HNI Corporation Provides Update Related to COVID-19 Coronavirus Pandemic
April 06 2020 - 10:03AM
Business Wire
HNI Corporation (NYSE: HNI; “the Corporation”) is providing an
update related to the ongoing COVID-19 pandemic crisis.
CEO Comment “First and foremost, our focus during this
crisis is on the well-being of our members. To protect our teams,
we have implemented workplace measures consistent with guidelines
from the Centers for Disease Control and Prevention. While the
situation is dynamic, at this point we continue to operate at our
primary manufacturing locations,” stated Jeff Lorenger, HNI
Corporation, Chairman, President, and Chief Executive Officer. “We
entered this crisis in a position of strength. We have low debt
levels and possess liquidity equivalent to more than two years of
free cash flow. While the ultimate impact of the outbreak is
uncertain, we are confident in our ability to effectively weather
this crisis.”
Liquidity Position At the end of the first quarter 2020,
the Corporation had $233 million in total debt, representing a
gross leverage ratio of 1.0x as calculated under the Corporation’s
lending agreements, which is well below the 3.5x gross leverage
covenant in the existing agreements with the Corporation’s lenders.
Liquidity, as measured by the combination of cash and available
capacity on the Corporation’s lending facilities, totaled nearly
$350 million. Of the total debt outstanding, $100 million is
private placement notes (half matures in 2025 and half in 2028),
with the remainder of funds drawn on the $450MM revolving credit
facility (matures in 2023). “Our liquidity position is strong, and
we are taking actions to ensure the long-term health of our
organization. Accordingly, we are reducing operating costs,
lowering capital expenditures, and temporarily suspending our share
repurchase activity to support free cash flow,” said Mr.
Lorenger.
Suspending Guidance The Corporation is suspending its
fiscal 2020 sales and earnings forecast due to the uncertainty
caused by the coronavirus pandemic. “The economic volatility from
this crisis is challenging our sales visibility and ability to
provide earnings guidance. That said, we remain confident in our
long-term strategic direction,” Mr. Lorenger concluded.
Upcoming Communication The Corporation’s first quarter
for fiscal 2020 ended on March 28th. Results for the quarter and
further updates on the Corporation’s response to this pandemic will
be disclosed with the earnings release in late April.
About HNI Corporation HNI
Corporation is an NYSE traded company (ticker symbol: HNI)
providing products and solutions for the home and workplace
environments. HNI Corporation is a leading global office furniture
manufacturer and is the nation's leading manufacturer of hearth
products. The Corporation's strong brands have leading positions in
their markets. 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 the expected effects on our business, financial condition
and results of operations from the COVID-19 pandemic.
Forward-looking statements can be identified by words including
"anticipate," "believe," "could," "confident," "estimate,"
"expect," "forecast," "hope," "intend," "likely," "may," "plan,"
"possible," "potential," "predict," "project," "should," "will,"
"would", or other similar words, phrases, or expressions.
Forward-looking statements involve known and unknown risks and
uncertainties, including the duration and scope of the COVID-19
pandemic, which may cause the Corporation's actual future results
and performance to differ materially from expected results. These
risks include but are not limited to: 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; impacts of tax legislation; and force
majeure events outside the Corporation’s control. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200406005513/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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