HNI HNI Corporation

HNI Corporation (NYSE: HNI) today announced sales for the second quarter ended July 3, 2021 of $510.5 million and net income of $17.4 million. GAAP net income per diluted share was $0.39, compared to $0.29 in the prior year. Non-GAAP net income per diluted share was $0.40, compared to $0.20 in the prior year. GAAP to non-GAAP reconciliations follow the financial statements in this release.

Second Quarter Highlights

• Non-GAAP EPS doubled vs. prior year: Second quarter 2021 non-GAAP EPS increased 100 percent year-over-year despite a challenging inflationary environment and the return of costs related to temporary actions taken in the prior-year quarter. The profit growth was driven by increased volume and higher productivity.
• Exceptional performance in Residential Building Products: Second quarter 2021 revenue grew 51 percent, organically, on a year-over-year basis, and operating margin expanded 530 basis points from prior-year quarter. Segment operating profit more than doubled versus second quarter 2020 levels.
• Recovery in Workplace Furnishings: Second quarter 2021 revenue was up approximately nine percent from the second quarter of 2020, on an organic basis. Segment non-GAAP operating profit increased more than 20 percent year-over-year.

“Our members again executed at a high level during the second quarter—delivering substantial year-over-year profit improvement. Our industry leading Residential Building Products platform continues to drive exceptional growth, and we are capitalizing on the beginnings of the post-pandemic recovery in Workplace Furnishings. Our strong growth and the macro-economic environment presented new challenges related to labor availability, supply chain capacity, and inflation. Our teams managed through those challenges to deliver strong results. Overall, the second quarter shows the power of our diversified revenue streams, our ability to react quickly to changing market dynamics, and our overall operational capability,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.

HNI Corporation – Financial Performance

(Dollars in millions, except per share data)

 

Three Months Ended

 

 

 

July 3, 2021

 

June 27, 2020

 

Change

GAAP

 

 

 

 

 

Net Sales

$510.5

 

 

$417.5

 

 

22.3

%

Gross Profit %

36.8

%

 

36.1

%

 

70

bps

SG&A %

32.0

%

 

32.6

%

 

-60

bps

Operating Income

$24.7

 

 

$14.8

 

 

66.3

%

Operating Income %

4.8

%

 

3.6

%

 

120

bps

Effective Tax Rate

23.7

%

 

2.7

%

 

 

Net Income %

3.4

%

 

3.0

%

 

40

bps

EPS – diluted

$0.39

 

 

$0.29

 

 

34.5

%

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Gross Profit %

36.8

%

 

36.1

%

 

70

bps

Operating Income

$25.3

 

 

$14.8

 

 

70.7

%

Operating Income %

5.0

%

 

3.6

%

 

140

bps

EPS – diluted

$0.40

 

 

$0.20

 

 

100.0

%

Second Quarter Summary Comments

• Consolidated net sales increased 22.3 percent from the prior-year quarter to $510.5 million. On an organic basis, sales increased 19.8 percent year-over-year. The acquisition of Design Public Group ("DPG") in the fourth quarter of 2020 increased year-over-year sales by $8.7 million, and the acquisition of residential building products distributors in 2020 and 2021 increased year-over-year sales by $1.5 million. A reconciliation of organic sales, a non-GAAP measure, follows the financial statements in this release.
• Gross profit margin expanded 70 basis points compared to the prior-year quarter. This increase was primarily driven by higher volume and improved net productivity, partially offset by unfavorable price-cost and the return of costs related to temporary actions taken in the prior-year quarter.
• Selling and administrative expenses as a percent of sales decreased 60 basis points compared to the prior-year quarter. The decrease was driven by improved leverage from higher volume, partially offset by the return of costs related to temporary actions taken in the prior-year quarter, higher investment spend, increased freight costs, and normalized variable compensation. Included in current-year quarter SG&A was $0.6 million of one-time costs from exiting Workplace Furnishings showrooms.
• Non-GAAP net income per diluted share was $0.40 compared to $0.20 in the prior-year quarter. The $0.20 increase was due to higher volume and improved net productivity, partially offset by unfavorable price-cost, the return of costs related to temporary actions taken in the prior-year quarter, higher investment spend, and normalized variable compensation.
• Non-GAAP EPS in the prior-year quarter included an effective tax rate of 32.5 percent, compared to a GAAP tax rate of 2.7 percent. The higher non-GAAP tax rate was related to timing of the tax impact from one-time charges recorded in first quarter 2020.

