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HNI Corporation Reports Earnings for Third Quarter Fiscal Year 2020

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HNI Corporation (NYSE:HNI) today announced sales for the third quarter ended September 26, 2020 of $507.1 million and net income of $30.7 million. GAAP net income per diluted share was $0.71, compared to $1.07 in the prior year. Non-GAAP net income per diluted share was $0.71, compared to $1.08 in the prior year. GAAP to non-GAAP reconciliations follow the financial statements in this release.

Third Quarter Highlights

  • Strong results in Residential Building Products: Third quarter operating profit increased 27 percent; operating margin expanded 270 basis points; and net sales grew 9.3 percent on a year-over-year basis.
  • Solid profits in Workplace Furnishings: Third quarter 2020 operating profit was nearly $17 million, despite a 27 percent year-over-year contraction on the segment's top line.
  • Continued strong cash flow: Third quarter operating cash flow increased $12.7 million or 12 percent versus the prior year quarter despite continued pandemic related top-line pressures. Operating cash flow for the first three quarters of 2020 totaled $143 million, which represents a 24 percent increase compared to the prior year period.
  • High-quality balance sheet: Quarter-ending debt levels were $175 million with a gross leverage ratio of approximately 0.9x. Cash totaled $109 million as of the end of the third quarter, representing an increase of $83 million from the second quarter balance.

"Our members delivered another solid quarter in an environment that remains uniquely challenging. And, again in the third quarter, our results demonstrate much of what is unique about HNI. Our diversified revenue streams, our ability and willingness to invest despite ongoing uncertainty, and our cost and expense management efforts combined to deliver strong free cash flow in the third quarter, positioning us well for the future," stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.

HNI Corporation – Financial Performance

(Dollars in millions, except per share data)

 

Three Months Ended

 

 

 

September 26,

2020

 

September 28,

2019

 

Change

GAAP

 

 

 

 

 

Net Sales

$507.1

 

 

$625.4

 

 

(18.9

%)

Gross Profit %

36.6

%

 

38.0

%

 

-140 bps

 

SG&A %

28.9

%

 

28.3

%

 

60 bps

 

Operating Income

$38.8

 

 

$60.7

 

 

(36.1

%)

Operating Income %

7.6

%

 

9.7

%

 

-210 bps

 

Effective Tax Rate

17.6

%

 

21.2

%

 

 

Net Income %

6.1

%

 

7.4

%

 

-130 bps

 

EPS – diluted

$0.71

 

 

$1.07

 

 

(33.6

%)

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Gross Profit %

36.6

%

 

38.0

%

 

-140 bps

 

Operating Income

$38.8

 

 

$61.1

 

 

(36.6

%)

Operating Income %

7.6

%

 

9.8

%

 

-220 bps

 

EPS – diluted

$0.71

 

 

$1.08

 

 

(34.3

%)

Third Quarter Summary Comments

  • Consolidated net sales decreased 18.9 percent from the prior-year quarter to $507.1 million. On an organic basis, sales decreased 19.3 percent. The impact of residential building products distributors acquired in 2020 increased sales $2.4 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 140 basis points compared to the prior-year quarter. This decrease was primarily driven by lower Workplace Furnishings volume, partially offset by volume growth in Residential Building Products and net productivity.
  • Selling and administrative expenses as a percent of sales increased 60 basis points compared to prior-year quarter due to lower volume, partially offset by lower core SG&A spend, and freight & distribution productivity.
  • Consolidated operating income declined $21.9 million or 36.1 percent versus the prior year quarter. On a non-GAAP basis, the decline was $22.4 million, which equates to a decremental margin of 19 percent.
  • Non-GAAP net income per diluted share was $0.71 compared to $1.08 in the prior-year quarter. The $0.37 decrease was due to lower Workplace Furnishings volume, partially offset by year-over-year SG&A expense management, net productivity benefits, and volume growth in Residential Building Products.

