10-Q 1 kbal-20220331.htm KIMBALL INTERNATIONAL, INC. FORM 10-Q kbal-20220331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number    0-3279
kbal-20220331_g1.jpg
KIMBALL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Indiana35-0514506
(State or other jurisdiction of(I.R.S. Employer Identification No.)
incorporation or organization)
1600 Royal Street, Jasper, Indiana
47546-2256
(Address of principal executive offices)(Zip Code)
(812) 482-1600
Registrant’s telephone number, including area code
Not Applicable
Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading Symbol(s)Name of each exchange on which registered
Class B Common Stock, par value $0.05 per shareKBAL
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
Yes  x    No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  o                         Accelerated filer  x 
Non-accelerated filer  o                         Smaller reporting company 
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 
Yes      No  x
The number of shares outstanding of the Registrant’s common stock as of April 28, 2022 was:
Class A Common Stock - 181,067 shares
Class B Common Stock - 36,634,841 shares



KIMBALL INTERNATIONAL, INC.
FORM 10-Q
INDEX
Page No.
 
PART I    FINANCIAL INFORMATION
 
 
PART II    OTHER INFORMATION
 

2


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KIMBALL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except for Share and Per Share Data)
(Unaudited) 
March 31,
2022
June 30,
2021
ASSETS  
Current Assets:  
Cash and cash equivalents$12,726 $24,336 
Receivables, net of allowances of $1,040 and $1,121, respectively
71,495 58,708 
Inventories83,545 54,291 
Prepaid expenses and other current assets30,686 22,012 
Total current assets198,452 159,347 
Property and equipment, net of accumulated depreciation of $191,299 and $191,757, respectively
92,542 90,623 
Right-of-use operating lease assets16,922 14,654 
Goodwill47,844 81,962 
Other intangible assets, net of accumulated amortization of $48,344 and $41,796, respectively
59,911 64,478 
Deferred tax assets15,738 16,368 
Other assets17,193 17,163 
Total Assets$448,602 $444,595 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt$33 $30 
Accounts payable70,446 41,537 
Customer deposits27,595 24,438 
Current portion of operating lease liability6,254 6,590 
Dividends payable3,688 3,532 
Accrued expenses37,081 39,115 
Total current liabilities145,097 115,242 
Long-term debt, less current maturities58,046 40,079 
Long-term earn-out liability4,440 20,190 
Long-term operating lease liability14,025 12,536 
Other liabilities14,994 16,878 
Total other long-term liabilities91,505 89,683 
Shareholders’ Equity:
Common stock-par value $0.05 per share:
Class A - Shares authorized: 50,000,000
               Shares issued: 181,000 and 188,000, respectively
9 9 
Class B - Shares authorized: 100,000,000
               Shares issued: 42,842,000 and 42,835,000, respectively
2,142 2,142 
Additional paid-in capital7,025 5,298 
Retained earnings268,836 299,034 
Accumulated other comprehensive income3,505 1,980 
Less: Treasury stock, at cost, 6,222,000 shares and 6,148,000 shares, respectively
(69,517)(68,793)
Total Shareholders’ Equity212,000 239,670 
Total Liabilities and Shareholders’ Equity$448,602 $444,595 
3


