HNI Corporation (NYSE: HNI) today announced sales for the full year ended December 31, 2022 of $2.362 billion and net income of $123.9 million. GAAP net income per diluted share was $2.94, compared to $1.36 in the prior year. Non-GAAP net income per diluted share was $2.20, compared to $1.63 in the prior year. GAAP to non-GAAP reconciliations follow the financial statements in this release.
Fourth quarter sales of $568.9 million were down 6 percent from year-ago levels, and fourth quarter net income was $16.3 million. GAAP net income per diluted share was $0.39, compared to $0.19 in the prior year, equal to a year-over-year increase of 105 percent. Non-GAAP net income per diluted share was $0.63, compared to $0.43 in the prior year.
Fourth Quarter Highlights
“We delivered solid margin expansion and strong earnings growth in both the fourth quarter and the full year of 2022 in a softening demand environment. Our margin expansion initiatives in Workplace Furnishings are delivering results. Second half 2022 operating margin expanded 150 basis points versus the prior-year period despite volume pressures tied to the slowing economy. In our Residential Building Products segment, we delivered profit growth and margin expansion while preparing for softer housing-related demand. Our results in Residential Building Products demonstrate the strength of our differentiated business model,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
Fourth Quarter - Financial Performance |
||||||||||
(Dollars in millions, except per share data) |
||||||||||
|
Three Months Ended |
|
|
|||||||
|
December 31,
|
|
January 1,
|
|
Change |
|||||
GAAP |
|
|
|
|
|
|||||
Net Sales |
$ |
568.9 |
|
|
$ |
602.9 |
|
|
(5.6 |
%) |
Gross Profit % |
|
36.6 |
% |
|
|
32.2 |
% |
|
440 bps |
|
SG&A % |
|
31.5 |
% |
|
|
29.2 |
% |
|
230 bps |
|
Restructuring and Impairment Charges % |
|
1.0 |
% |
|
|
1.0 |
% |
|
— bps |
|
Operating Income |
$ |
23.0 |
|
|
$ |
11.9 |
|
|
93.0 |
% |
Operating Income % |
|
4.0 |
% |
|
|
2.0 |
% |
|
200 bps |
|
Effective Tax Rate |
|
21.0 |
% |
|
|
19.4 |
% |
|
|
|
Net Income % |
|
2.9 |
% |
|
|
1.4 |
% |
|
150 bps |
|
EPS – diluted |
$ |
0.39 |
|
|
$ |
0.19 |
|
|
105.3 |
% |
|
|
|
|
|
|
|||||
Non-GAAP |
|
|
|
|
|
|||||
Gross Profit % |
|
37.4 |
% |
|
|
33.5 |
% |
|
390 bps |
|
Operating Income |
$ |
36.2 |
|
|
$ |
25.8 |
|
|
40.0 |
% |
Operating Income % |
|
6.4 |
% |
|
|
4.3 |
% |
|
210 bps |
|
EPS – diluted |
$ |
0.63 |
|
|
$ |
0.43 |
|
|
46.5 |
% |
Fourth Quarter Summary Comments
Change in net sales, as reported |
(5.6 |
%) |
Impact of residential building products acquisitions |
0.7 |
% |
Impact of Lamex divestiture |
(5.1 |
%) |
Change in organic net sales |
(1.2 |
%) |
Organic net sales were unfavorably impacted by 4.6 percent due to the restructuring of an eCommerce business. A reconciliation of organic sales, a non-GAAP measure, follows the financial statements in this release.
Full Year - Financial Performance |
||||||||||
(Dollars in millions, except per share data) |
||||||||||
|
Twelve Months Ended |
|
|
|||||||
|
December 31,
|
|
January 1,
|
|
Change |
|||||
GAAP |
|
|
|
|
|
|||||
Net Sales |
$ |
2,361.8 |
|
|
$ |
2,184.4 |
|
|
8.1 |
% |
Gross Profit % |
|
35.4 |
% |
|
|
34.7 |
% |
|
70 bps |
|
SG&A % |
|
30.6 |
% |
|
|
30.5 |
% |
|
10 bps |
|
Gain on Sale of Subsidiary |
$ |
50.4 |
|
|
$ |
— |
|
|
NM |
|
Restructuring and Impairment Charges % |
|
0.3 |
% |
|
|
0.3 |
% |
|
— bps |
|
Operating Income |
$ |
155.2 |
|
|
$ |
85.4 |
|
|
81.7 |
% |
Operating Income % |
|
6.6 |
% |
|
|
3.9 |
% |
|
270 bps |
|
Effective Tax Rate |
|
15.4 |
% |
|
|
23.6 |
% |
|
|
|
Net Income % |
|
5.2 |
% |
|
|
2.7 |
% |
|
250 bps |
|
EPS – diluted |
$ |
2.94 |
|
|
$ |
1.36 |
|
|
116.2 |
% |
|
|
|
|
|
|
|||||
Non-GAAP |
|
|
|
|
|
|||||
Gross Profit % |
|
35.7 |
% |
|
|
35.0 |
% |
|
70 bps |
|
Operating Income |
$ |
128.4 |
|
|
$ |
100.7 |
|
|
27.4 |
% |
Operating Income % |
|
5.4 |
% |
|
|
4.6 |
% |
|
80 bps |
|
EPS – diluted |
$ |
2.20 |
|
|
$ |
1.63 |
|
|
35.0 |
% |
Full Year Summary Comments
Change in net sales, as reported |
8.1 |
% |
Impact of residential building products acquisitions |
2.0 |
% |
Impact of Lamex divestiture |
(2.5 |
%) |
Change in organic net sales |
8.5 |
% |
Organic net sales were unfavorably impacted by 5.2 percent due to the restructuring of an eCommerce business.
