MUSCATINE, Iowa, April 18, 2012 /PRNewswire/ -- HNI
Corporation (NYSE: HNI) today announced sales for the first
quarter ended March 31, 2012, of
$445.2 million, a 12 percent increase
from the prior year quarter, and a net loss of ($0.1) million, or ($0.00) per diluted share for the quarter, a
four cent improvement from the prior
year quarter. Net income per diluted share on a non-GAAP
basis when excluding restructuring and transition charges was
$0.01.
First Quarter Summary Comments
"We are pleased with our improved performance over prior
year. Both segments delivered sales growth led by a
double-digit increase in our office furniture supplies-driven
channel. Strong performance in the new construction channel
also drove growth in our hearth business," said Stan Askren, HNI Corporation Chairman, President
and Chief Executive Officer.
First
Quarter
|
Three
Months Ended
|
Percent
Change
|
|
Dollars in
millions
except per
share data
|
|
3/31/2012
|
4/02/2011
|
|
|
|
|
|
|
Net
sales
|
$445.2
|
$396.2
|
12.4%
|
|
Gross
margin
|
$146.8
|
$134.7
|
9.0%
|
|
Gross
margin %
|
33.0%
|
34.0%
|
|
|
SG&A
|
$144.6
|
$133.8
|
8.1%
|
|
SG&A
%
|
32.5%
|
33.8%
|
|
|
Operating
income
|
$2.2
|
$0.9
|
138.3%
|
|
Operating
income %
|
0.5%
|
0.2%
|
|
|
Net income
(loss)
|
$(0.1)
|
$(1.8)
|
92.0%
|
|
|
|
|
|
|
Earnings
per share attributable to HNI Corporation – diluted
|
$(0.00)
|
$(0.04)
|
100.0%
|
|
First Quarter Results
- Consolidated net sales increased $49.1
million or 12.4 percent to $445.2
million. Acquisitions contributed $15.4 million, or 3.9 percentage points of
sales.
- Gross margins were 1.0 percentage points lower than prior year
primarily due to higher material costs, unfavorable mix, and impact
of Sagus acquisition, 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 due to higher volume and lower restructuring charges
partially offset by increased fuel costs, investments in growth
initiatives, higher incentive-based compensation and impact of
Sagus acquisition.
- The Corporation's first quarter results included $1.2 million of restructuring and transition
charges of which $0.3 million were
included in cost of sales. These included costs associated
with previously announced shutdown and consolidation of office
furniture manufacturing locations. Included in the first
quarter of 2011 was $1.4 million of
restructuring costs.
First
Quarter – Non-GAAP Financial Measures – Continuing
Operations
|
(Reconciled with most comparable GAAP financial
measures)
|
|
|
|
|
Dollars in
millions
Except per
share data
|
Three
Months Ended
3/31/2012
|
|
Three
Months Ended
4/02/2011
|
|
Gross
Profit
|
Operating
Income
|
EPS
|
|
Gross
Profit
|
Operating
Income
|
EPS
|
As
reported (GAAP)
|
$146.8
|
$2.2
|
$(0.00)
|
|
$134.7
|
$0.9
|
$(0.04)
|
% of
net sales
|
33.0%
|
0.5%
|
|
|
34.0%
|
0.2%
|
|
|
|
|
|
|
|
|
|
Restructuring and impairment
|
$0.2
|
$1.1
|
$0.01
|
|
-
|
$1.4
|
$0.02
|
Transition
costs
|
$0.1
|
$0.1
|
$0.00
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Results
(non-GAAP)
|
$147.1
|
$3.4
|
$0.01
|
|
$134.7
|
$2.3
|
$(0.02)
|
% of
net sales
|
33.0%
|
0.8%
|
|
|
34.0%
|
0.6%
|
|
Cash flow used in operations for the quarter was $27.7 million compared to $22.0 million for the same quarter last
year. Capital expenditures were $12.8
million in the first quarter of 2012 compared to
$6.4 million in the first quarter of
2011.
