Welcome!

News Feed Item

HNI Corporation Increases Sales And Earnings For First Quarter Fiscal 2014

MUSCATINE, Iowa, April 16, 2014 /PRNewswire/ -- HNI Corporation (NYSE: HNI) today announced sales for the first quarter ended March 29, 2014, of $452.2 million and net income of $11.1 million, or $0.24 per diluted share for the quarter.  Non-GAAP net income per diluted share improved nine cents from the prior year quarter to $0.12, which excludes a pre-tax gain of $8.4 million on the sale of a vacated facility.   

First Quarter Summary Comments
"We are pleased with our continued improved performance and strong profit growth over prior year.  Strong performance in our hearth business was a key driver to our first quarter profit improvement.  As expected, office furniture sales increased in our contract channel while our supplies-driven channel was negatively impacted by harsh weather," said Stan Askren, HNI Corporation Chairman, President and Chief Executive Officer.

First Quarter – GAAP Financial Measures



Dollars in millions

Three Months Ended

Percent

except per share data

3/29/2014

3/30/2013

 Change





Net sales

$452.2

$442.3

2.2%

Gross profit

$155.2

$147.8

5.0%

Gross profit %

34.3%

33.4%


SG&A (including restructuring)

$145.2

$144.7

3.2%

SG&A %

32.1%

32.7%


(Gain) on sale of assets

$(8.4)

-

NM

Operating income

$18.4

$3.1

499.0%

Operating income %

4.1%

0.7%


Net income attributable to HNI Corporation

$11.1

$1.4

688.2%





Earnings per share attributable to HNI Corporation – diluted

$0.24

$0.03

700.0%

First Quarter Results

  • Consolidated net sales increased $9.9 million or 2.2 percent to $452.2 million. Compared to prior year quarter, divestitures reduced sales $6.8 million. On an organic basis sales increased 3.8 percent.
  • Gross margin was 0.9 percentage points higher than prior year primarily due to higher volume in the hearth products segment and increased price realization partially offset by lower volume and unfavorable mix in the office furniture segment.
  • Total selling and administrative expenses as a percent of net sales, including restructuring charges, decreased 0.6 percentage points due to volume and freight efficiencies partially offset by investment in strategic initiatives and higher incentive-based compensation.
  • The Corporation's first quarter results included an $8.4 million gain on the sale of a vacated facility.
  • The provision for income taxes for the prior year quarter reflects the effect of the retroactive extension of the 2012 research tax credit of $0.9 million, all of which was recognized in first quarter 2013.

First Quarter – Non-GAAP Financial Measures

(Reconciled with most comparable GAAP financial measures)





Dollars in millions

Except per share data

Three Months Ended

3/29/2014


Three Months Ended

3/30/2013


Operating

Income

Diluted

EPS


Operating

Income

Diluted

EPS

As reported (GAAP)

$18.4

$0.24


$3.1

$0.03

 % of net sales

4.1%



0.7%








Restructuring and impairment

-



$0.2

$0.00

Gain on sale

$(8.4)

$(0.12)


-








Results (non-GAAP)

$10.0

$0.12


$3.2

$0.03

 % of net sales

2.2%



0.7%


Cash flow used in operations for the quarter was $36.1 million compared to $31.3 million for the same quarter last year.  Capital expenditures were $22.7 million in the first quarter of 2014 compared to $14.8 million in the first quarter of 2013. 

Office Furniture – GAAP Financial Measures


 

Dollars in millions

Three Months Ended

Percent
Change

3/29/2014

3/30/2013

Sales

$358.4

$365.8

-2.0%

Operating profit

$16.5

$8.7

89.6%

Operating profit %

4.6%

2.4%


 

First Quarter – Non-GAAP Financial Measures

(Reconciled with most comparable GAAP financial measures)



Three Months Ended

Percent

Dollars in millions

3/29/2014

3/30/2013

Change





Operating profit as reported (GAAP)

$16.5

$8.7

89.6%

% of Net Sales

4.6%

2.4%






Restructuring and impairment

$(0.0)

$0.2


Gain on sale

$8.4

-






Operating profit (non-GAAP)

$8.1

$8.9

-8.9%

% of Net Sales

2.3%

2.4%


  • First quarter sales for the office furniture segment decreased $7.5 million or 2.0 percent to $358.4 million. Compared to prior year quarter, divestitures reduced sales by $6.8 million. On an organic basis, sales decreased 0.2 percent driven by a decrease in the supplies-driven channel partially offset by an increase in the contract channel.
  • First quarter operating profit increased $7.8 million. Operating profit was positively impacted by increased price realization, freight efficiencies and the gain on sale of a vacated facility. These were partially offset by lower volume and unfavorable mix.

