HNI Corporation and Subsidiaries | ||||||||
Quarterly Report on Form 10-Q | ||||||||
Table of Contents | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
Page | ||||||||
Item 1. | Financial Statements (Unaudited) | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | Defaults Upon Senior Securities - None | - | ||||||
Item 4. | Mine Safety Disclosures - Not Applicable | - | ||||||
Item 5. | Other Information - None | - | ||||||
Item 6. | ||||||||
HNI Corporation and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(In thousands, except per share data)
|
|||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Net sales | $ | 510,455 | $ | 417,456 | $ | 994,748 | $ | 886,161 | |||||||||||||||
Cost of sales | 322,593 | 266,551 | 626,940 | 559,238 | |||||||||||||||||||
Gross profit | 187,862 | 150,905 | 367,808 | 326,923 | |||||||||||||||||||
Selling and administrative expenses | 163,175 | 136,063 | 320,521 | 303,148 | |||||||||||||||||||
Impairment charges | — | — | — | 32,661 | |||||||||||||||||||
Operating income (loss) | 24,687 | 14,842 | 47,287 | (8,886) | |||||||||||||||||||
Interest expense, net | 1,857 | 1,943 | 3,612 | 3,754 | |||||||||||||||||||
Income (loss) before income taxes | 22,830 | 12,899 | 43,675 | (12,640) | |||||||||||||||||||
Income taxes | 5,418 | 345 | 11,245 | (1,299) | |||||||||||||||||||
Net income (loss) | 17,412 | 12,554 | 32,430 | (11,341) | |||||||||||||||||||
Less: Net loss attributable to non-controlling interest | (2) | (2) | (3) | (2) | |||||||||||||||||||
Net income (loss) attributable to HNI Corporation | $ | 17,414 | $ | 12,556 | $ | 32,433 | $ | (11,339) | |||||||||||||||
Average number of common shares outstanding – basic | 43,776 | 42,640 | 43,469 | 42,634 | |||||||||||||||||||
Net income (loss) attributable to HNI Corporation per common share – basic | $ | 0.40 | $ | 0.29 | $ | 0.75 | $ | (0.27) | |||||||||||||||
Average number of common shares outstanding – diluted | 44,481 | 42,929 | 43,986 | 42,634 | |||||||||||||||||||
Net income (loss) attributable to HNI Corporation per common share – diluted | $ | 0.39 | $ | 0.29 | $ | 0.74 | $ | (0.27) | |||||||||||||||
Foreign currency translation adjustments | $ | 194 | $ | 45 | $ | 62 | $ | (555) | |||||||||||||||
Change in unrealized gains (losses) on marketable securities, net of tax | (25) | 244 | (125) | 302 | |||||||||||||||||||
Change in derivative financial instruments, net of tax | 143 | (283) | 406 | (2,499) | |||||||||||||||||||
Other comprehensive income (loss), net of tax | 312 | 6 | 343 | (2,752) | |||||||||||||||||||
Comprehensive income (loss) | 17,724 | 12,560 | 32,773 | (14,093) | |||||||||||||||||||
Less: Comprehensive loss attributable to non-controlling interest | (2) | (2) | (3) | (2) | |||||||||||||||||||
Comprehensive income (loss) attributable to HNI Corporation | $ | 17,726 | $ | 12,562 | $ | 32,776 | $ | (14,091) |
HNI Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (In thousands) |
|||||||||||
(Unaudited) | |||||||||||
July 3,
2021 |
January 2,
2021 |
||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 118,498 | $ | 116,120 | |||||||
Short-term investments | 102 | 1,687 | |||||||||
Receivables | 213,925 | 207,971 | |||||||||
Allowance for doubtful accounts | (4,365) | (5,514) | |||||||||
Inventories | 187,467 | 137,811 | |||||||||
Prepaid expenses and other current assets | 47,571 | 37,660 | |||||||||
Total Current Assets | 563,198 | 495,735 | |||||||||
Property, Plant, and Equipment: | |||||||||||
Land and land improvements | 29,974 | 29,691 | |||||||||
Buildings | 293,842 | 293,708 | |||||||||
Machinery and equipment | 580,730 | 578,643 | |||||||||
