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 (17 CFR 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 17, 2013.
|
HNI CORPORATION
|
||||
Date:
|
July 17, 2013
|
By
|
/s/ Kurt A. Tjaden
|
|
Kurt A. Tjaden
Vice President and Chief Financial Officer
|
99.1
|
Text of press release dated July 17, 2013.
|
Second Quarter – GAAP Financial Measures
|
|||||||||||
Dollars in millions
except per share data
|
Three Months Ended
|
||||||||||
6/29/2013
|
6/30/2012
|
Percent Change
|
|||||||||
Net sales
|
$ | 510.7 | $ | 480.4 | 6.3 | % | |||||
Gross profit
|
$ | 174.7 | $ | 165.1 | 5.8 | % | |||||
Gross profit %
|
34.2 | % | 34.4 | % | |||||||
SG&A
|
$ | 154.5 | $ | 151.7 | 1.8 | % | |||||
SG&A %
|
30.3 | % | 31.6 | % | |||||||
Operating income
|
$ | 20.2 | $ | 13.4 | 50.8 | % | |||||
Operating income %
|
3.9 | % | 2.8 | % | |||||||
Net income attributable to HNI Corporation
|
$ | 11.4 | $ | 7.0 | 62.6 | % | |||||
Earnings per share attributable to HNI Corporation – diluted
|
$ | 0.25 | $ | 0.15 | 66.7 | % |
·
|
Consolidated net sales increased $30.3 million or 6.3 percent to $510.7 million. Compared to prior year quarter, divestitures, partially offset by the acquisition of BP Ergo, resulted in a $4.9 million sales decline.
|
·
|
Gross margins were 0.2 percentage points lower than prior year primarily due to new product ramp up and facility reconfiguration costs to meet changing market demands partially offset by higher volume and increased price realization.
|
·
|
Total selling and administrative expenses as a percent of net sales, including restructuring charges, improved 1.3 percentage points from the prior year quarter due to higher volume, network distribution realignment savings and lower restructuring charges partially offset by investment in growth initiatives and a loss on the sale of a small non-core office furniture business.
|
·
|
Included in the second quarter of 2012 was $1.0 million of restructuring and transition costs of which $0.3 million were included in cost of sales.
|
Dollars in millions
Except per share data
|
Three Months Ended
6/29/2013
|
Three Months Ended
6/30/2012
|
||||||||||||||||||||||
Gross
Profit
|
Operating
Income
|
EPS
|
Gross
Profit
|
Operating
Income
|
EPS
|
|||||||||||||||||||
As reported (GAAP)
|
$ | 174.7 | $ | 20.2 | $ | 0.25 | $ | 165.1 | $ | 13.4 | $ | 0.15 | ||||||||||||
% of net sales
|
34.2 | % | 3.9 | % | 34.4 | % | 2.8 | % | ||||||||||||||||
Restructuring and impairment
|
- | $ | (0.0 | ) | $ | (0.00 | ) | $ | 0.2 | $ | 0.4 | $ | 0.01 | |||||||||||
Transition costs
|
- | - | - | $ | 0.1 | $ | 0.6 | $ | 0.01 | |||||||||||||||
Loss on sale
|
- | $ | 2.4 | $ | 0.03 | - | - | - | ||||||||||||||||
Results (non-GAAP)
|
$ | 174.7 | $ | 22.6 | $ | 0.28 | $ | 165.4 | $ | 14.4 | $ | 0.17 | ||||||||||||
% of net sales
|
34.2 | % | 4.4 | % | 34.4 | % | 3.0 | % |
Office Furniture – GAAP Financial Measures
|
||||||||||||
Dollars in millions
|
Three Months Ended
|
Percent Change
|
||||||||||
6/29/2013
|
6/30/2012
|
|||||||||||
Sales
|
$ | 436.2 | $ | 418.6 | 4.2 | % | ||||||
Operating profit
|
$ | 22.1 | $ | 22.1 | 0.3 | % | ||||||
Operating profit %
|
5.1 | % | 5.3 | % |
Second Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial measures)
|
||||||||||||
Three Months Ended
|
Percent
|
|||||||||||
Dollars in millions
|
6/29/2013
|
6/30/2012
|
Change
|
|||||||||
Operating profit as reported (GAAP)
|
$ | 22.1 | $ | 22.1 | 0.3 | % | ||||||
% of Net Sales
|
5.1 | % | 5.3 | % | ||||||||
Restructuring and impairment
|
$ | (0.0 | ) | $ | 0.4 | |||||||
Transition costs
|
- | $ | 0.6 | |||||||||
Loss on sale
|
$ | 2.4 | - | |||||||||
Operating profit (non-GAAP)
|
$ | 24.6 | $ | 23.1 | 6.2 | % | ||||||
% of Net Sales
|
5.6 | % | 5.5 | % |
·
|
Second quarter sales for the office furniture segment increased $17.6 million or 4.2 percent to $436.2 million. The increase was across both channels of the Corporation’s office furniture segment. Compared to prior year quarter, divestitures, partially offset by the acquisition of BP Ergo, resulted in a $4.9 million sales decline.