Hearth Products


 

Dollars in millions

Three Months Ended

Percent
Change

3/29/2014

3/30/2013

Sales

$93.8

$76.5

22.7%

Operating profit

$11.7

$3.6

226.0%

Operating profit %

12.5%

4.7%


  • First quarter sales for the hearth products segment increased $17.4 million or 22.7 percent to $93.8 million driven by increases in both the new construction channel and the remodel/retrofit channel.
  • First quarter operating profit increased $8.1 million. Operating profit was positively impacted by increased volume and higher price realization partially offset by higher incentive-based compensation.

Outlook
"We enter the second quarter with solid momentum across our office furniture and hearth businesses, and we remain on track to grow sales and significantly increase profits in 2014.  I remain confident about our long-term investments and ability to deliver long-term shareholder value," said Mr. Askren.

The Corporation estimates sales to be flat to up 4 percent in the second quarter over the same period in the prior year.  Non-GAAP earnings per diluted share are anticipated in the range of $0.32 to $0.37 for the second quarter, which excludes restructuring charges.  For the full year, the Company is raising its estimate of non-GAAP earnings per diluted share to the range of $1.70 to $1.85, which excludes restructuring charges and gain on sale of a vacated facility.

The Corporation remains focused on creating long-term shareholder value by growing its business through investment in building brands, product solutions and selling models, enhancing its strong member-owner culture and continuing to execute its long-standing rapid continuous improvement discipline to build best total cost and a lean enterprise.

Conference Call
HNI Corporation will host a conference call on Thursday, April 17, 2014 at 10:00 a.m. (Central) to discuss first quarter 2014 results.  To participate, call 1-877-512-9166 – conference ID number 16653090.  A live webcast of the call will be available on HNI Corporation's website at http://www.hnicorp.com (under Investor Information – Webcasts).  A replay of the webcast will be made available at the website address above.  An audio replay of the call will be available until Thursday, April 24, 2014, 10:59 p.m. (Central) by dialing 1-855-859-2056 or 1-404-537-3406 – Conference ID number 16653090. 

About HNI Corporation

HNI Corporation is a NYSE traded company (ticker symbol:  HNI) providing products and solutions for the home and workplace environments.  HNI Corporation is the second largest office furniture manufacturer in the world and is also the nation's leading manufacturer and marketer of gas- and wood-burning fireplaces.  The Corporation's strong brands, including HON®, Allsteel®, Gunlocke®, Paoli®, Maxon®, Lamex®, HBF® , artcobell, Midwest Folding Products, ERGO®, Heatilator®, Heat & Glo®, Quadra-Fire® and Harman Stove, have leading positions in their markets.  HNI Corporation is committed to maintaining its long-standing corporate values of integrity, financial soundness and a culture of service and responsiveness.  More information can be found on the Corporation's website at www.hnicorp.com.

Non-GAAP Financial Measures

This earnings release contains certain non-GAAP financial measures.  A "non-GAAP financial measure" is a numerical measure of a company's financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the company.  We have provided a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.

The non-GAAP financial measures used within this earnings release are:  operating income, operating profit and net income per diluted share (i.e., EPS), excluding restructuring and impairment charges, transition costs and gain on sale of a vacated facility.  Non-GAAP EPS is calculated using the Corporation's overall effective tax rate for the period.  We present these measures because management uses this information to monitor and evaluate financial results and trends.  Management believes this information is also useful for investors.  This earnings release also contains a forward-looking estimate of non-GAAP earnings per diluted share for the second quarter and full fiscal year 2014.  We provide such non-GAAP measures to investors on a prospective basis for the same reasons we provide them to investors on a historical basis.  We are unable to provide a reconciliation of our forward-looking estimate of non-GAAP earnings per diluted share to a forward-looking estimate of GAAP earnings per diluted share because certain information needed to make a reasonable forward-looking estimate of GAAP earnings per diluted share for the full fiscal year is difficult to predict and estimate and is often dependent on future events which may be uncertain or outside of our control.  These may include unanticipated charges related to asset impairments (fixed assets, intangibles or goodwill), unanticipated acquisition related costs and other unanticipated non-recurring items not reflective of ongoing operations. 