Construction in progress | 24,310 | 17,750 | |||||||||
928,856 | 919,792 | ||||||||||
Less accumulated depreciation | 568,551 | 553,835 | |||||||||
Net Property, Plant, and Equipment | 360,305 | 365,957 | |||||||||
Right-of-use Finance Leases | 9,671 | 6,095 | |||||||||
Right-of-use Operating Leases | 66,254 | 70,219 | |||||||||
Goodwill and Other Intangible Assets | 451,624 | 458,896 | |||||||||
Other Assets | 26,136 | 21,130 | |||||||||
Total Assets | $ | 1,477,188 | $ | 1,418,032 |
HNI Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (In thousands, except par value) |
|||||||||||
(Unaudited) | |||||||||||
July 3,
2021 |
January 2,
2021 |
||||||||||
Liabilities and Equity | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 420,706 | $ | 413,638 | |||||||
Current maturities of long-term debt | 3,955 | 841 | |||||||||
Current maturities of other long-term obligations | 4,119 | 2,990 | |||||||||
Current lease obligations - finance | 2,439 | 1,589 | |||||||||
Current lease obligations - operating | 19,680 | 19,970 | |||||||||
Total Current Liabilities | 450,899 | 439,028 | |||||||||
Long-Term Debt | 174,566 | 174,524 | |||||||||
Long-Term Lease Obligations - Finance | 7,193 | 4,516 | |||||||||
Long-Term Lease Obligations - Operating | 50,710 | 53,249 | |||||||||
Other Long-Term Liabilities | 85,710 | 81,264 | |||||||||
Deferred Income Taxes | 73,327 | 74,706 | |||||||||
Total Liabilities | 842,405 | 827,287 | |||||||||
Equity: | |||||||||||
HNI Corporation shareholders' equity | 634,460 | 590,419 | |||||||||
Non-controlling interest | 323 | 326 | |||||||||
Total Equity | 634,783 | 590,745 | |||||||||
Total Liabilities and Equity | $ | 1,477,188 | $ | 1,418,032 |
HNI Corporation and Subsidiaries
Condensed Consolidated Statements of Equity
(In thousands, except per share data)
|
|||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended - July 3, 2021 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||
Balance, April 3, 2021 | $ | 43,552 | $ | 63,447 | $ | 519,559 | $ | (9,122) | $ | 325 | $ | 617,761 | |||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | 17,414 | — | (2) | 17,412 | |||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | 312 | — | 312 | |||||||||||||||||||||||||||||
Dividends payable | — | — | (246) | — | — | (246) | |||||||||||||||||||||||||||||
Cash dividends; $0.310 per share
|
— | — | (13,607) | — | — | (13,607) | |||||||||||||||||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||||||||||||||
Shares purchased | (156) | (6,562) | — | — | — | (6,718) | |||||||||||||||||||||||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 479 | 19,390 | — | — | — | 19,869 | |||||||||||||||||||||||||||||
Balance, July 3, 2021 | $ | 43,875 | $ | 76,275 | $ | 523,120 | $ | (8,810) | $ | 323 | $ | 634,783 | |||||||||||||||||||||||
Six Months Ended - July 3, 2021 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||
Balance, January 2, 2021 | $ | 42,919 | $ | 38,659 | $ | 517,994 | $ | (9,153) | $ | 326 | $ | 590,745 | |||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | 32,433 | — | (3) | 32,430 | |||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | 343 | — | 343 | |||||||||||||||||||||||||||||
Dividends payable | — | — | (527) | — | — | (527) | |||||||||||||||||||||||||||||
Cash dividends; $0.615 per share
|
— | — | (26,780) | — | — | (26,780) | |||||||||||||||||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||||||||||||||
Shares purchased | (156) | (6,562) | — | — | — | (6,718) | |||||||||||||||||||||||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 1,112 | 44,178 | — | — | — | 45,290 | |||||||||||||||||||||||||||||
Balance, July 3, 2021 | $ | 43,875 | $ | 76,275 | $ | 523,120 | $ | (8,810) | $ | 323 | $ | 634,783 |