KIMBALL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Amounts in Thousands, Except for Per Share Data)
(Unaudited)(Unaudited)
Three Months EndedNine Months Ended
March 31March 31
2022202120222021
Net Sales$180,918 $138,676 $488,931 $422,817 
Cost of Sales125,782 98,843 338,254 285,079 
Gross Profit55,136 39,833 150,677 137,738 
Selling and Administrative Expenses48,783 44,930 150,863 132,584 
Other General (Income) Expense(4,523) (4,523) 
Contingent Earn-out (Gain) Loss2,150  (15,750) 
Restructuring Expense1,730 2,617 4,195 8,473 
Goodwill Impairment  34,118  
Operating Income (Loss)6,996 (7,714)(18,226)(3,319)
Other Income (Expense):
Interest income25 59 77 248 
Interest expense(390)(177)(922)(263)
Non-operating income (expense), net(870)311 (347)2,434 
Other income (expense), net(1,235)193 (1,192)2,419 
Income (Loss) Before Taxes on Income5,761 (7,521)(19,418)(900)
Provision (Benefit) for Income Taxes(534)(2,992)650 (919)
Net Income (Loss)$6,295 $(4,529)$(20,068)$19 
Earnings (Loss) Per Share of Common Stock:  
Basic Earnings (Loss) Per Share$0.17 $(0.12)$(0.55)$0.00 
Diluted Earnings (Loss) Per Share$0.17 $(0.12)$(0.55)$0.00 
Class A and B Common Stock:
Average Number of Shares Outstanding - Basic36,795 36,860 36,788 36,932 
Average Number of Shares Outstanding - Diluted37,061 36,860 36,788 37,529 

4


KIMBALL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in Thousands)
(Unaudited)(Unaudited)
Three Months EndedThree Months Ended
March 31, 2022March 31, 2021
(Unaudited)Pre-taxTaxNet of TaxPre-taxTaxNet of Tax
Net income (loss)$6,295 $(4,529)
Other comprehensive income (loss):
Available-for-sale securities$ $ $ $(4)$1 $(3)
Postemployment severance actuarial change251 (66)185 174 (45)129 
Unrealized gain (loss) on interest rate swap1,345 (347)998    
Reclassification to (earnings) loss:
Amortization of actuarial change(129)34 (95)(112)29 (83)
Interest rate swap62 (16)46    
Other comprehensive income (loss)$1,529 $(395)$1,134 $58 $(15)$43 
Total comprehensive income (loss)$7,429 $(4,486)
(Unaudited)(Unaudited)
 Nine Months EndedNine Months Ended
March 31, 2022March 31, 2021
(Unaudited)Pre-taxTaxNet of TaxPre-taxTaxNet of Tax
Net income (loss)$(20,068)$19 
Other comprehensive income (loss):
Available-for-sale securities$ $ $ $(42)$11 $(31)
Postemployment severance actuarial change814 (211)603 476 (123)353 
Unrealized gain (loss) on interest rate swap1,446 (373)1,073    
Reclassification to (earnings) loss:
Amortization of actuarial change(399)103 (296)(333)86 (247)
Interest rate swap195 (50)145    
Other comprehensive income (loss)$2,056 $(531)$1,525 $101 $(26)$75 
Total comprehensive income (loss)$(18,543)$94 