|
·
|
Second quarter operating profit increased $0.1 million. Operating profit was positively impacted by higher volume, increased price realization, network realignment savings, and lower restructuring charges. These were partially offset by new product ramp-up, facility reconfiguration to meet changing market demands and a loss on the sale of a small non-core business.
|
Hearth Products
|
||||||||||||
Dollars in millions
|
Three Months Ended
|
Percent
Change
|
||||||||||
6/29/2013
|
6/30/2012
|
|||||||||||
Sales
|
$ | 74.5 | $ | 61.8 | 20.5 | % | ||||||
Operating profit
|
$ | 5.7 | $ | 0.9 | 564.5 | % | ||||||
Operating profit %
|
7.6 | % | 1.4 | % |
·
|
Second quarter sales for the hearth products segment increased $12.7 million or 20.5 percent to $74.5 million driven by increases in both the new construction channel and the remodel/retrofit channel.
|
·
|
Second quarter operating profit increased $4.8 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.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
(Dollars in thousands, except per share data)
|
June 29, 2013
|
June 30, 2012
|
June 29, 2013
|
June 30, 2012
|
||||||||||||
Net Sales
|
$ | 510,698 | $ | 480,400 | $ | 952,995 | $ | 925,612 | ||||||||
Cost of products sold
|
336,040 | 315,287 | 630,555 | 613,672 | ||||||||||||
Gross profit
|
174,658 | 165,113 | 322,440 | 311,940 | ||||||||||||
Selling and administrative expenses
|
154,538 | 151,455 | 299,094 | 295,189 | ||||||||||||
Restructuring and impairment charges
|
(35 | ) | 292 | 121 | 1,189 | |||||||||||
Operating income
|
20,155 | 13,366 | 23,225 | 15,562 | ||||||||||||
Interest income
|
158 | 276 | 310 | 455 | ||||||||||||
Interest expense
|
2,725 | 2,909 | 5,393 | 5,523 | ||||||||||||
Income before income taxes
|
17,588 | 10,733 | 18,142 | 10,494 | ||||||||||||
Income taxes
|
6,189 | 3,835 | 5,564 | 3,749 | ||||||||||||
Net income
|
11,399 | 6,898 | 12,578 | 6,745 | ||||||||||||
Less: Net income attributable to the noncontrolling interest
|
(22 | ) | (127 | ) | (251 | ) | (139 | ) | ||||||||
Net income attributable to HNI Corporation
|
$ | 11,421 | $ | 7,025 | $ | 12,829 | $ | 6,884 | ||||||||
Net income attributable to HNI Corporation common shareholders – basic
|
$ | 0.25 | $ | 0.15 | $ | 0.28 | $ | 0.15 | ||||||||
Average number of common shares outstanding – basic
|
45,412,668 | 45,419,564 | 45,283,716 | 45,285,545 | ||||||||||||
Net income attributable to HNI Corporation common shareholders – diluted
|
$ | 0.25 | $ | 0.15 | $ | 0.28 | $ | 0.15 | ||||||||
Average number of common shares outstanding – diluted
|
46,109,563 | 45,944,815 | 45,891,246 | 45,814,296 |
Assets
|
Liabilities and Shareholders' Equity
|
||||||||||||||||
As of
|
As of
|
||||||||||||||||
(Dollars in thousands)
|
June 29,
2013
|
Dec. 29,
2012
|
June 29, 2013
|
Dec. 29,
2012
|
|||||||||||||
Cash and cash equivalents
|
$ | 33,751 | $ | 41,782 |
Accounts payable and
|
||||||||||||
Short-term investments
|
7,251 | 7,250 |
accrued expenses
|
$ | 382,215 | $ | 390,958 | ||||||||||
Receivables
|
245,352 | 213,490 |
Note payable and current
|
||||||||||||||
Inventories
|
118,309 | 93,515 |
maturities of long-term debt
|
69,169 | 4,554 | ||||||||||||
Deferred income taxes
|
21,280 | 21,977 |
Current maturities of other
|
||||||||||||||
Prepaid expenses and
|
long-term obligations
|
3,016 | 373 | ||||||||||||||
other current assets
|
32,944 | 26,926 | |||||||||||||||
Current assets
|
458,887 | 404,940 |