HNI Corporation and Subsidiaries
Condensed Consolidated Statements of Equity
(In thousands, except per share data)
|
|||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended - June 27, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||
Balance, March 28, 2020 | $ | 42,647 | $ | 28,086 | $ | 491,429 | $ | (10,830) | $ | 323 | $ | 551,655 | |||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | 12,556 | — | (2) | 12,554 | |||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | 6 | — | 6 | |||||||||||||||||||||||||||||
Dividends payable | — | — | (70) | — | — | (70) | |||||||||||||||||||||||||||||
Cash dividends; $0.305 per share
|
— | — | (13,006) | — | — | (13,006) | |||||||||||||||||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||||||||||||||
Shares purchased | (28) | (622) | — | — | — | (650) | |||||||||||||||||||||||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 56 | 2,524 | — | — | — | 2,580 | |||||||||||||||||||||||||||||
Balance, June 27, 2020 | $ | 42,675 | $ | 29,988 | $ | 490,909 | $ | (10,825) | $ | 322 | $ | 553,069 | |||||||||||||||||||||||
Six Months Ended - June 27, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||
Balance, December 28, 2019 | $ | 42,595 | $ | 19,799 | $ | 529,723 | $ | (8,073) | $ | 324 | $ | 584,368 | |||||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | (11,339) | — | (2) | (11,341) | |||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | — | — | — | (2,752) | — | (2,752) | |||||||||||||||||||||||||||||
Impact of new accounting standard related to credit losses | — | — | (131) | — | — | (131) | |||||||||||||||||||||||||||||
Dividends payable | — | — | (116) | — | — | (116) | |||||||||||||||||||||||||||||
Cash dividends; $0.610 per share
|
— | — | (26,040) | — | — | (26,040) | |||||||||||||||||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||||||||||||||
Shares purchased | (214) | (4,988) | (1,188) | — | — | (6,390) | |||||||||||||||||||||||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 294 | 15,177 | — | — | — | 15,471 | |||||||||||||||||||||||||||||
Balance, June 27, 2020 | $ | 42,675 | $ | 29,988 | $ | 490,909 | $ | (10,825) | $ | 322 | $ | 553,069 |
HNI Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
|
|||||||||||
(Unaudited) | |||||||||||
Six Months Ended | |||||||||||
July 3,
2021 |
June 27,
2020 |
||||||||||
Net Cash Flows From (To) Operating Activities: | |||||||||||
Net income (loss) | $ | 32,430 | $ | (11,341) | |||||||
Non-cash items included in net income: | |||||||||||
Depreciation and amortization | 41,139 | 38,605 | |||||||||
Other post-retirement and post-employment benefits | 664 | 736 | |||||||||
Stock-based compensation | 7,788 | 5,659 | |||||||||
Reduction in carrying amount of right-of-use assets | 13,081 | 11,342 | |||||||||
Deferred income taxes | (1,430) | 1,092 | |||||||||
Impairment of goodwill and intangible assets | — | 32,661 | |||||||||
Other – net | 3,211 | (284) | |||||||||
Net increase (decrease) in cash from operating assets and liabilities | (62,905) | (49,631) | |||||||||
Increase (decrease) in other liabilities | 3,305 | (1,019) | |||||||||
Net cash flows from (to) operating activities | 37,283 | 27,820 | |||||||||
Net Cash Flows From (To) Investing Activities: | |||||||||||
Capital expenditures | (26,215) | (15,739) | |||||||||
Proceeds from sale of property, plant, and equipment | 151 | 69 | |||||||||
Capitalized software | (6,078) | (5,037) | |||||||||
Acquisition spending, net of cash acquired | (1,529) | (10,857) | |||||||||
Purchase of investments | (2,375) | (1,631) | |||||||||
Sales or maturities of investments | 2,393 | 1,043 | |||||||||
