HNI Corporation (NYSE: HNI) today announced sales for the
full year ended January 2, 2021 of $1.955 billion and net income of
$41.9 million. GAAP net income per diluted share was $0.98,
compared to $2.54 in the prior year. Non-GAAP net income per
diluted share was $1.79, compared to $2.59 in the prior year. GAAP
to non-GAAP reconciliations follow the financial statements in this
release.
Fourth quarter sales of $562.1 million were down 9 percent from
year-ago levels, and fourth quarter net income was $22.6 million.
GAAP net income per diluted share was $0.52, compared to $1.10 in
the prior year. Non-GAAP net income per diluted share was $0.66,
compared to $1.12 in the prior year.
Fourth Quarter Highlights
- Double-digit revenue and profit growth in Residential
Building Products. Fourth quarter segment revenue increased
15.9 percent organically year-over-year, while operating profit was
11.4 percent higher than the year-ago period.
- Solid profitability in Workplace Furnishings. Fourth
quarter segment operating profit exceeded $11 million, despite an
18.6 percent year-over-year top line contraction.
- Strong cash flow generation. Fourth quarter operating
cash flow totaled $71 million, and full year operating cash flow
was $214 million. Full year operating cash flow was only slightly
below the $219 million generated in fiscal year 2019 despite
year-over-year total revenue and non-GAAP operating profit declines
of 13 percent and 30 percent, respectively.
- High quality balance sheet. Debt at the end of the
fourth quarter totaled $175 million— unchanged from last quarter
and prior-year levels. The Corporation’s gross leverage ratio
remained low at 1.0x. Additionally, the Corporation ended the
quarter with $116 million of cash, an increase of $7 million from
the end of the third quarter and a $64 million increase from the
end of fiscal year 2019. The quarter-ending balance sheet reflects
the impacts of the acquisition of Design Public Group at the end of
fiscal year 2020.
“Our members finished a challenging year by delivering another
solid quarter. Our performance has enabled us to invest more
aggressively to improve our competitive position. The acquisition
of Design Public Group is a great example of these efforts, as it
accelerates our initiatives around eCommerce while providing access
to a broader customer group,” stated Jeff Lorenger, Chairman,
President, and Chief Executive Officer.
Fourth Quarter - Financial
Performance
(Dollars in millions, except per
share data)
Three Months Ended
January 2, 2021
December 28, 2019
Change
GAAP
Net Sales
$
562.1
$
616.1
(8.8
%)
Gross Profit %
37.1
%
38.0
%
-90
bps
SG&A %
30.4
%
27.4
%
300
bps
Restructuring and Impairment Charges %
1.1
%
0.2
%
90
bps
Operating Income
$
31.5
$
63.8
(50.6
%)
Operating Income %
5.6
%
10.3
%
-470
bps
Effective Tax Rate
24.2
%
23.1
%
Net Income %
4.0
%
7.7
%
-370
bps
EPS – diluted
$
0.52
$
1.10
(52.7
%)
Non-GAAP
Gross Profit %
37.1
%
38.0
%
-90
bps
Operating Income
$
39.5
$
64.9
(39.2
%)
Operating Income %
7.0
%
10.5
%
-350
bps
EPS – diluted
$
0.66
$
1.12
(41.1
%)
Fourth Quarter Summary Comments
- Consolidated net sales decreased 8.8 percent from the
prior-year quarter to $562.1 million. On an organic basis, sales
decreased 9.2 percent. The impact of building products distributors
acquired in 2020 increased sales $3.0 million compared to the
prior-year quarter. A reconciliation of organic sales, a non-GAAP
measure, follows the financial statements in this release.
- Gross profit margin decreased 90 basis points compared to the
prior-year quarter. This decrease was primarily due to lower
Workplace Furnishings volume and unfavorable mix, partially offset
by improved net productivity and higher Residential Building
Products volume.
- Selling and administrative expenses as a percent of sales
increased 300 basis points compared to the prior-year quarter. This
increase was primarily due to lower Workplace Furnishings volume
and higher investments, partially offset by volume growth in
Residential Building Products and freight & distribution
productivity. Included in current year quarter SG&A was $1.8
million of one-time costs from exiting workplace furnishings
showrooms, driven by conditions related to the COVID-19
pandemic.
