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<p><b>SECURITIES AND EXCHANGE COMMISSION<br>
WASHINGTON, D.C. &nbsp;20549<br>
<br>
FORM 8-K</b></p>
<p align="center">CURRENT REPORT<br>
</p>
<p align="center">Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934</p>
<p align="center"><br>
Date of Report (Date of earliest event reported) &nbsp;&nbsp;&nbsp;<u>December 12, 2002</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="center">1</p>
<hr SIZE="1">
<p><b>Item 9. Regulation FD Disclosure<br>
<br>
Kimball International, Inc. Announces Incremental Cost Scaling Actions and
Second Quarter Outlook</b></p>
<p>Jasper, IN (December 12, 2002) - Kimball International, Inc. (NASDAQ: KBALB)
today announced it is taking incremental actions to scale its cost structure to
more closely align its operating capacities and capabilities with reduced demand
levels. The Company's Board of Directors approved these incremental actions
earlier this week. The Company also announced its earnings outlook for its
second quarter fiscal 2003 ending December 31, 2002. This information is
intended to comply with Kimball's obligation under the SEC's Regulation FD. <br>
<br>
Incremental Cost Scaling Actions and Other Second Quarter Charges<br>
Kimball International has been taking various cost reduction actions over the
past several quarters in response to the slowing global economy and its effects
on the Company's markets. Scaling efforts during the second quarter of fiscal
2003 intensified due to the prolonged nature of the slowdown in many of the
Company's markets and the resulting continuation of underutilized manufacturing
capacity within both of the Company's segments. The Furniture and Cabinets
segment has also been impacted by a continued increase in imported furniture
products into the United States. Combined, the effect of lower demand for
products due to the weakened economy and greater supply of lower-cost import
alternatives has caused excess manufacturing capacity in the Furniture and
Cabinets segment that will be strategically reduced to position Kimball for
improved long-term profitability. In the Electronic Contract Assemblies segment,
weakened demand levels in select markets is driving consolidation and/or exit of
certain manufacturing capacities and capabilities. Of the scaling actions
approved in the second quarter of fiscal 2003, most of the actions, and their
associated costs, will occur within the Furniture and Cabinets segment, with the
furniture components product line driving a significant share of the total
costs. Overall scaling actions will include the consolidation of capabilities
and operations, selling and/or exiting redundant facilities, aligning personnel
costs and adjusting assets associated with scaling actions to their current fair
values.<br>
<br>
Over the past few quarters, the Company has disclosed the negative effect the
furniture components product line has had on Furniture and Cabinets segment
profitability, and also noted improvement in this product line was dependent
upon achieving higher volume levels and associated improvements in operating
efficiencies. During the fiscal 2003 second quarter, the Company reviewed recent
operating performance and updated market assessments indicating severe, and
possibly permanent, market reductions, and elected to shut down and exit its two
wood dimension manufacturing facilities. In light of the market reductions, the
Company also completed an asset impairment study for the wood veneer operations
concluding with an impairment totaling approximately $8.0 million which, in the
opinion of management, will align the carrying values of long-lived assets at
the Company's veneer operations with their fair values. This asset impairment
represents approximately 1% of total Kimball International assets.<br>
<br>
The Company will early adopt and apply the provisions of Statement of Financial
Accounting Standards No. 146 to account for the exit and disposal activities
associated with the scaling actions. When complete, total costs to execute the
above scaling actions and veneer operations asset impairment are expected to
total approximately $30 million pre-tax and will be recorded partially in the
second quarter of fiscal 2003 and over the next several quarters as specific
actions are taken. Approximately 50% of the total costs will be non-cash. The
Company estimates that once these actions are completed, they will reduce the
Company's total cost structure by approximately $20 to $25 million pre-tax on an
annualized basis. A portion of these cost savings will be redeployed into
strategic initiatives designed to accelerate sales growth, and improve quality
and efficiencies.<br>
<br>
The Company has previously internally announced many of the scaling actions
which include the exit of five facilities over the coming months, each of which
had been operating at a loss the last several quarters. These facilities
represent roughly 10% of total Kimball manufacturing facility square footage and
affect approximately 400 employees. Business in these facilities will, in part,
be transferred to other Kimball operations, resulting in the hiring of
additional employees at those facilities. <br>
&nbsp;</p>
<p align="center">2</p>
<p align="center"></p>
<hr SIZE="1">
<p>&quot;As we approached the mid-point in our fiscal year and analyzed the pressures
we are experiencing on our operating margins, our leadership team reexamined our
cost structures including capacities and capabilities across all our markets,&quot;
stated Kimball International Chairman and Chief Executive Officer, Douglas A.
