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<p><b><font size="2">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
WASHINGTON, D.C. &nbsp;20549<br>
</font>
<br>
FORM 8-K</b></p>
<p align="center"><b>CURRENT REPORT<br>
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934</b></p>
<p align="center"><br>
Date of Report (Date of earliest event reported) &nbsp;&nbsp;&nbsp;<u>September
13,
2006 (September 8, 2006)</u><br>
<br>
</p>
<table border="0" cellspacing="1" width="450">
  <tr>
    <td>
    <p align="center"><b><font size="5">KIMBALL INTERNATIONAL, INC.</font></b></td>
  </tr>
  <tr>
    <td><hr SIZE="1"></td>
  </tr>
  <tr>
    <td>
    <p align="center"><font size="2">(Exact name of registrant as specified in
    its charter)</font></td>
  </tr>
</table>
<p align="center"></p>
<center>
<table cellSpacing="0" width="624" border="0">
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="33%">&nbsp;</td>
    <td width="33%">&nbsp;</td>
  </tr>
  <tr>
    <td>
    <p align="center">Indiana</td>
    <td>
    <p align="center">0-3279</td>
    <td>
    <p align="center">35-0514506</td>
  </tr>
  <tr>
    <td>
    <p align="center"></p>
    <hr width="90%" SIZE="1"></td>
    <td>
    <p align="center"></p>
    <hr width="48%" SIZE="1"></td>
    <td>
    <p align="center"></p>
    <hr width="90%" SIZE="1"></td>
  </tr>
  <tr>
    <td align="center"><font size="2">(State or other jurisdiction of</font></td>
    <td align="center"><font size="2">(Commission File</font></td>
    <td align="center"><font size="2">(IRS Employer Identification No.)</font></td>
  </tr>
  <tr>
    <td align="center"><font size="2">incorporation)</font></td>
    <td align="center"><font size="2">Number)</font></td>
    <td>&nbsp;</td>
  </tr>
</table>
<table cellSpacing="0" width="624" border="0">
  <tr>
    <td width="55%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="41%">&nbsp;</td>
  </tr>
  <tr>
    <td>
    <p align="center">&nbsp;</td>
    <td>&nbsp;</td>
    <td>
    <p align="center">&nbsp;</td>
  </tr>
  <tr>
    <td>
    <p align="center">1600 Royal Street, Jasper, Indiana</td>
    <td>&nbsp;</td>
    <td>
    <p align="center">47549-1001</td>
  </tr>
  <tr>
    <td>
    <p align="center"></p>
    <hr width="64%" SIZE="1"></td>
    <td>&nbsp;</td>
    <td>
    <p align="center"></p>
    <hr width="48%" SIZE="1"></td>
  </tr>
  <tr>
    <td align="center"><font size="2">(Address of principal executive offices)</font></td>
    <td>&nbsp;</td>
    <td align="center"><font size="2">(Zip Code)</font></td>
  </tr>
</table>
</center>
<p align="center">Registrant's telephone number, including area code &nbsp;&nbsp;<u>(812)
482-1600</u></p>
<table border="0" cellspacing="1" width="350">
  <tr>
    <td>
    <p align="center">Not Applicable</td>
  </tr>
  <tr>
    <td><hr SIZE="1"></td>
  </tr>
  <tr>
    <td>
    <p align="center"><font size="2">(Former name or former address, if changed
    since last report)</font></td>
  </tr>
</table>
</center>
<p align="left"><font size="2">Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2.
below):</font></p>
<p align="left"><font size="2">[&nbsp;&nbsp; ] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)</font></p>
<p align="left"><font size="2">[&nbsp;&nbsp; ] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p>
<p align="left"><font size="2">[&nbsp;&nbsp; ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p>
<p align="left"><font size="2">[&nbsp;&nbsp; ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p>
<p align="center">&nbsp;</p>
<p align="center">1</p>
<hr SIZE="1">
<p><b>Item 2.05 Costs Associated with Exit or Disposal Activities</b><br>
<br>
In September 2005, Kimball International, Inc. (the &quot;Company&quot;) announced a plan
to sharpen its focus on its primary markets within the Furniture and Cabinets
segment. Since the announcement, the Company sold a forest products hardwood
lumber operation consisting of three sawmills and three lumberyards, an
operation which produced and sold fixed-wall furniture systems and a
polyurethane and polyester molded components business primarily serving the
residential furniture and recreational vehicle markets. Additionally, as the
Company has been sharpening its focus on its primary markets of office furniture
and hospitality within this segment, it has been exiting contract private label
products. <br>
<br>
In conjunction with the exit of contract private label products, on September 8,
2006 the Company approved a plan to exit the production of wood rear projection
television (&quot;PTV&quot;) cabinets and stands within the Furniture and Cabinets
segment, which affects the Company's Juarez, Mexico operation. With the exit of
the production of PTV cabinets and stands, the Company will have exited
substantially all contract private label products. For some time, the market
demand for PTV cabinets has been declining due to the market shift to plasma and
LCD large-screen televisions, and the Company has been responding to this trend.