Workplace Furnishings – Financial Performance |
||||||||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||||
|
Three Months Ended |
|
|
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
December 31,
|
|
January 1,
|
|
Change |
|
|
December 31,
|
|
January 1,
|
|
Change |
||||||||||
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales |
$ |
351.2 |
|
|
$ |
394.0 |
|
|
(10.8 |
%) |
|
|
$ |
1,486.2 |
|
|
$ |
1,434.0 |
|
|
3.6 |
% |
Operating Profit (Loss) |
($ |
7.7 |
) |
|
($ |
10.1 |
) |
|
23.8 |
% |
|
|
$ |
3.4 |
|
|
($ |
0.5 |
) |
|
734.6 |
% |
Operating Profit (Loss) % |
|
(2.2 |
%) |
|
|
(2.6 |
%) |
|
40 bps |
|
|
|
0.2 |
% |
|
|
(0.0 |
%) |
|
20 bps |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Profit |
$ |
8.4 |
|
|
$ |
3.5 |
|
|
136.5 |
% |
|
|
$ |
23.5 |
|
|
$ |
14.5 |
|
|
62.1 |
% |
Operating Profit % |
|
2.4 |
% |
|
|
0.9 |
% |
|
150 bps |
|
|
|
1.6 |
% |
|
|
1.0 |
% |
|
60 bps |
Fourth Quarter Summary Comments - Workplace Furnishings
Change in net sales, as reported |
(10.8 |
%) |
Impact of Lamex divestiture |
(7.6 |
%) |
Change in organic net sales |
(3.3 |
%) |
Organic net sales were unfavorably impacted by 7.3 percent due to the restructuring of an eCommerce business.
Full Year Summary Comments - Workplace Furnishings
Change in net sales, as reported |
3.6 |
% |
Impact of Lamex divestiture |
(3.6 |
%) |
Change in organic net sales |
7.3 |
% |
Organic net sales were unfavorably impacted by 8.2 percent due to the restructuring of an eCommerce business.
Residential Building Products – Financial Performance |
||||||||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||||
|
Three Months Ended |
|
|
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
December 31,
|
|
January 1,
|
|
Change |
|
|
December 31,
|
|
January 1,
|
|
Change |
||||||||||
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales |
$ |
217.7 |
|
|
$ |
209.0 |
|
|
4.2 |
% |
|
|
$ |
875.6 |
|
|
$ |
750.4 |
|
|
16.7 |
% |
Operating Profit |
$ |
41.7 |
|
|
$ |
38.1 |
|
|
9.5 |
% |
|
|
$ |
158.7 |
|
|
$ |
141.9 |
|
|
11.9 |
% |
Operating Profit % |
|
19.2 |
% |
|
|
18.2 |
% |
|
100 bps |
|
|
|
18.1 |
% |
|
|
18.9 |
% |
|
-80 bps |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Profit |
$ |
43.3 |
|
|
$ |
38.1 |
|
|
13.6 |
% |
|
|
$ |
160.3 |
|
|
$ |
141.9 |
|
|
13.0 |
% |
Operating Profit % |
|
19.9 |
% |
|
|
18.2 |
% |
|
170 bps |
|
|
|
18.3 |
% |
|
|
18.9 |
% |
|
-60 bps |
Fourth Quarter Summary Comments - Residential Building Products
Full Year Summary Comments - Residential Building Products
Fourth Quarter Orders
Fiscal Year 2023 Outlook
Concluding Remarks
“We expect to drive profit improvement in Workplace Furnishings despite continued volume pressures as our focused margin expansion initiatives continue to gain traction. During 2023, we expect improved productivity, favorable price-cost, and cost actions to more than offset lower volume. Beyond 2023, we are not reliant on volume growth to drive margin expansion in Workplace Furnishings. However, looking ahead, recent mid-market employment and demand trends, feedback from large corporate customers regarding return-to-office plans, and signals from recent migration patterns toward secondary and tertiary geographies all align with our market positions and point to the return of sustained volume growth.
