HNI Corporation (NYSE: HNI) today announced sales for the first quarter ended March 30, 2024 of $588.0 million and net income of $17.7 million.
Highlights
"Our teams continue to build upon the strong progress we have made over the past two years. We delivered earnings that were nearly triple the prior-year period, with EPS and operating margin reaching first quarter levels not seen since 2007.
"Our strong results continued to be fueled by our Workplace Furnishings profit transformation plan and the inclusion of Kimball International, which combined to deliver the highest first quarter Workplace Furnishings profit margin since 2016.
"In Residential Building Products, our recent cost actions helped support profitability despite ongoing market weakness. Longer-term we remain bullish about the prospects of the housing market, broadly, and our market-leading position, specifically.
"Overall, we started the year on a very strong note. Our results reflect the dedication of our member-owners, the strength of our business model, and our ability to manage through all parts of the economic cycle," stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
HNI Corporation ? First Quarter Financial Performance |
||||||||||
(Dollars in millions, except per share data) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
March 30,
|
|
April 1,
|
|
Change |
|||||
GAAP |
|
|
|
|
|
|||||
Net Sales |
$ |
588.0 |
|
|
$ |
479.1 |
|
|
22.7 |
% |
Gross Profit % |
|
39.6 |
% |
|
|
36.4 |
% |
|
320 bps |
|
SG&A % |
|
34.5 |
% |
|
|
35.0 |
% |
|
-50 bps |
|
Operating Income |
$ |
29.7 |
|
|
$ |
6.4 |
|
|
362 |
% |
Operating Income % |
|
5.0 |
% |
|
|
1.3 |
% |
|
370 bps |
|
Effective Tax Rate |
|
19.6 |
% |
|
|
58.4 |
% |
|
|
|
Net Income % |
|
3.0 |
% |
|
|
0.3 |
% |
|
270 bps |
|
EPS ? diluted |
$ |
0.37 |
|
|
$ |
0.04 |
|
|
825 |
% |
|
|
|
|
|
|
|||||
Non-GAAP |
|
|
|
|
|
|||||
Gross Profit % |
|
39.6 |
% |
|
|
36.5 |
% |
|
310 bps |
|
Operating Income |
$ |
29.9 |
|
|
$ |
10.3 |
|
|
191 |
% |
Operating Income % |
|
5.1 |
% |
|
|
2.1 |
% |
|
300 bps |
|
Effective Tax Rate |
|
19.6 |
% |
|
|
30.5 |
% |
|
|
|
EPS ? diluted |
$ |
0.37 |
|
|
$ |
0.13 |
|
|
185 |
% |
The following table contains results for (1) the Corporation's legacy business, excluding the impacts of KII ("Legacy HNI") and (2) KII. Please refer to non-GAAP reconciliations, which follow the financial statements in this release, for further information on the adjustments made to calculate non-GAAP performance.
HNI Corporation ? First Quarter Impact of Kimball International Acquisition |
|||||||||||||||||||||
(Dollars in millions, except per share data) |
|||||||||||||||||||||
|
Three Months Ended |
|
|
|
|
||||||||||||||||
|
March 30,
|
|
April 1,
|
|
|
|
|
||||||||||||||
GAAP |
Legacy HNI |
|
KII |
|
Consolidated HNI |
|
Consolidated HNI |
|
Legacy Change |
|
Consolidated Change |
||||||||||
Net Sales |
$ |
440.5 |
|
|
$ |
147.5 |
|
|
$ |
588.0 |
|
|
$ |
479.1 |
|
|
(8.1 |
%) |
|
22.7 |
% |
Gross Profit |
$ |
175.8 |
|
|
$ |
57.0 |
|
|
$ |
232.8 |
|
|
$ |
174.3 |
|
|
0.9 |
% |
|
33.6 |
% |
Gross Profit % |
|
39.9 |
% |
|
|
38.7 |
% |
|
|
39.6 |
% |
|
|
36.4 |
% |
|
350 bps |
|
320 bps |
||
Operating Income |
$ |
16.1 |
|
|
$ |
13.6 |
|
|
$ |
29.7 |
|
|
$ |
6.4 |
|
|
150 |
% |
|
362 |
% |
Operating Income % |
|
3.6 |
% |
|
|
9.2 |
% |
|
|
5.0 |
% |
|
|
1.3 |
% |
|
230 bps |
|
