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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Section 2 — Financial Information
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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 April 17, 2013.
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HNI CORPORATION
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Date:
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April 17, 2013
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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 April 17, 2013.
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First Quarter – GAAP Financial Measures
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|||||||||||
Dollars in millions
except per share data
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Three Months Ended
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||||||||||
3/30/2013
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3/31/2012
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Percent Change
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|||||||||
Net sales
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$ | 442.3 | $ | 445.2 | -0.7 | % | |||||
Gross profit
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$ | 147.8 | $ | 146.8 | 0.7 | % | |||||
Gross profit %
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33.4 | % | 33.0 | % | |||||||
SG&A
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$ | 144.7 | $ | 144.6 | 0.0 | % | |||||
SG&A %
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32.7 | % | 32.5 | % | |||||||
Operating income
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$ | 3.1 | $ | 2.2 | 39.9 | % | |||||
Operating income %
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0.7 | % | 0.5 | % | |||||||
Net income (loss) attributable to HNI Corporation
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$ | 1.4 | $ | (0.1 | ) | 1098.6 | % | ||||
Earnings per share attributable to HNI Corporation – diluted
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$ | 0.03 | $ | (0.00 | ) |
·
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Consolidated net sales decreased $2.9 million or 0.7 percent to $442.3 million. Compared to prior year quarter, divestitures, partially offset by the acquisition of BP Ergo, resulted in a $1.9 million sales decline.
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·
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Gross margins were 0.4 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.
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·
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Total selling and administrative expenses as a percent of net sales, including restructuring charges, increased 0.2 percentage points due to selling initiatives and higher incentive-based compensation partially offset by network realignment savings and lower restructuring costs.
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·
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The Corporation's first quarter results included $0.2 million of restructuring charges associated with previously announced shutdown and consolidation of office furniture manufacturing locations. Included in the first quarter of 2012 was $1.2 million of restructuring and transition costs of which $0.3 million were included in cost of sales.
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·
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The provision for income taxes for the quarter reflects the effect of a retroactive extension of the 2012 research tax credit of $0.9 million, all of which was recognized in first quarter 2013.
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Dollars in millions
Except per share data
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Three Months Ended
3/30/2013
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Three Months Ended
3/31/2012
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||||||||||||||||||||||
Gross
Profit
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Operating
Income
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EPS
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Gross
Profit
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Operating
Income
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EPS
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|||||||||||||||||||
As reported (GAAP)
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$ | 147.8 | $ | 3.1 | $ | 0.03 | $ | 146.8 | $ | 2.2 | $ | (0.00 | ) | |||||||||||
% of net sales
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33.4 | % | 0.7 | % | 33.0 | % | 0.5 | % | ||||||||||||||||
Restructuring and impairment
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- | $ | 0.2 | $ | 0.00 | $ | 0.2 | $ | 1.1 | $ | 0.01 | |||||||||||||
Transition costs
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- | - | $ | 0.1 | $ | 0.1 | $ | 0.00 | ||||||||||||||||
Results (non-GAAP)
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$ | 147.8 | $ | 3.2 | $ | 0.03 | $ | 147.1 | $ | 3.4 | $ | 0.01 | ||||||||||||
% of net sales
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33.4 | % | 0.7 | % | 33.0 | % | 0.8 | % |
Office Furniture – GAAP Financial Measures
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|||||||||||
Dollars in millions
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Three Months Ended
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Percent Change
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|||||||||
3/30/2013
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3/31/2012
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Sales
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$ | 365.8 | $ | 378.6 | -3.4 | % | |||||
Operating profit
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$ | 8.7 | $ | 7.9 | 10.8 | % | |||||
Operating profit %
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2.4 | % | 2.1 | % |
First Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial measures)
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||||||||||||
Three Months Ended
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Dollars in millions
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3/30/2013
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3/31/2012
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Percent Change
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|||||||||
Operating profit as reported (GAAP)
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$ | 8.7 | $ | 7.9 | 10.8 | % | ||||||
% of Net Sales
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2.4 | % | 2.1 | % | ||||||||
Restructuring and impairment
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$ | 0.2 | $ | 1.1 | ||||||||
Transition costs
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- | $ | 0.1 | |||||||||
Operating profit (non-GAAP)
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$ | 8.9 | $ | 9.0 | -2.0 | % | ||||||
% of Net Sales
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2.4 | % | 2.4 | % |
·
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First quarter sales for the office furniture segment decreased $12.8 million or 3.4 percent to $365.8 million. The change was driven by a decrease in the contract and international businesses partially offset by an increase in the supplies-driven channel. Compared to prior year quarter, divestitures, partially offset by the acquisition of BP Ergo, resulted in a $1.9 million sales decline.