Forward-looking Statements

This release contains "forward-looking" statements that refer to future events and expectations.  These statements address future plans, outlook, objectives and financial performance including expectations for future sales growth and earnings per diluted share (GAAP and non-GAAP) for the second quarter and full year fiscal 2014.  In addition, forward-looking statements may be identified by words such as "anticipate," "believe," "could," "confident," "estimate," "expect," "forecast," "hope," "intend," "likely," "may," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and variations of such words and similar expressions.  Forward-looking statements involve known and unknown risks, which may cause the Corporation's actual future results to differ materially from expected results.  These risks include, without limitation:  the Corporation's ability to realize financial benefits from its (a) price increases, (b) cost containment and business simplification initiatives, (c) investments in strategic acquisitions, new products and brand building, (d) investments in distribution and rapid continuous improvement, (e) ability to maintain its effective tax rate, (f) repurchases of common stock and (g) consolidation and logistical realignment initiatives; uncertainty related to the availability of cash and credit, and the terms and interest rates on which credit would be available, to fund operations and future growth; lower than expected demand for the Corporation's products due to uncertain political and economic conditions; slow or negative growth rates in global and domestic economies or in the domestic housing market; lower industry growth than expected; major disruptions at key facilities or in the supply of any key raw materials, components or finished goods; competitive pricing pressure from foreign and domestic competitors; higher than expected costs and lower than expected supplies of materials; higher costs for energy and fuel; changes in the mix of products sold and of customers purchasing; relationships with distribution channel partners, including the financial viability of distributors and dealers; restrictions imposed by the terms of the Corporation's revolving credit facility and note purchase agreement; currency fluctuations and other factors described in the Corporation's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q.  The Corporation undertakes no obligation to update, amend or clarify forward-looking statements.

For Information Contact:
Matthew D. McGough, Vice President, Corporate Finance (563) 272-7563
Kurt A. Tjaden, Vice President and Chief Financial Officer (563) 272-7400

 

 


HNI CORPORATION


Unaudited Condensed Consolidated Statement of Operations



Three Months Ended

(Dollars in thousands, except per share data)

Mar. 29, 2014

Mar. 30, 2013

Net Sales

$452,201

$442,297

Cost of products sold

297,029

294,515

Gross profit

155,172

147,782

Selling and administrative expenses

145,210

144,556

(Gain) on sale of assets

(8,400)

-

Restructuring and impairment charges

(28)

156

Operating income

18,390

3,070

Interest income

70

152

Interest expense

2,202

2,668

Income before income taxes

16,258

554

Income taxes

5,242

(625)

Net income

11,016

1,179

Less:  Net income (loss) attributable to the noncontrolling interest

(80)

(229)

Net income attributable to HNI Corporation

$11,096

$1,408

Net income attributable to HNI Corporation common shareholders – basic

$0.25

$0.03

Average number of common shares outstanding – basic

45,038,512

45,154,764

Net income attributable to HNI Corporation common shareholders – diluted

$0.24

$0.03

Average number of common shares outstanding – diluted

45,837,579

45,719,878



 

 

Unaudited Condensed Consolidated Balance Sheet



Assets

Liabilities and Shareholders' Equity


As of


As of

 

(Dollars in thousands)

Mar. 29,

2014

Dec. 28,

2013


Mar. 29,

2014

Dec. 28,

2013

Cash and cash equivalents

$45,684

$ 65,030

Accounts payable and



Short-term investments

7,252

7,251

   accrued expenses

$336,584

$ 407,799

Receivables

203,695

228,715

Note payable and current



Inventories

100,283

89,516

   maturities of long-term debt

39,175

484

Deferred income taxes

15,371

16,051

Current maturities of other



Prepaid expenses and



   long-term obligations

2,987

3,301

   other current assets

26,463

26,665




      Current assets

398,748

433,228

      Current liabilities

378,746

411,584










Long-term debt

150,077

150,091




Capital lease obligations

76

106




Other long-term liabilities

67,360

67,543

Property and equipment – net

273,877

267,401

Deferred income taxes

73,324

68,964

Goodwill

287,092

286,655




Other assets

152,730

147,421

Parent Company shareholders' equity






442,855

436,328




Noncontrolling interest

9

89




Shareholders' equity

442,864

436,417




      Total liabilities and



Total assets

$1,112,447

$1,134,705

        shareholders' equity

$1,112,447

$1,134,705

 