- The Corporation recorded net charges of $6.2 million in the
current year quarter related to the impairment of goodwill and
other assets in the Workplace Furnishings segment. In the
prior-year quarter, the Corporation recorded $1.2 million of
restructuring costs in connection with structural realignments in
the Workplace Furnishings segment.
- Non-GAAP net income per diluted share was $0.66 compared to
$1.12 in the prior-year quarter. The $0.46 decrease was primarily
driven by lower Workplace Furnishings volume and unfavorable mix,
partially offset by strong Residential Building Products volume and
net productivity.
Full Year - Financial
Performance
(Dollars in millions, except per
share data)
Twelve Months Ended
January 2, 2021
December 28, 2019
Change
GAAP
Net Sales
$
1,955.4
$
2,246.9
(13.0
%)
Gross Profit %
36.9
%
37.1
%
-20
bps
SG&A %
31.8
%
30.3
%
150
bps
Restructuring and Impairment Charges %
2.0
%
0.1
%
190
bps
Operating Income
$
61.4
$
151.3
(59.4
%)
Operating Income %
3.1
%
6.7
%
-360
bps
Effective Tax Rate
22.9
%
22.6
%
Net Income %
2.1
%
4.9
%
-280
bps
EPS – diluted
$
0.98
$
2.54
(61.4
%)
Non-GAAP
Gross Profit %
36.9
%
37.1
%
-20
bps
Operating Income
$
107.0
$
153.9
(30.5
%)
Operating Income %
5.5
%
6.8
%
-130
bps
EPS – diluted
$
1.79
$
2.59
(30.9
%)
Full Year Summary Comments
- Consolidated net sales decreased 13.0 percent from the prior
year to $1.955 billion. On an organic basis, sales decreased 13.4
percent year-over-year. The impact of building products
distributors acquired in 2020 increased sales $9.4 million compared
to the prior year.
- Gross profit margin decreased 20 basis points compared to the
prior year. This decrease was driven by lower Workplace Furnishings
volume, partially offset by net productivity and higher Residential
Building Products volume.
- Selling and administrative expenses as a percent of sales
increased 150 basis points compared to the prior year. This
increase was driven by lower Workplace Furnishings volume,
partially offset by lower core SG&A and freight &
distribution productivity. Included in current year SG&A was
$6.8 million of one-time costs incurred as a result of the COVID-19
pandemic (of which $1.6 million was recorded as a corporate
charge).
- The Corporation recorded net charges of $38.8 million related
to impairments of goodwill, intangibles, and other assets in the
Workplace Furnishings segment. In the prior year, the Corporation
recorded $2.4 million of restructuring costs in connection with
structural realignments in the Workplace Furnishings segment.
- Non-GAAP net income per diluted share was $1.79, compared to
$2.59 in the prior year. The $0.80 decrease was due to lower
Workplace Furnishings volume, partially offset by improved net
productivity, lower core SG&A, and higher Residential Building
Products volume.
Fourth Quarter Balance Sheet and Cash Flow
- The Corporation’s cash balance at the end of the fourth quarter
of 2020 totaled $116 million—representing a $7 million increase
from third quarter-ending levels and a $64 million increase from
the total reported at the end of the fourth quarter of 2019. The
Corporation built cash during the fourth quarter while funding the
acquisition of Design Public Group.
- Quarter-ending debt levels were $175 million—approximately
equal to the prior quarter and prior year balances. The outstanding
debt consisted of $100 million in private placement notes and $75
million drawn on the Corporation’s $450 million revolving credit
facility. The gross leverage ratio was 1.0x at the end of the
fourth quarter, which was up slightly from 0.9x last quarter but
well below the Corporation’s debt covenant of 3.5x.
- Full-year cash flow from operations of $214 million was only
modestly below the $219 million generated in 2019 despite
challenging conditions throughout 2020.
- Capital expenditures in 2020 of $32.3 million were down 47
percent from the $60.8 million in 2019. The decrease reflects the
Corporation’s adjustment to the pandemic-related conditions.
Investment in capitalized software increased 57 percent on a
year-over-year basis to $9.5 million, reflecting the Corporation’s
emphasis on digital initiatives. Cash flow used for acquisitions
totaled $58.3 million in 2020.