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·
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First quarter operating profit increased $0.8 million. Operating profit was positively impacted by increased price realization, network realignment savings, lower incentive-based compensation and restructuring charges. These were partially offset by lower volume and unfavorable mix.
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Hearth Products
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Dollars in millions
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Three Months Ended
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Percent Change
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|||||||||
3/30/2013
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3/31/2012
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Sales
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$ | 76.5 | $ | 66.6 | 14.8 | % | |||||
Operating profit
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$ | 3.6 | $ | 1.1 | 217.2 | % | |||||
Operating profit %
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4.7 | % | 1.7 | % |
·
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First quarter sales for the hearth products segment increased $9.9 million or 14.8 percent to $76.5 million driven by increases in both the new construction channel and the remodel/retrofit channel.
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·
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First quarter operating profit increased $2.5 million. Operating profit was positively impacted by increased volume, higher price realization and lower input costs partially offset by increased investments in selling initiatives and higher incentive-based compensation.
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Three Months Ended
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(Dollars in thousands, except per share data)
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Mar. 30, 2013
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Mar. 31, 2012
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Net Sales
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$ | 442,297 | $ | 445,212 | ||||
Cost of products sold
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294,515 | 298,385 | ||||||
Gross profit
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147,782 | 146,827 | ||||||
Selling and administrative expenses
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144,556 | 143,734 | ||||||
Restructuring and impairment charges
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156 | 897 | ||||||
Operating income
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3,070 | 2,196 | ||||||
Interest income
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152 | 179 | ||||||
Interest expense
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2,668 | 2,614 | ||||||
Income (loss) before income taxes
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554 | (239 | ) | |||||
Income taxes
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(625 | ) | (86 | ) | ||||
Net income (loss)
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1,179 | (153 | ) | |||||
Less: Net income attributable to the noncontrolling interest
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(229 | ) | (12 | ) | ||||
Net income (loss) attributable to HNI Corporation
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$ | 1,408 | $ | (141 | ) | |||
Net income (loss) attributable to HNI Corporation common shareholders – basic
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$ | 0.03 | $ | (0.00 | ) | |||
Average number of common shares outstanding – basic
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45,154,764 | 45,151,526 | ||||||
Net income (loss) attributable to HNI Corporation common shareholders – diluted
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$ | 0.03 | $ | (0.00 | ) | |||
Average number of common shares outstanding – diluted
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45,719,878 | 45,151,526 |
Assets
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Liabilities and Shareholders' Equity
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||||||||||||||||
As of
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As of
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||||||||||||||||
(Dollars in thousands)
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Mar. 30,
2013
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Dec. 29,
2012
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Mar. 30,
2013
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Dec. 29,
2012
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Cash and cash equivalents
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$ | 30,910 | $ | 41,782 |
Accounts payable and
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Short-term investments
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7,251 | 7,250 |
accrued expenses
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$ | 332,931 | $ | 390,958 | ||||||||||
Receivables
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194,762 | 213,490 |
Note payable and current
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Inventories
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106,669 | 93,515 |
maturities of long-term debt
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49,169 | 4,554 | ||||||||||||
Deferred income taxes
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21,723 | 21,977 |
Current maturities of other
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Prepaid expenses and
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long-term obligations
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2,834 | 373 | ||||||||||||||
other current assets