Third Quarter Balance Sheet and Cash Flow

  • The Corporation's cash balance totaled $109 million—representing an increase of $83 million from the second quarter's total of $26 million.
  • Quarter-ending debt levels were $175 million, consisting of $100 million in private placement notes and $75 million drawn on the Corporation's $450 million revolving line of credit. The gross leverage ratio was approximately 0.9x and well below the Corporation's debt covenant of 3.5x.
  • Compared to the prior year period, cash flow from operating activities on a year-to-date basis increased 24 percent to $143 million. Improved working capital efficiency primarily drove the increase.
  • Capital expenditures on a year-to-date basis declined $21 million or 46 percent year-over-year. The decrease reflects the Corporation's response to pandemic-related pressures. Investment in capitalized software increased $3.2 million or 77 percent year-over-year on a year-to-date basis, reflecting the Corporation's emphasis on digital initiatives.

Third Quarter Orders

  • Orders in the Workplace Furnishings segment excluding eCommerce declined 25 percent year-over-year. This compares favorably to the 35 percent order decline in the second quarter of 2020. Monthly year-over-year order declines moderated through the third quarter; however, market conditions remain uncertain and volatile.
  • Orders in eCommerce increased 35 percent year-over-year. Much of the moderation from the second quarter's triple-digit order increase was a result of tougher comparables and supply constraints. September eCommerce orders re-accelerated and are indicative of continued strong demand and improving inventory positions.
  • Orders in the Residential Building Products segment increased 13 percent compared to the prior year quarter. Remodel-retrofit activity was strong throughout the third quarter, and orders related to new home construction gained momentum over the period.

Workplace Furnishings – Financial Performance

(Dollars in millions)

 

Three Months Ended

 

 

 

September 26,

2020

 

September 28,

2019

 

Change

GAAP

 

 

 

 

 

Net Sales

$353.4

 

 

$484.8

 

 

(27.1

%)

Operating Profit

$16.8

 

 

$51.2

 

 

(67.1

%)

Operating Profit %

4.8

%

 

10.6

%

 

-580 bps

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Operating Profit

$16.8

 

 

$51.7

 

 

(67.4

%)

Operating Profit %

4.8

%

 

10.7

%

 

-590 bps

 

  • Workplace Furnishings net sales decreased 27.1 percent from the prior-year quarter to $353.4 million.
  • Workplace Furnishings GAAP operating profit margin decreased 580 basis points versus the prior-year quarter. On a non-GAAP basis, segment operating margin decreased 590 basis points year-over-year driven by lower volume, partially offset by net productivity and lower core SG&A spend.

Residential Building Products – Financial Performance

(Dollars in millions)

 

Three Months Ended

 

 

 

September 26,

2020

 

September 28,

2019

 

Change

GAAP

 

 

 

 

 

Net Sales

$153.7

 

 

$140.6

 

 

9.3

%

Operating Profit

$30.2

 

 

$23.8

 

 

27.0

%

Operating Profit %

19.6

%

 

16.9

%

 

270 bps

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Operating Profit

$30.2

 

 

$23.8

 

 

27.0

%

Operating Profit %

19.6

%

 

16.9

%

 

270 bps

 

  • Residential Building Products net sales increased 9.3 percent from the prior-year quarter to $153.7 million. On an organic basis, sales increased 7.6 percent. The impact of building products distributors acquired in 2020 increased sales $2.4 million compared to the prior-year quarter.
  • Residential Building Products operating profit margin expanded 270 basis points, primarily driven by higher volume, favorable price-cost, lower core SG&A spend, and net productivity.

Concluding Remarks

"As we look ahead, we are prepared to confront the continued near-term macro challenges. However, we see longer-term opportunity and signs our strategies are gaining momentum. I am extremely proud of all our HNI members and of the company's collective perseverance and ability to adapt.

As we emerge from this period, we will do so as a stronger company— well positioned to grow revenue, expand margins, and generate cash flow," Mr. Lorenger concluded.