“In Residential Building Products, we are prepared for a slowing near-term demand environment. However, we remain committed to our growth initiatives in the areas of category awareness, new product innovation—including electric, online capabilities, and expansion of our owned installing-distribution footprint. The housing market remains undersupplied, and demographic trends support demand growth. Given the market’s strong fundamentals and our unique growth opportunities, we are bullish about growth in Residential Building Products beyond 2023,” Mr. Lorenger concluded.
Conference Call
HNI Corporation will host a conference call on Thursday, February 23, 2023 at 10:00 a.m. (Central) to discuss fourth quarter and fiscal year 2022 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 http://www.hnicorp.com (under Investors – Events & Presentations). A replay of the webcast will be made available at this website address. An audio replay of the call will be available until Thursday, March 2, 2023, 10:59 p.m. (Central) by dialing 1-800-770-2030 – Conference ID number 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, 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. These risks include but are not limited to: the duration and scope of the COVID-19 pandemic, including any emerging variants of the virus, and its effect on people and the economy; 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 |
|
Twelve Months Ended |
||||||||||||
December 31,
|
|
January 1,
|
|
December 31,
|
|
January 1,
|
|||||||||
Net sales |
$ |
568.9 |
|
|
$ |
602.9 |
|
|
$ |
2,361.8 |
|
|
$ |
2,184.4 |
|
Cost of sales |
|
361.0 |
|
|
|
408.7 |
|
|
|
1,526.9 |
|
|
|
1,427.0 |
|
Gross profit |
|
208.0 |
|
|
|
194.2 |
|
|
|
834.9 |
|
|
|
757.4 |
|
Selling and administrative expenses |
|
179.1 |
|
|
|
176.0 |
|
|
|
723.4 |
|
|
|
665.6 |
|
(Gain) loss on sale of subsidiary |
|
0.3 |
|
|
|
— |
|
|
|
(50.4 |
) |
|
|
— |
|
Restructuring and impairment charges |
|
5.7 |
|
|
|
6.3 |
|
|
|
6.7 |
|
|
|
6.3 |
|
Operating income |
|
23.0 |
|
|
|
11.9 |
|
|
|
155.2 |
|
|
|
85.4 |
|
Interest expense, net |
|
2.3 |
|
|
|
1.7 |
|
|
|
8.8 |
|
|
|
7.2 |
|
Income before income taxes |
|
20.6 |
|
|
|
10.2 |
|
|
|
146.4 |
|
|
|
78.3 |
|
Income taxes |
|
4.3 |
|
|
|
2.0 |
|
|
|
22.5 |
|
|
|
18.5 |
|
Net income |
|
16.3 |
|
|
|
8.2 |
|
|
|
123.9 |
|
|
|
59.8 |
|
Less: Net income (loss) attributable to non-controlling interest |
|
0.0 |
|
|
|
0.0 |
|
|
|
(0.0 |
) |
|
|
(0.0 |
) |
Net income attributable to HNI Corporation |
$ |
16.3 |
|
|
$ |
8.2 |
|
|
$ |
123.9 |
|
|
$ |
59.8 |
|
|
|
|
|
|
|
|
|
||||||||
Average number of common shares outstanding – basic |
|
41.4 |
|
|
|
43.0 |
|
|
|
41.7 |
|
|
|
43.4 |
|
Net income attributable to HNI Corporation per common share – basic |
$ |
0.39 |
|
|
$ |
0.19 |
|
|
$ |
2.97 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
||||||||
Average number of common shares outstanding – diluted |
|
41.9 |
|
|
|
43.7 |
|
|
|
42.2 |
|
|
|
44.0 |
|
Net income attributable to HNI Corporation per common share – diluted |
$ |
0.39 |
|
|
$ |
0.19 |
|
|
$ |
2.94 |
|
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments |
$ |
(0.2 |
) |
|
$ |
0.3 |
|
|
$ |
(5.7 |
) |
|
$ |
0.4 |
|