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31,673 | 26,926 | |||||||||||||||
Current assets
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392,988 | 404,940 |
Current liabilities
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384,934 | 395,885 | ||||||||||||
Long-term debt
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150,132 | 150,146 | |||||||||||||||
Capital lease obligations
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198 | 226 | |||||||||||||||
Other long-term liabilities
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58,360 | 57,281 | |||||||||||||||
Property and equipment – net
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244,381 | 240,490 |
Deferred income taxes
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57,107 | 55,433 | ||||||||||||
Goodwill
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288,348 | 288,348 | |||||||||||||||
Other assets
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147,013 | 145,853 |
Parent Company shareholders'
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||||||||||||||
equity
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421,847 | 420,359 | |||||||||||||||
Noncontrolling interest
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152 | 301 | |||||||||||||||
Shareholders' equity
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421,999 | 420,660 | |||||||||||||||
Total liabilities and
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|||||||||||||||||
Total assets
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$ | 1,072,730 | $ | 1,079,631 |
shareholders' equity
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$ | 1,072,730 | $ | 1,079,631 |
Three Months Ended
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(Dollars in thousands)
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Mar. 30, 2013
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Mar. 31, 2012
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Net cash flows from (to) operating activities
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$ | (30,021 | ) | $ | (27,698 | ) | ||
Net cash flows from (to) investing activities:
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||||||||
Capital expenditures
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(16,044 | ) | (12,817 | ) | ||||
Other
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(753 | ) | (447 | ) | ||||
Net cash flows from (to) financing activities
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35,946 | 24,670 | ||||||
Net increase (decrease) in cash and cash equivalents
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(10,872 | ) | (16,292 | ) | ||||
Cash and cash equivalents at beginning of period
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41,782 | 72,811 | ||||||
Cash and cash equivalents at end of period
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$ | 30,910 | $ | 56,519 |
Three Months Ended
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(Dollars in thousands)
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Mar. 30, 2013
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Mar. 31, 2012
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Net sales:
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Office furniture
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$ | 365,832 | $ | 378,604 | ||||
Hearth products
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76,465 | 66,608 | ||||||
$ | 442,297 | $ | 445,212 | |||||
Operating profit (loss):
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Office furniture
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Operations before restructuring and impairment charges
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$ | 8,856 | $ | 8,752 | ||||
Restructuring and impairment charges
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(156 | ) | (897 | ) | ||||
Office furniture – net
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8,700 | 7,855 | ||||||
Hearth products
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3,591 | 1,132 | ||||||
Total operating profit
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12,291 | 8,987 | ||||||
Unallocated corporate expense
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(11,737 | ) | (9,226 | ) | ||||
Income before income taxes
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$ | 554 | $ | (239 | ) | |||
Depreciation and amortization expense:
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Office furniture
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$ | 8,823 | $ | 8,561 | ||||
Hearth products
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1,393 | 1,565 | ||||||
General corporate
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873 | 695 | ||||||
$ | 11,089 | $ | 10,821 | |||||
Capital expenditures – net:
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Office furniture
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$ | 10,644 | $ | 9,191 | ||||
Hearth products
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1,057 | 376 | ||||||
General corporate
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4,343 | 3,250 | ||||||
$ | 16,044 | $ | 12,817 | |||||
As of
Mar. 30, 2013
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As of
Mar. 31, 2012
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|||||||
Identifiable assets:
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||||||||
Office furniture
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$ | 697,278 | $ | 660,443 | ||||
Hearth products
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254,925 | 256,772 | ||||||
General corporate
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120,527 | 119,775 | ||||||
$ | 1,072,730 | $ | 1,036,990 |
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