Iowa
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1-14225
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42-0617510
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(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02
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Results of Operations and Financial Condition.
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99.1
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Text of press release dated October 19, 2011.
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HNI CORPORATION
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||||
Date:
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October 19, 2011
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By
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/s/ Kurt A. Tjaden
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Kurt A. Tjaden
Vice President and Chief Financial Officer
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99.1
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Text of press release dated October 19, 2011.
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Third Quarter
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||||||||||||
Three Months Ended
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Percent
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|||||||||||
Dollars in millions except per share data
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10/01/2011
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10/02/2010
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Change
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|||||||||
Net sales
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$ | 504.2 | $ | 458.9 | 9.9 | % | ||||||
Gross margin
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$ | 179.4 | $ | 161.2 | 11.3 | % | ||||||
Gross margin %
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35.6 | % | 35.1 | % | ||||||||
SG&A
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$ | 138.9 | $ | 130.3 | 6.7 | % | ||||||
SG&A %
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27.6 | % | 28.4 | % | ||||||||
Operating income
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$ | 40.4 | $ | 31.0 | 30.7 | % | ||||||
Operating income %
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8.0 | % | 6.7 | % | ||||||||
Income from continuing operations
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$ | 24.9 | $ | 15.6 | 59.2 | % | ||||||
Earnings per share from continuing operations attributable to HNI Corporation – diluted
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$ | 0.55 | $ | 0.34 | 58.8 | % |
·
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Consolidated net sales increased $45.4 million or 9.9 percent to $504.2 million.
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·
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Gross margins were 0.5 percentage points higher than prior year primarily due to higher volume, better price realization and lower restructuring and transition costs offset partially by increased material costs.
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·
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Total selling and administrative expenses as a percent of net sales, including restructuring charges, improved 0.8 percentage points due to higher volume partially offset by increased fuel costs and higher incentive-based compensation.
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·
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The Corporation's third quarter results included $0.5 million of restructuring and transition charges associated with previously announced shutdown and consolidation of office furniture manufacturing locations. These included accelerated depreciation and transition costs of $0.2 million in cost of sales. Included in the third quarter of 2010 were $0.7 million of restructuring and transition costs.
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Dollars in millions
except per share data
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Three Months Ended
10/01/2011
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Three Months Ended
10/02/2010
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|||||
Gross
Profit
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Operating
Income
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EPS
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Gross
Profit
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Operating
Income
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EPS
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||
As reported (GAAP)
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$179.4
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$40.4
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$0.55
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$161.2
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$31.0
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$0.34
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% of net sales
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35.6%
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8.0%
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35.1%
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6.7%
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|||
Restructuring and impairment
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$0.2
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$0.4
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$0.00
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$0.9
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$0.6
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$0.01
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Transition costs
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$0.1
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$0.1
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$0.00
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$0.1
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$0.1
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$0.00
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Results (non-GAAP)
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$179.7
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$41.0
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$0.55
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$162.2
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$31.7
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$0.35
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% of net sales
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35.6%
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8.1%
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35.3%
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6.9%
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Office Furniture
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||||||||||||
Three Months Ended
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Percent
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|||||||||||
Dollars in millions
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10/01/2011
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10/02/2010
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Change
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|||||||||
Sales
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$ | 421.9 | $ | 387.4 | 8.9 | % | ||||||
Operating profit
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$ | 41.5 | $ | 34.0 | 22.0 | % | ||||||
Operating profit %
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9.8 | % | 8.8 | % |
Third Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial measures)
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||||||||||||
Three Months Ended
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Percent
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|||||||||||
Dollars in millions
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10/01/2011
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10/02/2010
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Change
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|||||||||
Operating profit as reported (GAAP)
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$ | 41.5 | $ | 34.0 | 22.0 | % | ||||||
% of Net Sales
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9.8 | % | 8.8 | % | ||||||||
Restructuring and impairment
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$ | 0.4 | $ | 0.6 | ||||||||
Transition costs
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$ | 0.1 | $ | 0.1 | ||||||||
Operating profit (non-GAAP)
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$ | 42.0 | $ | 34.7 | 21.0 | % | ||||||
% of Net Sales
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10.0 | % | 9.0 | % |
·
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Third quarter sales for the office furniture segment increased $34.5 million or 8.9 percent to $421.9 million. The increase was across all channels of the office furniture segment with a more substantial increase in the contract and international channels.
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·
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Third quarter operating profit increased $7.5 million. Operating profit was positively impacted by higher volume, better price realization and lower restructuring costs. These were partially offset by higher input costs.
