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Share Name | Share Symbol | Market | Type |
---|---|---|---|
HNI Corporation | NYSE:HNI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
5.06 | 10.35% | 53.94 | 54.27 | 49.60 | 49.875 | 778,837 | 23:19:54 |
Strong second quarter EPS fueled by Workplace Furnishings profit transformation, Kimball International accretion, and Residential Building Products actions
HNI Corporation (NYSE: HNI) today announced net sales for the second quarter ended June 29, 2024 of $623.7 million and net income of $36.0 million.
Highlights
“Our members again demonstrated the organization’s ability to drive strong profit growth. We delivered non-GAAP EPS that was 44 percent higher than the prior-year period, reaching a record level for the second quarter.
“The combination of our profit transformation initiatives and the Kimball International acquisition continue to deliver strong earnings growth in the Workplace Furnishings segment. These efforts drove segment operating profit margin to a multi-decade high for the second quarter. Notably, these results have been achieved without support from the economic cycle.
“In Residential Building Products, profit dollars and margin were up year-over-year despite ongoing housing market weakness. Longer-term, we remain bullish about the prospects of the housing market, broadly, and our market-leading position, specifically.
“Overall, our strategies, our dedicated member-owners, the strength of our customer-first business model, and our proven ability to manage through all parts of the economic cycle are delivering excellent results,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
HNI Corporation – Second Quarter Financial Performance
(Dollars in millions, except per share data)
Three Months Ended
June 29, 2024
July 1, 2023
Change
GAAP
Net Sales
$623.7
$563.5
10.7%
Gross Profit %
41.9%
38.3%
360 bps
SG&A %
33.0%
37.4%
-440 bps
Restructuring and Impairment Charges %
0.3%
1.4%
-110 bps
Operating Income (Loss)
$53.4
($3.6)
NM
Operating Income (Loss) %
8.6%
(0.6%)
920 bps
Effective Tax Rate
21.7%
(41.8%)
Net Income (Loss) %
5.8%
(2.3%)
810 bps
EPS – diluted
$0.75
($0.30)
NM
Non-GAAP
Gross Profit %
42.0%
38.2%
380 bps
Operating Income
$55.9
$36.6
52.9%
Operating Income %
9.0%
6.5%
250 bps
Effective Tax Rate
21.7%
22.4%
EPS – diluted
$0.79
$0.55
43.6%
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 to GAAP reconciliations, which follow the financial statements in this release, for further information on the adjustments made to calculate non-GAAP performance.
HNI Corporation – Second Quarter Impact of Kimball International Acquisition
(Dollars in millions, except per share data)
Three Months Ended
June 29, 2024
July 1, 2023
GAAP
Legacy HNI
KII
Consolidated HNI
Legacy HNI
KII*
Consolidated HNI*
Net Sales
$484.1
$139.6
$623.7
$507.5
$56.0
$563.5
Gross Profit
$200.8
$60.5
$261.3
$192.7
$22.9
$215.5
Gross Profit %
41.5%
43.3%
41.9%
38.0%
40.8%
38.3%
Restructuring and Impairment
$2.0
$0.0
$2.0
$2.1
$6.0
$8.1
Operating Income (Loss)
$34.9
$18.6
$53.4
$8.9
($12.5)
($3.6)
Operating Income (Loss) %
7.2%
13.3%
8.6%
1.8%
(22.3%)
(0.6%)
EPS - diluted
$0.75
($0.30)
Non-GAAP
Gross Profit
$201.4
$60.5
$261.9
$192.4
$22.9
$215.3
Gross Profit %
41.6%
43.3%
42.0%
37.9%
40.8%
38.2%
Operating Income
$37.4
$18.6
$55.9
$32.7
$3.9
$36.6
Operating Income %
7.7%
13.3%
9.0%
6.5%
6.9%
6.5%
EPS - diluted
$0.64
$0.79
$0.55
$0.55
*2023 second quarter results reflect one month of KII and include Poppin.