In August, 2004 the Company sold the building in Juarez and subsequently leased
back a much smaller manufacturing footprint in the same facility to reduce
excess capacity, and then during fiscal year 2006 the Company further
consolidated its two Mexican wood PTV cabinet and stand operations into the one
smaller Juarez facility. The Company had planned to gradually exit the PTV
cabinet product in tandem with the naturally declining PTV market and utilize
the Juarez facility within the Furniture and Cabinets segment for the production
of other products. However, the demand for PTV cabinets by the Company's current
customers is declining at a faster pace than what was originally anticipated and
as a result, during the first quarter of fiscal year 2007, management has
reconsidered the future utilization of the Juarez facility. As a result, a
decision was made to exit this Mexico operation and to not utilize the Juarez
facility for the production of other products. Production is scheduled to cease
during the second quarter of fiscal year 2007 and the Company estimates that
substantially all inventory will be sold by the end of the second quarter.
Miscellaneous wrap-up activities including disposition of remaining equipment
will be completed by the end of the third quarter of fiscal year 2007. The lease
on the building expires in August 2009, and the Company will begin to attempt to
sub-lease its portion of the facility. <br>
<br>
The Company currently estimates that the pre-tax charges related to the exit
activities will be approximately, in millions, $6.0 to $8.0 consisting of
approximately $2.0 to $2.3 of property and equipment non-cash asset impairment,
$1.8 to $2.2 of severance and other employee costs, $0.7 to $1.1 of lease exit
costs and $1.5 to $2.4 of other exit costs. The Company has a deferred gain of
$1.4 million which was the result of the sale of the building in 2004 which will
partially offset the restructuring charges. Approximately $3.5 million of the
total cost estimate is expected to be cash expense, exclusive of proceeds from
sale of equipment which are expected to be approximately $0.8 million.<br>
<br>
As PTV production volumes had been decreasing over the past several quarters,
losses had been increasing at the Juarez facility. The pre-tax operating loss,
before corporate allocations, was $1.2 million in the most recent completed
fiscal year 2006 fourth quarter and $3.4 million for the full fiscal year 2006.
The Company expects continued operating losses during the exit period. The
avoidance of these losses will begin in the latter half of fiscal year 2007 when
exit activities are complete. <br>
<br>
The exit of the Juarez operation will be classified as Discontinued Operations
in the Company's Consolidated Statements of Income beginning in the period in
which the exit is substantially complete which is currently estimated to be the
second quarter of fiscal year 2007. Exit costs incurred prior to Discontinued
Operations classification will be classified as Restructuring costs in the
Consolidated Statements of Income.<br>
<br>
<b>Item 2.06 Material Impairments</b><br>
<br>
The information set forth above under Item 2.05 is incorporated by reference
into this Item 2.06. <br>
&nbsp;</p>
<p align="center">2</p>
<p align="center"></p>
<hr SIZE="1"><center>
<p><b>SIGNATURES</b></p>
</center>
<p>Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized. </p>
<div align="right">
  <table cellSpacing="0" border="0" cellpadding="0">
    <tr>
      <td width="30">&nbsp;</td>
      <td width="300">&nbsp;</td>
    </tr>
    <tr>
      <td width="30">&nbsp;</td>
      <td width="300">KIMBALL INTERNATIONAL, INC.</td>
    </tr>
    <tr>
      <td width="30">&nbsp;</td>
      <td width="300">&nbsp;</td>
    </tr>
    <tr>
      <td width="30">&nbsp;</td>
      <td width="300">&nbsp;</td>
    </tr>
    <tr>
      <td width="30">
      <p align="center">By:</td>
      <td width="300">/s/ Michelle R. Schroeder</td>
    </tr>
    <tr>
      <td width="30">&nbsp;</td>
      <td width="300"><hr align="left" width="70%" SIZE="1"></td>
    </tr>
    <tr>
      <td width="30">&nbsp;</td>
      <td width="300">MICHELLE R. SCHROEDER<br>
      Vice President, Corporate Controller</td>
    </tr>
  </table>
</div>
<p><br>
Date: September 12, 2006</p>
<p align="center">3</p>
<hr>

</body>

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{"company-data": {"conformed-name": "KIMBALL INTERNATIONAL INC", "cik": "0000055772", "assigned-sic": "2520", "irs-number": "350514506", "state-of-incorporation": "IN", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-03279", "film-number": "061087291"}, "business-address": {"street1": "1600 ROYAL ST", "city": "JASPER", "state": "IN", "zip": "47549", "phone": "8124821600"}, "mail-address": {"street1": "1600 ROYAL STREET", "city": "JASPER", "state": "IN", "zip": "47549"}, "former-company": {"former-conformed-name": "JASPER CORP", "date-changed": "19740826"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported)
September
13,
2006 (September 8, 2006)
KIMBALL INTERNATIONAL, INC.
