comprehensive strategy to connect “our Purpose, our People, and our Brands to drive growth and unlock our true potential.”
Kimball International Connect enables the company to engage at higher levels of collaboration and interdependence.
The Kimball International Connect Strategy comprises four pillars: Inspire our People, Build our Capabilities, Fuel our Future and Accelerate Our Growth.
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