HNI Corporation — Second Quarter Summary Comments
Workplace Furnishings – Second Quarter Financial Performance
(Dollars in millions)
Three Months Ended
June 29, 2024
July 1, 2023
Change
GAAP
Net Sales
$480.2
$413.0
16.3%
Operating Income
$54.3
$15.9
242%
Operating Income %
11.3%
3.8%
750 bps
Non-GAAP
Operating Income
$56.9
$34.0
67.2%
Operating Income %
11.9%
8.2%
370 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 to GAAP reconciliations, which follow the financial statements in this release, for further information on the adjustments made to calculate non-GAAP performance.
Workplace Furnishings – Second Quarter Impact of Kimball International Acquisition
(Dollars in millions)
Three Months Ended
June 29, 2024
July 1, 2023
GAAP
Legacy Workplace
KII
Total Workplace
Legacy Workplace
KII*
Total Workplace*
Net Sales
$
340.6
$
139.6
$
480.2
$
357.1
$
56.0
$
413.0
Operating Income (Loss)
$
35.8
$
18.6
$
54.3
$
28.4
($
12.5
)
$
15.9
Operating Income (Loss) %
10.5
%
13.3
%
11.3
%
8.0
%
(22.3
%)
3.8
%
Non-GAAP
Operating Income
$
38.3
$
18.6
$
56.9
$
30.2
$
3.9
$
34.0
Operating Income %
11.3
%
13.3
%
11.9
%
8.5
%
6.9
%
8.2
%
*2023 second quarter results reflect one month of KII and include Poppin.
Residential Building Products – Second Quarter Financial Performance
(Dollars in millions)
Three Months Ended
June 29, 2024
July 1, 2023
Change
GAAP
Net Sales
$143.5
$150.4
(4.6%)
Operating Income
$19.8
$15.6
26.9%
Operating Income %
13.8%
10.3%
350 bps
Non-GAAP
Operating Profit
$19.8
$16.8
17.5%
Operating Profit %
13.8%
11.2%
260 bps
Second Quarter Order Rates
Outlook
Concluding Remarks
“Our strategies continue to drive outstanding earnings growth, and our teams delivered excellent results in the first half of 2024. In Workplace Furnishings, our profit transformation initiatives pushed margins to multi-decade highs. Adding to our momentum, workplace demand is beginning to turn. We expect revenue growth in the second half of the year, which, when combined with our transformation efforts, will drive continued year-over-year profit growth and margin improvement.
“Looking beyond 2024, we have clear line-of-sight to $45 to $50 million of incremental benefit driven by the ongoing integration of Kimball International and the maturing efficiency of our new facility in Mexico.
“In Residential Building Products, we remain bullish about the intermediate and long-term dynamics of our business, and we expect revenue growth to return in the back half of 2024. We remain uniquely positioned to drive high-margin growth as housing stabilizes.
“Our core strategies are unchanged. We will continue to deliver margin expansion in Workplace Furnishings and drive long-term revenue growth in Residential Building Products,” concluded Mr. Lorenger.