5


KIMBALL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
 (Unaudited)
Nine Months Ended
March 31
20222021
Cash Flows From Operating Activities:
Net income (loss)$(20,068)$19 
Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities:
Depreciation10,820 10,836 
Amortization7,212 4,212 
Gain on sales of assets(4,537)(165)
Restructuring and asset impairment charges1,527 1,916 
Deferred income tax and other deferred charges95 (491)
Goodwill impairment34,118  
Stock-based compensation3,708 4,048 
Change in earn-out liability(15,750) 
Other, net(2,528)(1,440)
Change in operating assets and liabilities:
Receivables(12,847)24,055 
Inventories(29,254)7,057 
Prepaid expenses and other current assets(7,928)(1,991)
Accounts payable27,600 (9,391)
Customer deposits3,157 2,636 
Accrued expenses(1,927)(13,971)
Net cash (used for) provided by operating activities(6,602)27,330 
Cash Flows From Investing Activities:
Capital expenditures(12,869)(8,968)
Proceeds from sales of assets5,498 498 
Cash paid for acquisition (101,478)
Purchases of capitalized software(2,925)(4,940)
Purchases of available-for-sale securities (10,000)
Maturities of available-for-sale securities 14,750 
Other, net(50)74 
Net cash used for investing activities(10,346)(110,064)
Cash Flows From Financing Activities:
Proceeds from revolving credit facility45,000 40,000 
Payments on revolving credit facility(27,000) 
Repayments of long-term debt(30)(28)
Dividends paid to shareholders(9,925)(9,969)
Repurchases of Common Stock(2,447)(2,077)
Repurchase of employee shares for tax withholding(590)(258)
Net cash provided by financing activities5,008 27,668 
Net Decrease in Cash, Cash Equivalents, and Restricted Cash (1)
(11,940)(55,066)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period (1)
25,727 92,444 
Cash, Cash Equivalents, and Restricted Cash at End of Period (1)
$13,787 $37,378 
Supplemental Disclosure of Cash Flow Information
Non-cash items:
Contingent earn-out liability upon Poppin, Inc. acquisition$ $31,790 
Cash paid (refunded) during the period for:
Income taxes$(99)$6,239 
Interest expense$862 $211 
(1) The following table reconciles cash and cash equivalents in the balance sheets to cash, cash equivalents, and restricted cash per the statements of cash flows. The restricted cash included in other assets on the balance sheet represents amounts pledged as collateral for a long-term financing arrangement as contractually required by a lender. The restriction will lapse when the related debt is paid. Restricted cash also included customer deposits held due to a foreign entity being classified as a restricted entity by a government agency subsequent to our receipt of the deposit and cash held in escrow for repayment of the Payment Protection Program loan that Poppin, Inc. obtained prior to its acquisition.
(Amounts in Thousands)March 31,
2022
June 30,
2021
March 31,
2021
June 30,
2020
Cash and Cash Equivalents$12,726 $24,336 $33,451 $91,798 
Restricted cash included in Other Assets1,061 1,391 3,927 646 
Total Cash, Cash Equivalents, and Restricted Cash at end of period$13,787 $25,727 $37,378 $92,444 
6


KIMBALL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Amounts in Thousands, Except for Share and Per Share Data)
Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive IncomeTreasury StockTotal Shareholders’ Equity
Three months ended March 31, 2022 (Unaudited)Class AClass B
Amounts at December 31, 2021$9 $2,142 $6,015 $265,924 $2,371 $(69,797)$206,664 
Net income (loss)6,295 6,295 
Other comprehensive income (loss)1,134 1,134 
Issuance of unrestricted shares (12,000 shares)
7 158 165 
Compensation expense related to stock compensation plans1,153 1,153 
Restricted stock units issuance (9,000 shares)
(150)122 (28)
Dividends declared ($0.09 per share)
(3,383)(3,383)
Amounts at March 31, 2022$9 $2,142 $7,025 $268,836 $3,505 $(69,517)$212,000 
Three months ended March 31, 2021 (Unaudited)
Amounts at December 31, 2020$9 $2,142 $4,843 $302,937 $2,169 $(68,088)$244,012 
Net income (loss)(4,529)(4,529)
Other comprehensive income (loss)43 43 
Issuance of unrestricted shares (13,000 shares)
(196)172 (24)
Conversion of Class A to Class B common stock (1,000 shares)
   
Compensation expense related to stock compensation plans1,790 1,790 
Repurchase of Common Stock (109,000 shares)
(1,441)(1,441)
Dividends declared ($0.09 per share)
(3,392)(3,392)
Amounts at March 31, 2021$9 $2,142 $6,437 $295,016 $2,212 $(69,357)$236,459 
Nine months ended March 31, 2022 (Unaudited)
Amounts at June 30, 2021$9 $2,142 $5,298 $299,034 $1,980 $(68,793)$239,670 
Net income (loss)(20,068)(20,068)
Other comprehensive income (loss)1,525 1,525 
Issuance of unrestricted shares (30,000 shares)
(235)397 162 
Conversion of Class A to Class B common stock (5,000 shares)
   