Office
Furniture
|
Dollars in
millions
|
Three
Months Ended
|
Percent
Change
|
3/31/2012
|
4/02/2011
|
Sales
|
$378.6
|
$331.1
|
14.3%
|
Operating
profit
|
$7.9
|
$8.1
|
-2.9%
|
Operating
profit %
|
2.1%
|
2.4%
|
|
First
Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial
measures)
|
|
Three
Months Ended
|
Percent
|
Dollars in
millions
|
3/31/2012
|
4/02/2011
|
Change
|
|
|
|
|
Operating
profit as reported (GAAP)
|
$7.9
|
$8.1
|
-2.9%
|
% of Net
Sales
|
2.1%
|
2.4%
|
|
|
|
|
|
Restructuring and impairment
|
$1.1
|
$1.0
|
|
Transition
costs
|
$0.1
|
-
|
|
|
|
|
|
Operating
profit (non-GAAP)
|
$9.0
|
$9.1
|
-0.8%
|
% of Net
Sales
|
2.4%
|
2.8%
|
|
- First quarter sales for the office furniture segment increased
$47.5 million or 14.3 percent to
$378.6 million. The increase
was across all channels of the Corporation's office furniture
segment. Acquisitions contributed $15.4 million or 4.6 percentage points of
sales.
- First quarter operating profit decreased $0.2 million. Operating profit was
negatively impacted by increased input costs, unfavorable mix,
impact of Sagus acquisition, investments in growth initiatives and
higher incentive-based compensation. These were partially
offset by higher volume and increased price realization.
Hearth
Products
|
Dollars in
millions
|
Three
Months Ended
|
Percent
Change
|
3/31/2012
|
4/02/2011
|
Sales
|
$66.6
|
$65.0
|
2.4%
|
Operating
income (loss)
|
$1.1
|
$(0.6)
|
290.3%
|
Operating
profit %
|
1.7%
|
-0.9%
|
|
First
Quarter – Non-GAAP Financial Measures
(Reconciled with most comparable GAAP financial
measures)
|
|
Three
Months Ended
|
Percent
|
Dollars in
millions
|
3/31/2012
|
4/02/2011
|
Change
|
|
|
|
|
Operating
income (loss) as reported (GAAP)
|
$1.1
|
$(0.6)
|
290.3%
|
% of Net
Sales
|
1.7%
|
-0.9%
|
|
|
|
|
|
Restructuring and impairment
|
-
|
$0.4
|
|
|
|
|
|
Operating
income (loss) (non-GAAP)
|
$1.1
|
$(0.2)
|
598.7%
|
% of net
sales
|
1.7%
|
-0.3%
|
|
- First quarter sales for the hearth products segment increased
$1.6 million or 2.4 percent to
$66.6 million driven by an increase
in the new construction channel partially offset by a decline in
the remodel/retrofit channel.
- First quarter operating profit increased $1.7 million. Operating profit was
positively impacted by increased volume, higher price realization
and cost reduction initiatives partially offset by increased input
costs.
Outlook
"I am encouraged by the continued improvement in the economy and
remain optimistic about our markets and prospects for growth.
Looking ahead to the second quarter, we anticipate strong sales
momentum continuing across our office furniture and hearth
businesses. We remain on track to grow sales and increase
profits in 2012. I remain confident our investments are
accelerating profitable growth and delivering long-term shareholder
value. The Corporation is financially strong and well
positioned for the future," said Mr. Askren.
The Corporation estimates sales growth between 8 to 11 percent
in the second quarter over the same period in the prior year.
Non-GAAP earnings per diluted share are anticipated in the
range of $0.13 to $0.18 for the
second quarter, which excludes restructuring charges and transition
costs. For the full year, the Company is narrowing its
estimate of non-GAAP earnings per diluted share to the range of
$1.35 to $1.50, which excludes
restructuring charges and transition costs.
