Iowa
|
1-14225
|
42-0617510
|
(State or Other Jurisdiction
of Incorporation)
|
(Commission File Number)
|
(IRS Employer
Identification No.)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Section 2 — Financial Information
|
Item 2.02
|
Results of Operations and Financial Condition.
|
99.1
|
Text of press release dated July 20, 2011.
|
HNI CORPORATION
|
||||
Date:
|
July 20, 2011
|
By
|
/s/ Kurt A. Tjaden
|
|
Kurt A. Tjaden
Vice President and Chief Financial Officer
|
99.1
|
Text of press release dated July 20, 2011.
|
Second Quarter
|
||||||||||||
Dollars in millions
except per share data
|
Three Months Ended
|
|||||||||||
7/02/2011
|
7/03/2010
|
Percent Change
|
||||||||||
Net sales
|
$ | 432.8 | $ | 398.2 | 8.7 | % | ||||||
Gross margin
|
$ | 146.9 | $ | 141.3 | 4.0 | % | ||||||
Gross margin %
|
33.9 | % | 35.5 | % | ||||||||
SG&A
|
$ | 136.7 | $ | 129.3 | 5.7 | % | ||||||
SG&A %
|
31.6 | % | 32.5 | % | ||||||||
Operating income
|
$ | 10.3 | $ | 12.0 | -14.8 | % | ||||||
Operating income %
|
2.4 | % | 3.0 | % | ||||||||
Income from continuing operations
|
$ | 4.6 | $ | 5.6 | -17.7 | % | ||||||
Earnings per share from continuing operations attributable to HNI Corporation – diluted
|
$ | 0.10 | $ | 0.12 | -16.7 | % |
●
|
Consolidated net sales increased $34.6 million or 8.7 percent to $432.8 million.
|
|
●
|
Gross margins were 1.6 percentage points lower than prior year primarily due to lower price realization, increased material costs and unfavorable mix offset partially by higher volume and lower restructuring and transition costs.
|
|
●
|
Total selling and administrative expenses as a percent of net sales, including restructuring charges, improved 0.9 percentage points due to higher volume and lower restructuring charges partially offset by increased fuel costs, investments in growth initiatives and higher incentive-based compensation.
|
|
●
|
The Corporation's second quarter results included $0.5 million of restructuring charges. These included $0.4 million associated with previously announced shutdown and consolidation of production of office furniture manufacturing locations and $0.1 million related to restructuring of hearth operations. Included in the second quarter of 2010 were $2.4 million of restructuring and transition costs.
|
Dollars in millions
except per share data
|
Three Months Ended
7/02/2011
|
Three Months Ended
7/03/2010
|
||||||||||||||||||||||
Gross Profit
|
Operating Income
|
EPS
|
Gross Profit
|
Operating Income
|
EPS
|
|||||||||||||||||||
As reported (GAAP)
|
$ | 146.9 | $ | 10.3 | $ | 0.10 | $ | 141.3 | $ | 12.0 | $ | 0.12 | ||||||||||||
% of net sales
|
33.9 | % | 2.4 | % | 35.5 | % | 3.0 | % | ||||||||||||||||
Restructuring and impairment
|
- | $ | 0.5 | $ | 0.01 | $ | 0.9 | $ | 2.1 | $ | 0.03 | |||||||||||||
Transition costs
|
- | - | - | $ | 0.3 | $ | 0.3 | $ | 0.00 | |||||||||||||||
Results (non-GAAP)
|
$ | 146.9 | $ | 10.7 | $ | 0.11 | $ | 142.4 | $ | 14.4 | $ | 0.15 | ||||||||||||
% of net sales
|
33.9 | % | 2.5 | % | 35.8 | % | 3.6 | % |
Office Furniture
|
||||||||||||
Three Months Ended
|
||||||||||||
Dollars in millions
|
7/02/2011
|
7/03/2010
|
Percent Change
|
|||||||||
Sales
|
$ | 372.6 | $ | 342.7 | 8.7 | % | ||||||
Operating profit
|
$ | 17.9 | $ | 22.7 | -21.4 | % | ||||||
Operating profit %
|
4.8 | % | 6.6 | % |
Second Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial measures)
|
||||||||||||
Three Months Ended
|
Percent
|
|||||||||||
Dollars in millions
|
7/02/2011
|
7/03/2010
|
Change
|
|||||||||
Operating profit as reported (GAAP)
|
$ | 17.9 | $ | 22.7 | -21.4 | % | ||||||
% of Net Sales
|
4.8 | % | 6.6 | % | ||||||||
Restructuring and impairment
|
$ | 0.4 | $ | 2.1 | ||||||||
Transition costs
|
- | $ | 0.3 | |||||||||
Operating profit (non-GAAP)
|
$ | 18.3 | $ | 25.1 | -27.1 | % | ||||||
% of Net Sales
|
4.9 | % | 7.3 | % |
●
|
Second quarter sales for the office furniture segment increased $29.9 million or 8.7 percent to $372.6 million driven by an increase in the contract and international channels offset by a decline in the supplies-driven channel.