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Hearth Products
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||||||||||||
Three Months Ended
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Percent
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|||||||||||
Dollars in millions
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10/01/2011
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10/02/2010
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Change
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|||||||||
Sales
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$ | 82.3 | $ | 71.5 | 15.2 | % | ||||||
Operating profit
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$ | 6.9 | $ | 3.0 | 126.1 | % | ||||||
Operating profit %
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8.3 | % | 4.3 | % |
·
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Third quarter sales for the hearth products segment increased $10.9 million or 15.2 percent to $82.3 million. The increase was across all channels of the hearth products segment with a more substantial increase in the remodel-retrofit channel.
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·
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Third quarter operating profit increased $3.8 million. Operating profit was positively impacted by increased volume and higher price realization offset partially by higher material costs and incentive-based compensation.
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
(Dollars in thousands, except per share data)
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Oct. 1, 2011
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Oct. 2, 2010
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Oct. 1, 2011
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Oct. 2, 2010
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||||||||||||
Net Sales
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$ | 504,220 | $ | 458,853 | $ | 1,333,181 | $ | 1,220,581 | ||||||||
Cost of products sold
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324,825 | 297,635 | 872,132 | 798,866 | ||||||||||||
Gross profit
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179,395 | 161,218 | 461,049 | 421,715 | ||||||||||||
Selling and administrative expenses
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138,671 | 130,514 | 407,281 | 381,346 | ||||||||||||
Restructuring and impairment charges
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277 | (251 | ) | 2,130 | 2,821 | |||||||||||
Operating income
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40,447 | 30,955 | 51,638 | 37,548 | ||||||||||||
Interest income
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222 | 166 | 465 | 346 | ||||||||||||
Interest expense
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2,567 | 2,843 | 9,189 | 8,620 | ||||||||||||
Income from continuing operations before income taxes
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38,102 | 28,278 | 42,914 | 29,274 | ||||||||||||
Income taxes
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13,186 | 12,630 | 15,192 | 12,176 | ||||||||||||
Income from continuing operations, less applicable income taxes
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24,916 | 15,648 | 27,722 | 17,098 | ||||||||||||
Discontinued operations, less applicable income taxes
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- | (13 | ) | - | (2,551 | ) | ||||||||||
Net income
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24,916 | 15,635 | 27,722 | 14,547 | ||||||||||||
Less: Net income attributable to the non-controlling interest
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(31 | ) | (46 | ) | (127 | ) | 149 | |||||||||
Net income attributable to HNI Corporation
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$ | 24,947 | $ | 15,681 | $ | 27,849 | $ | 14,398 | ||||||||
Income from continuing operations attributable to HNI Corporation per common share – basic
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$ | 0.56 | $ | 0.35 | $ | 0.62 | $ | 0.38 | ||||||||
Discontinued operations attributable to HNI Corporation per common share –basic
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- | $ | (0.00 | ) | - | $ | (0.06 | ) | ||||||||
Net income attributable to HNI Corporation common shareholders – basic
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$ | 0.56 | $ | 0.35 | $ | 0.62 | $ | 0.32 | ||||||||
Average number of common shares outstanding – basic
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44,787,437 | 44,800,821 | 44,795,155 | 45,053,536 | ||||||||||||
Income from continuing operations attributable to HNI Corporation per common share – diluted
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$ | 0.55 | $ | 0.34 | $ | 0.61 | $ | 0.37 | ||||||||
Discontinued operations attributable to HNI Corporation per common share – diluted
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- | $ | (0.00 | ) | - | $ | (0.06 | ) | ||||||||
Net income attributable to HNI Corporation common shareholders – diluted
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$ | 0.55 | $ | 0.34 | $ | 0.61 | $ | 0.31 | ||||||||
Average number of common shares outstanding – diluted
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45,637,042 | 45,601,327 | 45,683,520 | 45,831,091 |
Assets
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As of
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Liabilities and Shareholders' Equity
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As of
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||||||||||||||
(Dollars in thousands)
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Oct. 1,
2011
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Jan. 1,
2011
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Oct. 1,
2011
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Jan. 1,
2011
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|||||||||||||
Cash and cash equivalents
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$ | 101,534 | $ | 99,096 |
Accounts payable and
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||||||||||||
Short-term investments
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19,504 | 10,567 |
accrued expenses
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$ | 352,222 | $ | 311,066 | ||||||||||
Receivables
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220,484 | 190,118 |
Note payable and current
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||||||||||||||
Inventories
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95,725 | 68,956 |
maturities of long-term debt
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50,378 | 50,029 | ||||||||||||
Deferred income taxes
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21,336 | 18,467 |
Current maturities of other
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||||||||||||||