Compensation expense related to stock incentive plans3,708 3,708 
Restricted stock units issuance (87,000 shares)
(1,642)1,136 (506)
Relative total shareholder return performance units issuance (5,000 shares)
(104)72 (32)
Repurchase of Common Stock (196,000 shares)
(2,329)(2,329)
Dividends declared ($0.27 per share)
(10,130)(10,130)
Amounts at March 31, 2022$9 $2,142 $7,025 $268,836 $3,505 $(69,517)$212,000 
Nine months ended March 31, 2021 (Unaudited)
Amounts at June 30, 2020$10 $2,141 $3,770 $305,024 $2,137 $(68,286)$244,796 
Net income (loss)19 19 
Other comprehensive income (loss)75 75 
Issuance of unrestricted shares (37,000 shares)
(511)487 (24)
Conversion of Class A to Class B common stock (2,000 shares)
(1)1  
Compensation expense related to stock incentive plans4,048 4,048 
Restricted stock units issuance (15,000 shares)
(284)204 (80)
Relative total shareholder return performance units issuance (32,000 shares)
(586)430 (156)
Cumulative effect of change in accounting principle134 134 
Repurchase of Common Stock (171,000 shares)
(2,192)(2,192)
Dividends declared ($0.27 per share)
(10,161)(10,161)
Amounts at March 31, 2021$9 $2,142 $6,437 $295,016 $2,212 $(69,357)$236,459 
7


KIMBALL INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball International,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K. Additionally, based on the duration and severity of the current global situation involving the COVID-19 pandemic, related supply chain disruptions and inflation, the extent to which COVID-19 will impact our business and our consolidated financial results will depend on future developments, which are highly uncertain and cannot be predicted.
Note 2. Recent Accounting Pronouncements and Supplemental Information
Recently Issued Accounting Pronouncements Not Yet Adopted:
In October 2021, the Financial Accounting Standards Board issued guidance on accounting for contract assets and contract liabilities, related to revenue contracts with customers, during a business combination by the acquiring business entity. The acquirer is to measure the contract asset and contract liability as of the acquisition date as if the acquirer had originated the contracts. This is a departure from the current practice under U.S. GAAP of recognizing contract assets and contract liabilities at fair value as of the acquisition date. The guidance will be effective in our first quarter of fiscal year 2024, though early adoption is permitted. Management is unable to predict whether the adoption of this guidance will have a material impact on our financial statements.
Goodwill and Other Intangible Assets:
Goodwill represents the difference between the purchase price and the related underlying tangible and intangible net asset fair values resulting from business acquisitions. Goodwill is assigned to and the fair value is tested at the reporting unit level. Annually, or if conditions indicate an earlier assessment is necessary, we may assess qualitative factors to determine if it is more likely than not that the fair value is less than its carrying amount. We also have the option to bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test which compares the carrying value of the reporting unit to the reporting unit’s fair value to identify impairment. Under the quantitative assessment, if the fair value of the reporting unit is less than the carrying value, goodwill is written down to its fair value. The fair value is established primarily using a discounted cash flow analysis and secondarily a market approach utilizing current industry information. The calculation of the fair value of the reporting unit considers current market conditions existing at the assessment date and reporting unit specific scenarios weighted on probability of outcome.
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, and determination of our weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. While we have historically performed goodwill impairment testing annually during the second fiscal quarter, changes in circumstances may require an interim assessment of the carrying amounts of our reporting units relative to their fair values.
In connection with our annual goodwill impairment test and the preparation of our financial statements, we assessed goodwill at the reporting unit level for impairment during our second quarter of fiscal year 2022 and based on our analysis our Poppin reporting unit had a carrying amount that exceeded its fair value. A forecast revision to delay future sales and earnings growth of
8