Current liabilities
|
454,400 | 395,885 | ||||||||||||
Long-term debt
|
150,118 | 150,146 | |||||||||||||||
Capital lease obligations
|
169 | 226 | |||||||||||||||
Other long-term liabilities
|
61,179 | 57,281 | |||||||||||||||
Property and equipment – net
|
252,243 | 240,490 |
Deferred income taxes
|
60,142 | 55,433 | ||||||||||||
Goodwill
|
287,092 | 288,348 | |||||||||||||||
Other assets
|
146,655 | 145,853 |
Parent Company shareholders'
|
||||||||||||||
equity
|
418,724 | 420,359 | |||||||||||||||
Noncontrolling interest
|
145 | 301 | |||||||||||||||
Shareholders' equity
|
418,869 | 420,660 | |||||||||||||||
Total liabilities and
|
|||||||||||||||||
Total assets
|
$ | 1,144,877 | $ | 1,079,631 |
shareholders' equity
|
$ | 1,144,877 | $ | 1,079,631 |
Six Months Ended
|
||||||||
(Dollars in thousands)
|
June 29, 2013
|
June 30, 2012
|
||||||
Net cash flows from (to) operating activities
|
$ | (12,542 | ) | $ | 5,684 | |||
Net cash flows from (to) investing activities:
|
||||||||
Capital expenditures
|
(39,306 | ) | (25,066 | ) | ||||
Other
|
762 | (651 | ) | |||||
Net cash flows from (to) financing activities
|
43,055 | 2,279 | ||||||
Net increase (decrease) in cash and cash equivalents
|
(8,031 | ) | (17,754 | ) | ||||
Cash and cash equivalents at beginning of period
|
41,782 | 72,812 | ||||||
Cash and cash equivalents at end of period
|
$ | 33,751 | $ | 55,058 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
(Dollars in thousands)
|
June 29, 2013
|
June 30, 2012
|
June 29, 2013
|
June 30, 2012
|
||||||||||||
Net sales:
|
||||||||||||||||
Office furniture
|
$ | 436,169 | $ | 418,562 | $ | 802,001 | $ | 797,166 | ||||||||
Hearth products
|
74,529 | 61,838 | 150,994 | 128,446 | ||||||||||||
$ | 510,698 | $ | 480,400 | 952,995 | $ | 925,612 | ||||||||||
Operating profit:
|
||||||||||||||||
Office furniture
|
||||||||||||||||
Operations before restructuring and impairment charges
|
$ | 22,092 | $ | 22,350 | $ | 30,948 | $ | 31,102 | ||||||||
Restructuring and impairment charges
|
35 | (292 | ) | (121 | ) | (1,189 | ) | |||||||||
Office furniture – net
|
22,127 | 22,058 | 30,827 | 29,913 | ||||||||||||
Hearth products
|
5,699 | 857 | 9,290 | 1,989 | ||||||||||||
Total operating profit
|
27,826 | 22,915 | 40,117 | 31,902 | ||||||||||||
Unallocated corporate expense
|
(10,238 | ) | (12,182 | ) | (21,975 | ) | (21,408 | ) | ||||||||
Income before income taxes
|
17,588 | $ | 10,733 | $ | 18,142 | $ | 10,494 | |||||||||
Depreciation and amortization expense:
|
||||||||||||||||
Office furniture
|
$ | 9,304 | $ | 8,320 | $ | 18,127 | $ | 16,881 | ||||||||
Hearth products
|
1,372 | 1,500 | 2,765 | 3,065 | ||||||||||||
General corporate
|
1,073 | 716 | 1,946 | 1,411 | ||||||||||||
$ | 11,749 | $ | 10,536 | $ | 22,838 | $ | 21,357 | |||||||||
Capital expenditures – net:
|
||||||||||||||||
Office furniture
|
$ | 15,533 | $ | 5,809 | $ | 26,177 | $ | 15,000 | ||||||||
Hearth products
|
1,176 | 577 | 2,233 | 953 | ||||||||||||
General corporate
|
6,553 | 5,862 | 10,896 | 9,113 | ||||||||||||
$ | 23,262 | $ | 12,248 | $ | 39,306 | $ | 25,066 | |||||||||
As of
June 29, 2013
|
As of
June 30, 2012
|
|||||||||||||||
Identifiable assets:
|
||||||||||||||||
Office furniture
|
$ | 754,695 | $ | 692,732 | ||||||||||||
Hearth products
|
266,171 | 263,380 | ||||||||||||||
General corporate
|
124,011 | 119,526 | ||||||||||||||
$ | 1,144,877 | $ | 1,075,638 |
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__`&