Fourth Quarter 2020 Outlook

  • Limited visibility and volatile conditions: Pandemic-related uncertainty remains and limits the Corporation's visibility.
  • Workplace Furnishings revenue: Recent order trends suggest year-over-year revenue declines will moderate slightly in the fourth quarter. Additionally, the fourth quarter 2020 benefits from an extra week in the fiscal calendar. Assuming the recent trends continue, the combination of these factors point to fourth quarter revenue declines in the mid-teens on a year-over-year rate basis.
  • Residential Building Products revenue: The Corporation believes cyclical strength, secular support, company-specific initiatives, and its strong competitive position support revenue growth acceleration. Recent order trends, housing construction activity, and the fourth quarter's extra week suggest fourth quarter growth rates in the mid to high teens compared to the prior year quarter.
  • HNI decremental margins: The Corporation expects decremental margins for the full year to be less than 20 percent on a consolidated basis. This implies higher decremental margins in the fourth quarter, primarily driven by unfavorable business mix and accelerating investment levels.
  • Balance sheet: The Corporation continues to expect strong cash generation and estimates the year-ending debt to be approximately $175 million, consistent with the third quarter balance and the level reported at the end of 2019.

Conference Call

HNI Corporation will host a conference call on Monday, October 19, 2020 at 10:00 a.m. (Central) to discuss third quarter fiscal year 2020 results. To participate, call 1-877-512-9166 – conference ID number 6673387. 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 also be made available at that website address. An audio replay of the call will be available until Monday, October 26, 2020, 10:59 p.m. (Central) by dialing 1-855-859-2056 or 1-404-537-3406 – Conference ID number 6673387.

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

 

Nine Months Ended

September 26,

2020

 

September 28,

2019

 

September 26,

2020

 

September 28,

2019

Net sales

$

507,063

 

 

 

$

625,386

 

 

 

$

1,393,224

 

 

 

$

1,630,868

 

 

Cost of sales

321,516

 

 

 

387,715

 

 

 

880,754

 

 

 

1,030,993

 

 

Gross profit

185,547

 

 

 

237,671

 

 

 

512,470

 

 

 

599,875

 

 

Selling and administrative expenses

146,785

 

 

 

176,731

 

 

 

449,933

 

 

 

511,080

 

 

Impairment and restructuring charges

 

 

 

284

 

 

 

32,661

 

 

 

1,214

 

 

Operating income

38,762

 

 

 

60,656

 

 

 

29,876

 

 

 

87,581

 

 

Interest expense, net

1,517

 

 

 

2,205

 

 

 

5,271

 

 

 

6,795

 

 

Income before income taxes

37,245

 

 

 

58,451

 

 

 

24,605

 

 

 

80,786

 

 

Income taxes

6,558

 

 

 

12,375

 

 

 

5,259

 

 

 

17,878

 

 

Net income

30,687

 

 

 

46,076

 

 

 

19,346

 

 

 

62,908

 

 

Less: Net loss attributable to non-controlling interest

(1

)

 

 

(2

)

 

 

(3

)

 

 

(2

)

 

Net income attributable to HNI Corporation

$

30,688

 

 

 

$

46,078

 

 

 

$

19,349

 

 

 

$

62,910

 

 

 

 

 

 

 

 

 

 

Average number of common shares outstanding – basic

42,684

 

 

 

42,899

 

 

 

42,651

 

 

 

43,217

 

 

Net income attributable to HNI Corporation per common share – basic

$

0.72

 

 

 

$

1.07

 

 

 

$

0.45

 

 

 

$

1.46

 

 

Average number of common shares outstanding – diluted

43,010

 

 

 

43,186

 

 

 

42,905

 

 

 

43,620

 

 

Net income attributable to HNI Corporation per common share – diluted

$

0.71

 

 

 

$

1.07

 

 

 

$

0.45

 

 

 

$

1.44

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

$

923

 

 

 

$

(1,035

)

 

 

$

368

 

 

 

$

(406

)

 

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

(33

)

 

 

36

 