370 bps |
||
EPS - diluted |
|
|
|
|
$ |
0.37 |
|
|
$ |
0.04 |
|
|
|
|
825 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross Profit |
$ |
175.9 |
|
|
$ |
57.0 |
|
|
$ |
233.0 |
|
|
$ |
174.8 |
|
|
0.7 |
% |
|
33.3 |
% |
Gross Profit % |
|
39.9 |
% |
|
|
38.7 |
% |
|
|
39.6 |
% |
|
|
36.5 |
% |
|
340 bps |
|
310 bps |
||
Operating Income |
$ |
16.2 |
|
|
$ |
13.7 |
|
|
$ |
29.9 |
|
|
$ |
10.3 |
|
|
57.7 |
% |
|
191 |
% |
Operating Income % |
|
3.7 |
% |
|
|
9.3 |
% |
|
|
5.1 |
% |
|
|
2.1 |
% |
|
160 bps |
|
300 bps |
||
EPS - diluted |
$ |
0.27 |
|
|
|
|
$ |
0.37 |
|
|
$ |
0.13 |
|
|
108 |
% |
|
185 |
% |
HNI Corporation ? First Quarter Summary Comments
Workplace Furnishings ? First Quarter Financial Performance |
||||||||||
(Dollars in millions) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
March 30,
|
|
April 1,
|
|
Change |
|||||
GAAP |
|
|
|
|
|
|||||
Net Sales |
$ |
439.8 |
|
|
$ |
299.6 |
|
|
46.8 |
% |
Operating Income (Loss) |
$ |
26.3 |
|
|
($ |
4.0 |
) |
|
759 |
% |
Operating Income (Loss) % |
|
6.0 |
% |
|
|
(1.3 |
%) |
|
730 bps |
|
|
|
|
|
|
|
|||||
Non-GAAP |
|
|
|
|
|
|||||
Operating Income (Loss) |
$ |
26.5 |
|
|
($ |
3.6 |
) |
|
841 |
% |
Operating Income (Loss) % |
|
6.0 |
% |
|
|
(1.2 |
%) |
|
720 bps |
The following table contains results for (1) the Corporation's legacy workplace furnishings business, excluding the impacts of KII ("Legacy Workplace") and (2) KII. Please refer to non-GAAP reconciliations, which follow the financial statements in this release for further information on the adjustments made to calculate non-GAAP performance.
Workplace Furnishings ? First Quarter Impact of Kimball International Acquisition |
|||||||||||||||||||||
(Dollars in millions) |
|||||||||||||||||||||
|
Three Months Ended |
|
|
|
|
||||||||||||||||
|
March 30,
|
|
April 1,
|
|
|
|
|
||||||||||||||
GAAP |
Legacy Workplace |
|
KII |
|
Total Workplace |
|
Total Workplace |
|
Legacy Change |
|
Total Change |
||||||||||
Net Sales |
$ |
292.3 |
|
|
$ |
147.5 |
|
|
$ |
439.8 |
|
|
$ |
299.6 |
|
|
(2.5 |
%) |
|
46.8 |
% |
Operating Income (Loss) |
$ |
12.7 |
|
|
$ |
13.6 |
|
|
$ |
26.3 |
|
|
($ |
4.0 |
) |
|
418 |
% |
|
759 |
% |
Operating Income (Loss) % |
|
4.3 |
% |
|
|
9.2 |
% |
|
|
6.0 |
% |
|
|
(1.3 |
%) |
|
560 bps |
|
730 bps |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income (Loss) |
$ |
12.8 |
|
|
$ |
13.7 |
|
|
$ |
26.5 |
|
|
($ |
3.6 |
) |
|
457 |
% |
|
841 |
% |
Operating Income (Loss) % |
|
4.4 |
% |
|
|
9.3 |
% |
|
|
6.0 |
% |
|
|
(1.2 |
%) |
|
560 bps |
|
720 bps |
Residential Building Products ? First Quarter Financial Performance |
||||||||||
(Dollars in millions) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
March 30,
|
|
April 1,
|
|
Change |
|||||
GAAP |
|
|
|
|
|
|||||
Net Sales |
$ |
148.2 |
|
|
$ |
179.4 |
|
|
(17.4 |
%) |
Operating Income |
$ |
21.4 |
|
|
$ |
28.1 |
|
|
(23.9 |
%) |
Operating Income % |
|
14.4 |
% |
|
|
15.6 |
% |
|
-120 bps |
First Quarter Order Rates
Outlook
Concluding Remarks
"We had an excellent start to 2024 as our strategies continue to deliver outstanding earnings growth. In Workplace Furnishings, our profit transformation initiatives maintained their momentum, pushing margins to multi-year highs. We expect modest revenue growth to translate into continued solid year-over-year profit and margin improvement in the segment during 2024.