Change in unrealized gains (losses) on marketable securities, net of tax |
|
0.1 |
|
|
|
(0.1 |
) |
|
|
(0.7 |
) |
|
|
(0.3 |
) |
Change in pension and post-retirement liability, net of tax |
|
4.3 |
|
|
|
1.2 |
|
|
|
4.3 |
|
|
|
1.2 |
|
Change in derivative financial instruments, net of tax |
|
(0.1 |
) |
|
|
0.4 |
|
|
|
0.8 |
|
|
|
1.0 |
|
Other comprehensive income (loss), net of tax |
|
4.1 |
|
|
|
1.9 |
|
|
|
(1.3 |
) |
|
|
2.4 |
|
Comprehensive income |
|
20.4 |
|
|
|
10.1 |
|
|
|
122.6 |
|
|
|
62.2 |
|
Less: Comprehensive income (loss) attributable to non-controlling interest |
|
0.0 |
|
|
|
0.0 |
|
|
|
(0.0 |
) |
|
|
(0.0 |
) |
Comprehensive income attributable to HNI Corporation |
$ |
20.4 |
|
|
$ |
10.1 |
|
|
$ |
122.6 |
|
|
$ |
62.2 |
|
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In millions) (Unaudited) |
|||||||
|
December 31,
|
|
January 1,
|
||||
Assets |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
17.4 |
|
|
$ |
52.3 |
|
Short-term investments |
|
2.0 |
|
|
|
1.4 |
|
Receivables |
|
218.4 |
|
|
|
240.0 |
|
Allowance for doubtful accounts |
|
(3.2 |
) |
|
|
(2.8 |
) |
Inventories, net |
|
180.1 |
|
|
|
181.6 |
|
Prepaid expenses and other current assets |
|
54.4 |
|
|
|
51.1 |
|
Total Current Assets |
|
469.2 |
|
|
|
523.5 |
|
Property, Plant, and Equipment: |
|
|
|
||||
Land and land improvements |
|
30.8 |
|
|
|
30.9 |
|
Buildings |
|
275.4 |
|
|
|
294.5 |
|
Machinery and equipment |
|
602.6 |
|
|
|
593.6 |
|
Construction in progress |
|
34.2 |
|
|
|
29.7 |
|
|
|
942.9 |
|
|
|
948.7 |
|
Less accumulated depreciation |
|
(590.3 |
) |
|
|
(581.9 |
) |
Net Property, Plant, and Equipment |
|
352.5 |
|
|
|
366.8 |
|
Right-of-use Finance Leases |
|
11.4 |
|
|
|
10.2 |
|
Right-of-use Operating Leases |
|
88.4 |
|
|
|
82.9 |
|
Goodwill and Other Intangible Assets, net |
|
439.8 |
|
|
|
471.5 |
|
Other Assets |
|
53.2 |
|
|
|
43.1 |
|
Total Assets |
$ |
1,414.5 |
|
|
$ |
1,497.9 |
|
|
|
|
|
||||
Liabilities and Equity |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
367.7 |
|
|
$ |
473.8 |
|
Current maturities of debt |
|
1.3 |
|
|
|
3.2 |
|
Current maturities of other long-term obligations |
|
2.1 |
|
|
|
3.9 |
|
Current lease obligations - Finance |
|
3.7 |
|
|
|
2.8 |
|
Current lease obligations - Operating |
|
20.3 |
|
|
|
22.8 |
|
Total Current Liabilities |
|
395.1 |
|
|
|
506.4 |
|
Long-Term Debt |
|
188.8 |
|
|
|
174.6 |
|
Long-Term Lease Obligations - Finance |
|
7.7 |
|
|
|
7.4 |
|
Long-Term Lease Obligations - Operating |
|
78.9 |
|
|
|
63.8 |
|
Other Long-Term Liabilities |
|
66.3 |
|
|
|
80.7 |
|
Deferred Income Taxes |
|
61.0 |
|
|
|
75.0 |
|
Equity: |
|
|
|
||||
HNI Corporation shareholders’ equity |
|
616.5 |
|
|
|
589.6 |
|
Non-controlling interest |
|
0.3 |
|
|
|
0.3 |
|
Total Equity |
|
616.8 |
|
|
|
590.0 |
|
Total Liabilities and Equity |
$ |
1,414.5 |
|
|
$ |
1,497.9 |
|
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (In millions)
(Unaudited) |
|||||||
|
Twelve Months Ended |
||||||
|
December 31,
|
|
January 1,
|
||||
Net Cash Flows From (To) Operating Activities: |
|
|
|
||||
Net income |
$ |
123.9 |
|
|
$ |
59.8 |
|
Non-cash items included in net income: |
|
|
|
||||
Depreciation and amortization |
|
84.2 |
|
|
|
83.1 |
|
Other post-retirement and post-employment benefits |