 

 

269

 

 

 

252

 

 

Change in pension and post-retirement liability, net of tax

 

 

 

 

 

 

 

 

 

(1,185

)

 

Change in derivative financial instruments, net of tax

106

 

 

 

(477

)

 

 

(2,393

)

 

 

(2,112

)

 

Other comprehensive income (loss), net of tax

996

 

 

 

(1,476

)

 

 

(1,756

)

 

 

(3,451

)

 

Comprehensive income

31,683

 

 

 

44,600

 

 

 

17,590

 

 

 

59,457

 

 

Less: Comprehensive loss attributable to non-controlling interest

(1

)

 

 

(2

)

 

 

(3

)

 

 

(2

)

 

Comprehensive income attributable to HNI Corporation

$

31,684

 

 

 

$

44,602

 

 

 

$

17,593

 

 

 

$

59,459

 

 

HNI Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

 

September 26,

2020

 

December 28,

2019

Assets

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

109,385

 

 

 

$

52,073

 

 

Short-term investments

1,495

 

 

 

1,096

 

 

Receivables

209,921

 

 

 

278,124

 

 

Allowance for doubtful accounts

(5,991

)

 

 

(3,559

)

 

Inventories

144,135

 

 

 

163,465

 

 

Prepaid expenses and other current assets

41,490

 

 

 

37,635

 

 

Total Current Assets

500,435

 

 

 

528,834

 

 

Property, Plant, and Equipment:

 

 

 

Land and land improvements

29,782

 

 

 

29,394

 

 

Buildings

295,998

 

 

 

295,517

 

 

Machinery and equipment

577,442

 

 

 

581,225

 

 

Construction in progress

12,142

 

 

 

20,881

 

 

 

915,364

 

 

 

927,017

 

 

Less accumulated depreciation

551,031

 

 

 

545,510

 

 

Net Property, Plant, and Equipment

364,333

 

 

 

381,507

 

 

Right-of-use Finance Leases

2,193

 

 

 

2,129

 

 

Right-of-use Operating Leases

73,896

 

 

 

72,883

 

 

Goodwill and Other Intangible Assets

412,287

 

 

 

445,709

 

 

Other Assets

21,581

 

 

 

21,450

 

 

Total Assets

$

1,374,725

 

 

 

$

1,452,512

 

 

Liabilities and Equity

 

 

 

Current Liabilities:

 

 

 

Accounts payable and accrued expenses

$

390,535

 

 

 

$

453,202

 

 

Current maturities of long-term debt

 

 

 

790

 

 

Current maturities of other long-term obligations

2,890

 

 

 

1,931

 

 

Current lease obligations - Finance

691

 

 

 

564

 

 

Current lease obligations - Operating

23,124

 

 

 

22,218

 

 

Total Current Liabilities

417,240

 

 

 

478,705

 

 

Long-Term Debt

174,502

 

 

 

174,439

 

 

Long-Term Lease Obligations - Finance

1,522

 

 

 

1,581

 

 

Long-Term Lease Obligations - Operating

57,948

 

 

 

58,233

 

 

Other Long-Term Liabilities

67,187

 

 

 

67,990

 

 

Deferred Income Taxes

82,736

 

 

 

87,196

 

 

Equity:

 

 

 

HNI Corporation shareholders' equity

573,269

 

 

 

584,044

 

 

Non-controlling interest

321

 

 

 

324

 

 

Total Equity

573,590

 

 

 

584,368

 

 

Total Liabilities and Equity

$

1,374,725

 

 

 

$

1,452,512

 

 

HNI Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Nine Months Ended

 

September 26,

2020

 

September 28,

2019

Net Cash Flows From (To) Operating Activities:

 

 

 

Net income

$

19,346

 

 

 

$

62,908

 

 

Non-cash items included in net income:

 

 

 

Depreciation and amortization

57,917

 

 

 

57,838

 

 

Other post-retirement and post-employment benefits

1,104

 

 

 

1,106

 

 