Second Quarter Orders

• Orders in the Workplace Furnishings segment increased more than 30 percent year-over-year, led by activity with small to mid-sized customers. Public sector demand remained strong, and domestic contract orders recovered—increasing more than 23 percent from second quarter 2020 levels.
• Normalized orders in the Residential Building Products segment increased more than 50 percent compared to the prior-year quarter, with the trend moderating somewhat as the quarter progressed as year-ago comparisons increased. Remodel-retrofit and new construction were both strong throughout the quarter.

Workplace Furnishings – Financial Performance

(Dollars in millions)

 

Three Months Ended

 

 

 

July 3, 2021

 

June 27, 2020

 

Change

GAAP

 

 

 

 

 

Net Sales

$344.1

 

 

$308.1

 

 

11.7

%

Operating Profit

$8.8

 

 

$7.8

 

 

12.5

%

Operating Profit %

2.5

%

 

2.5

%

 

0

bps

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Operating Profit

$9.4

 

 

$7.8

 

 

20.8

%

Operating Profit %

2.7

%

 

2.5

%

 

20

bps

• Workplace Furnishings net sales increased 11.7 percent from the prior-year quarter to $344.1 million. On an organic basis, sales increased 8.9 percent year-over-year. The acquisition of DPG in the fourth quarter of 2020 increased sales by $8.7 million compared to the prior-year quarter.
• Workplace Furnishings GAAP operating profit margin was flat versus the prior-year quarter. On a non-GAAP basis, segment operating margin expanded 20 basis points year-over-year driven by higher volume and improved productivity, partially offset by unfavorable price-cost and the return of costs related to temporary actions taken in the prior-year quarter.
• The Workplace Furnishings segment recorded $0.6 million of one-time costs in the current-year quarter from exiting showrooms.

Residential Building Products – Financial Performance

(Dollars in millions)

 

Three Months Ended

 

 

 

July 3, 2021

 

June 27, 2020

 

Change

GAAP

 

 

 

 

 

Net Sales

$166.3

 

 

$109.4

 

 

52.1

%

Operating Profit

$30.5

 

 

$14.4

 

 

112.5

%

Operating Profit %

18.4

%

 

13.1

%

 

530

bps

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Operating Profit

$30.5

 

 

$14.4

 

 

112.5

%

Operating Profit %

18.4

%

 

13.1

%

 

530

bps

• Residential Building Products net sales increased 52.1 percent from the prior-year quarter to $166.3 million. On an organic basis, sales increased 50.7 percent year-over-year. The impact of building products distributors acquired in 2020 and 2021 increased sales $1.5 million compared to the prior-year quarter.
• Residential Building Products operating profit margin expanded 530 basis points, primarily driven by strong volume growth, partially offset by unfavorable price-cost, normalized variable compensation, the return of costs related to temporary actions taken in the prior-year quarter, and higher investment spend.

Third Quarter 2021 Outlook

• Strong consolidated growth: The Corporation expects consolidated revenue to grow in the mid-20 percent range compared to the prior-year quarter. This outlook includes the impact of headwinds from labor availability and supply chain constraints.
• Residential Building Products revenue:Recent order trends, new home construction activity, the outlook for remodel/retrofit demand, and expected benefits tied to multiple growth initiatives, combine to suggest growth rates in the mid-to-high 20 percent range compared to the prior-year quarter, including the impact of constraints.
• Workplace Furnishings revenue:Strong second quarter order trends, continued momentum with office re-entry activity, and a low prior-year comparable suggest a growth rate, including acquisition impacts, in the low-to-mid-20 percent range on a year-over-year basis, net of the impact from constraints.
• Profitability drivers: Compared to the prior-year quarter, the Corporation expects the impact of strong volume growth to be mostly offset by cost challenges related to inflationary pressures, increased growth investments, and the return of costs associated with temporary actions taken in the prior year. The Corporation expects profit growth to accelerate after the third quarter as recent price actions become effective and temporary cost actions taken during the pandemic are anniversaried.