the Poppin reporting unit drove the decline in the fair value of the reporting unit, which was primarily attributable to changes in demand due to the ongoing COVID-19 pandemic and supply chain constraints. As a result, we recorded a goodwill impairment loss of $34.1 million during the second quarter of fiscal year 2022, as further discussed in Note 13. Fair Value of Notes to Condensed Consolidated Financial Statement.
The changes in the carrying amount of goodwill are summarized as follows:
(Amounts in Thousands)Gross GoodwillAccumulated ImpairmentNet Carrying Amount
June 30, 2020$12,893 $(1,733)$11,160 
Additions70,802 — 70,802 
June 30, 202183,695 (1,733)81,962 
Impairment— (34,118)(34,118)
March 31, 2022$83,695 $(35,851)$47,844 
See Note 3 - Acquisition of Notes to Condensed Consolidated Financial Statements for more information on this acquisition.
Other Intangible Assets reported on the Condensed Consolidated Balance Sheets consist of capitalized software, customer relationships, trade names, acquired technology, patents and trademarks, and non-compete agreements. Intangible assets are assessed for impairment when events or circumstances indicate that the carrying value may not be recoverable over the remaining lives of the assets. As a result of the downward revision in the forecasted operations of Poppin, management identified that a triggering event had occurred, indicating that certain long lived assets may not be recoverable. The intangible assets of the Poppin reporting unit were assessed for impairment during the second quarter of fiscal year 2022, and no impairment was identified. A summary of intangible assets subject to amortization is as follows:
 March 31, 2022June 30, 2021
(Amounts in Thousands)CostAccumulated
Amortization
Net ValueCostAccumulated
Amortization
Net Value
Capitalized Software$45,181 $34,992 $10,189 $43,200 $34,058 $9,142 
Customer Relationships19,050 6,016 13,034 19,050 3,936 15,114 
Trade Names36,570 5,897 30,673 36,570 3,154 33,416 
Acquired Technology7,000 1,312 5,688 7,000 559 6,441 
Patents and Trademarks354 39 315 354 16 338 
Non-Compete Agreements100 88 12 100 73 27 
Other Intangible Assets$108,255 $48,344 $59,911 $106,274 $41,796 $64,478 
A summary of the useful lives of intangible assets subject to amortization is as follows:
Years
Capitalized Software
2 to 13
Customer Relationships
10 to 20
Trade Names
10
Acquired Technology
7
Patents
14
Trademarks
15
Non-Compete Agreements
5
Amortization expense related to intangible assets was, in thousands, $2,358 and $7,212 during the quarter and year-to-date period ended March 31, 2022, and was, in thousands, $2,510 and $4,212 during the quarter and year-to-date period ended
9


March 31, 2021. Amortization expense in future periods is expected to be, in thousands, $2,462 for the remainder of fiscal year 2022, and $9,060, $8,454, $8,167, and $7,716 in the four years ending June 30, 2026, and $24,051 thereafter.
Capitalized software is stated at cost less accumulated amortization and is amortized using the straight-line method. During the software application development stage, capitalized costs include external consulting costs, cost of software licenses, and internal payroll and payroll-related costs for employees who are directly associated with a software project. Upgrades and enhancements are capitalized if they result in added functionality which enable the software to perform tasks it was previously incapable of performing. Software maintenance, training, data conversion, and business process re-engineering costs are expensed in the period in which they are incurred. 
Trade names, non-compete agreements, acquired technology, patents and trademarks are amortized on a straight-line basis over their estimated useful lives. Customer relationships are amortized based on estimated attrition rates of customers. We have no intangible assets with indefinite useful lives which are not subject to amortization.
Other General (Income) Expense:
Other General (Income) Expense includes the gain related to the sale of a warehouse during the third quarter of fiscal year 2022.
 Three Months EndedNine Months Ended
 March 31March 31
(Amounts in Thousands)2022202120222021
Other General (Income) Expense$(4,523)$ $(4,523)$ 
Non-operating Income (Expense), net:
Non-operating income and expense include the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, amortization of actuarial income, foreign currency rate movements, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain or loss on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses.
Components of the Non-operating income (expense), net line, were:
 Three Months EndedNine Months Ended
 March 31March 31
(Amounts in Thousands)2022202120222021
Gain (Loss) on SERP Investments$(887)$428 $(300)$2,567 
Other17 (117)(47)(133)
Non-operating income (expense), net$(870)$311 $(347)$2,434 