"The integration of Kimball International continues to build momentum. KII is strengthening our business?both strategically and financially. KII better positions us to lead in the evolving workplace market and provides new opportunities for growth.
"In Residential Building Products, we remain bullish despite recent housing-driven weakness. We have adjusted our cost structure while continuing to invest in our growth strategies, leading brands, and operating platforms. Recent housing data and improving internal metrics support our increasing optimism about demand trends in the back half of 2024, and we remain uniquely positioned to drive high-margin growth as housing stabilizes.
"Our core strategies are unchanged. We are committed to continuing to expand margins in Workplace Furnishings and driving long-term revenue growth in Residential Building Products," concluded Mr. Lorenger.
Conference Call
HNI Corporation will host a conference call on Monday, April 29, 2024 at 10:00 a.m. (Central) to discuss first quarter fiscal year 2024 results. To participate, call 1-855-761-5600 ? conference ID number 7175411. A live webcast of the call will be available on HNI Corporation's website at https://investors.hnicorp.com/events-and-presentations. A replay of the webcast and call will be made available from Monday, April 29, 2024 at 1:00 p.m. (Central) through Monday, May 6, 2024, 10:59 p.m. (Central). To replay the webcast, go to the link above. To replay the call, dial 1-800-770-2030 ? Conference ID: 7175411.
About HNI Corporation
HNI Corporation (NYSE: HNI) is a manufacturer of workplace furnishings and residential building products, operating under two segments. The Workplace Furnishings segment is a leading global designer and provider of commercial furnishings, going to market under multiple unique brands. The Residential Building Products segment is the nation's leading manufacturer and marketer of hearth products, which include a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. More information can be found on the Corporation's website at www.hnicorp.com.
Forward-Looking Statements
This release contains "forward-looking" statements based on current expectations regarding future plans, events, outlook, objectives, financial performance, expectations for sales growth, and earnings per diluted share (GAAP and non-GAAP), including statements regarding future levels of demand, anticipated macroeconomic conditions, expected differences in seasonality and its results on the Corporation's results of operations, the anticipated benefits and cost synergies of the acquisition of Kimball International, and future levels of productivity. Forward-looking statements can be identified by words including "expect," "believe," "anticipate," "estimate," "may," "will," "would," "could," "confident", or other similar words, phrases, or expressions. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Corporation's actual future results and performance to differ materially from expected results. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results due to the risks and uncertainties described elsewhere in this release, including but not limited to: the Corporation's ultimate realization of the anticipated benefits of the acquisition of Kimball International; disruptions in the global supply chain; the effects of prolonged periods of inflation and rising interest rates; labor shortages; the levels of office furniture needs and housing starts; overall demand for the Corporation's products; general economic and market conditions in the United States and internationally; industry and competitive conditions; the consolidation and concentration of the Corporation's customers; the Corporation's reliance on its network of independent dealers; change in trade policy; changes in raw material, component, or commodity pricing; market acceptance and demand for the Corporation's new products; changing legal, regulatory, environmental, and healthcare conditions; the risks associated with international operations; the potential impact of product defects; the various restrictions on the Corporation's financing activities; an inability to protect the Corporation's intellectual property; cybersecurity threats, including those posed by potential ransomware attacks; impacts of tax legislation; and force majeure events outside the Corporation's control, including those that may result from the effects of climate change. A description of these risks and additional risks can be found in the Corporation's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q. The Corporation assumes no obligation to update, amend, or clarify forward-looking statements, except as required by applicable law.