Fourth Quarter Orders
- Orders in the Workplace Furnishings segment excluding eCommerce
declined 21 percent year-over-year in the fourth quarter. December
year-over-year trends improved from those in October and November.
Order rates in the business focused on small to mid-sized customers
were better than those with contract customers.
- Orders in eCommerce increased 51 percent year-over-year in the
fourth quarter. While sales growth continued to be impacted by
supply constraints and tough year-ago comparables, year-over-year
order growth trends (adjusted for the extra week) were consistently
above 23 percent in each month of the quarter.
- Orders in the Residential Building Products segment increased
24 percent year-over-year in the fourth quarter. Order growth in
the quarter was comparable in the new construction and
repair/remodel markets, and total segment order growth strengthened
in December.
- The Corporation estimates the extra week in the fourth quarter
of 2020 added approximately five percentage points on a
year-over-year basis to total order growth.
Workplace Furnishings –
Financial Performance
(Dollars in millions)
Three Months Ended
Twelve Months Ended
January 2, 2021
December 28, 2019
Change
January 2, 2021
December 28, 2019
Change
GAAP
Net Sales
$
365.9
$
449.4
(18.6
%)
$
1,365.7
$
1,697.2
(19.5
%)
Operating Profit (Loss)
$
3.6
$
35.7
(89.8
%)
($5.0
)
$
103.9
(104.8
%)
Operating Profit (Loss) %
1.0
%
7.9
%
-690
bps
(0.4
%)
6.1
%
-650
bps
Non-GAAP
Operating Profit
$
11.6
$
36.9
(68.4
%)
$
39.1
$
106.5
(63.3
%)
Operating Profit %
3.2
%
8.2
%
-500
bps
2.9
%
6.3
%
-340
bps
Fourth Quarter Summary Comments - Workplace
Furnishings
- Workplace Furnishings net sales decreased 18.6 percent from the
prior-year quarter to $365.9 million.
- Workplace Furnishings GAAP operating profit margin decreased
690 basis points versus the prior-year period. On a non-GAAP basis,
segment operating margin decreased 500 basis points driven by lower
volume and unfavorable mix, partially offset by net
productivity.
- The Workplace Furnishings segment recorded net charges of $6.2
million in the current year quarter related to the impairment of
goodwill and other assets; as well as $1.8 million of one-time
costs from exiting workplace furnishings showrooms, driven by
conditions related to the COVID-19 pandemic.
Full Year Summary Comments - Workplace Furnishings
- Workplace Furnishings net sales decreased 19.5 percent from the
prior year to $1.366 billion.
- Workplace Furnishings GAAP operating profit margin decreased
650 basis points. On a non-GAAP basis, segment operating margin
decreased 340 basis points year-over-year, driven by lower volume,
partially offset by net productivity, and lower core SG&A
spend.
- The Workplace Furnishings segment recorded net charges of $38.8
million during the current year related to impairments of goodwill,
intangibles, and other assets, as well as $5.2 million of one-time
costs as a result of the COVID-19 pandemic.
Residential Building Products
– Financial Performance
(Dollars in millions)
Three Months Ended
Twelve Months Ended
January 2, 2021
December 28, 2019
Change
January 2, 2021
December 28, 2019
Change
GAAP
Net Sales
$
196.3
$
166.7
17.8
%
$
589.7
$
549.8
7.3
%
Operating Profit
$
44.1
$
39.6
11.4
%
$
109.3
$
94.3
15.9
%
Operating Profit %
22.5
%
23.8
%
-130
bps
18.5
%
17.2
%
130
bps
Non-GAAP
Operating Profit
$
44.1
$
39.6
11.4
%
$
109.3
$
94.3
15.9
%
Operating Profit %
22.5
%
23.8
%
-130
bps
18.5
%
17.2
%
130
bps
Fourth Quarter Summary Comments - Residential Building
Products
- Residential Building Products net sales increased 17.8 percent
from the prior-year quarter to $196.3 million. On an organic basis,
sales increased 15.9 percent year-over-year. The impact of building
products distributors acquired in 2020 increased sales $3.0 million
compared to prior-year quarter.
- Residential Building Products operating profit margin decreased
130 basis points, driven by increased investment spending and
higher variable compensation, partially offset by strong volume
growth.