Net cash flows from (to) investing activities | (33,653) | (32,152) | |||||||||
Net Cash Flows From (To) Financing Activities: | |||||||||||
Payments of long-term debt | (648) | (73,828) | |||||||||
Proceeds from long-term debt | 3,785 | 82,129 | |||||||||
Dividends paid | (26,841) | (26,040) | |||||||||
Purchase of HNI Corporation common stock | (6,543) | (6,764) | |||||||||
Proceeds from sales of HNI Corporation common stock | 29,320 | 1,294 | |||||||||
Other – net | (325) | 1,672 | |||||||||
Net cash flows from (to) financing activities | (1,252) | (21,537) | |||||||||
Net increase (decrease) in cash and cash equivalents | 2,378 | (25,869) | |||||||||
Cash and cash equivalents at beginning of period | 116,120 | 52,073 | |||||||||
Cash and cash equivalents at end of period | $ | 118,498 | $ | 26,204 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Systems and storage | $ | 200,733 | $ | 167,007 | $ | 383,537 | $ | 371,028 | |||||||||||||||
Seating | 116,887 | 114,772 | 217,241 | 230,644 | |||||||||||||||||||
Other | 26,517 | 26,302 | 46,107 | 44,795 | |||||||||||||||||||
Total workplace furnishings | 344,137 | 308,081 | 646,885 | 646,467 | |||||||||||||||||||
Residential building products | 166,318 | 109,375 | 347,863 | 239,694 | |||||||||||||||||||
Net sales | $ | 510,455 | $ | 417,456 | $ | 994,748 | $ | 886,161 |
July 3,
2021 |
January 2,
2021 |
||||||||||
Trade receivables (1) | $ | 213,925 | $ | 207,971 | |||||||
Contract assets (current) (2) | $ | 761 | $ | 761 | |||||||
Contract assets (long-term) (3) | $ | 1,980 | $ | 2,486 | |||||||
Contract liabilities (4) | $ | 57,481 | $ | 53,070 |
Fair Value | Weighted Average Amortization Period | |||||||
Inventories | $ | 971 | ||||||
Receivables | 4 | |||||||
Prepaid expenses and other current assets | 597 | |||||||
Accounts payable and accrued expenses | (8,035) | |||||||
Goodwill | 34,084 | |||||||
Customer lists | 11,500 | 11 years | ||||||
Software | 5,500 | 5 years | ||||||
Trade names | 5,200 | 10 years | ||||||
Other intangible assets | 300 | 3 years | ||||||
Total net assets | $ | 50,121 |
July 3,
2021 |
January 2,
2021 |
||||||||||
Finished products | $ | 143,921 | $ | 98,527 | |||||||
Materials and work in process | 74,526 | 70,264 | |||||||||
Last-in, first-out ("LIFO") allowance | (30,980) | (30,980) | |||||||||
Total inventories | $ | 187,467 | $ | 137,811 | |||||||
Inventory valued by the LIFO costing method | 75 | % | 75 | % |
July 3,
2021 |
January 2,
2021 |
||||||||||
Goodwill | $ | 287,938 | $ | 292,434 | |||||||
Definite-lived intangible assets | 137,107 | 139,863 | |||||||||
Indefinite-lived intangible assets | 26,579 | 26,599 | |||||||||
Total goodwill and other intangible assets | $ | 451,624 | $ | 458,896 |
Workplace Furnishings | Residential Building Products | Total | |||||||||||||||
Balance as of January 2, 2021 | |||||||||||||||||
Goodwill | $ | 168,477 | $ | 196,976 | $ | 365,453 | |||||||||||
Accumulated impairment losses | (72,876) | (143) | (73,019) | ||||||||||||||
Net goodwill balance as of January 2, 2021 | 95,601 | 196,833 | 292,434 | ||||||||||||||
Goodwill acquired / measurement period adjustments | (5,716) | 1,220 | (4,496) | ||||||||||||||
Balance as of July 3, 2021 | |||||||||||||||||
Goodwill | 162,761 | 198,196 | 360,957 | ||||||||||||||
Accumulated impairment losses | (72,876) | (143) | (73,019) | ||||||||||||||
Net goodwill balance as of July 3, 2021 | $ | 89,885 | $ | 198,053 | $ | 287,938 |
July 3, 2021 | January 2, 2021 | ||||||||||||||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
Software | $ | 190,355 | $ | 90,046 | $ | 100,309 | $ | 182,127 | $ | 78,619 | $ | 103,508 | |||||||||||||||||||||||