Stock-based compensation

6,746

 

 

 

5,408

 

 

Reduction in carrying amount of right-of-use assets

16,965

 

 

 

17,252

 

 

Deferred income taxes

(3,730

)

 

 

4,798

 

 

Impairment of goodwill and intangible assets

32,661

 

 

 

 

 

Other – net

815

 

 

 

4,473

 

 

Net increase (decrease) in operating assets and liabilities, net of divestitures

13,316

 

 

 

(28,359

)

 

Increase (decrease) in other liabilities

(1,779

)

 

 

(9,802

)

 

Net cash flows from (to) operating activities

143,361

 

 

 

115,622

 

 

 

 

 

 

Net Cash Flows From (To) Investing Activities:

 

 

 

Capital expenditures

(24,751

)

 

 

(46,093

)

 

Proceeds from sale of property, plant, and equipment

81

 

 

 

247

 

 

Acquisition spending, net of cash acquired

(10,857

)

 

 

 

 

Capitalized software

(7,250

)

 

 

(4,098

)

 

Purchase of investments

(3,922

)

 

 

(6,140

)

 

Sales or maturities of investments

3,246

 

 

 

3,889

 

 

Other – net

 

 

 

2,327

 

 

Net cash flows from (to) investing activities

(43,453

)

 

 

(49,868

)

 

 

 

 

 

Net Cash Flows From (To) Financing Activities:

 

 

 

Payments of long-term debt

(82,828

)

 

 

(125,039

)

 

Proceeds from long-term debt

82,119

 

 

 

115,775

 

 

Dividends paid

(39,060

)

 

 

(39,164

)

 

Purchase of HNI Corporation common stock

(6,764

)

 

 

(65,106

)

 

Proceeds from sales of HNI Corporation common stock

2,210

 

 

 

22,338

 

 

Other – net

1,727

 

 

 

1,636

 

 

Net cash flows from (to) financing activities

(42,596

)

 

 

(89,560

)

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

57,312

 

 

 

(23,806

)

 

Cash and cash equivalents at beginning of period

52,073

 

 

 

76,819

 

 

Cash and cash equivalents at end of period

$

109,385

 

 

 

$

53,013

 

 

HNI Corporation and Subsidiaries

Reportable Segment Data

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 26,

2020

 

September 28,

2019

 

September 26,

2020

 

September 28,

2019

Net Sales:

 

 

 

 

 

 

 

Workplace furnishings

$

353,361

 

 

 

$

484,755

 

 

 

$

999,827

 

 

 

$

1,247,778

 

 

Residential building products

153,702

 

 

 

140,631

 

 

 

393,397

 

 

 

383,090

 

 

Total

$

507,063

 

 

 

$

625,386

 

 

 

$

1,393,224

 

 

 

$

1,630,868

 

 

 

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes:

 

 

 

 

 

 

 

Workplace furnishings

$

16,826

 

 

 

$

51,162

 

 

 

$

(8,619

)

 

 

$

68,180

 

 

Residential building products

30,197

 

 

 

23,772

 

 

 

65,232

 

 

 

54,743

 

 

General corporate

(8,261

)

 

 

(14,278

)

 

 

(26,737

)

 

 

(35,342

)

 

Operating Income

38,762

 

 

 

60,656

 

 

 

29,876

 

 

 

87,581

 

 

Interest expense, net

1,517

 

 

 

2,205

 

 

 

5,271

 

 

 

6,795

 

 

Total

$

37,245

 

 

 

$

58,451

 

 

 

$

24,605

 

 

 

$

80,786

 

 

 

 

 

 

 

 

 

 

Depreciation and Amortization Expense:

 

 

 

 

 

 

 

Workplace furnishings

$

11,065

 

 

 

$

11,232

 

 

 

$

33,177

 

 

 

$

33,540

 

 

Residential building products

2,351

 

 

 

2,291

 

 

 

6,976

 

 

 

6,521

 

 

General corporate

5,896

 

 

 

