Kimball Receivables Concerns

Kimball International, Inc. (NASDAQ: KBALB) today reported net sales of $268.9 million and income from continuing operations of $4.1 million. As business softens they are experiencing difficulties in collecting receivables and some write-offs are occurring. Then the explanation stops. No further discussion about future losses or concerns about doubtful accounts. Read this quote from James C. Thyen, Chief Executive Officer and President,

“We are keenly focused on a daily basis on prudent management of our trade receivables and reducing our inventory levels. As expected, we have seen some aging of our accounts receivable which necessitated an increase in our bad debt reserve during the quarter. As the length and breadth of the recession remains difficult to predict, visibility into the future is very limited and will continue to present significant operating challenges in the near–term. Our strong balance sheet and the timely generation of cash by our timberland sales position us well to navigate through this global economic crisis.”

Essentially this guy is admitting that he cannot see but he got away with it this time because he scored some extraordinary gains by selling timberland positions. What about next time? The receivables book is suspect.