Full Year Summary Comments - Residential Building
Products
- Residential Building Products net sales increased 7.3 percent
from the prior year to $589.7 million. On an organic basis, sales
increased 5.6 percent year-over-year. The impact of building
product distributors acquired in 2020 increased sales $9.4 million
compared to prior year.
- Residential Building Products operating profit margin expanded
130 basis points, driven by higher volume and favorable price-cost,
partially offset by higher variable compensation.
Concluding Remarks
“In 2020, our members adapted, stayed agile, and kept HNI strong
in the face of challenging conditions. I am extremely proud of and
grateful for the efforts of all HNI members. I have no doubt we are
a stronger company because of what we experienced and how we
performed this past year.
As we look toward 2021, we see strengthening growth and momentum
in our Residential Building Products segment. Activity in both new
construction and remodeling are rising and continue to be supported
by demographics, deurbanization, nesting trends, and low housing
inventories.
In Workplace Furnishings, we are optimistic our environments
will improve as we progress through the year and continue to see
some signs of initial recovery. The vaccine roll-out, associated
return-to-the-office programs, and our ability to capture
work-from-home demand support revenue and profit growth as we move
through 2021. However, the precise timing and rate of improvement
remain uncertain.
In the first quarter of 2021, we expect the conditions we
experienced last quarter to generally continue,” Mr. Lorenger
concluded.
First Quarter Outlook
- Residential Building Products revenue: Cyclical
strength, secular support, company-specific initiatives, and a
strong competitive position will continue to drive revenue growth
in this segment. Recent trends point to first quarter
year-over-year total segment revenue growth rates in the mid-20
percent range.
- Workplace Furnishings revenue: Pandemic-related
uncertainty remains and limits the Corporation’s visibility.
However, recent order trends point to continued moderation in
year-over-year revenue declines driven by small to mid-sized
customers and public sector activity. Assuming recent trends
continue, first quarter segment revenue, including acquisition
impacts, would decline at a year-over-year rate in the high-single
digits to low-teens.
- Profitability drivers: The Corporation expects lower
first quarter profit margins compared to the prior year due to
reduced Workplace Furnishings volume, rising input costs, and
higher investment levels. However, first quarter earnings are
expected to be positive and will benefit from continued
year-over-year improvement in Residential Building Products volume,
net productivity benefits, and SG&A cost management.
- Balance sheet and cash flow: The Corporation expects to
maintain a strong balance sheet throughout 2021 with leverage
ratios in-line with those seen in recent quarters. Low leverage and
continued free cash flow generation will provide ample capacity for
continued investment, dividend payments, and opportunistic M&A
and share buyback activity.
Conference Call
HNI Corporation will host a conference call on Monday, March 1,
2021 at 10:00 a.m. (Central) to discuss fourth quarter and fiscal
year 2020 results. To participate, call 1-833-522-0258 – conference
ID number 5995465. A live webcast of the call will be available on
HNI Corporation’s website at http://www.hnicorp.com (under Investors – News
Releases & Events). A replay of the webcast will be made
available at this website address. An audio replay of the call will
be available until Monday, March 8, 2021, 10:59 p.m. (Central) by
dialing 1-800-585-8367 or 1-416-621-4642 – Conference ID number
5995465.
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 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 “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. These risks include but are not
limited to: the duration and scope of the COVID-19 pandemic, and
its effect on people and the economy; 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.