Conference Call
HNI Corporation will host a conference call on Thursday, July 25, 2024 at 10:00 a.m. (Central) to discuss second 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 Thursday, July 25, 2024 at 1:00 p.m. (Central) through Thursday, August 1, 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) has been improving where people live, work, and gather for more than 75 years. 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 effects 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
Six Months Ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Net sales
$
623.7
$
563.5
$
1,211.7
$
1,042.5
Cost of sales
362.4
347.9
717.5
652.7
Gross profit
261.3
215.5
494.2
389.8
Selling and administrative expenses
205.9
211.0
409.0
378.9
Restructuring and impairment charges
2.0
8.1
2.1
8.1
Operating income (loss)
53.4
(3.6
)
83.1
2.9
Interest expense, net
7.4
5.5
15.1
8.2
Income (loss) before income taxes
46.0
(9.0
)
68.0
(5.3
)
Income taxes
10.0
3.8
14.3
6.0
Net income (loss)
36.0
(12.8
)
53.7
(11.3
)
Less: Net income (loss) attributable to non-controlling interest
(0.0
)
(0.0
)
0.0
(0.0
)
Net income (loss) attributable to HNI Corporation
$
36.0
$
(12.8
)
$
53.7
$
(11.3
)
Average number of common shares outstanding – basic
47.2
43.3
47.1
42.4
Net income (loss) attributable to HNI Corporation per common share – basic
$
0.76
$
(0.30
)
$
1.14
$
(0.27
)
Average number of common shares outstanding – diluted
48.2
43.3
48.2
42.4
Net income (loss) attributable to HNI Corporation per common share – diluted
$
0.75
$
(0.30
)
$
1.11
$
(0.27
)
Foreign currency translation adjustments
$
(0.1
)
$
(0.0
)
$
(0.1
)
$
0.0
Change in unrealized gains (losses) on marketable securities, net of tax
0.0
(0.1
)
(0.0
)
0.1
Change in derivative financial instruments, net of tax
0.3
—
1.7
(0.1
)
Other comprehensive income (loss), net of tax
0.3
(0.1
)
1.7
0.0
Comprehensive income (loss)
36.3
(12.9
)
55.4
(11.2
)
Less: Comprehensive income (loss) attributable to non-controlling interest
(0.0
)
(0.0
)
0.0
(0.0
)
Comprehensive income (loss) attributable to HNI Corporation
$
36.3
$
(12.9
)
$
55.4
$
(11.2
)
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
June 29, 2024
December 30, 2023
Assets
Current Assets:
Cash and cash equivalents
$
28.2
$
28.9
Short-term investments
5.3
5.6
Receivables
258.9
247.1
Allowance for doubtful accounts
(2.3
)
(3.5
)
Inventories, net
222.8
196.6
Prepaid expenses and other current assets
55.1
61.3
Total Current Assets
568.1
535.9
Property, Plant, and Equipment:
Land and land improvements
59.2
58.9
Buildings
413.4
406.8
Machinery and equipment
708.1
705.8
Construction in progress
23.3
22.2
1,204.1
1,193.7
Less accumulated depreciation
(656.0
)
(638.5
)
Net Property, Plant, and Equipment
548.1
555.2
Right-of-use Finance Leases
12.7
12.2
Right-of-use Operating Leases
111.5
115.2
Goodwill and Other Intangible Assets, net
638.7
651.9
Other Assets
61.8
58.4
Total Assets
$
1,940.8
$
1,928.8
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses
$
390.9
$
418.7
Current maturities of debt
50.7
7.5
Current maturities of other long-term obligations
2.2
7.3
Current lease obligations - Finance
4.8
4.4
Current lease obligations - Operating
25.7
25.9
Total Current Liabilities
474.2
463.7
Long-Term Debt
411.7
428.3
Long-Term Lease Obligations - Finance
7.9
7.9
Long-Term Lease Obligations - Operating
101.6
104.0
Other Long-Term Liabilities
79.6
78.0
Deferred Income Taxes
77.7
85.1
Total Liabilities
1,152.7
1,167.0
Equity:
HNI Corporation shareholders’ equity
787.8
761.4
Non-controlling interest
0.3
0.3
Total Equity
788.1
761.8
Total Liabilities and Equity
$
1,940.8
$
1,928.8
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Six Months Ended
June 29, 2024
July 1, 2023
Net Cash Flows From (To) Operating Activities:
Net income (loss)