Trademarks and trade names | 11,764 | 4,073 | 7,691 | 9,964 | 3,546 | 6,418 | |||||||||||||||||||||||||||||
Customer lists and other | 92,847 | 63,740 | 29,107 | 91,002 | 61,065 | 29,937 | |||||||||||||||||||||||||||||
Net definite-lived intangible assets | $ | 294,966 | $ | 157,859 | $ | 137,107 | $ | 283,093 | $ | 143,230 | $ | 139,863 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Capitalized software | $ | 5,804 | $ | 4,828 | $ | 11,427 | $ | 9,378 | |||||||||||||||
Other definite-lived intangibles | $ | 1,630 | $ | 1,152 | $ | 3,255 | $ | 2,675 |
2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||
Amortization expense | $ | 29.4 | $ | 26.3 | $ | 22.2 | $ | 18.4 | $ | 17.2 |
July 3,
2021 |
January 2,
2021 |
||||||||||
Trademarks and trade names | $ | 26,579 | $ | 26,599 |
Six Months Ended | |||||||||||
July 3,
2021 |
June 27,
2020 |
||||||||||
Balance at beginning of period | $ | 16,109 | $ | 15,865 | |||||||
Accruals for warranties issued during period | 4,471 | 4,626 | |||||||||
Adjustments related to pre-existing warranties | — | (272) | |||||||||
Settlements made during the period | (4,029) | (5,076) | |||||||||
Balance at end of period | $ | 16,551 | $ | 15,143 |
July 3,
2021 |
January 2,
2021 |
||||||||||
Current - in the next twelve months | $ | 5,953 | $ | 5,918 | |||||||
Long-term - beyond one year | 10,598 | 10,191 | |||||||||
Total | $ | 16,551 | $ | 16,109 |
July 3,
2021 |
January 2,
2021 |
||||||||||
Revolving credit facility with interest at a variable rate
(July 3, 2021 - 1.1%; January 2, 2021 - 1.2%)
|
$ | 75,000 | $ | 75,000 | |||||||
Fixed rate notes due in 2025 with an interest rate of 4.22%
|
50,000 | 50,000 | |||||||||
Fixed rate notes due in 2028 with an interest rate of 4.40%
|
50,000 | 50,000 | |||||||||
Other amounts | 3,955 | 841 | |||||||||
Deferred debt issuance costs | (434) | (476) | |||||||||
Total debt | 178,521 | 175,365 | |||||||||
Less: Current maturities of long-term debt | 3,955 | 841 | |||||||||
Long-term debt | $ | 174,566 | $ | 174,524 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Income (loss) before income taxes | $ | 22,830 | $ | 12,899 | $ | 43,675 | $ | (12,640) | |||||||||||||||
Income taxes | $ | 5,418 | $ | 345 | $ | 11,245 | $ | (1,299) | |||||||||||||||
Effective tax rate | 23.7 | % | 2.7 | % | 25.7 | % | 10.3 | % |
Fair value as of measurement date |
Quoted prices in active markets for identical assets
(Level 1) |
Significant other observable inputs
(Level 2) |
Significant unobservable inputs
(Level 3) |
||||||||||||||||||||
Balance as of July 3, 2021 | |||||||||||||||||||||||
Cash and cash equivalents (including money market funds) (1) | $ | 118,498 | $ | 118,498 | $ | — | $ | — | |||||||||||||||
Government securities (2) | $ | 5,573 | $ | — | $ | 5,573 | $ | — | |||||||||||||||
Corporate bonds (2) | $ | 7,844 | $ | — | $ | 7,844 | $ | — | |||||||||||||||
Derivative financial instruments - liability (3) | $ | 1,766 | $ | — | $ | 1,766 | $ | — | |||||||||||||||
Deferred stock-based compensation (4) | $ | 8,204 | $ | — | $ | 8,204 | $ | — | |||||||||||||||
Balance as of January 2, 2021 | |||||||||||||||||||||||
Cash and cash equivalents (including money market funds) (1) | $ | 116,120 | $ | 116,120 | $ | — | $ | — | |||||||||||||||
Government securities (2) | $ | 6,371 | $ | — | $ | 6,371 | $ | — | |||||||||||||||
Corporate bonds (2) | $ | 7,228 | $ | — | $ | 7,228 | $ | — | |||||||||||||||
Derivative financial instruments - liability (3) | $ | 2,328 | $ | — | $ | 2,328 | $ | — | |||||||||||||||
Deferred stock-based compensation (4) | $ | 7,207 | $ | — | $ | 7,207 | $ | — |