HNI Corporation and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (In millions, except per share data) (Unaudited) |
|||||||
|
Three Months Ended |
||||||
March 30,
|
|
April 1,
|
|||||
Net sales |
$ |
588.0 |
|
|
$ |
479.1 |
|
Cost of sales |
|
355.1 |
|
|
|
304.8 |
|
Gross profit |
|
232.8 |
|
|
|
174.3 |
|
Selling and administrative expenses |
|
203.1 |
|
|
|
167.9 |
|
Restructuring charges |
|
0.1 |
|
|
|
? |
|
Operating income |
|
29.7 |
|
|
|
6.4 |
|
Interest expense, net |
|
7.6 |
|
|
|
2.7 |
|
Income before income taxes |
|
22.0 |
|
|
|
3.8 |
|
Income taxes |
|
4.3 |
|
|
|
2.2 |
|
Net income |
|
17.7 |
|
|
|
1.6 |
|
Less: Net income (loss) attributable to non-controlling interest |
|
0.0 |
|
|
|
(0.0 |
) |
Net income attributable to HNI Corporation |
$ |
17.7 |
|
|
$ |
1.6 |
|
|
|
|
|
||||
Average number of common shares outstanding ? basic |
|
47.1 |
|
|
|
41.5 |
|
Net income attributable to HNI Corporation per common share ? basic |
$ |
0.38 |
|
|
$ |
0.04 |
|
Average number of common shares outstanding ? diluted |
|
48.1 |
|
|
|
42.1 |
|
Net income attributable to HNI Corporation per common share ? diluted |
$ |
0.37 |
|
|
$ |
0.04 |
|
|
|
|
|
||||
Foreign currency translation adjustments |
$ |
0.0 |
|
|
$ |
0.1 |
|
Change in unrealized gains (losses) on marketable securities, net of tax |
|
(0.0 |
) |
|
|
0.2 |
|
Change in derivative financial instruments, net of tax |
|
1.4 |
|
|
|
(0.1 |
) |
Other comprehensive income (loss), net of tax |
|
1.4 |
|
|
|
0.1 |
|
Comprehensive income |
|
19.0 |
|
|
|
1.7 |
|
Less: Comprehensive income (loss) attributable to non-controlling interest |
|
0.0 |
|
|
|
(0.0 |
) |
Comprehensive income attributable to HNI Corporation |
$ |
19.0 |
|
|
$ |
1.7 |
|
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In millions) (Unaudited) |
|||||||
|
March 30,
|
|
December 30,
|
||||
Assets |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
27.0 |
|
|
$ |
28.9 |
|
Short-term investments |
|
5.5 |
|
|
|
5.6 |
|
Receivables |
|
231.9 |
|
|
|
247.1 |
|
Allowance for doubtful accounts |
|
(2.8 |
) |
|
|
(3.5 |
) |
Inventories, net |
|
212.1 |
|
|
|
196.6 |
|
Prepaid expenses and other current assets |
|
53.5 |
|
|
|
61.3 |
|
Total Current Assets |
|
527.2 |
|
|
|
535.9 |
|
Property, Plant, and Equipment: |
|
|
|
||||
Land and land improvements |
|
59.0 |
|
|
|
58.9 |
|
Buildings |
|
409.6 |
|
|
|
406.8 |
|
Machinery and equipment |
|
714.5 |
|
|
|
705.8 |
|
Construction in progress |
|
21.8 |
|
|
|
22.2 |
|
|
|
1,204.8 |
|
|
|
1,193.7 |
|
Less accumulated depreciation |
|
(652.6 |
) |
|
|
(638.5 |
) |
Net Property, Plant, and Equipment |
|
552.2 |
|
|
|
555.2 |
|
Right-of-use Finance Leases |
|
11.7 |
|
|
|
12.2 |
|
Right-of-use Operating Leases |
|
113.8 |
|
|
|
115.2 |
|
Goodwill and Other Intangible Assets, net |
|
645.9 |
|
|
|
651.9 |
|
Other Assets |
|
61.8 |
|
|
|
58.4 |
|
Total Assets |
$ |
1,912.6 |
|
|
$ |
1,928.8 |
|
Liabilities and Equity |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
363.7 |
|
|
$ |
418.7 |
|
Current maturities of debt |
|
12.8 |
|
|
|
7.5 |
|
Current maturities of other long-term obligations |
|
2.0 |
|
|
|
7.3 |
|
Current lease obligations - Finance |
