Strong second quarter EPS fueled by
Workplace Furnishings profit transformation, Kimball International
accretion, and Residential Building Products actions
- Delivered strong second quarter EPS, GAAP $0.75 / non-GAAP
$0.79 (+44% YoY).
- Expanded operating margins in Workplace Furnishings +750 bps
GAAP / +370 bps non-GAAP YoY.
- Net sales growth expected to return in both segments during the
second half of 2024.
- 2024 EPS expected to deliver strong growth and reach an
all-time high.
- Elevated earnings growth visibility extends beyond 2024 from
initiatives already underway.
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
- Strong earnings growth. Second quarter GAAP earnings per
share totaled $0.75. Non-GAAP EPS of $0.79 was a record for the
second quarter driven by continued operating margin expansion in
Workplace Furnishings, strong accretion from Kimball International
(“KII”), and profit growth in Residential Building Products.
Non-GAAP to GAAP reconciliations follow the financial statements in
this release.
- Expecting return of revenue growth. For the second half
of 2024, Workplace Furnishings net sales are expected to increase
at a low-single digit rate year-over-year. Residential Building
Products net sales are projected to grow at a mid-single digit pace
versus the same period in 2023. Year-over-year trends in both
segments are expected to improve from the third quarter to the
fourth quarter.
- Anticipating record earnings per share for 2024. Third
consecutive year of non-GAAP EPS growth to be driven by continued
profit transformation in Workplace Furnishings, benefits from KII,
and profit enhancement in Residential Building Products.
- Elevated visibility beyond 2024. KII synergies,
including savings associated with the recently announced
manufacturing network optimization initiative, and the ramp of the
Corporation’s new facility in Mexico are expected to yield total
net savings of $70 to $75 million. Approximately $45 to $50 million
of the benefit will impact 2025 and 2026.
- Strong balance sheet. Gross leverage was 1.5x, as
calculated in accordance with the Corporation’s debt agreements.
That ratio was down from 1.9x in the first quarter due to higher
profit and modestly lower debt. The Corporation also accelerated
stock repurchase activity in the quarter.
“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
- Consolidated net sales increased 10.7 percent from the
prior-year quarter to $623.7 million. On an organic basis, net
sales decreased 3.0 percent year-over-year. The acquisition of KII
increased year-over-year net sales by $80.5 million. The
divestiture of KII's Poppin business in the third quarter of 2023
decreased year-over-year sales by $3.4 million. A reconciliation of
organic net sales, a non-GAAP measure, to net sales follows the
financial statements in this release.
- Gross profit margin expanded 360 basis points compared
to the prior-year quarter. This increase was driven by improved net
productivity and the impact of the KII acquisition.
- Selling and administrative expenses as a percent of
sales decreased 440 basis points compared to the prior-year
quarter. The decrease was driven by $31.3 million of non-repeating
KII acquisition-related fees and expenses incurred in the
prior-year quarter and improved freight and distribution
productivity, partially offset by lower organic volume and elevated
healthcare costs.
- Restructuring and impairment charges of $2.0 million
were incurred in the current quarter primarily in connection with a
Workplace Furnishings factory consolidation initiative. $8.1
million of charges were incurred in the prior-year quarter mainly
related to the exit of the Poppin business.
- Net income per diluted share increased from the
prior-year quarter driven by the net impact of the KII acquisition,
including related transaction fees, and improved net productivity,
partially offset by lower organic volume and elevated healthcare
costs.
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.
- Workplace Furnishings net sales increased 16.3 percent
from the prior-year quarter to $480.2 million. Organic net sales
decreased 2.4 percent year-over-year. The impact of the KII
acquisition increased sales by $80.5 million over the prior-year
quarter. The divestiture of KII's Poppin business in the third
quarter of 2023 decreased year-over-year sales by $3.4
million.
- Workplace Furnishings operating margin of 11.3 percent
improved 750 basis points versus the prior-year quarter, driven by
improved net productivity, favorable impacts from KII and the
divestiture of Poppin, and $10.3 million of non-repeating KII
acquisition-related fees and expenses incurred in the prior-year
quarter. Second quarter non-GAAP operating profit margin was 11.9
percent, an improvement of 370 basis points year-over-year.
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
- Residential Building Products net sales decreased 4.6
percent from the prior-year quarter to $143.5 million primarily due
to housing market weakness with remodel/retrofit sales declining at
a higher rate than new construction.
- Residential Building Products operating profit margin of
13.8 percent increased 350 basis points year-over-year driven by
improved net productivity, favorable product mix, and lower core
SG&A, partially offset by lower sales volume.
Second Quarter Order Rates
- In the Workplace Furnishings segment, orders were
approximately flat compared to the prior-year period on an organic
basis. Orders from small-to-medium sized customers outpaced orders
from contract customers.
- Orders in the Residential Building Products segment
decreased four percent compared to the second quarter of 2023.
Changes in the Corporation’s pre-season, early order program
negatively impacted the second quarter order rate. Excluding the
early order program, normalized second quarter orders in the
segment grew four percent year-over-year, which the Corporation
believes is more indicative of demand conditions.
Outlook
- Demand environment. For the second half of 2024,
Workplace Furnishings net sales are expected to increase at a
low-single digit rate year-over-year. This Workplace outlook
represents a modest reduction from the outlook provided in the
previous earnings release and primarily reflects timing in the
contract space. Second-half Residential Building Products net sales
are projected to grow at a mid-single digit pace versus the same
period in 2023. Year-over-year trends in both segments are expected
to improve from the third quarter to the fourth quarter.
- 2024 outlook commentary. Full-year non-GAAP earnings per
share are expected to increase strongly from 2023 and reach record
levels. Continued improvement in the second half is expected to be
driven by margin expansion in both Workplace Furnishings and
Residential Building Products.
- Elevated earnings growth visibility beyond 2024. The
Corporation expects $70 to $75 million of savings associated with
KII synergies (approximately $50 million) and the ramp of its
Mexico facility ($20 to $25 million). Both initiatives are
currently underway and provide strong visibility to future earnings
growth with an estimated $45 to $50 million of the savings
benefiting the 2025 to 2026 period.
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
HNI (NYSE:HNI)
過去 株価チャート
から 6 2024 まで 7 2024
HNI (NYSE:HNI)
過去 株価チャート
から 7 2023 まで 7 2024