|
|
●
|
Second quarter operating profit decreased $4.8 million. Operating profit was negatively impacted by lower price realization, higher input costs, unfavorable mix and investments in strategic growth initiatives. These were partially offset by higher volume and lower restructuring costs.
|
Hearth Products
|
||||||||||||
Three Months Ended
|
||||||||||||
Dollars in millions
|
7/02/2011
|
7/03/2010
|
Percent Change
|
|||||||||
Sales
|
$ | 60.2 | $ | 55.5 | 8.4 | % | ||||||
Operating (loss)
|
$ | (1.0 | ) | $ | (2.6 | ) | 63.9 | % | ||||
Operating profit %
|
-1.6 | % | -4.7 | % |
Second Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial measures)
|
||||||||||||
Three Months Ended
|
Percent
|
|||||||||||
Dollars in millions
|
7/02/2011
|
7/03/2010
|
Change
|
|||||||||
Operating (loss) as reported (GAAP)
|
$ | (1.0 | ) | $ | (2.6 | ) | 63.9 | % | ||||
% of Net Sales
|
-1.6 | % | -4.7 | % | ||||||||
Restructuring and impairment
|
$ | 0.1 | - | |||||||||
Operating (loss) (non-GAAP)
|
$ | (0.9 | ) | $ | (2.6 | ) | 65.9 | % | ||||
% of net sales
|
-1.5 | % | -4.7 | % |
●
|
Second quarter sales for the hearth products segment increased $4.6 million or 8.4 percent to $60.2 million driven by an increase in the remodel-retrofit channel partially offset by a decline in the new construction channel.
|
|
●
|
Second quarter operating profit increased $1.7 million. Operating profit was positively impacted by increased volume and higher price realization offset partially by higher material costs and incentive-based compensation.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
(Dollars in thousands, except per share data)
|
July 2, 2011
|
July 3, 2010
|
July 2, 2011
|
July 3, 2010
|
||||||||||||
Net Sales
|
$ | 432,810 | $ | 398,222 | $ | 828,961 | $ | 761,728 | ||||||||
Cost of products sold
|
285,880 | 256,905 | 547,307 | 501,231 | ||||||||||||
Gross profit
|
146,930 | 141,317 | 281,654 | 260,497 | ||||||||||||
Selling and administrative expenses
|
136,197 | 128,032 | 268,610 | 250,832 | ||||||||||||
Restructuring and impairment charges
|
463 | 1,238 | 1,853 | 3,072 | ||||||||||||
Operating income
|
10,270 | 12,047 | 11,191 | 6,593 | ||||||||||||
Interest income
|
110 | 92 | 243 | 180 | ||||||||||||
Interest expense
|
3,033 | 3,054 | 6,622 | 5,777 | ||||||||||||
Income from continuing operations before income taxes
|
7,347 | 9,085 | 4,812 | 996 | ||||||||||||
Income taxes
|
2,744 | 3,493 | 2,006 | (454 | ) | |||||||||||
Income from continuing operations, less applicable income taxes
|
4,603 | 5,592 | 2,806 | 1,450 | ||||||||||||
Discontinued operations, less applicable income taxes
|
- | (827 | ) | - | (2,538 | ) | ||||||||||
Net income (loss)
|
4,603 | 4,765 | 2,806 | (1,088 | ) | |||||||||||
Less: Net income attributable to the noncontrolling interest
|
(54 | ) | 62 | (96 | ) | 195 | ||||||||||
Net income (loss) attributable to HNI Corporation
|
$ | 4,657 | $ | 4,703 | $ | 2,902 | $ | (1,283 | ) | |||||||
