Good morning, ladies and gentlemen. My name is Whitley, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Kimball International Fourth Quarter Fiscal 2014 Financial Results Conference Call. All lines have been placed on listen-only mode to prevent any background noise. After the Kimball's speakers' opening remarks, there will be a question-and-answer period where Kimball will respond to questions from analysts. (Operator Instructions) As with prior conference calls, today's call, August, 1, 2014, will be recorded and may contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Risk factors that may influence the outcome of forward-looking statements can be seen in the Kimball's Form 10-K and today's release. The panel for today's call is Jim Thyen, President and Chief Executive Officer of Kimball International; Bob Schneider, Executive Vice President and Chief Financial Officer, and Don Charron, Executive Vice President and President of Kimball Electronics Group. I would now like to turn today's call over to Jim Thyen. Mr. Thyen, you may begin.

Thank you, Whitley. And welcome everyone to our fourth quarter conference call. Our earnings release was issued this morning on the results of our fourth quarter ended June 30, 2014. We have posted a financial summary presentation on our website to accompany this conference call. It can be found on our Investor Relations website along the Webcast link. My overview comments will be followed by Bob's financial review. We will then open the call for questions. Don Charron, Executive Vice President and President of the Electronics Group, is joining us on the call today and will participate in the question-and-answer segment of the call. Approximately 13 months ago we began our fiscal year 2014 operations. In our Electronics segment, we were carrying positive momentum from a successful fiscal year 2013. In our Furniture segment, we were challenged from a marginal fiscal year 2013. I will overview both segments starting with Furniture. We finished fiscal year 2013 in Furniture with declining revenue and net income, vary above breakeven. At the end of fiscal year 2013, we were deep in the implementing corrective actions to address the performance problems. These corrective actions were very important to our turnaround and our Furniture team delivered quite well with very successful execution. We have positive net income in each quarter during fiscal year 2014, and each quarter's earnings shortened improvement over the prior year. The positive improvement in the Furniture segment generated over $10 million of net income for fiscal year 2014. Several factors are contributing to the Furniture segment. First, we made several key management changes and fill these key furniture positions with outstanding talent. We are very pleased with the progress made and the positive impact these management changes have had in our organization. Additionally, we increase investments in product development and marketing.…

Our fourth quarter consolidated net sales were $336.8 million, which was an increase of 6% from the fourth quarter of last year. Sales increased in both the EMS segment and the Furniture segment in the fourth quarter. Net sales in our EMS segment increased 3% compared to the fourth quarter of last year, and in at just shy of our previous quarterly sales record. We saw growth in three of the four vertical markets we focus on, including medical, automotive and industrial. Sales to customers in the automotive market increased in the fourth quarter despite a $10 million reduction in sales to JCI compared to last year. As Jim mentioned, sales to JCI started to ramp down in the fourth quarter of this fiscal year. Sales to customers in our smallest market which is public safety declined compared to last year. Sales in the Furniture segment increased 10% in the fourth quarter compared to last year, on increases of both hospitality and office furniture. The increase in hospitality sales was partially the result of a large project that shipped during the fourth quarter and accounted for $6.2 million in sales during the quarter. And we were encouraged to see a 30% growth in our office furniture sales to the federal government in the fourth quarter compared to last year which is a nice change. We also saw sales growth of office furniture to the State Government in education verticals during the quarter. Orders received in the Furniture segment during the fourth quarter increased 4% compared to last year due to an increase in orders of hospitality furniture. Our open order backlog as of June 30th was 2% higher than June 30th of last year and 14% higher than where we ended last quarter. Or consolidated gross margin improved 1.4 percentage…

(Operator Instructions) You have a question from the line of Todd Schwartzman with Sidoti & Company. Please proceed. Todd Schwartzman - Sidoti & Company: Hi, good morning guys.

Hi, Todd. Todd Schwartzman - Sidoti & Company: Bob, regarding the spin related expenses of $6 million total, I think you said, has there been anything incurred thus far other than Q4s $2 million, just want to get a sense of what remains?

