JASPER, ID -- Kimball International's contract electronics assembly group extended its September quarter net loss to $1.1 million, down 345% from last year, on lower demand for medical and industrial products.

Net sales for EMS unit during the fiscal 2012 first quarter ended Sept. 30 were down 20% to $142.8 million.

Overall net sales for the company were $270.6 million, down 8% year-over-year, and the net loss was $146,000, down 132% from net income of $456,000 last year. Sequentially, consolidated net sales decreased 4% as an increase in net sales in the Furniture segment was more than offset by a decline in net sales in the EMS segment.

First-quarter gross profit, as a percent of net sales, improved 1.4 percentage points from the prior year first quarter due to a shift in sales mix towards the Furniture segment, which carries a higher gross profit percentage than the printed circuit board assembly segment. Operating cash outflow was $6.6 million compared to an outflow of $10.4 million in the first quarter of the prior year.

In a statement, chief executive and president James C. Thyen said, "The macro economic environment continues to reflect volatility and drive uncertainty as nations struggle with significant fiscal matters. The impact is reflected in all of our markets often disturbing business strategy, execution, and timing."

During the current quarter, Kimball will close its Wales facility and also complete the closing of its Fremont, CA, facility, moves that should lessen the burden of excess capacity costs.

The electronics manufacturing services unit saw lower net sales to customers in the medical and industrial control industries, in part due to a previously announced expiration of a contract with one medical customer late in fiscal year 2011, which accounted for a $38 million decline in net sales. Excluding that customer, first-quarter net sales to the medical industry increased by a double-digit percentage over the prior year. Sequentially, first-quarter net sales decreased 12%. Gross profit slipped 20 basis points.

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