HNI Corporation and
Subsidiaries
Condensed Consolidated
Statements of Income
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
Twelve Months Ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
Net sales
$
562,139
$
616,079
$
1,955,363
$
2,246,947
Cost of sales
353,489
382,192
1,234,243
1,413,185
Gross profit
208,650
233,887
721,120
833,762
Selling and administrative expenses
170,994
168,969
620,927
680,049
Restructuring and impairment charges
6,157
1,157
38,818
2,371
Operating income
31,499
63,761
61,375
151,342
Interest expense, net
1,719
1,833
6,990
8,628
Income before income taxes
29,780
61,928
54,385
142,714
Income taxes
7,207
14,333
12,466
32,211
Net income
22,573
47,595
41,919
110,503
Less: Net income (loss) attributable to
the non-controlling interest
5
0
2
(2
)
Net income attributable to HNI
Corporation
$
22,568
$
47,595
$
41,917
$
110,505
Average number of common shares
outstanding – basic
42,797
42,755
42,689
43,101
Net income attributable to HNI Corporation
per common share – basic
$
0.53
$
1.11
$
0.98
$
2.56
Average number of common shares
outstanding – diluted
43,220
43,137
42,956
43,495
Net income attributable to HNI Corporation
per common share – diluted
$
0.52
$
1.10
$
0.98
$
2.54
Foreign currency translation
adjustments
$
1,474
$
468
$
1,841
$
61
Change in unrealized gains (losses) on
marketable securities, net of tax
(4
)
(1
)
265
251
Change in pension and post-retirement
liability, net of tax
(920
)
(1,648
)
(920
)
(2,833
)
Change in derivative financial
instruments, net of tax
126
159
(2,266
)
(1,953
)
Other comprehensive income (loss), net of
tax
676
(1,022
)
(1,080
)
(4,474
)
Comprehensive income
23,249
46,573
40,839
106,029
Less: Comprehensive income (loss)
attributable to non-controlling interest
5
0
2
(2
)
Comprehensive income attributable to HNI
Corporation
$
23,244
$
46,573
$
40,837
$
106,031
HNI Corporation and
Subsidiaries
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
January 2, 2021
December 28, 2019
Assets
Current Assets:
Cash and cash equivalents
$
116,120
$
52,073
Short-term investments
1,687
1,096
Receivables
207,971
278,124
Allowance for doubtful accounts
(5,514
)
(3,559
)
Inventories
137,811
163,465
Prepaid expenses and other current
assets
37,660
37,635
Total Current Assets
495,735
528,834
Property, Plant, and Equipment:
Land and land improvements
29,691
29,394
Buildings
293,708
295,517
Machinery and equipment
578,643
581,225
Construction in progress
17,750
20,881
919,792
927,017
Less accumulated depreciation
553,835
545,510
Net Property, Plant, and Equipment
365,957
381,507
Right-of-use Finance Leases
6,095
2,129
Right-of-use Operating Leases
70,219
72,883
Goodwill and Other Intangible Assets
458,896
445,709
Deferred Income Taxes
607
176
Other Assets
20,523
21,274
Total Assets
$
1,418,032
$
1,452,512
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses
$
413,638
$
453,202
Current maturities of long-term debt
841
790
Current maturities of other long-term
obligations
2,990
1,931
Current lease obligations - Finance
1,589
563
Current lease obligations - Operating
19,970
22,219
Total Current Liabilities
439,028
478,705
Long-Term Debt
174,524
174,439
Long-Term Lease Obligations - Finance
4,516
1,581
Long-Term Lease Obligations -
Operating
53,249
58,233
Other Long-Term Liabilities
81,264
67,990
Deferred Income Taxes
74,706
87,196
Equity:
HNI Corporation shareholders' equity
590,419
584,044
Non-controlling interest
326
324
Total Equity
590,745
584,368
Total Liabilities and Equity
$
1,418,032
$
1,452,512
HNI Corporation and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Twelve Months Ended
January 2, 2021
December 28, 2019
Net Cash Flows From (To) Operating
Activities:
Net income
$
41,919
$
110,503
Non-cash items included in net income:
Depreciation and amortization
77,683
77,427
Other post-retirement and post-employment
benefits
1,472
1,475
Stock-based compensation
7,827
6,830
Reduction in carrying amount of