|
4.4 |
|
|
|
4.4 |
|
Current lease obligations - Operating |
|
24.9 |
|
|
|
25.9 |
|
Total Current Liabilities |
|
407.7 |
|
|
|
463.7 |
|
Long-Term Debt |
|
460.2 |
|
|
|
428.3 |
|
Long-Term Lease Obligations - Finance |
|
7.3 |
|
|
|
7.9 |
|
Long-Term Lease Obligations - Operating |
|
103.7 |
|
|
|
104.0 |
|
Other Long-Term Liabilities |
|
78.8 |
|
|
|
78.0 |
|
Deferred Income Taxes |
|
83.0 |
|
|
|
85.1 |
|
Total Liabilities |
|
1,140.8 |
|
|
|
1,167.0 |
|
Equity: |
|
|
|
||||
HNI Corporation shareholders' equity |
|
771.5 |
|
|
|
761.4 |
|
Non-controlling interest |
|
0.3 |
|
|
|
0.3 |
|
Total Equity |
|
771.8 |
|
|
|
761.8 |
|
Total Liabilities and Equity |
$ |
1,912.6 |
|
|
$ |
1,928.8 |
|
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (In millions) (Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
March 30,
|
|
April 1,
|
||||
Net Cash Flows From (To) Operating Activities: |
|
|
|
||||
Net income |
$ |
17.7 |
|
|
$ |
1.6 |
|
Non-cash items included in net income: |
|
|
|
||||
Depreciation and amortization |
|
26.4 |
|
|
|
20.1 |
|
Other post-retirement and post-employment benefits |
|
0.3 |
|
|
|
0.3 |
|
Stock-based compensation |
|
7.7 |
|
|
|
4.5 |
|
Deferred income taxes |
|
(2.1 |
) |
|
|
(0.6 |
) |
Other ? net |
|
0.6 |
|
|
|
0.6 |
|
Net decrease in cash from operating assets and liabilities |
|
(47.6 |
) |
|
|
(10.5 |
) |
Increase (decrease) in other liabilities |
|
(7.2 |
) |
|
|
1.4 |
|
Net cash flows from (to) operating activities |
|
(4.3 |
) |
|
|
17.3 |
|
|
|
|
|
||||
Net Cash Flows From (To) Investing Activities: |
|
|
|
||||
Capital expenditures |
|
(10.7 |
) |
|
|
(19.9 |
) |
Capitalized software |
|
(0.5 |
) |
|
|
(0.2 |
) |
Purchase of investments |
|
(0.6 |
) |
|
|
(1.6 |
) |
Sales or maturities of investments |
|
1.2 |
|
|
|
1.5 |
|
Other ? net |
|
0.1 |
|
|
|
0.1 |
|
Net cash flows from (to) investing activities |
|
(10.6 |
) |
|
|
(20.0 |
) |
|
|
|
|
||||
Net Cash Flows From (To) Financing Activities: |
|
|
|
||||
Payments of debt |
|
(81.5 |
) |
|
|
(77.8 |
) |
Proceeds from debt |
|
118.6 |
|
|
|
97.1 |
|
Dividends paid |
|
(16.6 |
) |
|
|
(13.7 |
) |
Purchase of HNI Corporation common stock |
|
(2.6 |
) |
|
|
? |
|
Proceeds from sales of HNI Corporation common stock |
|
0.6 |
|
|
|
0.6 |
|
Other ? net |
|
(5.6 |
) |
|
|
(4.0 |
) |
Net cash flows from (to) financing activities |
|
12.9 |
|
|
|
2.1 |
|
|
|
|
|
||||
Net decrease in cash and cash equivalents |
|
(2.0 |
) |
|
|
(0.6 |
) |
Cash and cash equivalents at beginning of period |
|
28.9 |
|
|
|
17.4 |
|
Cash and cash equivalents at end of period |
$ |
27.0 |
|
|
$ |
16.8 |
|
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries Reportable Segment Data (In millions) (Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
March 30,
|
|
April 1,
|
||||
Net Sales: |
|
|
|
||||
Workplace furnishings |
$ |
439.8 |
|
|
$ |
299.6 |
|
Residential building products |
|
148.2 |
|
|
|
179.4 |
|
Total |
$ |
588.0 |
|
|
$ |
479.1 |
|
|
|
|
|
||||
Income (Loss) Before Income Taxes: |
|
|
|
||||
Workplace furnishings |
$ |
26.3 |
|
|
$ |
(4.0 |
) |
Residential building products |
|
21.4 |
|
|
|
28.1 |
|
General corporate |
|
(18.0 |
) |
|
|
(17.7 |
) |