The Corporation remains focused on creating long-term
shareholder value by growing its business through investment in
building brands, product solutions and selling models, enhancing
its strong member-owner culture and remaining focused on its
long-standing rapid continuous improvement programs to build best
total cost and a lean enterprise.
Conference Call
HNI Corporation will host a conference call on Thursday, April 19, 2012 at 10:00 a.m. (Central) to discuss first quarter
2012 results. To participate, call 1-877-512-9166 –
conference ID number 67520718. A live webcast of the call
will be available on HNI Corporation's website at
http://www.hnicorp.com (under Investor Information –
Webcasts). A replay of the webcast will be made available at
the website address above. An audio replay of the call will
be available until Thursday, April 26,
2012, 10:59 p.m. (Central) by
dialing 1-855-859-2056 or 1-404-537-3406 – Conference ID number
67520718.
Non-GAAP Financial Measures
This earnings release contains certain non-GAAP financial
measures. A "non-GAAP financial measure" is a numerical
measure of a company's financial performance that excludes or
includes amounts different than the most directly comparable
measure calculated and presented in accordance with GAAP in the
statements of income, balance sheets or statements of cash flow of
the company. We have provided a reconciliation of non-GAAP
financial measures to the most directly comparable GAAP financial
measure.
The non-GAAP financial measures used within this earnings
release are: gross profit, operating income, operating profit
and net income per diluted share (i.e., EPS), excluding
restructuring and impairment charges and transition costs.
Non-GAAP EPS is calculated using the Corporation's overall
effective tax rate for the period. We present these measures
because management uses this information to monitor and evaluate
financial results and trends. Management believes this
information is also useful for investors. This earnings
release also contains a forward-looking estimate of non-GAAP
earnings per diluted share for the full fiscal year. We
provide such non-GAAP measures to investors on a prospective basis
for the same reasons we provide them to investors on a historical
basis. We are unable to provide a reconciliation of our
forward-looking estimate of non-GAAP earnings per diluted share to
a forward-looking estimate of GAAP earnings per diluted share
because certain information needed to make a reasonable
forward-looking estimate of GAAP earnings per diluted share for the
full fiscal year is difficult to predict and estimate and is often
dependent on future events which may be uncertain or outside of our
control. These may include unanticipated charges related to
asset impairments (fixed assets, intangibles or goodwill),
unanticipated acquisition related costs and other unanticipated
non-recurring items not reflective of ongoing operations.
About HNI Corporation
HNI Corporation is a NYSE traded company (ticker symbol: HNI)
providing products and solutions for the home and workplace
environments. HNI Corporation is the second largest office
furniture manufacturer in the world and is also the nation's
leading manufacturer and marketer of gas- and wood-burning
fireplaces. The Corporation's strong brands, including HON®,
Allsteel®, Gunlocke®, Paoli®, Maxon®, Lamex®, HBF® ,
Artco-Bell™, Midwest Folding Products™,
LSI Corporation of America™, Heatilator®, Heat &
Glo®, Quadra-Fire® and Harman
Stove™ have leading positions in their
markets. HNI Corporation is committed to maintaining its
long-standing corporate values of integrity, financial soundness
and a culture of service and responsiveness. More information
can be found on the Corporation's website at www.hnicorp.com.