right-of-use assets
22,997
22,936
Deferred income taxes
(12,005
)
6,750
Impairment of goodwill and intangible
assets
39,580
—
Other – net
3,064
5,607
Net increase (decrease) in operating
assets and liabilities, net of divestitures
24,204
(3,280
)
Increase (decrease) in other
liabilities
7,728
(8,868
)
Net cash flows from (to) operating
activities
214,469
219,380
Net Cash Flows From (To) Investing
Activities:
Capital expenditures
(32,296
)
(60,826
)
Acquisition spending, net of cash
acquired
(58,258
)
—
Capitalized software
(9,506
)
(6,059
)
Purchase of investments
(4,222
)
(6,702
)
Sales or maturities of investments
3,611
4,845
Other – net
299
5,847
Net cash flows from (to) investing
activities
(100,372
)
(62,895
)
Net Cash Flows From (To) Financing
Activities:
Payments of long-term debt
(83,179
)
(215,934
)
Proceeds from long-term debt
83,309
141,035
Dividends paid
(52,096
)
(52,232
)
Purchase of HNI Corporation common
stock
(6,764
)
(83,887
)
Proceeds from sales of HNI Corporation
common stock
8,064
30,473
Other – net
616
(686
)
Net cash flows from (to) financing
activities
(50,050
)
(181,231
)
Net increase (decrease) in cash and cash
equivalents
64,047
(24,746
)
Cash and cash equivalents at beginning of
period
52,073
76,819
Cash and cash equivalents at end of
period
$
116,120
$
52,073
HNI Corporation and
Subsidiaries
Reportable Segment
Data
(In thousands)
(Unaudited)
Three Months Ended
Twelve Months Ended
January 2, 2021
December 28, 2019
January 2, 2021
December 28, 2019
Net Sales:
Workplace Furnishings
$
365,883
$
449,408
$
1,365,711
$
1,697,186
Residential Building Products
196,256
166,671
589,652
549,761
Total
$
562,139
$
616,079
$
1,955,363
$
2,246,947
Income (Loss) Before Income Taxes:
Workplace Furnishings
$
3,646
$
35,714
$
(4,972
)
$
103,894
Residential Building Products
44,090
39,586
109,321
94,329
General corporate
(16,237
)
(11,539
)
(42,974
)
(46,881
)
Operating Income
$
31,499
$
63,761
$
61,375
$
151,342
Interest expense, net
1,719
1,833
6,990
8,628
Total
$
29,780
$
61,928
$
54,385
$
142,714
Depreciation and Amortization Expense:
Workplace Furnishings
$
11,436
$
11,348
$
44,615
$
44,887
Residential Building Products
2,411
2,363
9,386
8,884
General corporate
5,918
5,880
23,682
23,656
Total
$
19,765
$
19,591
$
77,683
$
77,427
Capital Expenditures (including
capitalized software):
Workplace Furnishings
$
5,848
$
11,947
$
24,188
$
41,137
Residential Building Products
2,339
1,446
8,213
12,225
General corporate
1,614
3,301
9,401
13,523
Total
$
9,801
$
16,694
$
41,802
$
66,885
As of January 2, 2021
As of December 28, 2019
Identifiable Assets:
Workplace Furnishings
$
762,780
$
874,913
Residential Building Products
381,550
364,653
General corporate
273,702
212,946
Total
$
1,418,032
$
1,452,512
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 our condensed consolidated financial statements,
which are prepared and presented in accordance with GAAP, we use
the following non-GAAP financial measures within this earnings
release: 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.
The sales adjustments to arrive at our non-GAAP organic sales
information included in this earnings release excludes the impact
of acquiring building products distributors. The transactions
excluded for purposes of our other non-GAAP financial information
included in this earnings release for all periods presented include
restructuring charges, impairment charges, COVID-19 costs, and/or
transition costs. Impairment and COVID-19 costs incurred in the
current year periods presented are primarily comprised of goodwill
and intangible asset impairments and one-time charges related to
the COVID-19 pandemic. Restructuring charges incurred in the prior
year periods presented are primarily comprised of severance costs
related to a structural realignment in the workplace furnishings
segment. Transition costs incurred in connection with this
realignment include member relocation costs.