(Exact name of registrant as specified in
    its charter)
Indiana
0-3279
35-0514506
(State or other jurisdiction of
(Commission File
(IRS Employer Identification No.)
incorporation)
Number)
1600 Royal Street, Jasper, Indiana
47549-1001
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(812)
482-1600
Not Applicable
(Former name or former address, if changed
    since last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2.
below):
[   ] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
[   ] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1
Item 2.05 Costs Associated with Exit or Disposal Activities
In September 2005, Kimball International, Inc. (the "Company") announced a plan
to sharpen its focus on its primary markets within the Furniture and Cabinets
segment. Since the announcement, the Company sold a forest products hardwood
lumber operation consisting of three sawmills and three lumberyards, an
operation which produced and sold fixed-wall furniture systems and a
polyurethane and polyester molded components business primarily serving the
residential furniture and recreational vehicle markets. Additionally, as the
Company has been sharpening its focus on its primary markets of office furniture
and hospitality within this segment, it has been exiting contract private label
products.
In conjunction with the exit of contract private label products, on September 8,
2006 the Company approved a plan to exit the production of wood rear projection
television ("PTV") cabinets and stands within the Furniture and Cabinets
segment, which affects the Company's Juarez, Mexico operation. With the exit of
the production of PTV cabinets and stands, the Company will have exited
substantially all contract private label products. For some time, the market
demand for PTV cabinets has been declining due to the market shift to plasma and
LCD large-screen televisions, and the Company has been responding to this trend.
In August, 2004 the Company sold the building in Juarez and subsequently leased
back a much smaller manufacturing footprint in the same facility to reduce
excess capacity, and then during fiscal year 2006 the Company further
consolidated its two Mexican wood PTV cabinet and stand operations into the one
smaller Juarez facility. The Company had planned to gradually exit the PTV
cabinet product in tandem with the naturally declining PTV market and utilize
the Juarez facility within the Furniture and Cabinets segment for the production
of other products. However, the demand for PTV cabinets by the Company's current
customers is declining at a faster pace than what was originally anticipated and
as a result, during the first quarter of fiscal year 2007, management has
reconsidered the future utilization of the Juarez facility. As a result, a
decision was made to exit this Mexico operation and to not utilize the Juarez
facility for the production of other products. Production is scheduled to cease
during the second quarter of fiscal year 2007 and the Company estimates that
substantially all inventory will be sold by the end of the second quarter.
Miscellaneous wrap-up activities including disposition of remaining equipment
will be completed by the end of the third quarter of fiscal year 2007. The lease
on the building expires in August 2009, and the Company will begin to attempt to
sub-lease its portion of the facility.
The Company currently estimates that the pre-tax charges related to the exit
activities will be approximately, in millions, $6.0 to $8.0 consisting of
approximately $2.0 to $2.3 of property and equipment non-cash asset impairment,
$1.8 to $2.2 of severance and other employee costs, $0.7 to $1.1 of lease exit
costs and $1.5 to $2.4 of other exit costs. The Company has a deferred gain of
$1.4 million which was the result of the sale of the building in 2004 which will
partially offset the restructuring charges. Approximately $3.5 million of the
total cost estimate is expected to be cash expense, exclusive of proceeds from
sale of equipment which are expected to be approximately $0.8 million.
As PTV production volumes had been decreasing over the past several quarters,
losses had been increasing at the Juarez facility. The pre-tax operating loss,
before corporate allocations, was $1.2 million in the most recent completed
fiscal year 2006 fourth quarter and $3.4 million for the full fiscal year 2006.
The Company expects continued operating losses during the exit period. The
avoidance of these losses will begin in the latter half of fiscal year 2007 when
exit activities are complete.
The exit of the Juarez operation will be classified as Discontinued Operations
in the Company's Consolidated Statements of Income beginning in the period in
which the exit is substantially complete which is currently estimated to be the
second quarter of fiscal year 2007. Exit costs incurred prior to Discontinued
Operations classification will be classified as Restructuring costs in the
Consolidated Statements of Income.
Item 2.06 Material Impairments
The information set forth above under Item 2.05 is incorporated by reference
into this Item 2.06.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
KIMBALL INTERNATIONAL, INC.
By:
/s/ Michelle R. Schroeder
MICHELLE R. SCHROEDER
Vice President, Corporate Controller
Date: September 12, 2006
3