Habig. &quot;The result of this examination drove the incremental scaling actions
outlined above. These actions, coupled with a continued focus on our
discretionary cost structures, will enable Kimball to improve our operating
margins and overall competitiveness in our markets. However, demand levels in
many of our markets remain unstable, which requires us to continuously monitor
our capacities across our markets in both segments. While ensuring we have the
appropriate capacity to support our long-term growth objectives, we will take
further actions to scale our operations, if required. In the end, our focus
remains the same-positioning Kimball International for long-term growth in both
sales and earnings,&quot; stated Mr. Habig.<br>
<br>
&quot;It is important to recognize that Kimball and our employees have taken
responsible actions as they have been required. In spite of our employees'
commitment and best efforts, we were unable to overcome the effects of depressed
markets without these additional scaling actions. While the actions to scale our
capacity are critical to ensure the long-term success of Kimball International,
we regret the impact of these actions on the affected employees. Where
appropriate, we have proactively utilized a program to match skills of affected
employees with other openings within our Company. Those not offered other
opportunities will be provided with transition assistance,&quot; concluded Mr. Habig.
<br>
<br>
Second Quarter Outlook <br>
Kimball International expects second quarter fiscal 2003 consolidated sales to
approximate the prior year second quarter level and projects its loss for the
current fiscal year second quarter, inclusive of the restructuring and other
charges outlined above, to be $(0.07) to $(0.12) per diluted share of Class B
common stock. Excluding the restructuring and other charges, the Company
projects its current year second quarter earnings will be $0.13 to $0.18 per
share. The Company's comparable earnings in the prior fiscal year second quarter
was $0.18 per Class B share. <br>
<br>
The Company expects second quarter sales in the Furniture and Cabinets segment
to approximate the prior year while sales in the Electronic Contract Assemblies
segment are projected to exceed the prior year. The Company is projecting the
net income level in the Electronic Contract Assemblies segment, before
restructuring charges, to be above the prior year, as certain business units
experienced stronger volume levels and associated improvements in operating
efficiencies, which more than offset current margin pressures related to this
segment's customer and program diversification efforts. The net income level in
the Furniture and Cabinets segment, before restructuring and other charges, is
projected to fall well below the prior year. Most major product lines within the
Furniture and Cabinets segment are projecting lower net income levels, with the
greatest reduction projected in the contract manufacturing product line, related
in part to reduced manufacturing efficiencies and elevated cost structures
relative to current demand levels.<br>
<br>
Second Quarter Conference Call / Webcast<br>
Kimball International will conduct a conference call on Tuesday, January 28,
2003 following the release of its second quarter fiscal 2003 results. A webcast
of the conference call will take place simultaneously. Details of the conference
call and webcast will be released on or about January 21, 2003.<br>
<br>
Forward-Looking Statements<br>
Certain statements contained within this release are considered forward-looking
under the Private Securities Litigation Reform Act of 1995, and are subject to
risks and uncertainties including, but not limited to, actual costs to complete
the incremental scaling activities exceeding the estimates disclosed above,
significant volume reductions from key contract customers, loss of key customers
or suppliers within specific industries, availability or cost of raw materials,
and increased competitive pricing pressures reflecting excess industry
capacities. Additional cautionary statements regarding other risk factors that
could have an effect on the future performance of the Company are contained in
the Company's Form 10-K filing for the period ending June 30, 2002. <br>
<br>
About Kimball International, Inc. <br>
Kimball International, Inc. provides a vast array of products from its two
business segments: the Furniture and Cabinets segment and the Electronic
Contract Assemblies segment. The Furniture and Cabinets segment provides
furniture for the office, residential, lodging and healthcare industries, all
sold under the Company's family of brand names. Other products produced by
Kimball on a contract basis include store fixtures, television cabinets and
stands, residential furniture and furniture components. The Electronic Contract
Assemblies segment provides design engineering, manufacturing, packaging and
distribution of electronic assemblies, circuit boards, multi-chip modules and
semiconductor components on a contract basis to a variety of industries on a
global scale. <br>
<br>
For more information about Kimball International, Inc., visit the Company's web
site on the Internet at www.kimball.com.</p>
<p align="center">&quot;We Build Success&quot;<br>
<br>
3</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/ Robert F. Schneider</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">ROBERT F. SCHNEIDER<br>
      Executive Vice President, <br>
      Chief Financial Officer<br>
      Treasurer</td>
    </tr>
  </table>
</div>
<p><br>
Date: December 13, 2002</p>
<p align="center">4</p>
<hr>

</body>

</html>
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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)
December 12, 2002
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)
1
Item 9. Regulation FD Disclosure
Kimball International, Inc. Announces Incremental Cost Scaling Actions and
Second Quarter Outlook
Jasper, IN (December 12, 2002) - Kimball International, Inc. (NASDAQ: KBALB)
today announced it is taking incremental actions to scale its cost structure to
more closely align its operating capacities and capabilities with reduced demand
levels. The Company's Board of Directors approved these incremental actions
earlier this week. The Company also announced its earnings outlook for its
second quarter fiscal 2003 ending December 31, 2002. This information is
intended to comply with Kimball's obligation under the SEC's Regulation FD.