$
53.7
$
(11.3
)
Non-cash items included in net income:
Depreciation and amortization
52.8
42.7
Other post-retirement and post-employment benefits
0.5
0.5
Stock-based compensation
11.7
7.6
Deferred income taxes
(7.6
)
(9.5
)
Other – net
2.3
2.3
Net increase (decrease) in cash from operating assets and liabilities
(61.2
)
4.8
Increase (decrease) in other liabilities
(5.1
)
2.7
Net cash flows from (to) operating activities
47.0
39.8
Net Cash Flows From (To) Investing Activities:
Capital expenditures
(27.3
)
(37.7
)
Acquisition spending, net of cash acquired
—
(369.8
)
Capitalized software
(1.4
)
(3.4
)
Purchase of investments
(1.9
)
(3.1
)
Sales or maturities of investments
3.4
3.0
Other – net
0.2
0.2
Net cash flows from (to) investing activities
(26.9
)
(410.8
)
Net Cash Flows From (To) Financing Activities:
Payments of debt
(202.4
)
(161.7
)
Proceeds from debt
228.6
572.3
Dividends paid
(32.1
)
(28.6
)
Purchase of HNI Corporation common stock
(13.4
)
—
Proceeds from sales of HNI Corporation common stock
1.2
1.2
Other – net
(2.7
)
(5.9
)
Net cash flows from (to) financing activities
(20.8
)
377.3
Net increase (decrease) in cash and cash equivalents
(0.7
)
6.3
Cash and cash equivalents at beginning of period
28.9
17.4
Cash and cash equivalents at end of period
$
28.2
$
23.8
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries
Reportable Segment Data
(In millions)
(Unaudited)
Three Months Ended
Six Months Ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Net Sales:
Workplace furnishings
$
480.2
$
413.0
$
920.0
$
712.7
Residential building products
143.5
150.4
291.7
329.8
Total
$
623.7
$
563.5
$
1,211.7
$
1,042.5
Income (Loss) Before Income Taxes:
Workplace furnishings
$
54.3
$
15.9
$
80.6
$
11.9
Residential building products
19.8
15.6
41.1
43.6
General corporate
(20.7
)
(35.0
)
(38.6
)
(52.7
)
Operating income (loss)
53.4
(3.6
)
83.1
2.9
Interest expense, net
7.4
5.5
15.1
8.2
Total
$
46.0
$
(9.0
)
$
68.0
$
(5.3
)
Depreciation and Amortization Expense:
Workplace furnishings
$
17.8
$
13.8
$
35.6
$
25.0
Residential building products
3.6
3.4
7.1
6.7
General corporate
5.0
5.4
10.1
11.0
Total
$
26.4
$
22.6
$
52.8
$
42.7
Capital Expenditures (including capitalized software):
Workplace furnishings
$
12.3
$
17.9
$
18.4
$
31.8
Residential building products
1.8
2.4
4.3
7.4
General corporate
3.4
0.9
5.9
2.0
Total
$
17.5
$
21.1
$
28.7
$
41.2
As of
June 29, 2024
As of
December 30, 2023
Identifiable Assets:
Workplace furnishings
$
1,321.8
$
1,311.4
Residential building products
476.3
467.1
General corporate
142.7
150.3
Total
$
1,940.8
$
1,928.8
Amounts may not sum due to rounding.
Non-GAAP Financial Measures
This earnings release includes certain non-GAAP financial measures as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of historical non-GAAP financial measures to the most directly comparable historical GAAP measures 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 similarly titled 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 net sales and non-GAAP gross profit, operating income, operating profit, income taxes, net income, and net income per diluted share (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 net sales information presented in this earnings release relate to the exclusion of net sales of KII in the current period, and Poppin in the prior-year 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 the Poppin business; current period costs associated with factory consolidation initiatives in the Workplace Furnishings segment; prior period cost reduction actions primarily related to the Residential Building Products segment; and prior period impairment charges in the Workplace Furnishings segment related to the planned sale of an office building and the disposal of information technology assets.