We had some in Q3 and, let's see Todd if I can track that down for you that quickly. Let's see, we had pre-tax in Q3, $856,000 and in Q4 we had [$1.978 million] (ph) and that brings us to $3 million in fiscal 2014 and roughly another $3 million will happen in fiscal 2015. Todd Schwartzman - Sidoti & Company: Great, thanks. Now, just looking at consolidated SG&A cost going forward, where are the – couple of puts and takes in Q4 pertaining to the sale of the facility as well as the cost of the spin-off. But looking ahead in fiscal 2015, is that $57 million number pretty good quarterly run rate to use for modelling purposes?

Todd, really, really good question and very depended on a lot of things. Depending on profitability for incentive compensation cost and also Todd, very important as we get past the spin in terms of what the effects will be on each of the separate business units, which we are continuing to work on and we will go public with that in October. Not totally sure on your question whether the $57 million would be recurring, we do have seasonality in our business which impacts it quarter-to-quarter also. Todd Schwartzman - Sidoti & Company: Right. And I should preface it by saying that, I realize that you're on track, it's like if anything it looks the spin, maybe expected to occur slightly sooner than you thought. You can chime in on that if I'm wrong. But I'm just assuming status growth that the spin just does not occur until I see it happening. So, maybe not a fair way to look at it but it's just kind of assuming the business remains as is, as factoring at seasonality as well just wanted to get a sense of whether there is any deceleration in some of those compensation related cost going forward?

If we assume there is not a spin and for the annual total cost on SG&A very, very depended on profitability and the incentive compensation cost which is really the wildcard I think to that point. Todd, outside of that, there are not any very large adjustments, and again, that's all preface as you had indicated in your question, assuming that we did not have the spin. Todd Schwartzman - Sidoti & Company: Okay.

And Todd let me add to that, the quarter we just ended, the $57 million in SG&A you referred to, that does have a fair amount of investment that we made in new product introductions that is a little higher than we had in the past, which is something we'd like to see because that's very important for growth of the company into the future. Todd Schwartzman - Sidoti & Company: So, you do or do not take your foot of the pedal as far as fiscal 2015?

We keep that foot on the pedal for growth and new product introductions and marketing programs. And so the cost that you see in the quarter we just ended, were not going to let up in terms of reducing investments in new product introductions and marketing. Todd Schwartzman - Sidoti & Company: And I just wanted to, for my clarification, ask you to speak a little bit more Jim about the – what you're seeing in EMS in terms of backfill, the JCI business? I think I heard you say that it will take a couple of quarters beyond Q2 to see year-over-year organic growth in EMS segment revenue, is that correct? And also, what was the JCI top line contribution in the fourth quarter?

That is correct. We do see taking a couple of quarters out. We have very heavy activity in our business development. Our pipeline is robust and healthy and so we're confident about filling that hole. Donald, actually will elaborate a little bit.

Yeah, I think, as Jim said, we're confident that we've got the right activities in place to backfill for JCI, like timing of those new programs really the question mark here. When they'll start to ramp up and how much revenue we'll have in place to backfill the JCI business. The good news is that, as we predicted the JCI business is winding down as we previously predicted. So, we've got good visibility of the wind down part of shift, how fast the new programs will ramp up actually.

And Todd, as a reminder, in the 8-K we put forth back in December, we had estimated about $19 million in sales with JCI with respect to the business that's going end of life and exiting. We're pretty close to that. And we also had estimated getting the point to the ramp down, dropping down to roughly $5 million in sales for the second quarter of 2015. And our latest view is that, that's still is pretty much on target. So, the ramp down is phased, and it gives us some time to backfill appropriately. Todd Schwartzman - Sidoti & Company: So, the fourth quarter, sales of JCI did it approximate in the $19 million or is that something less than that?

It was a little bit shy of that but very close to it. And also Todd, recognize that, and I think we might have talked about this in the past, JCI will remain a customer. So, not all of the product is going end of life for exiting and some of the business was purchased by another company that has been and will continue to have Kimball make product for them. So, it was a sub-portion of the total JCI business that was going to be exiting. Just as a point of reference. Todd Schwartzman - Sidoti & Company: Any insight into new wins in the quarter on the EMS?

