Kimball International Announces Plans to Divest Land Holdings with Sale of 27,000 Acres in Kentucky and Indiana

Kimball International, Inc. (NASDAQ: KBALB) announced that it has decided to sell all of the Company’s undeveloped land holdings and timberlands. Currently, Kimball owns approximately 27,000 acres located in Indiana and Kentucky.

According to Jim Thyen, President and CEO of Kimball International, the decision to sell the property was carefully considered by Kimball’s Board of Directors and based on a number of business reasons.

“When the company operated its own lumber mills as part of its vertical integration model, the timberlands supported our manufacturing operations. But since we are no longer vertically integrated, our properties are now managed as a financial investment,” explained Thyen. “While our rock solid balance sheet and strong current cash position did not necessitate a sale to raise funds for operations, given the properties’ significant value, but relative illiquidity, Kimball share owners will be better served by converting this investment into cash at this time to fund the Company’s growth strategies in both its Furniture and Electronics businesses.”

Kimball first began acquiring properties in 1963 as a strategic reserve of its primary raw material: wood. Recognized for its long-term, sustainable forestry management practices, Kimball’s reputation for environmental sensitivity is well known among many agencies and organizations. The Company had a long history of working with State Departments of Natural Resources, Fish and Wildlife, and the Nature Preserves Commission, as well as with The Nature Conservancy, to set aside portions of its forest tracts for preservation, along with research projects coordinated with the University of Kentucky and Purdue University.

“We feel that it’s important for the people to know that we are proud of our excellent stewardship of these properties and our natural environment. Kimball’s policy of “managed use” and selective harvesting on our properties wisely utilized its commercial value, provided jobs and economic value directly to the country’s forest products industry, and at the same time provided for the preservation and long-term responsible management of this great renewable resource, its wildlife and natural habitat,” noted Mr. Thyen. “This applies not only to how we managed our forests, but also to how we manage our manufacturing operations. We continue to foster a stewardship philosophy in pollution prevention, waste reduction and recycling efforts.”

The sale will be conducted utilizing an auction approach, a process that makes land available to the broadest audience of potential buyers and to the varied interests of the purchasers, thus allowing for better use: farming, sustainable forest management, conservation and preservation, wildlife refuge and hunting, natural resource exploration and recovery.

Kimball has retained Woltz & Schrader Auctions to conduct the sale. Woltz & Schrader is the nation’s leading auctioneer of agricultural, recreational, development and other types of land throughout the United States and is uniquely qualified to access buyers on a national and international basis.

Dates for the auction of the properties have been set for November 6, 7 and 8, 2008. For detailed information, contact: Woltz & Schrader at 1-800-451-2709 or visit www.schraderauction.com.

About Kimball International:

Recognized with a reputation for excellence, Kimball International is committed to a high performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Kimball employees know they are part of a corporate culture that builds success for Customers while enabling employees to share in the Company’s success through personal, professional and financial growth.

Kimball International, Inc. (NASDAQ: KBALB) provides a variety of products from its two business segments: the Electronic Manufacturing Services segment and the Furniture segment. The Electronic Manufacturing Services segment provides engineering and manufacturing services which utilize common production and support capabilities to a variety of industries globally. The Furniture segment provides furniture for the office and hospitality industries, sold under the Company’s family of brand names.

To learn more about Kimball International, Inc., visit the Company’s website on the Internet at: www.kimball.com.

“Kimball International… We Build Success!”