Operating income |
|
29.7 |
|
|
|
6.4 |
|
Interest expense, net |
|
7.6 |
|
|
|
2.7 |
|
Total |
$ |
22.0 |
|
|
$ |
3.8 |
|
|
|
|
|
||||
Depreciation and Amortization Expense: |
|
|
|
||||
Workplace furnishings |
$ |
17.8 |
|
|
$ |
11.2 |
|
Residential building products |
|
3.5 |
|
|
|
3.3 |
|
General corporate |
|
5.1 |
|
|
|
5.7 |
|
Total |
$ |
26.4 |
|
|
$ |
20.1 |
|
|
|
|
|
||||
Capital Expenditures (including capitalized software): |
|
|
|
||||
Workplace furnishings |
$ |
6.2 |
|
|
$ |
13.9 |
|
Residential building products |
|
2.5 |
|
|
|
5.0 |
|
General corporate |
|
2.5 |
|
|
|
1.1 |
|
Total |
$ |
11.2 |
|
|
$ |
20.0 |
|
|
|
|
|
||||
|
As of March 30, 2024 |
|
As of December 30, 2023 |
||||
Identifiable Assets: |
|
|
|
||||
Workplace furnishings |
$ |
1,302.9 |
|
|
$ |
1,311.4 |
|
Residential building products |
|
471.3 |
|
|
|
467.1 |
|
General corporate |
|
138.3 |
|
|
|
150.3 |
|
Total |
$ |
1,912.6 |
|
|
$ |
1,928.8 |
|
Amounts may not sum due to rounding.
Non-GAAP Financial Measures
This earnings release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to HNI's financial statements as prepared in accordance with GAAP are included below and throughout this earnings release. This information gives investors additional insights into HNI's financial performance and operations. While HNI's management believes the non-GAAP financial measures are useful in evaluating HNI's operations, this information should be considered supplemental and not in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, this earnings release contains the following non-GAAP financial measures: organic sales, gross profit, operating income, operating profit, income taxes, net income, and net income per diluted share (i.e., EPS). These measures are adjusted from the comparable GAAP measures to exclude the impacts of the selected items as summarized in the tables below. Generally, non-GAAP EPS is calculated using HNI's overall effective tax rate for the period, as this rate is reflective of the tax applicable to most non-GAAP adjustments. In the prior-year quarter, the effective tax rate used to calculate non-GAAP EPS differs from the GAAP effective tax rate due to the impact of nondeductible charges associated with the acquisition of Kimball International. Additionally, non-GAAP EPS for the Legacy HNI business is calculated by excluding the impact of new issuances of HNI common stock and HNI restricted stock units made in connection with the acquisition of Kimball International.
The sales adjustments to arrive at the non-GAAP organic sales information presented in this earnings release relate to the exclusion of net sales of KII in the current period. The transactions excluded for purposes of other non-GAAP financial information included in this earnings release include: professional fees and other costs related to the acquisition of Kimball International; restructuring charges recorded to cost of sales comprised of inventory valuation adjustments and relocation and new facility setup costs in the Workplace Furnishings segment; costs associated with the exit of Poppin, and prior period transactions related to company-wide cost reduction initiatives.