Income from continuing operations attributable to HNI Corporation per common share – basic
|
$ | 0.10 | $ | 0.12 | $ | 0.06 | $ | 0.03 | ||||||||
Discontinued operations attributable to HNI Corporation per common share –basic
|
- | $ | (0.02 | ) | - | $ | (0.06 | ) | ||||||||
Net income (loss) attributable to HNI Corporation common shareholders – basic
|
$ | 0.10 | $ | 0.10 | $ | 0.06 | $ | (0.03 | ) | |||||||
Average number of common shares outstanding – basic
|
44,745,474 | 45,193,336 | 44,799,013 | 45,179,893 | ||||||||||||
Income from continuing operations attributable to HNI Corporation per common share – diluted
|
$ | 0.10 | $ | 0.12 | $ | 0.06 | $ | 0.03 | ||||||||
Discontinued operations attributable to HNI Corporation per common share – diluted
|
- | $ | (0.02 | ) | - | $ | (0.06 | ) | ||||||||
Net income (loss) attributable to HNI Corporation common shareholders – diluted
|
$ | 0.10 | $ | 0.10 | $ | 0.06 | $ | (0.03 | ) | |||||||
Average number of common shares outstanding – diluted
|
45,667,453 | 46,011,691 | 45,732,598 | 45,179,893 |
|
|||||||||||||||||
Assets |
As of
|
Liabilities and Shareholders' Equity |
As of
|
||||||||||||||
(Dollars in thousands)
|
July 2,
2011
|
Jan. 1,
2011
|
July 2,
2011
|
Jan. 1,
2011
|
|||||||||||||
Cash and cash equivalents
|
$ | 46,763 | $ | 99,096 |
Accounts payable and
|
||||||||||||
Short-term investments
|
13,210 | 10,567 |
accrued expenses
|
$ | 320,753 | $ | 311,066 | ||||||||||
Receivables
|
210,105 | 190,118 |
Note payable and current
|
||||||||||||||
Inventories
|
101,042 | 68,956 |
maturities of long-term debt
|
50,105 | 50,029 | ||||||||||||
Deferred income taxes
|
21,985 | 18,467 |
Current maturities of other
|
||||||||||||||
Prepaid expenses and
|
long-term obligations
|
261 | 256 | ||||||||||||||
other current assets
|
30,040 | 20,957 | |||||||||||||||
Current assets
|
423,145 | 408,161 |
Current liabilities
|
371,119 | 361,351 | ||||||||||||
Long-term debt
|
150,000 | 150,000 | |||||||||||||||
Capital lease obligations
|
396 | 111 | |||||||||||||||
Other long-term liabilities
|
50,647 | 47,437 | |||||||||||||||
Property and equipment – net
|
223,874 | 231,781 |
Deferred income taxes
|
38,541 | 30,525 | ||||||||||||
Goodwill
|
260,634 | 260,634 | |||||||||||||||
Other assets
|
96,220 | 97,304 |
Parent Company shareholders'
|
||||||||||||||
equity
|
392,770 | 407,985 | |||||||||||||||
Noncontrolling interest
|
400 | 471 | |||||||||||||||
Shareholders' equity
|
393,170 | 408,456 | |||||||||||||||
Total liabilities and
|
|||||||||||||||||
Total assets
|
$ | 1,003,873 | $ | 997,880 |
shareholders' equity
|
$ | 1,003,873 | $ | 997,880 |
Six Months Ended
|
||||||||
(Dollars in thousands)
|
July 2, 2011
|
July 3, 2010
|
||||||
Net cash flows from (to) operating activities
|
$ | (8,359 | ) | $ | 1,541 | |||
Net cash flows from (to) investing activities:
|
||||||||
Capital expenditures
|
(14,572 | ) | (12,428 | ) | ||||