|
1.3 |
|
|
|
1.3 |
|
Stock-based compensation |
|
9.0 |
|
|
|
12.9 |
|
Deferred income taxes |
|
(15.3 |
) |
|
|
(0.4 |
) |
Restructuring and impairment charges |
|
6.2 |
|
|
|
5.8 |
|
Gain on sale of subsidiary |
|
(50.4 |
) |
|
|
— |
|
Other – net |
|
2.7 |
|
|
|
4.0 |
|
Net decrease in cash from operating assets and liabilities |
|
(72.7 |
) |
|
|
(34.4 |
) |
Decrease in other liabilities |
|
(7.7 |
) |
|
|
(0.5 |
) |
Net cash flows from (to) operating activities |
|
81.2 |
|
|
|
131.6 |
|
|
|
|
|
||||
Net Cash Flows From (To) Investing Activities: |
|
|
|
||||
Capital expenditures |
|
(60.0 |
) |
|
|
(53.5 |
) |
Acquisition spending, net of cash acquired |
|
(11.4 |
) |
|
|
(44.6 |
) |
Capitalized software |
|
(8.4 |
) |
|
|
(13.1 |
) |
Purchase of investments |
|
(2.8 |
) |
|
|
(3.4 |
) |
Sales or maturities of investments |
|
2.3 |
|
|
|
3.3 |
|
Proceeds from sale of subsidiary, net of cash divested |
|
69.5 |
|
|
|
— |
|
Other – net |
|
0.0 |
|
|
|
0.2 |
|
Net cash flows from (to) investing activities |
|
(10.7 |
) |
|
|
(111.0 |
) |
|
|
|
|
||||
Net Cash Flows From (To) Financing Activities: |
|
|
|
||||
Payments of debt |
|
(401.6 |
) |
|
|
(2.6 |
) |
Proceeds from debt |
|
413.9 |
|
|
|
5.0 |
|
Dividends paid |
|
(53.2 |
) |
|
|
(53.8 |
) |
Purchase of HNI Corporation common stock |
|
(65.2 |
) |
|
|
(59.2 |
) |
Proceeds from sales of HNI Corporation common stock |
|
4.7 |
|
|
|
31.1 |
|
Other – net |
|
(4.0 |
) |
|
|
(5.1 |
) |
Net cash flows from (to) financing activities |
|
(105.4 |
) |
|
|
(84.5 |
) |
|
|
|
|
||||
Net decrease in cash and cash equivalents |
|
(34.8 |
) |
|
|
(63.9 |
) |
Cash and cash equivalents at beginning of period |
|
52.3 |
|
|
|
116.1 |
|
Cash and cash equivalents at end of period |
$ |
17.4 |
|
|
$ |
52.3 |
|
Amounts may not sum due to rounding.
HNI Corporation and Subsidiaries Reportable Segment Data (In millions)
(Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
December 31,
|
|
January 1,
|
|
December 31,
|
|
January 1,
|
||||||||
Net Sales: |
|
|
|
|
|
|
|
||||||||
Workplace Furnishings |
$ |
351.2 |
|
|
$ |
394.0 |
|
|
$ |
1,486.2 |
|
|
$ |
1,434.0 |
|
Residential Building Products |
|
217.7 |
|
|
|
209.0 |
|
|
|
875.6 |
|
|
|
750.4 |
|
Total |
$ |
568.9 |
|
|
$ |
602.9 |
|
|
$ |
2,361.8 |
|
|
$ |
2,184.4 |
|
|
|
|
|
|
|
|
|
||||||||
Income (Loss) Before Income Taxes: |
|
|
|
|
|
|
|
||||||||
Workplace Furnishings |
$ |
(7.7 |
) |
|
$ |
(10.1 |
) |
|
$ |
3.4 |
|
|
$ |
(0.5 |
) |
Residential Building Products |
|
41.7 |
|
|
|
38.1 |
|
|
|
158.7 |
|
|
|
141.9 |
|
General corporate |
|
(10.8 |
) |
|
|
(16.1 |
) |
|
|
(57.3 |
) |
|
|
(55.9 |
) |
Gain (loss) on sale of subsidiary |
|
(0.3 |
) |
|
|
— |
|
|
|
50.4 |
|
|
|
— |
|
Operating Income |
$ |
23.0 |
|
|
$ |
11.9 |
|
|
$ |
155.2 |
|
|
$ |
85.4 |
|
Interest expense, net |
|
2.3 |
|
|
|
1.7 |
|
|
|
8.8 |
|
|
|
7.2 |
|
Total |
$ |
20.6 |
|
|
$ |
10.2 |
|
|
$ |
146.4 |
|
|
$ |
78.3 |
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and Amortization Expense: |
|
|
|
|
|
|
|
||||||||
Workplace Furnishings |
$ |
11.1 |
|
|
$ |
11.9 |
|
|
$ |
45.7 |
|
|
$ |
47.8 |
|
Residential Building Products |
|
3.3 |
|
|
|
2.6 |
|
|
|
12.6 |
|
|
|
10.0 |
|
General corporate |
|
6.4 |
|
|
|
6.6 |
|
|
|
25.9 |
|
|
|