Concluding Remarks

“Looking to the remainder of 2021 and into 2022, we remain optimistic about our businesses and our markets. We continue to gain momentum in Workplace Furnishings, where our winning customer experiences, multiple strategic investments, and operational excellence provide a competitive advantage as the market recovers. In addition, our unique, industry-leading Residential Building Products platform is positioned for sustained long-term growth. Our growth strategies in this segment continue to gain traction, and we see strong demand supported by demographics and low housing inventories.

I am extremely proud of and grateful for the efforts of all HNI members. As we move through the next stage of the recovery, we do so positioned to grow revenue, expand margins, and increase cash flow,” Mr. Lorenger concluded.

Conference Call

HNI Corporation will host a conference call on Thursday, July 29, 2021 at 10:00 a.m. (Central) to discuss second quarter fiscal year 2021 results. To participate, call 1-833-522-0258 – conference ID number 9696837. 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 29, 2021 at 1:00 p.m. (Central) through Thursday, August 5, 2021, 10:59 p.m. (Central). To replay the webcast, go to the link above. To replay the call, dial 1-800-585-8367 or 416-621-4642 – Conference ID: 9696837.

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 Comprehensive Income

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

July 3, 2021

 

June 27, 2020

 

July 3, 2021

 

June 27, 2020

Net sales

$

510,455

 

 

 

$

417,456

 

 

 

$

994,748

 

 

 

$

886,161

 

 

Cost of sales

322,593

 

 

 

266,551

 

 

 

626,940

 

 

 

559,238

 

 

Gross profit

187,862

 

 

 

150,905

 

 

 

367,808

 

 

 

326,923

 

 

Selling and administrative expenses

163,175

 

 

 

136,063

 

 

 

320,521

 

 

 

303,148

 

 

Impairment charges

—

 

 

 

—

 

 

 

—

 

 

 

32,661

 

 

Operating income (loss)

24,687

 

 

 

14,842

 

 

 

47,287

 

 

 

(8,886

)

 

Interest expense, net

1,857

 

 

 

1,943

 

 

 

3,612

 

 

 

3,754

 

 

Income (loss) before income taxes

22,830

 

 

 

12,899

 

 

 

43,675

 

 

 

(12,640

)

 

Income taxes

5,418

 

 

 

345

 

 

 

11,245

 

 

 

(1,299

)

 

Net income (loss)

17,412

 

 

 

12,554

 

 

 

32,430

 

 

 

(11,341

)

 

Less: Net loss attributable to non-controlling interest

(2

)

 

 

(2

)

 

 

(3

)

 

 

(2

)

 

Net income (loss) attributable to HNI Corporation

$

17,414

 

 

 

$

12,556

 

 

 

$

32,433

 

 

 

$

(11,339

)

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding – basic

43,776

 

 

 

42,640

 

 

 

43,469

 

 

 

42,634

 

 

Net income (loss) attributable to HNI Corporation per common share – basic

$

0.40

 

 

 

$

0.29

 

 

 

$

0.75

 

 

 

$

(0.27

)

 

Average number of common shares outstanding – diluted

44,481

 

 

 

42,929

 

 

 

43,986

 

 

 

42,634

 

 

Net income (loss) attributable to HNI Corporation per common share – diluted

$

0.39

 

 

 

$

0.29

 

 

 

$

0.74

 

 

 

$

(0.27

)

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

$

194

 

 

 

$

45

 

 

 

$

62

 

 

 

$

(555

)

 

Change in unrealized gains (losses) on marketable securities, net of tax

(25

)

 

 

244

 

 

 

(125

)

 

 

302

 

 

Change in derivative financial instruments, net of tax

143

 

 

 

(283

)

 

 

406

 

 

 

(2,499

)

 

Other comprehensive income (loss), net of tax

312

 

 

 

6

 

 

 

343

 

 

 

(2,752

)

 

Comprehensive income (loss)

17,724

 

 

 

12,560

 

 

 

32,773

 

 

 

(14,093

)

 