Incremental Cost Scaling Actions and Other Second Quarter Charges
Kimball International has been taking various cost reduction actions over the
past several quarters in response to the slowing global economy and its effects
on the Company's markets. Scaling efforts during the second quarter of fiscal
2003 intensified due to the prolonged nature of the slowdown in many of the
Company's markets and the resulting continuation of underutilized manufacturing
capacity within both of the Company's segments. The Furniture and Cabinets
segment has also been impacted by a continued increase in imported furniture
products into the United States. Combined, the effect of lower demand for
products due to the weakened economy and greater supply of lower-cost import
alternatives has caused excess manufacturing capacity in the Furniture and
Cabinets segment that will be strategically reduced to position Kimball for
improved long-term profitability. In the Electronic Contract Assemblies segment,
weakened demand levels in select markets is driving consolidation and/or exit of
certain manufacturing capacities and capabilities. Of the scaling actions
approved in the second quarter of fiscal 2003, most of the actions, and their
associated costs, will occur within the Furniture and Cabinets segment, with the
furniture components product line driving a significant share of the total
costs. Overall scaling actions will include the consolidation of capabilities
and operations, selling and/or exiting redundant facilities, aligning personnel
costs and adjusting assets associated with scaling actions to their current fair
values.
Over the past few quarters, the Company has disclosed the negative effect the
furniture components product line has had on Furniture and Cabinets segment
profitability, and also noted improvement in this product line was dependent
upon achieving higher volume levels and associated improvements in operating
efficiencies. During the fiscal 2003 second quarter, the Company reviewed recent
operating performance and updated market assessments indicating severe, and
possibly permanent, market reductions, and elected to shut down and exit its two
wood dimension manufacturing facilities. In light of the market reductions, the
Company also completed an asset impairment study for the wood veneer operations
concluding with an impairment totaling approximately $8.0 million which, in the
opinion of management, will align the carrying values of long-lived assets at
the Company's veneer operations with their fair values. This asset impairment
represents approximately 1% of total Kimball International assets.
The Company will early adopt and apply the provisions of Statement of Financial
Accounting Standards No. 146 to account for the exit and disposal activities
associated with the scaling actions. When complete, total costs to execute the
above scaling actions and veneer operations asset impairment are expected to
total approximately $30 million pre-tax and will be recorded partially in the
second quarter of fiscal 2003 and over the next several quarters as specific
actions are taken. Approximately 50% of the total costs will be non-cash. The
Company estimates that once these actions are completed, they will reduce the
Company's total cost structure by approximately $20 to $25 million pre-tax on an
annualized basis. A portion of these cost savings will be redeployed into
strategic initiatives designed to accelerate sales growth, and improve quality
and efficiencies.
The Company has previously internally announced many of the scaling actions
which include the exit of five facilities over the coming months, each of which
had been operating at a loss the last several quarters. These facilities
represent roughly 10% of total Kimball manufacturing facility square footage and
affect approximately 400 employees. Business in these facilities will, in part,
be transferred to other Kimball operations, resulting in the hiring of
additional employees at those facilities.