25.3 |
|
Total |
$ |
20.7 |
|
|
$ |
21.1 |
|
|
$ |
84.2 |
|
|
$ |
83.1 |
|
|
|
|
|
|
|
|
|
||||||||
Capital Expenditures (including capitalized software): |
|
|
|
|
|
|
|
||||||||
Workplace Furnishings |
$ |
14.0 |
|
|
$ |
10.8 |
|
|
$ |
40.4 |
|
|
$ |
34.8 |
|
Residential Building Products |
|
4.1 |
|
|
|
4.0 |
|
|
|
16.2 |
|
|
|
16.1 |
|
General corporate |
|
1.5 |
|
|
|
4.0 |
|
|
|
11.7 |
|
|
|
15.6 |
|
Total |
$ |
19.7 |
|
|
$ |
18.8 |
|
|
$ |
68.4 |
|
|
$ |
66.5 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
As of
|
|
As of
|
||||||||
Identifiable Assets: |
|
|
|
|
|
|
|
||||||||
Workplace Furnishings |
|
|
|
|
$ |
761.5 |
|
|
$ |
809.0 |
|
||||
Residential Building Products |
|
|
|
|
|
493.0 |
|
|
|
479.5 |
|
||||
General corporate |
|
|
|
|
|
160.0 |
|
|
|
209.5 |
|
||||
Total |
|
|
|
|
$ |
1,414.5 |
|
|
$ |
1,497.9 |
|
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. In the current quarter and year periods, the effective tax rate used to calculate non-GAAP EPS differs from the GAAP effective tax rate due to the impact of the Lamex divestiture in third quarter 2022. 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 the non-GAAP organic sales information presented in this earnings release relate to the current period exclusion of net sales of residential building products companies acquired, as well as the exclusion of a portion of the prior period net sales of the Lamex business that was divested in the current year. The transactions excluded for purposes of other non-GAAP financial information included in this earnings release include restructuring charges comprised of inventory valuation adjustments, severance, and relocation and new facility setup costs in connection with capacity expansion initiatives in the Workplace Furnishings segment. Also excluded are items related to the gain on sale of the Lamex business, asset impairments, severance and other charges related to company-wide cost reduction initiatives, and costs in the prior year driven by the COVID-19 pandemic.
HNI Corporation Reconciliation |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||
|
Three Months Ended |
|||||||||||||||
|
December 31, 2022 |
|
January 1, 2022 |
|||||||||||||
|
Workplace
|
Residential
|
Total |
|
Workplace
|
Residential
|
Total |
|||||||||
Sales as reported (GAAP) |
$ |
351.2 |
|
$ |
217.7 |
|
$ |
568.9 |
|
|
$ |
394.0 |
$ |
209.0 |
$ |
602.9 |
% change from PY |
|
(10.8 |
%) |
|
4.2 |
% |
|
(5.6 |
%) |
|
|
|
|
|||
Less: Acquisitions |
|
— |
|
|
3.9 |
|
|
3.9 |
|
|
|
— |
|
— |
|
— |
Less: Divestiture |
|
— |
|
|
— |
|
|
— |
|
|
|
30.8 |
|
— |
|
30.8 |
|
|
|
|
|
|
|
|
|||||||||
Organic Sales (non-GAAP) |
$ |
351.2 |
|
$ |
213.8 |
|
$ |
565.0 |
|
|
$ |
363.1 |
$ |
209.0 |
$ |
572.1 |
% change from PY |
|
(3.3 |
%) |
|
2.3 |
% |
|
(1.2 |
%) |
|
|
|
|
HNI Corporation Reconciliation |
||||||||||||||||
(Dollars in millions) |
||||||||||||||||
|
Twelve Months Ended |
|||||||||||||||
|
December 31, 2022 |
|
January 1, 2022 |
|||||||||||||
|
Workplace
|
Residential
|
Total |
|
Workplace
|
Residential
|
Total |
|||||||||
Sales as reported (GAAP) |
$ |
1,486.2 |
|
$ |
875.6 |
|
$ |
2,361.8 |
|
|
$ |
1,434.0 |
$ |
750.4 |
$ |
2,184.4 |
% change from PY |
|
3.6 |
% |
|
16.7 |
% |
|
8.1 |
% |
|
|
|
|