HNI Corporation
Reconciliation
(Dollars in millions)
Three Months Ended
January 2, 2021
December 28, 2019
Workplace
Furnishings
Residential
Building
Products
Total
Workplace
Furnishings
Residential
Building
Products
Total
Sales as reported (GAAP)
$
365.9
$
196.3
$
562.1
$
449.4
$
166.7
$
616.1
% change from PY
(18.6
%)
17.8
%
(8.8
%)
Less: Acquisitions
—
(3.0
)
(3.0
)
—
—
—
Organic Sales (non-GAAP)
$
365.9
$
193.2
$
559.1
$
449.4
$
166.7
$
616.1
% change from PY
(18.6
%)
15.9
%
(9.2
%)
HNI Corporation
Reconciliation
(Dollars in millions)
Twelve Months Ended
January 2, 2021
December 28, 2019
Workplace
Furnishings
Residential
Building
Products
Total
Workplace
Furnishings
Residential
Building
Products
Total
Sales as reported (GAAP)
$
1,365.7
$
589.7
$
1,955.4
$
1,697.2
$
549.8
$
2,246.9
% change from PY
(19.5
%)
7.3
%
(13.0
%)
Less: Acquisitions
—
(9.4
)
(9.4
)
—
—
—
Organic Sales (non-GAAP)
$
1,365.7
$
580.3
$
1,946.0
$
1,697.2
$
549.8
$
2,246.9
% change from PY
(19.5
%)
5.6
%
(13.4
%)
HNI Corporation
Reconciliation
(Dollars in millions, except per
share data)
Three Months Ended
January 2, 2021
Gross Profit
Operating
Income
Tax
Net Income
EPS
As reported (GAAP)
$
208.6
$
31.5
$
7.2
$
22.6
$
0.52
% of net sales
37.1
%
5.6
%
4.0
%
Tax %
24.2
%
Impairment charges
—
6.2
1.6
4.6
0.11
COVID-19 costs
—
1.8
0.4
1.4
0.03
Results (non-GAAP)
$
208.6
$
39.5
$
9.3
$
28.5
$
0.66
% of net sales
37.1
%
7.0
%
5.1
%
Tax %
24.5
%
HNI Corporation
Reconciliation
(Dollars in millions, except per
share data)
Three Months Ended
December 28, 2019
Gross Profit
Operating
Income
Tax
Net Income
EPS
As reported (GAAP)
$
233.9
$
63.8
$
14.3
$
47.6
$
1.10
% of net sales
38.0
%
10.3
%
7.7
%
Tax %
23.1
%
Restructuring charges
—
1.2
0.3
0.9
0.02
Results (non-GAAP)
$
233.9
$
64.9
$
14.6
$
48.5
$
1.12
% of net sales
38.0
%
10.5
%
7.9
%
Tax %
23.1
%
HNI Corporation
Reconciliation
(Dollars in millions, except per
share data)
Twelve Months Ended
January 2, 2021
Gross Profit
Operating Income
Tax
Net Income
EPS
As reported (GAAP)
$
721.1
$
61.4
$
12.5
$
41.9
$
0.98
% of net sales
36.9
%
3.1
%
2.1
%
Tax %
22.9
%
Impairment charges
—
38.8
8.9
29.9
0.70
COVID-19 costs
—
6.8
1.6
5.3
0.12
Results (non-GAAP)
$
721.1
$
107.0
$
22.9
$
77.1
$
1.79
% of net sales
36.9
%
5.5
%
3.9
%
Tax %
22.9
%
HNI Corporation
Reconciliation
(Dollars in millions, except per
share data)
Twelve Months Ended
December 28, 2019
Gross Profit
Operating Income
Tax
Net Income
EPS
As reported (GAAP)
$
833.8
$
151.3
$
32.2
$
110.5
$
2.54
% of net sales
37.1
%
6.7
%
4.9
%
Tax %
22.6
%
Restructuring charges
—
2.4
0.5
1.8
0.04
Transition costs
—
0.2
0.0
0.2
0.00
Results (non-GAAP)
$
833.8
$
153.9
$
32.8
$
112.5
$
2.59
% of net sales
37.1
%
6.8
%
5.0
%
Tax %
22.6
%
Workplace Furnishings
Reconciliation
(Dollars in millions)
Three Months Ended
Twelve Months Ended
January 2, 2021
December 28, 2019
Percent Change
January 2, 2021
December 28, 2019
Percent Change
Operating profit as reported (GAAP)
$
3.6
$
35.7
(89.8
%)
($
5.0
)
$
103.9
(104.8
%)
% of net sales
1.0
%
7.9
%
(0.4
%)
6.1
%
Restructuring charges
—
1.2
—
2.4
Impairment charges
6.2
—
38.8
—
COVID-19 costs
1.8
—
5.2
—
Transition costs
—
—
—
0.2
Operating profit (non-GAAP)
$
11.6
$
36.9
(68.4
%)
$
39.1
$
106.5
(63.3
%)
% of net sales
3.2
%
8.2
%
2.9
%
6.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210301005184/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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