This earnings release refers to our expectations regarding non-GAAP EPS. The Corporation is unable to provide a reconciliation of this forward-looking non-GAAP measure to future EPS without unreasonable effort due to the uncertainty regarding, and to the potential variability of, many of the costs and expenses that could potentially impact EPS calculated on a GAAP basis. These items include, but are not limited to, impairments, financial impacts from changes in legal, regulatory, and tax requirements, charges related to actions taken to improve future profitability, and the impact of acquisitions and divestitures, if any. These items necessary to reconcile forward-looking non-GAAP EPS to EPS could be material and have a significant impact on the Corporation’s results computed in accordance with GAAP.
HNI Corporation Reconciliation
(Dollars in millions)
Three Months Ended
June 29, 2024
July 1, 2023
Workplace Furnishings
Residential Building Products
Total
Workplace Furnishings
Residential Building Products
Total
Net sales as reported (GAAP)
$
480.2
$
143.5
$
623.7
$
413.0
$
150.4
$
563.5
% change from PY
16.3
%
(4.6
%)
10.7
%
Less: Kimball International acquisition
80.5
—
80.5
—
—
—
Less: Poppin divestiture
—
—
—
3.4
—
3.4
Organic net sales (non-GAAP)
$
399.8
$
143.5
$
543.2
$
409.6
$
150.4
$
560.1
% change from PY
(2.4
%)
(4.6
%)
(3.0
%)
HNI Corporation Reconciliation
(Dollars in millions, except per share data)
Three Months Ended
June 29, 2024
Gross Profit
Operating Income
Tax
Net Income
EPS
As reported (GAAP)
$
261.3
$
53.4
$
10.0
$
36.0
$
0.75
% of net sales
41.9
%
8.6
%
5.8
%
Tax %
21.7
%
Restructuring charges
0.6
2.6
0.6
2.0
0.04
Acquisition costs
—
(0.1
)
(0.0
)
(0.0
)
(0.00
)
Results (non-GAAP)
$
261.9
$
55.9
$
10.5
$
38.0
$
0.79
% of net sales
42.0
%
9.0
%
6.1
%
Tax %
21.7
%
HNI Corporation Reconciliation
(Dollars in millions)
Three Months Ended
June 29, 2024
Legacy HNI
KII
Consolidated HNI
Gross Profit as reported (GAAP)
$
200.8
$
60.5
$
261.3
% of net sales
41.5
%
43.3
%
41.9
%
Restructuring charges recorded to cost of sales
0.6
—
0.6
Gross Profit (non-GAAP)
$
201.4
$
60.5
$
261.9
% of net sales
41.6
%
43.3
%
42.0
%
Operating income as reported (GAAP)
$
34.9
$
18.6
$
53.4
% of net sales
7.2
%
13.3
%
8.6
%
Restructuring charges
2.6
0.0
2.6
Acquisition costs
(0.1
)
0.0
(0.1
)
Operating income (non-GAAP)
$
37.4
$
18.6
$
55.9
% of net sales
7.7
%
13.3
%
9.0
%
HNI Corporation Reconciliation
(Dollars in millions, except per share data)
Three Months Ended
June 29, 2024
GAAP (as reported):
Legacy HNI
Consolidated HNI
Operating income
$
34.9
$
53.4
Interest expense, net
1.8
7.4
Income taxes (21.7%)
7.2
10.0
Net income
$
25.9
$
36.0
Average number of common shares outstanding – diluted
43.3
(1
)
48.2
EPS - Diluted
$
0.60
$
0.75
Non-GAAP:
Operating income
$
37.4
$
55.9
Interest expense, net
1.8
7.4
Income taxes (21.7%)
7.7
10.5
Net income
$
27.9
$
38.0
Average number of common shares outstanding – diluted
43.3
(1
)
48.2
EPS - Diluted
$
0.64
$
0.79
(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