Forward Looking Statements
This release contains "forward-looking" statements that refer to
future events and expectations. These statements address
future plans, outlook, objectives and financial performance
including expectations for future sales growth and earnings per
diluted share (GAAP and non-GAAP) for the second quarter of fiscal
2012 and for fiscal 2012. In addition, forward looking
statements may be identified by words such as "anticipate,"
"believe," "could," "confident," "estimate," "expect," "forecast,"
"hope," "intend," "likely," "may," "plan," "possible," "potential,"
"predict," "project," "should," "will," "would" and variations of
such words and similar expressions. Forward-looking
statements involve known and unknown risks, which may cause the
Corporation's actual future results to differ materially from
expected results. These risks include, without
limitation: the Corporation's ability to realize financial
benefits from its (a) price increases, (b) cost containment and
business simplification initiatives, (c) investments in strategic
acquisitions, new products and brand building, (d) investments in
distribution and rapid continuous improvement, (e) ability to
maintain its effective tax rate, (f) repurchases of common stock
and (g) consolidation and logistical realignment initiatives;
uncertainty related to the availability of cash and credit, and the
terms and interest rates on which credit would be available, to
fund operations and future growth; lower than expected demand for
the Corporation's products due to uncertain political and economic
conditions; slow or negative growth rates in global and domestic
economies and the protracted decline in the domestic housing
market; lower industry growth than expected; major disruptions at
key facilities or in the supply of any key raw materials,
components or finished goods; competitive pricing pressure from
foreign and domestic competitors; higher than expected costs and
lower than expected supplies of materials ; higher costs for energy
and fuel; changes in the mix of products sold and of customers
purchasing; relationships with distribution channel partners,
including the financial viability of distributors and dealers;
restrictions imposed by the terms of the Corporation's revolving
credit facility and note purchase agreement; currency fluctuations
and other factors described in the Corporation's annual and
quarterly reports filed with the Securities and Exchange Commission
on Forms 10-K and 10-Q. The Corporation undertakes no
obligation to update, amend or clarify forward-looking
statements.
For Information Contact:
Derek P. Schmidt, Treasurer
and Vice President, Corporate Finance (563) 272-7344
Kurt A. Tjaden, Vice President and
Chief Financial Officer (563) 272-7400
HNI
CORPORATION
|
Unaudited Condensed Consolidated Statement of
Operations
|
|
|
(Dollars
in thousands, except per share data)
|
Three
Months Ended
|
Mar. 31,
2012
|
Apr. 2,
2011
|
Net
Sales
|
$445,212
|
$396,151
|
Cost of
products sold
|
298,385
|
261,427
|
Gross
profit
|
146,827
|
134,724
|
Selling
and administrative expenses
|
143,734
|
132,413
|
Restructuring and impairment charges
|
897
|
1,390
|
Operating
income
|
2,196
|
921
|
Interest
income
|
179
|
133
|
Interest
expense
|
2,614
|
3,589
|
Income
(loss) before income taxes
|
(239)
|
(2,535)
|
Income
taxes
|
(86)
|
(738)
|
Net income
(loss)
|
(153)
|
(1,797)
|
Less: Net income attributable to the
noncontrolling interest
|
(12)
|
(42)
|
Net income
(loss) attributable to HNI Corporation
|
$
(141)
|
$(1,755)
|
Net income
(loss) attributable to HNI Corporation common shareholders –
basic
|
$(0.00)
|
$(0.04)
|
Average
number of common shares outstanding – basic
|
45,151,526
|
44,852,553
|
Net income
(loss) attributable to HNI Corporation common shareholders –
diluted
|
$(0.00)
|
$(0.04)
|
Average
number of common shares outstanding – diluted
|
45,151,526
|
44,852,553
|
Unaudited Condensed Consolidated Balance
Sheet
|
|
|
Assets
|
Liabilities and Shareholders'
Equity
|
|
As
of
|
|
As
of
|
(Dollars
in thousands)
|
Mar.
31,
2012
|
Dec.
31,
2011
|
|
Mar.
31,
2012
|
Dec.
