Strong earnings growth driven by Workplace
Furnishings profit transformation
- EPS of $0.37 increased 825% on a GAAP basis and 185% on a
non-GAAP basis YoY.
- Workplace Furnishings operating margin expanded 730 bps GAAP
and 720 bps non-GAAP YoY.
- Full-year and second quarter 2024 non-GAAP EPS expected to
strongly increase YoY.
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
- Excellent earnings growth. First quarter earnings per
share of $0.37 was up considerably on both a GAAP and non-GAAP
basis versus the prior year despite an 8.1 percent year-over-year
organic revenue decline, which was primarily driven by continued
housing market softness. GAAP to non-GAAP reconciliations follow
the financial statements in this release.
- Profit transformation actions continue to drive improvement
in Workplace Furnishings. First quarter non-GAAP operating
profit margin for Workplace Furnishings, when excluding impacts
from the Kimball International acquisition, expanded 560 basis
points year-over-year.
- Solid accretion from Kimball International. Kimball
International (“KII”) generated an operating profit margin of 9.3
percent and added an estimated $0.10 to non-GAAP EPS.
- Residential Building Products posts solid profit despite a
soft housing market. Segment operating profit was $21.4 million
with an operating margin of 14.4 percent. Recent cost actions
continued to support profitability. Growth and margin expansion are
expected to return as the year progresses.
- Strong balance sheet. Gross leverage was 1.9x, as
calculated in accordance with the Corporation’s debt agreements.
That ratio was unchanged from the fourth quarter of 2023 as higher
profit offset a modest seasonal increase in debt. The Corporation
also accelerated stock repurchase activity in the quarter.
- Projecting strong 2024 earnings growth to be driven by
continued profit transformation in Workplace Furnishings and
benefits from KII. In 2024, Workplace Furnishings organic revenue
is expected to grow at a low single-digit pace, and Residential
Building Products revenue is projected to be flat-to-slightly
down.
- Expecting solid increase in second quarter earnings.
Momentum with Workplace Furnishings profit transformation
initiatives and accretion from KII are anticipated to drive solid
year-over-year non-GAAP EPS growth. Compared to the prior year,
organic Workplace Furnishings revenue is expected to be down
slightly, while Residential Building Products revenue is projected
to decline at a low-single digit rate.
“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, 2024
April 1, 2023
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, 2024
April 1, 2023
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
- Consolidated net sales increased 22.7 percent from the
prior-year quarter to $588.0 million. On an organic basis, sales
decreased 8.1 percent year-over-year. The acquisition of KII
increased year-over-year net sales by $147.5 million. A
reconciliation of organic sales, a non-GAAP measure, follows the
financial statements in this release.
- Gross profit margin expanded 320 basis points compared
to the prior-year quarter. This increase was driven by favorable
price-cost, improved net productivity, and the impact of the KII
acquisition, partially offset by lower organic volume.
- Selling and administrative expenses as a percent of
sales decreased 50 basis points compared to the prior-year quarter.
The decrease was driven by $3.4 million of non-repeating KII
acquisition-related fees and expenses incurred in the prior-year
quarter, dilution from price realization, lower legacy core
SG&A, and KII acquisition-related administrative cost
synergies, partially offset by lower organic volume and higher
variable compensation.
- GAAP and non-GAAP net income per diluted share was $0.37
compared to $0.04 and $0.13, respectively, in the prior-year
quarter. The increase was driven by favorable price-cost, improved
net productivity, the net impact of the KII acquisition, lower core
SG&A, and a lower effective tax rate, partially offset by lower
organic volume and higher variable compensation.
Workplace Furnishings – First
Quarter Financial Performance
(Dollars in millions)
Three Months Ended
March 30, 2024
April 1, 2023
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, 2024
April 1, 2023
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
- Workplace Furnishings net sales increased 46.8 percent
from the prior-year quarter to $439.8 million. Organic sales
decreased 2.5 percent year-over-year. The impact of the KII
acquisition increased sales by $147.5 million over the prior-year
quarter.
- Workplace Furnishings GAAP operating margin of 6.0
percent improved 730 basis points versus the prior-year quarter,
driven by favorable price-cost, improved net productivity,
favorable impacts from KII, and lower legacy core SG&A. These
factors were partially offset by lower organic volume and higher
variable compensation. Excluding the impact of KII, first quarter
GAAP operating profit margin for Legacy Workplace was 4.3 percent,
an improvement of 560 basis points year-over-year.
Residential Building Products
– First Quarter Financial Performance
(Dollars in millions)
Three Months Ended
March 30, 2024
April 1, 2023
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
- Residential Building Products net sales decreased 17.4
percent from the prior-year quarter to $148.2 million primarily due
to housing market weakness, with remodel/retrofit (R&R) sales
declining at a higher rate than new construction.
- Residential Building Products operating profit margin of
14.4 percent compressed 120 basis points year-over-year driven by
lower volume, partially offset by improved net productivity,
favorable price-cost, lower variable compensation, and lower core
SG&A.
First Quarter Order Rates
- In the Workplace Furnishings segment, orders increased
two percent versus the prior-year period. Orders from both
small-to-medium sized customers and contract customers increased at
a similar rate to the segment overall.
- Orders in the Residential Building Products segment
decreased 12 percent compared to the first quarter of 2023. During
the quarter, orders in new construction outperformed R&R.
Reduced channel backlogs and shortened lead times resulted in
R&R orders returning to normal patterns, which negatively
impacted year-over-year growth.
Outlook
- Second quarter non-GAAP earnings per share is expected
to increase solidly year-over-year driven by the benefit of KII and
continued profit transformation in Legacy Workplace Furnishings
despite increasingly difficult year-ago comps. The second quarter
of 2023 was the first quarter to show noticeable benefits from
profit transformation initiatives in Legacy Workplace
Furnishings.
- Demand environment. In the second quarter of 2024, the
Corporation expects Workplace Furnishings organic segment revenue
to be down slightly compared to the same quarter of 2023. In
Residential Building Products, the Corporation expects
year-over-year declines to moderate with second quarter revenue
down at a low-single digit rate versus the year-ago period.
- Impact of Kimball International. For the second quarter
of 2024, the Corporation expects KII to be accretive to non-GAAP
EPS, generally in line with first quarter results. KII is expected
to add $75 to $80 million of incremental revenue to second quarter
results. The Corporation continues to expect annual cost synergies
resulting from the combination with KII to total $35 million when
mature.
- 2024 outlook commentary. Full-year earnings are expected
to increase strongly from 2023 levels driven by continued margin
expansion in Workplace Furnishings and the full-year benefit of
accretion from KII. The Corporation continues to expect Workplace
Furnishings organic revenue to increase at a low-single digit rate.
Residential Building Products segment revenue trends are expected
to improve as the year progresses, with year-over-year growth
returning in the second half. Residential Building Products
full-year revenue is expected to be flat-to-slightly down versus
2023 levels. This is a modest reduction from the outlook provided
on the previous earnings call and is reflective of softer
conditions in the R&R space and a slower start in new
construction.
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, 2024
April 1, 2023
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, 2024
December 30, 2023
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, 2024
April 1, 2023
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, 2024
April 1, 2023
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, 2024
April 1, 2023
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
%)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425994122/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)
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HNI (NYSE:HNI)
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