Prepaid expenses and
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long-term obligations
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261 | 256 | ||||||||||||||
other current assets
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20,564 | 20,957 | |||||||||||||||
Current assets
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479,147 | 408,161 |
Current liabilities
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402,861 | 361,351 | ||||||||||||
Long-term debt
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150,182 | 150,000 | |||||||||||||||
Capital lease obligations
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370 | 111 | |||||||||||||||
Other long-term liabilities
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51,064 | 47,437 | |||||||||||||||
Property and equipment – net
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219,711 | 231,781 |
Deferred income taxes
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41,022 | 30,525 | ||||||||||||
Goodwill
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260,634 | 260,634 | |||||||||||||||
Other assets
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95,692 | 97,304 |
Parent Company shareholders'
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||||||||||||||
equity
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409,328 | 407,985 | |||||||||||||||
Noncontrolling interest
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357 | 471 | |||||||||||||||
Shareholders' equity
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409,685 | 408,456 | |||||||||||||||
Total liabilities and
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|||||||||||||||||
Total assets
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$ | 1,055,184 | $ | 997,880 |
shareholders' equity
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$ | 1,055,184 | $ | 997,880 |
Nine Months Ended
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||||||||
(Dollars in thousands)
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Oct. 1, 2011
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Oct. 2, 2010
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Net cash flows from (to) operating activities
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$ | 66,972 | $ | 49,119 | ||||
Net cash flows from (to) investing activities:
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||||||||
Capital expenditures
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(20,194 | ) | (18,676 | ) | ||||
Other
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(5,588 | ) | 2,773 | |||||
Net cash flows from (to) financing activities
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(38,753 | ) | (48,351 | ) | ||||
Net increase (decrease) in cash and cash equivalents
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2,437 | (15,135 | ) | |||||
Cash and cash equivalents at beginning of period
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99,096 | 87,374 | ||||||
Cash and cash equivalents at end of period
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$ | 101,533 | $ | 72,239 |
Three Months Ended
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Nine Months Ended
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|||||||||||||||
(Dollars in thousands)
|
Oct. 1, 2011
|
Oct. 2, 2010
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Oct. 1, 2011
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Oct. 2, 2010
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||||||||||||
Net sales:
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||||||||||||||||
Office furniture
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$ | 421,873 | $ | 387,382 | $ | 1,125,643 | $ | 1,030,112 | ||||||||
Hearth products
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82,347 | 71,471 | 207,538 | 190,469 | ||||||||||||
$ | 504,220 | $ | 458,853 | $ | 1,333,181 | $ | 1,220,581 | |||||||||
Operating profit (loss):
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||||||||||||||||
Office furniture
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||||||||||||||||
Operations before restructuring and impairment charges
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$ | 41,776 | $ | 33,776 | $ | 69,161 | $ | 65,701 | ||||||||
Restructuring and impairment charges
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(277 | ) | 251 | (1,711 | ) | (2,720 | ) | |||||||||
Office furniture – net
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41,499 | 34,027 | 67,450 | 62,981 | ||||||||||||
Hearth products
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||||||||||||||||
Operations before restructuring and impairment charges
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6,875 | 3,041 | 5,749 | (2,397 | ) | |||||||||||
Restructuring and impairment charges
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- | - | (419 | ) | (101 | ) | ||||||||||
Hearth products – net
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6,875 | 3,041 | 5,330 | (2,498 | ) | |||||||||||
Total operating profit
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48,374 | 37,068 | 72,780 | 60,483 | ||||||||||||
Unallocated corporate expense
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(10,272 | ) | (8,790 | ) | (29,866 | ) | (31,209 | ) | ||||||||
Income before income taxes
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$ | 38,102 | $ | 28,278 | $ | 42,914 | $ | 29,274 | ||||||||
Depreciation and amortization expense:
|
||||||||||||||||
Office furniture
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$ | 8,855 | $ | 11,096 | $ | 27,308 | $ | 34,468 | ||||||||
Hearth products
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1,818 | 2,559 | 5,925 | 9,052 | ||||||||||||
General corporate
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700 | 602 | 1,902 | 1,841 | ||||||||||||
$ | 11,373 | $ | 14,257 | $ | 35,135 | $ | 45,361 | |||||||||
Capital expenditures – net:
|
||||||||||||||||
Office furniture
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$ | 4,578 | $ | 4,018 | $ | 15,812 | $ | 14,625 | ||||||||
Hearth products
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975 | 614 | 1,980 | 1,443 | ||||||||||||
General corporate
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69 | 1,616 | 2,402 | 2,608 | ||||||||||||
$ | 5,622 | $ | 6,248 | $ | 20,194 | $ | 18,676 | |||||||||
As of
Oct. 1, 2011
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As of
Oct. 2, 2010
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|||||||||||||||
Identifiable assets:
|
||||||||||||||||
Office furniture
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$ | 618,588 | $ | 601,661 | ||||||||||||
Hearth products
|
282,168 | 291,213 | ||||||||||||||
General corporate
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154,428 | 109,892 | ||||||||||||||
$ | 1,055,184 | $ | 1,002,766 |
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