Foreign Currency Translation Adjustment | Unrealized Gains (Losses) on Debt Securities | Pension and Post-retirement Liabilities | Derivative Financial Instruments | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
Balance as of January 2, 2021 | $ | (1,071) | $ | 360 | $ | (6,682) | $ | (1,760) | $ | (9,153) | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | 62 | (158) | — | 68 | (28) | |||||||||||||||||||||||||||
Tax (expense) or benefit | — | 33 | — | (16) | 17 | |||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | — | — | — | 354 | 354 | |||||||||||||||||||||||||||
Balance as of July 3, 2021 | $ | (1,009) | $ | 235 | $ | (6,682) | $ | (1,354) | $ | (8,810) |
Foreign Currency Translation Adjustment | Unrealized Gains (Losses) on Debt Securities | Pension and Post-retirement Liabilities | Derivative Financial Instruments | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
Balance as of December 28, 2019 | $ | (2,912) | $ | 95 | $ | (5,762) | $ | 506 | $ | (8,073) | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | (555) | 382 | — | (3,229) | (3,402) | |||||||||||||||||||||||||||
Tax (expense) or benefit | — | (80) | — | 759 | 679 | |||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | — | — | — | (29) | (29) | |||||||||||||||||||||||||||
Balance as of June 27, 2020 | $ | (3,467) | $ | 397 | $ | (5,762) | $ | (1,993) | $ | (10,825) |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | Affected Line Item in the Statement Where Net Income is Presented |
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
|||||||||||||||||||||
Derivative financial instruments | ||||||||||||||||||||||||||
Interest rate swap | Interest expense, net | $ | (249) | $ | (74) | $ | (463) | $ | 40 | |||||||||||||||||
Income taxes | 59 | (5) | 109 | (11) | ||||||||||||||||||||||
Net of tax | $ | (190) | $ | (79) | $ | (354) | $ | 29 |
Six Months Ended | |||||||||||
July 3,
2021 |
June 27,
2020 |
||||||||||
Dividends per common share | $ | 0.615 | $ | 0.610 |
Six Months Ended | |||||||||||
July 3,
2021 |
June 27,
2020 |
||||||||||
Shares repurchased | 155,914 | 214,200 | |||||||||
Average price per share | $ | 43.09 | $ | 29.83 | |||||||
Cash purchase price | $ | (6,718) | $ | (6,390) | |||||||
Purchases unsettled as of quarter end | 175 | — | |||||||||
Prior year purchases settled in current year | — | (374) | |||||||||
Shares repurchased per cash flow | $ | (6,543) | $ | (6,764) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Numerator for both basic and diluted EPS attributable to HNI Corporation net income (loss) | $ | 17,414 | $ | 12,556 | $ | 32,433 | $ | (11,339) | |||||||||||||||
Denominators: | |||||||||||||||||||||||
Denominator for basic EPS weighted-average common shares outstanding | 43,776 | 42,640 | 43,469 | 42,634 | |||||||||||||||||||
Potentially dilutive shares from stock-based compensation plans | 705 | 289 | 517 | — | |||||||||||||||||||
Denominator for diluted EPS | 44,481 | 42,929 | 43,986 | 42,634 | |||||||||||||||||||
Earnings per share – basic | $ | 0.40 | $ | 0.29 | $ | 0.75 | $ | (0.27) | |||||||||||||||
Earnings per share – diluted | $ | 0.39 | $ | 0.29 | $ | 0.74 | $ | (0.27) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Common stock equivalents excluded because their inclusion would be anti-dilutive | 1,027 | 3,320 | 1,350 | 3,428 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Compensation cost | $ | 2,568 | $ | 1,301 | $ | 7,788 | $ | 5,659 |
Six Months Ended | |||||||||||
July 3,
2021 |
June 27,
2020 |
||||||||||
Restricted stock units | $ | 15,817 | $ | 5,852 | |||||||
Performance stock units | $ | 6,013 | $ | 5,852 |
Unrecognized Compensation Expense
(in thousands) |