July 1, 2023
Gross Profit
Operating Income (Loss)
Tax
Net Income (Loss)
EPS
As reported (GAAP)
$
215.5
$
(3.6
)
$
3.8
$
(12.8
)
$
(0.30
)
% of net sales
38.3
%
(0.6
%)
(2.3
%)
Tax %
(41.8
%)
Restructuring charges
(0.2
)
7.2
1.6
5.6
0.13
Impairment charges
—
0.6
0.1
0.5
0.01
Cost reduction initiative
—
1.1
0.2
0.8
0.02
Acquisition costs
—
31.3
1.2
30.1
0.69
Results (non-GAAP)
$
215.3
$
36.6
$
7.0
$
24.1
$
0.55
% of net sales
38.2
%
6.5
%
4.3
%
Tax %
22.4
%
HNI Corporation Reconciliation
(Dollars in millions)
Three Months Ended
July 1, 2023
Legacy HNI
KII
Consolidated HNI
Gross Profit as reported (GAAP)
$
192.7
$
22.9
$
215.5
% of net sales
38.0
%
40.8
%
38.3
%
Restructuring charges recorded to cost of sales
(0.2
)
—
(0.2
)
Gross Profit (non-GAAP)
$
192.4
$
22.9
$
215.3
% of net sales
37.9
%
40.8
%
38.2
%
Operating income (loss) as reported (GAAP)
$
8.9
$
(12.5
)
$
(3.6
)
% of net sales
1.8
%
(22.3
%)
(0.6
%)
Restructuring charges
1.2
6.0
7.2
Impairment charges
0.6
—
0.6
Cost reduction actions
1.1
—
1.1
Acquisition costs
20.9
10.3
31.3
Operating income (non-GAAP)
$
32.7
$
3.9
$
36.6
% of net sales
6.5
%
6.9
%
6.5
%
HNI Corporation Reconciliation
(Dollars in millions, except per share data)
Three Months Ended
July 1, 2023
GAAP (as reported):
Legacy HNI
Consolidated HNI
Operating income (loss)
$
8.9
$
(3.6
)
Interest expense, net
3.0
5.5
Income taxes (-41.8%)
(2.5
)
3.8
Net income (loss)
$
8.4
$
(12.8
)
Average number of common shares outstanding – diluted
42.2
(1
)
43.3
EPS - Diluted
$
0.20
$
(0.30
)
Non-GAAP:
Operating income
$
32.7
$
36.6
Interest expense, net
3.0
5.5
Income taxes (22.4%)
6.7
7.0
Net income
$
23.1
$
24.1
Average number of common shares outstanding – diluted
42.2
(1
)
43.9
EPS - Diluted
$
0.55
$
0.55
(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.
Workplace Furnishings Reconciliation
(Dollars in millions)
Three Months Ended
June 29, 2024
July 1, 2023
Legacy Workplace Furnishings
KII
Total Workplace Furnishings
Legacy Workplace Furnishings
KII
Total Workplace Furnishings
Operating income (loss) as reported (GAAP)
$
35.8
$
18.6
$
54.3
$
28.4
$
(12.5
)
$
15.9
% of net sales
10.5
%
13.3
%
11.3
%
8.0
%
(22.3
%)
3.8
%
Impairment charges
—
—
—
0.6
—
0.6
Restructuring charges
2.6
0.0
2.6
1.2
6.0
7.2
Acquisition costs
—
0.0
0.0
—
10.3
10.3
Operating income (non-GAAP)
$
38.3
$
18.6
$
56.9
$
30.2
$
3.9
$
34.0
% of net sales
11.3
%
13.3
%
11.9
%
8.5
%
6.9
%
8.2
%
Residential Building Products Reconciliation
(Dollars in millions)
Three Months Ended
June 29, 2024
July 1, 2023
Percent Change
Operating income as reported (GAAP)
$
19.8
$
15.6
26.9
%
% of net sales
13.8
%
10.3
%
Cost reduction actions
—
1.3
Operating income (non-GAAP)
$
19.8
$
16.8
17.5
%
% of net sales
13.8
%
11.2
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240723332376/en/
Marshall H. Bridges, Senior Vice President and Chief Financial Officer (563) 272-7400 Matthew S. McCall, Vice President, Investor Relations and Corporate Development (563) 275-8898
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