Less: Comprehensive loss attributable to non-controlling interest

(2

)

 

 

(2

)

 

 

(3

)

 

 

(2

)

 

Comprehensive income (loss) attributable to HNI Corporation

$

17,726

 

 

 

$

12,562

 

 

 

$

32,776

 

 

 

$

(14,091

)

 

 

HNI Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

July 3, 2021

 

January 2, 2021

Assets

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

118,498

 

 

 

$

116,120

 

 

Short-term investments

102

 

 

 

1,687

 

 

Receivables

213,925

 

 

 

207,971

 

 

Allowance for doubtful accounts

(4,365

)

 

 

(5,514

)

 

Inventories

187,467

 

 

 

137,811

 

 

Prepaid expenses and other current assets

47,571

 

 

 

37,660

 

 

Total Current Assets

563,198

 

 

 

495,735

 

 

Property, Plant, and Equipment:

 

 

 

Land and land improvements

29,974

 

 

 

29,691

 

 

Buildings

293,842

 

 

 

293,708

 

 

Machinery and equipment

580,730

 

 

 

578,643

 

 

Construction in progress

24,310

 

 

 

17,750

 

 

 

928,856

 

 

 

919,792

 

 

Less accumulated depreciation

568,551

 

 

 

553,835

 

 

Net Property, Plant, and Equipment

360,305

 

 

 

365,957

 

 

Right-of-use Finance Leases

9,671

 

 

 

6,095

 

 

Right-of-use Operating Leases

66,254

 

 

 

70,219

 

 

Goodwill and Other Intangible Assets

451,624

 

 

 

458,896

 

 

Other Assets

26,136

 

 

 

21,130

 

 

Total Assets

$

1,477,188

 

 

 

$

1,418,032

 

 

Liabilities and Equity

 

 

 

Current Liabilities:

 

 

 

Accounts payable and accrued expenses

$

420,706

 

 

 

$

413,638

 

 

Current maturities of long-term debt

3,955

 

 

 

841

 

 

Current maturities of other long-term obligations

4,119

 

 

 

2,990

 

 

Current lease obligations - Finance

2,439

 

 

 

1,589

 

 

Current lease obligations - Operating

19,680

 

 

 

19,970

 

 

Total Current Liabilities

450,899

 

 

 

439,028

 

 

Long-Term Debt

174,566

 

 

 

174,524

 

 

Long-Term Lease Obligations - Finance

7,193

 

 

 

4,516

 

 

Long-Term Lease Obligations - Operating

50,710

 

 

 

53,249

 

 

Other Long-Term Liabilities

85,710

 

 

 

81,264

 

 

Deferred Income Taxes

73,327

 

 

 

74,706

 

 

Total Liabilities

842,405

 

 

 

827,287

 

 

Equity:

 

 

 

HNI Corporation shareholders' equity

634,460

 

 

 

590,419

 

 

Non-controlling interest

323

 

 

 

326

 

 

Total Equity

634,783

 

 

 

590,745

 

 

Total Liabilities and Equity

$

1,477,188

 

 

 

$

1,418,032

 

 

 

HNI Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Six Months Ended

 

July 3, 2021

 

June 27, 2020

Net Cash Flows From (To) Operating Activities:

 

 

 

Net income (loss)

$

32,430

 

 

 

$

(11,341

)

 

Non-cash items included in net income:

 

 

 

Depreciation and amortization

41,139

 

 

 

38,605

 

 

Other post-retirement and post-employment benefits

664

 

 

 

736

 

 

Stock-based compensation

7,788

 

 

 

5,659

 

 

Reduction in carrying amount of right-of-use assets

13,081

 

 

 

11,342

 

 

Deferred income taxes

(1,430

)

 

 

1,092

 

 

Impairment of goodwill and intangible assets

—

 

 

 

32,661

 

 

Other – net

3,211

 

 

 

(284

)

 

Net increase (decrease) in operating assets and liabilities

(62,905

)

 

 

(49,631

)

 

Increase (decrease) in other liabilities

3,305

 

 

 

(1,019

)

 

Net cash flows from (to) operating activities

37,283

 

 

 

27,820

 

 

 

 

 

 

Net Cash Flows From (To) Investing Activities:

 

 

 

Capital expenditures

(26,215

)

 

 

(15,739

)

 

Proceeds from sale of property, plant, and equipment

151

 

 

 

69

 

 

Acquisition spending, net of cash acquired

(1,529

)

 

 

(10,857

)

 

Capitalized software

(6,078

)

 

 

(5,037

)

 

Purchase of investments

(2,375

)

 

 

(1,631

)

 

Sales or maturities of investments

2,393

 

 

 

1,043

 

 

Net cash flows from (to) investing activities

(33,653

)

 

 

(32,152

)

 

 

 

 

 

Net Cash Flows From (To) Financing Activities:

 

 

 

Payments of long-term debt

(648

)

 

 

(73,828

)

 

Proceeds from long-term debt

3,785

 

 

 

82,129

 

 

Dividends paid

(26,841

)

 

 

(26,040

)

 

Purchase of HNI Corporation common stock

(6,543

)

 

 

(6,764

)

 

Proceeds from sales of HNI Corporation common stock

29,320

 

 

 

1,294

 

 

Other – net

(325

)

 

 

1,672

 

 

Net cash flows from (to) financing activities

(1,252

)

 

 

(21,537

)

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

2,378

 

 

 

(25,869

)

 

Cash and cash equivalents at beginning of period

116,120

 

 

 

52,073

 

 

Cash and cash equivalents at end of period

$

118,498

 

 

 

$

26,204

 

 

 

HNI Corporation and Subsidiaries

Reportable Segment Data

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

July 3, 2021

 

June 27, 2020

 

July 3, 2021

 

June 27, 2020

Net Sales:

 

 

 

 

 

 

 

Workplace furnishings

$

344,137

 

 

 

$

308,081

 

 

 

$

646,885

 

 

 

$

646,467

 

 

Residential building products

166,318

 

 

 

109,375

 

 

 

347,863

 

 

 

239,694

 

 

Total

$

510,455

 

 

 

$

417,456

 

 

 

$

994,748

 

 

 

$

886,161

 

 

 

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes:

 

 

 

 

 

 

 

Workplace furnishings

$

8,756

 

 

 

$

7,785

 

 

 

$

5,685

 

 

 

$

(25,446

)

 

Residential building products

30,525

 

 

 

14,365

 

 

 

70,374

 

 

 

35,036

 

 

General corporate

(14,594

)

 

 

(7,308

)

 

 

(28,772

)

 

 

(18,476

)

 

Operating Income (Loss)

24,687

 

 

 

14,842

 

 

 

47,287

 

 

 

(8,886

)

 

Interest expense, net

1,857

 

 

 

1,943

 

 

 

3,612

 

 

 

3,754

 

 

Total

$

22,830

 

 

 

$

12,899

 

 

 

$

43,675

 

 

 

$

(12,640

)

 

 

 

 

 

 

 

 

 

Depreciation and Amortization Expense:

 

 

 

 

 

 

 

Workplace furnishings

$

12,051

 

 

 

$

10,782

 

 

 

$

24,035

 

 

 

$

22,113

 

 

Residential building products

2,448

 

 

 

2,318

 

 

 

4,858

 

 

 

4,624

 

 

General corporate

6,177

 

 

 

6,019

 

 

 

12,246

 

 

 

11,868

 

 

Total

$

20,676

 

 

 

$

19,119

 

 

 

$

41,139

 

 

 

$

38,605

 

 

 

 

 

 

 

 

 

 

Capital Expenditures (including capitalized software):

 

 

 

 

 

 

 

Workplace furnishings

$

7,017

 

 

 

$

4,293

 

 

 

$

17,504

 

 

 

$

11,394

 

 

Residential building products

1,947

 

 

 

206

 

 

 

6,657

 

 

 

3,179

 

 

General corporate

4,365

 

 

 

3,118

 

 

 

8,132

 

 

 

6,203

 

 

Total

$

13,329

 

 

 

$

7,617

 

 

 

$

32,293

 

 

 

$

20,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

July 3, 2021

 

As of

January 2, 2021

Identifiable Assets:

 

 

 

 

 

 

 

Workplace furnishings

 

 

 

 