|||
Less: Acquisitions |
|
— |
|
|
43.7 |
|
|
43.7 |
|
|
|
— |
|
— |
|
— |
Less: Divestiture |
|
— |
|
|
— |
|
|
— |
|
|
|
48.7 |
|
— |
|
48.7 |
|
|
|
|
|
|
|
|
|||||||||
Organic Sales (non-GAAP) |
$ |
1,486.2 |
|
$ |
831.9 |
|
$ |
2,318.1 |
|
|
$ |
1,385.3 |
$ |
750.4 |
$ |
2,135.7 |
% change from PY |
|
7.3 |
% |
|
10.9 |
% |
|
8.5 |
% |
|
|
|
|
HNI Corporation Reconciliation |
||||||||||||||||||
(Dollars in millions, except per share data) |
||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||
|
December 31, 2022 |
|||||||||||||||||
|
Gross
|
|
Operating
|
|
Tax |
|
Net
|
|
EPS |
|||||||||
As reported (GAAP) |
$ |
208.0 |
|
|
$ |
23.0 |
|
|
$ |
4.3 |
|
|
$ |
16.3 |
|
|
$ |
0.39 |
% of net sales |
|
36.6 |
% |
|
|
4.0 |
% |
|
|
|
|
2.9 |
% |
|
|
|||
Tax % |
|
|
|
|
|
21.0 |
% |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring charges |
|
4.8 |
|
|
|
7.5 |
|
|
|
1.7 |
|
|
|
5.8 |
|
|
|
0.14 |
Impairment charges |
|
— |
|
|
|
3.0 |
|
|
|
0.7 |
|
|
|
2.3 |
|
|
|
0.06 |
Company-wide cost reduction initiative |
|
— |
|
|
|
2.5 |
|
|
|
0.5 |
|
|
|
1.9 |
|
|
|
0.05 |
(Gain) loss on sale of subsidiary |
|
— |
|
|
|
0.3 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Results (non-GAAP) |
$ |
212.8 |
|
|
$ |
36.2 |
|
|
$ |
7.3 |
|
|
$ |
26.6 |
|
|
$ |
0.63 |
% of net sales |
|
37.4 |
% |
|
|
6.4 |
% |
|
|
|
|
4.7 |
% |
|
|
|||
Tax % |
|
|
|
|
|
21.4 |
% |
|
|
|
|
HNI Corporation Reconciliation |
||||||||||||||||||
(Dollars in millions, except per share data) |
||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||
|
January 1, 2022 |
|||||||||||||||||
|
Gross
|
|
Operating
|
|
Tax |
|
Net
|
|
EPS |
|||||||||
As reported (GAAP) |
$ |
194.2 |
|
|
$ |
11.9 |
|
|
$ |
2.0 |
|
|
$ |
8.2 |
|
|
$ |
0.19 |
% of net sales |
|
32.2 |
% |
|
|
2.0 |
% |
|
|
|
|
1.4 |
% |
|
|
|||
Tax % |
|
|
|
|
|
19.4 |
% |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring charges |
|
7.6 |
|
|
|
8.2 |
|
|
|
1.9 |
|
|
|
6.3 |
|
|
|
0.14 |
Impairment charges |
|
— |
|
|
|
5.8 |
|
|
|
1.3 |
|
|
|
4.4 |
|
|
|
0.10 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Results (non-GAAP) |
$ |
201.8 |
|
|
$ |
25.8 |
|
|
$ |
5.2 |
|
|
$ |
18.9 |
|
|
$ |
0.43 |
% of net sales |
|
33.5 |
% |
|
|
4.3 |
% |
|
|
|
|
3.1 |
% |
|
|
|||
Tax % |
|
|
|
|
|
21.7 |
% |
|
|
|
|
HNI Corporation Reconciliation |
|||||||||||||||||||
(Dollars in millions, except per share data) |
|||||||||||||||||||
|
Twelve Months Ended |
||||||||||||||||||
|
December 31, 2022 |
||||||||||||||||||
|
Gross
|
|
Operating
|
|
Tax |
|
Net
|
|
EPS |
||||||||||
As reported (GAAP) |
$ |
834.9 |
|
|
$ |
155.2 |
|
|
$ |
22.5 |
|
|
$ |
123.9 |
|
|
$ |
2.94 |
|
% of net sales |
|
35.4 |
% |
|
|
6.6 |
% |
|
|
|
|
5.2 |
% |
|
|
||||
Tax % |
|
|
|
|
|
15.4 |
% |
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Restructuring charges |
|
8.8 |
|
|
|
11.5 |
|
|
|
2.6 |
|
|
|
8.9 |
|
|
|
0.21 |
|
Impairment charges |
|
— |
|
|
|
4.0 |
|
|
|
0.9 |
|
|
|
3.1 |
|
|
|
0.07 |
|
Company-wide cost reduction initiative |
|
— |
|
|
|
8.0 |
|
|
|
1.8 |
|
|
|
6.2 |
|
|
|
0.15 |
|
Gain on sale of subsidiary |
|
— |
|
|
|
(50.4 |
) |
|
|
(1.0 |
) |
|
|
(49.4 |
) |
|
|
(1.17 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Results (non-GAAP) |
$ |
843.7 |
|
|
$ |
128.4 |
|