10


Note 3. Acquisition
On December 9, 2020, we acquired Poppin, Inc. (“Poppin”), a tech-enabled, market-leading B2B commercial furniture design company headquartered in New York City, New York. Poppin designs commercial-grade furniture that is made to mix, match, and scale in today’s modern office and work-from-home environments. The acquisition purchase price totaled $110.4 million in initial cash consideration plus $31.8 million in contingent earn-out consideration as valued at the date of acquisition.
The contingent earn-out is payable on annual revenue and profitability milestones achieved through June 30, 2024. As of March 31, 2022 and June 30, 2021, the fair value of the contingent earn-out liability was $4.4 million and $20.2 million, respectively.
A summary of the final purchase price allocation is as follows:
Purchase Price Allocation
(Amounts in Thousands)
Cash$5,768 
Receivables2,814 
Inventories15,718 
Other current assets700 
Net property and equipment975 
Other intangible assets52,394 
Goodwill70,801 
Right-of-use operating lease assets5,103 
Other long-term assets4,161 
Deferred tax assets5,836 
Total Assets$164,270 
Current maturities of long-term debt1,252 
Accounts payable7,715 
Customer deposits2,045 
Current portion of operating lease liability1,937 
Accrued expenses5,260 
Long-term debt, less current maturities1,252 
Long-term operating lease liability2,565 
Other long-term liabilities80 
Total Liabilities $22,106 
Net Assets$142,164 

Consideration
(Amounts in Thousands)
Cash$110,374 
Contingent earn-out — fair value at acquisition date31,790 
Fair value of total consideration$142,164 
Less: Acquired cash5,768 
Total consideration less acquired cash$136,396 

11


Goodwill is primarily attributable to the anticipated supply chain and revenue synergies including cross selling initiatives expected from the operations of the combined company. The goodwill is not deductible for tax purposes. See Note 2 - Recent Accounting Pronouncements and Supplemental Information of Notes to Condensed Consolidated Financial Statements for more information on goodwill and other intangible assets, including the goodwill impairment charge recognized during the second quarter of fiscal year 2022. The purchase price allocation was final as of September 30, 2021.
The operating results of this acquisition are included in our consolidated financial statements beginning on December 9, 2020. For the third quarter of fiscal year 2022, net sales and net loss related to Poppin were $17.2 million of net sales and $3.6 million of net loss. For the year-to-date period ending March 31, 2022, net sales and net losses related to Poppin were $45.9 million of net sales and $10.6 million of net loss. The aforementioned net losses include amortization on acquired intangibles and exclude earn-out adjustments related to operating performance and goodwill impairment after the acquisition date. There were no direct acquisition costs during the quarter and year-to-date periods ended March 31, 2022.
Pro Forma Information
The following unaudited pro forma financial information summarizes the combined results of operations for Kimball International, Inc. and Poppin, Inc. as if the companies were combined as of the beginning of fiscal period presented below:
(unaudited)
 Nine months ended
 March 31
(Amounts in Thousands, Except Per Share Data)2021
Net Sales$442,966 
Net Income (Loss)(3,187)
Diluted Earnings (Loss) Per Share of Common Stock$(0.08)
This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments. This pro forma information is not necessarily indicative of what our results would have been had we operated the businesses since the beginning of the period presented. The pro forma adjustments reflect the income statement effects of amortization of intangibles related to the fair value adjustments of the assets acquired, acquisition-related costs, incremental interest expense, and the related tax effects.
Note 4. Restructuring
We recognized pre-tax restructuring expense of $1.7 million and $4.2 million in the three and nine months ended March 31, 2022, and recognized $2.6 million and $8.5 million for the three and nine months ended March 31, 2021.
We utilized available market prices and management estimates to determine the fair value of impaired assets. Restructuring is included in the Restructuring Expense line item on our Condensed Consolidated Statements of Income.
Transformation Restructuring Plan:
Included in the current phase of our transformation restructuring plan are activities such as the streamlining of manufacturing facilities, voluntary retirement incentive programs, and the consolidation of showrooms. This phase of the transformation restructuring plan began in the first quarter of our fiscal year 2021, and we expect a substantial majority of the restructuring actions to be completed by the end of fiscal year 2023.
In addition to the savings already generated from the first phase of the transformation restructuring plan, the efforts of this second phase of the transformation restructuring plan are expected to generate annualized pre-tax savings of approximately $18.0 million