HNI Corporation Reconciliation |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||
|
Three Months Ended |
|||||||||||||||
|
March 30, 2024 |
|
April 1, 2023 |
|||||||||||||
|
Workplace Furnishings |
Residential Building Products |
Total |
|
Workplace Furnishings |
Residential Building Products |
Total |
|||||||||
Sales as reported (GAAP) |
$ |
439.8 |
|
$ |
148.2 |
|
$ |
588.0 |
|
|
$ |
299.6 |
$ |
179.4 |
$ |
479.1 |
% change from PY |
|
46.8 |
% |
|
(17.4 |
%) |
|
22.7 |
% |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||||||
Less: Kimball International acquisition |
|
147.5 |
|
|
? |
|
|
147.5 |
|
|
|
? |
|
? |
|
? |
|
|
|
|
|
|
|
|
|||||||||
Organic Sales (non-GAAP) |
$ |
292.3 |
|
$ |
148.2 |
|
$ |
440.5 |
|
|
$ |
299.6 |
$ |
179.4 |
$ |
479.1 |
% change from PY |
|
(2.5 |
%) |
|
(17.4 |
%) |
|
(8.1 |
%) |
|
|
|
|
HNI Corporation Reconciliation |
||||||||||||||||||
(Dollars in millions, except per share data) |
||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||
|
March 30, 2024 |
|||||||||||||||||
|
Gross Profit |
|
Operating Income |
|
Tax |
|
Net Income |
|
EPS |
|||||||||
As reported (GAAP) |
$ |
232.8 |
|
|
$ |
29.7 |
|
|
$ |
4.3 |
|
|
$ |
17.7 |
|
|
$ |
0.37 |
% of net sales |
|
39.6 |
% |
|
|
5.0 |
% |
|
|
|
|
3.0 |
% |
|
|
|||
Tax % |
|
|
|
|
|
19.6 |
% |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring charges |
|
0.1 |
|
|
|
0.2 |
|
|
|
0.0 |
|
|
|
0.2 |
|
|
|
0.00 |
Acquisition costs |
|
? |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Results (non-GAAP) |
$ |
233.0 |
|
|
$ |
29.9 |
|
|
$ |
4.4 |
|
|
$ |
17.9 |
|
|
$ |
0.37 |
% of net sales |
|
39.6 |
% |
|
|
5.1 |
% |
|
|
|
|
3.0 |
% |
|
|
|||
Tax % |
|
|
|
|
|
19.6 |
% |
|
|
|
|
HNI Corporation Reconciliation |
|||||||||||
(Dollars in millions) |
|||||||||||
|
Three Months Ended |
||||||||||
|
March 30, 2024 |
||||||||||
|
Legacy HNI |
|
KII |
|
Consolidated HNI |
||||||
Gross Profit as reported (GAAP) |
$ |
175.8 |
|
|
$ |
57.0 |
|
|
$ |
232.8 |
|
% of net sales |
|
39.9 |
% |
|
|
38.7 |
% |
|
|
39.6 |
% |
|
|
|
|
|
|
||||||
Restructuring charges recorded to cost of sales |
|
0.1 |
|
|
|
? |
|
|
|
0.1 |
|
Gross Profit (non-GAAP) |
$ |
175.9 |
|
|
$ |
57.0 |
|
|
$ |
233.0 |
|
% of net sales |
|
39.9 |
% |
|
|
38.7 |
% |
|
|
39.6 |
% |
|
|
|
|
|
|
||||||
Operating income as reported (GAAP) |
$ |
16.1 |
|
|
$ |
13.6 |
|
|
$ |
29.7 |
|
% of net sales |
|
3.6 |
% |
|
|
9.2 |
% |
|
|
5.0 |
% |
|
|
|
|
|
|
||||||
Restructuring charges |
|
0.1 |
|
|
|
0.1 |
|
|
|
0.2 |
|
Acquisition costs |
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
Operating income (non-GAAP) |
$ |
16.2 |
|
|
$ |
13.7 |
|
|
$ |
29.9 |
|
% of net sales |
|
3.7 |
% |
|
|
9.3 |
% |
|
|
5.1 |
% |
HNI Corporation Reconciliation |
||||||
(Dollars in millions, except per share data) |
||||||
|
Three Months Ended |
|||||
|
March 30, 2024 |
|||||
GAAP (as reported): |
Legacy HNI |
|
Consolidated HNI |
|||
Operating income |