31,
2011
|
Cash and
cash equivalents
|
$56,519
|
$
72,812
|
Accounts
payable and
|
|
|
Short-term
investments
|
9,157
|
9,157
|
accrued expenses
|
$306,110
|
$358,290
|
Receivables
|
197,460
|
204,036
|
Note
payable and current
|
|
|
Inventories
|
99,909
|
101,873
|
maturities of long-term debt
|
65,345
|
30,345
|
Deferred
income taxes
|
17,761
|
18,797
|
Current
maturities of other
|
|
|
Prepaid
expenses and
|
|
|
long-term obligations
|
261
|
275
|
other current assets
|
33,913
|
27,365
|
|
|
|
Current
assets
|
414,719
|
434,040
|
Current
liabilities
|
371,716
|
388,910
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
150,187
|
150,200
|
|
|
|
Capital
lease obligations
|
313
|
340
|
|
|
|
Other
long-term liabilities
|
54,241
|
52,716
|
Property
and equipment – net
|
227,528
|
229,727
|
Deferred
income taxes
|
43,485
|
42,770
|
Goodwill
|
272,481
|
270,761
|
|
|
|
Other
assets
|
122,262
|
119,730
|
Parent
Company shareholders'
|
|
|
|
|
|
equity
|
416,795
|
419,057
|
|
|
|
Noncontrolling interest
|
253
|
265
|
|
|
|
Shareholders' equity
|
417,048
|
419,322
|
|
|
|
Total liabilities
and
|
|
|
Total
assets
|
$1,036,990
|
$1,054,258
|
shareholders' equity
|
$1,036,990
|
$1,054,258
|
Unaudited Condensed Consolidated Statement of
Cash Flows
|
|
|
|
Three
Months Ended
|
(Dollars
in thousands)
|
Mar. 31,
2012
|
Apr. 2,
2011
|
Net cash
flows from (to) operating activities
|
$(27,698)
|
$(21,983)
|
Net cash
flows from (to) investing activities:
|
|
|
Capital expenditures
|
(12,817)
|
(6,440)
|
Other
|
(447)
|
(1,851)
|
Net cash
flows from (to) financing activities
|
24,670
|
(16,459)
|
Net
increase (decrease) in cash and cash equivalents
|
(16,292)
|
(46,733)
|
Cash and
cash equivalents at beginning of period
|
72,811
|
99,096
|
Cash and
cash equivalents at end of period
|
$
56,519
|
$
52,363
|
Business Segment Data
|
|
|
|
Three
Months Ended
|
(Dollars
in thousands)
|
Mar. 31,
2012
|
Apr. 2,
2011
|
Net
sales:
|
|
|
Office furniture
|
$378,604
|
$331,127
|
Hearth products
|
66,608
|
65,024
|
|
$445,212
|
$396,151
|
|
|
|
Operating
profit (loss):
|
|
|
Office furniture
|
|
|
Operations before restructuring
and impairment charges
|
$
8,752
|
$
9,115
|
Restructuring and impairment
charges
|
(897)
|
(1,022)
|
Office furniture
– net
|
7,855
|
8,093
|
Hearth products
|
|
|
Operations before restructuring
and impairment charges
|
1,132
|
(227)
|
Restructuring and impairment
charges
|
-
|
(368)
|
Hearth products
– net
|
1,132
|
(595)
|
Total operating profit
|
8,987
|
7,498
|
Unallocated
corporate expense
|
(9,226)
|
(10,033)
|
Income before income taxes
|
$
(239)
|
$
(2,535)
|
|
|
|
Depreciation and amortization expense:
|
|
|
Office furniture
|
$
8,561
|
$
9,430
|
Hearth products
|
1,565
|
2,152
|
General corporate
|
695
|
566
|
|
$
10,821
|
$
12,148
|
|
|
|
Capital
expenditures – net:
|
|
|
Office furniture
|
$
9,191
|
$
3,635
|
Hearth products
|
376
|
464
|
General corporate
|
3,250
|
2,341
|
|
$
12,817
|
$
6,440
|
|
|
|
|
As
of
Mar. 31,
2012
|
As
of
Apr. 2,
2011
|
Identifiable assets:
|
|
|
Office furniture
|
$
660,443
|
$
582,295
|
Hearth products
|
256,772
|
264,817
|
General corporate
|
119,775
|
109,194
|
|
$1,036,990
|
$
956,306
|
SOURCE HNI Corporation