Just to back that, we continue to have some success on that front Todd. So, I don’t have any specifics to share with you but overall we continue to see positive activity in the pipeline, our win rate has been out of our targeted level, so, we’re pleased with that. And really now it's more about the timing of ramping up those new programs. Todd Schwartzman - Sidoti & Company: Just trying to, just kind to get my arms around the sales decline or flat to declining sales year-over-year organically in EMS. So, there is no misunderstanding. If there is a new program from an existing customer, do you include or exclude that in organic sales?

Well, if it's a new program with an existing customer, we would consider that to be part of our organic growth rate. Todd Schwartzman - Sidoti & Company: Okay. And in fiscal 2015, is there anything else, of size or substance to know that's reaching end of life?

No. Todd Schwartzman - Sidoti & Company: Okay. On furniture, where did the furniture, - where does furniture volume need to be? I know that the – you had previously spoken to, I think it was 8% op margin goal ultimately, is that correct?

So, you're at 3%, 3.1% in the latest quarter. Where does the volume in that business need to be for you, for that segment margin to hit say 5%, alternatively 6%, 7%, so on, up towards your goal. Do you have any stair-step, kind of back of the envelop expectations?

To get the 8% Todd, we need about $155 million to $160 million a quarter in sales. I haven't stair stepped it but that's roughly what the contributions margin that we have in our business that we need to get to the 8% goal. With our frame of reference that we just ended at $137 million last quarter. Todd Schwartzman - Sidoti & Company: Got it. In the office furniture brand, could you quantify maybe or speak to the sales increases or decreases as the case maybe that you're seeing by specific product category. So, again that's exclusive of Kimball hospitality?

As an overview, the whole furniture segment sales were up 10%. As, I think we'd indicated, biggest portion of that is hospitality and our big driver of that was a $6.2 million order that shipped in the quarter, which is important to know and understand because that size order doesn't repeat frequently. As you pull that out Todd and you look at what's the office effect, BIFMA in the quarter was up 1.3% and we were up little bit over 2x that roughly. So, our office business actually did quite well relative to the market in Q4. And hospitality did quite well in part due to a very large order that got shipped in the quarter. Todd Schwartzman - Sidoti & Company: So you are up about 2.5% on the office side and expect $6 million order was hospitality up more than that year-over-year?

Yes. Todd Schwartzman - Sidoti & Company: Okay.

I don't have a percent right in front of me but they were up even without that order. Todd Schwartzman - Sidoti & Company: With respect to this furniture R&D dollars, how much are you dedicating or will you dedicate going forward to the collaborative type products?

That's a huge amount of our new product introduction. Development is just on that collaborative open space type product. That said, we also have a lot of investment that's in CD. But the vast majority of our focus and what we did at NeoCon this year with respect to office furniture was really, it was like collaborative, the collaborative type product. We had Todd 12 new product introductions at NeoCon just with Kimball office. And we had about half of that at national. And very strong focus on new product introduction, marketing programs, it goes back to my point earlier that we have hit the gasp pedal in those areas and we feel we have to do that and we’ll continue to do that to significantly grow the furniture business. Todd Schwartzman - Sidoti & Company: Great. As I recollect going back couple of years ago, I think the hospitality - in terms of gross margins, the hospitality margin was about a third lower than the office furniture. Is that correct? What's the trend in there? Any update on that might be helpful, just to give us a sense of how to think about a consolidated segment margin.

We don't disclose the actual gross margin between those product lines Todd. We have had challenges in hospitality in the past as we disclosed in this past year, that go to what our margin ended up being. But in terms of the opportunity for gross margin, there's a lot of similarity between office and hospitality. That doesn't mean we're always getting that type of margin but in many cases we do, that are consistent among the two markets. Todd Schwartzman - Sidoti & Company: Great. Thank you. That's all I've got. Appreciate it.

Thank you.

(Operator Instructions)

Thank you, Whitley. And that brings us to the end of today's call. We appreciate your interest. We look forward to speaking with you on our next call. Thank you and have a great day.

At this time, listeners may simply hang-up to disconnect from call. Thank you and have a nice day.