2
"As we approached the mid-point in our fiscal year and analyzed the pressures
we are experiencing on our operating margins, our leadership team reexamined our
cost structures including capacities and capabilities across all our markets,"
stated Kimball International Chairman and Chief Executive Officer, Douglas A.
Habig. "The result of this examination drove the incremental scaling actions
outlined above. These actions, coupled with a continued focus on our
discretionary cost structures, will enable Kimball to improve our operating
margins and overall competitiveness in our markets. However, demand levels in
many of our markets remain unstable, which requires us to continuously monitor
our capacities across our markets in both segments. While ensuring we have the
appropriate capacity to support our long-term growth objectives, we will take
further actions to scale our operations, if required. In the end, our focus
remains the same-positioning Kimball International for long-term growth in both
sales and earnings," stated Mr. Habig.
"It is important to recognize that Kimball and our employees have taken
responsible actions as they have been required. In spite of our employees'
commitment and best efforts, we were unable to overcome the effects of depressed
markets without these additional scaling actions. While the actions to scale our
capacity are critical to ensure the long-term success of Kimball International,
we regret the impact of these actions on the affected employees. Where
appropriate, we have proactively utilized a program to match skills of affected
employees with other openings within our Company. Those not offered other
opportunities will be provided with transition assistance," concluded Mr. Habig.
Second Quarter Outlook
Kimball International expects second quarter fiscal 2003 consolidated sales to
approximate the prior year second quarter level and projects its loss for the
current fiscal year second quarter, inclusive of the restructuring and other
charges outlined above, to be $(0.07) to $(0.12) per diluted share of Class B
common stock. Excluding the restructuring and other charges, the Company
projects its current year second quarter earnings will be $0.13 to $0.18 per
share. The Company's comparable earnings in the prior fiscal year second quarter
was $0.18 per Class B share.
The Company expects second quarter sales in the Furniture and Cabinets segment
to approximate the prior year while sales in the Electronic Contract Assemblies
segment are projected to exceed the prior year. The Company is projecting the
net income level in the Electronic Contract Assemblies segment, before
restructuring charges, to be above the prior year, as certain business units
experienced stronger volume levels and associated improvements in operating
efficiencies, which more than offset current margin pressures related to this
segment's customer and program diversification efforts. The net income level in
the Furniture and Cabinets segment, before restructuring and other charges, is
projected to fall well below the prior year. Most major product lines within the
Furniture and Cabinets segment are projecting lower net income levels, with the
greatest reduction projected in the contract manufacturing product line, related
in part to reduced manufacturing efficiencies and elevated cost structures
relative to current demand levels.
Second Quarter Conference Call / Webcast
Kimball International will conduct a conference call on Tuesday, January 28,
2003 following the release of its second quarter fiscal 2003 results. A webcast
of the conference call will take place simultaneously. Details of the conference
call and webcast will be released on or about January 21, 2003.
Forward-Looking Statements
Certain statements contained within this release are considered forward-looking
under the Private Securities Litigation Reform Act of 1995, and are subject to
risks and uncertainties including, but not limited to, actual costs to complete
the incremental scaling activities exceeding the estimates disclosed above,
significant volume reductions from key contract customers, loss of key customers
or suppliers within specific industries, availability or cost of raw materials,
and increased competitive pricing pressures reflecting excess industry
capacities. Additional cautionary statements regarding other risk factors that
could have an effect on the future performance of the Company are contained in
the Company's Form 10-K filing for the period ending June 30, 2002.
About Kimball International, Inc.
Kimball International, Inc. provides a vast array of products from its two
business segments: the Furniture and Cabinets segment and the Electronic
Contract Assemblies segment. The Furniture and Cabinets segment provides
furniture for the office, residential, lodging and healthcare industries, all
sold under the Company's family of brand names. Other products produced by
Kimball on a contract basis include store fixtures, television cabinets and
stands, residential furniture and furniture components. The Electronic Contract
Assemblies segment provides design engineering, manufacturing, packaging and
distribution of electronic assemblies, circuit boards, multi-chip modules and
semiconductor components on a contract basis to a variety of industries on a
global scale.
For more information about Kimball International, Inc., visit the Company's web
site on the Internet at www.kimball.com.
"We Build Success"
3
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/ Robert F. Schneider
ROBERT F. SCHNEIDER
Executive Vice President,
Chief Financial Officer
Treasurer
Date: December 13, 2002
4