$ |
16.1 |
|
|
$ |
29.7 |
Interest expense, net |
|
1.8 |
|
|
|
7.6 |
Income taxes (19.6%) |
|
2.8 |
|
|
|
4.3 |
Net income |
$ |
11.5 |
|
|
$ |
17.7 |
Average number of common shares outstanding ? diluted |
|
43.3 |
(1) |
|
|
48.1 |
EPS - Diluted |
$ |
0.27 |
|
|
$ |
0.37 |
|
|
|
|
|
||
Non-GAAP: |
|
|
|
|
||
Operating income |
$ |
16.2 |
|
|
$ |
29.9 |
Interest expense, net |
|
1.8 |
|
|
|
7.6 |
Income taxes (19.6%) |
|
2.8 |
|
|
|
4.4 |
Net income |
$ |
11.6 |
|
|
$ |
17.9 |
Average number of common shares outstanding ? diluted |
|
43.3 |
(1) |
|
|
48.1 |
EPS - Diluted |
$ |
0.27 |
|
|
$ |
0.37 |
(1) The average number of common shares outstanding ? diluted for the Legacy HNI business is calculated by excluding the average impacts of new issuances of HNI common stock (4.7 million) and dilutive HNI restricted stock units (0.1 million) as a result of the acquisition of Kimball International.
HNI Corporation Reconciliation |
|||||||||||||||||||
(Dollars in millions, except per share data) |
|||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||
|
April 1, 2023 |
||||||||||||||||||
|
Gross Profit |
|
Operating Income |
|
Tax |
|
Net Income |
|
EPS |
||||||||||
As reported (GAAP) |
$ |
174.3 |
|
|
$ |
6.4 |
|
|
$ |
2.2 |
|
|
$ |
1.6 |
|
|
$ |
0.04 |
|
% of net sales |
|
36.4 |
% |
|
|
1.3 |
% |
|
|
|
|
0.3 |
% |
|
|
||||
Tax % |
|
|
|
|
|
58.4 |
% |
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Restructuring charges |
|
0.5 |
|
|
|
0.5 |
|
|
|
0.1 |
|
|
|
0.3 |
|
|
|
0.01 |
|
Cost reduction initiative |
|
? |
|
|
|
(0.1 |
) |
|
|
(0.0 |
) |
|
|
(0.0 |
) |
|
|
(0.00 |
) |
Acquisition costs |
|
? |
|
|
|
3.4 |
|
|
|
? |
|
|
|
3.4 |
|
|
|
0.08 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Results (non-GAAP) |
$ |
174.8 |
|
|
$ |
10.3 |
|
|
$ |
2.3 |
|
|
$ |
5.3 |
|
|
$ |
0.13 |
|
% of net sales |
|
36.5 |
% |
|
|
2.1 |
% |
|
|
|
|
1.1 |
% |
|
|
||||
Tax % |
|
|
|
|
|
30.5 |
% |
|
|
|
|
Workplace Furnishings Reconciliation |
||||||||||||||||||
(Dollars in millions) |
||||||||||||||||||
|
Three Months Ended |
|
|
|||||||||||||||
|
March 30,
|
|
April 1,
|
|
|
|||||||||||||
|
Legacy Workplace Furnishings |
|
KII |
|
Total Workplace Furnishings |
|
Total Workplace Furnishings |
|
Total Change |
|||||||||
Operating income (loss) as reported (GAAP) |
$ |
12.7 |
|
|
$ |
13.6 |
|
|
$ |
26.3 |
|
|
$ |
(4.0 |
) |
|
759 |
% |
% of net sales |
|
4.3 |
% |
|
|
9.2 |
% |
|
|
6.0 |
% |
|
|
(1.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring charges |
|
0.1 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.5 |
|
|
|
|
Acquisition costs |
|
? |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
Cost reduction initiative |
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) (non-GAAP) |
$ |
12.8 |
|
|
$ |
13.7 |
|
|
$ |
26.5 |
|
|
$ |
(3.6 |
) |
|
841 |
% |
% of net sales |
|
4.4 |
% |
|
|
9.3 |
% |
|
|
6.0 |
% |
|
|
(1.2 |
%) |
|
|
These press releases may also interest you
|