|
$ |
26.8 |
|
|
$ |
92.8 |
|
|
$ |
2.20 |
|
% of net sales |
|
35.7 |
% |
|
|
5.4 |
% |
|
|
|
|
3.9 |
% |
|
|
||||
Tax % |
|
|
|
|
|
22.4 |
% |
|
|
|
|
HNI Corporation Reconciliation |
||||||||||||||||||
(Dollars in millions, except per share data) |
||||||||||||||||||
|
Twelve Months Ended |
|||||||||||||||||
|
January 1, 2022 |
|||||||||||||||||
|
Gross
|
|
Operating
|
|
Tax |
|
Net
|
|
EPS |
|||||||||
As reported (GAAP) |
$ |
757.4 |
|
|
$ |
85.4 |
|
|
$ |
18.5 |
|
|
$ |
59.8 |
|
|
$ |
1.36 |
% of net sales |
|
34.7 |
% |
|
|
3.9 |
% |
|
|
|
|
2.7 |
% |
|
|
|||
Tax % |
|
|
|
|
|
23.6 |
% |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring charges |
|
7.6 |
|
|
|
8.2 |
|
|
|
1.9 |
|
|
|
6.3 |
|
|
|
0.14 |
Impairment charges |
|
— |
|
|
|
5.8 |
|
|
|
1.3 |
|
|
|
4.4 |
|
|
|
0.10 |
COVID-19 costs |
|
— |
|
|
|
1.4 |
|
|
|
0.4 |
|
|
|
1.0 |
|
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Results (non-GAAP) |
$ |
765.0 |
|
|
$ |
100.7 |
|
|
$ |
22.1 |
|
|
$ |
71.5 |
|
|
$ |
1.63 |
% of net sales |
|
35.0 |
% |
|
|
4.6 |
% |
|
|
|
|
3.3 |
% |
|
|
|||
Tax % |
|
|
|
|
|
23.6 |
% |
|
|
|
|
Workplace Furnishings Reconciliation |
||||||||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||||
|
Three Months Ended |
|
|
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
December 31,
|
|
January 1,
|
|
Percent
|
|
|
December 31,
|
|
January 1,
|
|
Percent
|
||||||||||
Operating profit (loss) as reported (GAAP) |
($ |
7.7 |
) |
|
($ |
10.1 |
) |
|
23.8 |
% |
|
|
$ |
3.4 |
|
|
($ |
0.5 |
) |
|
734.6 |
% |
% of net sales |
|
(2.2 |
%) |
|
|
(2.6 |
%) |
|
|
|
|
|
0.2 |
% |
|
|
(0.0 |
%) |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restructuring charges |
|
7.5 |
|
|
|
7.9 |
|
|
|
|
|
|
11.5 |
|
|
|
7.9 |
|
|
|
||
Impairment charges |
|
3.0 |
|
|
|
5.8 |
|
|
|
|
|
|
3.0 |
|
|
|
5.8 |
|
|
|
||
Company-wide cost reduction initiative |
|
5.6 |
|
|
|
— |
|
|
|
|
|
|
5.6 |
|
|
|
— |
|
|
|
||
COVID-19 costs |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
1.4 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating profit (non-GAAP) |
$ |
8.4 |
|
|
$ |
3.5 |
|
|
136.5 |
% |
|
|
$ |
23.5 |
|
|
$ |
14.5 |
|
|
62.1 |
% |
% of net sales |
|
2.4 |
% |
|
|
0.9 |
% |
|
|
|
|
|
1.6 |
% |
|
|
1.0 |
% |
|
|
Residential Building Products Reconciliation |
||||||||||||||||||||||
(Dollars in millions) |
||||||||||||||||||||||
|
Three Months Ended |
|
|
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
December 31,
|
|
January 1,
|
|
Percent
|
|
|
December 31,
|
|
January 1,
|
|
Percent
|
||||||||||
Operating profit as reported (GAAP) |
$ |
41.7 |
|
|
$ |
38.1 |
|
|
9.5 |
% |
|
|
$ |
158.7 |
|
|
$ |
141.9 |
|
|
11.9 |
% |
% of net sales |
|
19.2 |
% |
|
|
18.2 |
% |
|
|
|
|
|
18.1 |
% |
|
|
18.9 |
% |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company-wide cost reduction initiative |
|
1.5 |
|
|
|
— |
|
|
|
|
|
|
1.5 |
|
|
|
— |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating profit (non-GAAP) |
$ |
43.3 |
|
|
$ |
38.1 |
|
|
13.6 |
% |
|
|
$ |
160.3 |
|
|
$ |
141.9 |
|
|
13.0 |
% |
% of net sales |
|
19.9 |
% |
|
|
18.2 |
% |
|
|
|
|
|
18.3 |
% |
|
|
18.9 |
% |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230221005861/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