5,863

 

 

 

17,764

 

 

 

17,777

 

 

Total

$

19,312

 

 

 

$

19,386

 

 

 

$

57,917

 

 

 

$

57,838

 

 

 

 

 

 

 

 

 

 

Capital Expenditures (including capitalized software):

 

 

 

 

 

 

 

Workplace furnishings

$

6,946

 

 

 

$

6,524

 

 

 

$

18,340

 

 

 

$

29,190

 

 

Residential building products

2,695

 

 

 

3,204

 

 

 

5,874

 

 

 

10,779

 

 

General corporate

1,584

 

 

 

2,856

 

 

 

7,787

 

 

 

10,222

 

 

Total

$

11,225

 

 

 

$

12,584

 

 

 

$

32,001

 

 

 

$

50,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

September 26,

2020

 

As of

December 28,

2019

Identifiable Assets:

 

 

 

 

 

 

 

Workplace furnishings

 

 

 

 

$

714,896

 

 

 

$

874,913

 

 

Residential building products

 

 

 

 

393,941

 

 

 

364,653

 

 

General corporate

 

 

 

 

265,888

 

 

 

212,946

 

 

Total

 

 

 

 

$

1,374,725

 

 

 

$

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 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, 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 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 residential building products distributors. Restructuring charges incurred in the prior year period are primarily comprised of severance costs related to a structural realignment in the Workplace Furnishings segment. Transition items incurred in connection with this realignment include member relocation costs.

HNI Corporation Reconciliation

(Dollars in millions)

 

Three Months Ended

 

September 26, 2020

 

September 28, 2019

 

Workplace

Furnishings

Residential

Building

Products

Total

 

Workplace

Furnishings

Residential

Building

Products

Total

Sales as reported (GAAP)

$

353.4

 

$

153.7

 

$

507.1

 

 

$

484.8

 

$

140.6

 

$

625.4

 

% change from PY

(27.1

%)

9.3

%

(18.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

Less: Acquisitions

 

2.4

 

2.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic Sales (non-GAAP)

$

353.4

 

$

151.3

 

$

504.6

 

 

$

484.8

 

$

140.6

 

$

625.4

 

% change from PY

(27.1

%)

7.6

%

(19.3

%)

 

 

 

 

HNI Corporation Reconciliation

(Dollars in millions, except per share data)

 

Three Months Ended

September 28, 2019

 

Gross

Profit

 

Operating

Income

 

Tax

 

Net Income

 

EPS

As reported (GAAP)

$

237.7

 

 

$

60.7

 

 

$

12.4

 

 

$

46.1

 

 

$

1.07

 

% of net sales

38.0

%

 

9.7

%

 

 

 

7.4

%

 

 

Tax %

 

 

 

 

21.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

 

0.3

 

 

0.1

 

 

0.2

 

 

0.01

 

Transition costs

 

 

0.2

 

 

0.0

 

 

0.2

 

 

0.00

 

 

 

 

 

 

 

 

 

 

 

Results (non-GAAP)

$

237.7

 

 

$

61.1

 

 

$

12.5

 

 

$

46.5

 

 

$

1.08

 

% of net sales

38.0

%

 

9.8

%

 

 

 

7.4

%

 

 

Tax %

 

 

 

 

21.2

%

 

 

 

 

Workplace Furnishings Reconciliation

(Dollars in millions)

 

Three Months Ended

 

 

 

September 26,

2020

 

September 28,

2019

 

Percent Change

Operating profit as reported (GAAP)

$

16.8

 

 

$

51.2

 

 

(67.1

%)

% of net sales

4.8

%

 

10.6

%

 

 

 

 

 

 

 

 

Restructuring charges

 

 

0.3

 

 

 

Transition costs

 

 

0.2

 

 

 

 

 

 

 

 

 

Operating profit (non-GAAP)

$

16.8

 

 

$

51.7

 

 

(67.4

%)

% of net sales

4.8

%

 

10.7

%

 

 

 

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