Weighted-Average Remaining
Service Period (years) |
||||||||||
Non-vested stock options | $ | 876 | 0.8 | ||||||||
Non-vested restricted stock units | $ | 9,173 | 1.2 | ||||||||
Non-vested performance stock units | $ | 6,222 | 1.3 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Net Sales: | |||||||||||||||||||||||
Workplace furnishings | $ | 344,137 | $ | 308,081 | $ | 646,885 | $ | 646,467 | |||||||||||||||
Residential building products | 166,318 | 109,375 | 347,863 | 239,694 | |||||||||||||||||||
Total | $ | 510,455 | $ | 417,456 | $ | 994,748 | $ | 886,161 | |||||||||||||||
Income (Loss) Before Income Taxes: | |||||||||||||||||||||||
Workplace furnishings | $ | 8,756 | $ | 7,785 | $ | 5,685 | $ | (25,446) | |||||||||||||||
Residential building products | 30,525 | 14,365 | 70,374 | 35,036 | |||||||||||||||||||
General corporate | (14,594) | (7,308) | (28,772) | (18,476) | |||||||||||||||||||
Operating income (loss) | 24,687 | 14,842 | 47,287 | (8,886) | |||||||||||||||||||
Interest expense, net | 1,857 | 1,943 | 3,612 | 3,754 | |||||||||||||||||||
Total | $ | 22,830 | $ | 12,899 | $ | 43,675 | $ | (12,640) | |||||||||||||||
Depreciation and Amortization Expense: | |||||||||||||||||||||||
Workplace furnishings | $ | 12,051 | $ | 10,782 | $ | 24,035 | $ | 22,113 | |||||||||||||||
Residential building products | 2,448 | 2,318 | 4,858 | 4,624 | |||||||||||||||||||
General corporate | 6,177 | 6,019 | 12,246 | 11,868 | |||||||||||||||||||
Total | $ | 20,676 | $ | 19,119 | $ | 41,139 | $ | 38,605 | |||||||||||||||
Capital Expenditures (including capitalized software): | |||||||||||||||||||||||
Workplace furnishings | $ | 7,017 | $ | 4,293 | $ | 17,504 | $ | 11,394 | |||||||||||||||
Residential building products | 1,947 | 206 | 6,657 | 3,179 | |||||||||||||||||||
General corporate | 4,365 | 3,118 | 8,132 | 6,203 | |||||||||||||||||||
Total | $ | 13,329 | $ | 7,617 | $ | 32,293 | $ | 20,776 | |||||||||||||||
As of
July 3, 2021 |
As of
January 2, 2021 |
||||||||||||||||||||||
Identifiable Assets: | |||||||||||||||||||||||
Workplace furnishings | $ | 784,880 | $ | 762,780 | |||||||||||||||||||
Residential building products | 408,333 | 381,550 | |||||||||||||||||||||
General corporate | 283,975 | 273,702 | |||||||||||||||||||||
Total | $ | 1,477,188 | $ | 1,418,032 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
Change |
July 3,
2021 |
June 27,
2020 |
Change | ||||||||||||||||||||||||||||||
Net sales | $ | 510,455 | $ | 417,456 | 22.3% | $ | 994,748 | $ | 886,161 | 12.3% | |||||||||||||||||||||||||
Cost of sales | 322,593 | 266,551 | 21.0% | 626,940 | 559,238 | 12.1% | |||||||||||||||||||||||||||||
Gross profit | 187,862 | 150,905 | 24.5% | 367,808 | 326,923 | 12.5% | |||||||||||||||||||||||||||||
Selling and administrative expenses | 163,175 | 136,063 | 19.9% | 320,521 | 303,148 | 5.7% | |||||||||||||||||||||||||||||
Impairment charges | — | — | —% | — | 32,661 | (100.0)% | |||||||||||||||||||||||||||||
Operating income (loss) | 24,687 | 14,842 | 66.3% | 47,287 | (8,886) | NM | |||||||||||||||||||||||||||||
Interest expense, net | 1,857 | 1,943 | (4.4)% | 3,612 | 3,754 | (3.8)% | |||||||||||||||||||||||||||||
Income (loss) before income taxes | 22,830 | 12,899 | 77.0% | 43,675 | (12,640) | NM | |||||||||||||||||||||||||||||
Income taxes | 5,418 | 345 | NM | 11,245 | (1,299) | NM | |||||||||||||||||||||||||||||
Net loss attributable to non-controlling interest | (2) | (2) | 0.0% | (3) | (2) | (50.0)% | |||||||||||||||||||||||||||||
Net income (loss) attributable to HNI Corporation | $ | 17,414 | $ | 12,556 | 38.7% | $ | 32,433 | $ | (11,339) | NM | |||||||||||||||||||||||||