$

784,880

 

 

 

$

762,780

 

 

Residential building products

 

 

 

 

408,333

 

 

 

381,550

 

 

General corporate

 

 

 

 

283,975

 

 

 

273,702

 

 

Total

 

 

 

 

$

1,477,188

 

 

 

$

1,418,032

 

 

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 condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, this earnings release uses the following non-GAAP financial measures: organic sales, gross profit, operating income (loss), operating profit (loss), income taxes, net income (loss), and net income (loss) 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 table below. Generally, non-GAAP EPS is calculated using HNI’s overall effective tax rate for the year, as this rate is reflective of the tax applicable to most non-GAAP adjustments.

The sales adjustments to arrive at the non-GAAP organic sales information included in this earnings release excludes the impact of acquiring DPG and residential building products distributors. The transactions excluded for purposes of our other non-GAAP financial information included in this earnings release include non-recurring costs related to the COVID-19 pandemic.

HNI Corporation Reconciliation

(Dollars in millions)

 

Three Months Ended

 

July 3, 2021

 

June 27, 2020

 

Workplace Furnishings

Residential Building Products

Total

 

Workplace Furnishings

Residential Building Products

Total

Sales as reported (GAAP)

$

344.1

 

$

166.3

 

$

510.5

 

 

$

308.1

 

$

109.4

 

$

417.5

 

% change from PY

11.7

%

52.1

%

22.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Less: Acquisitions

8.7

 

1.5

 

10.2

 

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

Organic Sales (non-GAAP)

$

335.4

 

$

164.8

 

$

500.2

 

 

$

308.1

 

$

109.4

 

$

417.5

 

% change from PY

8.9

%

50.7

%

19.8

%

 

 

 

 

HNI Corporation Reconciliation

(Dollars in millions, except per share data)

 

Three Months Ended

July 3, 2021

 

Gross Profit

 

Operating Income

 

Tax

 

Net Income

 

EPS

As reported (GAAP)

$

187.9

 

 

$

24.7

 

 

$

5.4

 

 

$

17.4

 

 

$

0.39

 

% of net sales

36.8

%

 

4.8

%

 

 

 

3.4

%

 

 

Tax %

 

 

 

 

23.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 costs

—

 

 

0.6

 

 

0.2

 

 

0.5

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

Results (non-GAAP)

$

187.9

 

 

$

25.3

 

 

$

5.6

 

 

$

17.9

 

 

$

0.40

 

% of net sales

36.8

%

 

5.0

%

 

 

 

3.5

%

 

 

Tax %

 

 

 

 

23.7

%

 

 

 

 

HNI Corporation Reconciliation

(Dollars in millions, except per share data)

 

Three Months Ended

June 27, 2020

 

Gross Profit

 

Operating Income

 

Tax

 

Net Income

 

EPS

As reported (GAAP)

$

150.9

 

 

$

14.8

 

 

$

0.3

 

 

$

12.6

 

 

$

0.29

 

% of net sales

36.1

%

 

3.6

%

 

 

 

3.0

%

 

 

Tax %

 

 

 

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax adjustment

—

 

 

—

 

 

3.8

 

 

(3.8)

 

 

(0.09)

 

 

 

 

 

 

 

 

 

 

 

Results (non-GAAP)

$

150.9

 

 

$

14.8

 

 

$

4.2

 

 

$

8.7

 

 

$

0.20

 

% of net sales

36.1

%

 

3.6

%

 

 

 

2.1

%

 

 

Tax %

 

 

 

 

32.5

%

 

 

 

 

Workplace Furnishings Reconciliation

(Dollars in millions)

 

Three Months Ended

 

 

 

July 3, 2021

 

June 27, 2020

 

Percent Change

Operating profit as reported (GAAP)

$

8.8

 

 

$

7.8

 

 

12.5

%

% of net sales

2.5

%

 

2.5

%

 

 

 

 

 

 

 

 

COVID-19 costs

0.6

 

 

—

 

 

 

 

 

 

 

 

 

Operating profit (non-GAAP)

$

9.4

 

 

$

7.8

 

 

20.8

%

% of net sales

2.7

%

 

2.5

%

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005072/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