Other
|
(1,533 | ) | 36 | |||||
Net cash flows from (to) financing activities
|
(27,869 | ) | (32,200 | ) | ||||
Net increase (decrease) in cash and cash equivalents
|
(52,333 | ) | (43,051 | ) | ||||
Cash and cash equivalents at beginning of period
|
99,096 | 87,374 | ||||||
Cash and cash equivalents at end of period
|
$ | 46,763 | $ | 44,323 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
(Dollars in thousands)
|
July 2, 2011
|
July 3, 2010
|
July 2, 2011
|
July 3, 2010
|
||||||||||||
Net sales:
|
||||||||||||||||
Office furniture
|
$ | 372,643 | $ | 342,698 | $ | 703,770 | $ | 642,730 | ||||||||
Hearth products
|
60,167 | 55,524 | 125,191 | 118,998 | ||||||||||||
$ | 432,810 | $ | 398,222 | $ | 828,961 | $ | 761,728 | |||||||||
Operating profit (loss):
|
||||||||||||||||
Office furniture
|
||||||||||||||||
Operations before restructuring and impairment charges
|
$ | 18,270 | $ | 23,945 | $ | 27,385 | $ | 31,925 | ||||||||
Restructuring and impairment charges
|
(412 | ) | (1,238 | ) | (1,434 | ) | (2,971 | ) | ||||||||
Office furniture – net
|
17,858 | 22,707 | 25,951 | 28,954 | ||||||||||||
Hearth products
|
||||||||||||||||
Operations before restructuring and impairment charges
|
(899 | ) | (2,633 | ) | (1,126 | ) | (5,438 | ) | ||||||||
Restructuring and impairment charges
|
(51 | ) | - | (419 | ) | (101 | ) | |||||||||
Hearth products – net
|
(950 | ) | (2,633 | ) | (1,545 | ) | (5,539 | ) | ||||||||
Total operating profit
|
16,908 | 20,074 | 24,406 | 23,415 | ||||||||||||
Unallocated corporate expense
|
(9,561 | ) | (10,989 | ) | (19,594 | ) | (22,419 | ) | ||||||||
Income before income taxes
|
$ | 7,347 | $ | 9,085 | $ | 4,812 | $ | 996 | ||||||||
Depreciation and amortization expense:
|
||||||||||||||||
Office furniture
|
$ | 9,023 | $ | 11,731 | $ | 18,453 | $ | 23,372 | ||||||||
Hearth products
|
1,954 | 2,714 | 4,107 | 6,493 | ||||||||||||
General corporate
|
637 | 599 | 1,202 | 1,239 | ||||||||||||
$ | 11,614 | $ | 15,044 | $ | 23,762 | $ | 31,104 | |||||||||
Capital expenditures – net:
|
||||||||||||||||
Office furniture
|
$ | 7,599 | $ | 7,046 | $ | 11,234 | $ | 10,607 | ||||||||
Hearth products
|
541 | 387 | 1,005 | 829 | ||||||||||||
General corporate
|
1,834 | 196 | 2,333 | 992 | ||||||||||||
$ | 9,974 | $ | 7,629 | $ | 14,572 | $ | 12,428 | |||||||||
As of
July 2, 2011
|
As of
July 3, 2010
|
|||||||||||||||
Identifiable assets:
|
||||||||||||||||
Office furniture
|
$ | 629,014 | $ | 603,106 | ||||||||||||
Hearth products
|
270,126 | 286,072 | ||||||||||||||
General corporate
|
104,733 | 83,628 | ||||||||||||||
$ | 1,003,873 | $ | 972,806 |
88+!5%"I1PV+Q]/"TL95I*<9.*Q,,%A55I7]E-TE)PYG)RUH\+Y!
MA^(,UXKP^68?#\19YE.5Y'F^;X?VE#&9AE>25LSQ&4X;$SI5(*;R^KG&9/"X
MCE6)I1Q4J:K>RA2A3_2ZX_X*">&;C]DBW_8UD_9TTC_A5UJ\5_%J2_$CQ`GC
M!?$,>NGQ(?$']L+HPM#>2:N\TDD)THV3VLK61MO).:^;_P!CR2UE_;._99DL
M;:6SLI/VG/@>]K:3W/VR:VMV^*GA*EF6<589SF>80IX_'.C2>*KT(TIU_
M9P53F4(I'[9__)X?[5__`&