As a Percentage of Net Sales: | |||||||||||||||||||||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||||||||
Gross profit | 36.8 | 36.1 | 70 | bps | 37.0 | 36.9 | 10 | bps | |||||||||||||||||||||||||||
Selling and administrative expenses | 32.0 | 32.6 | -60 | bps | 32.2 | 34.2 | -200 | bps | |||||||||||||||||||||||||||
Impairment charges | — | — | — | bps | — | 3.7 | -370 | bps | |||||||||||||||||||||||||||
Operating income (loss) | 4.8 | 3.6 | 120 | bps | 4.8 | (1.0) | 580 | bps | |||||||||||||||||||||||||||
Income taxes | 1.1 | 0.1 | 100 | bps | 1.1 | (0.1) | 120 | bps | |||||||||||||||||||||||||||
Net income (loss) attributable to HNI Corporation | 3.4 | 3.0 | 40 | bps | 3.3 | (1.3) | 460 | bps |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
Change |
July 3,
2021 |
June 27,
2020 |
Change | ||||||||||||||||||||||||||||||
Net sales | $ | 344,137 | $ | 308,081 | 11.7 | % | $ | 646,885 | $ | 646,467 | 0.1 | % | |||||||||||||||||||||||
Operating profit (loss) | $ | 8,756 | $ | 7,785 | 12.5 | % | $ | 5,685 | $ | (25,446) | 122.3 | % | |||||||||||||||||||||||
Operating profit (loss) % | 2.5 | % | 2.5 | % | 0 | bps | 0.9 | % | (3.9) | % | 480 | bps |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
Change |
July 3,
2021 |
June 27,
2020 |
Change | ||||||||||||||||||||||||||||||
Net sales | $ | 166,318 | $ | 109,375 | 52.1 | % | $ | 347,863 | $ | 239,694 | 45.1 | % | |||||||||||||||||||||||
Operating profit | $ | 30,525 | $ | 14,365 | 112.5 | % | $ | 70,374 | $ | 35,036 | 100.9 | % | |||||||||||||||||||||||
Operating profit % | 18.4 | % | 13.1 | % | 530 | bps | 20.2 | % | 14.6 | % | 560 | bps |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
July 3,
2021 |
June 27,
2020 |
July 3,
2021 |
June 27,
2020 |
||||||||||||||||||||
Dividends per common share | $ | 0.310 | $ | 0.305 | $ | 0.615 | $ | 0.610 |
Period | Total Number of Shares (or Units) Purchased (1) |
Average Price
Paid per Share (or Unit) |
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs | ||||||||||||||||||||||
04/04/21 – 05/01/21 | 68,000 | $ | 41.07 | 68,000 | $ | 155,494,413 | ||||||||||||||||||||
05/02/21 – 05/29/21 | 40,000 | $ | 44.39 | 40,000 | $ | 153,718,790 | ||||||||||||||||||||
05/30/21 – 07/03/21 | 47,914 | $ | 44.88 | 47,914 | $ | 151,568,628 | ||||||||||||||||||||
Total | 155,914 | 155,914 |
3.1 | |||||
10.1 | |||||
10.2 | |||||
10.3 | |||||
10.4 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
101 | The following materials from HNI Corporation's Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2021 are formatted in Inline XBRL (eXtensible Business Reporting Language) and filed electronically herewith: (i) Condensed Consolidated Statements of Comprehensive Income; (ii) Condensed Consolidated Balance Sheets; (iii) Condensed Consolidated Statements of Equity; (iv) Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
HNI Corporation | |||||||||||
Date: August 3, 2021 | By: | /s/ Marshall H. Bridges | |||||||||
Marshall H. Bridges | |||||||||||
Senior Vice President and Chief Financial Officer |
Date: August 3, 2021 | By: | /s/ Jeffrey D. Lorenger | ||||||
Name: Jeffrey D. Lorenger | ||||||||
Title: Chairman, President, and Chief Executive Officer |
Date: August 3, 2021 | By: | /s/ Marshall H. Bridges | ||||||
Name: Marshall H. Bridges | ||||||||
Title: Senior Vice President and Chief Financial Officer |
Date: August 3, 2021 | By: | /s/ Jeffrey D. Lorenger | ||||||
Name: Jeffrey D. Lorenger | ||||||||
Title: Chairman, President, and Chief Executive Officer |
Date: August 3, 2021 | By: | /s/ Marshall H. Bridges | ||||||
Name: Marshall H. Bridges | ||||||||
Title: Senior Vice President and Chief Financial Officer |