 

 

Unaudited Condensed Consolidated Statement of Cash Flows



Three Months Ended

(Dollars in thousands)

Mar. 29, 2014

Mar. 30, 2013

Net cash flows from (to) operating activities

$(36,065)

$(31,272)

Net cash flows from (to) investing activities:



   Capital expenditures

(22,693)

(14,793)

   Other

12,812

(753)

Net cash flows from (to) financing activities

26,600

35,946

Net increase (decrease) in cash and cash equivalents

(19,346)

(10,872)

Cash and cash equivalents at beginning of period

65,030

41,782

Cash and cash equivalents at end of period

45,684

$ 30,910

 

 

Business Segment Data



Three Months Ended

(Dollars in thousands)

Mar. 29, 2014

Mar. 30, 2013

Net sales:



  Office furniture

$358,369

$365,832

  Hearth products

93,832

76,465


$452,201

$442,297




Operating profit (loss):



  Office furniture



    Operations before restructuring and impairment charges

$16,465

$   8,856

    Restructuring and impairment charges

28

(156)

       Office furniture – net

16,493

8,700

  Hearth products

11,708

3,591

  Total operating profit

28,201

12,291

       Unallocated corporate expense

(11,943)

(11,737)

  Income before income taxes

$16,258

$      554




Depreciation and amortization expense:



  Office furniture

$9,499

$   8,823

  Hearth products

1,176

1,393

  General corporate

1,349

873


$12,024

$ 11,089




Capital expenditures (including capitalized software):



  Office furniture

$13,488

$ 9,932

  Hearth products

1,512

614

  General corporate

7,693

4,247


$22,693

$ 14,793





As of

Mar. 29, 2014

As of

Dec. 28, 2013

Identifiable assets:



  Office furniture

$706,081

$ 722,697

  Hearth products

257,411

255,978

  General corporate

148,955

156,030


$1,112,447

$1,134,705

 

SOURCE HNI Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
The cloud competition for database hosts is fierce. How do you evaluate a cloud provider for your database platform? In his session at 18th Cloud Expo, Chris Presley, a Solutions Architect at Pythian, will give users a checklist of considerations when choosing a provider. Chris Presley is a Solutions Architect at Pythian. He loves order – making him a premier Microsoft SQL Server expert. Not only has he programmed and administered SQL Server, but he has also shared his expertise and passion w...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
SYS-CON Events announced today that FalconStor Software® Inc., a 15-year innovator of software-defined storage solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. FalconStor Software®, Inc. (NASDAQ: FALC) is a leading software-defined storage company offering a converged, hardware-agnostic, software-defined storage and data services platform. Its flagship solution FreeStor®, utilizes a horizonta...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
SYS-CON Events announced today that (ISC)²® (“ISC-squared”) will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Two leading non-profits focused on cloud and information security, (ISC)² and Cloud Security Alliance (CSA), developed the Certified Cloud Security Professional (CCSP) certification to address the increased demand for cloud security expertise due to rapid growth in cloud. Recently named “The Next...
The Art of DevOps provides a fun overview to help teams understand DevOps. Written in the style of the famous 6th century Chinese manuscript “The Art of War,” this eBook describes DevOps in the form of a mission to continuously deliver assets to the operational battlegrounds safely, securely, and quickly. It’s a fun read with valuable insights.
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
WebSocket is effectively a persistent and fat pipe that is compatible with a standard web infrastructure; a "TCP for the Web." If you think of WebSocket in this light, there are other more hugely interesting applications of WebSocket than just simply sending data to a browser. In his session at 18th Cloud Expo, Frank Greco, Director of Technology for Kaazing Corporation, will compare other modern web connectivity methods such as HTTP/2, HTTP Streaming, Server-Sent Events and new W3C event APIs ...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...